LPX - Quick Take - Live from the Truist Securities Industrials & Services Conference

Research evidence excerpt

LPX - Quick Take - Live from the Truist Securities Industrials & Services Conference

26 volumes with starts tracking down

Reasons for this report 6%, implying some level of share gains.

✓ Management Meeting Takeaways Meanwhile, ExpertFinish volumes remain favorable with stronger than expected adoption

✓ Truist Securities Conference Takeaways from large builders due to install time. In general, LPX seeks to partner with large builders in

markets where it is currently underpenetrated to drive greater geographic share gains with

Florida being a notable success thus far this year. We believe current progress with builder

bundling amid a softer supply/demand backdrop should result in greater gains when market

conditions tighten as product availability becomes more of a concern for customers. LPX is

working to increase builder stickiness largely through customer experience with early wins

already materializing, including some contractors charging builders less to use SmartSide

vs. fiber cement given significant installation cost savings. The company should be able to

protect or continue share gains with smaller regional builders given more significant market

fragmentation and less centralized purchasing common with smaller players.

In addition, greater ExpertFinish capacity from Green Bay, Bath, and eventually North

Branch should yield scale and efficiency benefits, further benefitting margins after 800bps

of appreciation last year. Should demand fail to materialize, the new North Branch capacity,

which we believe will be larger than the next two largest ExpertFinish facilities combined,

should still provide efficiency gains at current capacity levels with LPX likely able to shut

down its least efficient lines while the new capacity ramps. Elsewhere, we continue to believe