Louisiana-Pacific Corporation Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Siding: Volume was flat in Q3, but revenue grew 5% due to price and mix. ExpertFinish sales volume increased 17% year-over-year, with the April launch of the ExpertFinish naturals collection contributing to a beneficial price mix effect.
• OSB: OSB prices were soft, but the OSB operations team achieved 80% OEE, up 2 points from the prior year, and aggressive cost control helped outperform guidance.
• Awards and Leadership: LP was named one of the 50 Best Manufacturers in the US and America's Most Admired Workplaces. Brad Southern announced retirement, with Jason Ringblom set to succeed him.

Segment Performance

• Siding: Volume in the third quarter was flat. Sales revenue grew 5% driven by price and strong mix. ExpertFinish prefinished siding saw 17% year-over-year volume growth, accounting for 10% of overall Siding volume and 17% of overall Siding revenue.
• OSB: OSB prices were soft in a challenging demand environment, but overall equipment effectiveness (OEE) hit 80%, up 2 points from the prior year.

Guidance

• Siding: Reaffirms full-year EBITDA guidance of $430M. Q4 revenue expected ~$370M, EBITDA ~$82M. Full-year revenue growth revised to 8% from 9%, EBITDA margin to ~26%.
• OSB: Fourth quarter OSB guidance slightly improved, but price realization likely less of a tailwind. Full-year total company EBITDA revised to $425M, up $20M from prior guidance. CapEx guidance cut, with consideration of converting Maniwaki OSB mill to Siding.

Risks

• Tariffs: Minor tariff impacts on raw materials, but LP currently bearing minimal tariff costs.
• Market Volatility: OSB market softness and potential extended downturn, impact on pricing and demand.

Question and Answer

Q: Potential shift from Houlton to Maniwaki?

A: Maniwaki is a large OSB facility with scale and network optimization benefits; decision based on timing and capital efficiency.

Q: Pricing in Siding for 2026?

A: Targeting 3%-4% price increase in 2026, managing order intake to avoid channel inventory build.

Q: Shed volumes in Q3 and Q4?

A: Shed volumes normalized, up year-over-year, with resilience in repair/remodel, especially in northern markets.

Q: Maniwaki timeline and Section 232?

A: Process dynamic, Maniwaki evaluation based on financial and market dynamics; 232 tariffs currently not a decision maker but a potential benefit.

Q: ExpertFinish margins and sustainability?

A: Margins good but improving, demand sticky due to value prop and naturals collection; focus on distribution and marketing to sustain share gains.