Investor Presentation Bob Buck Chairman and CEO Summer 2010

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Investor Presentation Bob Buck Chairman and CEO Summer 2010 Financials Q3 ended June 2010

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Financials Q3 ended June 2010. Investor Presentation Bob Buck Chairman and CEO Summer 2010. Forward looking statements. - PowerPoint PPT Presentation

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Page 1: Investor Presentation Bob Buck Chairman and CEO Summer 2010

Investor Presentation

Bob BuckChairman and CEO

Summer 2010

Financials Q3 ended June 2010

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Forward looking statements

This presentation contains “forward-looking statements”. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements expressed or implied

by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we

cannot guarantee future results, levels of activity, performance or achievements. We caution you not to place undue reliance on forward-

looking statements, which reflect our analysis only and speak only as of the date of this presentation, and you should refer to the “Risk Factors” section of

our latest Form 10K. We undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

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Company Overview

Paul IsabellaPresident and COO

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Beacon Overview

A leader in key metropolitan markets in the Northeast, Mid-Atlantic, Midwest, Central Plains, Southeast and Southwest regions in the United States and in Eastern Canada 179 branches across 37 U.S. states and 3 Canadian provinces Over 40,000 customers Broad product offering of up to 10,000 SKUs

Strong long-term historical performance FY 2009 Sales of $1.73 billion (10-year CAGR 30%) FY 2009 Operating Income of $109.2 million (10-year CAGR 29%) FY 2009 Operating margin of 6.3%

Successfully completed 12 major acquisitions since our IPO in 2004

Opened 25 new greenfield locations since the IPO

Founded in 1928, Beacon Roofing Supply, Inc. has grown to be one of the largest distributors of residential and non-residential roofing materials in the United States and Canada

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March Across North America

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Comprehensive assortment of products for all external residential and commercial building needs

Complete product offering

1 Steep Slope Roofing System

2 Underlayment

3 Custom Metals

4 Substrates

5 Wood & Vinyl Siding

6 Flat Roof Systems

7 Rigid Insulations

8 Air & Vapor Barriers

9 Pressure Treated Lumber

10 Cavity Wall Air & Vapor Barrier Systems

11 Doors & Windows

12 Through Wall Flashings

13 Expansion Joints

14 Below Grade Waterproofing System

15 Below Grade Drainage Systems

16 Waterstop

17 Concrete Sealers & Coatings

18 Ground Barriers

Revenue product mix1

Residential roofing

52%

Non-residential roofing

34%

Complementary building products

14%

1 Reflects net revenue for FY 2009

10,000 SKUs offered

Selected relationships with manufacturers to achieve substantial volume discounts

Historically re-roofing makes up approximately 70% and 80% of residential and non-residential demand*

*source – Freedonia April 2008

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Why Invest in Beacon?

High value-added distributor performing a critical role in the roofing supply chain

Market leader in an attractive, growing and fragmented industry

Highly scalable platform and proven business model with minimal capital expenditures

Superior financial performance highlighted by attractive growth and margins Historical 10-year sales CAGR: 30% (2000-2009) CAGR internal sales growth since our IPO: 4.1% Strong EBITDA margins: 8.3% in 2009

Results-oriented management, corporate culture and controls

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Large and Attractive Market

$15.0 billion industry* in the U.S. with a projected growth rate of 2.4% annually through 2014

Re-roofing (vs. new construction) accounts for approximately 70% of roofing expenditures

In 2009 re-roofing made up approximately 90% and 79% of residential and non-residential demand, respectively

The median age of the housing stock as of 2009 is 35 years old.

Roofing demand has grown every year since 1993 Grown through four years of declining

building construction expenditures (1995, 2001, 2002, 2007)

Residential58%

Non-residential

42%

U.S. roofing materials market (SQS)

Source: The Freedonia Group – March 2010 *represents sales by manufacturers

Overview

1980's

12.5%

pre-1960

31.7%

2000's

12.4%

1990's

12.2%

1960's

11.7%

1970s

19.5%

Year of construction of housing stock,

2009 (129.5 million units)

Roofing market is somewhat insulated from swings in the overall building cycle

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Re-Roofing Concentration Drives Stable GrowthRoofing Demand Compared to Interest Rates

Total roofing demand is very stable

Installed base of existing homes and commercial buildings is large and growing

Re-roofing is not a luxury expenditure, and it is not discretionary

There is virtually no correlation between interest rates and demand for roofing

Source: The Freedonia Group

$7.4 $7.7 $7.6 $8.2 $8.4 $9.3 $9.5 $9.8 $10.2 $10.5 $11.4 $12.1 $13.8 $13.9 $13.7 $15.8 $15.0

7.3%

8.4%

7.8%7.6%

8.1%8.0%

5.1%

6.1%6.3%

6.4%6.2%

5.8%5.8%

6.5%

7.0%6.9%

7.4%

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20095.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

Roofing Demand ($'s in billions) Interest Rates

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Re-Roofing Concentration Drives Stable GrowthConstruction Spending Growth by Category

Residential new construction activity has been volatile

Commercial new construction is also volatile and closely follows economic cycles

Demand for roofing, due to the large installed base of aging structures, remains very stable and consistent despite the construction cycles

-40.0%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%D

ec-9

3

Dec-9

4

Dec-9

5

Dec-9

6

Dec-9

7

Dec-9

8

Dec-9

9

Dec-0

0

Dec-0

1

Dec-0

2

Dec-0

3

Dec-0

4

Dec-0

5

Dec-0

6

Dec-0

7

Dec-0

8

Dec-0

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Non-Residential Construction YoY % Residential Construction YoY % Roofing Demand YoY %

Source: The Freedonia Group

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Highly Fragmented Market is Ripe for Consolidation

Source: IBIS World Pty Ltd.

< 5% are regional

Key Considerations

Beacon is the second largest roofing distributor in North America

Although over 1,500 distributors serve the roofing materials market, fewer than 5% are regional

Consolidation driven by customer demands and needs

Total number of roofing distributors > 1,500

Roofing Distributors

Market Share by Revenue

Source: Company estimate

Beacon7 %

All Other73 %

Other Top 320 %

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Strong Platform for Growth and Acquisitions

New branch openings

(e.g., Boston/Houston)

Existing market growth

Acquisitions

1,500+ distributors

+ + =Potential

average annual growth

2–5% 3–5% 10–15% 15–25%

Targeted number: 6-12 locations per year

Incremental sales effect: $12–25mm

EBITDA impact: Typically breakeven in year one

Compelling customer-driven rationale for industry consolidation

Acquisition opportunities are identified and actionable Highly fragmented

market Over 1,500 players

Long history of successful integration Margin and revenue

improvement Scalable platform

Market plans by location

Sales rep productivity

Identify new prospects

New product offerings

5–10% “organic” average annual growth potential

Actual sales 10-year CAGR: 30%

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Growth Through New Branch Openings

Disciplined approach to new branch openings in contiguous markets

Most branches opened by Beacon have been successful

36 branches opened since 1997, only one of which has closed

Low initial investment: $600,000 – $1,000,000

Rapid breakeven – typically cash flow positive within one year

New markets are consistently being identified and evaluated

25 branches have been opened since the IPO

Others in location identification stage

Branch managers have been identified

Selective geographic expansion through new branch openings

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Acquisitions Come with Significant Synergy Potential

Sophisticated Uniform IT Platform

Beacon has a Highly Scalable Business Model

Revenue Expansion

Best Practices

Large Operational Scale

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Financial overview

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Significant sales growth

Net Sales ($ in millions)

$127.0$224.0

$415.1

$549.9 $559.5$652.9

$1,500.6

$1,645.8

$1,784.5$1,734.0

$1,246.2

$1,127.4

$850.9

$0

$500

$1,000

$1,500

$2,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q32009

Q32010

2000–2009 30% CAGR

Fiscal years YTD 2010

9.5% Contraction

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$8.5 $10.4

$31.3

$100.3

$69.8

$94.7

$109.2

$72.7

$42.8

$29.4

$60.7

$42.3

$18.7

$0

$20

$40

$60

$80

$100

$120

1999 2000 2001 2002 2003 PF2004

2005 2006 2007 2008 2009 Q32009

Q32010

Operating Income

($ in millions)

2000—2009 30% CAGR

Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.

Fiscal years YTD 2010

41.2% Contraction

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19.7% 22.6% 25.4% 22.7% 23.5% 23.7% 23.9% 22.5%24.7% 24.3% 24.3%25.2%

0%

15%

30%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 YTD2009

YTD2010

Margin Analysis

Gross profit margin

4.6% 4.5% 5.3% 5.6% 6.5% 7.1% 6.7%4.2% 5.3% 6.3% 5.8%

3.8%

0%

4%

8%

2000 2001 2002 2003 PF2004

2005 2006 2007 2008 2009 YTD2009

YTD2010

Operating income margin

Note: Operating income for pro forma 2004 excludes certain stock-based-compensation of $9.0mm.

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Financial Review

(1) For a reconciliation of Adjusted EBITDA to Net Income, please reference our press

releases dated December 1, 2009 and August 5, 2010

($ millions, except EPS)

YoY YTD YTD YoYFY 2008 FY 2009 Change 2009 2010 Change

Net Sales 1,784.5$ 1,734.0$ -2.8% 1,246.2$ 1,127.4$ -9.5%

Gross Profit 420.0 411.1 -2.1% 298.1 253.7 -14.9% % margin 23.5% 23.7% 23.9% 22.5%

Operating Income 94.7 109.2 15.3% 72.7 42.8 -41.2% % margin 5.3% 6.3% 5.8% 3.8%

Net Income 40.3 52.4 30.0% 33.4 17.7 -47.1% % margin 2.3% 3.0% 2.7% 1.6%

Adjusted EBITDA (1) 133.8 144.4 7.9% 99.2 67.4 -32.1% % margin 7.5% 8.3% 8.0% 6.0%

Diluted EPS 0.90$ 1.15$ 28.0% 0.74$ 0.38$ -48.6%

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Financially Positioned to Deliver on Growth

Ample Liquidity $150 million U.S. revolving line of credit and CDN $15 million Canadian revolving line

of credit, with initial term loans totaling $350 million, through October 2013 $159 million available at June 30, 2010, plus approximately $82 million in cash

Conservative Capital Structure Strong free cash flow Net Debt/Total capital ratio of 36% at June 30, 2010 Net debt to Adjusted EBITDA ratio(1) of 2.33 to 1 as of June 30, 2010

Robust Financial Controls Systems integrated Sarbanes-Oxley compliant Disciplined financial approach 2009 bad debt expense of 0.4% of net sales

Minimal Capital Expenditures of Less than 2% of Sales

$23.1 million in 2007, $5.7 million in 2008, $13.7 million in 2009

(1) Calculated as defined under our credit facilities.

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Annual Financial Performance Objectives

Long-term average sales growth goal of 5%-10% (excluding acquisitions)

Gross margin between 22.5%–24%

Operating margin between 6%-8%

Capital expenditures of less than 2% of sales

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Beacon – A Company of Substance

Culture

Forecasting &

Accountability

Excellent

Track Record

Routines

Benchmarking

Fundamentals

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Our Company Values and Culture