Company: QXO-PB
Filing Date: 2025-02-21
Form Type: DFAN14A
Source: 0000950142-25-000485
Chunk: 5

Company: QXO, Inc.
Filing Date: 2025-02-21
Form: DFAN14A
Chunk 5
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 permission to use these quotes. Debunking Beacon’s misleading claims Beacon's fiction: “Ambition 2025 has delivered above-market growth.” Fact: Beacon’s growth has significantly lagged its peers. From 2019 through LTM September 2024, Beacon’s ~8% revenue CAGR is the lowest of its peer group and well below the peer median of ~12%.7 Beacon's fiction: “Ambition 2025 is responsible for Beacon’s 11 straight quarters of record net sales.” Fact: This can be attributed nearly entirely to extraordinary inflation, aided by taking on significant debt for M&A transactions and greenfields. Importantly, Beacon is on track to miss all its Ambition 2025 margin targets. Acquiring low margin sales is not a sustainable strategy for long-term value creation. Beacon's fiction: “Beacon’s total shareholder return of more than 200% during the past five years show Ambition 2025 has been successful.” Fact: Beacon’s total shareholder return (TSR) numbers are not impressive in the context of the performance of its peers. Over the past five years, Beacon’s total shareholder return has trailed its Building Products Proxy Peers by 86% and trailed those peers by 140% since CEO Julian Francis took over as CEO in August 2019.8 Moreover, the valuation gap between Beacon’s Enterprise Value-to-EBITDA multiple and those of its Building Products Proxy Peers has widened by 1.3x over the last three years.9 Beacon's fiction: “Continuing to run the Company’s standalone plan will deliver substantially greater value for the Company’s stockholders than QXO’s offer.” Fact: Beacon is tracking to miss its Ambition 2025 plan, with consensus analyst estimates indicating that Beacon will: Miss its 2025 gross margin target by 127 bps; Miss its 2025 EBITDA margin target by 112 bps; and Report EBITDA margins 18 bps lower in 2025 than when the Ambition 2025 plan was introduced.10 Beacon’s Investor Day was announced only after QXO emphasized to Beacon that it was ready to approach shareholders directly, and it has made shareholders wait another two months for its projections. Such a delay in disclosure suggests the company lacks credible projections and requires the lengthy interim period to formulate them from scratch. Management itself acknowledged in its filings that its upcoming 2028 targets are “ambitious,” implying they may not be realistic. Assuming an average historical trading multiple of