Doman Building Materials Group Ltd.

Climate Impact & Sustainability Data (2018, 2019, 2019-06-30, 2020, 2021)

Material decline in lumber, OSB, and panel pricing impacting demand for products.
Wildfires in British Columbia temporarily halting harvesting activities.
Significant fall in construction materials pricing in the second half of 2018.

Continued focus on operational efficiencies, gross margin optimization, overall cost management, and a disciplined acquisition strategy.
Mitigation strategies to minimize the potential impacts of future commodity price volatility (vendor managed inventories, direct shipments, matching inventory levels).
Strategy to increase the proportion of value-added products (pressure-treated wood).

Decreased demand for timber from regional sawmill customers reflecting production curtailments across the industry in 2019.
Lower construction material pricing levels and pricing trends relative to 2018.
Weather conditions during the first quarter of 2019 impacting construction activities.
Potential impact of the COVID-19 virus on the North American economy.

Use of vendor managed inventories, direct shipments from manufacturer to customer, and matching inventory levels to maintain high customer service levels, minimizing excess inventory exposed to market fluctuations.
Strategy to increase the proportion of value-added products (pressure treated wood) in overall sales.
Close monitoring of operations, legacy customers, and potential seasonal weather impacts to translate revenue into higher earnings.

Use of vendor managed inventories
Direct shipments from manufacturer to customer
Matching inventory levels to maintain high customer service and minimize excess inventory
Strategy to increase proportion of value-added products (pressure treated wood)

COVID-19 global pandemic and its economic and societal disruption
Production curtailments by major producers earlier in the year contributed to low levels of supply chain inventory
Extremely dry conditions in British Columbia, with harvesting activities temporarily halted due to increased provincial fire risk ratings

Reducing the Company’s quarterly dividend
Optimizing its working capital
Implementing working hours reductions
Initiating temporary employee layoffs
Deferring or eliminating certain non-essential operating expenditures
Minimizing capital expenditures
Evaluating ongoing cost savings opportunities
Assessing financial assistance options available under COVID-19-related government programs
Use of vendor managed inventories
Direct shipments from the manufacturer to the customer
Optimizing inventory levels to maintain its high standard of customer service levels and minimizing excess inventory otherwise exposed to market fluctuations

COVID-19 pandemic causing material disruption to businesses globally and significant economic uncertainty.
Construction materials pricing volatility.
Cybersecurity risks increased due to the pandemic and remote work arrangements.

Specific health and safety measures (limiting employees on premises, mandatory quarantines, staggered work hours, etc.).
Optimizing working capital, deferring non-essential expenditures, minimizing capital expenditures.
Adjusting quarterly dividends as required.
Use of vendor managed inventories, direct shipments from manufacturer to customer, lumber futures contracts, optimizing inventory levels.
Continuously monitoring IT infrastructure to maintain privacy and confidentiality of information.