Good morning, everyone. I'm Terry Hammons, Senior Vice President, General Counsel, and Corporate Secretary here at Simpson. On behalf of our entire team, I'd like to thank you for joining us this morning, for those of you on the East Coast this afternoon, for our Virtual Analyst and Investor Day presentation. We're joining you live from our training center at our home offices here in Pleasanton, California, and we're thrilled to have all of you here with us virtually today. Before we begin, I'd like to draw your attention to our Safe Harbor Statement. The information that we're going to share with you today is being broadcast live on our Investor Relations page on our newly designed website, which is located at ir.simpsonmfg.com.
As you will hear more about today, at Simpson, we pride ourselves on providing the best possible service and experience to all of our valued stakeholders, and that includes our customers, our vendors and suppliers, our employees, and of course, our investors. In that regard, we are very pleased to be able to provide an upgraded Investor Relations website, which we released this past week, and we believe it will provide an enhanced user experience for all of our valued stakeholders. As you saw from our opening video, for nearly 65 years, Simpson has dedicated itself to providing No-Equal structural solutions and technology to help people construct safer, stronger homes and buildings. The presenters here with me today represent the Simpson Executive Management Team. This group has over 53 years of executive management experience and has been with Simpson for a combined over 56 years.
With me today is Karen Colonias, our President and Chief Executive Officer, Michael Olosky, our Chief Operating Officer, and Brian Magstadt, our CFO and Treasurer. Each of the presenters will share a little bit more of their personal background with you when they present. As for me, I've been with Simpson as Senior Vice President, General Counsel, since 2019, and prior to that, I was Vice President, Deputy General Counsel at Albemarle Corporation, where I was responsible for all corporate legal activities, including corporate governance, securities, and all strategic transactions. We hope today's presentations will provide you with a deeper appreciation and perspective of our history, as well as our competitive advantages. We hope to introduce you to our forward-looking strategy and reinforce our dedication and commitment to being a good corporate citizen, as well as our continuing commitment to creating strong shareholder value.
We also want to make sure that we provide plenty of time for you to ask questions. So, following our formal presentations, which we expect to span about the next hour and a half, we will wrap up with a dedicated question-and-answer session. Should you like to ask a question, please type it into the Ask a Question box at the bottom left of your screen at any time. Your questions will not be seen by any other viewers, and it will remain anonymous. Thank you again for joining us here today. We're excited to get started, and with that, I'll turn it over to our President and CEO, Karen Colonias.
Good morning, everyone. Thanks for joining us today. Hopefully, you've got a little bit of time to spend and learn quite a few things about Simpson Manufacturing. Just a little bit about my background, I think Terry said, you've got 53 years of Simpson experience. To help you not have to calculate, I've been here more than 35 years, so certainly seen a lot of changes at Simpson. I began my career at Simpson in 1984. I was the second R&D engineer, and I can tell you that that's a great position to have at Simpson because you really get to spend time developing new products, and that's a lot what this company is about, is innovation. In 1998, I was promoted to the Vice President of Engineering, and in that role, I had global responsibility for all the engineering, R&D, code report activities.
In 2004, I was given the opportunity to be the Vice President of the Northwest Region, and in that role, I was responsible for the 13 western states from both the sales and service standpoint and also responsible for our manufacturing facility, which is located in Stockton, California. In 2009, I became Simpson's CFO, and in 2012, I was given the honor of being Simpson's CEO and have held that role for the past 10 years. I joined our board in 2013. I have had the luxury of seeing some great growth and changes in this company. Let's talk a little bit about the company itself. As you see in the bottom left-hand corner, that's our founder, Barclay Simpson. Barclay's father had a screen company, and he used to manufacture those screens, and he had what was called the punch press.
One day, Barclay's neighbor came to him and said, "I need to put two pieces of wood together. I need some help. I don't want to use just nails. How am I going to do that?" The product you see on the top left is the first connector that Simpson Strong-Tie ever manufactured. Barclay used his innovative skills and his equipment. We still sell this product today, along with about 14,000 other connector products. A couple of things that are most important on this timeline is not only did we become the leader in connectors, wood connectors, in 1970, but in 1994, we actually took the company public, certainly a big moment in the history of Simpson Strong-Tie. As you continue down the path, you see we added concrete products to our offering. We added wood fasteners in 1997.
And the reason behind that is something that you see in that slide in 2001. In 2001, Simpson Manufacturing invested over $10 million in the state-of-the-art lateral testing. To date, it is still the only privately owned test lab within the United States. And I'll talk more about that, but it allowed us to go from a manufacturer of just a connector to a provider of solutions. We could see how that connector performed with our anchors into concrete and our fasteners into wood. And as you can see from that test setup, we can do over a three-story structure and see how the complete performance of our products works in the structure. As we continue down our journey, you see we've added more stainless steel fasteners. We have large moment frames, which typically go around garage fronts. And then that other big step was in 2012.
In 2008, when the housing industry went from 2.1 million housing starts to 580,000 housing starts, our industry started looking at technology. How do we use technology to be more efficient in our designs, in our count of the parts that are in-house, and how do we do that? And those are the areas where software and technology became important. We gained and entered this market in 2012 with our design software. And as you see, in 2017 and into 2020, we have products which will calculate and take off exactly what's in that structure: how many doors, windows, nails, and of course, Simpson connectors. And in 2020, we introduced products that allow a virtual realization of what a deck might look like on the back of your house, how to design a pergola.
And so these are elements in which technology has continued to grow and put Simpson into a solutions provider, not just a product provider. We certainly make sure that everything we do, and we are concerned to make sure that our shareholders are top of mind. And in this slide, you see that in 1994, when we did our initial public offering, that came out at $11.50. We split twice, so if I take that back, we were at $2.87. Some other dates that were important, we will talk about our 2020 Plan, and that was announced on October 30th of 2017. And during that time, you see we had a nice increase in the stock price. We'll talk a little bit more about maybe potentially why that happened.
And then, as we look just a year ago, in March of 2020, of course, we had the COVID-19 pandemic that strikes. We were extremely luckily considered an essential business, and we actually had a very, very nice year in 2020 from the standpoint of supporting our customers with our products and our services. And just on March 16th, you see the stock was over $109 a share. So from a compounded annual growth rate of about 14.5% since March of this year, since our IPO in 1994. So what is it that makes Simpson unique? For those of you that I've had the opportunity to speak with, we talk a lot about our brand, our culture, and our secret sauce. And our mission is to help people design and provide solutions to design safer, stronger structures. And again, the word is solutions, not just a product.
Most people, before our entry into the full-scale testing, would have said Simpson Strong-Tie is a manufacturer of building materials. Today, people refer to us as an engineering company that manufactures building materials. And again, that's because we provide a solution from a software, a service, and a product, not just the product itself. What you see on the right side are our founder's company, nine principles of what he founded the company on. And we live these principles every single day. We spend a lot of time communicating with our employees, making sure that we have our relentless customer focus, that we're engaged with everyone in this company matters, and that we're giving back to our communities. And we'll speak a little bit more about how we do those things. But again, what makes Simpson unique is our people, and we'll spend some more time about that.
So a little bit of a look at our business model. As Terry mentioned, we actually are celebrating 65 years this year of being in business. Our customers are engineers who are specifying our product and who are having confidence in the performance of our product, the code officials, the builders and contractors who are the ones who are actually installing those products, and then, of course, all of our key customers of our distributors, whether you get the product in a lumber yard, at a home center, or through a pro dealer. We want to be sure we've serviced all of those customers from the design of the product, speccing it on, the blueprints, bringing that product through to the contractors, and being sure that that product makes it to the job site. We do this through our innovation.
We'll show you more about our laboratories, but Simpson is a very innovative company. We have a dedicated research and development department, and we develop several products a year to really, again, a solution for those safer, stronger structures. We always spend time in training. Training is key. It's not only with the Simpson employees and our salespeople, but we spend time training our customers, those would be the engineers, the code officials, as well as our distributors. How do we install our product correctly? How do you choose the correct product? Where do I get the product? We do a lot of training seminars to help make sure that our process is smooth and we are the easiest company to do business with. Because of that, you see some of the things that we have on the right.
We have 98 of the top 100 builders use our Simpson Strong-Tie products on their construction projects. We have millions of specifications over that 65-year career and history. As I mentioned, we have over 14,000 wood connector products, about 3,300 in the concrete space, and so all of these elements give us a very, very strong business model. I mentioned innovation. As I said, we like to be sure that we can get our products and ideas patented. We also spend a lot of time getting our products through a code report. You see, we have 229 code reports. Code reports are important. As an engineer of record, you are responsible for the performance of the structure, and yet the weakest point on that structure is the joints where two wood pieces would come together, and that's where our product is installed.
We need those engineers to feel comfortable, confident in the performance of our product and the loads that we've provided them. We do that not only through testing in our own laboratories, but through third-party testing and then going to the final extent of providing the testing, the calculations, and the data to those third-party code agencies to ensure that confidence in those engineers and our product. I mentioned our accredited testing labs, and we'll see a little bit more of that later. Technology, as I said, has become a key element in a solutions approach in the wood building industry. You see we have over 55 software and web apps that people can use to help them design the structure, to help them figure out how many of our products they need on the structure, and to help them figure out where can I get that product.
Our engineering team is unequaled. We have 307 engineers across the country and across the globe that help not only design products, go to the field for inspection, technical support, provide technical support in any means, be sure our literature, our code reports, everything is accurate, and those engineers do a great job every single day. They are visiting our job sites with our field reps. Our field reps probably visit over thousands of job sites on an annualized basis to help install the product correctly, answer any questions that might occur at that site, and be sure that the construction goes smoothly. We do not ever want Simpson to be a reason a job site is held up, and so we'll work at all of those locations to be sure that we've covered that. I mentioned training. 26 training centers on a global basis.
Those training centers have over 1,000 training and product knowledge systems per year that they work through. Product availability. You know, contractors, unfortunately, are notorious for not planning well. It is important that the product can be available to them in a very, very short period of time, and most of our products are delivered to a job site within a 24-48-hour time frame. From a global standpoint, we're a little over a 94% fill rate. In North America, we're at about a 98% fill rate. That's important, again, so that we don't slow down any jobs and have any limitations on that product being able to provide it in that same day or within that 48-hour turnaround time, so let's talk about our testing. As I mentioned, picture on the left, that is our Tye Gilb test lab .
About $10 million was spent to be able to develop this test lab. If you look closely, that is actually a person standing on the bottom right-hand side of that test lab, so that gives you a perspective of the size of this lab. We can test up to three stories. We can simulate any earthquake record. What do we use it for? We use it to help us design new products. We need to know how does our product work in that three-story test. How does the plywood work? How do the nails work? How does the fasteners work? We can use it to help building code agencies develop better building codes by looking at a full systems approach. Also, we want to talk from our concrete.
Our concrete and our fasteners go through the same extensive testing, in-house testing, third-party testing, and code reports to ensure that those people and those specifiers using our products are comfortable and confident in the performance. So rather than speaking so much about this, let me turn to a short video where you can see what some of our testing capabilities are.
The equipment looks like it's state-of-the-art. The technicians are very professional. I'm impressed with everything I see here.
The test setup that Simpson has here is far more sophisticated than what you find in most universities.
Seeing this facility and seeing the amount of money that Simpson invests in research, it just blows you away, and your confidence level just goes up a notch.
All of us here absolutely know that someone's life may depend on our product.
There is a very rigorous, well-defined test protocol that all the products need to go through. I think people are surprised by how much testing actually goes into our products.
So you can see that we are really engaged in testing. A little saying at Simpson is one test is worth a thousand opinions. And if you look at the system and the detail that we go into the testing, you should have complete confidence in the performance of our products. So let's talk a little bit about how 2020 performed. As I mentioned, we were very fortunate to be considered an essential business. Housing market did well in 2020, and we also had an increase in the retail and the R&R and DIY space. So we had $1.27 billion of net sales in 2020.
You see wood construction, the majority of our business, about 85% of our sales went to the wood segment of our business and about 15% to the concrete segment. From a geographic breakdown, about 88% of those sales were in North America and about the remaining 12% in Europe. From a pandemic standpoint, Europe had a much tougher time as far as some of our facilities actually being closed down from that pandemic. In Europe, building materials were not considered an essential business during the 2020 time frame. A little bit more about the space that we work in. So when we talk about market size, on the wood standpoint, where we're talking about our wood connectors and our truss products, we believe the market size, as well as Simpson's addressable market, is $2.5 billion. That's North America, that's Europe, and that's our Asia-Pac areas there we do business.
Today, we've got about a 36% of that $2.5 billion market. You may have heard me say in the past that in the U.S., we have about a north of 75% market share on our wood connectors, and that is still true. But from a standpoint of our global footprint in the wood space, about a 36% market share. When we look at fasteners and concrete, you see there we take the market size and we break it down to an addressable market. So as I look at the fastener area, I have a $5.8 billion global market size, but our addressable market is $1 billion. Why do we have that reduction? We don't want to be selling commodity products. At Simpson, I got to give a salesperson a tool to sell with, and that's not going to be price.
So I want to use the assets that we've developed over the past 65 years. Is it our testing? Is it our engineering support? Is it our distribution footprint? Is it our availability when we look at corrosion resistance? What is the feature set that I'm going to give those salespeople to work and to sell that Simpson Strong-Tie product? So with those parameters in mind, we take that $5.8 billion market size and we drop it down to a $1 billion addressable market where we can differentiate our product, our service, our solutions. Today, we have about a 19% share of that $1 billion market. Similarly, in the concrete space, a $15 billion global market, our addressable market, $1.3 billion. Today, we have about a 14% addressable market in that space.
So you can see we have room to grow not only in our wood products, but in our fasteners and our connector space. I just want to do a quick recap of our 2020 goals. And I want to start by congratulating all 3,500 Simpson employees. It was not easy to meet any of these goals. Brian and I spent a lot of time communicating, traveling around to all Simpson locations to talk about why did we put these metrics out there? Why did we put these targets? Our operating expenses were growing at a faster rate than our compounded annual growth rate. Something needed to change, and there needed to be focus there. Our operating income in Europe was not at the point we wanted it to be, and our gross margins in our concrete space were not where we wanted them to be.
So we put these metrics in place, really tactical metrics, on where we needed to strengthen Simpson Strong-Tie's foundation. Again, not easy to do. We put in new management in both our concrete area as well as in our European market. We changed our strategy in both of those markets. From an operating expense standpoint, we took things down to zero-based budgeting. We looked at every single expense. Was that the best expense in which to grow the company? All of those things, and when you see the results in the 2020 versus the 2020 target, you see in most cases we not only met those targets but exceeded those targets. Again, not a simple thing to do, very, very difficult tasks. And certainly, we have now positioned ourselves with a very, very strong foundation.
If I could see you out there, I know you'd all be saying, "Well, that's great, Karen, but it is March of 2021, and that's what you did three years ago." So what are we doing today? And we want to talk about we've got this strong foundation, and today we want to talk about a stronger future as we look at Simpson Strong-Tie. We have a dedication to growth. As you saw in those slides, we have plenty of area to grow from a market share standpoint. But Mike will talk to you about other areas which we can grow. And in those growth areas, we need innovation. That innovation will be from products, it'll be how we service our customers, and it'll also be the technology that we provide our customers.
Brian will spend some time talking about our commitment to this balanced capital allocation and certainly our expense management. We did a great job meeting our 2020 targets. We want to ensure that we continue down that trajectory, and then I'll spend some more time about our corporate and social responsibilities, remembering Barclay's nine principles that's key to our social and corporate responsibilities. Let's see where our five-year ambitions are. We want to strengthen our values-based culture. If you get anything out of my presentation, I hope you get how important Simpson Strong-Tie's employees are, how we want to continue those nine principles of business and continue to strengthen that values-based culture. We have leadership programs that we work on. We have diversity, equity, and inclusion programs.
We have things we're doing from a safety standpoint, our communication cadence, and of course, giving back to our communities, all key areas on how we strengthen that values-based culture. Again, that is based on those nine principles of doing business. We want to be the partner of choice, and that means a lot of different things to different people. It doesn't only mean I want to provide you a connector on time or a fastener or an epoxy product on time. It means I want to be your solution provider. I want to be your trusted brand to provide you a solution to get that product out to your job site. I want to make it easy to do business with Simpson. We don't want anybody to think about any of our competitors' names.
So we want to be that partner of choice in all of our aspects of our business. Want to be an innovative leader in all market segments. In our 65 years, I don't think anybody would say that Simpson is not an innovative company when it comes to our wood-to-wood connectors. But we have so much more we can do from our concrete space, from our steel opportunities, our fasteners, our technology, a lot of innovation in our software solutions that can help all parts of our business. So we want to be an innovative leader in all of our markets. If we can meet all these, I think there'll be no doubt that we will continue our above-market growth relative to the U.S. housing starts. We'll continue to expand our operating income to remain within the top quartile of our proxy peers.
And we'll continue expanding our return on invested capital to be in that top quartile of our proxy peers. Very aggressive, again, very strong foundation, and we are looking forward to this even stronger future. So I'll turn it over to Mike, and he will give you some more details about how we're going to do that.
Thank you, Karen. So hello. Let me get to the first page here. Great. Hello. My name is Mike Olosky, and I'm the Chief Operating Officer at Simpson. So I lead our sales, engineering, and operations teams. I also lead the marketing teams. I've been with Simpson since November of 2020, so I'm the new person on the team. Prior to Simpson, I worked in the adhesives business at Henkel. My last job at Henkel, I was President of Henkel North America. The two roles prior to that, I led our innovation activity.
I was head of innovation for adhesive technologies. And prior to that, I was president of Henkel Asia-Pacific. Now let's talk about the details behind the five ambitions that Karen outlined. We have several growth initiatives that we believe will help us continue that above-market growth trend that Karen mentioned. These growth initiatives are a combination of organic and inorganic opportunities. Organic opportunities in terms of getting into new markets, developing new customers, introducing new products, and also moving into adjacencies. Inorganic opportunities in terms of licensing and buying IP, looking at venturing, which Brian will touch on later, and traditional M&A. Okay. These growth initiatives have five market-facing components. The first one is OEM, so original equipment manufacturers. The second one is around repair and remodel or do-it-yourself. Those are combined into one market segment for us. The third is mass timber, a new construction methodology.
The fourth is concrete, and the fifth is structural steel. And then to drive growth in those first three markets, we want to be a bigger leader. We want to have a stronger engineered construction fastening solutions business. We think that'll help us grow those markets, those first three markets, by having a broader product line with fastening solutions. And then we believe that we need to be a stronger leader in customer-facing technology. Okay. That's software that helps our customers better run their business, and that's software that helps our customers design, select, and specify the right Simpson solution for the right job. And that customer-facing technology that we talk about will drive growth in these areas. We also believe it'll drive growth across all of Simpson Manufacturing. Now, all of these initiatives are also very much aligned with the strong business model that Karen outlined. Okay.
We're going to leverage that business model, meaning lots of engineering, lots of development work, lots of testing, validation, developing specs, and code reports. That does mean that we'll need to make investments upfront to realize these opportunities, but we do believe that'll help us make stronger for the future. So now let's talk through each one of these initiatives in a little bit more detail. So OEM, original equipment manufacturers. So our target markets here start with our core factory-built housing. Okay. That's a perfect fit for us, houses that are built in factories. That's our traditional connecting and fastening product lines exactly in our wheelhouse. Our OEM target markets also include some adjacencies. So that's trailer manufacturing, wood shipping crates, pallet racking systems, stadium seating, just to name a few.
The market for the OEM segment is roughly around $90 million, and that market size is really built around primarily our fastening technologies. So as we continue to expand our product line for OEM solutions, we think the market size will continue to grow for that space. We do have a good product line already for OEMs. We have 2,500 existing products that we believe are a good fit for the OEM markets. Our strategy here, we want to lead with our fasteners, our fastening technologies, but we also believe we can leverage our anchoring technologies. And then the more we get in and we know these individual customers, we know these markets better, we think there's the ability to develop value-added OEM-specific structural solutions. We do have relationships with a lot of customers and a lot of channels serving those customers today.
But as that business develops, we believe we're going to need to develop more direct and distribution sales channels. And then with all of these, we think there's an opportunity to leverage external innovation opportunities. Again, that's IP, that's venturing, that's M&A, that's partnerships. Lots of opportunities to grow the OEM business. So how are we doing? Well, we've developed collated fastening systems for boat manufacturers. We're launching new collated screw systems, our fastening systems for utility trailer flooring systems. Okay. And our story here is really all around efficiency. Our value prop for those two segments is efficiency. So our collated fasteners, they're screws that are held together by a holding strip. They automatically feed through our Quik Drive system, and you see the Quik Drive system in the middle of that slide there.
That enables the user to stand up and drive the fasteners without getting up and down all the time. And then we also have patented fastening technology. That enables us to start the screws faster and drive them easier. So combine all of that, that helps make our customers more efficient with our fastening solutions. With one pontoon manufacturer, they were able to use that to increase the output of their manufacturing line by 30%. We've had another trailer manufacturer that's used those efficiency gains to help them lower their costs. So that's the OEM business. Now, repair and remodel and do-it-yourself combined into our second segment. So let me step back a little bit by saying we are very well known in the building and construction industry. Okay. The pros in that space know us very, very well.
Now we want to expand that same brand positioning and be a known and trusted partner for repair, remodel, and DIY solutions. That is a very interesting and big market for us. It's between $500-$700 million, and it's got a lot of different segments to it: decks, pergolas, porches, patios, gazebos, fencing, just to name a few. Okay. Why do we think we can play and win in this market? Well, we have a great case study with our Outdoor Accents product line. And the Outdoor Accents product line is the dark hardware in that first picture. So we launched our Outdoor Accents product line in 2016 with 12 SKUs. That business has grown. Now we have 90 SKUs. It's a very nice size business for us. And last quarter, that business for Outdoor Accents was double the quarter of a previous year.
So a good growth story. From a strategy perspective, we want to improve retail execution. So that starts with improving offshelf placement, making it easier for our customers to find and pick our products. We also want to increase our cross-merchandising efforts. We are also very excited about some of the e-commerce opportunities for repair and remodel DIY. So we're developing lots of content so that we can partner with our home center brand advocates to make sure we're maximizing e-commerce sales for our customers and for Simpson. Okay. So how are we doing in the R&R DIY space? So a couple of milestones. Well, we launched 500 products to 1,700 customers or 1,700 Lowe's stores in a pandemic. Obviously, not an easy thing to do. We've launched several integrated marketing campaigns. We've also been heavily promoting our outdoor living software. So that's for decks and pergolas.
Let me do a little bit of a deep dive on decks. A typical Midwestern deck has roughly $1,000 of hardware on it. A typical Midwestern deck has roughly $1,000 of hardware. Okay. Our solution, our deck planning software, contains 200 SKUs or 200 Simpson products in it. Our deck planning software has helped people design 80,000 decks so far, and roughly two-thirds of those decks, they've downloaded the bill of materials. Basically created a shopping list. That outdoor living software is really helping drive a lot of growth for us. If you look at the SKUs that are in that deck planning software, those SKUs are up 40% over the same quarter last year. Nice growth plans.
We think we can continue that growth by taking the deck planning and pergola planning software and additional capabilities and then extend that out to our customers' websites, make it easier for their consumers to go in and design decks using Simpson solutions and print out a bill of materials to take to their store to buy the products for the project. Okay. mass timber. So mass timber is a very new construction approach. It started in Europe. It uses very large engineered wood panels to make floors for roofs and for side panels for walls. And you can see a picture of one of the panels on the bottom left part of the slide. So these buildings are absolutely gorgeous, and they also have a very positive impact on the market. The market for mass timber is $200 million.
The mass timber business, as I said, really started, or mass timber design really started, in Europe. So we're starting to now see that business pick up in the US. So the majority of that $200 million is probably in Europe, but that is really picking up in the US with strong double-digit growth rates. As with any new market, we're finding all kinds of new product ideas because the connecting technologies in a mass timber home is very different than the connecting technologies in two-by-four construction. So we do have products for that market now, but we need to really step it up to develop our product line and make sure we have solutions specific to the mass timber industry. Okay. To do that means we need to continue to invest in research and development. We need to continue to invest in testing.
We do believe some of these solutions may require investment in additional manufacturing capabilities to make the parts, make the components for the end customers. We also think there's tons of opportunity in this space for us to utilize external innovation opportunities. Again, looking at IP, looking at venturing, partnering, and acquisition targets. How are we doing in the mass timber space? A couple of quick highlights. We've launched our first ever mass timber catalog. We've taken that same content. We've put that onto a landing page connected to strongtie.com. That content has helped us get involved in more and more projects. We are actively winning new business, so we are starting to see that business develop. What we're really excited about, though, is we're involved in the TallWood shake table test. It's a 10-story mass timber building.
So the one that Karen showed you was three stories. This is 10 stories. It's going to be run in Southern California. And that's an absolutely perfect opportunity for us to learn more about how our technologies work in those big structures, learn how the whole thing works together as a system. And I'm also really confident we're going to get a whole bunch of new product ideas when we do that test. Concrete. So our concrete business is $185 million, and we have some very aggressive growth plans for our concrete business. Here, we want to become the recognized leader in concrete construction. We want to become the recognized leader in all segments of concrete construction. The market here is $1.3 billion. The growth rates of various parts of this market are going to be linked to the infrastructure spend.
Just as a quick example here, we have fiber-reinforced polymer materials that are used to repair aging or damaged concrete. That business is growing like crazy. We've got a lot of demand for it. It's double-digit up over a prior year. Again, thanks to strong demand and infrastructure spend. We are a leader in several segments of this space. We want to extend that brand name out to all markets. So we've taken now the concrete business, we've taken the big umbrella, we've broken that down into eight specific market segments. Just to name a few is bridge, marine, water treatment, roads, and pipes, just to name a couple of them. And we're developing market-specific playbooks for each one of those market segments. In there, we're going to make sure that we've got specific solutions to each market.
We've got a complete line of products that enable us to offer solutions to those customers in those market segments. Within some of those markets, there are some very unique and challenging applications. So that requires further investment in testing and engineering capabilities. But those unique and challenging applications also mean sometimes our customers need a third party to apply the product, either a special skill set or special equipment. So we need to continue to develop out a stronger partner network to help us grow our concrete business. We also think there's some opportunities for us to optimize our operational footprint related to the concrete product line to help us provide even better service to our customer base. So a couple of milestones here. We've extended a couple of our product lines. We've enhanced a couple of our product lines. We've improved our software related to concrete.
We've been able to take share. We've been able to gain new customers. That is going to help us grow that business in the future. But we're also really excited about one major testing program that we're running. So for our carbon fiber strengthening systems for asphalt, this is a product line that's sold in Europe. We're running a big testing program this summer. We think that's an interesting opportunity. We need the data from that program. We need the results from that program to help us develop the business in the U.S. The next market is structural steel. So half of the construction spent in the U.S. is structural steel. Half the construction spent is structural steel. And it's almost all welded connections. So here, we want to convert those traditional welded connections to bolted connections. We want to make the market for bolted connections in structural steel buildings.
We believe that that's roughly a $350 million addressable market, and the big issue/opportunity here is a shortage of field welders, so our bolted connections use less welding. Our bolted connections also increase productivity, so this technology was originally designed for seismic opportunities. It's got a real interesting approach, a set of solutions for seismic opportunities, but that productivity gain that we see with bolted connections also makes it applicable to all structural steel construction methods, so the plan here, we want to expand our YieldLink product line. So YieldLink is the name of the brand of the products that we're selling in this space. We want to continue to specify and sell to the people that fabricate, erect, and build, and design structural steel buildings. We want to continue to invest in the engineering and the testing capabilities to help us develop that product line.
And we want to leverage external innovation opportunities similar to the other segments. Okay. So a couple of examples. First, the picture on your left is an example of a bolted connection in a structural steel building. So we've completed several of these projects already. We had 40 of these projects get specified last year. We've embedded our YieldLink technology or capabilities into widely used engineering design software programs. You see some examples of partners on the right. That's helping them spec in our YieldLink technology. And we've opened up a brand new state-of-the-art manufacturing line in Riverside, California, to help supply product once this business starts to ramp up. Okay. The next one is construction fasteners. So we talked about five market-oriented growth initiatives. Construction fastener is a product-related initiative.
And as I said, very much linked to helping us drive our OEM business, original equipment manufacturers, the DIY R&R business, and also our mass timber business. So the target here is we want to be the global leader in engineered load-rated construction fastening solutions, high-end, high-performing fasteners. That market is roughly $1 billion. And that market is a perfect complement to our core product lines, our connector product lines. For that market, we have a lot of established channels already. We have a lot of established customers already. As we said, we want to extend that into the OEM space. We also believe, which is a good fit for us, there's a lot of room for additional innovation in this area.
So we want to continue to develop out, build that product line by capturing on these additional innovations that we have because we believe a broader product line around construction fastening solutions will help us better serve and support our customers. Some of the areas we want to develop new products are really focused on the engineers and also the end users. We want screws that start faster, screws that drive easier, screws that are higher quality, that don't have problems in the field with higher load capabilities. Okay. And then to help us spec those in and help our customers spec in those fastening solutions, we're going to continue to develop our industry-leading software tools related to construction fasteners. Okay. So I talked about five market-oriented growth initiatives. Construction fastener is the sixth one, more of a product growth initiative. Okay.
The seventh part really ties this whole thing together. That's the customer-facing technology, software that helps our customers run their business and specify Simpson products. And before I get into a little bit more details, let's do a quick intro video on it.
From connectors to fasteners to anchors, Simpson Strong-Tie makes some of the most high-performance hardware in the industry. We also have innovative software that makes any job easier, faster, and more efficient. Our software integrates with your existing systems and matches your needs with the best solutions to help you work smarter. You'll collaborate more effectively, save more money, and improve your workflow. Our specification tools can help simplify the process of engineering and analysis, easily design, specify, and calculate for any material or application.
Production home building is more productive and more collaborative with BIM technology and our cloud-based material management and estimation logic tool that automates and streamlines takeoffs. Simplify option management with our sophisticated software that helps coordinate design options, generate construction documents, and automate the task of creating both master plan and lot-specific sets. Our easy, flexible component manufacturing solutions help create layouts, design individual members, and optimize truss components, as well as generate production output and reports. We also have a versatile lumber and building materials management and estimation system that quickly transforms any takeoff into real-world data and easily designs strong and beautiful outdoor structures in just minutes with our simple deck and pergola tools. Great software equals greater efficiency. Save time, save money, and improve your workflow with software solutions from Simpson Strong-Tie.
Okay. So we believe the building and construction industry will continue to leverage software and digital capabilities to better run their business. And as we've mentioned, we want to help develop the software that helps them run their business more efficiently, help them develop the software that helps them design, select, and specify the Simpson solutions. And we're developing different capabilities for different customer types. So you see the slide here. And we want to try to pull all that together like it depicts on the slide into one open solution that our customers can seamlessly work across to realize the different functionalities and capabilities on that slide. Okay. So let's talk that through a little bit. So first, the engineer with Simpson is always at the center of everything we want to do. For engineers, you can see a set of capabilities that we're developing.
But let's talk a little bit more about the plug-ins. I mentioned that with structural steel, we have plug-ins that work in the design engineer's software of choice that make it easy for him to design, select, and specify Simpson technologies. For lumber yards, they can use our EWP design capabilities to do enterprise layout, enterprise-wide systems for layouts, for design and structural analysis. Our builders, they can leverage our software to help them build accurate takeoffs. And the takeoffs are basically a bill of material or a list of products that are used for that particular job. We're working with component and truss manufacturers to help them build better roofing, wall, and floor systems with our component and truss design capabilities. And then I talk about repair and remodel and DIY already.
So altogether, it's really about our customers leveraging these capabilities to run their business better and help them build safer and stronger structures. And we have a quick case study from McCall Homes. Let's roll it.
We really, really want to simplify the building process, make it predictable, make it easy, and get tons of choice for our clients, but the right amount of choice. I'm Brad McCall with McCall Homes. I'm an owner and a family company. We build homes in Billings, Montana. And we have a real focus on building real communities and not just homes.
When we met the folks from Simpson Strong-Tie, we had a problem of we want to go to the next level with our drafting and take it to instead of this old 2D AutoCAD, we were curious about the 3D BIM and what does that mean and how could we leverage all of these neat benefits.
BIM is software that enables us to visualize a home before we even start building, and that's something we can present to the client. They can see what their home is really going to look like. We can get into the architectural details, and we can go all the way through from design to estimating to production, and everybody can see and verify that everything in this home is going to work the way that we intend it to.
I think what's good about BIM is that you can draw in 2D and 3D, and you'll get the same results. It's not drawing just one line and then drawing again in a different view. When I started with McCall Homes and using Vertex, I was trained by Simpson Strong-Tie on just the simple basics of drawing a house. And then they expanded into creating base plans and having all their structural options in there.
An average house, when I got that put on my desk to generate an estimate for it, I'd have to do a siding takeoff and then run through the predetermined spreadsheet we had for that particular model, double-check all the quantities, make sure they're right, put it through the system. And that usually takes a full day to do that. Whereas now, I can run a house in an hour.
People are a little bit too scared of the new build process. There's so many unknowns. They've heard horror stories from a friend who built a new home, and it was a mess. And the budgets went crazy, and they had a million things to pick out. And the whole experience, they almost got divorced. It was such a nightmare.
From our customer's perspective, we can offer them reliable timelines and costs and even take it as far as giving them reliable pricing on options throughout. So if they want to change a floor plan in a certain way, we can present them with what the price of that will be before we even start construction.
Somebody that's going to be a partner with us, we really want to emphasize that. It's not just an interchange of we pay some money, they give us some stuff.
We really want people who can be a part of our team and help us with that same mission of delivering a great home to people, whether that's in the right lumber or the right software that we need. Day in and day out, we are engaged with the folks from Simpson Strong-Tie to support our BIM system, support our Pipeline estimating system. If we ever need something fixed or customization done, they're responsive and quick, and so we can count on them to support our team to get our job done. Out of all of the different technology partners we have, there's no one that's as responsive and delivers as high quality of a product as Simpson Strong-Tie.
Great, so we have several growth initiatives that are opening up all kinds of new marketing opportunities for us.
These opportunities are a really good fit for the strong business model that Karen talked about. But developing and commercializing a real comprehensive set of solutions for these opportunities is not an easy thing to do. We are going to work like crazy on it, and we're confident we can make it happen, and that's exactly why we are an innovation leader and a partner of choice in the building and construction industry. Okay. Brian.
Thank you, Mike. I'm very pleased to be with you today virtually. Just a little brief background on me. I started with Simpson in 2004 in our financial reporting group, and in 2012, I became our CFO. So I look forward to discussing our financial overview with you today.
So far, you've heard a lot about our company, history, as well as our growth strategy, ambitions to lead Simpson to an even stronger future. In my remarks today, I'll be addressing a few areas that relate to our financials that we would like to highlight, including our thoughtful deployment of capital, consistently strong gross profit and operating income margins, return on invested capital improvement, use of cash priorities, and our acquisition strategy. We believe we're well positioned to execute our strategic initiatives given our demonstrated commitment to disciplined capital allocation and expense management. Our capital allocation strategy is focused on both growth and stockholder returns. As Mike highlighted, we will drive growth both organically and through strategic M&A opportunities in our key focus areas. In mid-2016, we revised our capital allocation strategy with a goal of returning at least 50% of our cash flow from operations to our stockholders.
Since 2017, that amount has been 69%, far exceeding our threshold. This 50% return target is reviewed annually and will be addressed this May at our upcoming board meeting. We return value to our stockholders through the payment of dividends and share repurchases. We've consistently maintained and grown our quarterly cash dividends since instituting them in 2004, and since 2017, we've increased our quarterly dividend by approximately 12% and repurchased about $318 million worth of our stock, including a record $111 million in 2018. Additionally, as reflected on the graph at the bottom of the slide, our SG&A as a percentage of sales has steadily decreased each year since 2017 as a result of our careful expense management achieved through the 2020 Plan. This led us to surpassing our 2020 operating expense as a percentage of revenue target of 26%-27%.
But just a reminder, 2020 saw some one-time benefits from reduced travel and trade show costs as a result of COVID-19 restrictions. U.S. housing starts are a leading indicator for at least 50% of our business based on current housing starts. As you can see from this chart, there has been a direct correlation between our net sales, which are represented by the orange bars, and U.S. housing starts as depicted by the black line over time. In an effort to help mitigate our exposure to cyclical U.S. housing markets over time, as well as to better respond to the needs of our customers, we have been focused on a number of initiatives.
Those are increasing our market share and profitability in Europe, growing our share in the concrete space through our narrowed concentration on six key end markets, continuing to develop our fastener offering for other end markets, and developing DIY products and solutions. These focus areas over the past number of years have enabled us to offer a more complete solution to our customers and bolster our sales in our product categories. As discussed, we are continuing to focus on diversifying our portfolio and investing in adjacencies, which in turn will further limit our exposure to U.S. housing starts. We currently believe the U.S. housing industry will grow in the mid-single digits over the next five years. As such, we are defining above-market growth as high single digits from a volume perspective. Now, I'd like to focus on our consistently strong gross profit margins.
Over the 15-year period since 2006, our gross profit margin has averaged 43.4%, which is a reflection of our premium product pricing and continual efforts to be the most cost-effective manufacturer. I would note that 2020 was more of an anomaly year and not necessarily indicative of the expected run rate moving forward, which we expect to be relatively consistent or slightly above our historical average. As we continue to build the moat around Simpson's products through state-of-the-art testing, technology, and innovation, we believe this could lead to higher gross margins over time from both our product pricing and the value we provide our customers in providing complete solutions. On that note, I'd like to take a moment to discuss some recent pricing dynamics in the marketplace. In early February, we announced price increases ranging from 5%-12% in the U.S. in an effort to offset rising material costs.
As a reminder, after announcing a price increase, we provide our customers with a 60-day notice period before it goes into effect with a clause that prohibits significant pre-buying ahead of the increase in order for us to properly manage our inventory levels. We expect this price increase to support our ability to maintain strong gross profit margins. This slide depicts our strong operating margins compared to the average of our proxy peer group since 2006. We've consistently outperformed our proxy peer group average over this 15-year timeframe, much of which is attributed to our longstanding trusted brand reputation, which we've built through proprietary testing capabilities, deep industry relationships, and superior customer service, allowing us to properly price the value we serve.
In addition, over the past few years, we've diligently focused on improving our operating leverage and working capital management, helping us to strengthen our operating margin performance in recent years. This is reflected by our disciplined expense management along with the reduction of inefficiencies in our business. This has led to a consistent above-industry-average operating margin performance. Moving forward, we will continue to be disciplined in our approach of eliminating inefficiencies and utilizing careful expense management. As stated on our fourth quarter and full year 2020 earnings call, we expect our operating income margin to be in the range of 16.5%-18.5% in 2021. This guidance includes some headwinds in our gross margin previously discussed, along with higher operating expenses relative to 2020. The higher OpEx spend is associated with our key growth initiatives Mike just discussed as we look to expand our market share and top line.
Over the next few years, we expect our OpEx as a percent of revenue will remain at an elevated rate to support our growth initiatives. Importantly, despite these investments over the next few years, our goal is to ensure our operating income margin remains within the top quartile of our proxy peer group and to trend back to current levels as we begin to see the growth initiatives leverage that spend. Looking ahead to 2025, we expect our operating margins to expand from our historical average and align closer to the high teens range, well above our proxy peer group average due to a more normalized CapEx spend and supported by top-line revenue expansion as a result of our growth initiatives.
As you can see on this slide, we are currently within the top quartile of peers for return on invested capital and intend to keep it that way even as we continue to invest in our growth. For the year 2020, our return on invested capital reached 20%, which is a reflection of our disciplined execution on the 2020 Plan, including our efforts to increase revenue, rationalize our cost structure, and improve working capital management and overall balance sheet initiative or balance sheet discipline, in addition to the elements previously discussed around the 2020 year. The culmination of these efforts resulted in a substantially enhanced return on invested capital, which surpassed our 2020 target of 15%-16%. This next slide reflects our capital deployment history since 2017. Over this time, we've generated $692 million in cumulative operating cash flows.
As I mentioned earlier, we have returned nearly 70% to stockholders in the form of repurchases of common stock and quarterly cash dividends. We remain committed to providing consistent returns to our stockholders to continue to maximize value. We are also focused on organic growth opportunities through strategic capital investments in our business, which is reflected by our investment of roughly $163 million in capital expenditures since 2017, representing about 25% of our operating cash flows. Due to the COVID-19 environment, we initially focused our 2020 capital expenditures on projects necessary for safety and repair. However, we began in the latter part of 2020, and we will continue to greenlight a number of projects moving forward as we make investments in our business. Our capital expenditures budget for 2021 is $50 million-$55 million, of which about $10 million-$13 million is planned for maintenance CapEx.
Further, our current year plan includes a number of projects we had delayed last year due to COVID that have been moved into 2021. Lastly, we've used approximately 5% of our cash flow for acquisitions in the form of tuck-ins and strategic asset purchases, making several small acquisitions in the past few years. Our strong cash flow generation and access to capital provide us with the flexibility to allocate capital to support our growth through capital expenditures and acquisitions, as well as to return value to our stockholders through quarterly cash dividends and share repurchases. We've noted our use of cash priorities in order of priority on this slide. First, in regard to growth, we will continue to make investments to support our key growth initiatives, including in the areas of engineering and innovation, people, and our testing capabilities.
We may also opt to achieve growth via strategic acquisitions, which I'll elaborate on shortly. As it relates to dividends, we've consistently declared our quarterly cash dividend and have raised it 11 times in our history without ever having to reduce it in an effort to return value to our stockholders. Our commitment to repurchase shares to fully maximize stockholder value is represented by the repurchase of common stock I previously noted. Given the confidence our board has in the stronger future ahead for Simpson, our share repurchase authorization was recently renewed to allow for purchases of up to $100 million of our common stock through the end of this year. Lastly, I'd like to further hone in on our acquisition strategy moving forward.
In alignment with our ambition to be the partner of choice, we will continue to evaluate acquisitions in the building materials space to help strengthen our core value proposition by expanding our innovative product lines and developing complete solutions for our markets. Our goal is to continue improving our market share with our growth initiatives and to be the innovation leader in the markets we operate. In addition, we are striving to improve our manufacturing capabilities and efficiencies to reduce lead times and bring production closer to the end customer. In order to execute on these goals, we are leveraging venture capital expertise to help identify potential strategic acquisitions or investments, including innovative technologies of interest. We believe this approach helps provide us with real-time market access to the latest industry technology trends and innovation in the building space.
There are roughly 1,000 startups in the construction industry every year, and with the help of our partner, we will be able to identify potential strategic acquisitions while leveraging their existing due diligence and industry insights. From a metrics standpoint, we evaluate various different measures with internal thresholds for items such as ROI, payback, IRR, net present value, price to earnings, or cash flow multiples. Thank you for your time today. I will now turn it back over to Karen for closing remarks.
Thank you, Brian. So we're going to just talk a little bit on some of our ESG projects that we've been engaged in, and we'll have plenty of time for all those questions I'm sure you guys have.
So again, at Simpson, we continue to strive to operate in a safe and environmentally responsible manner, and that includes with our employees, our customers, and of course, within our community. Some of the things that we've engaged in from a standpoint of our social responsibilities is last year, again, we issued in March our first inaugural ESG report. Just earlier this month, we updated that report with some more metrics associated with our initiatives that we're working on, but we've taken this a step further. We have a steering committee here at Simpson that works on ESG. We've hired an ESG analyst, and we're also working with consultants to help us be even more transparent in our disclosures and also, most importantly, work on those elements that are key to Simpson and key to making us that environmentally responsible company.
When you get a chance to look at the new ESG report, you'll see that we've added our diversity and inclusion, our human capital management. I just have to say I hate that. It's an employee distribution grouping human capital management. That's just crazy wording, but that's how it's looked at. We've also launched our diversity, equity, and inclusion program. We have a consultant that's helping us. We have several employees who are engaged in our focus groups, and we're really looking to see what are the things we need to do here at Simpson Strong-Tie to continue to grow that values-based culture, to continue to be a good corporate citizen, and to continue to ensure that everybody has the opportunities that they're looking for within our company.
So before we again open up to questions, I would be remiss if I didn't talk about Barclay's principle of giving back. That is a key element within this company. We have one day a year where we have all of our areas, all of our branches get together and determine what is a local area that they want to contribute and give back to from a charitable standpoint. It might be we build bicycles. It could be that we had backpacks that we filled for students. Maybe there were food products that we were packaging. It only happens every single year. We also really encourage all of our employees to reach out to those local organizations that they feel really tied to, and Simpson will contribute to their charitable organizations as it's important to them. What I'd like to show you now is a video.
This is our international sales meeting. This happened about three years ago, and we decided that instead of the activity being golf, that we were going to take all 350 Simpson employees who were at this meeting, and we were going to work on a Habitat build, the largest Habitat build that Simpson Group has ever worked on and as a national sponsor for Habitat for Humanity, whose mission really ties with Simpson, right? They are trying to build affordable housing. We want solutions that help those houses safe and strong through any natural disasters. So here's a short video of that Habitat project in Phoenix, Arizona.
Today, we're welcoming close to 400 Simpson Strong-Tie volunteers coming down here to Central City South to help in our neighborhood revitalization project here. People think about Habitat for Humanity as putting one family in one home, but we have decided over the years that a lot of families need renovations and repairs to their homes to stay in them. So that's why we're in a neighborhood like this. We're not only building new homes, as you can see behind me, we're renovating and repairing another 80 in these two neighborhoods of Central City South, Phoenix.
Simpson's goal is to help build safer, stronger structures, and Habitat's goal is to help build affordable housing, and the two married together can provide community some of the best projects at an affordable rate, and we can meet both of our goals.
The core values for Simpson Strong-Tie is giving back, and that was something that was given to us as a legacy by our founder, Barclay Simpson. Extremely important to him, and it's ingrained in our culture. It's who we are as a company.
Barclay's principle number eight, I mean, that's a big one. Give back. For me, that's something that I really love to do because if it wasn't for somebody giving me that opportunity to step in and do what I'm doing, I would never be standing here being able to do the same thing.
The nice thing about being here is the fact that we actually get to practice what we preach, which is to put something back into the community, collaborate with such a great industry leader such as Habitat for Humanity.
It was just a pleasure to be able to give back. It's all about giving back. Simpson Strong-Tie is about that.
It's just so much fun to be a part of something that's giving back, but it's a company that stands behind it and allows us to do so.
It was an honor to be here today to help build this house that's behind us. We got a good start on it. Really wish we could finish it, but we got pretty much the outside of the walls up today, a lot more than I thought we did, so it was great teamwork, and I really appreciate everybody's effort.
Oh, thank you, Habitat. I am so grateful that you guys came into our lives. Everybody needs a helping hand every once in a while, and you guys came in when I needed it. Thank you.
Yeah, that Habitat build was, again, a huge opportunity for Simpson. It allows us to not only give back to the communities, but it's always nice for Simpson employees to be comfortable in understanding the products that we have and the importance that they are in each of those structures. So a little bit of a wrap-up here before we get to some questions. As we talked about, lots of room for growth opportunities, not only in our organic area, but certainly the areas that Mike discussed as far as growing and using innovation to be able to grow in those spaces, and certainly continuing to grow at that rate above U.S. housing starts. Again, Brian talked about continuing our operating income and our return on invested capital remaining in that quartile or that top quartile of our peers.
Certainly, again, if you've gotten anything out of today's presentation, I hope that you understand the strength of the Simpson culture, the passion that the employees have for this company, the products that we produce, and the mission that we have. I want to finish with a short video. This happened in 2018. If you remember, Hurricane Michael hit Mexico Beach, Florida. That was a hurricane of a Category 5, noted 160-mile-an-hour wind speed. When you look at this video, it really ties all of Simpson together from the specification of the product, the installation of the product, and in this case, the actual testing from a natural disaster. Here's the Hurricane Michael video from Mexico Beach.
Mexico Beach is not the town that historically had seen hurricanes, certainly nothing like Michael. As I drove back in town, I was heartbroken to see the homes around me had been destroyed. I can't describe the satisfaction that I had in having a home that we had worked so hard to build the way we built and to see it survive.
The amount of damage in Gulf County is insane. I think because of the area that a lot of people haven't seen a 150-mile-an-hour storm before.
The intensification at the very end of the storm prior to landfall, that was something that we did not prepare for. We know now it is much different to prepare for a category four or five event than it is a two or three event.
We want to know, does what we do in the lab translate into what's happening in the field? We will look at the different failure modes, and we're going to see, did we expect this failure mode to happen based on the type of construction? How can we make this better? What sort of connection can make it so we don't see that same failure mode again? Were there any surprises? What were the building codes at that time?
We would talk to our engineer about the code, and then we looked for the products and the methods that would help us go above and beyond. We didn't build a code. We built to our comfort level. We use building code as a guide and the bare minimum in our design process.
The person that's building a house, buying a house, they may not know that the code is actually the minimum standard. It's there for life safety. So here in Mexico Beach, what are they going to do when they rebuild? Is building to code going to be all right, or do they want to go above code?
Jack and I discussed early the type of connectors and fasteners that would be used on the structure. He specifies Simpson Strong-Tie. I was happy to hear that because I know Simpson's a great product.
LeBron and Russell wanted us to design a home that could withstand the most violent hurricane. In doing that, they were very hands-on with the project. Engineers generally aren't salesmen. I'm not a salesman. We use certain products and tell them, "These are the best products. These are the guts of your home, and this is what will make it stay here." Our roof is held down with hurricane anchors. The roof is the toughest part of the engineering. The product that holds the roof down is critical.
Building for high wind events is not just for new construction. You can fortify an existing home to withstand high wind events by using retrofit connections. You can take them from the roof all the way to the foundation. You're not going to just tear the house down and build a new house. So how are you going to make that house stronger? Most people think that it's a huge, extensive process, and we have to rip the roof off. And what we end up doing is we tear out the soffit, and we add hurricane straps from the soffit. It's all on the outside of the home. After the hurricane here in Mexico Beach, we went out and we did a damage assessment ourselves. There was 113 homes that we had added Simpson Strong-Tie hurricane straps to.
We had zero damage to the houses that we added the hurricane straps, but then you drive a block down the street, and you see houses with the roof completely gone. I've seen Mother Nature relocate roofs free of charge multiple times. You have to make those connections all the way down into the point of resistance, which is typically a foundation, and if you skip a step, you will see a failure happen somewhere down that load path. Once your roof is gone, that building is gone.
Our homes have now been tested. We tell all of our clients that it's an investment for you.
We want our engineers to be able to specify with confidence, and they know they have confidence when they're using Simpson Strong-Tie because it's not only calculated, it's tested, it's proven, and then we go check it out in the real world as well.
So we will welcome you back from that. That's a really great video and certainly a great testimonial of the performance of our products. We'd now like to open it up to Q&A session.
First question. Your description of the importance of code reports and technical specs makes sense, but how is that differentiated from competitors?
Yeah, so when we talk about our code reports, when we look at testing a product, we not only test it. I'll just give you an example. We test on variations of wood: Doug- fir, southern pine, spruce- pine- fir. Those are all building materials that are used across the United States. If I'm going to test a concrete product, I'm going to test it in block, hollow block, grouted block. I'm going to test it in concrete. So our extent of testing is not just in the normal application of our product, but it's in all potential applications of the product. That, again, allows engineers to be able to specify our product and know the performance on whatever medium that they're attaching that product to. You are correct. Our competitors also have code reports.
We have the broadest line of code reports and broadest line of testing capabilities as well as tests in our library than any of our other competitors. So that's really what gives us that differentiation. And I would add one more thing about testing. If our product is misinstalled on a job site, we will send our salespeople out to that job site. We will be able to simulate what that misinstallation looks like in our laboratories, and we will provide those test results to the engineer of record so that engineer of record can make a determination if that product is still going to meet the loads they're looking for. So we take testing extremely seriously, our code reports, and these are the things that our specifiers have come to feel very comfortable with in the quality, the support, and the performance of Simpson Strong-Tie products.
All right. Brian, I think this one will be for you. It's in a couple of parts here. So you've put through a price increase on connectors and some other products effective in early April. Can you speak to the realization you expect to see and if there's been any associated pre-buy? We've seen distributors go out with 10% increases. So is that a fair representation or proxy for what realization should look like? How much does this translate to total company pricing realization, and is it enough to fully offset higher steel costs this year?
Yeah. So from a price increase, yes, as I noted in the prepared remarks, a 5%-12% price increase. We do expect that to offset the material costs based on information that we know today. We don't see significant pre-buying activity as of now. That price increase does go into effect here in early April. And of course, we'll have more commentary around Q1 and the specific dynamics of the numbers to Q1 of last year. But from a price increase perspective, we do look to have that offset raw material cost increases.
All right. So Mike, this one's for you. What attracted you to Simpson?
Great question. I love it. So three things really brought me to Simpson. One, the people. We have a team that is super passionate about Simpson, a team that is super passionate about our customers, and I absolutely love that. The culture, this culture of we're going to do everything we can to help our customers get better, is also a super good fit for me. And then the business model around solutions. So I have a lot of experience in this developing solutions for our customers. So that engineering work, that strong business model that Karen outlined, a perfect fit. So people, culture, and a great business model.
Sounds good. Okay. So here's the next question. Just to confirm, your five-year outlook is mid-single-digit market growth with Simpson outpacing that, growing high single digits organically. Is that correct?
I'll start with that one. So from a volume perspective, correct. Obviously, pricing has some effect on that top-line revenue on a comparable period, but we think the housing industry would be that mid-single digit. And due to the growth initiatives that were put into place, that we would be able to outpace that growth from a volume perspective, capturing market share, growing in those initiatives that Mike had talked about. I guess that's exclusive of price. Price obviously has an impact there as well. So really looking at the volume implications in that guide.
Maybe just a little bit more. I think it's important to note that when you looked at the growth areas that Mike was able to show you, none of those were attached to U.S. housing starts. So all of those are areas where we feel we've got product, services, people, our distribution in place where we'll be able to gain market share and see some revenue growth in that space. But again, it's important to note none of those were associated with U.S. housing starts.
I guess I would add just one final comment that we did talk about acquisitions helping us in our strategic initiatives. That growth assumption would not assume any growth via acquisition. It would just be those volume gains and entries into those newer categories that we talked about.
All right. So are four times inventory turns still a long-term target, and what steps are needed to get there?
I'll work on that one. Yeah. In our original 2020 Plan that we put out, again, in October of 2017, we had an inventory turn target of four times. We removed that from our metrics basically due to what we were seeing on material cost. We are still pushing, and our manufacturing group is still pushing to have a four times inventory turn. I think we ended 2020 at about 2.7, where historically our inventory turns were at 2. So great progress during that time frame, and as we look at our inventory, we really break that into three components. So there's the finished goods that we produce in our manufacturing facilities, and those are the ones that we can really control. There's the raw materials. As you're seeing today, those prices and those availabilities are going crazy.
So there's the raw material piece of our inventory, and then there's our buyout products. Typically, that would be the majority of our fasteners and our anchor type of products. So we are really pushing from our lean initiatives on how we manufacture our products. Our SAP initiatives have helped us. We can now, from a North America standpoint, we have SAP implemented in all of our North America locations. We can now look at total inventory as well as total customer demand. We can run different analysis on that demand profile that will then tell us how much inventory should we be producing at all of our locations. So between our lean initiatives and what's called our SIOP process, which is our sales, inventory, operations, and planning, those two things are really helping us on the inventory that we produce, so our finished good inventory.
It's a little tough from the raw material standpoint, based on what's going on with the market today, how to be sure that we've got that piece of the inventory under control. Obviously, we cannot run out of steel. So long answer, but yes, we're still pushing to be four-time inventory turn. We're certainly pushing very hard on those elements that we can control, and hopefully, we'll have some normalization of our steel here soon, and that will help us on the raw material standpoint.
All right. So as you expand your offering of new products in the OEM and R&R/ DIY space, do your new products get built into the code? Excuse me, get built into code. I imagine some of the products do not necessarily have code to be written into. So just speak to that if you could. Yeah.
So part of the OEM markets, they'll have specifications to that unique application. So for example, the two areas I outlined, pontoon manufacturers, they'll have their own set of specifications. Trailer manufacturers will do the same. So there won't necessarily be a building code that's a direct fit to that, but there is still developing the material or developing the solution specific to the application. There's testing to confirm that it works, and then we lock that in with the customer's design of that particular trailer or pontoon boat, just to stick with that example.
Yeah. Let me just add a little bit more on the DIY part of that question. The biggest opportunity is obviously in decks. When you use our software, it will actually get your ZIP code, and we will be able to design that deck based on the code requirements in your jurisdiction. So decks are still designed to a standard code requirement depending on where your geographic area is. That's certainly the largest area where we see we can use our software as well as our products to meet that code requirement. You might not need an engineer to specify it, but you'll still have the products that are meeting the code needs in your local jurisdiction.
Great, so next question. Looking at some of the targeted growth initiatives between OEM, concrete, structural steel, and even mass timber, each of those are really separate from new residential construction. Is that an explicit focus there in terms of wanting to diversify the business to a greater extent? And then second, could you talk about where you feel you stand on the growth progression within those areas in terms of which opportunities are still nascent versus those where you already feel relatively established?
So, let me take that two parts.
Good question. Questions.
I'll take the first part. As we mentioned, we think about 50% of the total company revenue on a global standpoint is based on U.S. housing starts. U.S. housing starts are certainly a very cyclical type of business, as we saw again in 2008. Any of you who lived through that, going from 2 million housing starts and us being able to not get product out the door fast enough to going to 580,000 housing starts was a pretty eye-opening event. And so we still, our core business is wood construction, wood construction connectors. But what we see in these adjacencies, and I'll let Mike speak more to this, is we see the opportunity to use our same products through a different channel or a different application. And that's really what we want to take advantage of.
And it just so happens that those channels and those applications are not tied to housing starts. So whether we're discussing OEM, we talked about structural steel. That's a commercial application. We talked about our DIY, again, repair, remodel, decks, fences. All of those allow us to take the product that we've developed with all the assets behind it, all the testing, all the code reports, all the service levels, the technology, and being able to get those products into a different channel and for a different end-use application. And then I'll.
Yeah. So the red thread, I mean, just building on what Karen mentioned, the red thread is really the strong business model. Every point she mentioned and all the points around that strong business model, that's what connects all of these initiatives. So for each one of these, we have established business in them already. There are certain segments and product lines that we think there is plenty of opportunity to further develop them, and we're working hard to do that, but we do have established business, established customers, established specs in each of these initiatives.
All right. Next question. What do you think is the most underappreciated aspect of Simpson that will be a big factor in performance as you look out five to 10 years?
I should have a connector in my hand. I think people are always amazed that for this, and I'll call it little bit piece of metal, that we can have the highest gross margin in the building industry at around that 45%. And how is it possible? How do we differentiate? How do we get a higher price for our product? It all comes through the people and the service aspect and that number one value of relentless customer focus.
So there's a lot behind that little bit piece of metal, whether it's the engineering and the manufacturing, the quality checks that we have on it, the salesperson that goes out to the job site to help any field problems, the inside salesperson that is answering your phone call, letting you know when your deliveries are available, all of our engineering and technical support, certainly all of our marketing group that can provide you any details that you need about that particular product. So even though it's somewhat killing me as far as a little bit piece of metal, there is a huge support team behind it. There are 65 years of experience and dedication behind that. And I think that's what people miss is the values-based culture we have here at Simpson and the people aspect that supports that bent piece of metal.
Great. So how will investors be able to measure returns on growth initiatives, quarterly or annual updates or metrics?
Certainly, we're going to provide information around elements that are moving the needle within a quarter on a comparable basis. Any significant, whether it be if it's revenue wins or elements that from a comparability perspective help explain the change. Also, as we make these investments in our business, if there are those elements that help us explain from a comparability perspective between quarters, we want to be able to highlight those. I guess just from an overall larger picture on a maybe less frequent basis, we obviously continue to track those goals that we noted to be in top quartile of our peer group, above average operating margin, return on invested capital elements, and those will get updated periodically with, of course, our information as well as how we compare to those other companies.
I believe as we are looking at those initiatives that we've talked about here, we'll be able to share more details as we're capturing some of those wins, so to speak. Mike, as he talked about each initiative, showed some examples in how each of those were relevant to that particular initiative. We hope to be able to continue to expand on that type of information as we meet with investors or update outside constituents on a periodic basis.
All right. Brian, we'll stick with you. Could you walk through and put a little more color around your comments on EBIT margins looking forward? Obviously, in 2021, you have some costs coming back into the business and some gross margin pressures, but it sounds like you expect EBIT margins to be flattish, if not lower than that, still over the next couple of years. Is that correct?
Yeah, correct. I mean, as we are ramping up to be able to go after and win in those categories that we talked about, it's going to take resources. It's going to take people. It's going to take testing. It's going to take potential capital investments. We do expect that to leverage over time. As we've said many times, we need to give our teams, our salespeople, the tools and the elements to go out and win that business. And oftentimes, that means some spend ahead of major revenue. That being said, there is an important element in our operating margin tied to gross margin. And you saw that one slide that I showed that had those variations over the years.
But if we think about a normalized operating margin in the, say, 44%-45% range on a long-term basis, we would expect for a couple few years to have some additional OpEx as a percent of revenue. However, as I also mentioned, within or by about 2025, we would expect that to be back in the high teens, so above that historical average.
All right. So we'll open this up to the group here. Have you thought about doing any direct-to-consumer marketing as a part of your growth initiatives? That video is quite compelling.
You start. I'll pick it up.
All right. I'll start. So, direct to consumers. We mentioned that we have a Pergola software and the Deck software, and of course, that is really ideally, we'd like to be when you type in a search engine for Deck, we want Simpson Strong-Tie to come up, right? So I want that software to come up. It's very interactive, easy for consumers, anybody to build their deck. One of the great things is the visualization that it has. Because it's very hard for most people to envision what will that look like on my house. And that's a nice feature that we have on our product. So once your deck's designed, again, we've talked about a bill of materials. So first of all, it's going to engineer the deck based on where your geography is. It's going to give you a bill of materials.
How many sticks of wood? How many Simpson connectors, Simpson fasteners, Simpson anchors that you're going to need, and then it's going to tell you it's going to print that out. Some DIY people or consumers might say, "I can build that myself." They might take that blueprint and say, "I know a contractor. I'm going to give them the contractor. I'm going to give them this so they can build it," but the other thing it's going to do is it's going to say, "Where can I find all these products?" so we are definitely marketing direct-to-consumers. I think most consumers are not that DIY person that's going to be bold enough to take a step and build that deck, but they are going to be bold enough to design it on the computer, and so we are definitely marketing to that group.
We want to not only market to it, just like an engineer. We want to pull that sale through. So we want to tell them where to get the product. We want to show them what their deck is going to look like when it's completed. It's possible that we would have a library of deck builders in your area, and you can choose who there might be. So lots of opportunities to market to consumers when they can see what that end product looks like. And that's what you can get from both our deck software, our Pergola software. We also have one that's going to show you about a garage organizer. So we really think this is a great opportunity. Contractors, framers, if you say Simpson Strong-Tie, they can tell you exactly what our product is and where it's used.
Average consumer has no idea who Simpson Strong-Tie is. So a lot of work being done in getting more of that brand awareness.
Just to add a little bit, we have very much established channels directly to the end consumer. So now it's about that retail execution component that I mentioned, helping our customers better market our solutions to the end consumer using software tools, placement of materials, merchandising ideas, kitting, putting things together, anything we can do to help make it easy for our customers to go to their consumers is stuff that we're very much working on.
All right. Mike, I think we can stick with you as a follow-up here. Historically, specification and installed base has created a lot of stickiness for Simpson products, particularly in connectors. The software and the move to digital versus two-dimensional and manual drawings put this at risk at all. Separately, is Simpson software geared towards small builders? And what are larger or production builders doing from a software perspective?
Yeah. So the first part, the stickiness aspect, has multiple components to it. It's optimizing the design using our solutions. And our customers can use our software technology to help optimize their design. Then there's testing and validation that goes behind that. There's code reports that go behind that. So we tend to think of the software as really enabling our customers to specify and find more ways to use our products to make their projects or houses better. So I wouldn't anticipate at all that that kind of gets rid of that stickiness. And I tend to say easy in equals easy out. And certainly, a lot of these things that we're talking about take a lot of work upfront. So I think the software solutions are actually going to have the opposite effect. They're going to help us specify more products and be more locked into these designs.
And then the second one is around small builders, I think, right? Yeah. So our customer-facing technology team has a very clear roadmap of where we want to go. We are working with all of the different customer types that I mentioned. We do have many small builders that are using our solutions today. So we do want to be focused on how we want to do it because when we work with a customer to roll out our customer-facing technology, a lot of times they're using that software to run their business, as I had mentioned earlier. So we need to make sure that we're doing all the work upfront so that it's designed and tailored and fits in perfectly with their business, and we offer the right amount of support.
So we are being very targeted and focused on how we do it, but we do have a wide range of customers using our technology today.
Yeah. And I would just add one thing to that. I think as you heard Mike say when we talk about our customer-facing technology, it's an open platform. And so the spectrum that our customers want to use software could be from zero all the way to from start to finish. So we want to offer them the applications that work for their business to make them more efficient. Maybe that's only a truss design software. Maybe it's the truss wall and floor design software. So we're very in tune with what is it our customers need from a software standpoint and which elements of our software can make them more effective and efficient in their roles. So again, open platform, use the pieces that you need in your job to make that customer more efficient and effective.
All right, so how should we think about the scale of investment required to really push these new growth initiatives forward? Is it more weighted towards R&D and engineering or sales?
We can all probably take parts of that one. Why don't you go ahead?
Do the first part. So we have products available today that we are selling today into each of those initiatives. So that is established. But almost every single time I talked about building out our product lines, building out a broader set of solutions for each one of those customer applications. So to do that, it's going to require engineering and testing upfront, as I said multiple times. So there's certainly some investment from an engineering and research effort. Now, we are also actively managing our portfolio of projects. So in some cases, it's shifting people that used to work on one project now to the newer projects. In additional cases, we are adding some headcount to drive some of these projects. From a sales perspective, in some of these areas, we have very well-established sales channels. We have very well-established distribution channels.
Maybe a little bit of resource shift or a little bit of additional resource in some of these areas. For the OEM segment, some of these, as I mentioned, are adjacencies for us. They are new, and we would need to either shift, and we're doing a combination of shifting and adding people to go after each one of those areas.
All right, so what are your fastest-growing products and markets at this moment?
Yeah. I think if you guys have heard me say our fastener line has been our fastest-growing product line and market opportunity for the past few years. That's why we're very engaged in that. What we've found is if you think on our fastener line, we're really talking about screws versus nails. And we're seeing a trend. Screw is a much stronger connection. So we're seeing a trend removing from nails going into screws. And so that's why we're seeing that extension. But again, as Mike mentioned, it's also about installation. We have tools that allow you to install our products at a very fast rate. So fasteners are becoming a growing market segment, not only in our wood construction. So our fasteners right now can be used to put subfloor down. They can be used to attach the truss to the top of the plates, lots of different applications.
But we also have fasteners that can be used in steel markets, that can be used in concrete space. So that's certainly we have been able to carve out. And as I mentioned, I think that fastener market was $5.8 billion. We carved out $1 billion. And I'm not remembering here, but I think we got about a 16% or 17% market share. We see opportunity to grow in that market share with, again, all the same things we do with our connector line, our concrete line, and all of our products is have a differentiated product that has high quality, not only for manufacturing, but it's been tested, it's been code-listed, it performs for the contractor, it installs at a faster rate. So fasteners has definitely been that fast-growing market for the past several years.
All right. Then we'll finish with one last question here. Can you provide an update quarter-to-date? Can you provide an update on quarter-to-date trends for the first quarter?
I'll start on that one. So the quarter has been, we've seen strength this Q1 versus last year Q1. Obviously, there was some weather and some severe weather in the Southeast in February, but trends have looked from a top-line revenue perspective pretty strong compared to Q1 of last year.
That's it. We don't have any more questions coming in. So.
Great. Great.
Well, thanks, everybody. I appreciate it. I really wish I could see your faces. But I do appreciate that you spent a couple of hours with us this morning or this afternoon, whichever time zone you're in. I certainly hope that you see not only the strength in what we were able to do with our 2020 goals and metrics and how we really built this very strong foundation that Simpson stands on. And then certainly, we are very excited about our future growth opportunities. And you certainly see us taking again all those great assets and qualities that have been behind this company for the past 65 years. And really, let's take that to additional markets. So appreciate your time, and thank you very much.