Interface, Inc. · NASDAQ:TILE
Interface — 2017 Global Industrial Conference
32 slides from Interface's conference presentation, Nov 6, 2017
Slide 1: 2017 Global Industrial Conference
Interface’ 2017 Global Industrial Conference November 7, 2017
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, including, in particular, statements about Interface’ s plans, strategies and prospects. These are based on the Company’ s current assumptions, expectations and projections about future events. Although Interface belie
Slide 3: Presenters: Jay Gould and Bruce Hausmann
Interface’ Jay Gould President and Chief Executive Officer Bruce Hausmann Vice President and Chief Financial Officer
Slide 4: Contents
CONTENTS Industry Overview Interface Positioning Value Creation Strategy Financial Results 9IPj19}U]
Slide 5: Global Commercial Flooring Segment
Global Commercial Flooring Segment Commercial Flooring represents a $34 Billion segment with growth aligned to GDP expansion. Approximately 20% of hard surface volume is in the high growth resilient category, which includes LVT. Carpet Tile represents 13% of global commercial flooring with continued
Slide 6: Global Commercial Flooring Segment
Global Commercial Flooring Segment = Carpet tile has captured a large share of soft surface flooring in the office and education segments ‘| Other vertical segments represent growth opportunities for carpet tile, particularly hospitality and “living. + The strongest segments for LVT are multi-reside
Slide 7: Global Carpet Tile Segment
Global Carpet Tile Segment = 70% ofthe carpet tile segment is highly influenced by A&D and End Users. = Dealers influence more commodity portions of demand. GLOBAL CARPET TILE 100% 90% 20% 70% e0% 50% 40% 30% 20% 10% om J ottce| Education Reta Government -BIPfI9}U]
Slide 8: Global Carpet Tile Segment
Global Carpet Tile Segment = 75% of carpet tile demand is driven by renovation versus new build. GLOBAL CARPET TILE : HH Oftice Education Retail Government! Hospitality Heatthcare| MutiRes ‘Source: Management estates -BIPfI9}U]
Slide 9: Global Carpet Tile Segment Share
Global Carpet Tile Segment Share * Interface maintains the largest share of the $4.4B global carpet tile segment at approximately 22%. GLOBAL CARPET TILE SEGMENT ‘Source: Management estates -BIPfI9}U]
Slide 10: Contents
CONTENTS Industry Overview Interface Positioning Value Creation Strategy Financial Results 9IPj19}U]
Slide 11: Carpet Tile
Carpet Tile BENEFITS OF MODULAR CARPET = Creative design freedom = No glue, no pad = LOWER COST to change = Produces LESS WASTE = FASTER and more PROFITABLE INSTALLATION for contractors = Easier to RECONFIGURE and MAINTAIN = Easily RECYCLED and REPURPOSED = Superior ACOUSTICAL properties 9IPj19}U]
Slide 12: Modular Resilient Flooring
Modular Resilient Flooring INTERFACE LUXURY VINYL TILE (LVT) is our first modular resilient flooring offering to complement our carpet tile products * Entrance into high growth LVT market * Integrates soft and hard surfaces into flooring design * Complements and enhances our carpet tile portfolio —
Slide 13: Brand Love: Recognized Leadership
Brand Love: Recognized Leadership = Interface has the Leading Net Promoter Score in the U.S., Europe and Asia indicating a consistently high quality customer experience around the globe 9IPj19}U]
Slide 14: Sustainability Leadership
Sustainability Leadership 9IPj19}U] = Interface is the only company with a sustained presence on the Globescan SustainAbility Survey list of Sustainability Leaders for 20 years SUSTAINABILITY LEADERS - GLOBESCAN SUSTAINABILITY SURVEY
Slide 15: Customer Intimacy: Global Account Management
Customer Intimacy: Global Account Management with Local Reach Se Showrooms 4 Sales & Marketing Associates * 600+ Interface Sales & Marketing Associates = 31 Showrooms (10 Americas, 8 EMEA, 13 Asia-Pacific) GLOBALACCOUNT MANAGEMENT * Contract Maintenance + Merchandising & Marketing * Businessintelige
Slide 16: Supply Chain Excellence: Global Manufacturing
Supply Chain Excellence: Global Manufacturing >) AMERICAS: Sales 59% Production 47% © Manufacturing Facility Note: Sales and Production fewes represent FYE 2016, -BIPfI9}U] 6
Slide 17: Interface Sales Profile
Interface Sales Profile -BIPfI9}U] BILLINGS BY BILLINGS BY GEOGRAPHY END USE MARKET Americas EMEA = Office Education s Australia mAsia = Retail ‘Hospitality "Government Healthcare =Consumer = Multi-Residential uta asof FYE2016 17
Slide 18: Contents
CONTENTS Industry Overview Interface Positioning Value Creation Strategy Financial Results 9IPj19}U]
Slide 19: Value Creation Strategy
Value Creation Strategy 9IPj19}U] Interface will become the world's most valuable interior products & services company by 2020 Sustainability Leadership Environmental ‘Stewardship Building Industry Leading 188 Margins to Fuel Growth Target 40% Gross Profit Margin Maintain SG&A: Repurpose then Reinve
Slide 20: Strategic Pillars
Strategic Pillars -BIPfI9}U] Develop a Modular Resilient Flooring Busine Execute Supply in Productivity Control SG&A * Enhance salesforce = Penetrate the high productivity growth LVT segment * Execute Troup Co. Optimization plan + Segmentation * Offer integrated soft * Implement alow « Prodiet pitt,
Slide 21: Revenue Growth
Revenue Growth = Organic net sales are up 3% year-to-date through Q3'17 = Q3'17 organic net sales were up 4% versus Q3'16 with growth balanced between carpet tile and LVT * Organic orders have grown sequentially during the year with orders up 7% in Q3'17 versus Q3'16 ORGANIC NET SALES* ($ inmilions)
Slide 22: Gross Margin Expansion
Gross Margin Expansion -BIPfI9}U] "Gross margin continues to improve as we implement productivity initiatives and diversify our product portfolio + Troup County Optimization efforts are dri = LVT margins are accretive productivity results GROSS MARGIN (Gross Profit as a % of Net Sales) ie 38.9% — 38
Slide 23: SG&A Management
SG&A Management -BIPfI9}U] Effective SG&A management has driven down SG&A as a percent of Net Sales We've repurposed spend following restructuring activities in Q4'16 and Q1'17 and exiting FLOR specialty retail We will continue to manage spend while investing in brand building activities with positi
Slide 24: Profitability
Profitability -BIPfI9}U] * Solid sales growth, productivity enhancements and effective spend management is generating sustainable margin expansion OPERATING MARGIN* (Adjusted Operating income as a % of Net Sales) ioe 1.9% 13% 10.9%, 11% 10% o% a2 8% 2014 2015 2016 y1Da3 2017 * See Aspen fora reconca
Slide 25: Earnings Per Share
Earnings Per Share -BIPfI9}U] = Our value creation strategy is generating double digit EPS growth EARNINGS PER SHARE* (Adusted Diluted Earnings Per Share) S256 CAG SE $1.13 $1.20 110 $1.10 bs $1.03 $1.00 $0.90 $0.80 $070 $062 30.60 $050 $0.40 2014 2015 2016 Lt 03 2017 See Append fora reconcliaton on
Slide 26: Contents
CONTENTS Industry Overview Interface Positioning Value Creation Strategy = Financial Results 9IPj19}U]
Slide 27: Quarterly and Year-to-Date Results
Quarterly and Year-to-Date Results 2016 | Change Net Sales $257.4 $248.3 3.7% $730.2 $719.1 1.5% cross Proft os 029 8% 242-7787 20% aintcae ax oe com sae a Adjusted Operating Income 309 287 20.1% 866 786 10.2% moines ae’. a Adjusted Net Income 194 15.9 22.2% 53.6 495 8.4% x inaies 1 zs ax ee Adjuste
Slide 28: Capital Structure
Capital Structure 9IPj19}U] ENDING CASH BALANCE (inmitions) NET DEBT’ ($inmilions) 300 $208 $200 ee sis6 $105 100 so mi mis mt6 | a82017 ‘Net Debt pl 0% 07% 1.0% TOTAL DEBT (Sinmitions) ‘400 se00 200 sas s270 | I ] I ou am ie | as207 DEBT" / TOTAL CAPITAL 25% _ | ml are” ats | 206 as207 See Append f
Slide 29: Capital Allocation
Capital Allocation -BIPfI9}U] Our operating cash flow and capital structure allow us to fund share repurchases and regular quarterly dividends while continuing to reinvest in the business = We've completed $81 million of share repurchases in 2017 through Q3 and are on track to execute the remaining
Slide 30: Investment Highlights
Investment Highlights -BIPfI9}U] Interface is a leading global provider of modular flooring solutions for the commercial segment = Global share leaderin the $4.4 ilion carpet tle segment which continues the secular shit away from broadloom carpet Entering the high growth resitent flooring segment wi
Slide 31: Questions?
= oe oO = o oO oO QUESTIONS?
Slide 32: Appendix: Reconciliation of Non-GAAP Figures
Appendix: Reconciliation of Non-GAAP Figures omy Ea Seer ass “eas “ahs —" eer ae = oe ae me seat — 5 — feet — aes a (im mins) _@2016__a3207__a3 2016 __ 3.2007 _ Ree as ey ee ee Paste: oe ees regio aa) rH Cane Spey Rea ee da seh eS erased mitre nme ili ged he ear et a 0 — a a a ae = te — hag ep er Pe