Slide 1: Mohawk Industries, Inc. Investor Presentation – October 2014
Mohawk Industries, Inc. Investor Presentation – October 2014
Slide 2: Forward-looking Statements
Forward-looking Statements Certain of the statements in this presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties including, but not limited to, those set forth in our press releas
Slide 3: Mohawk Industries Highlights
Mohawk Industries Highlights ▪ World’s largest flooring manufacturer ▪ Leading market positions • Ceramic • Wood • Carpet & Rugs • Stone Flooring & • Laminate Countertops ▪ Expanding international presence ▪ Total flooring product offering ▪ Vertically integrated manufacturing ▪ Superior distributio
Slide 4: Mohawk by the Numbers
M8) Mohawk by the Numbers @® @ © ® $7.78 = $1,034M = 1.216% Worldwide Sales EBITDA Stock Growth a0 Since 1992 Since 1992 ee ee 13 30,000+ 140+ 25,000+ Countries Employees Countries Customers Manufacturing Worldwide Sales Worldwide
Slide 5: Focused Business Strategy
Ml Focused Business Strategy ET VALUE MAXIMIZATION = Grow shareholder value a Deliver above-market returns efficiencies and distribution OPERATIONAL EXCELLENCE : = Drive optimization of resources and materials = Leverage knowledge and = Increase profits through growth, ; innovation across segments =
Slide 6: Growth Through Innovation & Acquisition
Growth Through Innovation & Acquisition 6
Slide 7: Acquisition Strategy
WW Acauisition Strategy @® & GEOGRAPHY = PRODUCTS © MANAGEMENT — RETURNS = New Locations : m New flooring = Proven ‘= Good valuation : product categories management team : mu Leverage strengths : : m Potential for in existing | m Categories with = Good bench ' significant ROI locations : synergies t
Slide 8: International Expansion
MH International Expansion is “North » America Europe Carpet . Russia Rugs + Mats Ceramic Ceramic Laminate Ceramic Laminate Wood Laminate Wood LVT Australia Laminate Wood Distribution South America Asia Wood Ceramic (JV) Laminate (JV) Laminate (JV)
Slide 9: Position by Product, Geography & End Market
Position by Product, Geography & End Market 2013 Sales Mix By Segment By Geography By End Market Western Carpet 40% Europe 20% Commercial Russia 5% 20% Ceramic 40% ROW 5% North America Residential Laminate & 70% 80% Wood 20% Represents 2013 on a Pro forma basis. 9
Slide 10: Positive Industry Outlook
Positive Industry Outlook United States GDP growing Flooring industry growth will outpace economy Low mortgage rates driving home sales Rising home prices support reinvestment New residential construction increasing Pent-up demand from postponed residential remodeling Before After Commercial end mar
Slide 11: Historic Pent Up Demand: Flooring
Historic Pent Up Demand: Flooring U.S. Shipments - Millions Sq. Ft. Ceramic Carpet Year Sq. Feet % PY Sq. Feet % PY 1980 553 -9% 9,526 -12% 1981 554 0% 8,916 -6% 1982 530 -4% 7,972 -11% 1983 646 18% 9,811 23% 1990 1,030 -15% 12,240 3% 1991 928 -11% 11,502 -6% 1992 1,042 11% 12,773 11% 2001 2,307 0%
Slide 12: Product Mix Across U.S. Flooring Industry
Product Mix Across U.S. Flooring Industry U.S. Flooring Industry - $20 Billion Hardwood 10% Ceramic 13% Carpets & Rugs 51% Laminate 5% Stone 6% Other Resilient 2% Vinyl 12% Source: Floor Covering Weekly, July 21, 2014. 12 12
Slide 13: U.S. Floor Covering Sales by End-Use Market
U.S. Floor Covering Sales by End-Use Market U.S. Industry Sales ▪ Industry recovery early in cycle Residential Builder 14% ▪ New housing starts Replacement and remodeling 60% improved in 2013 ▪ Significant pent-up demand for residential remodeling due to impact of recession ▪ Commercial typically la
Slide 14: 2013 U.S. Flooring Market Leaders
2013 U.S. Flooring Market Leaders Total Flooring Industry Competitor Mix Mohawk 22% Imports & All Others 35% Armstrong 6% Tarkett 4% Mannington 4% Beaulieu of America 3% Interface 2% Shaw 20% Engineered Floors 2% Dixie Group 2% Source: Floor Focus, May 2014 14 14
Slide 15: U.S. Floorcovering Distribution Channels
U.S. Floorcovering Distribution Channels U.S. Industry Contractor 17% Specialty Stores 51% Home Centers 30% Other 2% Sources: Floor Covering Weekly, July 21, 2014, and management estimate. 15 15
Slide 16: Innovative Products & Technologies
Innovative Products & Technologies 16
Slide 17: World-Class Systems
World-Class Systems ▪ State-of-the-art order and inventory management system ▪ Sophisticated transportation management ▪ Integrated warehouse management ▪ Next-generation supply chain planning 17
Slide 18: Best-in-Class Distribution Network
Best-in-Class Distribution Network ▪ National network of distribution centers provides efficient delivery ▪ Service Centers provide key channel for ceramic distribution ▪ BEST-IN-CLASS: • Logistics system • 1,500 sales representatives • 300 distribution points • 600 trucks 18
Slide 19: The Business of Sustainability
The Business of Sustainability Improving Environment in Our Communities ▪ Waste reduction • 4 billion lbs. of recycled materials purchased • Zero Process Waste to Landfill campaign ▪ Use of recycled content • Over 500 products contain recycled material • Able to recycle 5 billion plastic bottles ann
Slide 20: Ceramic: 40% of Revenue Competitive Advantages
Ceramic: 40% of Revenue Competitive Advantages ▪ Worldwide ceramic leader with leading positions in North America, Europe and Russia ▪ Most widely recognized ceramic brands ▪ Broad product line satisfies all channels and price points ▪ North American market share substantially larger than closest co
Slide 21: Ceramic: Expanding Globally
Ceramic: Expanding Globally Market Leader Leading Position Manufacturing Locations 21
Slide 22: 2013 Global Tile Market: Opportunity
2013 Global Tile Market: Opportunity Consumption by Region 125 Billion Sq. Ft. European Union 7% Turkey, Saudi India 7% Arabia & Iran 7% Brazil 7% Africa 6% Indonesia & Vietnam 5% Russia 2% USA 2% China 39% Other 18% Sources: Ceramic World Review, September 2014, Internal Analysis. 22
Slide 23: Ceramic: Brands Serving All Channels
Ceramic: Brands Serving All Channels 23 23
Slide 24: Carpet: 40% of Revenue Competitive Advantages
Carpet: 40 % of Revenue Competitive Advantages ▪ Leading market share in all channels ▪ Leader in innovation & soft technology ▪ Well-known exclusive brands – SmartStrand and WearDated Embrace ▪ Proprietary Continuum process – polyester fiber with up to 100% recycled content ▪ Strong aligned dealer
Slide 25: Carpet: Brands Serving All Channels
Carpet: Brands Serving All Channels 25 25
Slide 26: Laminate & Wood: 20% of Revenue Competitive Advantages
Laminate & Wood: 20% of Revenue Competitive Advantages ▪ Laminate leader in mid- to high-end categories ▪ Strong consumer brand recognition in Europe & U.S. ▪ Complete laminate and pre-finished wood offering ▪ Undisputed innovation leader ▪ Vertically integrated low-cost manufacturer 26 26
Slide 27: Laminate & Wood: Brands Serving All Channels
Laminate & Wood: Brands Serving All Channels 27 27
Slide 28: Laminate & Wood Segment: Non-Flooring Products
Laminate & Wood Segment: Non-Flooring Products ▪ Chipboards • Furniture and specialty construction ▪ Melamine-faced boards and panels • Furniture, DIY and construction industries ▪ Custom Roofing Panels • Insulated roof panels and hinged roofs ▪ Insulation Panels Chipboards Insulation Panels Roofing
Slide 29: Mohawk Industries, Inc.
Mohawk Industries, Inc. 29
Slide 30: Adjusted Net Sales & Adjusted EBITDA
Adjusted Net Sales & Adjusted EBITDA Net Sales EBITDA (% of Net Sales) $7,689 $1,034 $5,788 $5,642 $677 $5,465 $5,319 $631 $633 $605 2009 2010 2011 2012 2013* 2009 2010 2011 2012 2013* 11.1% 11.9% 11.2% 11.7% 13.4% Dollars in Millions, excluding unusual items *Pro forma 2013 30 30
Slide 31: Earnings Summary (ex-unusual items)
Earnings Summary (ex-unusual items) (Dollars in Millions except EPS) Years Ended 2009 2010 2011 2012 2013 PF Net Sales $ 5,465 $ 5,319 $ 5,642 $ 5,788 $ 7,689 % Change (20%) (3%) 6% 3% 33% Operating Income $ 301 $ 327 $ 345 $ 398 $ 710 Operating Margin 6% 6% 6% 7% 9% Net Earnings $ 154 $ 173 $ 202 $
Slide 32: Results by Segment (ex-unusual items)
Results by Segment (ex-unusual items) (Dollars in Millions) Segment 2009 2010 2011 2012 2013 PF Carpet Sales $ 2,978 $ 2,845 $ 2,928 $ 2,912 $ 2,986 % Change (19%) (4%) 3% (1%) 3% Operating Income $ 98 $ 133 $ 136 $ 169 $ 223 Operating Margin 3% 5% 5% 6% 7% Ceramic Sales $ 1,427 $ 1,367 $ 1,454 $ 1,
Slide 33: Quarterly Earnings Summary (Ex-unusual items)
Quarterly Earnings Summary (Ex-unusual items) (Dollars in Millions except EPS) Third Quarter 2012 2013 2014 Net Sales $ 1,473 $ 1,962 $ 1,991 % Change 2% 33% 2% Operating Income $ 108 $ 213 $ 238 Operating Margin 7% 11% 12% Diluted EPS $ 1.04 $ 2.02 $ 2.44 % Change 25% 95% 21% Diluted EPS $2.44 $2.0
Slide 34: Leverage and Capital Structure
Leverage and Capital Structure (Dollars in Millions) Capitalization As of Interest Net Debt-to-EBITDA Multiple* 9/27/2014 Rate 2.6x Securitization Facility $500 L+0.70% Commercial Paper 569 0.63% Revolving Credit Facility 11 L+1.25% 2016 Senior Notes 700 6.13% 2.3x 2023 Senior Notes 600 3.85% 2.3x O
Slide 35: Mohawk Industries, Inc.
Mohawk Industries, Inc. 35