Interface, Inc. · NASDAQ:TILE
Interface — Investor Presentation (March 2019)
39 slides from Interface's investor presentation, Mar 19, 2019
Slide 1: Investor Presentation March 18, 2019
Investor PresentationMarch 18, 2019
Slide 2: 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 believes that the expectations refl
Slide 3: Interface at a Glance
Interface at a Glance Interface is a global leader of commercial flooring solutions including carpet tile, luxury vinyl tile (LVT) and performance rubber flooring. Headquartered in Atlanta, GA7 manufacturing locations on 4 continents4,500 global employeesSales in over 110 countriesNew Product Vitali
Slide 4: Investment Thesis
Grow Revenue at 2x the IndustryBuild Industry Leading Gross Margins Manage SG&A Spend While Investing in Our Brand & Growth DriversEPS Growth 2x – 2.5x Revenue Growth Investment Thesis VALUE DRIVERS 42%Gross Profit Margin 15%Operating Income Margin 19%EBITDAMargin HIGH LEVEL TARGETS Strong brands th
Slide 5: Investment Highlights: Who We Are
Investment Highlights: Who We Are leadingglobal provider of commercial flooring solutions most valuable brand in the flooring category strongest global sales & marketing capabilities global manufacturing footprint and industry-leading gross margins engaged, customer-centric culture, focused on perfo
Slide 6: Growth and Value Creation Strategy
Grow the CoreCarpet Tile Business Build a Resilient Flooring Business ExecuteSupply ChainProductivity Optimize SG&AResources Growth and Value Creation Strategy Lead a World-Changing Sustainability MovementCentered Around Mission Zero and Climate Take Back. Interface’s vision is to become the world’s
Slide 7: Interface Positioning
Interface Positioning InterfacePositioning
Slide 8: Leading Global Provider of Flooring Solutions
GLOBAL COMMERCIAL FLOORING SEGMENT (in Billions) Source: Management estimates Leading Global Provider of Flooring Solutions Interface participates in the $35 Billion Global Commercial Flooring segmentWe are the global share leader in the $4.6 Billion Carpet Tile segment which continues to take share
Slide 9: Participating in Attractive Commercial Flooring Segments
GLOBAL COMMERCIAL FLOORING: SEGMENT SIZE vs FORECAST GROWTH and GROSS MARGIN Participating in Attractive Commercial Flooring Segments Interface serves growing segments of hard and soft surface with the highest margins Source: Management estimates
Slide 10: Premium Player in the Specified Channel
GLOBAL CARPET TILE SEGMENT BY CHANNEL Premium Player in the Specified Channel Interface competes on design, sustainability and innovation, commanding a premium price point and industry leading marginsInterface is the share leader in the specified and end user channels of commercial carpet tile which
Slide 11: Attractive Product Portfolio
Carpet TileBiomimicry-inspired random design (i2)High recycled content No glue installation (TacTiles®)Carbon neutral (Carbon Neutral Floors™)Faster, more profitable installation for contractorsEasily recycled (ReEntry® program)Luxury Vinyl Tile (LVT)Creative design freedomComplements and enhances o
Slide 12: Modular Product Offering
Benefits of ModularCreative design freedomNo glue, no padLower cost to changeProduces less wasteFaster, more profitable installation for contractorsEasier to reconfigure and maintainSelective replacement Modular Product Offering
Slide 13: Global Sales and Manufacturing Platform
Global Sales and Manufacturing Platform Sales in over 110 countries1,100 sales & marketing professionalsGlobal account management Seven manufacturing locations on four continentsGlobal supply chain managementUnique blend of efficiency and customization Note: Figures represent proforma FYE 2018 for I
Slide 14: Diversified Customer Verticals
Diversified Customer Verticals CORPORATE OFFICEHighest penetration of carpet tile vs broadloomGlobal Account managementEmerging market penetration EDUCATIONK-12 and higher educationSecond highest penetration of carpet tile vs broadloom Second largest market for rubber HOSPITALITYGuest rooms, corrido
Slide 15: Growth and Value Creation
Growth andValue Creation
Slide 16: Growth and Value Creation Strategy
Grow the CoreCarpet Tile Business Build a Resilient Flooring Business ExecuteSupply ChainProductivity Optimize SG&AResources Growth and Value Creation Strategy Lead a World-Changing Sustainability MovementCentered Around Mission Zero and Climate Take Back. Interface’s vision is to become the world’s
Slide 17: Grow the Core Carpet Tile Business
Grow the Core Carpet Tile Business Enhance salesforce productivity – Execute on selling system transformation including reorganization, training and technology toolsElevate and grow segments – Drive growth in priority segments including Corporate Office, Hospitality, Living and EducationOptimize pro
Slide 18: Build a Resilient Flooring Business
Build a Resilient Flooring Business Continue penetrating the high growth LVT segment, building on successful global LVT launchIntegrate nora® rubber flooring into our product portfolioLeverage innovation pipelineExpand global participationStrategically expand product portfolio
Slide 19: Resilient Flooring: nora Acquisition
Resilient Flooring: nora Acquisition nora is a leading global manufacturer of commercial rubber floorcovering systems for healthcare, education, life sciences, public buildings and other end markets
Slide 20: nora is a Global Leader in Performance Flooring
Source: Management estimates GLOBAL COMMERCIAL FLOORING: SEGMENT SIZE vs FORECAST GROWTH and GROSS MARGIN nora is a Global Leader in Performance Flooring nora is the leader in the nearly $1B rubber flooring category of the $34B global commercial flooring industryRubber flooring is ideal for applicat
Slide 21: Interface and nora Together
Interface and nora Together Americas EMEA APAC Americas EMEA APAC + Office 15% 25% Americas EMEA APAC Americas EMEA APAC Non-office Office Non-office Note: Figures represent proforma FYE 2018 sales for Interface and nora combined Geographic Reach Segmentation excluding nora
Slide 22: Execute Supply Chain Productivity
Execute Supply Chain Productivity Execute Troup County Optimization plan which we expect to yield annualized savings of $30MImplement a dynamic yarn strategyContinue to deliver on productivity pipeline initiatives
Slide 23: Optimize SG&A Resources
Optimize SG&A Resources Repurpose spend toward growth initiatives and the highest ROIStage gating of key investments Leverage Interface’s purpose-driven culture
Slide 24: Purpose-Driven Culture Galvanized Around a Common Sustainability Mission
Purpose-DrivenCultureGalvanizedAround aCommonSustainability Mission GLOBESCAN SUSTAINABILITY SURVEY – 20+ YEAR HISTORY Unilever Patagonia Interface IKEA Tesla Natura M&S Nestle
Slide 25: Climate Take Back
We commit to running our business in a way that creates a climate fit for life – and we call on others to do the same.We expect to demonstrate that industry can operate with carbon negative business models. As a first step, we are the first global flooring manufacturer to offer carbon neutral carpet
Slide 26: Moving Toward a Carbon Negative Business Model
7 k g 2 k g Moving Toward a Carbon Negative Business Model It is possible to make a product with the potential to reverse global warming. CO2 Proof Positive Carpet Tile Prototype
Slide 27: Financial Performance
wn Financial™ ———— ~Performance.
Slide 28: GAAP Financial Results
GAAP Financial Results ($ in millions, except EPS) Fourth Quart 2018 2017 Net Sales $337.1 $266.2 Gross Profit 121.7 101.8 % of Net Sales 36.1% 38.2% SG&A Expense 97.2 70.8 % of Net Sales 28.8% 26.6% Operating Income 3.9 31.0 % of Net Sales 1.2% 11.6% Net Income 6.4 43 % of Net Sales 1.9% 1.6% EPS (
Slide 29: Adjusted Financial Results
Adjusted Financial Results* * See Appendix for a reconciliation on Non-GAAP figures
Slide 30: Organic Sales Growth
Organic Sales Growth FYE ORGANIC SALES*($ in millions) Q4 ORGANIC SALES*($ in millions) Organic Sales were up 7% in 2018 7% Growth * See Appendix for a reconciliation on Non-GAAP figures 2% Growth
Slide 31: Adjusted EBITDA Growth
Adjusted EBITDA Growth FYE ADJUSTED EBITDA*($ in millions) Q4 ADJUSTED EBITDA*($ in millions) Adjusted EBITDA was up 32% in the fourth quarter and up 22% in 2018 22% Growth * See Appendix for a reconciliation on Non-GAAP figures 32% Growth
Slide 32: Adjusted Earnings Per Share
Adjusted Earnings Per Share ADJUSTED EARNINGS PER SHARE (DILUTED)* Our value creation strategy is generating double digit Adjusted EPS growth 17% CAGR * See Appendix for a reconciliation on Non-GAAP figures
Slide 33: Capitalization and Liquidity
TOTAL DEBT($ in millions) NET DEBT($ in millions) NET DEBT / ADJUSTED EBITDA* Capitalization and Liquidity * See Appendix for a reconciliation on Non-GAAP figures ADJUSTED EBITDA*($ in millions)
Slide 34: Capital Allocation for Value Creation
Capital Allocation for Value Creation Investing in the business to fuel our value creation strategy while upholding a disciplined approach to capital allocationMaintaining strong liquidity with $286 million available under our revolving credit facility Reinvest in the Business Evaluate Leverage Expl
Slide 35: Outlook and Objectives
Outlook and Objectives Total Net Sales growth, including nora, of 16 - 18%Organic sales growth from carpet and LVT of 2 - 4% Adjusted Gross Profit Margin of 40 - 40.5% (130 - 180 basis points expansion)Adjusted SG&A Expenses of 28 - 28.5% as a percentage of net salesInterest and Other Expenses of $2
Slide 36: Investment Highlights: Who We Are
Investment Highlights: Who We Are leadingglobal provider of commercial flooring solutions most valuable brand in the flooring category strongest global sales & marketing capabilities global manufacturing footprint and industry-leading gross margins engaged, customer-centric culture, focused on perfo
Slide 37: Appendix
Appendix Appendix
Slide 38: Appendix: Reconciliation of Non-GAAP Figures
Appendix: Reconciliation of Non-GAAP Figures
Slide 39: Appendix: Reconciliation of Non-GAAP Figures
Appendix: Reconciliation of Non-GAAP Figures