Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q2 2023 Earnings Presentation
17 slides from Armstrong World Industries's earnings presentation, Jul 25, 2023
Slide 1: 2nd Quarter 2023 Earnings Presentation
2nd Quarter 2023 Earnings Presentation July 25, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement Disclosures in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, those relating to future financial and operational results, expected savings from cost management initia
Slide 3: Basis of Presentation Explanation
Basis of Presentation Explanation Results throughout this presentation are presented on a normalized basis. We remove the impact of certain discrete expenses and income in certain measures including adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), adjusted diluted
Slide 4: GAAP and non-GAAP Financial Results
GAAP and non-GAAP Financial Results AWI Consolidated Company Results Q2 2023 Q2 2022 YTD 2023 YTD 2023 Net Sales $325.4 $321.0 $635.6 $603.6 Net Earnings $60.2 $52.2 $107.5 $96.6 Operating Income $87.0 $71.6 $157.2 $134.8 Adj. EBITDA* $111 $102 $207 $189 Operating Income Margin (Operating Income % o
Slide 5: Robust Profitability Growth on Solid Execution
Robust Profitability Growth on Solid Execution 2nd Quarter 2023 Key Takeaways $325M (+1% VPY) Net Sales Net Sales up 1% and Adj. EBITDA* up 10% Total company Adjusted EBITDA margin* expanded 260bps Mineral Fiber segment Adj. EBITDA* up 7% $111M (+10% VPY) Driven by AUV1 improvement, moderating infla
Slide 6: Margin Expansion on Solid AUV Fall-Through & WAVE Growth
Margin Expansion on Solid AUV Fall-Through & WAVE Growth Mineral Fiber Q2 2023 Results $235 $234 Q2 Mineral Fiber Key Highlights Net Sales Adj. EBITDA margin* expanded 260bps Growth VPY (0%) ● year-over-year to 40.4% Solid topline AUV growth of 7% driven by Q2 '22 Q2 '23 ● like-for-like price Adj. E
Slide 7: Strong Adj. EBITDA Growth Driven by Operating Leverage
Strong Adj. EBITDA* Growth Driven by Operating Leverage Architectural Specialties Q2 2023 Results Q2 Architectural Specialties $87 $91 Key Highlights Net Sales ● Sales growth accelerated sequentially from Q1…order intake remains strong Growth VPY +6% ● Growth across most product categories Q2 '22 Q2
Slide 8: AWI Margin Expansion with Significant Adj. Free Cash Flow Growth
AWI Margin Expansion with Significant Adj. Free Cash Flow* Growth Q2 2023 Consolidated Company Key Metrics Q2 2022 Q2 2023 Variance Net Sales $321 $325 1% Adj. EBITDA* $102 $111 10% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 31.6% 34.2% 260bps Adj. Diluted Net Earnings Per Share* $1.29 $1.38 7
Slide 9: Solid Execution Through First Half of 2023
Solid Execution Through First Half of 2023 First Half 2023 Consolidated Company Key Metrics YTD 2022 YTD 2023 Variance Net Sales $604 $636 5% Adj. EBITDA* $189 $207 10% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 31.3% 32.6% 130bps Adj. Diluted Net Earnings Per Share* $2.30 $2.50 9% Adj. Free C
Slide 10: Adjusted Free Cash Flow Funds Balanced Capital Allocation Strategy
Adjusted Free Cash Flow* Funds Balanced Capital Allocation Strategy 2023 Year to Date Adj. Free Cash Flow* 2023 Year to Date Up 60% vs PY Capital Deployment CapEx Dividends Share Repurchases 2023 $42 $23 $57 2022 $28 $22 $85 *Non-GAAP measure. See slide 4 and appendix for reconciliation to nearest G
Slide 11: Updating Full Year 2023 Guidance
Updating Full Year 2023 Guidance Driving Growth in a Challenging Macroeconomic Environment Commentary1 Improved visibility removes worst case market downturn scenario Net Sales Adjusted EBITDA* $1,265M to $1,305M $400M to $420M Expect lower market demand, partially offset by initiatives, to result i
Slide 12: Appendix
Appendix
Slide 13: Full Year 2023 Assumptions
Full Year 2023 Assumptions Segment Net Sales Adjusted EBITDA Margin* Mineral Fiber +1% to +5% growth YoY >37.5% (prior: >37%) Architectural Specialties1 >6% growth YoY >18% Consolidated Company Shipping Days Full Year 2023 2022 2023 2024 2 Metrics vs Prior Year Capital expenditures $75M to $85M Q1 (
Slide 14: Q2 2023 Adjusted EBITDA and Adjusted Diluted EPS Reconciliation
Q2 2023 Adjusted EBITDA Reconciliation Q2 2023 Adjusted Diluted EPS Reconciliation For the Three Months For the Six Months For the Three Months For the Six Months Ended June 30, Ended June 30, Ended June 30, Ended June 30, 2 0 23 2 0 22 2 0 23 2 0 22 2 0 23 2 0 22 2 0 23 2 0 22 N et earnings $60 $52
Slide 15: Q2 2023 Adjusted Free Cash Flow Reconciliation
Q2 2023 Adjusted Free Cash Flow For the Three Months Ended June 30, For the Six Months Ended June 30, Reconciliation 2 0 23 2 0 22 2 0 23 2 0 22 N et cash provided by operating activities $68 $46 $94 $63 N et cash (used for) investing activities ($ 5 ) ($ 2 ) ($ 6 ) ($ 2 ) N et cash provided by oper
Slide 16: 2023 Adj. EBITDA Guidance Reconciliation
2023 Adj. EBITDA Guidance Reconciliation 2023 Segment Adj. EBITDA Margin Guidance For the Year Ending December 31, 2023 Reconciliation F ull Year 2023 Low High (Supports low-end Adj. EBITDA Margin % assumption) N et earnings $ 2 08 $ 2 17 MF AS UC Add: Income tax expense 67 73 N et sales $ 8 96 $ 3
Slide 17: 2023 Adj. Diluted EPS and Free Cash Flow Guidance Reconciliation
2023 Adj. Diluted EPS Guidance Reconciliation 2023 Adj. Free Cash Flow Guidance Reconciliation For the Year Ending December 31, 2023 For the Year Ending December 31, 2023 Low High Low High N et earnings $ 2 08 $ 2 17 N et cash provided by operating activities $ 2 30 $ 2 40 Add: Income tax expense 67
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