Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Investor Presentation (August 2024)
35 slides from Armstrong World Industries's investor presentation, Aug 21, 2024
Slide 1: Armstrong World Industries Investor Presentation August 2024
Armstrong World Industries Investor Presentation August 2024 Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 1. Worthington Armstrong Joint Venture (“WAVE”). 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 resu
Slide 3: Basis of Presentation
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: Armstrong World Industries, Inc.
Armstrong World Industries, Inc. Leader in the design and manufacturing of innovative ceiling and wall solutions in the Americas FULL YEAR 2023 CONSOLIDATED RESULTS $1,295M Net Sales $5.32 ADJUSTED DILUTED EPS* $263M ADJUSTED FREE CASH FLOW* $430M ADJUSTED EBITDA* EDUCATION 30% TRANSPORTATION 10% OF
Slide 5: The Armstrong Purpose
The Armstrong Purpose Making a positive difference in the spaces where we… LIVE WORK LEARN HEAL PLAY It matters to us, and it matters to our stakeholders
Slide 6: Three Pillars guide our sustainability program
Our workforce will be safe, diverse, inclusive and fulfilled, and we will actively contribute to our local communities. Our electricity will be either directly or indirectly sourced through renewable energy, and we will reduce carbon, GHG waste and water impacts of our products and solutions. We are
Slide 7: Creating a Differentiated and Focused Building Products Company
Creating a Differentiated and Focused Building Products Company 1. AWI Net Sales represents AWI on a Continuing Operations (Americas, ceilings and walls only) basis. | 2. Guidance as issued on July 30, 2024. 2013 2016 2021 2024 Guidance2 Mid-Point Added digital capabilities to better serve our custo
Slide 8: Why Invest in AWI?
Unique company in an attractive industry Complementary, high performing segments Strong financial returns Consistent & focused growth strategy Value Creation for Shareholders Why Invest in AWI?
Slide 9: Why Invest in AWI?
Unique company in an attractive industry Complementary, high performing segments Strong financial returns Consistent & focused growth strategy Value Creation for Shareholders Why Invest in AWI?
Slide 10: Unique company in an attractive industry
Strong and trusted brand Broadest, most innovative product portfolio Specification excellence through deep and long-standing relationships with architects and designers Large manufacturing scale with strong exclusive distribution partners Operational excellence supporting best-in-class service and q
Slide 11: Diverse End Markets Drive Stability Throughout Cycles
Diverse End Markets Drive Stability Throughout Cycles *12-to-24-month outlook based on internal company estimates and Dodge data and analytics. | **Based on internal company estimates. | 1. According to the Federal Aviation Administration. | 2. Elementary and Secondary School Emergency Relief. Retai
Slide 12: Why Invest in AWI?
Unique company in an attractive industry Complementary, high performing segments Strong financial returns Consistent & focused growth strategy Value Creation for Shareholders Why Invest in AWI?
Slide 13: Complementary Segments With Strong Profitability
Complementary Segments With Strong Profitability *Non-GAAP Measure. Reconciliations provided in the appendix of this presentation. | 1. CAGR represents 2018 to 2023 results. | 2. Based on internal company estimates. Mineral Fiber (MF) Segment Consistent AUV growth supported by innovation Targeted ma
Slide 14: Successful Joint Venture Creates Important Competitive Advantage
WAVE leverages the strengths and expertise of both parent companies Successful Joint Venture Creates Important Competitive Advantage Go to market expertise Steel procurement and supply chain management expertise Established in 1992 — 50/50 joint venture North American market leader in ceiling suspen
Slide 15: Recent 3form Acquisition Expands AS Product Portfolio
Recent 3form Acquisition Expands AS Product Portfolio1 1. Armstrong completed the acquisition of 3form, LLC in April 2024. At-a-Glance A design-driven category leader in translucent finishings ~390 employees 3 production facilities ~$96M sales in 2023
Slide 16: Together Our Segments Enable the AWI Total Customer Experience
Together Our Segments Enable the AWI Total Customer Experience AWI is uniquely positioned to efficiently deliver a broad range of innovative, highly-specified solutions to our customers Mineral Fiber Architectural Specialties Specification Leadership Broadest Portfolio of Products Brand Strength Ope
Slide 17: AWI is the Supplier of Choice for Large, Complex Projects
AWI is the Supplier of Choice for Large, Complex Projects Adobe North Tower, San Jose, CA Products Specified 2023 CISCA Award Winner Check out the full project here! AS: MetalWorks™ Custom Blades AS: Arktura® Vapor® Cluster AS: Turf® Custom Grid AS: Arktura® Vapor® Frequency AS: Tectum® AS: WoodWork
Slide 18: Why Invest in AWI?
Unique company in an attractive industry Complementary, high performing segments Strong financial returns Consistent & focused growth strategy Value Creation for Shareholders Why Invest in AWI?
Slide 19: Consistent and Focused Strategy That Drives Value for Stakeholders
Consistent and Focused Strategy That Drives Value for Stakeholders Market-driven product innovation Acquisitions to build greater market opportunity Enhances our competitive advantage Expands volume and AUV growth potential Creates shareholder value GROWTH STRATEGY EXPECTED OUTCOMES Customer-centric
Slide 20: New Products and Features Consistently Rewarded by the Market
New Products and Features Consistently Rewarded by the Market 1. Product Vitality Index represents the percent of total sales from products introduced in the last 5 years. Pre-Spin and Post-Spin refers to the separation from Armstrong Flooring, Inc., completed on April 1, 2016. 2. US and Canada Mine
Slide 21: Next Innovation Focus: Reducing Energy Use and Carbon in the Built Environment
Next Innovation Focus: Reducing Energy Use and Carbon in the Built Environment 1. Cooling energy savings according to research estimates measured in lab tests. Results may vary. | 2. Reduction in cradle-to-gate stages (A1-A3) impacts compared to standard Ultima® Panels. Carbon Impact Case Studies Un
Slide 22: Strategic Initiatives Support Volume and AUV Growth
Healthy, Sustainable Spaces Description Digital platform to deliver end-to-end ceiling solutions, accessing untouched demand Automated design service to deepen customer relationships, strengthen specifications & lower construction costs Focused on sustainable solutions for better indoor environmenta
Slide 23: Driving Profitable AS Topline Growth Through Acquisitions and Market Penetration
Driving Profitable AS Topline Growth Through both Acquisitions and Market Penetration 23 Acquisitions AWI’s scale and focus drive synergies to enhance profitability and create value EBITDA multiples: ~9x pre-synergy ~7x post-synergy2 AS Segment Net Sales 20% CAGR Reflects AS segment Net Sales midpoi
Slide 24: Why Invest in AWI?
Unique company in an attractive industry Complementary, high performing segments Strong financial returns Consistent & focused growth strategy Value Creation for Shareholders Why Invest in AWI?
Slide 25: Resilient Business Model Creates Value for Shareholders
^ Resilient Business Model Creates Value for Shareholders *Non-GAAP measure. See appendix for reconciliation to the nearest GAAP measure. Delivering exceptional results despite a tough macro environment Net Sales ($M) Adjusted EBITDA* ($M) Adj Free Cash Flow* ($M) Adjusted Diluted EPS* 9% 3 Year CAG
Slide 26: Strong Cash Flow Profile Supports All Capital Allocation Priorities
Strong Cash Flow Profile Supports All Capital Allocation Priorities Adj. Free Cash Flow* Adj. Free Cash Flow Conversion*1 ~$900M of Adj. Free Cash Flow* generated since 2020 Balanced Approach To Capital Allocation Capital Allocation Priorities Share Repurchases Acquisitions2 CapEx Cash Dividends $30
Slide 27: Creating Value for Shareholders
Creating Value for Shareholders 1. The performance shown in the chart assumes $100 invested on December 31, 2022 through July 31, 2024, with dividends reinvested, and it should not be considered indicative of future performance. Unique company in an attractive industry Complementary, high performing
Slide 28: Raising Full Year 2024 Guidance
Solid execution driving growth and margin expansion Raising Full Year 2024 Guidance1 *Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure 1. As issued on July 30, 2024. | 2. Additional assumptions available in the appendix of this presentation. Commentary2 Macro uncertainty con
Slide 29: Appendix
® Appendix
Slide 30: Updating Full Year 2024 Assumptions
Updating Full Year 2024 Assumptions1 Shipping Days vs Prior Year 2023 2024 2025 Q1 +1 - - Q2 - - - Q3 (1) +1 - Q4 - +1 - Full Year - +2 - 30 Segment2 Net Sales Adjusted EBITDA Margin Mineral Fiber +4% to +6% growth (prior: +2% to +5%) ~41% (prior: >40%) Architectural Specialties +22% to +24% growth
Slide 31: 2020 – 2023 Adjusted EBITDA Reconciliation
2020 – 2023 Adjusted EBITDA Reconciliation Year Ended December 31, For the Twelve Months Ended December 31, 2020 2021 2022 2023 Net Sales $937 $1,107 $1,233 $1,295 Net earnings (loss) ($99) $183 $203 $224 Less: Net (loss) earnings from discontinued operations (15) (2) 3 - Earnings (loss) from contin
Slide 32: 2020 – 2023 Adjusted Diluted Earnings per Share Reconciliation
2020 – 2023 Adjusted Diluted Earnings per Share Reconciliation Year Ended December 31, For the Twelve Months Ended December 31, 2020 2021 2022 2023 Earnings (loss) from continuing operations ($84) $185 $200 $224 Add/(less): Income tax expense (benefit) (43) 57 58 75 Earnings (loss) from continuing o
Slide 33: 2020 – 2023 Adjusted Free Cash Flow Reconciliation
2020 – 2023 Adjusted Free Cash Flow Reconciliation . Year Ended December 31, For the Three Months Ended March 31: 2020 2021 2022 2023 Net cash provided by operating activities $219 $187 $182 $234 Net cash (used for) provided by investing activities ($141) ($14) $28 ($10) Net cash provided by operati
Slide 34: 2023 Segment Adjusted EBITDA Reconciliation
2023 Segment Adjusted EBITDA Reconciliation 1. RIP expense represents only the plan service cost related to the RIP that is recorded within Operating Income. For all periods presented, we were not required to and did not make cash contributions to our RIP. 2. Represents the impact of acquisition-rel
Slide 35: Full Year 2024 Guidance Reconciliation
Full Year 2024 Low High Net earnings $254 $257 Add: Income tax expense 85 87 Earnings before income taxes $339 $344 Add: RIP (credit)4 (2) (1) Add: Acquisition-related amortization5 11 12 Add: Acquisition-related impacts2 2 2 Add: Environmental expense 1 1 Add: WAVE pension settlement3 1 1 Adjusted
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