Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q4 2015 Earnings Presentation
21 slides from Armstrong World Industries's earnings presentation, Feb 22, 2016
Slide 1: Earnings Call Presentation 4th Quarter 2015
Earnings Call Presentation 4th Quarter 2015 February 22, 2016 Exhibit 99.2
Slide 2: Safe Harbor Statement
Our disclosures in this presentation, including without limitation, those relating to future financial results guidance and the possible separation of our flooring business from our building products business, and in our other public documents and comments contain forward-looking statements within t
Slide 3: Basis of Presentation
All figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. When reporting our financial results within this presentation, we make several adjustments. Management uses the non-GAAP measures below in managing the business and believes the adj
Slide 4: Key Metrics – Fourth Quarter 2015
Key Metrics – Fourth Quarter 2015 2015 2014 Variance Net Sales (1) $600 $588 2.1% Operating Income (2) 44 50 (13.3%) % of Sales 7.3% 8.6% (130 bps) EBITDA 76 81 (6.4%) % of Sales 12.7% 13.8% (110 bps) Earnings Per Share (3) $0.27 $0.41 (34.1%) Free Cash Flow 4 49 (92.9%) Net Debt 758 857 (99) ROIC(4
Slide 5: Fourth Quarter 2015 vs. PY – Adjusted EBITDA to Reported Net Income
Fourth Quarter 2015 vs. PY– Adjusted EBITDA to Reported Net Income 2015 2014 V EBITDA– Adjusted $76 $81 ($5) Depreciation and Amortization (32) (31) (1) Operating Income – Adjusted $44 $50 ($6) Non-cash Impact of U.S. Pension 6 - 6 Separation Expenses 18 - 18 Cost Reduction Initiatives 8 2 6 Impairm
Slide 6: Fourth Quarter Sales and EBITDA by Segment – 2015 vs. Prior Year
Fourth Quarter Sales and EBITDA by Segment – 2015 vs. Prior Year
Slide 7: Building Products Fourth Quarter Results
On a comparable foreign exchange basis sales increased 1% as favorable price and mix performance offset volume declines in emerging markets. Sales in the Americas on a comparable foreign exchange basis were up 2.5% as volume, mix and price all improved over the prior year period Continued sales grow
Slide 8: Resilient Flooring Fourth Quarter Results
On a comparable foreign exchange basis sales increased 4% driven by volume growth across both regions and favorable mix; more than offsetting unfavorable price Reflects modest pricing pressure although less than the related input cost benefit and unfavorable mix in the Pacific Rim Volume growth acro
Slide 9: Wood Fourth Quarter Results
On a constant currency basis sales increased 3% as higher volumes more than offset unfavorable price and mix Some price compression, although less than input cost benefit, partly offset by favorable mix Reflects the benefit of favorable input costs Increased SG&A to support go-to-market investments
Slide 10: EBITDA Bridge – Fourth Quarter 2015 vs. Prior Year
EBITDA Bridge – Fourth Quarter 2015 vs. Prior Year
Slide 11: Free Cash Flow – Fourth Quarter 2015 vs. Prior Year
Free Cash Flow – Fourth Quarter 2015 vs. Prior Year * Prior year included $24 million benefit associated with the closing of intercompany loan hedges
Slide 12: Key Metrics – Full Year 2015
Key Metrics – Full Year 2015 2015 2014 Variance Net Sales (1) $2,492 $2,493 (0.0%) Operating Income (2) 270 272 (0.7%) % of Sales 10.8% 10.9% (10 bps) EBITDA 391 390 0.2% % of Sales 15.7% 15.6% 10 bps Earnings Per Share (3) $2.25 $2.38 (5.4%) Free Cash Flow 102 64 60.7% As reported Net Sales: $2,420
Slide 13: Full Year Sales and EBITDA by Segment – 2015 vs. Prior Year
Full Year Sales and EBITDA by Segment – 2015 vs. Prior Year
Slide 14: EBITDA Bridge – Full Year 2015 vs. Prior Year
EBITDA Bridge – Full Year 2015 vs. Prior Year ($18) $8 ($7) $2
Slide 15: Free Cash Flow – Full Year 2015 vs. Prior Year
Free Cash Flow – Full Year 2015 vs. Prior Year * Prior year included $24 million benefit associated with the closing of intercompany loan hedges
Slide 16: Separation Costs
Separation Costs Full Year Total 2015 2016 Expense 34 34 68 Cash (including capital expense) 27 59 86 Capital Expense 9 9 18
Slide 17: Appendix
@mstrong Appendix Inspiring Great Spaces
Slide 18: Full Year 2015 vs. PY – Adjusted EBITDA to Reported Net Income
Full Year 2015 vs. PY– Adjusted EBITDA to Reported Net Income 2015 2014 V EBITDA– Adjusted $391 $390 $1 Depreciation and Amortization (121) (118) (3) Operating Income – Adjusted $270 $272 ($2) Non-cash Impact of U.S. Pension 25 1 24 Separation Expenses 34 - 34 Multilayered Wood Flooring Duty 4 - 4 C
Slide 19: Consolidated Results
Consolidated Results Fourth Quarter 2015 Reported Comparability(1) Adjustments Fx(2) Adj 2015 Adjusted 2014 Reported Comparability(1) Adjustments Fx(2) Adj 2014 Adjusted Net Sales 577 - 23 600 587 - 1 588 Operating Income 9 32 3 44 36 12 2 50 EPS ($0.21) $0.44 $0.04 $0.27 $0.19 $0.20 $0.02 $0.41 Ful
Slide 20: Segment Operating Income (Loss)
Segment Operating Income (Loss) Fourth Quarter 2015 Reported Comparability(1) Adjustments 2015 Adjusted 2014 Reported Comparability(1) Adjustments 2014 Adjusted Building Products 51 8 59 55 3 58 Resilient Flooring (1) 1 0 16 (1) 15 Wood Flooring 8 1 9 (19) 12 (7) Unallocated Corporate (Expense) Inco
Slide 21: Cash Flow
Cash Flow Fourth Quarter Full Year ($ millions) 2015 2014 2015 2014 Net cash from operations $60 $98 $204 $209 Net cash (used for) investing (56) (52) (102) (149) Add back (subtract) adjustments to reconcile to free cash flow Net cash effect from deconsolidation of European Flooring business - 4 - 4
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