Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2024 Earnings Presentation
18 slides from Armstrong World Industries's earnings presentation, Oct 29, 2024
Slide 1: 3rd Quarter 2024 Earnings Presentation
3rd Quarter 2024 Earnings Presentation October 29, 2024
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, market and broader economic conditions and g
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 Results Q3 2024 Q3 2023 YTD 2024 YTD 2023 Net sales $386.6 $347.3 $1,078.0 $982.9 Net earnings $76.9 $69.5 $202.7 $177.0 Operating income $111.3 $100.2 $292.4 $257.4 Adj. EBITDA* $139 $125 $375 $332 Operating income margin (operating income % of n
Slide 5: Continued Double-Digit Top and Bottom-Line Growth
Continued Double-Digit Top and Bottom-Line Growth 3rd Quarter 2024 Key Takeaways $387M (+11% VPY) Net Sales Net Sales up 11% and Adj. EBITDA* up 11% Total company adj. EBITDA margin* similar to prior year at 35.9% Mineral Fiber segment Adj. EBITDA* up 8% $139M (+11% VPY) Adj. EBITDA margin* expanded
Slide 6: Best Q3 Adj. EBITDA Margin in Mineral Fiber Since 2019
Best Q3 Adj. EBITDA Margin* in Mineral Fiber Since 2019 Mineral Fiber Q3 2024 Results $258 $250 Net Sales Q3 Mineral Fiber Key Highlights Growth VPY +3% Adj. EBITDA margin* expanded 200bps ● to 43.9% Q3 '23 Q3 '24 Adj. EBITDA* Comparison VPY Q1 Q2 Q3 ● Market conditions continued to stabilize 2023 A
Slide 7: Robust AS Sales Growth Driven by Recent Acquisitions
Robust AS Sales Growth Driven by Recent Acquisitions Architectural Specialties Q3 2024 Results Net Sales Q3 Architectural Specialties Key Highlights $129 Growth VPY $98 ● Record-setting segment sales and earnings +32% ● Total AS Adj. EBITDA margin* of 20.1% including recent acquisitions Q3 '23 Q3 '2
Slide 8: Double-Digit Sales and Earnings Growth
Double-Digit Sales and Earnings Growth Q3 2024 Consolidated Company Key Metrics Q3 2023 Q3 2024 Variance Net Sales $347 $387 11% Adj. EBITDA* $125 $139 11% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 36.0% 35.9% (10bps) Adj. Diluted Earnings Per Share* $1.60 $1.81 13% $6 $1 $18 ($0) Adj. EBITDA
Slide 9: Strong Sales & Adj. EBITDA Growth with Margin Expansion
Strong Sales & Adj. EBITDA* Growth with Adj. EBITDA Margin* Expansion Year-to-Date 2024 Consolidated Company Key Metrics YTD 2023 YTD 2024 Variance Net Sales $983 $1,078 10% Adj. EBITDA* $332 $375 13% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 33.8% 34.8% 100bps Adj. Diluted Earnings Per Share
Slide 10: Adjusted Free Cash Flow Enables All Capital Allocation Priorities
Adjusted Free Cash Flow* Enables All Capital Allocation Priorities 2024 Year-to-Date Adj. Free Cash Flow* 2024 Year-to-Date Up 9% vs PY Capital Deployment $7 $212 $6 $0 $7 $195 ($3) 2024 $54 $37 $40 $99 2023 $60 $34 $97 $24 YTD Adj. Operating CapEx Interest WAVE Other YTD 2023 Cash Flow (1) Paid Div
Slide 11: Updating Full Year 2024 Guidance
Updating Full Year 2024 Guidance Solid execution driving growth and margin expansion Net Sales Adj. EBITDA* Commentary1 $1,420M to $1,435M $482M to $490M Stabilizing market conditions 10% to 11% YoY 12% to 14% YoY Expect full year MF volume down ~1% Prior: $1,415M to $1,440M Prior: $474M to $486M 9%
Slide 12: Appendix
Appendix
Slide 13: Updating Full Year 2024 Assumptions
Updating Full Year 2024 Assumptions Segment1 Net Sales Adjusted EBITDA Margin* Mineral Fiber ~5% growth (prior: +4% to +6%) > 41% (prior: ~41%) Architectural Specialties 23% to 24% growth (prior: +22% to +24%) ~18% (unchanged) Consolidated Metrics Full Year 2024 Shipping Days 2023 2024 2025 vs Prior
Slide 14: Q3 2024 Adjusted EBITDA Reconciliation
Q3 2024 Adjusted For the Three Months Ended September 30, For the Nine Months Ended September 30, Q3 2024 Adjusted EBITDA Reconciliation 2024 2023 2024 2023 Diluted EPS For the Three Months For the Nine Months Ended September 30, Ended September 30, Net sales $387 $347 $1,078 $983 Reconciliation 202
Slide 15: Q3 2024 Adjusted Free Cash Flow Reconciliation
For the Three Months Ended September 30, For the Nine Months Ended September 30, Q3 2024 Adjusted Free Cash Flow Reconciliation 2024 2023 2024 2023 Net cash provided by operating activities $97 $83 $180 $176 Net cash provided by (used for) investing activities $20 ($5) ($61) ($11) Net cash provided
Slide 16: Q3 2024 Segment Adj. EBITDA Reconciliation
For the Three Months Ended September 30, For the Nine Months Ended September 30, Q3 2024 Segment Adj. MF AS UC MF AS UC EBITDA Reconciliation 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Net sales $258 $250 $129 $98 - - $748 $712 $330 $271 - - Operating income (loss) $93 $86 $19 $16 (
Slide 17: 2024 Adj. EBITDA Guidance Reconciliation
2024 Adj. EBITDA Full Year 2024 Guidance Reconciliation Low High Net earnings $260 $262 Add: Income tax expense 83 84 Earnings before income taxes $343 $346 Add: Interest expense 40 41 Add: Other non-operating (income), net (11) (10) Operating income $372 $377 Add: RIP expense1 2 2 Add: Acquisition-
Slide 18: 2024 Adj. Diluted EPS and Adj. Free Cash Flow Guidance Reconciliation
2024 Adj. Diluted EPS Full Year 2024 Guidance Reconciliation Low High Net earnings $260 $262 Add: Income tax expense 83 84 Earnings before income taxes $343 $346 2024 Adj. Free Cash Flow Full Year 2024 Add: RIP (credit)1 (2) (1) Add: Acquisition-related amortization2 10 11 Guidance Reconciliation Lo
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