Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2014 Earnings Presentation
20 slides from Armstrong World Industries's earnings presentation, Oct 27, 2014
Slide 1: Earnings Call Presentation Third Quarter 2014
Earnings Call Presentation rd Quarter 2014 October 27, 2014 Exhibit 99.2
Slide 2: Safe Harbor Statement
Our disclosures in this presentation, including without limitation, those relating to future financial results guidance, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Those statements provide our
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 a
Slide 4: Key Metrics – Third Quarter 2014
2014 2013 Variance Key Metrics – Third Quarter 2014 Net Sales $725 $728 (0.5%) Operating Income (8.0%) % of Sales 12.0% 13.0% (100 bps) EBITDA (4.2%) % of Sales 16.2% 16.8% (60 bps) Earnings Per Share $0.83 $0.85 (2.5%) Free Cash Flow (37.0%) Net Debt ROIC 6.4% 8.3% (190 bps) As reported Net Sales:
Slide 5: Third Quarter 2014 vs. PY – Adjusted EBITDA to Reported Net Income
2014 2013 V Third Quarter 2014 vs. PY– Adjusted EBITDA to Reported Net Income EBITDA – Adjusted $117 $122 ($5) Depreciation and Amortization Operating Income – Adjusted $87 $94 ($7) Foreign Exchange Movements - Fixed Asset Accelerated Depreciation and Impairments (not included above) - Cost Reductio
Slide 6: Third Quarter Sales and EBITDA by Segment vs. PY
(11) 4 3 (1) Third Quarter Sales and EBITDA by Segment – 2014 vs. PY (3%) (7%) 4% (15%) (10%) (5%) 0% 5% 10% - Resilient Flooring Wood Flooring Building Products Corporate EBITDA Change (Left-hand scale) % Change in Sales (Right-hand scale)
Slide 7: EBITDA Bridge – Third Quarter 2014 vs. PY
EBITDA Bridge – Third Quarter 2014 vs. PY ($9) ($12) $15 $1 $2 $117 $122 $0 $20 $40 $60 $80 $100 $120 $140 $160 Price/Mix Volume Input Costs Mfg Cost SG&A WAVE Pension Expense Change in D&A ($3) ($1) $2
Slide 8: Cash Flow Bridge – Third Quarter 2014 vs. Prior Year
Free Cash Flow – Third Quarter 2014 vs. Prior Year ($11) ($13) ($1) ($14) $2 $2 $60 $95 $0 $20 $40 $60 $80 $100 Cash Earnings Working Capital Capex Interest Expense WAVE Dividends Other
Slide 9: Key Metrics – September YTD 2014
2014 2013 Variance Key Metrics – September YTD 2014 Net Sales $2,061 $2,045 0.8% Operating Income (4.5%) % of Sales 10.1% 10.7% (60 bps) EBITDA 0.9% % of Sales 14.5% 14.5% 0 bps Earnings Per Share $1.85 $1.66 11.0% Free Cash Flow (81.1%) As reported Net Sales: $2,073 million in and $2,059 million in
Slide 10: September YTD Sales and EBITDA by Segment vs. PY
(10) 11 5 (3) September YTD Sales and EBITDA by Segment – 2014 vs. PY (3%) (1%) 4% (15%) (10%) (5%) 0% 5% 10% 15% - Resilient Flooring Wood Flooring Building Products Corporate EBITDA Change (Left-hand scale) % Change in Sales (Right-hand scale)
Slide 11: EBITDA Bridge – September YTD vs. Prior Year
EBITDA Bridge – September YTD vs. Prior Year ($17) ($25) $3 $11 $300 $297 $200 $220 $240 $260 $280 $300 $320 $340 $360 Price/Mix Volume Input Costs Mfg Cost SG&A WAVE Pension Expense Change in D&A ($26) ($2) $46 $13
Slide 12: Cash Flow Bridge – September YTD vs. Prior Year
Free Cash Flow – September YTD vs. Prior Year ($5) ($40) ($11) ($15) $6 $4 $14 $75 $0 $10 $20 $30 $40 $50 $60 $70 $80 Cash Earnings Working Capital Capex Interest Expense WAVE Dividends Other
Slide 13: Key Metrics – Guidance 2014
2014 Estimate Range (1) 2013 (2) Variance Net Sales 2,680 to 2,720 2,700 (1%) to 1% Operating Income to (11%) to (5%) EBITDA to (3%) to 2% Earnings Per Share $2.00 to $2.15 $1.98 1% to 9% Free Cash Flow to (100%) to (41%) Guidance is presented using 2014 budgeted foreign exchange rates 2013 results
Slide 14: 2014 Financial Outlook
Raw Material & Energy Inflation Manufacturing Productivity * Earnings from WAVE Cash Taxes/ETR* Q4 Capital Spending Exclusions from EBITDA* SG&A 2014 Financial Outlook $30 - $40 million vs. 2013 Adjusted Gross Margin 0 to 30 bps vs. 2013 Net sales include foreign exchange impact As reported ETR of 4
Slide 15: Inspiring Great Spaces
Inspiring Great Spaces
Slide 16: September YTD 2014 vs. PY – Adjusted EBITDA to Reported Net Income
2014 2013 V September YTD 2014 vs. PY– Adjusted EBITDA to Reported Net Income EBITDA– Adjusted $300 $297 $3 Depreciation and Amortization Operating Income – Adjusted $207 $217 ($10) Foreign Exchange Movements Fixed Asset Accelerated Depreciation and Impairments (not included above) - Cost Reduction
Slide 17: 2014 Estimate Range – Adjusted Operating Income to Adjusted EBITDA
2014 Estimate Range Adjusted Operating Income to Free Cash Flow Adjusted Operating Income to Depreciation and Amortization to Adjusted EBITDA to Changes in Working Capital to Capex to Interest Expense to Cash Taxes to Other, including cash payments for restructuring and one-time items to Free Cash F
Slide 18: Consolidated Results
Third Quarter September YTD Consolidated Results Reported Comparability Adjustments FX Adj Adjusted Reported Comparability Adjustments FX Adj Adjusted Net Sales - - Operating Income - EPS $0.57 $0.26 - $0.83 $0.94 ($0.08) ($0.01) $0.85 Reported Comparability Adjustments FX Adj Adjusted Reported Comp
Slide 19: Segment Operating Income (Loss)
Third Quarter September YTD Segment Operating Income (Loss) Reported Comparability Adjustments Adjusted Reported Comparability Adjustments Adjusted Building Products Resilient Flooring Wood Flooring Unallocated Corporate (Expense) Income - Reported Comparability Adjustments Adjusted Reported Compara
Slide 20: Cash Flow
Third Quarter YTD Cash Flow ($ millions) Net cash from operations $89 $119 $111 $162 Net cash (used for) investing Free Cash Flow $60 $95 $14 $75
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