Slide 1: Mohawk Industries, Inc. Investor Presentation – February 2015
Mohawk Industries, Inc. Investor Presentation – February 2015
Slide 2: Forward-looking Statements
Forward-looking Statements Certain of the statements in this presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties including, but not limited to, those set forth in our press releas
Slide 3: Mohawk Industries Highlights
Mohawk Industries Highlights ▪ World’s largest flooring manufacturer ▪ Leading market positions • Ceramic • Wood • Carpet & Rugs • Stone Flooring & • Laminate Countertops ▪ Expanding international presence ▪ Total flooring product offering ▪ Vertically integrated manufacturing ▪ Superior distributio
Slide 4: Mohawk by the Numbers
M8) Mohawk by the Numbers @® © $7.88 SLITIM =—1,44755 Worldwide Sales Adjusted Stock Growth x EBITDA Since 1992 Since 1992 Soros n esas nea sean eens seen ance e seen ca pone cn ane c ans sac aan eee enna een ea poe e ease aoa seen eee ey ee oe @ © 30,000+ 140+ 25,000+ a. Employees Countries Custome
Slide 5: Focused Business Strategy
Ml Focused Business Strategy ET VALUE MAXIMIZATION = Grow shareholder value a Deliver above-market returns efficiencies and distribution OPERATIONAL EXCELLENCE : = Drive optimization of resources and materials = Leverage knowledge and = Increase profits through growth, ; innovation across segments =
Slide 6: Growth Through Innovation & Acquisition
Growth Through Innovation & Acquisition 6
Slide 7: Acquisition Strategy
WW Acauisition Strategy @® & GEOGRAPHY = PRODUCTS © MANAGEMENT — RETURNS = New Locations : m New flooring = Proven ‘= Good valuation : product categories management team : mu Leverage strengths : : m Potential for in existing | m Categories with = Good bench ' significant ROI locations : synergies t
Slide 8: IVC Group Acquisition: Announced Q1 2015
IVC Group Acquisition: Announced Q1 2015 • LVT, Sheet Vinyl & Laminate Production 2014CHART Sales TITLE by Product – Based in Belgium & U.S. – 2014 sales $735M & EBITDA 19.7% Laminate & MDF – #1 European residential sheet vinyl & LVT 30% – #2 North America sheet vinyl Vinyl Sheet 50% • Transaction D
Slide 9: International Expansion
MH International Expansion is North America Europe Carpet Russia Rugs + Mats Ceramic Ceramic Laminate Ceramic Laminate Wood Laminate Wood Australia Laminate Wood Distridutian South America Asia Wood Laminate (JV) Laminate (JV)
Slide 10: Position by Product, Geography & End Market
Position by Product, Geography & End Market 2014 Sales Mix without Acquisitions (Rounded) By Segment By Geography By End Market Western Europe 20% Commercial Carpet 40% 20% Russia 5% Ceramic ROW 5% 40% North America 70% Residential Laminate & 80% Wood 20% 10
Slide 11: Positive Industry Outlook
Positive Industry Outlook United States GDP growing Flooring industry growth will outpace economy Low mortgage rates driving home sales New residential construction increasing Rising home prices support reinvestment Pent-up demand from postponed residential remodeling Before After Commercial end mar
Slide 12: Historic Pent Up Demand: Flooring
Historic Pent Up Demand: Flooring U.S. Shipments - Millions Sq. Ft. Ceramic Carpet Year Sq. Feet % PY Sq. Feet % PY 1980 553 -9% 9,526 -12% 1981 554 0% 8,916 -6% 1982 530 -4% 7,972 -11% 1983 646 18% 9,811 23% 1990 1,030 -15% 12,240 3% 1991 928 -11% 11,502 -6% 1992 1,042 11% 12,773 11% 2001 2,307 0%
Slide 13: Product Mix Across U.S. Flooring Industry
Product Mix Across U.S. Flooring Industry U.S. Flooring Industry - $20 Billion Hardwood 12% Ceramic 13% Carpets & Rugs 51% Laminate 5% Stone 6% Other Resilient 1% Vinyl 12% Source: Floor Covering Weekly, July 21, 2014. 13 13
Slide 14: U.S. Floor Covering Sales by End-Use Market
U.S. Floor Covering Sales by End-Use Market U.S. Industry Sales ▪ Industry recovery early in cycle Builder 14% ▪ New housing starts Residential Replacement and remodeling 60% improved in 2013 ▪ Significant pent-up demand for residential remodeling due to impact of recession ▪ Commercial typically la
Slide 15: 2013 U.S. Flooring Market Leaders
2013 U.S. Flooring Market Leaders Total Flooring Industry Competitor Mix Mohawk 22% Imports & All Others 35% Armstrong 6% Tarkett 4% Mannington 4% Beaulieu of America 3% Shaw 20% Engineered Floors 2% Dixie Group 2% Interface 2% Source: Floor Focus, May 2014 15 15
Slide 16: U.S. Floorcovering Distribution Channels
U.S. Floorcovering Distribution Channels U.S. Industry Contractor 17% Specialty Stores 51% Home Centers 30% Other 2% Sources: Floor Covering Weekly, July 21, 2014, and management estimate. 16 16
Slide 17: Innovative Products & Technologies
Innovative Products & Technologies 17
Slide 18: World-Class Systems
World-Class Systems ▪ State-of-the-art order and inventory management system ▪ Sophisticated transportation management ▪ Integrated warehouse management ▪ Next-generation supply chain planning 18
Slide 19: Best-in-Class Distribution Network
Best-in-Class Distribution Network ▪ National network of distribution centers provides efficient delivery ▪ Service Centers provide key channel for ceramic distribution ▪ BEST-IN-CLASS: • Logistics system • 1,500 sales representatives • 300 distribution points • 600 trucks 19
Slide 20: The Business of Sustainability
The Business of Sustainability Improving the Environment in Our Communities ▪ Waste reduction • Almost 4 billion lbs. of recycled materials purchased • Zero Process Waste to Landfill campaign ▪ Use of recycled content • Over 500 products contain recycled material • Able to recycle 5 billion plastic
Slide 21: Ceramic: 40% of Revenue Competitive Advantages
Ceramic: 40% of Revenue Competitive Advantages ▪ Worldwide ceramic leader with leading positions in North America, Europe and Russia ▪ Most widely recognized ceramic brands ▪ Broad product line satisfies all channels and price points ▪ North American market share substantially larger than closest co
Slide 22: Ceramic: Expanding Globally
Ceramic: Expanding Globally Market Leader Leading Position Manufacturing Locations 22
Slide 23: 2013 Global Tile Market: Opportunity
2013 Global Tile Market: Opportunity Consumption by Region 125 Billion Sq. Ft. India 7% Turkey, Saudi European Union 7% Arabia & Iran 7% Brazil 7% Africa 6% Indonesia & Vietnam 5% Russia 2% USA 2% China 39% Other 18% Sources: Ceramic World Review, September 2014, Internal Analysis. 23
Slide 24: Ceramic: Brands Serving All Channels
Ceramic: Brands Serving All Channels 24 24
Slide 25: Carpet: 40% of Revenue Competitive Advantages
Carpet: 40% of Revenue Competitive Advantages ▪ Leading market share in all channels ▪ Leader in innovation & soft technology ▪ Well-known exclusive brands – SmartStrand and WearDated Embrace ▪ Proprietary Continuum process – polyester fiber with up to 100% recycled content ▪ Strong aligned dealer n
Slide 26: Carpet: Brands Serving All Channels
Carpet: Brands Serving All Channels 26 26
Slide 27: Laminate & Wood: 20% of Revenue Competitive Advantages
Laminate & Wood: 20% of Revenue Competitive Advantages ▪ Laminate leader in mid- to high-end categories ▪ Strong consumer brand recognition in Europe & U.S. ▪ Complete laminate and pre-finished wood offering ▪ Undisputed innovation leader ▪ Vertically integrated low-cost manufacturer 27 27
Slide 28: Laminate & Wood: Brands Serving All Channels
Laminate & Wood: Brands Serving All Channels 28 28
Slide 29: Laminate & Wood Segment: Non-Flooring Products
Laminate & Wood Segment: Non-Flooring Products ▪ Chipboards Roofing Panels • Furniture and specialty construction ▪ Custom Roofing Panels • Insulated roof panels and hinged roofs ▪ Insulation Panels Chipboards Insulation Panels 29
Slide 30: Mohawk Industries, Inc.
Mohawk Industries, Inc. 30
Slide 31: Adjusted Net Sales & Adjusted EBITDA
Adjusted Net Sales & Adjusted EBITDA Net Sales EBITDA (% of Net Sales) $7,803 $1,171 $7,349 $991 $5,788 $5,642 $677 $5,319 $631 $633 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 11.9% 11.2% 11.7% 13.5% 15.0% Dollars in Millions, excluding unusual items 31 31
Slide 32: Earnings Summary (ex-unusual items)
Earnings Summary (ex-unusual items) (Dollars in Millions except EPS) Years Ended 2010 2011 2012 2013 2014 Net Sales $ 5,319 $ 5,642 $ 5,788 $ 7,349 $ 7,803 % Change (3%) 6% 3% 27% 6% Operating Income $ 327 $ 345 $ 398 $ 690 $ 834 Operating Margin 6% 6% 7% 9% 11% Net Earnings $ 173 $ 202 $ 262 $ 473
Slide 33: Results by Segment (ex-unusual items)
Results by Segment (ex-unusual items) (Dollars in Millions) Segment 2010 2011 2012 2013 2014 Carpet Sales $ 2,845 $ 2,928 $ 2,918 $ 2,986 $ 3,014 % Change (4%) 3% (1%) 3% 1% Operating Income $ 133 $ 136 $ 169 $ 223 $ 268 Operating Margin 5% 5% 6% 7% 9% Ceramic Sales $ 1,367 $ 1,454 $ 1,616 $ 2,677 $
Slide 34: Quarterly Earnings Summary (Ex-unusual items)
Quarterly Earnings Summary (Ex-unusual items) (Dollars in Millions except EPS) Fourth Quarter 2012 2013 2014 Net Sales $ 1,436 $ 1,924 $ 1,951 % Change 4% 34% 1% Operating Income $ 102 $ 187 $ 221 Operating Margin 7% 10% 11% Diluted EPS $ 1.01 $ 1.79 $ 2.27 % Change 41% 77% 27% Diluted EPS $2.27 $1.
Slide 35: Leverage and Capital Structure
Leverage and Capital Structure (Dollars in Millions) Capitalization As of Interest Net Debt-to-EBITDA Multiple* 12/31/2014 Rate Securitization Facility $500 L+0.70% 2.3x Commercial Paper 302 0.67% 2.3x Revolving Credit Facility 196 L+1.25% 2016 Senior Notes 646 6.13% 2.1x 2.1x 2023 Senior Notes 600
Slide 36: Mohawk Industries, Inc.
Mohawk Industries, Inc. 36