Interface, Inc. · NASDAQ:TILE
Interface — Stifel 2020 Cross Sector Insight Conference
25 slides from Interface's conference presentation, Jun 8, 2020
Slide 1: Stifel 2020 Cross Sector Insight Conference
Stifel 2020 Cross Sector Insight Conference JUNE 9, 2020
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures This presentation contains forward-looking statements, including, in particular, statements about Interface’s plans, strategies and prospects. These are based on the Company’s current assumptions, expectations and projections about future events. Alth
Slide 3: Presenters: Dan Hendrix and Bruce Hausmann
Dan Hendrix Chairman, President and Chief Executive Officer Bruce Hausmann Vice President and Chief Financial Officer 3
Slide 4: Interface at a Glance
Interface at a Glance Interface is the leader in commercial flooring. Headquartered in Atlanta, GA ($ in millions, except EPS) FYE FYE % 2018 2019 growth 7 manufacturing locations on 4 continents Net Sales $1,180 $1,343 14% Adj Operating Income* $134 $150 12% 4,100 global employees Adj EPS (Diluted)
Slide 5: Investment Thesis
Investment Thesis • Strong commercial brands that lead in growth areas of the industry • Share leader in a $39 billion global commercial flooring category: – Leading share in carpet tile and rubber – Growing share in LVT • Strong growth execution and positioned for future growth: – Selling system tr
Slide 6: COVID-19 Response
COVID-19 Response Balanced approach to navigating COVID-19 crisis – right-sizing the organization in line with current demand while maintaining customer service and commitment to strategic agenda HEALTH & SAFETY COST REDUCTIONS SUPPLY CHAIN LIQUIDITY • Remote working • Right-sizing organization to •
Slide 7: Who We Are
Who We Are Established brand Global with a history manufacturing of innovation and a footprint with commitment to industry-leading sustainability gross margins Engaged customer- Leading centric culture global provider Strongest global focused on of commercial sales & marketing performance and floori
Slide 8: Growth Strategy
Growth Strategy Interface is the Leader in Commercial Flooring Grow the Core Build Execute Optimize SG&A Carpet Tile a Resilient Supply Chain Resources Business Flooring Business Productivity Lead a World-Changing Sustainability Movement Centered Around Climate Take Back. 8
Slide 9: Attractive Product Portfolio
Attractive Product Portfolio Carpet Tile • Biomimicry-inspired random design (i2) • High recycled content • No glue installation (TacTiles®) • Faster, more profitable installation for contractors • Easily recycled (ReEntry® program) • Carbon neutral (Carbon Neutral Floors™) Luxury Vinyl Tile (LVT) •
Slide 10: Leading Global Provider of Commercial Flooring Solutions
Leading Global Provider of Commercial Flooring Solutions • Interface participates in the $39 Billion Global Commercial Flooring segment • We are the global share leader in the $5.0 Billion Carpet Tile segment which now exceeds the value of Broadloom globally • We entered the high growth $3.3 Billion
Slide 11: Participating in Attractive Commercial Flooring Segments
Participating in Attractive Commercial Flooring Segments • Interface serves growing segments of hard and soft surface with the highest margins GLOBAL COMMERCIAL FLOORING: SEGMENT SIZE vs FORECASTED GROWTH and GROSS MARGIN 14% Bubble size = Global commercial value of category, 2019 12% LVT 10% 8% 6%
Slide 12: Brand Leader in the Specified Channel
Brand Leader in the Specified Channel • Interface competes on design, sustainability and innovation, commanding a premium price point and industry leading margins • Interface is the share leader in the specified and end user channels of commercial carpet tile which are highly influenced by Architect
Slide 13: Global Sales and Manufacturing Platform
Global Sales and Manufacturing Platform • Sales in over 110 countries • Seven manufacturing locations on four continents • Over 1,100 sales & marketing professionals • Global supply chain management • Global account management • Unique blend of efficiency and customization AMERICAS EMEA ASIA-PACIFC
Slide 14: Diversified Customer Verticals
Diversified Customer Verticals CORPORATE OFFICE • Highest penetration of carpet tile vs broadloom • Global Account management • Emerging market penetration BILLINGS BY SEGMENT EDUCATION • K-12 and higher education • Second highest penetration of carpet tile vs broadloom • Second largest market for r
Slide 15: Purpose-Driven Culture Galvanized Around a Common Sustainability Mission
Purpose-Driven Culture Galvanized Around a Common Sustainability Mission 2019 Recognition Our sustainability journey began in GlobeScan SustainAbility Leaders Report 1994, led by our founder, Ray Anderson. Floor Covering Weekly’s GreenStep Awards Over the last 25 years, we’ve changed Pinnacle Award
Slide 16: Radical Reductions in Environmental Impacts
Radical Reductions in Environmental Impacts 96% 89% 54% Reduction in Greenhouse Gas Reduction in Water Of total raw materials used emissions intensity intake intensity are bio-based or made since 1996 since 1996 of recycled materials 89% 69% 92% Energy use from Reduction in Carbon footprint Reductio
Slide 17: Carpet Tile Carbon Footprint Comparison
Carpet Tile Carbon Footprint Comparison CRADLE-TO-GATE CARBON FOOTPRINT, FROM RAW MATERIAL EXTRACTION THROUGH MANUFACTURING 17
Slide 18: Financial Performance
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Slide 19: Adjusted EBITDA Growth
Adjusted EBITDA Growth • Adjusted EBITDA of $203 as of LTM Q1 2020 ADJUSTED EBITDA* ($ in millions) 12% CAGR $225 $200 $203 $200 $186 $175 $152 $150 $142 $125 $100 $75 $50 $25 $0 2016 2017 2018 2019 LTM Q1 2020 * See Appendix for a reconciliation on Non-GAAP figures 19
Slide 20: Adjusted Earnings Per Share
Adjusted Earnings Per Share • Our value creation strategy is generating double digit Adjusted EPS growth ADJUSTED EARNINGS PER SHARE (DILUTED)* 18% CAGR $1.77 $1.80 $1.59 $1.60 $1.49 $1.40 $1.18 $1.20 $1.03 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 2016 2017 2018 2019 LTM Q1 2020 * See Appendix for a reco
Slide 21: Capitalization and Liquidity
Capitalization and Liquidity TOTAL DEBT NET DEBT $700 ($ in millions) $700($ in millions) $627 $619 $596 $555 $538 $515 $525 $525 $350 $350 $270 $230 $175 $175 $143 $105 $0 $0 2016 2017 2018 2019 Q1 2020 2016 2017 2018 2019 Q1 2020 ADJUSTED EBITDA* NET DEBT / ADJUSTED EBITDA* $250 ($ in millions) 3.
Slide 22: Who We Are
Who We Are Established brand Global with a history manufacturing of innovation and a footprint with commitment to industry-leading sustainability gross margins Engaged customer- Leading centric culture global provider Strongest global focused on of commercial sales & marketing performance and floori
Slide 23: Interface
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Slide 24: Appendix: Reconciliation of Non-GAAP Figures
Appendix: Reconciliation of Non-GAAP Figures ($ in millions) Q1 2019 Q1 2020 Net Sales as Reported (GAAP) $297.7 $288.2 Impact of Changes in Currency - 4.9 Organic Sales $297.7 $293.1 Gross Profit as Reported (GAAP) $116.5 $114.3 Purchase Accounting Amortization 1.9 1.3 Adjusted Gross Profit $118.4
Slide 25: Appendix: Reconciliation of Non-GAAP Figures
Appendix: Reconciliation of Non-GAAP Figures LTM 2018 2019 Q1 2019 Q1 2020 Q1 2020 Diluted EPS as Reported (GAAP) $0.84 $1.34 $ 0.12 $ (1.75) ($0.53) Purchase Accounting 0.38 0.08 0.02 0.02 0.08 Transaction Related Expenses 0.12 - - - - Goodwill and Intangible Asset Impairment Charge - - - 2.05 2.05
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