Mohawk Industries, Inc. · NYSE:MHK
Mohawk Industries — Q4 2024 Earnings Presentation
37 slides from Mohawk Industries's earnings presentation, Feb 7, 2025
Slide 1: Q4 2024 Investor Presentation
mohawkind.com Q4 2024 NYSE: MHK February 2025 Investor Presentation
Slide 2: Forward-looking Statements & Non-GAAP Numbers
Forward-looking Statements & Non-GAAP Numbers Certain of the statements in this presentation, particularly anticipating future performance, business prospects, growth and operating strategies and similar matters and those that include the words “could,” “should,” “believes,” “anticipates,” “expects,
Slide 3: Company Overview
Company Overview
Slide 4: Mohawk at a Glance
Mohawk at a Glance $10.8B $1.4B $9.70 $680M 2024 2024 2024 2024 Net Sales Adjusted EBITDA Adjusted EPS Free Cash Flow ~ ~ 32 41,900 19 180 Acquisitions Worldwide Countries Where Countries Where 2013-2024 Team Members1 We Manufacture1 We Sell Products1 1As of December 31, 2024 4
Slide 5: Three Reporting Segments
Three Reporting Segments Flooring Flooring Global North Rest of the Ceramic America World • 39% 2024 Sales • 35% 2024 Sales • 26% 2024 Sales • North America, Europe, • North America • Europe, Oceania, South America South America, Asia • Residential/Commercial • Floor and Wall Tile • Laminate/Wood •
Slide 6: Organizational Strategy
Organizati g ational Strategy MOHAWK
Slide 7: Growth Strategy
Growth Strategy Non-Organic Market Development Growth & Penetration Mergers & acquisitions Higher sales to existing customers, sales of existing products to new customers & expansion into new markets Growth Operational Levers Product Innovation Excellence & Improvement Simplified operations, Higher-
Slide 8: Operational Excellence
Operational Excellence • Reduce manufacturing complexities • Maximize productivity • Continuously improve quality • Leverage differentiated distribution advantages • Invest in assets that drive speed & efficiency • Optimize automation opportunities • Drive better decisions through advanced informati
Slide 9: Three Decades of Expansion
Three Decades of Expansion Established leading Established leading 7 bolt-on Went public in Established U.S. & EU position market positions in acquisitions extend 1992; expanded strong positions in sheet vinyl & Australia/New participation in U.S. carpet & in U.S. & EU LVT; grew EU Zealand carpet &
Slide 10: Market Development & Penetration
Market Development & Penetration Expanding sales with existing customers through • Differentiated new product launches, • Superior marketing and merchandising, and • Exclusive retail partnerships/aligned dealerships Entering new sales channels • Ceramic pavers for garden centers, landscapers and poo
Slide 11: Product Innovation
Product Innovation CERAMIC TILE CARPET Unprecedented Superior integral 3x the fiber of Combines exclusive surface realism slip resistance traditional carpet; ultra fibers for next level soft & stain resistant design & performance LAMINATE / WOOD RESILIENT Hyper-realistic visuals; Exclusive technolog
Slide 12: Capital Allocation Strategy
Capital Allocation Strategy Balanced Approach to Optimize Growth & Profitability Reinvest in the Business Focus on Sales Growth, Mix Improvement & Cost Reduction Maintain Investment Grade Credit Rating Net Debt to Adjusted EBITDA Ratio is 1.1x1 Pursue Bolt-on Acquisitions Target Strong Companies wit
Slide 13: Q4 2024 Performance
Q4 2024 Performance
Slide 14: Summary of Q4 2024 Results
Summary of Q4 2024 Results • Net sales of $2.6B • Adjusted EPS of $1.95; in line with prior year • Free Cash Flow of $236M • Margins benefited from restructuring, productivity gains, volume from 2 additional shipping days and lower interest expense, partially offset by unfavorable pricing, mix and h
Slide 15: Macroeconomics
Macroeconomics U.S. Economy • Q4 2024 Estimated GDP Growth: 2.3% • 2024 All Items Consumer Price Index: 2.9% • Low unemployment rates continue but down slightly • Dec. 2024 Architectural Billing Index at 44.1; 25%+ of firms report increase in delayed projects • Tariffs announced on Mexico, Canada, C
Slide 16: Q4 2024 Financials
Q4 2024 Financials Net Sales Adjusted EBITDA Q4 Q4 (In millions, except per share data) $2.6B $310M 2023 2024 (+1.0% YOY) (-5.4% YOY) Net Sales $2,612.3 $2,637.2 % Change -- 1.0% Adjusted OI Adjusted Diluted EPS % Change (Adjusted Basis) -- -1.0% $160M $1.95 Adjusted EBITDA $328.1 $310.4 (-8.9% YOY)
Slide 17: Q4 2024 Segment Financials
Q4 2024 Segment Financials Q4 2023 Q4 2024 (In millions) GLOBAL CERAMIC Sales $993.7 $1,008.2 % Change -- 1.5% Adjusted Operating Income $48.0 $53.5 % Adjusted Operating Margin 4.8% 5.3% FLOORING NA Sales $912.1 $937.2 % Change -- 2.8% Adjusted Operating Income $63.2 $53.7 % Adjusted Operating Margi
Slide 18: Global Ceramic
Global Ceramic • Results reflect unfavorable impact of lower pricing and mix and lower input costs, partially offset by productivity gains • Cost containment initiatives: • Optimizing manufacturing by rationalizing less productive operations • Implementing further process improvements • Re-engineeri
Slide 19: Flooring North America
Flooring North America • Results reflect lower pricing and mix and higher input costs, partially offset by higher volume, productivity gains and cost reduction actions • Cost containment initiatives: • Rationalizing selective operations to lower costs & enhance plant utilization • Retiring less effi
Slide 20: Flooring ROW
Flooring ROW • Results reflect unfavorable impact of pricing and mix and higher input costs, partially offset by productivity gains and lower energy expenses • Cost containment initiatives: • Decommissioning inefficient assets • Streamlining product portfolio • Lowering administrative overhead • Con
Slide 21: Q1 2025 Guidance
Q1 2025 Guidance • Expect ongoing softness across our regions in Q1 due to elevated interest rates, compounded inflation & underperforming housing markets • Anticipate pressure from pricing and mix to continue in competitive markets • Expect higher input costs to negatively impact margins • Restruct
Slide 22: Short-term Outlook
Short-term Outlook • Anticipate normal seasonal sales growth & EBIT margin expansion although soft markets continue • Q2 historically strongest for EU, though EU continues to experience demand & pricing headwinds • Pricing pressure will remain strong in competitive markets • Pursuit of volume to max
Slide 23: Longer-term Perspective
Longer-term Perspective • Excluding Flooring North America system change, expectation for 2025 is a slight improvement in earnings with limited market recovery • Cyclical industry downturns are typically followed by strong rebounds as demand returns to normal levels • Inflection point remains unpred
Slide 24: Appendix
a |) il A \ mn iw ILE IFEX Appendix MOHAWK
Slide 25: Annual Earnings Summary (Consolidated)
Annual Earnings Summary (Consolidated) 2022 2023 2024 (In millions, except per share data) Net Sales $11,737.1 $11,135.1 $10,836.9 % Change 4.8% -5.1% -2.7% Adjusted EBITDA $1,649.7 $1,416.5 $1,427.1 % Adjusted EBITDA Margin 14.1% 12.7% 13.2% Adjusted Operating Income $1,083.0 $814.4 $820.1 % Adjust
Slide 26: Annual Results by Segment
Annual Results by Segment 2022 2023 2024 (In millions) GLOBAL CERAMIC Sales $4,307.7 $4,300.1 $4,226.6 % Change 10.0% -0.2% -1.7% Adjusted Operating Income $456.9 $301.6 $291.8 % Adjusted Operating Margin 10.6% 7.0% 6.9% FLOORING NA Sales $4,207.1 $3,829.4 $3,769.9 % Change 2.2% -9.0% -1.6% Adjusted
Slide 27: Maturity/Liquidity Profile
Maturity/Liquidity Profile1 $2,500 December 31, 2024 Total Debt (millions)3 June 2027 EUR Note $520 24% Floating Sept 2028 USD Note $600 76% Fixed May 2030 USD Note $500 Average rate 4.0% USCP/Revolver4 $486 $2,000 ECP/Revolver4 $49 ECP/Revolver Leases/Other $90 Total Debt (Adjusted) $2,245 USCP/Rev
Slide 28: Reconciliation Tables
i Se Reconciliation Tables MOHAWK
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures RECONCILIATION OF NET SALES TO ADJUSTED NET SALES (In millions) Q4 2024 CONSOLIDATED Net Sales $ 2,637.2 Adjustment for constant shipping days (85.9) Adjustment for constant exchange acquisition volume rates 34.4 - Adjusted net sales $ 2,585.7 GLOBAL CERAMIC Net S
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING INCOME (In millions) Q4 2023 Q4 2024 CONSOLIDATED Operating income $ 167.1 $ 121.8 Adjustments to operating income: Restructuring, acquisition and integration-related and other costs 11.3 25.6 Software implementation cost write-off - 5.1 Impairm
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING INCOME (In millions) 2022 2023 2024 Operating income (loss) $ 244.2 (287.8) 694.7 Adjustments to operating income (loss): Restructuring, acquisition and integration-related and other costs 86.0 132.2 94.4 Software implementation cost write-off -
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED EBITDA (In millions) Q4 2023 Q4 2024 Net earnings (loss) including noncontrolling interests $ 139.4 93.2 Interest expense 17.4 9.8 Income tax expense 14.2 18.3 Net (earnings)/loss attributable to non-controlling interest 0.1 - Depreciation and amortizatio
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures TRAILING TWELVE MONTH NET SALES (In millions) Q1 2024 Q2 2024 Q3 2024 Q4 2024 TTM 2024 GLOBAL CERAMIC Sales $ 1,044.8 1,115.6 1,058.0 1,008.2 4,226.6 FLOORING NA Sales 900.2 958.5 974.0 937.2 3,769.9 FLOORING ROW Sales 734.4 727.2 687.0 691.8 2,840.4 CONSOLIDATED
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING INCOME (LOSS) (In millions) 2022 2023 2024 GLOBAL CERAMIC Operating income (loss) $ (236.1) (166.4) 249.5 Adjustments to segment operating income (loss): Restructuring, acquisition and integration-related and other costs 4.5 37.0 29.0 Inventory
Slide 35: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED NET EARNINGS (In millions, except per share data) 2022 2023 2024 Net earnings (loss) attributable to Mohawk Industries, Inc. $ 25.2 (439.5) 517.7 Adjusting items: Restructuring, acquisition, integration-related and other costs 87.8 129.3 94.4 Software imp
Slide 36: Reconciliation of Non-GAAP Measures: Net Debt
Reconciliation of Non-GAAP Measures NET DEBT (In millions) 2022Q4 2023Q4 2024Q4 Current portion of long-term debt and commercial paper $ 840.6 1,001.7 559.4 Long-term debt, less current portion 1,978.5 1,701.8 1,677.4 Total debt 2,819.1 2,703.5 2,236.8 Less: cash and cash equivalents 509.6 642.5 666
Slide 37: Q4 2024 Investor Presentation
Q4 2024 Investor Presentation For additional information, please visit mohawkind.com 37