Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q4 2023 Earnings Presentation
16 slides from Armstrong World Industries's earnings presentation, Feb 20, 2024
Slide 1: 4th Quarter & Full Year 2023 Earnings Presentation
4th Quarter & Full Year 2023 Earnings Presentation February 20, 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, expected savings from cost management initia
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 Q4 2023 Q4 2022 FY 2023 FY 2022 Net sales $312.3 $304.5 $1,295.2 $1,233.1 Earnings from continuing operations $46.8 $48.8 $223.8 $199.9 Operating income $66.3 $70.6 $323.7 $278.7 Adj. EBITDA* $98 $92 $430 $385 Operating income margin (oper
Slide 5: Delivering Strong Earnings and Cash Flow Growth
Delivering Strong Earnings and Cash Flow Growth Full-Year 2023 Key Takeaways $1,295M (+5% VPY) Net Sales Record-Setting net sales and adj. EBITDA* Total company adj. EBITDA margin* expanded 200bps to 33.2% Mineral Fiber segment adj. EBITDA* up 10% $430M (+12% VPY) Adj. EBITDA* Adj. EBITDA margin* ex
Slide 6: Mineral Fiber Q4 2023 Results
Strong Execution Drives Adjusted EBITDA Margin* Expansion Mineral Fiber Q4 2023 Results $216 $220 Q4 Mineral Fiber Key Highlights Net Sales Growth VPY +2% ● AUV growth driven by favorable like-for-like pricing, partially offset by unfavorable mix Q4 '22 Q4 '23 Flattish volumes due to growth initiati
Slide 7: Architectural Specialties Q4 2023 Results
Strong Adjusted EBITDA Margin* Expansion on Consistent Sales Growth Architectural Specialties Q4 2023 Results $89 $92 Q4 Architectural Specialties Key Highlights Net Sales +4% Growth VPY ● Recent acquisitions drive sales growth Q4 '22 Q4 '23 ● Adj. EBITDA margin* of 18.4% with 330bps of expansion on
Slide 8: Q4 23 Consolidated Company Key Metrics
Solid Execution With Adjusted EBITDA Margin* Expansion Q4 2023 Consolidated Company Key Metrics Q4 2022 Q4 2023 Variance Net Sales $305 $312 3% Adj. EBITDA* $92 $98 7% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 30.1% 31.4% 130bps Adj. Diluted Earnings Per Share* $1.08 $1.22 13% 1 2 3 *Non-GAAP
Slide 9: Full-Year 2023 Consolidated Company Key Metrics
Double-Digit Adj. EBITDA* Growth & Robust Adj. Free Cash Flow* Growth Full-Year 2023 Consolidated Company Key Metrics Full Year 2022 Full Year 2023 Variance Net Sales $1,233 $1,295 5% Adj. EBITDA* $385 $430 12% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 31.2% 33.2% 200bps Adj. Diluted Earnings
Slide 10: Proven Ability to Grow Cash Flow Despite Softer Market Conditions
Proven Ability to Grow Cash Flow Despite Softer Market Conditions Ample cash to deploy in support of all capital allocation priorities 2023 Adj. Free Cash Flow* Up 19% vs Prior Year 2023 Capital Deployment $263 CapEx Dividends Share Repurchases Acquisitions 2 $221 2023 $84 $47 $132 $17 2022 $75 $44
Slide 11: Issuing Full Year 2024 Guidance
Issuing Full Year 2024 Guidance Remaining focused on solid execution & margin expansion Commentary1 Expecting slower economic growth Net Sales Adjusted EBITDA* Initiatives partially offset lower market demand, $1,335M to $1,375M $450M to $470M resulting in MF volume down low-single digits 3% to 6% Y
Slide 12: Appendix
Appendix
Slide 13: Full Year 2024 Assumptions
Full Year 2024 Assumptions Segment1 Net Sales Adjusted EBITDA Margin* Mineral Fiber +2% to +5% growth ~40% Architectural Specialties +6% to +9% growth ~19% Consolidated Metrics Full Year 2024 Shipping Days 2023 2024 20252 vs Prior Year Capital expenditures $80M to $90M Q1 +1 - - Depreciation and amo
Slide 14: Adjusted EBITDA and Adjusted Diluted EPS Reconciliation
Adjusted EBITDA For the Three Months Year Ended Adjusted Diluted EPS For the Three Months Ended December 31, Year Ended December 31, Reconciliation Ended December 31, December 31, Reconciliation 2023 2022 2023 2022 2023 2022 2023 2022 Net earnings $47 $49 $224 $203 Net sales $312 $305 $1,295 $1,233
Slide 15: Adjusted Free Cash Flow Reconciliation
For the Three Months Ended December 31, Year Ended December 31, Adjusted Free Cash Flow Reconciliation 2023 2022 2023 2022 Net cash provided by operating activities $57 $63 $234 $182 Net cash provided by (used for) investing activities - $20 ($10) $28 Net cash provided by operating and investing act
Slide 16: 2024 Guidance Reconciliation
2024 Adj. EBITDA Full Year 2024 Guidance Reconciliation Low High Net earnings $243 $248 2024 Adj. Diluted EPS Guidance Reconciliation Add: Income tax expense 79 84 Full Year 2024 Earnings before income taxes $323 $332 Low High Add: Interest expense 40 42 Net earnings $243 $248 Add: Other non-operati
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