Slide 1: Interface, Inc. Investor Presentation September 2005
I N T E R F A C E Interface, Inc. Investor Presentation September 2005
Slide 2: Forward Looking Statements
Forward Looking Statements 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. Although Interface believe
Slide 3: Business Overview
Business Overview Interface, Inc. — September, 2005 3
Slide 4: Interface is a Leader in the Commercial Interiors Market
66%12%20%2%12%47%21%1%19%Interface is a Leader in the Commercial Interiors Market Modular Carpet Broadloom Carpet Fabrics Specialty Products Service (Divested in 2004)99% Commercial 1% Residential70% Corporate Office 30% Non-Corporate90% Refurbishment 10% New Construction LTM 2005 Portfolio Mix Inte
Slide 5: Interface Strengths
Top designers picked Interface brands as #1 in four of the six categories Interface Strengths Market Leader in Attractive Modular Segments Preeminent Brands -Quality, Reliability and Leadership Innovative Design and Development Capabilities Leader in Sustainability Made to Order / Low Cost Global Ma
Slide 6: Preeminent Brands - Quality, Reliability, Design
Preeminent Brands -Quality, Reliability, DesignS Source: Floor Focus 2004
Slide 7: Innovative Design and Development Capabilities Through Made to Order Approach
Innovative Design and Development Capabilities Through Our Differentiated Made to Order Business Approach Interface Operational Model INVENTORY TURNS % MADE TO ORDER Americas Modular1120%100%Asia Pacific Modular Europe Modular Fabrics Americas Broadloom Operations 1.Increase speed to market 2.Decrea
Slide 8: Leader in Sustainability
Leader in Sustainability Industrial Model of a Sustainable Enterprise 1.Eliminate Waste 2.Benign Emissions 3.Renewable Energy 4.Closed Loop Material Supply 5.Resource Efficient Transportation 6.Sensitivity Hook Up (Social Responsibility) 7.Redesign Commerce Interface’s Seven Fronts of Sustainability
Slide 9: The Path Forward
The Path Forward Interface, Inc. — September, 2005 9
Slide 10: The Industry is Off from Historical Highs, but Shows Signs of a Recovery
-40%-30%-20%-10%0%10%20%30%The Industry is Off from Historical Highs, but Shows Signs of a Recovery BIFMA Orders Year over Year Change %Growth for the year in 2005 is forecasted to be 9.2% versus 2004Forecasts are pointing to a recovery in the office furniture markets, due primarily to strong non-re
Slide 11: In the Face of a Significant Industry Downturn, Interface Grew Stronger
In the Face of a Significant Industry Downturn, Interface Grew Stronger Office Recovery1983 IPO $3.5Developed Platforms for Growth Our Challenge is to Execute Our Platforms for Growth Interface, Inc. (IFSIA) Stock Price History Segmentation Growth Projected Beginning of Office Rebound
Slide 12: In 2004 Interface Built a Foundation for Future Growth
In 2004 Interface Built a Foundation for Future Growth …Which Has Continued into 20052005Liquidity Improved Significantly Increased Market Share in the Corporate Office Continued to Execute Market Segmentation Accelerated Modular Carpet Growth in the US and Asia-Pacific Established Positive Sales an
Slide 13: Interface Showed Considerable Gains From the Trough
$1,017$876$745$767$881$936$0$200$400$600$800$1,000$1,20020002001200220032004LTM Q22005Interface Showed Considerable Gains From the Trough, Despite a Sluggish Corporate Office Market …Segmentation is Driving Results Interface Net Sales Revenue2000 -2005(000’s)9% off of 5 year High Mark Growth occurre
Slide 14: More Growth Opportunity Still Exists: Interface EBITDA
69.44.524.931.460.767.742.640.832.733.334.134.12154.622.46.2$0$40$80$120$16020002001200220032004LTM Q22005…More Growth Opportunity Still Exists Interface EBITDA2000 -LTM 2005EBIT; Earnings before Interest & Taxes Depreciation and Amortization Restructuring Charges$ 133.0$ 99.9$ 80.0$ 70.9$ 94.8(000’
Slide 15: Continue to Capitalize on Interface's Platforms for Growth
The Path Forward will be to Continue to Capitalize on Interface’s Platforms for Growth Execute Market Segmentation The Interface Opportunity Residential Growth Capture Emerging Markets Advance Sustainability Strategic Objective Significant economic growth forecasted for emerging markets -China, Japa
Slide 16: Focus on Continued Operational Excellence
As Well as Focus on Continued Operational Excellence The Interface Opportunity Tighten the Supply Chain Focus on Productivity De-Lever the Balance Sheet Strategic Objective High potential for operating leverage and strong cash flows Capitalize on global sourcing opportunities Continually push supply
Slide 17: Three-Year Tenets for Success
Three-Year Tenets for Success•De-lever the balance sheet through increased profitability, best-in-class supply chain, and divestiture of underperforming assets.•Execute a global Interface branding strategy.•Lead and shape the modular market expansion through mass distribution on a global basis.•Inve
Slide 18: Corporate Office Growth Platform
2004 demonstrated great progress in the growth of the corporate platform Continued maintenance of Interface’s share in the corporate office market, combined with modest 5% growth in the corporate office market itself, will produce desired results Corporate Office Recovery $ 150 M Base Year 2003 Exec
Slide 19: Maintain or Grow Corporate Share: Commercial Office Applications
Maintain or Grow Corporate Share Commercial Office Applications
Slide 20: Interface Modular Gross Sales and Margin 2000-2005
Interface Modular Gross Sales and Margin2000 -2005 Maintain or Grow Corporate Share Modular is Taking Share$ in Millions% Operating Profit Margin Interface Modular GROWTH in 2004 was 20% -Taking share in a Specified Office Market that is estimated to be UP 8%Modular Operating Profit %Actual Modular
Slide 21: Bentley Prince Street and Interface Fabrics Sales are Returning
Maintain or Grow Corporate Share Bentley Prince Street and Interface Fabrics Sales are Returning Bentley Prince Street Gross Sales2000 -2005$ in Millions Actual BPS Gross Sales Interface Fabrics Gross Sales 2000 -2005$ in Millions Actual Interface Fabrics Gross Sales$176$141$116$110$120$121020406080
Slide 22: Execute Market Segmentation
Interface Growth Platform Execute Market Segmentation $ 767MNet sales 2003(Target)$ 1.1B Execution Drivers Segmentation is taking hold in the U.S., with promising gains towards our Segmentation Platform goals Positive results are anticipated in Europe and Asia Pacific The Institutional (government a
Slide 23: Segmentation is Taking Hold in the US
67%64%58%54%49%48%50%33%36%42%46%51%52%50%0%25%50%75%100%20002001200220032004YTD2005TargetInterface Americas Modular Sales Mix Corporate vs. Non-Corporate 2000 -2004Execute Market Segmentation Segmentation is Taking Hold in the US …The Interface Segmentation Strategy is Showing Results in the United
Slide 24: Healthcare is Ready for Modular
Execute Market Segmentation Healthcare is Ready for Modular US Green Buildings Council LEED certification program will introduce building guidelines in 2004 for healthcare’s special needs.1.Infection control.2.Indoor air quality.3.Low VOC.
Slide 25: Interface Modular Meets Education's Special Needs
Execute Market Segmentation Interface Modular Meets Education’s Special Needs 1.Antimicrobial protects products against mold and mildew.2.Lasts longer than broadloom (selective replacement).3.Lowers installation costs and makes less waste. Including 2002 spending, $169 billion will have been spent t
Slide 26: Retail and Service Buildings - Largest Commercial Floor Space
Execute Market Segmentation Retail and Service Buildings -Largest Commercial Floor Space The tremendous amount of Retail and Service floor space represents a huge upside potential for Modular Carpet1.Retail and Service floor spaces are generally high traffic areas.2.Easier to isolate and repair prob
Slide 27: Hospitality Industry - Ideal Candidate For Interface Modular
Execute Market Segmentation Hospitality Industry -Ideal Candidate For Interface Modular The hospitality industry has a high degree of traffic flow and a need for quick and easy maintenance, making Interface Modular an ideal product1.Modular in Hospitality applications makes it easier to isolate and
Slide 28: Hospitality - The Hyatt Atlanta
Execute Market Segmentation Hospitality -The Hyatt Atlanta Carpet Tile Even Works in Common Areas
Slide 29: Expand the Residential Business
Interface Growth Platform Expand the Residential Business $ 767MNet sales 2003(Target)$ 1.1B Residential Expansion$50M Non-Office Commercial Market Segmentation$125M Corporate Office Recovery$ 150 M Base Year2003 Execution Drivers•With the entrance of InterfaceFLOR, Prince Street House & Home and He
Slide 30: Interface Flor and Prince Street House & Home Show Positive Results
Expand the Residential Business Interface Flor and Prince Street House & Home Show Positive ResultsQ4 2003Q1 2005Interface Flor13 Week Rolling Order Trend 2004INTERFACE and HEUGA COMMERCIAL BRANDSRESIDENTIAL BRANDSFLORHEUGAPRINCE ST H&H The Interface commercial brands benefit from the “buzz” with de
Slide 31: The Residential Opportunity
Expand the Residential Business The Residential Opportunity Consumers desire customizable, smart and better quality products that solve problems Lifestyle trends Desire for new applications “Cocooning” trend of investing in the home Purchasing trends DIY --“Do it yourself ”Design it yourself” Intern
Slide 32: InterfaceFLOR Roll-out to Lowe's
Expand the Residential Business InterfaceFLOR Roll-out to Lowe’s Lowe’s for Interface Flor Homeowners are able to buy Interface Products at a growing number of Lowe’s locations InterfaceFLOR is being rolled out to over 1,000 stores nationwide. Atlanta and Los Angeles markets will carry inventory and
Slide 33: Capture Emerging Markets
Interface Growth Platform Capture Emerging Markets$ 767MNet sales 2003(Target)$ 1.1B Execution Drivers Interface took large steps towards achieving the goals set forth in the Emerging Markets Platform in 2004The Asian markets continue to represent a large sales growth opportunity for Interface in bo
Slide 34: The China Opportunity
The China Opportunity Capturing Emerging Markets The China Opportunity1.Chinais the fastest growing carpet tile manufacturing country with over 15 producers in 2004. There is a high possibility of partnerships between USA / European manufacturers and their Chinese counterparts.2.The China market for
Slide 35: We Don't Know How Far Modular Can Go
We Don’t Know How Far Modular Can Go …