Slide 1: Q2 2024 Investor Presentation
mohawkind.com Q2 2024 NYSE: MHK July 2024 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 $10.9B $1.4B $9.53 $680M Q2 2024 TTM Q2 2024 TTM Q2 2024 TTM Q2 2024 TTM Net Sales Adjusted EBITDA Adjusted EPS Free Cash Flow ~ ~ 32 43,300 19 170 Acquisitions Worldwide Countries Where Countries Where 2013-2023 Team Members1 We Manufacture1 We Sell Products1 1As of December 31,
Slide 5: Three Reporting Segments
Three Reporting Segments Flooring Flooring Global North Rest of the Ceramic America World • 39% TTM Q2 ’24 Sales • 34% TTM Q2 ’24 Sales • 27% TTM Q2 ’24 Sales • North America, Europe, • Primarily U.S./Canada • Europe, Australia/NZ, South America South America, Asia • Residential/Commercial • Floor a
Slide 6: Organizational Strategy
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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 flooring
Slide 10: Market Development & Penetration
Market Development & Penetration Expanding sales with existing customers through • Differentiated new product launches • Superior marketing and merchandising • Exclusive retail partnerships/aligned dealerships Entering new sales channels • Ceramic pavers for garden centers, landscapers and pool cons
Slide 11: Product Innovation
Product Innovation CERAMIC TILE CARPET Unprecedented Superior integral 3x the fiber of traditional Combines exclusive surface realism slip resistance carpet; ultra soft & fibers for next level 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 Constrained Product Categories – ~$480M Planned for 2024 Maintain Investment Grade Credit Rating Net Debt to Adjusted EBITDA ratio is 1.3x Pursue Bolt-on Acquisitions Target Strong Comp
Slide 13: Q2 2024 Performance
Q2 2024 Performance
Slide 14: Summary of Q2 2024 Results
Summary of Q2 2024 Results • Net sales of $2.8B • Adjusted EPS of $3.00; up 8.7% • Margins benefited from restructuring, productivity and lower material & energy costs, offset by pressures in pricing & product mix • Market dynamics continued from Q1 2024 • Elevated interest rates • Restrained discre
Slide 15: Macroeconomics
Macroeconomics U.S. Economy • Revised Q1 2024 GDP: up 1.4% • Preliminary Q2 2024 GDP: up 2.8% • June Consumer Price Index fell to 3% • High employment rates continue but down slightly • Raw material and energy costs remain lower • July 2024 Architectural Billing Index at 46.4, up from prior month •
Slide 16: Q2 2024 Financials
Q2 2024 Financials Net Sales Adjusted EBITDA (In millions, except per share data) Q2 Q2 2023 2024 $2.8B $406M Net Sales $2,950.5 $2,801.3 (-4.5% YOY, (+4.0% YOY) Adjusted Basis) % Change -- -5.1% % Change (Adjusted Basis) -- -4.5% Adjusted OI Adjusted Diluted EPS Adjusted EBITDA $390.3 $405.8 $257M
Slide 17: Q2 2024 Segment Financials
Q2 2024 Segment Financials Q2 2023 Q2 2024 (In millions) GLOBAL CERAMIC Sales $1,155.4 $1,115.6 % Change -- -3.4% Adjusted Operating Income $99.1 $94.8 % Adjusted Operating Margin 8.6% 8.5% FLOORING NA Sales $1,001.7 $958.5 % Change -- -4.3% Adjusted Operating Income $60.6 $82.0 % Adjusted Operating
Slide 18: Global Ceramic
Global Ceramic • Results reflect unfavorable impact of price and product mix & foreign exchange headwinds, partially offset by lower input costs & productivity gains • New restructuring initiatives underway: • Optimizing manufacturing by idling some less productive operations • Aligning production t
Slide 19: Flooring North America
Flooring North America • Results reflect lower input costs, productivity gains and less restructuring costs, partially offset by unfavorable impact of price & product mix • New restructuring initiatives underway: • Rationalizing some manufacturing to enhance plant utilization • Retiring less efficie
Slide 20: Flooring ROW
Flooring ROW • Results reflect unfavorable impact of price and product mix and more restructuring costs, partially offset by lower input costs and productivity gains • New restructuring initiatives underway: • Lowering administrative and operational costs • Consolidating distribution • Streamlining
Slide 21: Short-term Outlook
Short-term Outlook • U.S. Fed may consider interest rate cut after positive June CPI; other central banks have made cuts or are signaling possible future cuts • Residential remodeling remains soft as lingering inflation impacts consumer discretionary spending ▪ Though slowing, commercial sector cont
Slide 22: Seizing Long-term Opportunities
Seizing Long-term Opportunities • If U.S. interest rate cuts begin in September, our industry should benefit next year as pent-up consumer demand will increase flooring purchases • Flooring sales expected to improve when • Inflation moderates & consumer confidence grows • Housing markets strengthen
Slide 23: Appendix
Appendix MOHAWK
Slide 24: Annual Earnings Summary (Consolidated)
Annual Earnings Summary (Consolidated) 2021 2022 2023 (In millions, except per share data) Net Sales $11,200.6 $11,737.1 $11,135.1 % Change 17.3% 4.8% -5.1% Adjusted EBITDA $1,948.8 $1,649.7 $1,416.5 % Adjusted EBITDA Margin 17.4% 14.1% 12.7% Adjusted Operating Income $1,360.4 $1,083.0 $814.4 % Adju
Slide 25: Annual Results by Segment
Annual Results by Segment 2021 2022 2023 (In millions) GLOBAL CERAMIC Sales $3,917.3 $4,307.7 $4,300.1 % Change 14.1% 10.0% -0.2% Adjusted Operating Income $405.8 $456.9 $301.6 % Adjusted Operating Margin 10.4% 10.6% 7.0% FLOORING NA Sales $4,116.4 $4,207.1 $3,829.4 % Change 14.5% 2.2% -9.0% Adjuste
Slide 26: Maturity/Liquidity Profile
Maturity/Liquidity Profile1 $2,500 June 29, 2024 Total Debt (millions)3 June 2027 EUR Note $536 29% Floating Sept 2028 USD Note $600 71% Fixed May 2030 USD Note $500 Average rate 4.13% USCP/Revolver $385 $2,000 ECP/Revolver $313 ECP/Revolver Leases/Other $85 Avail. Total Debt (Adjusted) $2,419 USCP/
Slide 27: Reconciliation Tables
Reconciliation Tables
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures RECONCILIATION OF NET SALES TO ADJUSTED NET SALES (In millions) Q2 2024 CONSOLIDATED Net Sales $ 2,801.3 Adjustment for constant shipping days (8.7) Adjustment for constant exchange rates 25.0 Adjusted net sales $ 2,817.6 GLOBAL CERAMIC Net Sales $ 1,115.6 Adjustm
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING INCOME (In millions) Q2 2023 Q2 2024 CONSOLIDATED Operating Income $ 153.1 214.0 Adjustments to operating income: Restructuring, acquisition and integration-related and other costs 41.7 41.4 Inventory step-up from purchase accounting 1.3 - Legal
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING INCOME TTM Q2 (In millions) 2022 2023 2024 Operating income (loss) $ 244.2 (287.8) (206.0) Adjustments to operating income (loss): Restructuring, acquisition and integration-related and other costs 86.0 132.2 107.7 Inventory step-up from purchas
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED EBITDA (In millions) Q2 2023 Q2 2024 Net earnings including noncontrolling interests $ 101.2 157.5 Interest expense 22.9 12.6 Income tax expense 26.8 42.3 Net (earnings)/loss attributable to non-controlling interest - (0.1) Depreciation and amortization*
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures TRAILING TWELVE MONTH NET SALES (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 TTM Q2 2024 GLOBAL CERAMIC Sales $ 1,091.7 993.7 1,044.8 1,115.6 4,245.8 FLOORING NA Sales 962.2 912.1 900.2 958.5 3,733.0 FLOORING ROW Sales 712.3 706.5 734.4 727.2 2,880.4 CONSOLIDATED
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING INCOME (In millions) 2022 2023 Q2 2024 TTM GLOBAL CERAMIC Operating (loss) $ (236.1) (166.4) (181.9) Adjustments to segment operating income (loss): Restructuring, acquisition and integration-related and other costs 4.5 37.0 38.3 Inventory step-
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED NET EARNINGS TTM Q2 (In millions, except per share data) 2022 2023 2024 Net earnings (loss) attributable to Mohawk Industries, Inc. $ 25.2 (439.5) (358.5) Adjusting items: Restructuring, acquisition, integration-related and other costs 87.8 129.3 105.0 In
Slide 35: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures NET DEBT (In millions) 2022Q4 2023Q4 2024Q2 Current portion of long-term debt and commercial paper $ 840.6 1,001.7 718.0 Long-term debt, less current portion 1,978.5 1,701.8 1,691.5 Total debt 2,819.1 2,703.5 2,409.5 Less: cash and cash equivalents 509.6 642.5 497
Slide 36: Q2 2024 Investor Presentation
Q2 2024 Investor Presentation For additional information, please visit mohawkind.com 36