Interface, Inc. · NASDAQ:TILE
Interface — Investor Presentation (March 2021)
35 slides from Interface's investor presentation, Mar 2, 2021
Slide 1: Investor Presentation March 2, 2021
Investor Presentation MARCH 2, 2021
Slide 2: Forward Looking Statements and Non-GAAP Measures
2 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. Al
Slide 3: Interface at a Glance
3 Interface at a Glance Headquartered in Atlanta, GA 7 manufacturing locations on 4 continents 3,700 global employees Sales in over 100 countries Over 1,000 Sales & Marketing professionals All products are Carbon Neutral Global Sustainability leader Americas EMEA APAC Corporate Office Non-Office * S
Slide 4: Investment Thesis
4 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
Slide 5: Who We Are
5 Who We Are Leading global provider of commercial flooring: Carpet Tile, Modular Area Rugs, LVT, Rubber Strong brands with a history of innovation and a commitment to sustainability Engaged customer-centric culture focused on performance and galvanized around our sustainability mission Strong globa
Slide 6: Interface is a Purpose-Driven Organization
6 Interface is a Purpose-Driven Organization Grow the Carpet Tile Business Grow the Resilient Flooring Business Execute Supply Chain Productivity Optimize SG&A Resources Our Core Mission is to Lead a World-Changing Sustainability Movement Centered Around Climate Take Back While Also Executing on Fou
Slide 7: Opportunities for Growth
7 Opportunities for Growth Consumer Presence via FLOR Product Innovation Continued Growth in Resilient Services as a Differentiator Broadloom Conversion Across Segments Enhanced Share of Dealer Discretionary
Slide 8: Interface Positioning
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Slide 9: Attractive Product Portfolio
9 Carpet Tile • Industry-leading cradle-to-gate carbon negative 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
Slide 10: Leading Global Provider of Commercial Flooring Solutions
10 GLOBAL COMMERCIAL FLOORING SEGMENT (in Billions) Source: Management estimates 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
Slide 11: Participating in Attractive Commercial Flooring Segments
11 Wood Laminate LVT Other Resilient Ceramic Tile Carpet Tile Rubber Broadloom (4%) (2%) 0% 2% 4% 6% 8% 10% 12% 14% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% E st im at ed C A G R t hr ou gh 2 02 4 Gross Margin Bubble size = Global commercial value of category, 2019 GLOBAL COMMERCIAL FLOORING: SEGME
Slide 12: Brand Leader in the Specified Channel
12 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 Archit
Slide 13: Global Sales and Manufacturing Platform
13 Global Sales and Manufacturing Platform • Sales & marketing offices in over 70 locations across 28 countries • Global account management • Seven manufacturing locations on four continents • Global supply chain management • Unique blend of efficiency and customization Note: Figures represent FYE 2
Slide 14: Diversified Customer Verticals
14 Diversified Customer Verticals CORPORATE OFFICE • Highest penetration of carpet tile vs broadloom • Global account management • Recurring renovations • Ongoing opportunity in Emerging Markets EDUCATION • K-12 and higher education • Second highest penetration of carpet tile vs broadloom • Second l
Slide 15: Growth and Value Creation
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Slide 16: Interface is a Purpose-Driven Organization
16 Interface is a Purpose-Driven Organization Grow the Carpet Tile Business Grow the Resilient Flooring Business Execute Supply Chain Productivity Optimize SG&A Resources Our Core Mission is to Lead a World-Changing Sustainability Movement Centered Around Climate Take Back While Also Executing on Fo
Slide 17: Grow the Core Carpet Tile Business
17 Grow the Core Carpet Tile Business • Enhance salesforce productivity – Capitalize on selling system transformation • Elevate and grow segments – Drive growth in priority segments including Corporate Office, Hospitality, Living and Education • Optimize product portfolio – Expand our portfolio to i
Slide 18: Benefits of Modular Carpet Tile Driving Share Gains vs. Broadloom
18 Benefits of Modular Carpet Tile Driving Share Gains vs. Broadloom Architect & Designer Specifier • Virtually endless styling choices • Truly custom – design by tile • No transition strips required • Better sustainability Dealer/Installer • Easier materials access into the building • Easier to han
Slide 19: Build a Resilient Flooring Business
19 Build a Resilient Flooring Business • Continue taking share in the high growth commercial LVT segment • Maximize cross-selling opportunities between nora® rubber flooring, LVT and carpet tile • Expand LVT offering in education and healthcare market with specialized 3mm product • Expand global par
Slide 20: Design Solutions for the Post-COVID-19 Environment
20 Design Solutions for the Post-COVID-19 Environment Modular Flooring & Social Distancing • Architects and Designers (A&D) are re-thinking space layouts and interior design elements as the world contemplates the return to work and school • Interface modular flooring plays an integral part in design
Slide 21: Purpose-Driven Culture Galvanized Around a Common Sustainability Mission
21 GLOBESCAN SUSTAINABILITY SURVEY – 20+ YEAR HISTORY Unilever Patagonia IKEA Natura Nestle Purpose-Driven Culture Galvanized Around a Common Sustainability Mission Recent Recognition UN Global Climate Action Award Climate Neutral Now Fast Company Most Innovative Energy Companies GlobeScan SustainAb
Slide 22: Radical Reductions in Environmental Impacts
22 Radical Reductions in Environmental Impacts Learn more about Interface’s sustainability strategy, environmental commitment and social responsibility at: https://investors.interface.com/corporate-responsibility-esg/default.aspx * Global carpet tile manufacturing sites per unit of output since 1996
Slide 23: Carpet Tile Carbon Footprint Comparison
23 Carpet Tile Carbon Footprint Comparison
Slide 24: Product Innovation: The First Cradle-to-Gate Carbon Negative Carpet Tile
24 Product Innovation The First Cradle-to-Gate Carbon Negative Carpet Tile Our goal is to make products with the lowest carbon footprint possible – products that go beyond neutral to help restore the health of the planet We’ve innovated ways to work with recycled content and bio-based materials
Slide 25: Financial Performance
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Slide 26: GAAP Financial Results
26 GAAP Financial Results ($ in millions, except EPS) Fiscal Year 2020 2019 Net Sales $1,103 $1,343 Gross Profit 411 533 % of Net Sales 37.2% 39.7% SG&A Expense 333 389 % of Net Sales 30.2% 29.0% Restructuring Charges (5) 13 Goodwill and Intangible Asset Impairment Charge 121 - Operating Income/(Los
Slide 27: Adjusted Financial Results
27 Adjusted Financial Results* * See Appendix for a reconciliation on Non-GAAP figures ($ in millions, except EPS) Fiscal Year 2020 2019 Net Sales $1,103 $1,343 Adjusted Gross Profit 416 539 % of Net Sales 37.7% 40.1% Adj SG&A Expense 306 389 % of Net Sales 27.7% 29.0% Adjusted Operating Income 110
Slide 28: Adjusted EBITDA
28 Adjusted EBITDA ADJUSTED EBITDA* ($ in millions) * See Appendix for a reconciliation on Non-GAAP figures $141 $152 $185 $197 $146 $0 $50 $100 $150 $200 2016 2017 2018 2019 2020
Slide 29: Adjusted Earnings Per Share
29 Adjusted Earnings Per Share ADJUSTED EARNINGS PER SHARE (DILUTED)* * See Appendix for a reconciliation on Non-GAAP figures $1.03 $1.18 $1.49 $1.59 $1.15 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 2016 2017 2018 2019 2020
Slide 30: Capitalization and Liquidity
30 TOTAL DEBT ($ in millions) NET DEBT ($ in millions) NET DEBT / ADJUSTED EBITDA* Capitalization and Liquidity * See Appendix for a reconciliation on Non-GAAP figures ADJUSTED EBITDA* ($ in millions) $270 $230 $619 $596 $577 $0 $175 $350 $525 $700 2016 2017 2018 2019 2020 $105 $143 $538 $515 $474 $
Slide 31: Financial Policy
31 Financial Policy Reduce Debt Reinvest in the Business Explore M&A Opportunities Return Excess Cash to Shareowners • Utilize excess cash to pay down debt • Optimize cost of capital and target Net Debt / Adjusted EBITDA < 2.0x • Invest in strategic initiatives with high returns, including organic g
Slide 32: Who We Are
32 Who We Are Leading global provider of commercial flooring: Carpet Tile, Modular Area Rugs, LVT, Rubber Strong brands with a history of innovation and a commitment to sustainability Engaged customer-centric culture focused on performance and galvanized around our sustainability mission Strong glob
Slide 33: Interface
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Slide 34: Appendix: Reconciliation of Non-GAAP Figures
34 Appendix: Reconciliation of Non-GAAP Figures Note: Sum of reconciling items may differ from total due to rounding of individual components ($ in millions) Q4 2019 Q4 2020 FYE 2019 FYE 2020 Net Sales as Reported (GAAP) $339.5 $276.9 $1,343.0 $1,103.3 Impact of Changes in Currency - (9.0) - (7.1) O
Slide 35: Appendix: Reconciliation of Non-GAAP Figures
35 Appendix: Reconciliation of Non-GAAP Figures Note: Sum of reconciling items may differ from total due to rounding of individual components * Historical AEBITDA figures have been updated to reflect a change in depreciation and amortization values used to calculate AEBITDA. ($ in millions) Q1 2020