Slide 1: Investor Presentation August 2020
INVESTOR PRESENTATION August 2020 1
Slide 2: Disclaimer
DISCLAIMER Information provided during this presentation and responses to various questions may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward- looking statements" as defined in the Private Securities Litigation Reform
Slide 3: Company Overview
COMPANY OVERVIEW Quartz Countertop • Leading designer and producer of high-end Inventor engineered quartz surfaces used in residential and commercial buildings Powerful Brand • Founded in 1987 and HQ in Israel High • Invented and pioneered quartz category Quality expansion via powerful Caesarstone®
Slide 4: Inspiring Design Lovers with Innovative Products and Solutions Around the World
Inspiring Design Lovers with Innovative Products and Solutions Around the World 4
Slide 5: Driving Growth Through Innovative Design and Colors
DRIVING GROWTH THROUGH INNOVATIVE DESIGN AND COLORS TREND SETTER INNOVATIVE DESIGNS COLOR LEADERSHIP PROPIETARY TECHNOLOGY 5
Slide 6: Pioneering Innovative Designs & Technology
PIONEERING INNOVATIVE DESIGNS & TECHNOLOGY PREMIUM POSTIONING Classico Supernatural Metropolitan Solaris – Outdoor Collection Wide range of evergreen Inspired by nature Inspired by the industrial trend Inspired by outdoor colors and designs surrounding trends and culture Luxurious marble & granite d
Slide 7: Superior Value Proposition
SUPERIOR VALUE PROPOSITION Caesarstone quartz products are superior to any other material Impact Resistant Heat Resistant Easy Fabrication Scratch Resistant Non Porous Multi Functional Stain Resistant Flexible Versatile Designs Food Safety - NSF Certified 7
Slide 8: A Global Leader in the Attractive Quartz Surface Market
A GLOBAL LEADER IN THE ATTRACTIVE QUARTZ SURFACE MARKET #1 or #2 player in key regions served Focused on high-end residential and commercial applications A global market leader with ~9% global Solid global distribution platform across market share (*) (1) approximately 45 countries Diversified geogr
Slide 9: Attractive Global Quartz Industry Landscape
ATTRACTIVE GLOBAL QUARTZ INDUSTRY LANDSCAPE $105B2 Global Counter-top Market Quartz Countertop Global Share1 Marble 9% 2010 2016 2018 Laminate 10% Quartz 7% 16% 18% Granite 23% Material Other 19% Segmentation Laminate 17% 10% 10% (2018 sales) Granite 28% 27% 23% Engineered Solid Surfaces 22% Quartz
Slide 10: Our Main Markets
OUR MAIN MARKETS Countertop Demand by Material1 (By Volume) Marble 5% (1.8%) Granite 12% Marble 1% Granite 12% (3.7%) Marble 1% Granite 5% (1.5%) (1.1%) (4.8%) (0%) Laminates 33% Laminates 36% (-0.6%) (-1.4%) Laminates 35% (-0.8%) Total Market Total Market Total Market 4.4M SQM 6.0M SQM 72.2M SQM (1
Slide 11: Strong Liquidity, Cash Flow and Capital Deployment
STRONG LIQUIDITY, CASH FLOW AND CAPITAL DEPLOYMENT Strong Track Disciplined Capital Record Capital Position of Cash Deployment Generation • No bank debt¹ • 3-year³ avg. above 50% • Global growth acceleration • Cash and marketable securities operating cash flow of Adj. EBITDA plan–strong returns of $
Slide 12: Management Key Initiatives
MANAGEMENT KEY INITIATIVES 12
Slide 13: Our Journey
OUR JOURNEY Global Growth Acceleration Plan Implementation Enhancing Global Infrastructure, Global DNA Vision, Strategy, Values, Organization Establishing Global Leadership Team 13
Slide 14: Executing the Global Growth Acceleration Plan
EXECUTING THE GLOBAL GROWTH ACCELERATION PLAN Infrastructure & Efficiency Growth & Innovation Production Supply Chain Health & Safety Go-to-Market Branding Efficiency Excellence Technology Processes People and Business Product Transformation Re-engineering Organizations Development Innovation Better
Slide 15: Capitalize on Strong North America Opportunity
CAPITALIZE ON STRONG NORTH AMERICA OPPORTUNITY Combined Canada and Improve U.S. into one channel region management Enhanced leadership and synergies More Big box efficiently penetration streamline U.S. tariffs operations on Chinese imports 15
Slide 16: The COVID-19 Crisis
Entering the Covid-19 PREPARED Crisis THE COVID-19 CRISIS TO NAVIGATE • Clear company strategy and execution plan • Substantial cash position with zero financial debt • Well positioned Leadership team • Encouraging sequential demand improvement in all regions during June • Robust global operating pl
Slide 17: Financial Summary & Outlook
FINANCIAL SUMMARY & OUTLOOK 17
Slide 18: Revenue & Profitability
REVENUE & PROFITABILITY Revenue ($M) Adjusted Gross Profit and % Margin ($M) 43.0% 45.5% 42.4% 39.4% 40.2% 40.1% 39.5% 33.5% 588.1 575.9 538.5 546.0 28.8% 27.3% 499.5 212.5 447.4 189.7 200.2 197.2 356.6 162.1 165.7 149.1 296.6 127.4 259.7 104.3 198.8 78.3 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 19: Q2 2020 Financial Performance
Q2 2020 FINANCIAL PERFORMANCE (28.3%) CCB Adj. Gross Profit (6.8%) Revenue (29.8%) Reported $141.1M $38.6M $20.3M $99.0M % margin 27.3% 20.5% Q2'19 Q2'20 Q2'19 Q2'20 • Lower sales volume • Lower raw material costs CCB: (36.0%) (11.5%) 4.4% (35.4%) • Less favorable regional and product mix • Foreign
Slide 20: Positioned to Deliver Long-Term Profitable Growth
POSITIONED TO DELIVER LONG-TERM PROFITABLE GROWTH Long North American Term Target Opportunity Go-to-market Gross Margin Strategy 32-35% Technological Transformation Adj. EBITDA Margin Accretive 17-18% 2019 Investments Leverage Performance Production & Premium Adj. Gross Margin1 Supply Chain Brand 27
Slide 21: Thank You
(© caesarstone THANK YOU
Slide 22: Appendix
APPENDIX 22
Slide 23: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION USD (0,000) 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A Net Income $29,006 $29,304 $40,367 $64,353 $80,256 $79,458 $76,483 $27,558 $24,568 $12,862 Interest Expense, net $2,370 $4,775 $2,773 $1,314 $1,048 $3,085 $3,318 $5,583 $3,639 $5,578 Taxes on incom
Slide 24: Adjusted Net Income Attributable to Controlling Interest Reconciliation
ADJUSTED NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST RECONCILIATION USD (0,000) 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A Net income attributable to controlling interest $28,658 $29,052 $39,632 $63,344 $78,436 $77,766 $74,596 $26,202 $24,405 $12,862 Legal settlements and loss c
Slide 25: Adjusted Gross Profit Reconciliation
ADJUSTED GROSS PROFIT RECONCILIATION USD (0,000) 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A Gross profit $78,288 $104,294 $127,395 $162,118 $189,651 $200,225 $212,486 $197,223 $163,414 $148,639 Non- recurring import related (income) 0 0 0 0 0 0 0 0 2,104 (1,501) expenses Share based