Mohawk Industries, Inc. · NYSE:MHK
Mohawk Industries — Investor Presentation (February 2014)
35 slides from Mohawk Industries's investor presentation, February 2014
Slide 1: Mohawk Industries, Inc. Investor Presentation - February 2014
Mohawk Industries, Inc. Investor Presentation - February 2014
Slide 2: Forward-looking Statements
Forward-looking Statements Certain of the statements in this presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties including, but not limited to, those set forth in our press releas
Slide 3: Mohawk Industries Highlights
Mohawk Industries Highlights World’s largest flooring manufacturer Expanding international presence Total flooring product offering Experienced management team Balanced and diversified business Vertically integrated manufacturing Superior distribution infrastructure 3 3
Slide 4: Worldwide Leader in Flooring
Worldwide Leader in Flooring (1) (1) 2012PF 2013PF Sales: $7.4B Sales: $7.7B EBITDA: $890M EBITDA: $1,034M Worldwide Presence Australia India Brazil Malaysia Canada Mexico China Russia Europe U.S. Leading Market Positions Ceramic Carpet and Rugs Laminate Wood (1) Proforma (Marazzi, Pergo and Spano a
Slide 5: Focused Business Strategy
Focused Business Strategy Grow shareholder value Value Deliver above market returns Creation Increase profits through growth, efficiencies and distribution Drive optimization of resources and materials Operating Excellence Leverage knowledge and innovation across segments Provide value to customers
Slide 6: Two Decades of Strategic Growth
Two Decades of Strategic Growth Russian Dal-Tile – laminate; Pergo, Marazzi U.S ceramic Australian Columbia Wood & Spano manufacturer distributor Focus on Unilin – laminate Chinese Brazilian soft surface in U.S. & Europe ceramic JV laminate JV 6
Slide 7: Position by Product, Geography & End Market
Position by Product, Geography & End Market 2013 Sales Mix By Product Category By Geography By End Market 7 Represents 2013 on a Pro Forma basis
Slide 8: Positive Industry Outlook
Positive Industry Outlook United States GDP growth at pre-recession levels Flooring industry growth outpacing economy Low mortgage rates driving home sales Rising home prices support reinvestment New residential construction increasing Before After Pent-up demand from postponed residential remodelin
Slide 9: Historic Pent Up Demand
Historic Pent Up Demand U.S. Carpet Industry Shipments (Sq. Yds.) Year Square Yards (000) % Change 1980 1,058,404 -12% 1981 990,619 -6% 1982 885,811 -11% 1983 1,090,071 23% 1990 1,360,043 3% 1991 1,278,017 -6% 1992 1,419,167 11% 2001 1,890,991 -4% 2002 1,953,685 3% 2006 1,771,012 -15% 2007 1,539,689
Slide 10: Product Mix Across U.S. Flooring Industry
Product Mix Across U.S. Flooring Industry 2012 U.S. Flooring Industry $19 Billion 10 Source: Floor Covering Weekly, July 22, 2013 10
Slide 11: U.S. Floor Covering Sales by End-Use Market
U.S. Floor Covering Sales by End-Use Market 2012 U.S. Industry Sales $19 Billion • Industry recovery early in cycle • New housing starts and remodeling improved in 2013 • Significant pent up demand for residential remodeling due to impact of recession • Commercial typically lags; indicators suggest
Slide 12: 2012 U.S. Flooring Market Leaders
2012 U.S. Flooring Market Leaders Total Flooring Industry Competitor Mix 12 Source: Floor Focus May 2013; Mohawk includes Marazzi 12
Slide 13: U.S. Floorcovering Distribution Channels
U.S. Floorcovering Distribution Channels 2012 U.S. Industry 13 Sources: Floor Covering Weekly, July 22, 2013, and management estimate 13
Slide 14: Innovative Products & Technologies
Innovative Products & Technologies Reveal Imaging – printed ceramic tile Ceramic – differentiated wood look • SmartStrand Silk – exclusive super soft fiber Continuum – proprietary polyester process GenuEdge – replicates the look of wood planks ™ in laminate Livyn LVT – proprietary Uniclic ® system Q
Slide 15: World Class Systems
World Class Systems • State of the art order and inventory management system • Sophisticated transportation management • Integrated warehouse management • Next generation supply chain planning 15
Slide 16: Best in Class Distribution Network
Best in Class Distribution Network • National network of distribution centers provides efficient delivery • Service Centers provide key channel for ceramic distribution • Best in Class: - Logistics system - 1,500 sales representatives - 300 distribution points - 600 trucks Carpet DC Carpet Satellite
Slide 17: The Business of Sustainability
The Business of Sustainability Improving Environment in Our Communities • Waste reduction - 3 billion lbs. of material - Zero Waste campaign in all facilities • Use of recycled content - 500 products contain recycled material - 20% of all plastic bottles recycled in N.A. - 29 million lbs. of tires r
Slide 18: Ceramic Segment
Ceramic Segment Competitive Advantages Worldwide ceramic leader with leading positions in North America, Europe and Russia Most widely recognized ceramic brands Broad product line satisfies all channels and price points North American market share substantially larger than closest competitor Unmatch
Slide 19: Ceramic Segment: Expanding Globally
Ceramic Segment: Expanding Globally Market Leader Top Player Manufacturing Locations 19
Slide 20: 2012 Global Tile Market: Opportunity
2012 Global Tile Market: Opportunity Consumption by Region 117.5 Billion Sq. Ft. <1% 20 Sources: Ceramic World Review, September 2013, Internal Analysis 20
Slide 21: Ceramic Segment: Brands Serving All Channels
Ceramic Segment: Brands Serving All Channels 216 company operated service centers in the U.S. and Canada 26 stone centers in the U.S. 9 design galleries in the U.S. Home centers in the U.S., Canada and Mexico Independent distributors in Mexico Independent retailers and distributors in Russia, the U.
Slide 22: Carpet Segment
Carpet Segment Competitive Advantages Leading market share in all channels Broadest array of flooring products Leader in innovation and soft technology Well known exclusive brands - SmartStrand and Embrace Strong aligned dealer network Low cost integrated manufacturing Best in class national distrib
Slide 23: Carpet Segment: Brands Serving All Channels
Carpet Segment: Brands Serving All Channels • Independent Specialty Retail • Aligned Dealers • Home Centers • Builder • Multi-family • Corporate • Hospitality • Educational • Institutional • Retail • Main Street • Health Care • Independent Specialty Retail • Aligned Dealers • Home Centers • Builder
Slide 24: Expanding Customer Technology
Expanding Customer Technology Mobile Track & Trace App Launched new mobile technology to sales team Ability to follow customer orders in a mobile environment Near real time data (updates every 2 hours) Order status updates to sales manager phones Sales Force Enabler: NavigatorTM Effective CRM to imp
Slide 25: Laminate & Wood Segment
Laminate & Wood Segment Competitive Advantages Laminate leader in mid- to high-end Spano and Pergo acquisitions improve leading positions in laminate and boards Strong consumer brand recognition in Europe & U.S. Complete laminate and pre-finished wood offering Undisputed innovation leader Vertically
Slide 26: Laminate & Wood Segment: Market Expansion
Laminate & Wood Segment: Market Expansion 26 26
Slide 27: Unilin Segment: Brands Serving All Channels
Unilin Segment: Brands Serving All Channels • Home Centers • Independent Specialty Retail • Commercial • Independent Specialty Retail • Builder • Multi-Family • Independent Specialty Retail • Builder • Multi-family • Independent Specialty Retail • Aligned Dealers • Home Centers • Builder • Multi-fam
Slide 28: Laminate & Wood Segment: Non-Flooring Products
Laminate & Wood Segment: Non-Flooring Products Insulation Boards • Chipboards - Furniture and specialty construction • Melamine-faced boards and panels - Furniture, DIY and construction industries • Custom Roofing Panels - Insulated roof panels and hinged roofs • Insulation Panels Roofing Panels Roo
Slide 29: Mohawk Industries, Inc.
LA MOHAWK INDUSTRIES, INC. Mohawk Industries, Inc. 49
Slide 30: Adjusted Revenues & Adjusted EBITDA
Adjusted Revenues & Adjusted EBITDA Revenues EBITDA (% of Revenues) 11.1% 11.9% 11.2% 11.7% 13.4% Dollars in Millions, excluding unusual items 30 * Pro forma 2013 30
Slide 31: Earnings Summary (ex-unusual items)
Earnings Summary (ex-unusual items) (Dollars in Millions except EPS) Years Ended 2013 2012 2011 2010 2009 Net Sales $ 7,349 $ 5,788 $ 5,642 $ 5,319 $ 5,465 % Change 27% 3% 6% (3%) (20%) Operating Income $ 690 $ 398 $ 345 $ 327 $ 301 % Oper. Margin 9% 7% 6% 6% 6% Net Earnings $ 473 $ 262 $ 202 $ 173
Slide 32: Results by Segment (ex-unusual items)
Results by Segment (ex-unusual items) (Dollars in Millions) Segment 2013 2012 2011 2010 2009 Carpet Sales $ 2,986 $ 2,912 $ 2,928 $ 2,845 $ 2,978 %Change 3% -1% 3% (4%) (19%) Operating Income $ 223 $ 169 $ 136 $ 133 $ 98 Margin 7% 6% 5% 5% 3% Ceramic Sales $ 2,677 $ 1,616 $ 1,454 $ 1,367 $ 1,427 %Ch
Slide 33: Quarterly Earnings Summary (Ex-unusual items)
Quarterly Earnings Summary (Ex-unusual items) (Dollars in Millions except EPS) Fourth Quarter 2013 2012 2011 Net Sales $ 1,924 $ 1,436 $ 1,378 % Change 34% 4% 9% Operating Income $ 187 $ 102 $ 80 % Oper. Margin 10% 7% 6% Diluted EPS $1.79 $1.01 $0.72 % Change 77% 41% 11% 33 33
Slide 34: Leverage and Capital Structure
Leverage and Capital Structure (Dollars in Millions) Capitalization As of Interest 12/31/2013 Rate Net Debt-to-EBITDA Multiple Securitization Facility $300 L+75 Existing Revolving Credit Facility 364 L+125 2016 Senior Notes 900 6.125% 2023 Senior Notes 600 3.85% Ind. Revenue Bonds, Capital Leases, &
Slide 35: Mohawk Industries, Inc.
LA MOHAWK INDUSTRIES, INC. Mohawk Industries, Inc. as
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