Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q2 2020 Earnings Presentation
18 slides from Armstrong World Industries's earnings presentation, Jul 28, 2020
Slide 1: Earnings Call Presentation 2nd Quarter 2020
Exhibit 99.2 July 28, 2020 Earnings Call Presentation 2nd Quarter 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Our disclosures in this presentation, including without limitation, those relating to future financial results market conditions and guidance, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litiga
Slide 3: Basis of Presentation Explanation
Basis of Presentation Explanation 3 When reporting our financial results within this presentation, we make adjustments to normalize the results. Management uses these non-GAAP measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance betwe
Slide 4: Consolidated Company Key Metrics - Second Quarter 2020
Consolidated Company Key Metrics-Second Quarter 2020 4 2020 2019 Variance Net Sales $203 $272 -25% Adj. EBITDA $69 $108 -36% % of Sales 34% 40% (590) bps (1) Adj. Earnings Per Share $0.75 $1.27 -41% Adj. Free Cash Flow $63 $55 15% Cash $117 $240 ($123) Revolver Availability $370 $200 $170 Liquidity
Slide 5: EBITDA Bridge - Second Quarter 2020 vs. PY
Adjusted EBITDA Bridge – Second Quarter 2020 vs. PY 5 Normalized(1) $120 $110 $108 $100 $90 $80 $4 $3 $5 $69 $70 ($38) ($9) $60 ($5) $50 $40 $30 $20 $10 $0 Q2 2019 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Q2 2020 "AUV" Lower volumes due to COVID-19… Sequential improvement within quarter (1) M
Slide 6: Free Cash Flow Bridge - Second Quarter 2020 vs. PY
Adjusted Free Cash Flow Bridge - Second Quarter 2020 vs. PY 6 Normalized(1) $80 $3 $6 $11 $3 $63 $60 $55 ($15) $40 $20 $0 (2) Q2 2019 Operating Capex Interest WAVE Other Q2 2020 Cash Flow Paid Dividends Cash flow remains strong despite COVID-19 pandemic NOTE: Adjustments include cash used or proceed
Slide 7: Mineral Fiber Second Quarter Results
Mineral Fiber Second Quarter Results 7 Sales $214 Down Key Highlights (26%) $158 • COVID-19 disruptions impacting market demand • Manufacturing gains driven by productivity • Sales improved sequentially in the quarter Q2 2020 Q2 2019 Q1 Q2 2019 Adjusted EBITDA $82 $96 Current Quarter Comments AUV (5
Slide 8: Architectural Specialties Second Quarter Results
Architectural Specialties Second Quarter Results 8 Sales Key Highlights Down $58 (22%) • Sales down 22% due to a reduction in demand $45 across almost all product categories and geographies as a result of COVID-19 Q2 2020 Q2 2019 Q1 Q2 2019 Adjusted EBITDA $10 $12 Current Quarter Comments Sales 4 (2
Slide 9: Consolidated Company Key Metrics - 1st Half 2020
Consolidated Company Key Metrics – 1st Half 2020 9 2020 2019 Variance Net Sales $452 $514 -12% Adj. EBITDA $166 $200 -17% % of Sales 37% 39% (220) bps Adj. Earnings Per Share (1) $1.76 $2.28 -23% Adj. Free Cash Flow $100 $74 36% Adj. EBITDA Change (Left-hand scale) % Change in Net Sales (Right-hand
Slide 10: EBITDA Bridge - 1st Half 2020 vs. PY
Adjusted EBITDA Bridge – 1st Half 2020 vs. PY 10 $200 $200 $180 $6 $6 $166 $5 $160 ($34) ($8) ($9) $140 $120 $100 $80 $60 $40 $20 $0 1H 2019 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE 1H 2020 "AUV" Balancing short-term cost containment with long-term growth drivers
Slide 11: Free Cash Flow Bridge - 1st Half 2020 vs. PY
Adjusted Free Cash Flow Bridge – 1st Half 2020 vs. PY 11 $120 $7 $9 $6 $100 $100 $21 ($16) $80 $74 $60 $40 1H 2019 Operating Cash Capex Interest WAVE Other 1H 2020 Flow Paid Dividends Strong cash earnings offset by weaker WAVE performance
Slide 12: 2020 Outlook
2020 Outlook 12 All projections assume sequential market improvement and no second wave of market shutdowns 2019 Actual Outlook Positive AUV Revenue $1,038 Down 10% to 18% Negative volume Benefit from recently announced Turf acquisition Ongoing productivity improvements Adjusted Manufactur
Slide 13: Our Value Creation Model - Medium to Long Term View
Our Value Creation Model – Medium to Long Term View 13 0% – 2% Mineral Fiber volume growth Revenue >15% Architectural Specialties growth 7% – 9% annual growth with 1-3 acquisitions per year Growth 3% – 5% average unit value increase ~60% incremental margin in mineral fiber Continue to pric
Slide 14: Appendix
Appendix =m 2 ANA @mstrong WORLD INDUSTRIES
Slide 15: EBITDA Reconciliation
Adjusted EBITDA Reconciliation 15 For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 V 2020 2019 V Earnings (Loss) from continuing operations, Reported $50 $64 ($14) ($173) $100 ($273) Add: Income tax expense (benefit), as reported $11 $19 ($8) ($66) $33 ($99) Earnings (
Slide 16: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation 16 CONSOLIDATED For the Three Months Ended June 30, For the Six Months Ended June 30, Per Per Per Per 2020 Diluted 2019 Diluted V 2020 Diluted 2019 Diluted V Share Share Share Share Earnings (Loss) from continuing operations, As Reported $50 $1.03 $
Slide 17: Free Cash Flow Reconciliation
Adjusted Free Cash(1) Flow Reconciliation 17 For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 V 2020 2019 V As Reported Net cash provided by operating activities $53 $32 $21 $79 $47 $32 As Reported Net cash provided by (used for) investing activities - $6 ($6) $10 ($32
Slide 18: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA 18 ARCHITECTURAL UNALLOCATED MINERAL FIBER SPECIALTIES CORPORATE For the Three Months Ended June 30, 2020 2019 V 2020 2019 V 2020 2019 V Operating Income (Loss) – As Reported $46 $79 ($33) $4 $10 ($6) $13 ($2) $15 Add: RIP Cost (1) - - - -
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