Fgi Industries Ltd. · NASDAQ:FGI
Fgi Industries — Q3 2022 Earnings Presentation
27 slides from Fgi Industries's earnings presentation, 2022
Slide 1: Slide 1
Slide 2: Disclaimer
DISCLAIMER Certain matters discussed in this presentation contains forward-looking statements concerning our business, operations and financial performance and conditions, as well as our plans, objectives and expectations for our business operations and financial performance and condi tion. These st
Slide 3: FGI Industries at a Glance
FGI INDUSTRIES AT A GLANCE FGI is a leading “B-to-B” global supplier of Kitchen & Bath products with a reputation for Innovation, Quality & Service developed over 30 years in conjunction with our parent company, Foremost Groups Ltd. | TICKER: FGI | $180MM+ REVENUE BUSINESS IPO in January 2022 35% re
Slide 4: Company Overview
COMPANY OVERVIEW SANITARYWARE - 61% REPAIR/REMODEL - ~80% (TOILETS & SEATS, SINKS & PEDESTALS) NEW C O N S T R U C T I O N - ~20% BATH FURNITURE - 30% (VANITIES, M I R R O RS , C A B I N ET S) OTHER - 9% (CUSTOM KITCHEN CABINETRY, SHOWER D O O R S /WA LLS ) USA - 62% PRIVATE LABELS - ~60% MASS RETAI
Slide 5: Executive Management Team
EXECUTIVE MANAGEMENT TEAM JOHN S. CHEN John Chen is the Executive Chairman of FGI Industries. Prior to his election, Mr. Chen spent the past 2 years serving as Executive Vice President of Corporate Development for Foremost Groups, Ltd. Prior to that he spent 11 EXECUTIVE CHAIRMAN years in the invest
Slide 6: Key Investment Highlights
SOOO Le ID s SOKOKOKO HK ”n - <= L —_ <= Y <= = 2 lu = - ” lu > < > Wu =<
Slide 7: Durable Competitive Advantages
DURABLE COMPETITIVE ADVANTAGES | POSITIVE INDUSTRY DYNAMICS: • Kitchen & Bath are the most significant areas of investment in the home and provide the highest return to homeowners, leading to good pricing power • Strong 3rd-party influence on consumer decisions (contractor, plumber, designer, archit
Slide 8: Diversified Product and Market Segments
DIVERSIFIED PRODUCT AND MARKET SEGMENTS FGI B R A N D S COMPETITORS BEST BETTER By By By GOOD By 8
Slide 9: Global Business Footprint
GLOBAL BUSINESS FOOTPRINT UNITED STATES & CANADA | EAST H A N O V E R , NEW JERSEY US Operations & Warehouse | HOBART, I N D I A N A Showerdoor Production Center Warehouse & Distribution | WO O D L A N D , C A L I F O RNIA Warehouse | TORONTO, CANADA Canada Operations & Warehouse EUROPE | DUSSELDORF
Slide 10: Large & Global Customer Base
LARGE & GLOBAL CUSTOMER BASE USA & C A N A D A EU E-COMMERCE 10
Slide 11: Key Drivers of Long-Term Shareholder Value
KEY DRIVERS OF LONG-TERM SHAREHOLDER VALUE • Re-invest in core businesses with • Grow Brands, Product evergreen expansion categories and sales opportunities Channels • Selective bolt-on • Focus on higher acquisitions incremental margin sales opportunities LONG-TERM VALUE • Excess free cashflow CREAT
Slide 12: BPC Strategy Drives Organic Growth
BPC STRATEGY DRIVES ORGANIC GROWTH B ra n d s | Well-defined brand architecture leads to better product development cycle by | Owned-brand development + strong private label market position by | Improving the quality, not just volume of brands by | Multi-year brand development plan across multiple p
Slide 13: Enhanced Financial Performance: Margin Accretion, Capital Efficient
ENHANCED FINANCIAL PERFORMANCE: MARGIN ACCRETION, CAPITAL EFFICIENT | MARGIN IMPROVEMENT Our growth and e f f i c i e n c y plans expect to generate continuous improvement in operating margins | LOW-CAPEX NEEDS FGI operates as a relatively capital-lite business model | EFFICIENT WORKING CAPITAL PLAN
Slide 14: "Bolt-On" Strategy
“BOLT-ON” STRATEGY 1 . M AR K E T EXAMPLE: SHOWER BUSINESSES | Thousands of small suppliers | Hired shower-door team from competitor | Evergreen product lines, categories and geographies | Grew the business to over $3mm in Gross Profit | Look for good teams and product lines, not turnarounds 2. TARG
Slide 15: Favorable End Market Trends
FAVORABLE END MARKET TRENDS 15
Slide 16: Large Addressable Market with GDP+ Growth
LARGE ADDRESSABLE MARKET WITH GDP+ GROWTH SUMMARY EST. 2021 RETAIL MARKET VALUE FOR THE KITCHEN AND BATH MARKETS | The addressable market of FGI’s current product portfolio represents less than 50% of the global Kitchen & Bath product market TOTAL KITCHEN (with over $150 billion of TAM) & BATH $158.
Slide 17: Repair and Remodel Markets Provide Stable Growth
REPAIR AND REMODEL MARKETS PROVIDE STABLE GROWTH CONSISTENT YEAR-OVER-YEAR GROWTH IN R&R EXPENDITURES FOR IMPROVEMENTS AND REPAIRS ARE EXPECTED TO GROW OUTSIDE OF EXTREME RECESSIONS YEARS THROUGHOUT 2022 AND INTO EARLY NEXT YEAR Leading Indicator of Remodeling Activity HISTORICAL R&R GROWTH Second Q
Slide 18: Financial Overview and Third Quarter Highlights
FINANCIAL OVERVIEW AND THIRD QUARTER HIGHLIGHTS 18
Slide 19: Business Highlights – 3Q22
BUSINESS HIGHLIGHTS – 3Q22 • Third quarter revenue declined 24% to $38.5 million driven by softer volume trends in Revenue Sanitaryware and Bath Furniture due largely to customer’s inventory de-stocking, partially offset by continued pricing gains and a more favorable mix. • We continued to grow our
Slide 20: 3Q22 Consolidated Financial Results
3Q22 CONSOLIDATED FINANCIAL RESULTS Total Revenue Gross Profit Operating Income Diluted EPS $MM $MM $MM $ $182.1 $31.7 $31.6 $8.2 $1.08 $165.3 $4.8 $0.40 $50.9 $8.1 $8.0 $38.5 $1.8 $1.7 $0.20 $0.11 3Q21 3Q22 LTM - LTM - 3Q21 3Q22 LTM - LTM - 3Q21 3Q22 LTM - LTM - 3Q21 3Q22 LTM - LTM - 3Q21 3Q22 3Q21
Slide 21: 3Q22 Business Line Results
3Q22 BUSINESS LINE RESULTS Sanitaryware Revenue Bath Furniture Revenue Other Revenue $MM $MM $MM $55.1 $23.6 $122.5 $111.3 $88.4 $38.2 $36.0 $15.5 $7.4 $8.2 $31.1 $25.5 $15.1 $4.6 $5.6 3Q21 3Q22 2020 2021 LTM 3Q21 3Q22 2020 2021 LTM 3Q21 3Q22 2020 2021 LTM 3Q22 3Q22 3Q22 • Sanitaryware revenue • Bat
Slide 22: Financial Outlook
FINANCIAL OUTLOOK 2022 Financial Outlook Revenue Operating Income Net Income $164 – 168 $6.0 – 6.5 $4.5 – 5.0 million million million 22
Slide 23: Key Investment Characteristics
KEY INVESTMENT C H A RACT ERISTICS TRUSTED GLOBAL STRONG ORGANIC ENHANCED “SPIN-OFF” VALUE-ACCRETIVE STRONG SUPPLIER GROWTH PROFITABILITY BOLT-ONS SHAREHOLDER ALIGNMENT We are global, diversified, We pursue a “BPC” strategy: As a carve-out division We may engage in High insider ownership, and reputa
Slide 24: Appendix
SOOO Le ID s SOKOKOKO HK cas Q 2 lu ri a. <x 24
Slide 25: Financial Summary
FINANCIAL SUMMARY (USD) 2019 2020 2021 3Q21 3Q22 REVENUES 126,282,212 134,827,701 181,943,027 50,886,390 38,544,062 GROSS PROFIT 25,439,069 28,404,640 32,202,408 8,129,002 8,040,610 GROSS MARGINS 20.1% 21.1% 17.7% 16.0% 20.9% SELLING AND DISTRIBUTION 14,917,601 15,487,306 17,636,820 4,606,648 4,268,
Slide 26: Financial Summary (continued)
FINANCIAL SUMMARY (continued) USE OF NON-GAAP FINANCIAL MEASURES In assessing the performance of our business, management utilizes a variety of financial and performance measures to assess our business performance, including to evaluate our ability to convert earnings from our operational performanc
Slide 27: Slide 27