Fgi Industries Ltd. · NASDAQ:FGI
Fgi Industries — Investor Presentation (December 2023)
30 slides from Fgi Industries's investor presentation, December 2023
Slide 1: Investor Presentation
Investor Presentation December 2023
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 condition. These sta
Slide 3: FGI Industries at a Glance
FGI Industries at a Glance New Construction 20% Leading global B2B supplier of Kitchen and Bath Products FGI is a leading global B2B supplier of Kitchen and Bath products with a Repair/Remodel 80% reputation of Innovation, Quality and Service developed over 30 years in conjunction with our parent co
Slide 4: Company Overview: Diverse Business Mix Provides Stability
Company Overview Diverse Business Mix Provides Stability Sanitaryware Bath Furniture Shower Systems Other (Kitchen Cabinetry, etc.) $105MM in 2022 Sales (65% of sales) $30MM in 2022 Sales (18% of sales) $22MM in 2022 Sales (14% of sales) $6MM in 2022 Sales (4% of sales) $12.5Bn market oppo
Slide 5: Global Operational Footprint and Customer Base
Company Overview United States & Canada Global Operational Footprint and Customer Base Europe United States & Canada Europe Asia-Pacific E-Commerce • EAST HANOVER, NEW JERSEY • DUSSELDORF, GERMANY • TANGSHAN, CHINA US Operations & Warehouse European Operations Product Purchasing & Development Center
Slide 6: Experienced Management Team
Company Overview Experienced Management Team John S. Chen David Bruce Perry Lin Bob Kermelewicz Jennifer Earl Norman Kroenke Executive Chairman Chief Executive Officer Chief Financial Officer EVP of FGI USA EVP of FGI Canada EVP of FGI Europe John appointed Dave was named CEO Perry was named CFO Bob
Slide 7: Key Investment Highlights
Key Investment Highlights FGl
Slide 8: Key Investment Highlights
Key Investment Highlights Opportunity to drive significant shareholder value We are dedicated to Diversified Portfolio and History of Innovation • Diversified mix of products, market segments and sales channels driving shareholder value • Tradition of strong innovation with leading ‘on-trend’ design
Slide 9: Diversified Portfolio and History of Innovation
Diversified Portfolio and History of Innovation Positioned for growth with diversified portfolio of innovative products GOOD, BETTER, BEST STRATEGY GOOD BETTER BEST by by 9
Slide 10: Well Positioned in the $100B+ Global Kitchen & Bath Market
Well Positioned in the $100B+ Global Kitchen & Bath Market HIGH HIGHER QUALITY MID-TO-HIGHER PRICE POINTS BETTER SUPPLY CHAIN BETTER OPERATIONS FRAGMENTED SUPPLIERS 60%+ OF INDUSTRY LOW HIGH MORE POTENTIAL PRODUCT-CATEGORY O F F ERI N GS HIGHER GROWTH POTENTIAL 10
Slide 11: Attractive Growth Opportunity
Attractive Growth Opportunity BPC Strategy Provides Opportunity for Above Market Growth 100% self-designed Recent investment products into “3D” capabilities PRODUCTS •75% existing products; Product design teams ~25% new products in in US, Asia and Europe Well-defined brand any given year (4+ Driving
Slide 12: Margin Improvement Initiatives
Margin Improvement Initiatives Growth and efficiency plans to generate improvement in operating margins Margins were pressured during ADJUSTED OPERATING MARGIN(1) 2022 due to supply chain challenges and inflationary headwinds, but we expect 7-9% meaningful margin improvement in coming years. Operati
Slide 13: Attractive Operating Model
Attractive Operating Model Flexible, capital-lite operating model provides protection in a downturn FGI benefits from a Step 1 Step 3 Product Innovation and Design Global Distribution and Support flexible, capital-lite • Tradition of strong innovation across Network operating model. FGI is a various
Slide 14: Favorable Industry Trends
Favorable Industry Trends Kitchen and Bath R&R market provides stable, predictable growth Kitchen and Bath Represent Most Significant Area of Repair & Remodel Provides Home Improvement Spending and Provide, Highest, Stable, Predictable Growth Return to Homeowners The Repair & Remodel US market segme
Slide 15: Capital Deployment Strategy
Capital Deployment Strategy Opportunity to create value through efficient capital deployment Capital Deployment Priorities 2023 -2024 2025+ Capital Allocation Priorities Capital Allocation Priorities • Re-Invest in Core Businesses with Evergreen • Acquisitions and Organic Growth Investments Expansio
Slide 16: New Business Integration
New Business Integration Focus on value-add through meaningful acquisitions Bolt-On Strategy Previous Examples MARKET VALUE Shower Business • Thousands of small • Price is right • Hired shower-door team suppliers • Must be financially • Evergreen product accretive from competitor lines, categories •
Slide 17: Value Creation Strategy
Value Creation Strategy Deploying capital to drive long-term shareholder value LONG-TERM VALUE BPC Strategy CREATION FORMULA: • Grow Brands, Product categories and sales Channels • Focus on higher incremental margin sales opportunities Above industry organic growth + Operating margin expansion + Enh
Slide 18: Repair and Remodel Industry Outlook
Repair and Remodel Industry Outlook 18
Slide 19: Repair & Remodel Growth Expected to Remain Resilient
Repair and Remodel Industry Outlook Repair & Remodel Growth Expected to Remain Resilient R&R Spending is expecting to remain resilient during Long-term drivers of R&R spending current downturn remain favorable 800 25.0% 17.2% 20.0% Structural deficit in 700 15.7% 15.8% 13.4% housing supply- 15.0% 60
Slide 20: Significant Opportunity for Market Share Gains and New Market Expansion
Repair and Remodel Industry Outlook Significant Opportunity for Market Share Gains and New Market Expansion (in Billions) FGI has significant opportunity to expand share in its current TOTAL KITCHEN product portfolio, with a market & BATH share position of less $158.6 BATH MARKE KITCHEN T than 1%. A
Slide 21: Third Quarter Overview and Financial Review
Third Quarter Overview and Financial Review 21
Slide 22: Business Highlights – 3Q23
Business Highlights – 3Q23 3Q23 results were Revenue Operating Income highlighted by Third quarter revenue declined Operating income was impacted 22% driven by continued inventory by ongoing investments in our continued gross margin de-stocking and uneven demand BPC organic growth initiatives improv
Slide 23: Quarterly Consolidated Financial Results
Quarterly Consolidated Financial Results Total Revenue Gross Profit Adjusted Operating Income Adjusted Net Income $MM $MM $MM $MM $182.1 $31.6 $30.6 $5.2 $4.0 $118.1 $2.9 $1.7 $1.3 $1.5 $38.5 $8.0 $7.8 $29.9 $0.6 $0.4 3Q22 3Q23 LTM - LTM - 3Q22 3Q23 LTM - LTM - 3Q22 3Q23 LTM - LTM - 3Q22 3Q23 LTM -
Slide 24: Quarterly Business Line Results
Quarterly Business Line Results Revenue by product category Sanitaryware Bath Furniture Shower Systems Other ($MM) ($MM) ($MM) ($MM) $55.3 $6.5 $104.5 $104.8 $21.9 $5.8 $19.1 $18.0 $75.2 $29.5 $3.1 $18.4 $2.0 $25.5 $20.7 $5.4 $1.7 $4.9 $5.6 $2.5 3Q22 3Q23 2021 2022 LTM 3Q22 3Q23 2021 2022 LTM 3Q22 3
Slide 25: Balance Sheet & Liquidity Update
Balance Sheet & Liquidity Update Cash & Availability ($MM) Net Debt (1) ($MM) $23.8 $22.5 $22.6 Significant working capital $20.9 improvements have $11.6 strengthened the balance $10.5 $11.0 sheet and liquidity $6.4 • Cash and availability was $20.9 million at 3Q23 owing to free cash flow $7.5 $7.0
Slide 26: Financial Outlook
Financial Outlook 2023 FINANCIAL OUTLOOK Adjusted Operating Adjusted Revenue Income Net Income $115 – 120 $2.0 – $2.8 $1.0 – 1.5 million million million The Company’s 2023 guidance includes roughly $0.8 million in costs related to investments with a major retail customer in addition to a previously
Slide 27: Investment Conclusion
Investment Conclusion Ample liquidity to support ongoing growth of business TRUSTED GLOBAL SUPPLIER STRONG ORGANIC GROWH We are global, diversified, and reputable We pursue a “BPC” strategy: focus on Brands, supplier of quality kitchen & bath products Products and sales Channel. Our BPC plan is (Inn
Slide 28: Appendix: Adjusted Operating Income Reconciliation
Appendix For the Three Months Ended For the Last Twelve Months Ended September 30, September 30, 2023 2022 2023 2022 Income from operations $ 481,690 $ 1,668,292 $ 2,062,628 $ 4,800,852 Adjustments: Arbitration legal fee 221,258 Anti-dumping penalty 124,865 Non-recurring IPO-related compensation 59,
Slide 29: Appendix: Adjusted Net Income Reconciliation
Appendix For the Three Months Ended For the Last Twelve Months Ended September 30, September 30, 2023 2022 2023 2022 Net income $ 343,492 $ 1,272,142 $ 835,653 $ 4,013,653 Adjustments: Arbitration legal fee 221,258 Anti-dumping penalty 124,865 Non-recurring IPO-related compensation 59,719 59,719 238
Slide 30: Appendix: Cash, Debt and Net Debt
Appendix 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Cash 8,793,338 3,126,305 5,981,019 10,068,777 7,380,232 6,894,762 5,369,947 Total Debt 16,321,410 14,690,048 13,007,649 9,795,052 8,426,548 7,863,680 7,962,203 Net Debt 7,528,072 11,563,743 7,026,630 (273,725) 1,046,316 968,918 2,592,256 30
FGI Industries — Investor Presentation (December 2023) on 6ix