Caesarstone Company Overview September, 2018 1
Written and oral statements made in this presentation and responses to various questions that reflect our views about our future performance, the Company’s financial position, business strategy and plans and objectives of management for future operations constitute “forward - looking statements” under the Private Securities Litigation Reform Act of 1995 . These statements, which contain words such as "believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “will,” “may,” “should”, “plan”, “seek” and similar expressions or references to future periods, reflect the beliefs and expectations of the Company and are subject to risks and uncertainties, including those described under “Risk factors” in the Company’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission, that may cause actual results to differ materially from the results discussed in our forward- looking statements. These risks and uncertainties include, among other factors, but are not limited to the strength of the home renovation and construction sectors; economic conditions within any of our key existing markets; actions by our competitors; changes in raw material prices, particularly polymer resins and pigments; fluctuations in currency exchange rates; the success of our expansion efforts in the United States; the outcome of silicosis claims and the claim by our former quartz processor; unpredictability of seasonal fluctuations in revenues; delays in manufacturing and other factors. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. These forward-looking statements are made only as of the date hereof, and neither the Company, nor any of its respective agents, employees or advisors intend, undertake or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. This presentation includes certain non-GAAP measures, which should all be considered in addition to, and not as a substitute for, comparable GAAP measures. A reconciliation of GAAP net income to adjusted EBITDA and adjusted net income are provided below. The Company provides these non- GAAP financial measures because it believes that they present a better measure of the Company’s core business and management uses the non- GAAP measures internally to evaluate the Company’s ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company’s operating performance. However these measures should not be Disclaimer considered as substitutes for GAAP measures and may be inconsistent with similar measures presented by other companies. 2
A Global Leader in the Attractive Quartz Surface Market Caesarstone invented the engineered Diversified geographical revenue Proven track record of innovation quartz countertop; and sustainable growth Product and the market with North America portion of ~58% Solid global distribution platform - World-class capabilities in: Attractive across over 50 countries Manufacturing, R&D and Marketing financial profile Premium brand, with superior A Global market leader Experienced and motivated customer value proposition with ~9% global market share (by volume) 1 management team 1 Source: Freedonia February 2017 study; company market share derived from company volume sales data and Freedonia global market size Caesarstone surfaces are a centrepiece in millions of homes around the world 3 3
New and Energized Management Team Yuval Dagim, Chief Executive Officer • Mr. Dagim joined as CEO in 2018 • Over 28 years of experience in global business and leadership across multiple industries, including building materials, consumer and construction • Successfully spearheaded numerous organizational enhancements and global business developments at several companies Ophir Yakovian, Chief Financial Officer • Mr. Yakovian joined as CFO in 2018 • Nearly 20 years of experience in various financial and leadership roles • Formerly served as CFO of Lumenis Ltd. (previously NASDAQ: LMNS), Tnuva Group and Perion Network Ltd. (NASDAQ:PERI) • Certified Public Accountant 4
The Quartz Market Opportunity 1 $95B 1 Global Counter-top Market Between 2010 – 2016 The market is historically dominated by Granite, Solid Surface & Laminate Total Counter-top market grew 4.9% CAGR Marble - 4% Laminates - 10% Quartz Counter-top market grew 17.9% CAGR Granite - 27% Material Other - 20% Segmentation (2016 sales) Engineered Quartz - 16% Solid Surfaces - 24% Quartz Is the Fastest Growing Category and Is Still In Its Growth Phase Counter-top Material Share 2010 vs.2016 Granite 2010 2016 27% 24% Solid Surface Market Share Quartz 7% 16% Quartz 16% Laminate 17% 10% 10% Laminate 4% 4% Marble Granite 28% 27% Development Growth Maturity Dwindling 1 Source: Freedonia February 2017 study; company market share derived from company volume sales data and Freedonia global market size 5 2 Based on Freedonia retail price (end-user consumer installed price, which includes installation and other related costs)
Caesarstone’s Superior Value Proposition Killer application - Superior to any natural stone Endorsement “ Quartz received the highest overall score Impact Resistant Flexible among countertop materials ” Consumer Reports Magazine, USA “ Scratch Resistant Easy Fabrication With computers, quartz has supplanted granite as the people’s choice” The Washington post, USA Stain Resistant Multi-functional “ You walk into a home and you see the kitchen has Caesarstone in it. It changes the way you look at the value of that house ” Heat Resistant Versatile Designs Ty Pennington, TV Personality, USA “ To me, Caesarstone is where beauty and function come together ” Non Porous Mario Batali, Prominent Chef, USA Low cost of ownership & Ever lasting beauty Caesarstone - where creativity meets quality 6
A Comprehensive and Lucrative Product Offering Classico Metropolitan Supernatural Concetto P r e m i u m P o s i t i o n i n g Inspired by nature Our wide range Inspired by the Hand-incorporated of evergreen colors industrial trend semi-precious Luxurious marble & and designs stones Proprietary granite designs technology Proprietary technology 7
Leading Global Footprint with Diverse Revenue Mix Canada UK USA Israel Singapore 31 Caesarstone Direct Sales in 6 countries (DC & offices) Australia 48 Caesarstone Distributors 6% - ROW CS partners along the value chain 10% Indirect 22% - Australia Architects & Designers ~240 K 6% - Europe distribution Kitchen & Bath ~18 K H1 ’ 18 7% - Israel H1'18 90% Fabricators ~9 K Channels Region Direct Split Split Developers/builders ~9 K distribution 18% - Canada 41% - USA relevant in the direct sales market 8
Positioned to Capture Future Quartz Market expansion Quartz Share of Total Countertop Market Caesarstone Quartz Countertop ) By Volume ( 1 Market Share ) By Volume ( 2 87% 85% 82% 2016 2010 52% 45% 39% 32% 24% 14% 13% 9% 5% Israel Australia Canada U.S. Israel Australia Canada U.S. 1 Source: Freedonia February 2017. Sales figures are based on retail price (end-user consumer installed price, which includes installation and other related costs) 9 2 company market share derived from company volume sales data and Freedonia market size in each region
The U.S. Remains a Significant Opportunity U.S. New Housing Starts 1 U.S. Home Improvement Product Sales 2 1,286k 1,177k $397 bn $327 bn 2015 2019E 2016 2018E U.S. Market Penetration (by volume) 3 Caesarstone U.S. Revenue Performance ($mm) YoY organic growth 10% 245 (0%) 223 223 1% increase 20% in penetration 186 14% ≈ $ 390mm 4 50% 123 42% 2010 21% 87 2016 9% 60 5% 31 Quartz Share of Countertop Market 2010 2011 2012 2013 2014 2015 2016 2017 1 HousingEconomics.com – Feb’ 18 2 Home Improvement Research Institute, September 201 10 3 Source: Freedonia February 2017. Company market share derived from company sales volume data and Fredonia market size 4 Calculation applies 1% increase in quartz penetration (by volume) based on 2016 total market volume and 2016 quartz retail prices as provided by Freedonia February 2017 report
World Class Manufacturing and R&D Capabilities 3 Production sites 1 in The US, Richmond hill – 2 lines 2 in Israel: Sdot Yam and Bar-lev – 5 lines Leading by Innovation Caesarstone invented the engineered quartz countertop Since then, our R&D capabilities have advanced to maintain the company’s product line at the forefront of the industry Our technologies, product & colors, have been a role model to a long list of followers The company intends to accelerate the investment in R&D and boost the throughput of its capabilities 12
The Surface of Choice in Commercial Properties A long list of design celebrities have chosen CS for their private residences for ex.: Tommy Hilfiger | Cher | Alexandra Von Furstenberg Courtney Cox | Mario Batali | Neal Patrick Harris 14 14
Pioneering Innovative Designs and Technology Color Leadership Rugged Concrete 4033 15 15
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