Mohawk posts net sales of more than $11 billion

The flooring giant posted net sales of $11.2 billion in 2021, a 17.3% increase. The Global Ceramic segment increased by 14% to $3.9 billion.

Mohawk Industries (Calhoun, Georgia) is continuing its expansion, breaking new records and once again demonstrating the strength and resilience of its business model.

The flooring giant posted net sales of $11.2 billion in the 12-month period ended 31 December 2021, a 17.3% increase on the prior year figure of $9.6 billion.

Operating margin for the year rose dramatically, with adjusted EBITDA exceeding $1.9 billion (+40%), operating income more than doubling to $1,335 million (operating margin rose to approximately 12%), and net earnings up 100% from $516 million to $1,033 million.

“For the full year, Mohawk’s business improved significantly,” said Jeffrey S. Lorberbaum, Mohawk’s Chairman and CEO. “Our fourth quarter sales remained strong, driven by a robust residential new construction and remodeling environment. Commercial sales improved as well, though they still lagged pre-pandemic levels. Earnings in the quarter benefited from improved price, mix and productivity.”

Although penalized by soaring raw material and energy prices, all three of the Group’s business units recorded very healthy economic/financial indicators in the fourth quarter of the year and for 2021 as a whole.

The Global Ceramic segment approaches $4 billion

In the fourth quarter, sales in the Global Ceramic segment increased by 3% (10% on a constant days and currency basis), bringing full-year sales to $3.9 billion (up 14.1% from $3.4 billion in 2020). The segment’s operating income grew by 140% in the space of a year to $403 million (10% of global ceramic net sales).

Mexico, Brazil and Russia outperformed in the quarter, even though sales in those regions were constrained by capacity limitations.

The segment grew its sales and improved its mix with innovative floor, wall and mosaic offerings, quartz and porcelain slabs, as well as expanding its position in exterior products. Soaring costs of materials, labour and energy continue to impact business, especially in Europe, the region worst affected by the energy crisis where natural gas prices are presently more than five times higher than last year. The negative effects will be felt as early as the first quarter of this year, “which we anticipate will create a $40-$45 million headwind, net of price increases”, said Lorberbaum, announcing a further increase in prices from the second half of 2022.

Mohawk has planned numerous investments, some of which are already underway, added Lorberbaum:

“In Brazil we are constructing a new porcelain tile facility that should be starting up in the second half of next year. In Mexico, we are expanding our production of mosaics and specialty products. In Russia, we are increasing our porcelain tile capacity with a new production line this year and another line in 2023. In Europe, we are adding capacity to expand our porcelain slab, outdoor and specialty tile businesses and in the U.S., we are increasing our quartz countertop production. Collectively, these expansions will support additional sales of approximately $300 million when all the lines are fully operational.”

Other flooring materials also see growth

Strong growth was also reported by the Flooring North America Business Unit (production and sale of carpet, laminate, vinyl, LVT and wood in North America), which posted net sales of $4.1 billion in 2021 (up 14.5% on 2020), and by the Flooring - Rest of the World Business Unit (production and sale of laminate, vinyl, LVT, wood and insulation panels outside North America), which recorded 25.4% year-on-year growth to $3.2 billion.

Mohawk is the leader in the U.S. laminate market and is increasing its laminate capacity to support $300 million of additional sales. The first expansion phase is starting up in the first quarter of 2022 with the second phase following in 2023. Mohawk also saw strong growth in its LVT business, the fastest growing flooring product in the market. Here too it is starting up a new operation to support sales of over $160 million.

The Flooring Rest of World Segment is also focused on boosting production and supply of laminate and LVT, with new plant investments planned through to the end of 2023.

An optimistic outlook for 2022

“After our record-setting 2021, we are enthusiastic about Mohawk’s future growth and profitability,” said Lorberbaum. “This year, GDP is expected to grow 3 to 5% in most of our markets, with residential sales remaining strong and commercial improving. Interest rates will likely rise but should remain historically favorable and support continued home sales and remodeling. During the year we anticipate inflation moderating, and constraints in labor, material and energy declining.”