1
Caesarstone
Company OverviewSeptember, 2018
2
Disclaimer
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
considered as substitutes for GAAP measures and may be inconsistent with similar measures presented
by other companies.
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A Global Leader in the Attractive Quartz Surface Market
1 Source: Freedonia February 2017 study; company market share derived from company volume sales data and Freedonia global market size
3
Caesarstone invented the engineered
quartz countertop;
Solid global distribution platform -
Proven track record of innovation
and sustainable growth
Diversified geographical revenue
A Global market leaderPremium brand, with superior
customer value proposition
World-class capabilities in:
Experienced and motivated
management team
Attractive
financial profile
Caesarstone surfaces are a centrepiece in millions of homes around the world
Product and the market
with ~9% global market share (by volume)1
across over 50 countries
with North America portion of ~58%
Manufacturing, R&D and Marketing
4
New and Energized Management Team
Ophir Yakovian, Chief Financial Officer
Yuval Dagim, Chief Executive 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
• 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
5
Quartz Is the Fastest Growing Category and Is Still In Its Growth Phase
1 Source: Freedonia February 2017 study; company market share derived from company volume sales data and Freedonia global market size2 Based on Freedonia retail price (end-user consumer installed price, which includes installation and other related costs)
The Quartz Market Opportunity1
2010 2016
Counter-top Material Share 2010 vs.2016
Granite
Quartz 16%
GrowthDevelopment Maturity Dwindling
10%M
ark
et
Sh
are
24%27%
4%
Solid Surface
Laminate
4% Marble
Between 2010 – 2016
Material
Segmentation
(2016 sales)
Engineered
Quartz - 16%
Marble - 4%
Laminates - 10%
Other - 20%
Granite - 27%
Solid Surfaces - 24%
$95B1 Global Counter-top MarketThe market is historically dominated by Granite, Solid Surface & Laminate
Total Counter-top market grew 4.9% CAGR
Quartz Counter-top market grew 17.9% CAGR
Granite 28% 27%
Quartz 7% 16%
Laminate 17% 10%
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Caesarstone’s Superior Value Proposition
Non Porous
Scratch Resistant
Multi-functional
Easy Fabrication
Flexible
Stain Resistant
Heat Resistant
Impact Resistant
Versatile Designs
Killer application - Superior to any natural stone
Low cost of ownership & Ever lasting beauty
Quartz received the highest overall score
among countertop materials”
Consumer Reports Magazine, USA“
With computers, quartz has supplanted granite
as the people’s choice”
The Washington post, USA “
To me, Caesarstone is where beauty
and function come together”
Mario Batali, Prominent Chef, USA“
Endorsement
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”
Ty Pennington, TV Personality, USA“
Caesarstone - where creativity meets quality
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A Comprehensive and Lucrative Product Offering
Our wide range
of evergreen colors
and designs
Classico
Hand-incorporated
semi-precious
stones
Concetto
Inspired by the
industrial trend
Proprietary
technology
Supernatural
Inspired by nature
Luxurious marble &
granite designs
Proprietary
technology
P r e m i u m P o s i t i o n i n g
Metropolitan
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H1'18
Region
Split
Singapore
Israel
Canada
USA
Australia
UK
Leading Global Footprint with Diverse Revenue Mix
CS partners along the value chain
31 Caesarstone Direct Sales in 6 countries (DC & offices)
48 Caesarstone Distributors
relevant in the direct sales market
H1’18
Channels
Split
22% - Australia
41% - USA18% - Canada
7% - Israel
6% - Europe
6% - ROW10%
Indirect
distribution
90%
Direct
distribution
~240 KArchitects & Designers
~18 KKitchen & Bath
~9 KFabricators
~9 KDevelopers/builders
9
2016
2010
85%
52%
39%
13%
Israel Australia Canada U.S.
Positioned to Capture Future Quartz Market expansion
1Source: Freedonia February 2017. Sales figures are based on retail price (end-user consumer installed price, which includes installation and other related costs)2company market share derived from company volume sales data and Freedonia market size in each region
82%
32%
9%5%
87%
45%
24%
14%
Israel Australia Canada U.S.
Quartz Share of Total Countertop Market )By Volume(1
Caesarstone Quartz Countertop
Market Share )By Volume(2
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The U.S. Remains a Significant Opportunity
1HousingEconomics.com – Feb’18 2 Home Improvement Research Institute, September 2013 Source: Freedonia February 2017. Company market share derived from company sales volume data and Fredonia market size4 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
1,177k1,286k
2016 2018E
U.S. New Housing Starts1
$327 bn$397 bn
2015 2019E
U.S. Home Improvement Product Sales2
5%
14%
Quartz Share of Countertop Market
2010
2016
U.S. Market Penetration (by volume)3 Caesarstone U.S. Revenue Performance ($mm)
31
6087
123
186
223 223245
2010 2011 2012 2013 2014 2015 2016 2017
21%
9%
42%
50%
YoY organic growth
20%
10%
1% increase
in penetration
≈ $390mm4
(0%)
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World Class Manufacturing and R&D Capabilities
Leading by Innovation
3 Production sites
Caesarstone invented the engineered quartz
countertop
2 in Israel: Sdot Yam and Bar-lev – 5 lines
1 in The US, Richmond hill – 2 lines
Since then, our R&D capabilities have advanced to maintain
the company’s product line at the forefront of the industry
Our technologies, product & colors, have been a role
model to a long list of followers
The company intends to accelerate the investment in
R&D and boost the throughput of its capabilities
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The Surface of Choice in Commercial Properties
A long list of design celebrities have chosen CS for their private residences for ex.:
Tommy Hilfiger | Cher | Alexandra Von Furstenberg
Courtney Cox | Mario Batali | Neal Patrick Harris
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15
Pioneering Innovative Designs
and Technology
15
Color Leadership
Rugged Concrete 4033
1616
Pioneering Innovative Designs
and Colors
Proprietary Technology
Excava 4046
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Pioneering Innovative Designs
and Colors
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A Trend Setter
Cloudburst concrete 4011
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Financial Section
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Growth and Profitability
198.8
259.7296.6
356.6
447.4499.5
538.5588.1
2010 2011 2012 2013 2014 2015 2016 2017
78.3104.3
127.4
162.1
189.7200.2
212.5197.2
39.4% 40.2%43.0% 45.5% 42.4%
40.1% 39.5%33.5%
2010 2011 2012 2013 2014 2015 2016 2017
50.558.8
69.4
91.7
116.6125.7 130.3
100.4
25.4%22.6% 23.4%
25.7% 26.1% 25.2% 24.2%
17.1%
2010 2011 2012 2013 2014 2015 2016 2017
¹ Adjusted net income attributable to controlling interest
29.834.8
44.0
64.0
82.583.7 81.2
49.8
15.0%13.4%
14.8%
17.9% 18.4% 16.8%15.1%
8.5%
2010 2011 2012 2013 2014 2015 2016 2017
Revenue ($mm) Gross Profit and % Margin ($mm)
Adj. EBITDA and % Margin ($mm) Adj. Net Income and % Margin ($mm)1
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Q2’18 Financial Performance
o Primarily reflects the lower gross margin
o CCB – Constant Currency Basis
$148.9M $149.2M
Q2'17 Q2'18
(1.5%) CCB
0.2% $
$51.9M$48.3M
Q2'17 Q2'18
M$
34.9% 32.4%% margin
(6.9%)
$29.6M
$24.6M
Q2'17 Q2'18
19.9% 16.5%
M$
% margin
(16.9%)
0.6% (6.9%) 3.8% (16.2%)o Reduced throughput in Israel
o Inventory and logistical inefficiencies
o Raw materials cost inflation
o Significant improvement in
throughput and yield at RCH
$16.9M$14.6M
Q2'17 Q2'18
0.49$ 0.43$EPS
M$
(13.1%)
Revenue Gross Profit
Adj. EBITDA Adj. Net Income
CCB:
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Caesarstone - Recent Challenges
Two major challenges affecting our performance:
1. Competition and execution – mainly in the US
Increased low cost competition, mainly from China
Internal sales and logistics execution challenges
2. Manufacturing efficiency:
Innovative designs and colors putting more pressure on our
production
Richmond Hill ramp up is longer and more complex than
anticipated
Gross Profit ($mm&%) and Adj EBITDA Margin
Short term key focus areas:
U.S.
Enter and expand Big Box channel
Develop an optimized distribution strategy
Leadership change
Operation
Operations process improvement lead by our new VP
Operation
Richmond Hill – Sep’17 leadership change and know-how
transfer from Israel already showing major positive results
Enhance offering introducing Innovative designs
and colors
42.6
60.0 58.5
51.4 49.2
51.9 49.7
46.3
34.2
48.3
36.5%
42.1%40.5%
38.1%36.1%
34.9%32.1% 31.3%
25.2%
32.4%
19.7%
27.9%26.0%
22.2%
17.8%19.9%
16.5%14.2%
8.2%
16.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
% Adj EBITDA
% GM
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Caesarstone Cash Flow Supports Future Growth
$5.5 $8.8$13.5
$27.4
$86.4
$76.5
$22.9 $22.7
2010 2011 2012 2013 2014 2015 2016 2017
Capital Expenditure ($mm)
% of
revenue:2.8% 3.4% 4.5% 7.7% 19.3% 15.3% 4.3% 3.8%
$45.0$50.0
$56.0$64.3
$30.2
$49.2
$107.3
$77.7
2010 2011 2012 2013 2014 2015 2016 2017
Adj. EBITDA Less Capital Expenditure ($mm)
% of
revenue:22.6% 19.3% 18.9% 18.0% 6.7% 9.8% 19.9% 13.2%
Flexible capital structure with $104.6M in cash and
short term bank deposits
Caesarstone current cash position and future cash generation
should enable us to accelerate investments in future growth
opportunities, both organically and via potential acquisitions
$40.7
$0.9
-$22.9
$21.6
$48.3
$19.9
$78.2
$38.2
2010 2011 2012 2013 2014 2015 2016 2017
Free Cash Flow ($mm)
2323
CEO Message
Caesarstone was established as a manufacturer – a plant with an innovative superior product.
Over the years, it consolidated its sale’s channels and
developed a desirable premium brand.
To do that, we will need to continue to shift the center of
gravity of the company, from an industrial leader to a world
class commercial organization.
Along this journey, we will need to use our special tools –
innovation, superior service, premium brand ,together with
our experienced and motivated team.
The company will continue to increase the proximity and the
offering to its customers base worldwide.
From Industrial Leader to a World Class Commercial Organization
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Thank You
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Quarterly Financial Performance
YoY Growth:
‘13-’14 23.5% 30.4% 30.7% 17.4%
‘14-’15 14.2% 9.9% 11.0% 12.1%
‘15-’16 8.4% 11.6% 5.5% 6.0%
’16-’17 16.7% 4.6% 7.2% 9.7%
’17-’18 (0.3%) 0.2%
YoY Growth:
‘13-’14 25.4% 23.3% 42.4% 16.1%
‘14-’15 15.3% 10.4% 0.8% 8.2%
‘15-’16 (9.8%) 18.7% 3.6% (1.5%)
’16-’17 5.5% (25.5%) (31.8%) (30.0%)
’17-’18 (53.8%) (16.9%)
2014 2015 2016 2017 2018
- Solid and growing Adjusted EBITDA through 2016
- Experiencing significant margin erosion since Q2’17 primarily related to
manufacturing performance, raw materials prices and strategic M&S investments
in the U.S and UK
- Commenced counter-measures to improve manufacturing performance
Consistent year-over-year revenue growth across quarters through 2017
Adj. EBITDA ($mm)
22.1
30.4
35.9
28.1
25.5
33.5 3
6.2
30.4
23.0
39.8
37.5
30.0
24.3
29.6
25.6
21.0
11.2
24.6
Q1 Q2 Q3 Q4
Revenue ($mm)94.4
116.1
123.3
113.6
107.8
127.5
136.8
127.4
116.9
142.3
144.3
135.0
136.4 148.9
154.7
148.1
136.1 149.2
Q1 Q2 Q3 Q4
Industry characterized by seasonality with strong Q3 and weaker Q1 annually
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Adjusted EBITDA Reconciliation
(1) Consists of legal settlements expenses and loss contingencies, net, in 2017 related primarily to Kfar Giladi arbitration, as well as to product liability claims and other adjustments to on-going legal claims.
(2) One time bonus paid by a shareholder to Company's employees.
(3) Consists of charges to cost of goods sold for the difference between the higher carrying cost of the inventory of two of the Company's subsidiaries- Caesarstone USA's inventory at the time of its acquisition and inventory that was purchased from its
distributor and Caesarstone Australia Pty Limited's inventory that was purchased from its distributor, and the standard cost of the Company's inventory- which adversely impacts the Company's gross margins until such inventory is sold. The majority
of the inventory acquired from Caesarstone USA was sold in 2011, and the majority of the inventory acquired from the Australian distributor was sold in 2012.
(4) Share-based compensation includes expenses related to stock options and restricted stock units granted to employees of the Company. In addition, includes expenses for phantom awards granted and related payroll expenses as a result of
exercises.
(5) Consists of direct expenses related to a follow-on offering that closed in June 2014.
(6) Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israel Tax Authority and with the National Insurance Institute of Israel.
USD (0,000) 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A
Net Income $29,006 $29,304 $40,367 $64,353 $80,256 $79,458 $76,483 $27,558
Interest Expense, net $2,370 $4,775 $2,773 $1,314 $1,048 $3,085 $3,318 $5,583
Taxes on income $7,399 $3,600 $6,821 $10,336 $13,738 $13,843 $13,003 $7,402
Depreciation and Amortization $10,034 $14,615 $14,368 $14,994 $17,176 $22,334 $28,254 $29,926
Legal settlements and loss contingencies (1) $4,654 $5,868 $24,797
Equity in losses of affiliate, net -$296 -$67
Minority Share in Canada (45%) $348 $252
Adj.EBITDA $49,105 $52,361 $64,329 $90,997 $112,218 $123,374 $126,926
% of sale $0 $0 $0 $0 $0 $0
Compensation paid by a shareholder (2) $266
Excess cost of acquired inventory (3) $4,021 $885 $188 $231
Share-based compensation expense (4) $1,384 $1,259 $3,007 $2,514 $2,642 $2,293 $3,068 $5,277
Inventory - change of estimate -$3,458 $0
Follow-on expenses (5) $1,470 $657
IPO bonus $1,970
Caesarstone USA contingent consideration adjustment $255
Litigation gain -$1,783 -$1,001
Microgil loan and inventory write down $2,916
Provision for employees fringe benefits (6) $939 -$114
Settlement with the tax authorities -$134
Adjusted EBITDA $50,489 $58,774 $69,445 $91,711 $116,553 $125,667 $130,260 $100,429
% of sale 25.4% 22.6% 23.4% 25.7% 26.1% 25.2% 24.2% 17.1%
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(1) Consists of legal settlements expenses and loss contingencies, net, in 2017 related primarily to Kfar Giladi arbitration, as well as to product liability claims and other One time bonus paid by a shareholder to Company's employees.
(2) Consists of charges to cost of goods sold for the difference between the higher carrying cost of the inventory of two of the Company's subsidiaries- Caesarstone USA's inventory at the time of its acquisition and inventory that was purchased from its
distributor and Caesarstone Australia Pty Limited's inventory that was purchased from its distributor, and the standard cost of the Company's inventory- which adversely impacts the Company's gross margins until such inventory is sold. The majority
of the inventory acquired from Caesarstone USA was sold in 2011, and the majority of the inventory acquired from the Australian distributor was sold in 2012.
(3) Share-based compensation includes expenses related to stock options and restricted stock units granted to employees of the Company. In addition, includes expenses for phantom awards granted and related payroll expenses as a result of
exercises.
(4) Consists of direct expenses related to a follow-on offering that closed in June 2014.
(5) Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israel Tax Authority and with the National Insurance Institute of Israel.
(6) Relates to an adjustment of provision for taxable employee fringe benefits as a result of a settlement with the Israeli Tax Authority and with the National Insurance Intitute of Israel.
(7) Tax adjustments for the three and twelve months ended December 31, 2017 and 2016 were based on the effective tax rates for these periods, respectively.
Adjusted Net Income Attributable to Controlling Interest Reconciliation
USD (0,000) 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A
Net income attributable to controlling interest $28,658 $29,052 $39,632 $63,344 $78,436 $77,766 $74,596 $26,202
Legal settlements and loss contingencies (1) $4,654 $5,868 $24,797
Compensation paid by a shareholder (2) $266
Excess cost of acquired inventory (3) $4,021 $885 $188 $231
Share-based compensation expense (4) $1,384 $1,259 $3,007 $2,514 $2,642 $2,293 $3,068 $5,277
IPO bonus $1,970
Caesarstone USA contingent consideration adjustment $255
Inventory - change of estimate -$3,458 $0
Follow-on expenses (5) $1,470 $657
Litigation gain -$1,783 -$1,001
Microgil loan and inventory write down $2,916
Provision for employees fringe benefits (6) 939.25 -$114
Settlement with the tax authorities -134.20
Tax adjustment (7) 342.00 -$1,158
Total adjustments before tax $1,384 $6,413 $5,116 $714 $4,677 $6,947 $8,044 $29,960
Less tax on above adjustments (8) $279 $700 $740 $99 $618 $1,031 $1,456 $6,343
Total adjustments after tax $1,105 $5,713 $4,376 $615 $4,059 $5,916 $6,588 $23,617
Adjusted Net Income $29,763 $34,765 $44,008 $63,959 $82,495 $83,682 $81,184 $49,819
% of sales 15.0% 13.4% 14.8% 17.9% 18.4% 16.8% 15.1% 8.5%