Investor Presentation 4 th Quarter 2017 Forward Looking Statements - - PowerPoint PPT Presentation
Investor Presentation 4 th Quarter 2017 Forward Looking Statements - - PowerPoint PPT Presentation
Investor Presentation 4 th Quarter 2017 Forward Looking Statements This presentation contains "forward-looking" statements based on current expectations regarding future plans, events, outlook, objectives and financial performance,
Forward Looking Statements
This presentation contains "forward-looking" statements based on current expectations regarding future plans, events, outlook,
- bjectives and financial performance, expectations for future sales growth and earnings per diluted share (GAAP and non-GAAP).
Forward-looking statements can be identified by words including “expect,” “believe,” “anticipate,” “estimate,” “may,” “will,” “would,” “could,” “confident” or other similar words, phrases or expressions. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Corporation's actual future results and performance to differ materially from expected
- results. These risks include but are not limited to: general economic conditions in the United States and internationally;
unfavorable changes in the United States housing market; industry and competitive conditions; a decline in corporate spending on
- ffice furniture; changes in raw material, component or commodity pricing; future acquisitions, divestitures or investments; the cost
- f energy; changing legal, regulatory, environmental and healthcare conditions; the Corporation’s ability to successfully complete
its business software system implementation; the Corporation’s ability to implement price increases; changes in the sales mix of products; the Corporation's ability to achieve the anticipated benefits from closures and structural alignment initiatives; and force majeure events outside the Corporation’s control. A description of these risks and additional risks can be found in the Corporation's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements.
Market Leader
3
Office Furniture Hearth
#2
Market Position
#1
$2.2B
Sales
24% 76%
Office Furniture 76% Hearth 24% Supplies Driven Contract & Other
Sales Channels
Hearth Office Furniture
4
New Construction Retail Wood & Gas Products
Market Drivers
Office Furniture
Source: The Conference Board
CEO Confidence Total Construction Spending: Office
Source: U.S. Bureau of the Census
Small Business Confidence
Source: National Federation of Independent Business
5
10 20 30 40 50 60 70 80 Line represents
- verall positive vs
negative sentiment
Source: Bureau of Labor Statistics CES Industries: Financial Activities, State and Local Government, Federal Government, Other Services, Professional Business Services, Information, and Education and Health Services
Service Sector Employment
Millions 72 74 76 78 80 82 84 86 80 85 90 95 100 105 110 15 yr. avg: 96 20 30 40 50 60 70 80 90 100
Billions
Single Family Housing Starts
Source: U.S. Census Bureau
Seasonally Adj. Annual Rate (K)
Residential Remodeling Index
Source: Hanley Wood
Oil Prices
Source: U.S. EIA
Market Drivers
Hearth Products US Temperatures
Variance from Average
Source: U.S. NOAA
6
- 4
- 2
2 4 6 8 Degree
Average
- 200
400 600 800 1,000 1,200 1,400
$0 $30 $60 $90 $120 $150 $0 $1 $2 $3 $4 $5 Dollars per Barrel Dollars per Gallon Heating Oil Crude-Brent
60 70 80 90 100 110 120
Breadth and Depth
Distribution Brands Products Price Points
Tuned and tailored Solutions for every need High to low Broadest coverage
7
House Of Brands
Split and Focus
8
Leverage Member Owner Culture with Lean
Supplies
- -Driven Channel
Contract Channel Contract Retail Commercial Image
Herman Miller Knoll Steelcase Haworth Global Asian Imports
Market Coverage
Office Furniture
North America
9
HNI Brands Key Competitors
Core, sweet spot
Retail less than 1%
` ` `
10
New Construction Channel Remodel/Retrofit Channel
Specialty Dealer DIY
HNI Brands Key Competitors
Core, sweet spot
`
Niche Competitors Travis Napoleon
Installing Distributors
Innovative Hearth Products (IHP)
Market Coverage
Hearth Products
$ in millions
Operating Cash Flow Dividends
Solid financial position
- Conservative leverage: Debt/EBITDA 1.4x
Significant cash flow generation
- Economic profit focus/alignment
Committed to strong dividend
- Sustainable and increasing
11
Financial Strength
$0.16 $0.18 $0.20 $0.22 $0.24 $0.26 $0.28 $- $50 $100 $150 $200 $250 $300 $350
Current Outlook
FY17 Outlook
Non-GAAP EPS
$1.88 to $1.95
(PY $2.62) Up 1 to 4 percent,
- rganically
Down 2 to 5 percent
Up 2 to 5 percent
FY18 Outlook
Non-GAAP EPS
$2.15 to $2.65
Up 1 to 4 percent Up 3 to 6 percent
HNI
Earnings Per Share
Office Furniture
Net Sales
Hearth
Net Sales
12
2018 Guidance Bridge
13
Incremental Profit
Office 25% Hearth 30%
Price
- ffsetting
inflation Core productivity & Structural cost Amortization & Comp reset
North America Office Furniture Structural Cost Benefits Other Businesses Hearth New Construction
Long-Term Earnings Growth
$ Growth opportunities
$0.40 - $0.60
$ Structural cost savings
+$0.20
$ Continued growth in single family housing
$0.45 - $0.65
$ Core growth
$0.60 - $0.80
14