Investor Presentation 4 th Quarter 2017 Forward Looking Statements - - PowerPoint PPT Presentation

investor presentation 4 th quarter 2017 forward looking
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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,


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SLIDE 1

Investor Presentation 4th Quarter 2017

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SLIDE 2

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.

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SLIDE 3

Market Leader

3

Office Furniture Hearth

#2

Market Position

#1

$2.2B

Sales

24% 76%

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SLIDE 4

Office Furniture 76% Hearth 24% Supplies Driven Contract & Other

Sales Channels

Hearth Office Furniture

4

New Construction Retail Wood & Gas Products

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SLIDE 5

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

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SLIDE 6

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

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SLIDE 7

Breadth and Depth

Distribution Brands Products Price Points

Tuned and tailored Solutions for every need High to low Broadest coverage

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SLIDE 8

House Of Brands

Split and Focus

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Leverage Member Owner Culture with Lean

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SLIDE 9

Supplies

  • -Driven Channel

Contract Channel Contract Retail Commercial Image

Herman Miller Knoll Steelcase Haworth Global Asian Imports

Market Coverage

Office Furniture

North America

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HNI Brands Key Competitors

Core, sweet spot

Retail less than 1%

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SLIDE 10

` ` `

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

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SLIDE 11

$ 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

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Financial Strength

$0.16 $0.18 $0.20 $0.22 $0.24 $0.26 $0.28 $- $50 $100 $150 $200 $250 $300 $350

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SLIDE 12

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

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SLIDE 13

2018 Guidance Bridge

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Incremental Profit

Office 25% Hearth 30%

Price

  • ffsetting

inflation Core productivity & Structural cost Amortization & Comp reset

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SLIDE 14

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

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