Millerknoll, Inc. · NASDAQ:MLKN
Millerknoll — Miller Herman — Baird 2015 Industrial Conference
28 slides from Millerknoll's conference presentation, Nov 9, 2015
Slide 1: Delivering Growth by Design
Delivering Growth by Design NASDAQ: MLHR Baird 2015 Industrial Conference Brian Walker, President and Chief Executive Officer Jeff Stutz, Executive Vice President, Chief Financial Officer November 9, 2015
Slide 2: Forward-looking statements
2 This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about
Slide 3: Company Snapshot
3 Headquarters: Zeeland, MI, USA Founded: 1905 Employees: 7,500 + FY15 Revenue: $2.14B FY15 Adj. EBITDA: $235M Over 600 dealers in 109 countries and 32 Design Within Reach retail studios Company Snapshot North America 58% Specialty 10% ELA 19% Consumer 13%
Slide 4: Work Heal Live Learn
Work Heal Live Learn A global lifestyle brand dedicated to creating inspiring places.
Slide 5: Large addressable market
5 Large addressable market Over the past five years, we have increased our market opportunity by approximately 50% to $35 billion. Value Drivers
Slide 6: Structurally Higher Margins
6Value Drivers Structurally Higher Margins Over the same period, we have expanded consolidated gross margin by over 400 basis points.
Slide 7: Faster growth areas
7Value Drivers Faster growth areas Since 2010, we’ve increased revenue by an average of 8% per year on an organic basis.
Slide 8: Our Strategy Aims To Drive Four Fundamental Shifts
8Our Strategy Aims To Drive Four Fundamental Shifts Product Centric North America Office Industry Brand Solutions Global Everywhere Industry + Consumer From: To:
Slide 9: Growth Enablers: Channel Expansion
9Growth Enablers Channel Expansion • Over 600 contract dealers in 109 countries • 32 Design Within Reach retail studios • Direct to consumer catalog marketing program • Multiple eCommerce storefronts Global, omni-channel reach across contract and consumer
Slide 10: Growth Enablers: Targeted Acquisitions
10Growth Enablers Targeted Acquisitions 2010 2012 2013 2015 Net Sales in FY15 +$470 million Audience Channel Geography Product Gross Margin in FY15 +130 bps
Slide 11: Growth Enablers: Product Innovation
11Growth Enablers Product Innovation • 22% of our sales in fiscal 2015 were from products developed in the past 4 years • Introduced over 40 new products and extensions in fiscal 2015 • Investment in design, research and development at 3.3% of sales in fiscal 2015
Slide 12: Lean Enterprise
12 Lean Enterprise • Focused improvement through: Customer first orientation Waste reduction Asset efficiency Growth Enablers Sales per Operational Sq. Foot +54% Sales per Employee Tangible Asset Turnover +23% +50% to 3x Improvement from FY10 to FY15
Slide 13: Strong and Continued Growth: Revenue
13Strong and Continued Growth Herman Miller Inc. Revenue Organic Revenue Growth exceeds North America Contract Industry Growth of 5.5% FY10 FY11 FY12 FY13 FY14 FY15 $1.9B $2.1B 10% 8% Organic Growth$1.8B$1.7B$1.6B $1.3B
Slide 14: Strong and Continued Growth: Adjusted EBITDA
14Strong and Continued Growth 16% Annual Growth Rate in EBITDA FY10 FY11 FY12 FY13 FY14 FY15 $206M $235M $182M$180M$165M $113M Herman Miller Inc. Adjusted EBITDA(1) (1)Represents a Non-GAAP measure; see Appendix for reconciliation
Slide 15: Increasing Cash Flows and Dividends
15Increasing Cash Flows and Dividends (1) Cash flow from operations less CAPEX plus domestic pension contributions; (2) Debt plus domestic pension liabilities FY10 FY11 FY12 FY13 FY14 FY15 CURRENT $5 $5 $19 $30 $33 $35 $95 $98 $112 $86 Adj. Free Cash Flow (1) ($ millions) FY10 FY11 FY12 FY13 FY14 FY
Slide 16: Future Value Drivers—3 to 5 Year Horizon
16Future Value Drivers—3 to 5 Year Horizon Core Contract Industry 2-3% New Products and Initiatives 1-1.5% Design Within Reach Studios / eCommerce Expansion 1-1.5% Estimated Annual Organic Revenue Growth 4-6% Targeted Acquisitions 1-2% Estimated Annual Revenue Growth Including Acquisitions 5-8% Oper
Slide 17: Investment Highlights
17Investment Highlights • Leading global brands • Large addressable market • Industry leader in design and innovation • Global, omni-channel reach • Robust operating performance • Strong balance sheet and returns on capital
Slide 18: Questions?
Questions?
Slide 19: Appendix
Appendix
Slide 20: Segment Overviews
Segment Overviews
Slide 21: Segment Overview: North America
21 North America 58% Specialty 10% ELA 19% Consumer 13% Appendix – Segment Overviews Overview FY15 Percent of Consolidated Revenues Macro-Economic Drivers Five Year Revenue Trend (in US$ millions) FY15 Adj. EBITDA Margin 12.2% Description: Design, manufacture and sale of furniture products for offic
Slide 22: Segment Overview: ELA
22 North America 58% Specialty 10% ELA 19% Consumer 13% Appendix – Segment Overviews FY15 Percent of Consolidated Revenues Five Year Revenue Trend (in US$ millions) FY15 Adj. EBITDA Margin Source: CSIL (January 2015) Regional Office Furniture Consumption (in US$ billions) GDP Forecast 223 290 347 37
Slide 23: Segment Overview: Specialty
23 North America 58% Specialty 10% ELA 19% Consumer 13% FY15 Percent of Consolidated Revenues Five Year Revenue Trend (in US$ millions) FY15 Adj. EBITDA Margin 58 80 94 112 206 220 5 YEAR CAGR 31% (14% organic) 9.5% SpecialtyAppendix – Segment Overviews FY10 FY11 FY12 FY13 FY14 FY15 Overview Macro-E
Slide 24: Segment Overview: Consumer
24 North America 58% Specialty 10% ELA 19% Consumer 13% FY15 Percent of Consolidated Revenues Five Year Revenue Trend (in US$ millions) FY15 Adj. EBITDA Margin 48 54 64 64 68 271 5 YEAR CAGR 41% (10% organic) 11% ConsumerAppendix – Segment Overviews FY10 FY11 FY12 FY13 FY14 FY15 Overview Macro-Econo
Slide 25: Non-GAAP financial measures notice
25 This presentation contains Adjusted EBITDA, Adjusted EBITDA ratios, and Organic Sales Growth, all of which constitute non-GAAP financial measures. Each of these financial measures is calculated by excluding items the Company believes are not indicative of its ongoing operating performance. The Co
Slide 26: Reconciliation of Non-GAAP Measures: Organic Sales Growth
26Appendix –Reconciliation of Non-GAAP Measures Organic Sales Growth (Decline) by Reportable Segment ($ Millions); (unaudited) Sales, as reported Performance Adjustments Dealer Divestitures Cumulative foreign exchange Acquisition-base year Sales, pro forma Compound Annual Growth Rate, as reported Co
Slide 27: Reconciliation of Non-GAAP Measures: Adjusted EBITDA by Segment
27Appendix –Herman Miller Inc. Reconciliation of Non-GAAP Measures Adjusted EBITDA by Reportable Segment ($ Millions) (unaudited) Segment Operating Earnings Add: Allocated Depreciation & Amortization Add: Restructuring/Impairment Expenses Adjusted EBITDA Revenue by Segment Adjusted EBITDA Margin Seg
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