Williams-sonoma, Inc. · NYSE:WSM
Williams-sonoma — Investor Presentation (September 2017)
42 slides from Williams-sonoma's investor presentation, Sep 28, 2017
Slide 1: 2017 Investor Presentation
2017 INVESTOR PRESENTATION L AUR A AL B E R J U L I E WH AL E N B E T H P OT I L LO-M I L L E R PRESIDENT AND EXECUTIVE VICE PRESIDENT, SVP FINANCE, CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER CORPORATE TREASURER, INVESTOR RELATIONS
Slide 2: Forward-Looking Statements
WIL L IAM S -S ON OM A , IN C. Forward-Looking Statements The forward-looking statements included in this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements address the financial condition, results of
Slide 3: Our Vision
WIL L IAM S -S ON OM A , IN C. OUR VISION from the beginning has been to enhance our customers’ lives at home. Our customers love their homes, and we have a singular focus on helping them make their homes a reflection of who they are. LAURA ALBER PRESIDENT & CEO 3
Slide 4: Discussion Overview
WIL L IAM S -S ON OM A , IN C. Discussion Overview 1 2 3 4 WHO S TRATEGIC GROW TH FINANCIAL WE ARE PRIORITIES OPPORTUNITIES OVERVIEW 4
Slide 5: Who We Are
OCMA >Ocean Park Series — otumonico: PRESTEL
Slide 6: What Sets Us Apart
WH O WE AR E What Sets Us Apart 1 MULTI-BRAND PORTFOLIO 2 MULTI-C HANNEL MODEL 3 VERTIC ALLY INTEGRATED 4 EXECUTIVE LEADERSHIP 5 CULTURE & VALUES 6
Slide 7: Multi-Channel, Multi-Brand, Vertically Integrated Retailer
WH O WE AR E Multi-Channel, Multi-Brand, Vertically Integrated Retailer For more than 60 years, we have offered products of the highest Q U A L I T Y at an excellent VA L U E to our customers through an elevated E X P E R I E N C E . We address a range of demographics, lifestyles, and life stages ac
Slide 8: Portfolio of Recognized Brands
WH O WE AR E : M ULT I-B R AN D P ORT F OL IO Portfolio of Recognized Brands $1,002MM $2,024MM 20 % 40% $5.1B FY16 NET $972MM 19% REVENUES 12 % 4% 5% $213MM OTHER $635MM $238MM 8
Slide 9: Leading Multi-Channel Retailer
WH O WE AR E : M ULT I-C H AN N E L M OD E L Leading Multi-Channel Retailer Multi-channel presence Multi-channel customers Web-influenced sales in will be a defining SPEND 5X MORE physical stores are characteristic of a than single channel customers expected to account for BES T -IN-CL ASS ALMOS T 4
Slide 10: E-commerce Penetration
WH O WE AR E : M ULT I-C H AN N E L M OD E L E-commerce Penetration Leading e-commerce penetration among multi-channel retailers 60% 52 52% % 45% 40% % OF E - C O MM E R CE P E NE T R ATI O N 30% 30% 27% 26% 23% 20% 20% 19.3% 17.2% 16% 16.2% 15% 12.9% 11% 10% 10.1% 10.2% 6.9% 7.4% 5.9% 6% 5% 4% 4.4%
Slide 11: E-commerce Excellence: Channel Profitability
WH O WE AR E : M ULT I-C H AN N E L M OD E L E-commerce Excellence: Channel Profitability One of the largest internet retailers, with a history of delivering industry-leading operating margins 2016 INTER NET RE TAILER TO P 5 0 0 (T O P 2 5 ) DT C O P E RATI N G P R O F I T M A R GI N 1 23.7% 23.6% 2
Slide 12: E-commerce Excellence
WH O WE AR E : M ULT I-C H AN N E L M OD E L E-commerce Excellence Keys to multi-channel success CULTURAL Evolved from a direct response heritage • Comprehensive database of over 58 million customers • Extensive customer data on cross-channel purchase and behavioral history • Sophisticated customer
Slide 13: Retail Stores Advantage
WH O WE AR E : M ULT I-C H AN N E L M OD E L Retail Stores Advantage Although e-commerce penetration has been increasing, retail stores are critical to our customers and our growth • Over 85% of all retail sales in the home furnishings industry, and almost 50% of our sales, are still done in stores
Slide 14: Vertically Integrated
WH O WE AR E : V E RT I C AL LY I N T E G R AT E D Vertically Integrated We control every aspect from product development to manufacturing, distribution and sale. This direct sourcing model allows us to generate industry-leading gross margins and quality, while delivering value to the customer. 150+
Slide 15: Regionalized Supply Chain Network
WH O WE AR E : V E RT I C AL LY I N T E G R AT E D Regionalized Supply Chain Network We have a proprietary delivery network that supports approximately one million in-home furniture deliveries CRANBURY, NJ DC DC MEMPHIS, DC TN CITY OF DC INDUSTRY, CA BRASELTON , GA DC ARLINGTON, TX WSI OPERATED FACI
Slide 16: Executive Team & Organizational Design
WH O WE AR E : E XE CUT IV E L E AD E R S H IP Executive Team & Organizational Design An executive team that is strong, experienced and cohesive • Average tenure of 13+ years • Strong track record of promoting from within • Strong commitment to financial discipline and returning capital to sharehold
Slide 17: Social Responsibility
WH O WE AR E : CULT URE & VALUE S Social Responsibility Acting responsibly is deeply linked to both the purpose and business strategy of Williams-Sonoma, Inc. LAURA ALBER PRESIDENT & CEO SERVING OUR CUS TOMERS THROUGH RESPONSIBLE SOURCING NEWER GENERATIONS OF TALENT means listening to what they care
Slide 18: Strategic Priorities
STRATEGIC PRIORITIES As we look to 2017, we will continue to IMPROVE PERFORMANCE with a focus on our highest strategic priorities of INNOVATION and OPERATIONAL EXCELLENCE. LAURA ALBER PRESIDENT & CEO 18
Slide 19: The Customer Experience is at the Center of Everything We Do
S T R AT E G I C P R I OR I T I E S The Customer Experience is at S AT I S FAC T I O N the Center of TRUST POSITIVIT Y Everything We Do CONVICTION L O YA L T Y COMMITMENT 1 FEELING EXPERIENCE DIGITAL LEADERSHIP & INNOVATION 2 PRODUCT INNOVATION & BRAND INITIATIVES 3 RETAIL TRANSFORMATION 4 OPERATION
Slide 20: Digital Leadership
S T R AT E G I C P R I OR I T I E S : D I G I TA L L E A D E R S H I P & I N N OVAT I ON Digital Leadership We are committed to enhancing our customers’ digital experience through technology that inspires and enables • Implement on-site digital tools to guide our customers’ purchase decisions such a
Slide 21: Digital Advertising
S T R AT E G I C P R I OR I T I E S : D I G I TA L L E A D E R S H I P & I N N OVAT I ON Digital Advertising AWA REN ES S CON SI DER ATI ON WW W. CON VERSI ON RETARGETING EMAIL SITE PERSONALIZATION L OYALTY Accelerate digital advertising investment in: Increase usage of digital storytelling • Conver
Slide 22: Cross-Brand Acquisition, Targeting & Personalization
S T R AT E G I C P R I OR I T I E S : D I G I TA L L E A D E R S H I P & I N N OVAT I ON Cross-Brand Acquisition, Targeting & Personalization Through personalized and targeted offerings we are engaging our customers with content and products instead of promotions • Differentiate our customer experie
Slide 23: Product Innovation
S T R AT E G I C P R I OR I T I E S Product Innovation AERIN L AUDER MONIQUE LHUILLIER WE WILL DRIVE PRODUCT INNOVATION ACROSS ALL OF OUR BRANDS Focus on value and opening price points Develop aesthetic variation and diversity of scale to meet evolving consumer lifestyles Introduce exciting collabor
Slide 24: Pottery Barn Brands
S T R AT E G I C P R I OR I T I E S : B R AN D I N I T I AT I V E S Pottery Barn Brands PRODUCT RETAIL DIGITAL INNOVATION Improve value equation and increase Continue the rollout and testing of our & MARKETING opening price points new store models Be an inspiring online resource, with a Add easy dec
Slide 25: Williams Sonoma
S T R AT E G I C P R I OR I T I E S : B R AN D I N I T I AT I V E S Williams Sonoma PRODUCT WILLIAMS SONOMA HOME RETAIL Expand our Williams Sonoma branded Develop new products, expanding Optimize our fleet, with market-by-market product offerings upon current offerings with new sizes, analysis to be
Slide 26: West Elm
S T R AT E G I C P R I OR I T I E S : B R AN D I N I T I AT I V E S West Elm Design-led furnishings brand positioned at the intersection of our customers’ lives at Home, Work, and Away RESIDENTIAL WORKSPACE HOTELS Introduced and continuing to evolve Entered the $25B commercial furnishings Highly imm
Slide 27: Retail Transformation
S T R AT E G I C P R I OR I T I E S Retail Transformation Drive retail transformation through differentiated experiences for our customers and overall fleet optimization RETAIL EXPERIENCE Our strategy is to distinguish ourselves further at retail through: • In-home, cross-brand design services • In-
Slide 28: Operational Excellence
S T R AT E G I C P R I OR I T I E S Operational Excellence Drive strategies that directly improve our customers’ experience CONTINUE OUR RELENTLESS FOCUS ON OPTIMIZING OUR SUPPLY CHAIN Inventory Optimization: In 2016, reduced inventory, SKU rationalization and better inventory positioning drove effi
Slide 29: Operational Excellence
S T R AT E G I C P R I OR I T I E S Operational Excellence Drive strategies that directly improve our customers’ experience BE THE MARKET LEADER IN CUSTOMER SATISFACTION Customer Satisfaction: Measure customer satisfaction at every possible interaction point Order Visibility: Enhance order visibilit
Slide 30: Growth Opportunities
GROWTH OPPORTUNITIES 30
Slide 31: West Elm: Accelerated Growth
G ROW T H OP P ORT UN I T I E S West Elm: Accelerated Growth Brand expected to exceed $2.0 Billion REVENUE GROWTH WEST ELM HAS GROWN TO BE A $1.0 BILLION $1,000 $972 BRAND WITH ONLY 18 % BRAND AWARENESS $821 Digital advertising, store expansion and partnership efforts $750 will play a significant ro
Slide 32: New Business Growth
G ROW T H OP P ORT UN I T I E S New Business Growth Our ability to successfully grow new businesses internally allows us to grow our market share and customer base • Our newer brands, REJUVENATION , which has • WILLIAMS SONOMA HOME continues to drive the potential to become one of our larger brands,
Slide 33: Global Expansion Provides Long-term Growth Opportunities
G ROW T H OP P ORT UN I T I E S Global Expansion Provides Long-term Growth Opportunities Global has more than doubled, growing from 3% to 6% of total revenue from 2010 to 2016 CANADA MEXICO UNITED KINGDOM SOUTH KOREA Company- Franchise model Company-owned model Franchise model owned model • 36 store
Slide 34: Comparative Market Performance
G ROW T H OP P ORT UN I T I E S Comparative Market Performance The U.S. home furnishings market has experienced relatively stagnant growth on a compound basis since 2000, and has still not reached levels seen just prior to the financial crisis U.S. FURNITURE & HOME FURNISHINGS STORES SALES WSM NET R
Slide 35: Summary
G ROW T H OP P ORT UN I T I E S Summary NET REVENUES $10.0 HOME FURNISHINGS IS A HIGHLY FRAGMENTED INDUSTRY $10B • • According to Euromonitor, WSI currently has approximately 4% total market share E-commerce is outpacing overall category growth $7.5 • With 52% of our business generated online, we ha
Slide 36: Financial Overview
FINANCIAL OVERVIEW 36
Slide 37: Strong Financial Returns
F I N AN CI AL OV E RV I E W Strong Financial Returns NET REVENUES NON-GAAP EARNINGS PER SHARE $4.00 $3.45- $6,000 $5,165- 10% CAGR $3.65* 6% CAGR $5,265* $3.37 $3.43 $3.50 $4,976 $5,084 $3.20 $4,699 $4,800 $4,388 $3.00 $2.84 $4,043 $2.58 $3,504 $3,721 $2.50 $3,600 $2.24 $1.95 $ I N M I L L I ON S $
Slide 38: Balanced Capital Allocation Strategy
F I N AN CI AL OV E RV I E W Balanced Capital Allocation Strategy C A P I TA L E X P E N D I T U R E S RETURNING CASH TO SHAREHOLDERS • Over the last five years, we have invested over $1.0 billion, • In 2016, we generated over $500 million in operating cash flow approximately $200 million per year,
Slide 39: Growth & Margin Drivers
F I N AN CI AL OV E RV I E W Growth & Margin Drivers OPPORTUNITIES TO EXPAND OPERATING MARGIN • Mix shift to e-commerce • Impact of direct sourcing advantage • Supply chain and inventory initiatives • Global growth and development • Leveraging costs as business scales 39
Slide 40: Williams-Sonoma, Inc. Fact Sheet
F I N AN CI AL OV E RV I E W Williams-Sonoma, Inc. STORE COUNT Fact Sheet AS OF JAN UARY 2 9, 2 017 2016 FINANCIAL HIGHLIGHTS Revenues $5.1B 201 234 POTTERY BARN E-commerce 52% Retail 48% WILLIAMS SONOMA Non-GAAP E.P.S. $3.43 98 Operating Cash Flow $525M Free Cash Flow $327M (Operating cash flow les
Slide 41: U.S. Retail Locations
F I N AN CI AL OV E RV I E W U.S. Retail Locations At the end of FY 2016, Williams-Sonoma, Inc. had 629 company-owned stores, including 583 in the United States, 26 in Canada, 19 in Australia and 1 in the United Kingdom. 12 2 12 8 3 7 36 2 17 3 16 3 2 21 13 11 18 26 25 4 5 2 12 23 5 6 4 92 9 2 7 10
Slide 42: INC.
INC. 2 -SONOMA WILLIAMS:
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