Millerknoll, Inc. · NASDAQ:MLKN
Millerknoll — Miller Herman — Baird 2019 Industrial Conference
23 slides from Millerknoll's conference presentation, Nov 5, 2019
Slide 1: Inspiring Designs to Help People Do Great Things
NASDAQ: MLHR Inspiring Designs to Help People Do Great Things Baird 2019 Industrial Conference Andi Owen, President and CEO Jeff Stutz, Chief Financial Officer
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This information contains forward-looking These statements do not guarantee future performance locate new retail studios, negotiate favorable lease terms statements within the meaning of Section 27A and involve certain risks, uncertainties, and assumptions for new and exis
Slide 3: Company Snapshot
COMPANY SNAPSHOT Headquarters: FY19 Revenue: $2.57B Omni-Channel Zeeland, MI, USA FY19 Adj. Operating distribution model Founded: 1905 Income: $227M • Over 600 contract dealers in 109 countries Employees: ~8,000 • 37 retail studios • Multiple global e-commerce storefronts FY19 REVENUE MIX North Amer
Slide 4: Strategic Priorities: Unlock the Power of One Herman Miller
STRATEGIC PRIORITIES: UNLOCK THE POWER OF ONE HERMAN MILLER Herman Miller Group 4
Slide 5: Strategic Priorities
STRATEGIC PRIORITIES Our strategy is centered around four strategic priorities BUILD A CUSTOMER- UNLOCK THE POWER OF CENTRIC, DIGITALLY-ENABLED ONE HERMAN MILLER 1 2 BUSINESS MODEL REINFORCE OUR COMMITMENT ACCELERATE TO OUR PEOPLE, OUR PLANET, PROFITABLE GROWTH 3 4 & OUR COMMUNITIES 5
Slide 6: Unlock the Power of One Herman Miller
STRATEGIC PRIORITIES UNLOCK THE POWER OF ONE HERMAN MILLER OBJECTIVES: Build an agile, collaborative, Simplify and tailor our go-to- Continue to lead in globally-connected market approach Product Innovation across organization fit for all businesses continuous evolution 6
Slide 7: Build a Customer-Centric, Digitally-Enabled Business Model
STRATEGIC PRIORITIES BUILD A CUSTOMER-CENTRIC, DIGITALLY-ENABLED BUSINESS MODEL OBJECTIVES: Leverage deep understanding Drive step-change in our data, Strengthen our core of customer journeys to deliver analytics, marketing, and technology backbone inspired products and frictionless brand capabiliti
Slide 8: Accelerate Profitable Growth
STRATEGIC PRIORITIES ACCELERATE PROFITABLE GROWTH OBJECTIVES: Strengthen & evolve the Drive outsized growth Expand our North America Contract in International Retail business business 8
Slide 9: Reinforce Our Commitment to Our People, Our Planet, & Our Communities
STRATEGIC PRIORITIES REINFORCE OUR COMMITMENT TO OUR PEOPLE, OUR PLANET, & OUR COMMUNITIES OBJECTIVES: Build, develop, and retain and Shape an inclusive and Elevate our Total Societal world-class talent diverse work force Impact (Better World) Commitment 9
Slide 10: Financial Outlook
Financial Outlook 10
Slide 11: Strong track record of financial performance
FINANCIAL OUTLOOK Strong track record of financial performance • Organic revenue growth of 6.1% at a premium to North America industry growth of 3.7% over past 5 years • Robust EPS growth over the same time frame • Healthy free cash flow generation Revenue Adjusted EPS Adj. Free Cash Flow(1) ($ bill
Slide 12: Disciplined capital allocation approach focused on value creation
FINANCIAL OUTLOOK Disciplined capital allocation approach focused on value creation STRONG & FLEXIBLE CAPITAL RETURNS SUPPORT GROWTH TARGETED M&A BALANCE SHEET TO SHAREHOLDERS ($ millions) Investments in Design Within Q1 FY20 ($ millions) R&D CAPEX Reach, naughtone, HAY, and Cash $160M DIVIDENDS SHA
Slide 13: Focused acquisition and partnership strategy
FINANCIAL OUTLOOK Focused acquisition and partnership strategy F Y10 FY12 FY13 FY15 FY16/FY20 FY19 FY19/FY20 Strategic Rationale Audience Channel Geography Product 13
Slide 14: Opportunity for continued revenue growth over the next three to five years
FINANCIAL OUTLOOK Opportunity for continued revenue growth over the next three to five years Revenue Core Contract Industry 2-3% New Products and Initiatives 1-2% Retail Growth 1-2% Estimated Annual Organic Revenue Growth 4-7% Targeted Acquisitions 2-3% Estimated Annual Revenue Growth Including Acqu
Slide 15: Operating income growth of 2x to 2.5x the rate of organic revenue growth
FINANCIAL OUTLOOK Operating income growth of 2x to 2.5x the rate of organic revenue growth Structurally higher operating margins driven by: • Growth in high margin product categories • Digital transformation • Retail growth and optimization • Scale advantages • Profit improvement initiatives 15
Slide 16: Our Compelling Story
FINANCIAL OUTLOOK Our Compelling Story 1 2 3 4 Distinct Capabilities Clear strategic priorities Strong track record of financial performance and compelling outlook 16
Slide 17: HermanMiller
HermanMiller
Slide 18: Appendix – Reconciliation of Non-GAAP Measures
APPENDIX – RECONCILIATION OF NON-GAAP MEASURES This presentation contains Organic Sales Growth, These non-GAAP financial measures are not measures Adjusted Operating Earnings, and Adjusted Earnings of financial performance under GAAP and should not Per Share, all of which constitute non-GAAP financi
Slide 19: Organic Sales Growth (Decline) by Segment
APPENDIX – RECONCILIATION OF NON-GAAP MEASURES Organic Sales Growth (Decline) by Segment ($ Millions); (unaudited) North America International Retail Total 2014 2019 2014 2019 2014 2019 2014 2019 Net Sales, as reported $ 1,442.1 $ 1,686.5 $ 392.2 $ 492.2 $ 67.7 $ 388.5 $ 1,882.0 $ 2,567.2 Proforma A
Slide 20: Adjusted Operating Margin by Segment
APPENDIX – RECONCILIATION OF NON-GAAP MEASURES Adjusted Operating Margin by Segment ($ Millions); (unaudited) FY19 Consolidated North America International Retail Corporate Operating Earnings $ 203.5 $ 189.7 $ 57.8 $ 5.3 $ (49.3) Add: Restructuring/Impairment Expenses 10.2 7.7 2.5 Add: Special Charg
Slide 21: Adjusted Earnings per Share
APPENDIX – RECONCILIATION OF NON-GAAP MEASURES Adjusted Earnings per Share ($ Millions); (unaudited) FY14 FY15 FY16 FY17 FY18 FY19 Earnings per Share – Diluted $ (0.37) $ 1.62 $ 2.26 $ 2.05 $ 2.12 $ 2.70 Add: Acquisition-related Adjustments $ 0.01 $ 0.10 Add: Legacy Pension Expenses $ 1.76 Add: Othe
Slide 22: Adjusted EBITDA and Adjusted EBITDA Ratios (Bank)
APPENDIX – RECONCILIATION OF NON-GAAP MEASURES Adjusted EBITDA and Adjusted EBITDA Ratios (Bank); ($ millions); (unaudited) Adjusted EBITDA (Bank) Ratios Trailing 4-Quarter Period Ended Q1 FY20 Q4 FY19 Q3 FY19 Q2 FY19 Earnings Before Income Taxes (EBT) $ 215.9 $ 195.1 $ 177.5 $ 168.0 Add: Depreciati
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