Haverty Furniture Companies, Inc. · NYSE:HVT
Haverty Furniture Companies — Investor Presentation (December 2016)
46 slides from Haverty Furniture Companies's investor presentation, Dec 6, 2016
Slide 1: Investor Presentation, December 7, 2016
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 2: Retail Footprint: 123 Stores across 16 states
Retail Footprint: 123 Stores across 16 states 4.4 M retail sq.ft. 17 stores 24 stores 29 stores I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 3: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 4: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 5: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 6: Havertys' Advantages
HAVERTYS’ Advantages z Attractive On-trend Target Customer z Appealing Store Base in Good Markets z Brand Strength z Exclusive Product – HVT Brand – Custom Program z Free In-home Design z Professional Delivery I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 7: Furniture Price Points
Brand /Retailer Landscape $$$$ Furniture Price Points $$$ $$ $ I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 8: Sales & Pretax Earnings - Annual
Sales & Pretax Earnings - Annual 900 70 850 60 800 50 Pretax Profit (Loss) 750 40 Net Sales $ MIL $ MIL 700 30 650 20 600 10 550 0 500 -10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Sales Pretax Profit (Loss) I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 9: EBITDA and Pretax Earnings
EBITDA and Pretax Earnings 80.0 75.0 73.3 70.5 70.0 60.0 52.5 50.0 46.9 45.3 43.6 EBITDA HVT $ MIL 40.0 Pretax Earn HVT 30.0 26.3 23.6 23.5 20.0 8.7 10.0 4.6 0.0 2010 2011 2012 2013 2014 2015 I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 10: Net Sales and EBITDA
Net Sales and EBITDA $804.9 $768.4 $746.1 Net Sales $670.1 $620.9 9.9% 9.2% 9.1% EBITDA % of Sales 6.6% EBITDA 3.8% $74.2 $70.5 $73.3 $44.4 $23.6 EBITDA % of sales Net Sales EBITDA 2011 2012 2013 2014 2015 2014 adj. $21.6 M for pension settlement expense I N V E S T O R P R E S E N T AT I O N Decemb
Slide 11: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 12: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 13: Comp Sales Growth: 5 Year Stack
Comp Sales Growth : 5 Year Stack 35% 2012 2013 2014 2015 2016 30% 1.2% 3.8% 3.0% 25% 3.5% 4.8% 2.5% 0.9% 20% 8.3% 3.6% 3.8% 3.2% 11.8% 15% 11.0% 11.5% 11.2% 9.5% 10% 5% 10.0% 5.7% 5.6% 6.0% 6.8% 0% -0.9% -0.9% Q-1 Q-2 Q-3 Q-4 Year -5% I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 14: Cash returned to shareholders
Cash returned to shareholders $ 134.7 million 2012- 2016 35 $29.8 $30.4 30 $24.7 25 $21.3 $ in millions 20 $14.0 15 $8.1 10 $5.4 5 $0.2 $0.8 0 2012 2013 2014 2015 YTD 2016 Dividends Stock Repurchases I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 15: Capital Expenditures 2010 - 2016
Capital Expenditures 2010 - 2016 21 stores New Locations $46,700,000 102 stores Remodels/expansions $44,700,000 Other improvements $24,600,000 Total Stores $116,000,000 Distribution $20,600,000 Information Technology $29,300,000 Total Cap Ex $165,900,000 I N V E S T O R P R E S E N T AT I O N Decemb
Slide 16: Capital Expenditures
Capital Expenditures New or replacement stores Remodels or expansions Other improvements Distribution Information Technology $30,000 $25,000 $20,000 $15,000 $24.0 $10,000 $19.6 $20.4 $15.2 $15.0 $15.0 $11 $5,000 $6.8 $0 2010 2011 2012 2013 2014 2015 2016 2017 Est New Stores* +1 +3 +4 - +5 +4 +4 +4 N
Slide 17: Profitability Opportunity 2017
60.0 Profitability Opportunity 2017 12.0% $54M $51M 50.0 $47M 10.0% 10.0 Gross Margin 53.5 % EBIT $ Variable SG&A - 17.9 % $43M Subtotal 35.6% of Sales $40M 40.0 Non-Variable 8.0% SG&A $260.7M $36M Other Income $1.5M $33M $29M 30.0 6.0% $26M 6.1% 5.8% $22M 5.5% 5.1% $18M 4.7% 20.0 4.4% EBIT as a % o
Slide 18: Financial improvements driven by strategic priorities
Financial improvements driven by strategic priorities Financial Improvement Strategic Priority Increase Sales per • Customer focus Square Foot • On trend merchandise • Omnichannel engagement Leverage Advertising • Change mix • More efficient spend Driving higher gross • Lower markdowns margins • Qua
Slide 19: Sales per square foot
Sales per square foot $220 sq/ft $200 sq/ft $206 $186 $180 sq/ft $160 sq/ft $160 $183 $185 $188 $176 $140 sq/ft $148 $148 $158 $139 $120 sq/ft $100 sq/ft Annual Net Sales per Weighted Sq. Ft. 2006 High Water Mark I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 20: Key attributes of our target consumer
Key attributes of our target consumer Attributes How she • Style-conscious, trend aware sees herself • Enjoys home décor & decorating for personal & social approval • Interested in career, financial, business & world news Education • Seeks information from multiple and sources – online & offline Inf
Slide 21: Product trends she expects to see
Product trends she expects to see Sable finishes Customers I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 22: Product trends she expects to see
Product trends she expects to see Rustic woods Customers I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 23: Product trends she expects to see
Product trends she expects to see Romantic florals Customers I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 24: Product trends she expects to see
Product trends she expects to see Steel black Customers I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 25: Product trends she expects to see
Product trends she expects to see Brass and metal finishes Customers I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 26: Margin expansion through product & services
Margin expansion through product & services • Continue to expand direct import program • Increase margin on special order sales • Continue to expand design program services Merchandise I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 27: Strategic Sourcing
Strategic Sourcing •Substantially all case goods are imported •Direct Imports - 27% of 2015 case goods sales •Work with outside designers to develop collections •Select factories •Use dedicated quality control team to inspect product in factories Merchandise I N V E S T O R P R E S E N T AT I O N De
Slide 28: Revenues by Category - 2015
Revenues by Category - 2015 Case Goods: Accessories & Bedroom 38.0% Other 11.9% 17.2% Mattress 10.9% Dining 11.0% Occasional Total 9.8% Upholstery 39.2% Merchandise I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 29: Average Ticket Initiatives
Average Ticket Initiatives - - - -Increase over prior year period - - - - - - 9 mos 2012 2013 2014 2015 2016 Avg. Retail Selling 4.6% 3.9% 2.3% 2.4% 2.4% Price/SKU Average Ticket* 7.8% 7.8% 2.9% 4.7% 2.2% Custom and 21.2% 12.6% 15.5% 8.3% 5.0% Special Orders* * Written Growth I N V E S T O R P R E S
Slide 30: Custom Upholstery
Custom Upholstery Growth I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 31: H Design: Free in-home service
H Design: Free in-home service 2015 – 16.2% of sales H Designer sales ticket twice overall average In-home H Designer visit generates sales ticket 2 ½ times overall average Strongest in Florida and in major markets 120 designers at YE 2016 Growth I N V E S T O R P R E S E N T AT I O N December
Slide 32: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 33: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 34: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 35: Research online before purchasing furniture
80% Research online before purchasing furniture 52% Research online using a smartphone 72% Recent Havertys.com mobile traffic (57% phone; 15% tablet) Metrics from Forrester, 2016, Google Furniture study, 2016 & CoreMetrics I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 36: ...and mobile
…and mobile I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 37: Local Pages
Local Pages • Created at the state, city and store level • Linked from search results • Improve Havertys’ online presence • Over 10,500 visits/week to these pages since launching in June Committed to continuous improvements to keep up with changing consumer behaviors and competitive environment I N
Slide 38: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 39: Opportunities to further target Media Investment
Opportunities to further target Media Investment Details Use data to • Requires investment in ongoing measurement, sharing of continually sales data & external expertise optimize spend Create Market • Allows for more efficient investment & unique media Level Media placements Plans • In-depth analyse
Slide 40: What is Omnichannel?
What is Omnichannel? The customer's experience of frictionless shopping and brand consistency • Across devices • Across channels • At any point in the shopping journey Omnichannel I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 41: Key components of an omnichannel retailer (NRF)
Key components of an omnichannel retailer (NRF) Ability to Website and Shipping and research & shop Mobile Customer Fulfillment consistently Optimized Service Options Options across channels Experiences • Product • Fully responsive • Schedule • FAQs & HVT information site delivery across reviews Cur
Slide 42: Optimize Flow of Product
Optimize Flow of Product • 3 DC’s in largest markets • 4 cross dock facilities • Expanded FDC • Expanding WDC Supply Chain I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 43: Opportunity to enhance distribution & supply chain
Opportunity to enhance distribution & supply chain Evaluate work flow and processes to streamline product flow Strategic Priority Approach Goal Process Engineer to • Optimize flow path within Improve productivity & across DC’s assess product flow Reduce distribution costs Quality • New vendor focuse
Slide 44: Enhanced Quality Assurance at Havertys
Enhanced Quality Assurance at Havertys New Root Cause Quality Management Program implemented in 2015 GOALS Supplement, not 1. Identify & eliminate potential replace vendors Quality Teams based in problems before production the U.S. and Asia Quality Control 2. Identify root cause & quickly implement
Slide 45: I N V E S T O R P R E S E N
I N V E S T O R P R E S E N T AT I O N December 7, 2016
Slide 46: Cautionary Note on Forward-Looking Statements (Non-GAAP, Safe Harbor)
Cautionary Note on Forward-Looking Statements (Non-GAAP, Safe Harbor) Today’s presentation may include forward-looking statements. These statements represent the Company’s belief regarding future events that, by their nature, are uncertain and outside of our control. Havertys’ actual results and fin
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