Hni Corporation · NYSE:HNI
Hni — Investor Presentation (June 2016)
19 slides from Hni's investor presentation, Jun 10, 2016
Slide 1: Investor Presentation Neocon 2016
Investor Presentation Neocon 2016
Slide 2: Forward Looking Statements
This presentation contains "forward-looking" statements based on current expectations regarding future plans, events, outlook, objectives and financial performance, expectations for future sales growth and earnings per diluted share (GAAP and non- GAAP). Forward-looking statements can be identified
Slide 3: Investment Considerations
2 Leading Market Positions Operational Excellence Investment Considerations 3 Breadth and Depth Financial Strength Long Term Value Creation
Slide 4: Market Leader: Office Furniture and Hearth
Market Leader Office Furniture Hearth #2 Market Position #1 $2.3B Sales $232M Operating Profits $2.58 EPS 23%77% 36%64% * See non-GAAP reconciliation on page 19 * * 4
Slide 5: Office Furniture and Hearth Sales Channels
Office Furniture 77% Hearth 23% New Construction Retail Wood & Gas Retail Pellet Supplies Driven Contract & Other Sales Channels HearthOffice Furniture 5
Slide 6: Market Drivers: Office Furniture
Source: U.S. Department of Commerce B ill io n s o f Dolla rs (n o m in a l) Corporate Profits Market Drivers Office Furniture Source: The Conference Board CEO Confidence Private Non-Residential Investment P e rc e n ta g e c h a n g e f ro m 1 y r. a g o Source: U.S. Department of Commerce Small Bu
Slide 7: Market Drivers: Hearth
Single Family Housing Starts Source: U.S. Census Bureau S e a s o n a lly A d j. A n n u a l R a te ( K ) Residential Remodeling Index Source: Hanley Wood Oil Prices Source: U.S. EIA Market Drivers Hearth US Temperatures Variance from Average Source: U.S. NOAA 7 -4 -2 0 2 4 6 8 M ar -1 3 M ay -1 3 J
Slide 8: Breadth and Depth
Breadth and Depth DistributionBrands Products Price Points Tuned and tailored Solutions for every need High to low Broadest coverage 8
Slide 9: House of Brands, Split and Focus, Leverage, Member Owner Culture
House Of Brands Split and Focus 9 Leverage Member Owner Culture with Lean
Slide 10: Office Furniture Market Coverage
Supplies--Driven Channel Contract Channel ContractRetail Commercial Image Herman Miller Knoll Steelcase Haworth Global Asian Imports Market Coverage Office Furniture North America 10 HNI Brands Key Competitors Core, sweet spot Retail less than 1%
Slide 11: Hearth Products Market Coverage
` ` ` 11 New Construction Channel Remodel/Retrofit Channel Specialty Dealer DIY HNI Brands Key Competitors Core, sweet spot ` Niche Competitors Travis Napoleon Installing Distributors International Hearth Products (IHP) Market Coverage Hearth Products
Slide 12: Operational Excellence / Lean
Lean culture drives best total cost Never finished SELECTED EXAMPLES Operational Excellence / Lean Culture Structural Cost Core Productivity Business Process Improvement Announced ongoing structural cost take out, $30 – $40M of annual savings by 2018 Leverage scale, capabilities, and capital to driv
Slide 13: Long Term Value Creation
Long Term Value Creation OBJECTIVE 2X EARNINGS 1 every 3 - 5 years
Slide 14: Mid-Term Financial Targets
Mid-Term Financial Targets 14 TOP-LINE GROWTH PROFIT LEVERAGE OPERATING MARGIN 4 - 5% 25 - 30% 12% Annualized EBIT Leverage P Proven Track Record P Attractive Markets / Leading Positions P Breadth and Depth P Operational Excellence / Lean Culture P Financial Strength REASONS TO BELIEVE * * Assumes m
Slide 15: Path to 2X Earnings
North America Office Furniture Structural Cost Benefits Other Businesses Hearth New Construction Path to 2X Earnings Modest Growth $0.30 - $0.40 $35-$40M of annual cost savings $0.40 - $0.50 $1.2M Single Family housing starts $0.75 - $1.00 GDP plus Inflation $0.75 - $1.00 15
Slide 16: Financial Strength
$ in m ill io n s Operating Cash Flow Dividends Significant cash flow generation • Economic profit focus/alignment Solid financial position • Conservative leverage: Debt/EBITDA 1.3x Committed to strong dividend • Sustainable and increasing 16 $- $50 $100 $150 $200 $250 $300 $350 20 07 20 08 20 09 20
Slide 17: Current Outlook
Current Outlook 17 2Q16 Outlook Non-GAAP EPS $0.62 to $0.67 (PY $0.53) Down 6 to 8 percent FY16 Outlook Non-GAAP EPS $2.70 to $2.90 (PY $2.58) Down 1 to 3 percent EPS Net Sales 17
Slide 18: Non-GAAP financial measures
This presentation contains certain non-GAAP financial measures. A "non-GAAP financial measure" is a numerical measure of a company's financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the sta
Slide 19: Non-GAAP Reconciliation
19 Non-GAAP Reconciliation(Dollars in millions, except per share data) Office Furniture Hearth Products Total Corporate Unallocated Income Before Income Tax EPS As reported (GAAP) $136.6 $78.2 $214.8 ($57.6) $157.2 $2.32 Restructuring and Impairment Charges $11.6 $0.9 $12.6 - $12.6 $0.19 Transition