Steelcase investor presentation 2009

Loading...

Flash Player 9 (or above) is needed to view presentations.
We have detected that you do not have it on your computer. To install it, go here.

0 comments

Post a comment

    Post a comment
    Embed Video
    Edit your comment Cancel

    5 Favorites

    Steelcase investor presentation 2009 - Presentation Transcript

    1. 1
    2. FORWARD-LOOKING STATEMENTS From time to time, in written and oral statements, the company discusses its expectations regarding future events and its plans and objectives for future operations. These forward-looking statements generally are accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may ” “possible ” “potential ” “predict ” “project ” or other similar words phrases or expressions Forward may, possible, potential, predict, project, words, expressions. Forward- looking statements involve a number of risks and uncertainties that could cause actual results to vary from the company’s expectations because of factors such as, but not limited to, competitive and general economic conditions domestically and internationally; acts of terrorism, war, governmental action, natural disasters and other Force Majeure events; changes in the legal and regulatory environment; restructuring activities; currency fluctuations; changes in customer demands; and the other risks and contingencies detailed in the company’s most recent Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. Steelcase undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. , , , March 2009 2
    3. our storyline WHO WE ARE 4 WHAT WE SEE 12 WHY INVEST IN US 19 APPENDIX 33 3
    4. WHO WE ARE 4
    5. WHO WE ARE we are passionate We strive to unlock the potential of people at work. It’s the fundamental principle on which our company was founded in 1912 and it remains our single-minded focus in the 21st century. A F T 1912 2009 5
    6. WHO WE ARE we are curious We start by being externally focused, understanding the world of work, workers and workplaces. Then Th we take our insights and create solutions th t help people h t k i i ht d t l ti that h l l have a b tt experience at work. better i t k This user-centered research is the science behind our products. OUR GLOBAL NETWORK OF RESEARCH PARTNERS Universities & Academic Research Independent Research Corporate Research Industrial Consortia MIT * Institutions Organizations OERC, OERC Office Ergonomics Technical University of Denmark Santa Fe Institute IBM Research * Research Committee Georgia Institute of Technology Academy for Neuroscience for Xerox PARC CBE, Center for the Built xclusive relationship Architecture Fuji Xerox Environment Illinois Institute of Technology Fraunhofer Institute Arup Comfort Council Harvard School of Architecture Social Technologies Ubisense MIT, Things That Think Michigan State University University of Michigan * DEGW Michigan Tech g Hewlett Packard Labs *Indicates an ex University of California Intel Research University of Munich IDEO Royal College of Art Ohio State University Kyushu University Japan 1.8% $61 1.6% 1 6% Based in Palo Alto CA IDEO Alto, CA, 1.4% helps organizations innovate $50 through design. Independently $44 STEELCASE R&D EXPENSE ranked by global business ($ million, % of revenue) leaders as one of the world’s most innovative companies, IDEO is majority-owned by Steelcase. FY07 FY08 FY09 6
    7. WHO WE ARE our R&D process UNDERSTAND >> OBSERVE >> SYNTHESIZE >> REALIZE >> PROTOTYPE >> MEASURE 7
    8. WHO WE ARE we are scaled globally GLOBAL OFFICE FURNITURE MARKET SALES BUSINESS SEGMENT REVENUE MIX ($ in billions) (fiscal 2009) $4.6 International Outside Home Country Home Country 29% $2.3 North America 55% Other 16% $0.0 iller orth I ura p ll uyo ball se HN K no rou elca m M K ok Kim H aw as G Oka man Ste S am H er Most recently published annual data and/or internal estimates 8
    9. WHO WE ARE we are globally local We have a unique ability to satisfy workplace needs of customers wherever they do work INDEPENDENT AND COMPANY-OWNED DEALERS North America: ~230 International: ~430 Manufacturing Locations Joint Ventures Worklife Centers 9
    10. WHO WE ARE “ DO ALL THE GOOD we are socially responsible YOU CAN DO FOR AS MANY PEOPLE AS YOU CAN FOR AS LONG AS YOU CAN.” At Steelcase, we believe in a balanced approach to profit, people and planet. Beginning B i i nearly 100 years ago, we committed t a social contract with th l itt d to i l t t ith the PETER WEGE* communities in which we lived and served. We would produce great furniture, be a great place to work, share profits with our shareholders and the community and leave the world a better place. Steelcase continues to make significant progress in each of these areas, but we’re always aware there’s more we can do. BALANCE planet / people / profit PASSION MATERIALS LIFECYCLE RECYCLE + CHEMISTRY ANALYSIS REUSE Sustainability is part of our social contract. Steelcase knows that the only way to provide the best products in the world is to ensure that they’re the best they re products for the world. That’s why every step of the way… through design, manufacture, delivery and product lifecycle… we consider the impact of our work on the environment and uncover opportunities to make things better. *Peter Wege is the son of one of our company’s founders and a long-time environmental champion. 10
    11. WHO WE ARE we are environmentally responsible Sustainable environments begin with sustainable communities. Caring about people and caring about abo t the planet At Steelcase our approach to s stainabilit is holistic scientific meas rable planet. Steelcase, o r sustainability holistic, scientific, measurable and long-term in its focus. 49% 64% 71% 95% CY01 CY08 CY01 CY08 CY01 CY08 CY01 CY08 Global VOC Air Emissions Global Greenhouse Gas Emissions Global Water Consumption Global Waste MORE CRADLE-TO-CRADLESM CERTIFIED PRODUCTS THAN ANYONE IN ANY INDUSTRY Steelcase Details PolyVision Nurture Designtex textiles Think® seating Enviro™ and 19” e3 Environmental Ceramicsteel™ Viridian™ casegoods Eco-Intelligent Polyester™ Amia™ seating Keyboard Platforms Premium Series whiteboards Climatex® Lifecyle™ Move™ seating Details Slatwall and 100 and 500 Series markerboards, Turnstone Crypton® Green ® Slatrail Worktools chalkboards and tackboards Leap seating Tour™ Montage® systems furniture C, F, G and SB Series marker and Groupwork Tables chalkboards Answer® systems furniture A t f it Scoop Stool êno Interactive Whiteboards, from Privacy Wall PolyVision 11
    12. WHAT WE SEE 12
    13. WHAT WE SEE macro drivers CORPORATE PROFITS AFTER-TAX (U.S.) NON-RESIDENTIAL FIXED INVESTMENT (U.S.) With IVA and CCA adjustments Equipment and Software $2,000 $1,200 $1,100 $1,500 $ billions $1,000 $ billions $1,000 b Sources: BEA, Economy.com, BLS; BIFMA; www.imf.org $900 $500 $800 $0 $700 2001 2002 2003 2004 2005 2006 2007 2008 2001 2002 2003 2004 2005 2006 2007 2008 JOB GROWTH (U.S.) WORLD GDP PROJECTIONS 600 9% 12% 8% 400 10% 7% Unemployment Ra (%) 200 8% ate total non-farm jobs s 6% S 2009 (in thousands) 0 6% 2,010 5% J-01 J-02 J-03 J-04 J-05 J-06 J-07 J-08 -200 4% 4% 3% 2% -400 2% Non-Farm Payroll 0% -600 Unemployment Rate 1% a a EU n y ly ce UK n a ia l ld ico . st E i S an in pa az r ic di ai Ita EC or Ea ss an U. In Sp Ch ex Br m Ja Af W Ru Fr e M -2% er dl G id -800 0% M The economy gained an estimated 2.5 million jobs in 2005; 2.1 million jobs in 2006; and 1.1 million jobs in 2007; Economy lost ~3 million jobs in 2008; Economy has lost 1.2 million jobs in first 2 months of 2009. 13
    14. WHAT WE SEE U.S. contract furniture industry U.S. OFFICE FURNITURE SHIPMENTS (TTM, $billions) 2008 U.S. CONTRACT FURNITURE PRODUCT MIX 100 $15,000 WOOD: 30% 80 $12,000 60 CAGR = 5% CAGR = 7% 40 NON-WOOD: 70% $9,000 20 0 CAGR = 9% $6,000 BIFMA shipment growth (%) $3,000 Increase in PCs become CY2004 5.1% white-collar white collar dominant in CY2005 12.7% Web 2.0 workforce workforce CY2006 7.4% CY2007 5.5% $- CY2008 (2.3%) Forecast CY2009 (19.3%) Jan Jan Jan Jan 1980 1990 2000 2009 Source: BIFMA 14
    15. WHAT WE SEE the market OUR CORE BRANDS U.S. ISSUES-BASED SEGMENTATION* Coalesse: Insight-led inspiration for premium and productive lifestyles. For businesses and mobile work Premium communities where work and life blend. design-oriented International Performance- oriented Steelcase: Insight-led performance for the world’s insights / capabilities leading organizations. organizations Supports how people work, wherever that may be. Simplicity- Nurture oriented Price/ Turnstone: Insight-led convenience- simplicity for great oriented emerging businesses. Great, simple, smart design accessible to all. *Qualitative; discussion purposes only 15
    16. WHAT WE SEE emerging trends… connecting and collaborating Ever-changing technology Globalization/distributed work Growing amount of collaborative work Diversity in workforce War for talent 16
    17. WHAT WE SEE work happens everywhere 17
    18. 18
    19. WHY INVEST IN US? 19
    20. WHY INVEST IN US? where we’re headed… WELL POSITIONED FOR GROWTH Global leader strategically positioned for growth in: - Existing markets: leverage installed base - Adjacent/new markets and customers: for example: healthcare, j p higher education, emerging businesses - Emerging markets: China, India, Eastern/Central Europe, Middle East MARGIN EXPANSION OPPORTUNITIES Continue modernization of industrial system Complete two business turnarounds Reinvent SG&A processes FINANCIAL PRIORITIES Maintain strong balance sheet Disciplined cash management 20
    21. WHY INVEST IN US? …and how we’ll get there FY11 Lead Solutions FY10 Lead Products FY09 Reinvent Create and serve Build global ability to serve growth FY08 Realign Achieve diversity from common platforms new market growth FY07 Modernize FY06 Recover GM* 30.7% 31.3% 32.9% 30.5% OPEX 26.4% 26.8% 27.0% 29.3% OI* 4.3% 4.5% 5.9% 1.2% *Before restructuring charges; see appendix for reconciliation Before 21
    22. WHY INVEST IN US? grow the business: existing markets Continue to support and evolve our installed customer base 22
    23. WHY INVEST IN US? grow the business: adjacent/new markets Moving the healthcare environment forward ~$1.5B opportunity in North America (office and clinical spaces) Differentiated approach - Insight-led - Strong networks - Integrated solutions improve experience 23
    24. WHY INVEST IN US? grow the business: adjacent/new markets Higher education 24
    25. WHY INVEST IN US? grow the business: adjacent/new customers Increase breadth of offering and extend reach to smaller customers PRODUCTS CUSTOMERS SMALLER 20-250 employees Leverage existing channel Increase distribution points to pursue emerging businesses Increase transactions through catalogs, retail stores and the web LARGER Continue to leverage existing dealer channel to pursue leading organizations > 250 employees 25
    26. WHY INVEST IN US? grow the business: adjacent/new customers An insight-led, inspired premium brand; ~$1B opportunity in North America It’s about a belief that… boundaries between work and life have blurred the solution is more than the pretty object materiality and craft are important experience matters spaces should be inspiring 26
    27. WHY INVEST IN US? grow the business: emerging markets A changing landscape Steelcase International INTERNATIONAL SEGMENT REVENUE MIX (constant currency) Rest of world Western Europe Western Europe: Germany, France, U.K., Spain/Portugal, Benelux, Italy FY02 FY09 27
    28. WHY INVEST IN US? margin expansion opportunity Continue modernization of industrial system Global Lean Simplicity supply chain Principles • 10+ years • Product platforms • Third-party sourcing • Ongoing journey • Valued features • In-house best shoring • Common parts NORTH AMERICA AND INTERNATIONAL STORAGE PRODUCT LINE EXAMPLE THIRD-PARTY SOURCING MANUFACTURING CONSOLIDATION 20 ~ 17.4 16 Number of parts eet) ~80% (Million square fe p reduction 12 ~ 8.0 8 4 ~ 54% reduction 0 FY00 FY09 Before After Today Tomorrow directional 28
    29. WHY INVEST IN US? margin expansion opportunity Complete business turnarounds Reinvent SG&A processes Wood PolyVision • Leverage technology • Consolidate functions SHRINK TO GROW as appropriate • Reinvent processes • Rebalance global workforce 29% FY07 FY08 FY07 FY08 WOOD CATEGORY POLYVISION OPERATING INCOME TREND OPERATING INCOME TREND (Excluding non-cash impairment charges) FY09 Future OPERATING EXPENSE RATIO (% of revenue) 29
    30. WHY INVEST IN US? financial priorities: maintain strong balance sheet Manage capital mix consistent with investment grade companies FY09: 1.6 FY09: 45% 0 1 2 35% 45% Debt to EBITDA (TFQ) less than 2 to 1 Adjusted Debt* to Total Capital 35% to 45% *Includes capitalization of operating leases FY09: NM FY09: $194 0 $150 35% 40% Cash Requirements Longer-term dividend payout ratio 35%–40% - Core operating needs $ 50 million - Minimum cash cushion $100 million • Excludes special cash dividend of $1.75/share paid January 2008 • Trailing Four Quarter (TFQ) 30
    31. WHY INVEST IN US? financial priorities: continue disciplined cash management CASH FLOW FROM OPERATIONS DEPRECIATION AND AMORTIZATION VS CAPEX VS. $350 $300 $300 $250 Capital Expenditures D&A $250 $200 $200 ($ millions) $150 $150 $100 $100 $50 $50 $0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 $0 CASH PRIORITIES FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 • Business reinvestment • Quarterly dividends • Share repurchases QUARTERLY DIVIDENDS PAID PER SHARE* DIVIDENDS* and SHARE REPURCHASES $0.16 $0.14 $300 ($ millions) $0.12 $250 Repurchases $0.10 $0 10 $200 Dividends $0.08 $150 $0.06 $100 $0.04 $0.02 $50 $0.00 $0 Q199 Q499 Q402 Q206 Q1FY10 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 * Excludes special cash dividend of $1.75/share paid January 2008 * Excludes special cash dividend of $1.75/share paid January 2008 31
    32. WHY INVEST IN US? summary: investment merits Global leader, well-positioned for growth with margin expansion opportunity 12% MARGIN EXPANSION 8% THROUGH Growth and diversification 5.9% Margin expansion Strong balance sheet 4% Restructuring costs 1.2% 1 2% As Reported 0% FY99 FY04 FY05 FY06 FY07 FY08 FY09 FUTURE -4% 32
    33. APPENDIX 33
    34. APPENDIX improving fundamentals Operating income percentage, excluding specific items 12% • Revenue Decline 9% • Inflation • Decline in cash- surrender value of company-owned life 6.3% insurance policies 6% 5.9% 4.7% 3.7% 3.1% 3% 0.0% 0% FY07 Restructuring Intangible Related FY07 FY08 Intangible Related FY08 FY09 Restructuring Intangible Related FY09 reported costs asset and decrease in excluding reported asset and decrease in excluding reported costs asset and decrease in excluding goodwill variable specific goodwill variable specific items goodwill variable specific items impairment compensation items impairment compensation impairment compensation 34
    35. APPENDIX segment performance STEELCASE INC. INTERNATIONAL SEGMENT 40% $4,000 $3,421 40% $922 $1,000 $3,097 $3,184 $894 $2,869 35% $2,614 $3,000 $736 $800 $2,346 32.9% 35% $645 33.4% 31.8% 30.6% $591 29.8% 33.0% $539 $600 30% 29.5% $2,000 30.0% 28.5% 30% 30.4% 26.2% $400 25.1% 25% $1,000 25% $200 20% $0 20% $0 FY04 FY05 FY06 FY07 FY08 FY09 FY04 FY05 FY06 FY07 FY08 FY09 Gross margin Revenue NORTH AMERICA SEGMENT OTHER CATEGORY $1,937 40% $1,796 $2,000 $1,740 40% $700 $1,697 37.7% $590 $1,514 37.1% 37.0% $565 $1,342 $1,600 $600 35% $522 $510 $528 35% 36.6% $465 $500 31.6% 34.3% $1,200 28.2% 31.3% $400 30% 28.4% 30% 27.0% $800 $300 24.9% 25% $200 25% 22.7% $400 $100 20% $0 20% $0 FY04 FY05 FY06 FY07 FY08 FY09 FY04 FY05 FY06 FY07 FY08 FY09 35
    36. APPENDIX our evolving business model Restructuring costs ($ millions, pre-tax) $60 $ $16 $42 $30 $45 $24 $33 $21 Cost of sales $20 Operating expenses $14 $8 $11 $5 $6 $ $2 $0 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY02-FY03 FY04 and beyond Rightsizing the Building a new business business model 36
    37. APPENDIX non-GAAP financial measures CONSOLIDATED GROSS MARGIN, EXCLUDING RESTRUCTURING CHARGES (% of revenue) FY04 FY05 FY06 FY07 FY08 FY09 Gross Margin as Reported 26.2% 28.5% 29.5% 30.6% 32.9% 29.8% Restructuring Costs 1.8% 0.3% 1.2% 0.7% 0.0% 0.7% Gross Margin without Restructuring Costs 28.0% 28.8% 30.7% 31.3% 32.9% 30.5% CONSOLIDATED OPERATING INCOME, EXCLUDING RESTRUCTURING CHARGES (% of revenue) FY04 FY05 FY06 FY07 FY08 FY09 Operating Income as Reported -3.2% 0.7% 2.9% 3.7% 5.9% 0.0% Restructuring Costs 2.3% 0.5% 1.4% 0.8% 0.0% 1.2% Operating Income without Restructuring Costs -0.9% 1.2% 4.3% 4.5% 5.9% 1.2% This presentation contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of the company. Pursuant to the requirements of Regulation G, the company has provided a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure. The non-GAAP financial measures used are: consolidated gross margin, excluding restructuring costs as a percentage of net revenue; and consolidated operating income, excluding restructuring costs as a percentage of revenue. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors. 37
    38. APPENDIX non-GAAP financial measures CONSOLIDATED OPERATING INCOME, EXCLUDING SPECIFIC CHARGES (% of revenue) FY07 FY07 FY08 FY08 (% of FY09 FY09 (% of ($ MM) (% of ($ MM) Revenue) ($ MM) Revenue) Revenue) Revenue $3,097.4 100.0% $3,420.8 100.0% $3,183.7 100.0% Operating Income as Reported $113.7 3.7% $202.8 5.9% $1.0 0.0% Restructuring Charges (Credits) $23.7 0.8% $(0.4) 0.0% $37.9 1.2% Intangible Asset and Goodwill Impairments $10.7 0.3% $21.1 0.6% $64.7 2.1% Related Variable Compensation Impact $(3.7) $(3 7) (0.1)% (0 1)% $(6.5) $(6 5) (0.2)% (0 2)% $(5.5) $(5 5) (0.2)% (0 2)% Operating Income Excluding Specific Items $144.4 4.7% $217.0 6.3% $98.1 3.1% This presentation contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of the company. Pursuant to the requirements of Regulation G, h G the company h provided a reconciliation of non-GAAP financial measures to the most directly comparable GAAP fi has id d ili i f GAAP fi i l h di l bl financial measure. i l The non-GAAP financial measures used are: consolidated operating income, excluding restructuring costs, intangible asset and goodwill-related impairment charges and incremental variable compensation expense due to favorable tax valuation allowance and reserve adjustment as a percentage of revenue. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors. 38
    39. 39
    40. The image cannot be display ed. Your computer may not hav e enough memory to open the image, or the image may hav e been corrupted. Restart y our computer, and then open the file again. If the red x still appears, y ou may hav e to delete the image and then insert it again. love how you work.™ About Steelcase Inc. Steelcase, the global leader in the office furniture industry, helps people have a better work experience by providing products, services and insights into the ways people work. The company designs and manufactures architecture, furniture and technology products. Founded in 1912 and headquartered in Grand Rapids, Michigan, Steelcase (NYSE: SCS) serves customers through a network of over 600 independent dealers and approximately 13,500 employees worldwide. Fiscal 2008 revenue was $3.4 billion. Learn more at www.steelcase.com. pp y p y © 2008 Steelcase Inc. Printed in U.S.A. 40

    + whatidiscoverwhatidiscover, 5 months ago

    custom

    1629 views, 5 favs, 0 embeds more stats

    Steelcase investor presentation 2009
    Steelcase

    More info about this document

    © All Rights Reserved

    Go to text version

    • Total Views 1629
      • 1629 on SlideShare
      • 0 from embeds
    • Comments 0
    • Favorites 5
    • Downloads 120
    Most viewed embeds

    more

    All embeds

    less

    Flagged as inappropriate Flag as inappropriate
    Flag as inappropriate

    Select your reason for flagging this presentation as inappropriate. If needed, use the feedback form to let us know more details.

    Cancel
    File a copyright complaint
    Having problems? Go to our helpdesk?

    Categories