Delivering Growth
by Design
NASDAQ: MLHR
Raymond James
39th Annual Institutional Investors Conference
Brian Walker, President, CEO
Jeff Stutz, Executive Vice President, CFO
2
This information contains forward-looking statements
within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the
Securities Exchange Act, as amended, that are based
on management’s beliefs, assumptions, current
expectations, estimates, and projections about
the office furniture industry, the economy, and the
company itself. Words like “anticipates,” “believes,”
“confident,” “estimates,” “expects,” “forecasts,”
likely,” “plans,” “projects,” “should,” variations of
such words, and similar expressions identify such
forward-looking statements.
These statements do not guarantee future performance
and involve certain risks, uncertainties, and assumptions
that are difficult to predict with regard to timing, extent,
likelihood, and degree of occurrence. These risks include,
without limitation, the success of our growth strategy,
our success in initiatives aimed at achieving long-term
cost savings goals, employment and general economic
conditions, the pace of economic recovery in the U.S, and
in our International markets, the increase in white-collar
employment, the willingness of customers to undertake
capital expenditures, the types of products purchased by
customers, competitive-pricing pressures, the availability and
pricing of raw materials, our reliance on a limited number
of suppliers, our ability to expand globally given the risks
associated with regulatory and legal compliance challenges
and accompanying currency fluctuations, changes in future
tax legislation or interpretation of current tax legislation, the
ability to increase prices to absorb the additional costs of
raw materials, the financial strength of our dealers and the
financial strength of our customers, the mix of our products
purchased by customers, our ability to locate new DWR
studios, negotiate favorable lease terms for new and existing
locations and the implementation of our studio portfolio
transformation, our ability to attract and retain
key executives and other qualified employees, our ability to
continue to make product innovations, the success of newly
introduced products, our ability to serve all of our markets,
possible acquisitions, divestitures or alliances, the pace and
level of government procurement, the outcome of pending
litigation or governmental audits or investigations, political
risk in the markets we serve, and other risks identified in our
filings with the Securities and Exchange Commission.
Therefore, actual results and outcomes may materially differ
from what we express or forecast. Furthermore, Herman
Miller, Inc., undertakes no obligation to update, amend or
clarify forward-looking statements.
Forward looking statements
Headquarters:
Zeeland, MI, USA
Founded: 1905
Employees: ~8,000
FY17 Revenue:
$2.28B
FY17 Adj. EBITDA:
$264M
Company Snapshot
Over 600 dealers in
109 countries and 32
Design Within Reach
retail studios
North America 56%
Specialty 13%
Consumer 14%
ELA 17%
3
4
Strategic Position
Capitalizing on an expanded total addressable market
Strategic Position
North America (Contract)
European (Contract)
Target Emerging Markets (Contract)
Consumer Lifestyle
Healthcare/Education/Hospitality
Small/Medium Business
Textiles
$14B
$16B
$10B
$6B
$3B
$3B
$2B $1B
$10B
$2B
$2B
2012—$28B 2017—$41B
Sources:
BIFMA, CSIL, Parthenon Group,
ACT Financial Survey, Management Estimates
5
Unparalleled multi-channel reach
including direct to consumer
Strategic Position
– Over 600 contract dealers in 109 countries
– 32 Design Within Reach retail studios
– Direct to consumer catalog
– Multiple global e-commerce storefronts
– Opportunities to grow share of
channel/customer wallet
Catalog
32 Studios600 Dealers
y
E-Commerce
6
7
Positioned for global growth
Strategic Position
– Growing and profitable business outside North America
– Favorable trends and demographics in Asia-Pacific
– Further growth opportunities:
• Leverage Herman Miller and POSH brands in Asia-Pacific
• Expand dealer networks and e-commerce platforms
• Regional R&D and manufacturing capabilities support
new product growth
• Leverage Healthcare, Education and Consumer franchises
2012 2017
+2%
+5%
CAGR
organic
ELA Revenue
$386M
$347M
8
Work Heal Learn
The global leader dedicated
to creating inspiring places
Strategic Position
Live
9
Investment Thesis
10
Our Compelling Story
Investment thesis
Powerful brands
deliver design and
innovation leadership
A higher
ambition culture
Strategic priorities and
value-drivers
Compelling financial outlook
and opportunity for margin
expansion
Strong track record of
performance and healthy
returns on capital
11
Driven by a sense of purpose
and values
A higher ambition culture
“A business is rightly judged by its products and services,
but it must also face scrutiny as to its humanity.”
- D.J. De Pree, Herman Miller Founder
Eleven Consecutive Perfect
Score in Human Rights
Campaign Foundation’s
Corporate Equality Index
Twelve of the Last Fourteen
Years on the Dow Jones
Sustainability World Index
Corporation of the Year in
the Commercial sector for
11 of the last 13 years by
the Michigan Minority Supplier
Development Council
12
An inspiring brand that customers value
Powerful brands deliver design and innovation leadership
* Twitter followers as of December 2017 (Herman Miller, Allsteel, Haworth, Knoll, and Steelcase)
#1 in Brand that Inspires,
Contract Magazine Survey
Social Media Followers – Nearly 5X all
major competitors combined*
13Powerful brands deliver design and innovation leadership
Healthcare
Performance textiles
Ergonomic work tools
Asia distribution
Nemschoff
Maharam
Colebrook Bosson Saunders
POSH
A portfolio of leading global brands
TIMELESS CRAFT
The convergence of world-class designers,
impeccable craftsmanship, and superior materials.
Brabo Sofa by Vincent Van Duysen
Crosshatch™ Chair by EOOS
H Frame Table by Ward Bennett
Full Twist™ Chair by Mark Goetz
Domino Storage™ by Isay Weinfeld
geigerfurniture.com
Herman Miller brands are #1 in six categories, Contract Magazine Survey (2017)
Craft wood furnishings
Geiger
Design Within Reach
Marketplace for authentic modern furnishings
14Strategic priorities and value-drivers
15
Bringing innovative solutions to our customers
through the Living Office framework
Strategic priorities and value-drivers
– An insight-driven and research-based
framework for making place a strategic asset
– Delivers measurable results through improved:
• Workplace Effectiveness
• Work Activity Support
• Workplace Experience
– Create smart, connected workplaces
through Live OS(SM)
– Guide innovation agenda
My workplace presents a good corporate image.
Staff Survey, CHS, Inc.
I can have impromptu meetings with colleagues.
Staff Survey, Harry’s
My work environment is the reason I continue to work here.
Example results from customer case studies:
Staff Survey, Tavistock Development Company
47%
54%
93%
93%
57%
16
Commitment to innovation
Strategic priorities and value-drivers
– Innovation
Priorities:
– 24% of our sales were from new products in fiscal 2017
– Introduced 50 new products and extensions in fiscal 2017
– Industry-leading investment in design, research and development at 3.2% of sales in fiscal 2017
Collaborative
and other
work points
Active/healthy
postures Enclosures
Technology
enhanced user
experience
17Strategic priorities and value-drivers
Leverage Dealer Eco-System
Digital Tools
Sales & Marketing Through Herman Miller Elements
“Bend” Price/Performance Curve
Increase Dealer
Share of Wallet
Dealer
Excellence
Make
Herman Miller
Easy to do
Business With
18
Clear path to revenue growth and margin
expansion in Consumer business
Strategic priorities and value-drivers
– Double digit revenue growth opportunity from Design Within Reach
by transforming legacy studios to larger formats and adding new locations
• Increase studio count to low forties and square footage to 400,000 - 450,000 by 2020
• 3 to 6 new or expanded studios per year
– Increase exclusive product mix from 60% to 70% of revenue
– Continued e-commerce growth
– Drive operational excellence through $10 to $20M profitability improvement intiative
– High single digit operating margin target by FY20
19
Profit Optimization Initiative
OPERATING
MARGIN OF:
$25 TO $35M
(BY FY20)
BUSINESS UNIT
SYNERGIES
LOGISTICS
OPTIMIZATION
FACILITIES
CONSOLIDATION
GENERAL COST
RATIONALIZATION
> 10%
OF SALES
(BY FY20)
Strategic priorities and value-drivers
20
Strong track record of
performance and healthy
returns on capital
21
$2.3B
Organic revenue growth of 4% at a premium
to North America Contract industry growth of 2%,
and robust EBITDA growth over last 5 years
Strong track record of performance and healthy returns on capital
FY12 FY13 FY14 FY15 FY16 FY17
$2.1B
$2.3B
$1.9B$1.8B$1.7B
FY12 FY13 FY14 FY15 FY16 FY17
$235M $259M$206M$182M$180M
Revenue Adjusted EBITDA(1)
(1) Represents a non-GAAP measure; see Appendix for reconciliation
8%
7%
CAGR
CAGR
$264M
22
Focused acquisition partnership strategy
accelerates our performance
Strong track record of performance and healthy returns on capital
Entering New Areas:
Audience
Channel
Geography
Product
23
Best-in-class lean enterprise
delivers leverage
Strong track record of performance and healthy returns on capital
– Focused improvement through:
• Customer first orientation
• Waste reduction
• Asset efficiency
– One of three U.S. companies showcased by
Toyota Production System Support Center
– Further opportunity to spread more
broadly and deeply through the organization
and across the entire value chain
West Michigan
sales per mfg.
square foot
+21%
Manufacturing
defect rate
Engineering lead
time for custom
requests
-26%
ppm
-46%
Improvement from FY12 to FY17
Robust free cash flow generation and disciplined
approach to capital allocation drives average annual
return on invested capital of 22% over last five years
Strong track record of performance and healthy returns on capital 24
(1) Cash flow from operations less CAPEX plus domestic pension contributions
FY12 FY13 FY14 FY15 FY16 FY17
$39
Adj. Free Cash Flow (1)
($ millions)
FY12 FY13 FY14 FY15 FY16 FY17
$150
$100
$50
$0
Debt to EBITDA Ratio
1.5
1.0
.5
$125
$115
FY12 FY13 FY14 FY15 FY16 FY17
Dividends Paid
($ millions)
$35
$50
$40
$35
$30
$25
$20
$15
$10
$5
$0
$98
$112
$86
$104
1.4 1.3 1.3
.08 .08
1.2
$5
$19
$30
$33
25
Compelling financial
outlook and opportunity
for margin expansion
26
Supportive economic backdrop
Compelling financial outlook and opportunity for margin expansion
(1) BIFMA (Nov 2017) (2) American Institute of Architects (Dec 2017) (3) National Association of Realtors (Dec 2017)
BIFMA Forecast(1)
+4.6% CY18
US Housing
Starts(3)
+9%
US Architectural
Billings Index(2)
> 50
10 out of last
12 months
US Tax Reform
• Job creation
• Lower tax rates
• Cash repatriation
• Immediate deduction
of capital investment
AIA Consensus
Office Construction
Forecast(2)
+4.6% CY18
Opportunity for continued above-average revenue
performance over the next three to five years
Compelling financial outlook and opportunity for margin expansion
Core Contract Industry 1-3%
New Products and Initiatives 1-1.5%
Consumer Growth 1-1.5%
Estimated Annual Organic Revenue Growth 3-6%
Targeted Acquisitions 1-2%
Estimated Annual Revenue Growth Including Acquisitions 4-8%
Revenue
27
Operating income growth of 2x to 2.5x the rate
of organic revenue growth
Compelling financial outlook and opportunity for margin expansion
– Structurally higher operating margins driven by:
• Expanding business and channel mix
• Consumer growth and higher exclusive product mix
• Volume leverage
• Lean enterprise focus
• Cost savings initiative targeting $25M to $35M in annual savings by FY20
• Target consolidated operating margin of 10% by FY20
28
29
U.S. Tax Reform impact to Herman Miller
Compelling financial outlook and opportunity for margin expansion
FY12 FY13 FY14 FY15 FY 16 FY17 FY18 FY19 & BEYOND
37%
30%
33%
30% 31%
25-27%
Finalizing
Estimate
49%
30
Our Compelling Story
Investment thesis
Powerful brands
deliver design and
innovation leadership
A higher
ambition culture
Strategic priorities and
value-drivers
Compelling financial outlook
and opportunity for margin
expansion
Strong track record of
performance and healthy
returns on capital
31
Appendix
32Appendix – Segment Overviews
Overview
FY17 Percent of Consolidated Revenues
Macro-Economic Drivers
Revenue Trend (in US$ millions) FY17 Adj. EBITDA Margin
16.2%
Description: Design, manufacture and sale of furniture products for office, education and healthcare environments in the United States and Canada
Source: BIFMA, November 2017
North America Sales (in US$ billions) Healthcare Construction Spending (in US$ billions)
FY12 FY13 FY14 FY15 FY16 FY17
5 YEAR CAGR
2%
(4% organic)
Other Leading Economic Indicators include: Corporate profitability, service sector employment, Architectural Billings Index (ABI), Office vacancy rates, CEO and small business
confidence, Non-residential Construction
North America Furniture Solutions
Source: U.S. Census Bureau and AIA Fcst, July 2017
2
01
3
2
01
4
2
01
5
2
01
6
20
17
20
18
20
02
2
00
3
2
00
4
2
00
5
2
00
6
2
00
7
2
00
8
2
00
9
2
01
0
2
01
1
2
01
2
2
01
3
2
01
4
2
01
5
2
01
6
20
17
20
18
History Forecast History Forecast
Education Construction Spending (in US$ billions)
Source: U.S. Census Bureau and AIA Fcst, July 2017
20
02
2
00
3
2
00
4
2
00
5
2
00
6
2
00
7
2
00
8
2
00
9
2
01
0
2
01
1
2
01
2
2
01
3
2
01
4
2
01
5
2
01
6
20
17
20
18
History Forecast
70.5 71.2 72.3
77.1 86.0
98.4
104.1 103.1
88.2 88.7 94.0
97.5
83.5
79.784.684.7 79.1
27.5 29.4
34.1 36.7
39.5
45.0
47.7 47.0
39.9 41.8
43.3
41.440.7
38.4
41.839.7 40.7
$1500
$1300
$1100
$900
$700
$500
North America 56%
Specialty 13%
Consumer 14%
ELA 17%
16.7
17.4
18.2 18.3
19.4
20.2
1,2771,2691,1761,1921,1521,143
33Appendix – Segment Overviews
FY17 Percent of Consolidated Revenues FY16 Adj. EBITDA Margin
Source: CSIL (2017)
Regional Office Furniture Consumption (in US$ billions) GDP Forecast
Region Annual 5 Year CAGR
Consumption
Europe $10.1 -0.1%
China $11.3 5.2%
India $2.4 6.6%
Brazil $1.3 -10.6%
Mexico $0.3 -7.7%
Source: World Bank (January 2018)
12.0%
Overview
Macro-Economic Drivers
Description: Design, manufacture and sale of furniture products primarily for office settings in EMEA (39% of sales in FY17), Latin America (21% of sales in FY17) and
Asia-Pacific (41% of sales in FY17)
ELA Furniture Solutions
North America 56%
Specialty 13%
Consumer 14%
ELA 17%
Revenue Trend (in US$ millions)
413
5 YEAR CAGR
2%
(5% organic)
FY12 FY13 FY14 FY15 FY16 FY17
347 377
392 386410
$500
$400
$300
$200
$100
$0
34
North America 56%
Specialty 13%
Consumer 14%
ELA 17%
FY17 Percent of Consolidated Revenues Revenue Trend (in US$ millions) FY17 Adj. EBITDA Margin
5 YEAR CAGR
12%
(2% organic) 8.6%
SpecialtyAppendix – Segment Overviews
FY12 FY13 FY14 FY15 FY16 FY17
Overview
Macro-Economic Drivers
Description: Design, manufacture and sale of high-craft furniture products and textiles focused on architect and design specifiers. The Specialty portfolio includes Geiger wood
products, Maharam textiles and Herman Miller Collection products.
Annual Fabric Sales (in US$ millions)
Source: ACT Financial Survey
AIA Consensus Construction Forecast
(% YOY Growth)
Source: The American Institute of Architects, Jan 2018
2018 2019
Non-Residential 4.0% 3.9%
Commercial Total 4.4% 2.9%
Office 4.6% 3.0%
Health 4.0% 4.9%
Education 4.0% 4.9%
Hotel 4.1% 0.8% 2009 2010 2011 2012 2013 2014 2015 2016
738 814 895
929 990
760
1,091 1,123
170
$300
$250
$200
$150
$100
$0
U.S. Architects Billing Index
Source: The American Institute of Architects
182
286 294
298
280
58
56
54
52
50
48
46
44
35
FY17 Percent of Consolidated Revenues Five Year Revenue Trend (in US$ millions) FY17 Adj. EBITDA Margin
64 64 68
271
5 YEAR CAGR
38%
(14% organic) 4.9%
ConsumerAppendix – Segment Overviews
FY12 FY13 FY14 FY15 FY16 FY17
Overview
Macro-Economic Drivers
Description: Sale of modern design furnishings and accessories in North America through multiple channels, including 32 Design Within Reach studios, eCommerce storefronts,
direct mailing catalogs and independent retailers.
Source: Ntl. Assoc. of Realtors U.S. Economic Outlook (December2017)
Existing Home Sales (thousands of units) Housing Starts (thousands of units) Furniture and Home Furnishing Stores
Annual Sales Growth
2010 2011 2012 2013 2014 2015 2016 2017
0.6%
2.6%
4.4%
3.6% 3.5%
5.7%
3.5%
4.9%
Source: US Census Bureau
2015 2016 2017 2018
5,250 5,450 5,520
5,640
Source: Ntl. Assoc. of Realtors U.S. Economic Outlook (December 2017)
History Forecast
2015 2016 2017 2018
1,174 1,200
1,310
History Forecast
1,112
North America 56%
Specialty 13%
Consumer 14%
ELA 17%
$300
$200
$100
$0
289
318
36
This presentation contains Organic Sales Growth,
Adjusted EBITDA, Adjusted EBITDA ratios, Adjusted
Operating Earnings, and Adjusted Earnings Per Share,
all of which constitute non-GAAP financial measures.
Each of these financial measures is calculated by
excluding items the Company believes are not
indicative of its ongoing operating performance.
The Company presents these non-GAAP financial
measures because it considers them to be important
supplemental indicators of financial performance and
believes them to be useful in analyzing ongoing results
from operations.
These non-GAAP financial measures are not measures
of financial performance under GAAP and should not
be considered alternatives to GAAP. Non-GAAP financial
measures have limitations as analytical tools and should not
be considered in isolation or as a substitute for analysis of
the Company’s results as reported under GAAP. In addition,
you should be aware that in the future the Company may
incur expenses similar to the adjustments presented.
Appendix –Reconciliation of Non-GAAP Measures
37Appendix –Reconciliation of Non-GAAP Measures
Organic Sales Growth (Decline) by Reportable Segment ($ Millions); (unaudited)
Sales, as reported
Proforma Adjustments
Dealer Divestitures
Cumulative foreign exchange
Acquisition - base year
Sales, pro forma
Compound Annual Growth Rate, as reported
Compound Annual Growth Rate, pro forma
$ 1,142.6
(70.3)
-
-
$ 1,072.3
$ 1,724.1
(95.3)
-
(7.0)
$ 1,621.8
$ 347.3
(25.0)
-
(7.0)
$ 315.3
$ 170.0
-
-
-
$170.0
$ 64.2
-
-
-
$ 64.2
$ 1,276.6
(16.6)
25.6
-
$ 1,285.6
2.2%
3.7%
$ 2,278.2
(16.6)
88.2
(353.2)
$ 1,996.6
5.7%
4.2%
$ 385.5
-
60.3
(51.4)
$ 394.4
2.1%
4.6%
$ 298.0
-
1.0
(107.5)
$ 191.5
11.9%
2.4%
$ 318.1
-
1.3
(194.3)
$ 125.1
37.7%
14.3%
North America ELA Specialty Consumer Total
2012 2012 2012 2012 20122017 2017 2017 2017 2017
38Appendix –Herman Miller Inc. Reconciliation of Non-GAAP Measures
Adjusted EBITDA by Reportable Segment ($ Millions) (unaudited)
Segment Operating Earnings
Add: Allocated Depreciation & Amortization
Add: Acquisition-related Adjustments
Add: Legacy Pension Expenses
Add: Restructuring/Impairment Expenses
Less: POSH Contingent Consideration Reduction
Adjusted EBITDA
Revenue by Segment
Adjusted EBITDA Margin
Segment Operating Earnings
Add: Allocated Depreciation & Amortization
Add: Acquisition-related Adjustments
Add: Legacy Pension Expenses
Add: Restructuring/Impairment Expenses
Less: Other, net
Less: POSH Contingent Consideration Reduction
Adjusted EBITDA
Revenue by Segment
Adjusted EBITDA Margin
Segment Operating Earnings
Add: Allocated Depreciation & Amortization
Add: Acquisition-related Adjustments
Add: Restructuring/Impairment Expenses
Less: Nonrecurring gains
Other, net
Adjusted EBITDA
Revenue by Segment
Adjusted EBITDA Margin
$ 137.6
37.3
-
-
5.4
-
$ 180.3
$ 1,724.1
10.5%
$ (25.7)
42.4
1.4
164.4
26.5
-
(2.6)
$ 206.4
$ 1,882.0
11.0%
$ 211.5
53.0
-
-
(6.1)
0.5
$ 258.9
$ 2,264.9
11.4%
$ 190.8
58.9
-
12.5
(0.7)
2.0
$ 263.5
$ 2,278.2
11.6%
2012 Actual 2013 Actual
$ 137.7
32.0
-
10.3
(0.7)
-
$179.3
$ 1,342.2
13.4%
$ 30.8
8.8
-
1.0
-
-
$ 40.6
$ 385.5
10.5%
$ 17.7
7.5
-
0.6
-
-
$ 25.8
$ 232.4
11.1%
$ 5.3
10.2
-
0.6
-
-
$ 16.1
$ 318.1
5.1%
$ (0.7)
0.4
-
-
-
2.0
$ 1.7
-
0.0%
NA ELA Specialty Consumer Corporate
Consol. Consol.
2014 Actual 2015 Actual
Consol. Consol.
2016 Actual 2017 Actual
Consol. Consol.
$ 114.9
37.6
-
28.2
1.2
-
$ 181.9
$ 1,774.9
10.2%
$ 163.4
49.8
10.0
-
12.7
(0.7)
-
$ 235.2
$ 2,142.2
11.0%