Fireside Chat with Allan Smith, CRO & Dave Sylvester, CFO on New Products and Financial Thoughts



KEY POINTS
  • On Wednesday, November 3, 2021, we hosted a Fireside Chat conversation with two senior executives of Steelcase, Inc. – Allan Smith, Chief Revenue Officer and Dave Sylvester, Chief Financial Officer. This Management Series Report summarizes several of the key points of the event and provides the reader a transcript of the event, edited for grammar, clarity, and readability.
  • The first half of the event was devoted to a conversation with Mr. Smith. Allan is a long-time Steelcase executive. He was recently promoted to Senior Vice President and Chief Revenue Officer as Sara Armbruster was assuming her role as CEO.
  • Smith discusses and demonstrates new products that have been recently introduced by Steelcase at NeoCon, the industry’s annual trade show (delayed due to the pandemic) and before. He relates how these products relate to the research into how people work that Steelcase sponsored and conducted before and during the early months of the pandemic.
  • For the second half of the video chat, Dave Sylvester, Senior Vice President and Chief Financial Officer, reviewed several items that interest investors, including (1) the negative cost/price impact of recent inflation that management believes will peak in 3Q22; (2) the three price increases Steelcase initiated in F22 and how these could factor into future results; (3) details about the supply chain and inefficiencies that Steelcase absorbed in its operating results so far in F22; and (4) the guidance that management issued with its 2Q22 earnings report and conference call.
  • In his summary comments, Sylvester mused that if (a) key costs decline, meeting external forecasts; (b) price realization progresses as it has historically; and (c) sales gains arrive as office occupancy increases, then next year can be “quite interesting to Steelcase.”

THE COMPANY

Named by Fortune Magazine as one of the world’s most admired companies (15 times before and now #1 in the Home Equipment and Furnishings sector), Steelcase is a global leader for commercial/contract furniture. Its global capabilities and research-based approach make it a preferred partner for leading organizations to serve customers in any part of the world. Simply put, Steelcase is one of America's best companies.

Steelcase was founded in Grand Rapids, MI in 1912 as The Metal Office Furniture Company (changed to Steelcase in 1954). Worldwide, Steelcase has 12,700 employees and ~800 dealers (~400 in the Americas, ~340 in EMEA, and ~60 in its Other segment. The company’s global reach touches 17 countries with 15 manufacturing locations, 8 of which are outside of North America. In addition to Steelcase, Steelcase Health, and Steelcase Learning, its brand names include Coalesse, Designtex, AMQ, Smith System, and Orangebox.

Steelcase became publicly owned in 1998 and reports in three operating segments: Americas, EMEA, and Other in addition to a corporate unallocated cost bucket. Its values include a commitment to ESG, and to Work Better Research. Link here to its 2021 Impact Report.

EXECUTIVE DISCUSSION

Budd Bugatch: Hello. I’m Budd Bugatch, Senior Analyst with Water Tower Research. Water Tower is dedicated to modernizing stakeholder communication and investor engagement. We work to create, deliver, and maintain the information flow required to build and preserve relationships with all stakeholders and potential investors.

This morning, I am thrilled to have a conversation with two senior leaders of Steelcase: Allan Smith, who was recently promoted to Senior Vice President and Chief Revenue Officer of Steelcase after serving as Vice President of Global Marketing, and David Sylvester, Senior Vice President and Steelcase Chief Financial Officer.

I have followed Steelcase for several decades initiating coverage shortly after its February 1998 IPO. Steelcase is a global leader in the contract/commercial furniture market.

It likely comes as no surprise that the pandemic caused significant upset for the commercial/contact f...

ABOUT THE EXECUTIVES
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Dave Sylvester

Senior Vice President & CFO

Steelcase Inc.

Elevated to Senior Vice President in April 2011, Sylvester has been the Steelcase CFO since 2006. His responsibilities include real estate, global business centers, and Steelcase aviation.

Previously, Dave was Vice President, Operations Finance (March 2005-October 2006), responsible for operations finance in North America and internationally. He also worked closely with the supply chain organization on product and process placement decisions and on implementing supply chain strategy around the world.

Dave began his Steelcase career in 1995 as Manager, Financial Reporting, and Planning. In 1998 he became Director and Assistant Controller, Corporate Finance, for Steelcase Inc., primarily responsible for all internal and external financial reporting and analysis.

Dave then served as finance leader for Steelcase International based in Strasbourg, France (2001-2005), where he was responsible for all finance-related activities outside of the United States and Canada, including profitability analyses, EVA measurement, accounting and reporting, acquisition integration, as well as a variety of special projects.

Before joining Steelcase, Dave held several audit positions with PriceWaterhouseCoopers in Chicago, Illinois. He graduated from Michigan State University in East Lansing, Michigan, in 1987 with a Bachelor’s degree in accounting and a Master of Business Administration in finance.

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Allan Smith

Vice President, Global Marketing

Steelcase Inc.

In his role as Vice President, Global Marketing, Allan Smith is responsible for portfolio strategy, product line management and profitability for Steelcase’s family of global brands, vertical markets and subsidiary businesses. His organization plays a leading role in Steelcase’s transformation of research and insights into innovative products and applications.

Earlier in his Steelcase career that began in 1991, Allan served in a variety of marketing leadership roles, including Vice President of Applications and Product Marketing; General Manager, Furniture and Technology; and Vice President of Marketing, Research and Product Development for Steelcase in Europe. He led the initial work to develop the company’s “Smart + Connected” technology strategy.

Allan headed up the company’s global environmental strategy and programs (2004-2008), and during this time contributed to the launch of the Steelcase Think™ chair, a product conceived, developed and produced for maximum sustainability. In an earlier role at Designtex, a Steelcase Design Partnership company, Allan was part of the team that launched the William McDonough Collection, the world’s first compostable, organic fabric collection.

Allan is a graduate of the University of Virginia.

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