Steelcase(US:SCS)2021-09-23 18:12Financial Data and Key Metrics Changes - In Q2 2022, Steelcase reported revenue of $725 million and earnings per share of $0.21, which were below the estimated ranges provided earlier [30][31] - The company experienced a 14% organic decline in revenue compared to the prior year, primarily due to a higher backlog from the previous year [31] - Operating income increased by $66 million sequentially, driven by a $168 million increase in revenue [34] Business Line Data and Key Metrics Changes - Total orders grew 24% year-over-year and 12% sequentially, with strong growth across all segments [7][36] - The Americas saw a sequential order growth of 10%, while EMEA and other regions experienced 17% and 20% growth respectively [36] - The backlog at the end of Q2 was 22% higher than the prior year, indicating strong demand despite supply chain challenges [41] Market Data and Key Metrics Changes - The company noted that order levels in the Americas were approaching or exceeding pre-pandemic levels, with significant recovery in EMEA and APAC regions [7][8] - In Asia Pacific, order levels were within 5% of FY '20 levels, despite significant declines in India due to pandemic impacts [8] Company Strategy and Development Direction - Steelcase is focusing on adapting to hybrid work environments, emphasizing the need for flexible office spaces and products [13][21] - The company plans to introduce new products that provide flexibility, privacy, and control to meet evolving customer needs [23][24] - There is a commitment to continue investing in product development and exploring growth opportunities in vertical markets such as education and healthcare [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery, noting strong order rates and minimal cancellations despite ongoing supply chain challenges [12][49] - The company anticipates continued inflationary pressures but has implemented multiple price increases to mitigate impacts [49][47] - Future prospects for fiscal 2023 include improved demand from a broader reopening of offices and potential pricing benefits offsetting inflation [48] Other Important Information - The company announced a third price increase due to ongoing commodity inflation, particularly in steel [10] - Management highlighted a strong commitment to ESG initiatives, including reducing carbon emissions and enhancing diversity, equity, and inclusion (DEI) efforts [17][100] Q&A Session Summary Question: Insights on order trends and potential softening - Management noted that while there are mixed signals in leading indicators, strong order growth continues, and there is no immediate concern about a slowdown [51][54] Question: Impact of pricing increases on demand - There has been no evidence of delayed orders or dampened demand due to price increases, although management acknowledges the risk [56] Question: Improvement in the Indian market - Supply and demand conditions in India have improved, with factories ramping back up and a growing pipeline of orders [58][59] Question: Confidence in revenue guidance amid supply chain issues - Management expects ongoing supply chain challenges but has factored these into their revenue outlook for Q3 and Q4 [66] Question: Differences in supply chain issues between the U.S. and EMEA - The Americas face more discrete supplier issues, while EMEA has been less affected by the broader supply chain challenges [78]