SCS – Market expectations are for Uniform ROA recovery, but management has concerns about their acquisitions and partnerships, growth in EMEA, and industry outlook

• Steelcase Inc. (SCS:USA)currently trades near recent averages relative to UAFRS-based (Uniform) Assets, with a 1.1x Uniform P/B. At these levels, the market has bullish expectations for the firm, but management may have concerns about EMEA orders growth, integrating and synergizing their acquisitions and partnerships, and industry-wide outlook
• Specifically, management may lack confidence in their ability to sustain strongEMEA orders growth, and may be exaggerating customer demand for additional partnerships. They may also be exaggerating the success of their new partnership programs, and may lack confidence in their ability to drive revenue and earnings growth through these relationships. Additionally, they may be exaggerating collective outlook for their industry, and may lack confidence in their ability to drive growth from their project pipeline. Finally, they may lack confidence in their ability to effectively manage the new mix and business model as a result of their acquisitions, and to maintain lower claims costs going forward