TRG | The Bottom Line – 6/16

TRG attended NeoCon in Chicago this week to get a flavor of ongoing return to office (RTO) trends and steps companies are taking to 1) attract current workers back into the office, 2) improve worker effectiveness in the office, 3) make hybrid work effective, and 4) attract and retain workers. The overall product set on display this year was not far off of what we saw in 2019, which is important in our view, as it shows that office product manufacturers already had a product set to fit the post-pandemic times. The title and opening lyrics of “Speed of Sound” by Coldplay effectively describe the state of the industry and TRG’s standout factor from NeoCon. Regarding the state of the industry, employers are trying to ascertain how long before workers are back in the office. Investors are asking the same question in order to understand future volumes. We continue to believe that offices are valuable to company cultures and collaboration. RTO is happening slowly, and we don’t see that retrenching. We believe the large publicly-traded office product manufacturers have the diverse product set and large dealer network to meet the demand. With an improved lower cost base, we believe margins should improve on greater volumes if RTO gains momentum in the coming years.