Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Q2 2020 Earnings Presentation
31 slides from Somnigroup International's earnings presentation, Aug 6, 2020
Slide 1: Tempur Sealy International, Inc. (TPX)
Tempur Sealy International, Inc. (TPX) “We are continuing to mitigate the COVID‐19 impact while optimizing our competitive position” 1 © 2020 Tempur Sealy International, Inc.
Slide 2: Purpose and Background
PURPOSE To Improve the Sleep of More People, Every Night, All Around the World BACKGROUND Tempur Sealy is the world’s largest bedding manufacturer. We are a market‐leading, vertically integrated global company that develops, manufacturers, markets and retails bedding products both on and offline. Ne
Slide 3: Global Manufacturing Footprint
GLOBAL MANUFACTURING FOOTPRINT 36 International Facilities 27 North American Facilities Wholly owned and Joint Venture Tempur‐Pedic Facility Joint Venture Licensee 3 © 2020 Tempur Sealy International, Inc.
Slide 4: Portfolio of Brands
Portfolio of Brands Tempur‐Pedic • Tempur‐Pedic uniquely adapts, supports and aligns to you to deliver truly life‐changing sleep $1,999‐$7,499 Stearns & Foster • The world’s finest beds made with exceptional materials, time‐honored craftsmanship and unparalleled design $1,499‐$4,999 Sealy • Every Se
Slide 5: Omni-Channel Consumer
OMNI‐CHANNEL CONSUMER 5 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 6: Powerful Omni-Distribution Platform
Powerful Omni‐Distribution Platform Largest part of worldwide distribution Wholesale Recent significant distribution gains Significant worldwide sales growth E‐Commerce Highly profitable and expanding margins Company Owned Luxury Tempur‐Pedic and multi‐branded showroom experiences Stores
Slide 7: Winning Online: Wholesale and Direct
Winning Online: Wholesale and Direct CHANNEL TempurPedic.com Most profitable online bedding company in the world DIRECT TO High growth and high margins CONSUMER Compressed Bedding Products Traditional Bedding Products TEMPUR‐Cloud® Tempur‐Pedic OMNI‐ COCOON by Sealy™ Stearns & Foster CHANNEL Sealy‐t
Slide 8: Tempur Sealy Compressed Offerings
Tempur Sealy Compressed Offerings Sealy‐to‐go COCOON by Sealy™ TEMPUR‐Cloud® Value Mid‐Level Premium Our compressed products are a convenient option for consumers shopping online through our direct business or our third‐party retail partners. 8 © 2020 Tempur Sealy International, Inc.
Slide 9: U.S. Company-Owned Store Strategy
U.S. Company‐Owned Store Strategy Tempur‐Pedic® Retail Stores: Sleep Outfitters®: Broad‐Based Opportunity High‐End Targeted Opportunity Strategic Representation • Approximately 65 high‐end retail destinations, with complementary co‐tenants, in high demographic areas • Regional bedding retailer that
Slide 10: Our Clean Shop Promise
Our Clean Shop PromiseTM protocol involves making deliberate adjustments to employee training, customer experience, store environment and the delivery process in order to ensure the health and safety of consumers and employees. Program Features: o One‐use mattress and pillow shields provide a tangib
Slide 11: Q2 Results and 2020 Outlook
Q2 RESULTS AND 2020 OUTLOOK 11 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 12: Second Quarter 2020 Highlights
Second Quarter 2020 Highlights Three Months Ended June 30th ($ in millions, except for % Reported % Change Constant 2020 2019 values) (unaudited) % Change Currency(1) Net Sales $665.2 $722.8 ‐8.0% ‐7.3% Net Income 23.0 41.6 ‐44.7% ‐44.2% (1) EBITDA 85.2 109.0 ‐21.8% ‐21.5% Net cash provided by opera
Slide 13: Product Sales
Product Sales Three Months Ended Bedding Other June 30, 2020 Net Sales (unaudited) Products Products Consolidated $ 606.6M $ 58.6M $ 665.2M YoY Growth ‐8.5% ‐2.7% ‐8.0% North America $ 533.0M $ 37.5M $ 570.5 YoY Growth ‐3.8% 10.6% ‐3.0% International $ 73.6M $ 21.1M $ 94.7M YoY Growth ‐32.1% ‐19.8%
Slide 14: Direct to Consumer
Direct to Consumer $120 Global Direct Sales • Distribution network made up of high growth, high margin, Web, Call Center, and Company‐owned stores $100 • Strong growth within the direct channel, growing 12% in the second quarter of 2020 $80 • Long‐term direct target: 25% of Tempur‐Pedic net sales $6
Slide 15: Debt Structure
o Leverage(1) lowest in Company’s history at 2.8x, within the Debt Structure revised target range of 2.0‐3.0x(2) o Capital structure contains long‐dated maturities; fixed rate debt represents around 2/3 of total debt o Over $600 million of available liquidity as of June 30, 2020 LEVERAGE(1) MANDATOR
Slide 16: Third Quarter and Full Year 2020 Outlook
o Experienced accelerating demand for bedding in second quarter which has continued into third quarter to‐date Third Quarter and Full o U.S. Sealy production capacity does not fully meet demand and is expected to be constrained through the third quarter Year 2020 Outlook o Internal target of 25% glo
Slide 17: Aspirational Program
Aspirational Program(4) o The plan is triggered when the company achieves between $600 million and $650 million of adjusted EBITDA(1) per credit facility on a trailing four quarter basis through the end of 2020. o Due to our strong performance in the fourth quarter of 2019 and first half of 2020, it
Slide 18: Driving Shareholder Value
DRIVING SHAREHOLDER VALUE 18 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 19: Long-term Initiatives and Competitive Advantages
Long‐term initiatives: o Develop the highest quality bedding products in all the markets we serve o Promote our worldwide brands with compelling marketing o Optimize our powerful omni‐distribution platform to be where consumers want to shop o Drive increases in EBITDA(1) Competitive advantages: o Co
Slide 20: Environmental, Social, and Governance
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE Tempur Sealy is committed to protecting and improving our communities and environment Environmental • In 2019, 85% of our North American production facility waste was recycled ‐ 15,825 barrels of oil, 56,049 trees, 18,549,937 KW hours, 3,297 tons of CO2, 23,078,
Slide 21: Corporate Social Value Highlights
Corporate Social Value Highlights Raymond James ranked Tempur Sealy in the top quartile for ESG out of all companies they consider o We have developed, manufactured and donated specialty mattresses and other products to be used in a ‘Strong Buy’ the fight against COVID‐19 o The Tempur Sealy Foundati
Slide 22: Thank you for your interest in Tempur Sealy International
Thank you for your interest in Tempur Sealy International For more information please email: investor.relations@tempursealy.com 22 © 2020 Tempur Sealy International, Inc.
Slide 23: Appendix
Appendix 23 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 24: Forward-Looking Statements
Forward‐Looking Statements This investor presentation contains statements that may be characterized as "forward‐looking" within the meaning of the federal securities laws, which includes information concerning one or more of the Company's plans, guidance, objectives, goals, strategies, and other inf
Slide 25: Use of Non-GAAP Financial Measures and Constant Currency Information
Use of Non‐GAAP Financial Measures and Constant Currency Information In this investor presentation and certain of its press releases and SEC filings, the Company provides information regarding adjusted net income, EBITDA, adjusted EBITDA (including COVID‐19 charges), adjusted EBITDA per credit facil
Slide 26: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 26 © 2020 Tempur Sealy International, Inc.
Slide 27: TTM Adjusted EBITDA Reconciliation
TTM Adjusted EBITDA Reconciliation 27 © 2020 Tempur Sealy International, Inc.
Slide 28: Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted EPS 28 © 2020 Tempur Sealy International, Inc.
Slide 29: Leverage Reconciliation
Leverage Reconciliation 29 © 2020 Tempur Sealy International, Inc.
Slide 30: Aspirational Program
Aspirational Program(4) The Company has an Aspirational Program which is a unique long‐term program designed to provide extraordinary compensation for extraordinary performance. The Company seeks to accomplish these goals in a way that rewards performance that is aligned with its stockholders’ int
Slide 31: Footnotes
Footnotes 1. Adjusted Net Income, EBITDA, adjusted EBITDA (including COVID‐19 charges), adjusted EBITDA per credit facility, adjusted EPS, leverage and constant currency are non‐GAAP financial measures. Please refer to the "Use of Non‐GAAP Financial Measures and Constant Currency Information" on the
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