Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Investor Presentation (May 2025)
50 slides from Somnigroup International's investor presentation, May 8, 2025
Slide 1: Somnigroup
® SOMNIGROUP NYSE: SGI
Slide 2: Somnigroup Investment Thesis
Leader in the $120 billion3 global bedding market. Broad, sustainable competitive advantages across iconic brands, capabilities, and scale; industry-leading design and manufacturing capabilities; vertically integrated operations; worldwide omni-channel distribution network. Attractive secular indust
Slide 3: About Somnigroup
In February 2025, the Company was reimagined, and Somnigroup International Inc. was founded, reflecting the transformative nature of the Mattress Firm acquisition. Somnigroup provides sleep solutions with a portfolio of outstanding businesses with iconic brands. SOMN = sleep OMNI = omnichannel GROUP
Slide 4: Somnigroup's Structure
High-level strategic direction • Corporate governance • Capital allocation Tactical go-to-market strategy • Operational excellence • Passionate customer service SOMNIGROUP’S STRUCTURE 4
Slide 5: Somnigroup overview
SOMNIGROUP 5 CONSUMER-CENTRIC INNOVATION DIVERSIFIED PORTFOLIO MANUFACTURING & LOGISTICS OMNI-CHANNEL RETAIL • Advanced R&D capabilities driving continuous solutions-based innovation • Diverse brand portfolio includes the most highly recognized brands in the industry • Global manufacturing footprint
Slide 6: Optimize consumer experience
SOMNIGROUP 6 Optimize investments in sleep technology Improve targeted innovation Drive advertising share of voice Enhance consumer outcomes Accelerate continuous feedback loop Uniquely positioned to optimize consumer experience
Slide 7: Somnigroup Ecosystem
SOMNIGROUP’S VERTICALLY INTEGRATED STRATEGY 7 OPERATIONS FACILITIES W I T H RETAIL STORES 20,000 associates Manufacturing and R&D facilities Distribution centers Logistics fleet Mattress Firm retail stores Dreams retail stores Tempur® retail stores E-commerce platforms SOMNIGROUP ECOSYSTEM
Slide 8: Somnigroup's Journey to Vertical Retailer
4% 4% 7% 9% 13% 13% 18% 23% 24% 25% 65% 0% 10% 20% 30% 40% 50% 60% 70% SOMNIGROUP’S JOURNEY TO VERTICAL RETAILER 8 DIRECT TO CONSUMER as a percentage of TOTAL SALES *FY’24 pro forma sales4 were 65% direct and 35% wholesale.
Slide 9: Somnigroup Team's Value Creation
SOMNIGROUP TEAM’S VALUE CREATION 9 Since the management change in 2015, sales have increased 70%, adjusted EBITDA2 has increased over 100%, and adjusted EPS2 has increased over 200%. Current SGI Management Track Record Since 2015 Total GrowthCAGR Trailing Twelve Months Ended March 31, 2025 Year Ende
Slide 10: Somnigroup Executive Team
KINDRA BELLIS CIO DAVID MONTGOMERY EVP, GLOBAL BUSINESS DEVELOPMENT SOMNIGROUP EXECUTIVE TEAM 10 SCOTT THOMPSON CHAIRMAN, CEO CLIFF BUSTER CEO STEVE RUSING PRESIDENT JONATHAN HIRST CEO TOM MURRAY EVP, CMO KINDEL NUÑO CHRO BHASKAR RAO EVP, CFO
Slide 11: Transaction Rationale
1. Expands consumer touchpoints to enhance ability to keep pace with evolving consumer preferences 2. Accelerates U.S. omni-channel strategy, enabling a seamless consumer experience 3. Simplifies consumer purchase journey, reducing friction at each touchpoint 4. Aligns new product development and te
Slide 12: Somnigroup's Robust Capital Allocation
SOMNIGROUP’S ROBUST CAPITAL ALLOCATION 12 INVESTMENTS IN GROWTH INITIATIVES CAPITAL RETURNED TO SHAREHOLDERS $800M+ invested in our people, plants and processes $5.7B4 invested in accretive M&A activities $1.9B invested in share repurchases $300M+ invested in quarterly dividends 2x-3x target leverag
Slide 13: Somnigroup's Tariff Exposure
SOMNIGROUP’S TARIFF EXPOSURE 13 TEMPUR SEALY NET IMPACT PRICE INCREASE (2% NORTH AMERICA NET SALES)* TARIFF IMPACT AFTER MITIGATING ACTIONS TARIFF IMPACT BEFORE MITIGATING ACTIONS TEMPUR SEALY COGS EXPOSURE* Tempur Sealy North America Mattress Firm • We anticipate some tariff impact will be passed t
Slide 14: Mattress Firm
MATTRESSFIRM
Slide 15: Overview – Mattress Firm Standalone
OVERVIEW – MATTRESS FIRM STANDALONE 15 LEADING OMNICHANNEL U.S. RETAILER 2,200+5 brick-and-mortar retail stores integrated with e- commerce and sleep education platforms to enable a seamless consumer purchase journey STRONG CONSUMER ENGAGEMENT Robust consumer touchpoints with deep insight into evolv
Slide 16: Retail Footprint
RETAIL FOOTPRINT 16 TX MT CA ID NV AZ OR IL NM CO WY MN SD IA ND UT KS NE WA WI OK MI MO NY PA FL IN AL GA AR LA NC VA TN KY OH MS ME SC WV VT NH CT NJ MD DE RI DC AK HI Owned locations Geographic Footprint • 2,2005+ owned retail stores across 45 states • Integrated e-commerce capabilities with 75M+
Slide 17: Mattress Firm's Diversified Product Offerings
MATTRESS FIRM’S DIVERSIFIED PRODUCT OFFERINGS 17 Somnigroup Brands and Private Label Other Leading Brands and Private Labels • A leading retailer of Tempur-Pedic®, Sealy®, and Stearns & Foster® branded products • Retails Sleepy’s® private label bedding manufactured by Tempur Sealy • A leading retail
Slide 18: Competitive Differentiators
SCALE COMPETITIVE DIFFERENTIATORS 18 PRODUCT SELECTION Diverse and curated assortment CONVENIENCE Seamless experience nationwide on and offline RETAIL EXPERTISE Highly trained Sleep Experts EXPERIENCE Personalized to each consumer CONSUMER TOUCHPOINTS Data driven tools improving consumer outcomes LO
Slide 19: Sales Growth Outlook
SALES GROWTH OUTLOOK 19 Drive conversion and AOV through enhanced RSA training Invest in stores and products to improve consumer shopping experience Continuously align brick-and-mortar footprint to consumer demand Drive e-commerce traffic via strategic investments in digital marketing Leverage impro
Slide 20: Tempur Sealy
TEMPUR*SEALY
Slide 21: Overview – Tempur Sealy Standalone
OVERVIEW – TEMPUR SEALY STANDALONE 21 CORE COMPETENCIES OMNI-CHANNEL DISTRIBUTION PRODUCTS SOLD IN 100+ COUNTRIES WORLDWIDE Consumer-Centric Innovation Leading Product Brands World-Class Manufacturing Integrated Marketing Extensive Logistics Capabilities ~70% Wholesale ~30% Direct-to-Consumer
Slide 22: Competitive Differentiators
COMPETITIVE DIFFERENTIATORS 22 ICONIC BRANDS Consumer preferred supported by advertising DIVERSE PORTFOLIO Wide range of price points and technologies MANUFACTURING Extensive capabilities across 70+ plants LOGISTICS Global integrated logistics operations R&D Advanced in-house technology and product
Slide 23: Brand Portfolio
BRAND PORTFOLIO 23 TEMPUR-PEDIC®: LEADING WORLDWIDE PREMIUM BEDDING BRAND Tempur-Pedic® uniquely adapts, supports, and aligns to you to deliver truly life- changing sleep. $2,200-$9,998* STEARNS & FOSTER®: HIGH-END-TARGETED BRAND The world’s finest beds that are made with exceptional materials, time
Slide 24: Global Manufacturing Footprint
GLOBAL MANUFACTURING FOOTPRINT 24 71 manufacturing facilities 20 million sq. ft. of manufacturing and distribution operations 4 state-of-the-art product testing locations 75k sq. ft. R&D innovation Wholly owned (31) Joint Venture (9) Licensee (27)Tempur-Pedic® Facility (4)
Slide 25: Successful Omni-Distribution Platform
TTM 1Q’25 Sales SUCCESSFUL OMNI-DISTRIBUTION PLATFORM 25 • Significant worldwide sales growth • Highly profitable and rapidly expanding • Direct customer relationships E-commerce • Luxury Tempur-Pedic® and Dreams® experiences • Operate over 6505 stores worldwide and expanding direct customer relatio
Slide 26: Key Markets
KEY MARKETS 26 NORTH AMERICA • $50B3 bedding market • Concentrated • Historically strong bedding industry growth, emerging from a prolonged downturn* • Market share leader with continued opportunities to expand through higher slot velocity, expansion into non-traditional channels, and growing DTC pr
Slide 27: Sales Growth Outlook
SALES GROWTH OUTLOOK 27 Expand into OEM market. Grow wholesale through existing and new retail relationships. Invest in innovation to meet customer demand. Expand direct-to-consumer through e-commerce and company-owned stores. Invest in U.S. Sealy and Stearns & Foster® products and marketing.
Slide 28: Welcome to Dreams
Wélcome to Dreams
Slide 29: Overview – Dreams Standalone
DIVERSIFIED PRODUCT OFFERING Multi-branded strategy comprised of in-house brands, Tempur Sealy brands, and third-party brands OVERVIEW – DREAMS STANDALONE 29 LEADING UK BEDDING RETAILER 200+ brick-and-mortar retail stores, 2,000+ colleagues, and an integrated e-commerce platform attracting over 18M
Slide 30: Financials
FINANCIALS 30
Slide 31: First Quarter Performance
FIRST QUARTER PERFORMANCE 31 Trailing Twelve Months EndedThree Months Ended % ChangeMarch 31, 2024 March 31, 2025% ChangeMarch 31, 2024 March 31, 2025 (in millions, except percentages and per common share amounts) 9.0%$4,906.7$5,346.234.9%$1,189.4$1,604.7Net Sales -23.4%$359.1$274.9-143.4%$76.3$(33.
Slide 32: 2025 Outlook
2025 OUTLOOK7 32 Expect full-year adjusted EPS 2 between $2.30 and $2.65 Other Modeling Assumptions $295M-$305MDepreciation & Amortization $225MCapital Expenditures $260M-$270MInterest Expense 25%U.S. Federal Tax Rate 210M sharesDiluted Share Count • On a reported basis, we expect sales between $7.3
Slide 33: Impact of Mattress Firm Acquisition
33 Impact of Mattress Firm acquisition ACQUISITION AND DIVESTITURE • The acquisition of Mattress Firm on February 5th • The divestiture of 103 Sleep Outfitters and 73 Mattress Firm stores on May 1st • The elimination of intercompany sales between Mattress Firm and Tempur Sealy, which is expected to
Slide 34: Long Term Perspective
LONG TERM PERSPECTIVE7 34 2026-2028 Adjusted EPS2 INTERNAL TARGETS3 • We are internally targeting sales to grow at a compound annual rate of mid single digits starting in 2025. • This indicates adjusted EPS2 would increase from the $2.50 midpoint for 2025 to approximately $4.85 by 2028, a compound a
Slide 35: Synergies Outlook
35% 30% 15% 20% Logistics Product Lifecycle Management Manufacturing Efficiencies Sourcing SYNERGIES OUTLOOK3 35 $100M OF RUN-RATE SYNERGIES EXPECTED RUN RATE SYNERGIES Enhanced visibility to consumer demand creates opportunities for agile and fortified supply chain management while expanded scale a
Slide 36: Strong Balance Sheet & Cash Flow
$0 $200 $400 $600 $800 2021 2022 2023 2024 TTM 1Q'25 Full-Year Operating Cash Flow STRONG BALANCE SHEET & CASH FLOW 36 1.0x 2.0x 3.0x 4.0x 1Q24 2Q24 3Q24 4Q24 1Q'25 Leverage2 Target Range Leverage $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2021 2022 2023 2024 TTM 1Q'25 Full-Year Adjusted EBI
Slide 37: Capital Structure
CAPITAL STRUCTURE 37 • Leverage2 was 3.5x and liquidity was ~$820M as of 3/31/25 • We expect to return to our target leverage range of 2.0x to 3.0x and for share repurchases to be minimal over the next 12 months and to return to active share repurchase thereafter • Credit ratings o Fitch: BB+ o Mood
Slide 38: Thank you for your interest
Thank you for your interest in For more information, please email: investor.relations@somnigroup.com 38
Slide 39: Appendix
APPENDIX 39
Slide 40: Post-Acquisition Mattress Firm Marketing
POST-ACQUISITION MATTRESS FIRM MARKETING 40 Mattress Firm Strategic Advertising Shift • Revising Mattress Firm’s advertising strategy is expected to further enhance Somnigroup’s overall marketing effectiveness • We have developed a new campaign that focuses on the role Mattress Firm and the products
Slide 41: U.S. Historical Industry Volumes
U.S. HISTORICAL INDUSTRY VOLUMES3 41 U.S. Produced Mattress Units Source: ISPA, U.S. ITC, management estimates 18.1 20.1 20.9 22.5 24.3 23.5 23.6 23.5 24.1 24.7 20.4 18.0 16.7 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 15.0 16.0 17.0 18.0 19.0 20.0 21.0 22.0 23.0 24.0 25.0 2009 20-year Trough 2013 2014 2015
Slide 42: Sustainability Initiatives
42 SUSTAINABILITY INITIATIVES Environmental • Achieved zero waste to landfill status at our Canadian and Mexican manufacturing operations and maintained our zero waste to landfill status at our U.S. and European manufacturing operations • Achieved zero waste to landfill status at 75% of our corporat
Slide 43: Forward-Looking Statements
43 This investor presentation contains statements regarding the Company’s expectations future performances, integration of acquired companies with our business (including Mattress Firm), the Company’s quarterly cash dividend, the Company’s expectations regarding geopolitical events (including the wa
Slide 44: Use of Non-GAAP Financial Measures
44 In this investor presentation and certain of its press releases and SEC filings, the Company provides information regarding adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, free cash flow, consolidated indebtedness less netted cash, and leverage, which are not recognized terms under U.
Slide 45: QTD Adjusted Net Income and Adjusted EPS
45 QTD ADJUSTED NET INCOME2 AND ADJUSTED EPS2 *For a reconciliation net income to adjusted net income and adjusted EPS in prior reporting periods, please refer to the Company’s SEC filings. Three Months Ended March 31, 2024March 31, 2025(in millions, except per share amounts) $ 76.3$ (33.1)Net (loss
Slide 46: TTM Adjusted Net Income and Adjusted EPS
46 TTM ADJUSTED NET INCOME2 AND ADJUSTED EPS2 *For a reconciliation net income to adjusted net income and adjusted EPS in prior reporting periods, please refer to the Company’s SEC filings. Trailing Twelve Months Ended March 31, 2025(in millions, except per common share amounts) $ 274.9Net income 11
Slide 47: Adjusted EBITDA
47 ADJUSTED EBITDA2 *For a reconciliation net income to EBITDA and Adjusted EBITDA in prior reporting periods, please refer to the Company’s SEC filings. Three Months Ended March 31, 2024March 31, 2025(in millions) $ 76.3$ (33.1)Net (loss) income 34.354.5Interest expense, net —6.8Transaction-related
Slide 48: TTM Adjusted EBITDA
48 TTM ADJUSTED EBITDA2 *For a reconciliation net income to EBITDA and Adjusted EBITDA in prior reporting periods, please refer to the Company’s SEC filings. Trailing Twelve Months Ended March 31, 2025(in millions) $ 274.9Net income 145.2Interest expense, net 16.6Transaction related interest expense
Slide 49: Leverage Reconciliation
49 LEVERAGE2 RECONCILIATION *For a reconciliation of leverage to consolidated indebtedness less netted cash in prior reporting periods, please refer to the Company’s SEC filings. March 31, 2025(in millions) $ 5,033.0Total debt, net 36.9Plus: Deferred financing costs (1) 5,069.9Total debt 111.1Less:
Slide 50: Footnotes
50 FOOTNOTES 1 Any financial information included in this presentation for Mattress Firm prior to the acquisition date of February 5, 2025, is based on Mattress Firm’s historical financial reporting and has not been audited by the Company or the Company’s accountants 2 Adjusted net income, EBITDA, a
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