Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (February 2021)
42 slides from Somnigroup International's investor presentation, Feb 22, 2021
Slide 1: Tempur Sealy International, Inc. (TPX)
© 2021 Tempur Sealy International, Inc. “Our growth reflects strong industry demand, our worldwide leadership position, and the success of our omni- channel distribution strategy” Tempur Sealy International, Inc. (TPX) 1 Pictured above: Tempur-Pedic flagship store in Manhattan
Slide 2: Purpose and Who We Are
© 2021 Tempur Sealy International, Inc.2 PURPOSE To Improve the Sleep of More People, Every Night, All Around the World WHO WE ARE As a global leader in the design, manufacture and distribution of bedding products, we know how crucial a good night of sleep is to overall health and wellness. Utilizin
Slide 3: TPX At A Glance
© 2021 Tempur Sealy International, Inc.3 Industry • Stable and growing global bedding industry of ~$50 billion(1) • U.S. market is concentrated and grows mid-single digits annually, driven by units and dollars(1) • International is highly fragmented and about the size of the U.S market(1) • TPX prod
Slide 4: Competitive advantages and Q4 2020 results
© 2021 Tempur Sealy International, Inc. o Established worldwide omni-channel presence o Iconic brand and product portfolio o World-class manufacturing capabilities o Industry-leading balance sheet and free cash flow(2) Competitive advantages: 4 Three Months Ended December 31th 2020 2019 Reported % C
Slide 5: 2021 Financial Targets and Assumptions; 2021 Outlook and Recent Trends
© 2021 Tempur Sealy International, Inc. 2021 Financial Targets(4) and Assumptions Depreciation & Amortization $160M-$180M Capital Expenditures $125 to $140M Interest Expense $55 to $60M U.S. Federal Tax Rate About 26% Diluted Share Count 207M shares o 15-20% full year 2021 sales growth o Full year E
Slide 6: Worldwide Omni-Channel
© 2021 Tempur Sealy International, Inc. © 2021 Tempur Sealy International, Inc. 6 WORLDWIDE OMNI-CHANNEL
Slide 7: Powerful Omni-Distribution Platform
© 2021 Tempur Sealy International, Inc. Powerful Omni-Distribution Platform Company Owned Stores Wholesale E-Commerce Third-party retailers are our largest distribution channel Significant OEM opportunity Significant worldwide sales growth Highly profitable and expanding rapidly Luxury Tem
Slide 8: Geographic Segments
© 2021 Tempur Sealy International, Inc.8 NORTH AMERICAN FY’20 SALES INTERNATIONAL FY’20 SALES Geographic Segments 27% 73% Direct Wholesale 11% 84% 5% Direct Wholesale OEM, Wholesale
Slide 9: Wholesale: Third-Party Retailers
© 2021 Tempur Sealy International, Inc.9 Wholesale: Third-Party Retailers • Dominant worldwide distribution and broadly diversified • Over 5,400 retail partners around the world selling through over 25,000 doors and their e-commerce platforms • Global TPX sales force of over 500 people supporting ou
Slide 10: Wholesale: U.S. OEM Opportunity
© 2021 Tempur Sealy International, Inc.10 Wholesale: U.S. OEM Opportunity • OEM market is about 20% of the total U.S. market and growing(1) • Leverages manufacturing expertise, diversifies consolidated sales stream and captures manufacturing profits from bedding brands beyond our own • Investing an
Slide 11: Winning Online: Wholesale and Direct
© 2021 Tempur Sealy International, Inc. TempurPedic.com Most profitable online bedding company in the world High growth and high margins Alternative Channels (Web-based Retailers) Dedicated sales team with focus on eMarketplace sales growth High growth and stable margins Traditional Retailers Online
Slide 12: Direct to Consumer
© 2021 Tempur Sealy International, Inc. $- $20 $40 $60 $80 $100 $120 $140 $160 Q4 2018 Q4 2019 Q4 2020 Global Direct Sales Intl NA Direct to Consumer • High growth and high margin sales from web, call center, and company-owned stores • Strong growth within the direct channel, growing 29% in the four
Slide 13: U.S. Company-Owned Store Strategy
© 2021 Tempur Sealy International, Inc. Sleep Outfitters®:Tempur-Pedic® Retail Stores: Broad-Based Opportunity Strategic Representation High-End Targeted Opportunity • Approximately 80 high-end retail destinations, with complementary co-tenants, in high demographic areas • Strategic market placement
Slide 14: International Markets
© 2021 Tempur Sealy International, Inc. International Markets 14 • Highly fragmented with broad geographic diversity across Europe and Asia • Developing new TEMPUR® line of mattresses to expand addressable market in 2022 • Europe – strong share position in premium category, targeting share growth th
Slide 15: Successful International Joint Ventures
© 2021 Tempur Sealy International, Inc.15 Successful International Joint Ventures UNITED KINGDOM • Acquired in 2020 • Full time employees : 250+ Developing markets for Sealy® branded products ASIA • Founded in 2000 • Compound annual growth rate of 36% • Operates in 21 countries and territories • Top
Slide 16: Brands & Products
© 2021 Tempur Sealy International, Inc. BRANDS & PRODUCTS 16 © 2021 Tempur Sealy International, Inc.
Slide 17: Portfolio of Global Brands
© 2021 Tempur Sealy International, Inc. Portfolio of Global Brands Stearns & Foster - High-end targeted brand • The world’s finest beds made with exceptional materials, time-honored craftsmanship and unparalleled design Sealy – No. 1 bedding brand in the U.S.(3) • Combines innovation, engineering an
Slide 18: Global marketing budget and increasing brand awareness
© 2021 Tempur Sealy International, Inc.18 TPX brands are supported by a $400+ million global marketing budget with INCREASING BRAND AWARENESS Brand Portfolio 50% 55% 60% 65% 70% 10% 15% 20% 25% 30% 2Q 3Q 4Q Tempur-Pedic U.S. 2020 Brand Metrics Purchase Intent Consideration
Slide 19: 2021 Sealy Launch
© 2021 Tempur Sealy International, Inc. Posturepedic Plus Posturepedic Essentials Surface-Guard SealyChill™ 2021 Sealy Launch “We expect this launch will further our market share gains and extend Sealy's lead as the number one mattress brand in North America3.” – Scott Thompson, CEO Featuring Indust
Slide 20: Tempur-Ergo Smart Bases
© 2021 Tempur Sealy International, Inc. With AUTOMATIC response to snoring 20 •Heart Rate •Breathing Rate •Snore Detection TEMPUR-ERGO® SMART BASES 100% PASSIVE SENSORS Powered by
Slide 21: Tempur Sealy Compressed Offerings
© 2021 Tempur Sealy International, Inc. Tempur Sealy Compressed Offerings Compressed bedding sales more than doubled in 2020 21 TEMPUR-Cloud®COCOON by Sealy™Sealy-to-go Value Mid-Level Premium Our compressed bedding products are an option for consumers shopping online through our direct business or
Slide 22: World-Class Manufacturing Capabilities
© 2021 Tempur Sealy International, Inc. WORLD-CLASS MANUFACTURING CAPABILITIES 22 © 2021 Tempur Sealy International, Inc.
Slide 23: North American and International Facilities
© 2021 Tempur Sealy International, Inc. 29 North American Facilities 37 International Facilities Wholly owned (29) Joint Venture (8) Licensee (26) Total Plants Tempur-Pedic Facility (3) 23
Slide 24: Leading Manufacturing Capabilities and R&D Innovation
© 2021 Tempur Sealy International, Inc.24 o 66 manufacturing facilities o 16 million square feet of manufacturing and distribution operations Leading Manufacturing Capabilities R&D Innovation o 75,000 square feet of research and development o 14 state-of-the art product testing labs
Slide 25: Expanding Manufacturing Capacity
© 2021 Tempur Sealy International, Inc.25 Expanding Manufacturing Capacity Sealy Dallas Sherwood West Coast facility Foam Pouring Facilities o Expanded Orlando plant production capacity by 60% in 2020 o Expect to open a 5th plant in the Northeast U.S. in 2021 o Expanding three existing foam faciliti
Slide 26: Industry-Leading Balance Sheet & Cash Flow
© 2021 Tempur Sealy International, Inc. INDUSTRY-LEADING BALANCE SHEET & CASH FLOW 26 © 2021 Tempur Sealy International, Inc.
Slide 27: Strong Balance Sheet & Cash Flow
© 2021 Tempur Sealy International, Inc.27 Strong Balance Sheet & Cash Flow 1.00x 2.00x 3.00x 1Q20 2Q20 3Q20 4Q20 Leverage(2) $0 $100 $200 $300 $400 $500 $600 2016 2017 2018 2019 2020 Full Year Free Cash Flow(2) 0% 20% 40% 60% 80% 2016 2017 2018 2019 2020 Full Year Free Cash Flow(2) / Full Year Adjus
Slide 28: Environmental, Social and Corporate Governance
© 2021 Tempur Sealy International, Inc.28 ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE © 2020 Tempur Sealy International, Inc.
Slide 29: Environmental, Social and Governance
© 2021 Tempur Sealy International, Inc. Environmental, Social and Governance Tempur Sealy is committed to protecting and improving our communities and environment Environmental • Committed to achieving carbon neutrality for our wholly-owned global operations by 2040 • Achieved a 28% reduction in gre
Slide 30: Corporate Social Value Highlights
© 2021 Tempur Sealy International, Inc. Corporate Social Value Highlights Tempur Sealy has donated… - an estimated $100 million in product over the last 10 years, - cash and stock valued at $9.5 million dollars over the last 4 years, and - 17,500+ products to aid in the COVID-19 crisis. Ranked a ‘St
Slide 31: Value Creation Drivers
© 2021 Tempur Sealy International, Inc.31 Value Creation Drivers • Bedding market is a stable and growing industry with strong returns • Importance of bedding will continue as consumers connect health and wellness with a good night of sleep • Track record of developing and marketing differentiated p
Slide 32: Thank you for your interest in Tempur Sealy International
© 2021 Tempur Sealy International, Inc. Thank you for your interest in Tempur Sealy International For more information please email: investor.relations@tempursealy.com 32
Slide 33: Appendix
© 2021 Tempur Sealy International, Inc. Appendix © 2020 Tempur Sealy International, Inc. 33
Slide 34: Forward-Looking Statements
© 2021 Tempur Sealy International, Inc. This investor presentation contains statements relating to the Company's quarterly cash dividend, the Company's share repurchase targets, the Company's expectations regarding net sales for 2021, EBITDA for 2021, and EPS for 2021 and subsequent periods and the
Slide 35: Use of Non-GAAP Financial Measures and Constant Currency Information
© 2021 Tempur Sealy International, Inc. 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 per credit facility, f
Slide 36: Mandatory Maturity Profile and Debt Structure
© 2021 Tempur Sealy International, Inc. $21 $21 $32 $330 $600 2021 2022 2023 2024 2025 2026 Mandatory Maturity Profile*(5) Debt Structure o Leverage(2) lowest in Company’s history at 1.7x, below the target range of 2.0-3.0x(5) o Capital structure contains long-dated maturities Rating Agency Ratings
Slide 37: Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. Adjusted EBITDA Reconciliation © 2020 Tempur Sealy International, Inc. 37
Slide 38: TTM Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. TTM Adjusted EBITDA Reconciliation © 2020 Tempur Sealy International, Inc. 38
Slide 39: Adjusted Net Income and Adjusted EPS
© 2021 Tempur Sealy International, Inc. Adjusted Net Income and Adjusted EPS 39
Slide 40: Leverage Reconciliation
© 2021 Tempur Sealy International, Inc. Leverage Reconciliation 40 *For a reconciliation of leverage to total debt, net for reporting periods in the years 2016-2020, please refer to the Company’s SEC filings.
Slide 41: Free Cash Flow and Free Cash Flow / Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. Free Cash Flow and Free Cash Flow / Adjusted EBITDA Reconciliation 41 *For a reconciliation of adjusted EBITDA per credit facility to net income for reporting periods in the years 2016-2020, please refer to the Company’s SEC filings.
Slide 42: Footnotes
© 2021 Tempur Sealy International, Inc. Footnotes 1. Management estimates 2. Adjusted Net Income, EBITDA, adjusted EBITDA per credit facility, adjusted EPS, leverage, free cash flow and constant currency are non-GAAP financial measures. Please refer to the "Use of Non-GAAP Financial Measures and Con
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