Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (January 2023)
33 slides from Somnigroup International's investor presentation, Jan 31, 2023
Slide 1: Tempur Sealy International, Inc. (TPX)
We continue to demonstrate the resilience of our business model as we generate profits, invest in our business, return capital to shareholders, and outperform the global bedding industry. TEMPUR SEALY INTERNATIONAL, INC., TPX “ “ 1
Slide 2: Investment Thesis
2 History of market share gains across global omnichannel distribution Seasoned, well-aligned management with proven track record Legacy of strong value creation via capital allocation including share buybacks and acquisitions The leading vertically integrated global bedding company with iconic bran
Slide 3: Tenured Leadership Team
3 U.S. Market International Markets Tenured Leadership Team >185 YEARS COMBINED TPX EXPERIENCE 14 YEARS AVERAGE TPX TENURE Shared Services Scott Thompson Chairman, President & CEO Bhaskar Rao EVP, CFO Cliff Buster CEO, North America Diana Strickland SVP, Human Resources Kindra Bellis SVP, CIO David
Slide 4: Current TPX Management Track Record Since 2015
4 Current TPX Management Track Record Since 2015 (in millions, except percentages, multiples, stock price and per common share amounts) Tailing Twelve Months Ended December 31, 2015 Trailing Twelve Months Ended September 30, 2022 CAGR Total Growth Net Sales $3,151 $5,093 7% 62% Adjusted EBITDA2 $456
Slide 5: Award-Winning Products Spanning Key Retail Price Points
Award-Winning Products Spanning Key Retail Price Points VALUE PREMIUM $1,800 – $6,450 $2,200 – $9,000 $230 – $3,500 Private Label 5
Slide 6: World-Class Manufacturing Capabilities
World-Class Manufacturing Capabilities 34 NORTH AMERICAN FACILITIES | 37 INTERNATIONAL FACILITIES 6 Wholly owned (32) Tempur-Pedic® Facility (4) Joint venture (8) Licensee (27)
Slide 7: Successful Global Omni Distribution Platform
• Significant worldwide sales growth • Highly profitable and expanding rapidly • Direct customer relationships Ecommerce • Luxury Tempur-Pedic®, Dreams, and multi-branded showroom experiences • Operate over 650 stores worldwide and expanding direct customer relationships • Unlocks addressable market
Slide 8: Omnichannel Strategy
WHAT COMFORT SHOULD BE™ Providing an omnichannel experience through owned stores and e-commerce initiatives Sealy.com and Stearns&Foster.com DTC officially launched in 2022 • Sites are in their infancy and provide DTC growth opportunity over time as we test and optimize Omnichannel Strategy 8
Slide 9: Omnichannel Strategy: e-commerce fundamentals
WHAT COMFORT SHOULD BE™ Our e-commerce activities are based on three fundamentals: 1) Profitable growth, with high return on investment (vs. growth at any cost) 2) Providing consumers with a resource to research and educate themselves on our products • 72% of mattress purchases begin after the consu
Slide 10: Omnichannel Strategy: new products and digital marketing
WHAT COMFORT SHOULD BE™ We introduced new products into the market in 2022 including the Sealy FlexGrid and Sealy Naturals • Provides additional options for consumers seeking a grid-based or eco-friendly product online We use a comprehensive approach to digital marketing, including: • Branded search
Slide 11: Stearns & Foster: Path to a Billion Dollar Brand
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® Stearns & Foster 11 2023: OUR FIRST STEP ON THE PATH TO A BILLION DOLLAR BRAND AND BECOMING THE #1 LUXURY INNERSPRING BRAND
Slide 12: Stearns & Foster new product lineup
Stearns & Foster 12 A comprehensive new lineup of products designed to drive retailer and consumer interest • Modern, fresh, and inspirational aesthetics differentiated by collection • New, exclusive features for upgraded, indulgent comfort at the high end with sustainably sourced latex and cool to
Slide 13: Stearns & Foster advertising and brand awareness
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® Stearns & Foster 13 To increase brand awareness in advance of the new product launch, TSI spent record levels of advertising in 2021 and 2022 for S&F TSI will support continued growth in brand awareness through: • All new advertising and brand messaging • Na
Slide 14: Stearns & Foster 2023 New Product Launch
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® 14 2023 New Product Launch INNOVATION THAT PERFORMS
Slide 15: Tempur-Pedic: Deep, Undisturbed Sleep
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® Tempur-Pedic 15 Building on over three decades of innovation, Tempur-Pedic focuses on solutions to: DEEP, UNDISTURBED SLEEPTM Aches & Pains Sleeping Hot Snoring In March 2023, the next generation of Tempur mattresses launches with all new Tempur-Breeze In ad
Slide 16: All new Tempur-Breeze
WHAT COMFORT SHOULD BE™ Tempur-Pedic 16 All new Tempur-Breeze, elevating upon our industry-leading portfolio • Improved Tempur feels made possible by innovative, new Tempur formulation • Measurably Cooler Sleep with more all-night cooling power • Improved merchandising to Drive Mix and Average Selli
Slide 17: New Tempur Bases
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® Tempur-Pedic 17 Featuring exciting ergonomic and connected-sleep innovations, new Tempur Bases reimagine sleep • Improved Ergonomic designs with a new, proprietary Lumbar Support • Industry leading SleepTracker-AI, validated by Stanford Medical, now upgraded
Slide 18: International Markets – TEMPUR Brand Overview
18 International Markets – TEMPUR Brand Overview TEMPUR sold in 90+ countries • 22 countries served through wholly owned subsidiaries, the rest by third- party distributors Selling direct via own stores and online channels, and wholesale via furniture and bedding retailers Key markets include German
Slide 19: TEMPUR Historical Strategy & Performance
19 International Markets – TEMPUR Brand Historical Strategy & Performance • Employed super premium strategy • Managed for cash, markets harvested versus seeded for growth • Conservative approach to China strategy • Highly complex and individualized SKUs, and therefore highly complex and individualiz
Slide 20: 2023 Strategy – Mattresses
20 International Markets – TEMPUR Brand 2023 Strategy – Mattresses • Leveraging proven innovation that has met with success in the U.S. • Innovations: • Next generation/higher performance Tempur foams • Cooling yarns • Washable TEMPUR quilting • High airflow 3D fabric • To increase efficiency / redu
Slide 21: 2023 Strategy: Mattresses - Simplified SKU build
21 International Markets – TEMPUR Brand 2023 Strategy: Mattresses - Simplified SKU build Historical 2023 Common component platform: Late dedication:
Slide 22: Super Premium: Proven U.S Innovation
22 International Markets – Super Premium 2023 Strategy: Mattresses – Proven U.S Innovation • Continue to appeal to super premium consumer, better channel/customer differentiation
Slide 23: Incremental Price Points
23 International Markets – Incremental Price Points 2023 Strategy: Mattresses – Premium/Top Mainstream Price Points • Targeting new consumers
Slide 24: New Pillows
24 International Markets – New Pillows 2023 Strategy • Continue to grow super premium, while also targeting new distribution/consumers in premium/top mainstream price points
Slide 25: New Bed Bases
25 International Markets – New Bed Bases 2023 Strategy • Continue to grow super premium, while also targeting new distribution/consumers in premium/top mainstream price points TEMPUR ONE™/EASE™ TEMPUR ARC™
Slide 26: New Product Rollout
26 International Markets – New Product Rollout 2023 Strategy • All markets start their roll out in Q1 • Roll out completed in all markets during 2023 • EMEA - 70% • APAC - 20% • Third-Party Distributors - 10% • EBITDA benefit fully realized in 2024 Q1 Q4Q3Q2 EMEA APAC DISTRIBUTORS 2023 Roll Out Timi
Slide 27: Third Quarter and Trailing Twelve Month Performance
Three Months Ended Trailing Twelve Months Ended (in millions, except percentages and per common share amounts) September 30, 2022 September 30, 2021 % Change September 30, 2022 September 30, 2021 % Change Net Sales $1,283.3 $1,358.3 -5.5% $5,093.4 $4,628.2 10.1% Net Income $132.7 $177.4 -25.2% $529.
Slide 28: Balanced Capital Allocation Strategy
• Long-term target leverage ratio of 2.0 – 3.0x2 • Continue to invest in the business, including a new domestic foam-pouring plant to be operational in 2023 • Disciplined approach to shareholder returns includes a quarterly dividend • Repurchased 39% of shares outstanding since 2015 at an average pr
Slide 29: Environmental, Social, & Governance
Environmental, Social, & Governance 29
Slide 30: Investment Thesis
30 History of market share gains across global omnichannel distribution Seasoned, well-aligned management with proven track record Legacy of strong value creation via capital allocation including share buybacks and acquisitions The leading vertically integrated global bedding company with iconic bra
Slide 31: Thank you for your interest in Tempur Sealy International
For more information, please email: investor.relations@tempursealy.com 31 Thank you for your interest in Tempur Sealy International
Slide 32: Forward-Looking Statements; Use of Non-GAAP Financial Measures
32 Forward-Looking Statements Use of Non-GAAP Financial Measures 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 nett
Slide 33: Notes and Non-GAAP Definitions
33 1 Management estimates 2 Adjusted net income, EBITDA, adjusted EBITDA, adjusted EPS, leverage, free cash flow, and constant currency are non-GAAP financial measures. Please refer to the “Use of Non-GAAP Financial Measures” on a previous slide for more information regarding the definitions of adju
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