Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (November 2017)
23 slides from Somnigroup International's investor presentation, Nov 29, 2017
Slide 1: Tempur Sealy International, Inc. Investor Presentation
1 November 2017 “Success is strengthening our Iconic Brands while driving higher ROIC through focused execution” Tempur Sealy International, Inc. (TPX)
Slide 2: Global Bedding Products Company Investment Merits
2 Global Bedding Products Company Investment Merits Tempur Sealy is the premium market leader… • Strong brands across a complete portfolio of products • Global manufacturing foot print • Structural growth industry, with high ROIC and free cash flow(1) • Industry is relatively concentrated in US and
Slide 3: Bedding Industry Market Opportunity
3 Bedding Industry Market Opportunity
Slide 4: Growing Global Mattress Industry
4 Growing Global Mattress Industry $ in billions Non-US world consumption data is impacted by exchange rate fluctuations, please see footnote 5 for source. US mattress sales growing at a 6% CAGR over last twenty years driven by consumer shift to higher priced mattresses Non‐US mattress sales gre
Slide 5: Tempur Sealy Has Well Established Global Brands
5 Tempur Sealy Has Well Established Global Brands Tempur‐Pedic • Nothing precisely adapts, supports and aligns like Tempur‐Pedic for life‐changing sleep Stearns & Foster • Finest beds made with exceptional materials and unparalleled craftsmanship Sealy • Featuring Posturepedic Technology providing s
Slide 6: Complete Portfolio Of Products
6 Complete Portfolio Of Products
Slide 7: New Products for 2017
7 New Products for 2017 The new Sealy featuring Posturepedic Technology™ provides targeted support where you need it most. Celebrating 25 years in sleep innovation with the limited‐edition Tempur‐Legacy mattress. Launching internationally, the new Tempur‐Pedic Flagship line features improved aesthet
Slide 8: Worldwide Direct Business
8 $‐ $10 $20 $30 $40 $50 $60 $70 1Q'16 1Q'17 2Q'16 2Q'17 3Q'16 3Q'17 Direct Channel International North America Worldwide Direct Business Company Owned StoresWeb Call Center $ in millions +43% +39% +48%
Slide 9: Global Manufacturing Footprint
9 Global Manufacturing Footprint North American and International operating models support domestic demand and global growth Driving for operational improvements on key metrics like product quality and on‐time delivery 23 North American Facilities 34 International Facilities Wholly owned and Joi
Slide 10: Third Quarter Highlights
10 Third Quarter Highlights Net Sales in North America Declined from Last Year, Tempur‐Pedic Sales Increased 26% Excluding Mattress Firm Direct Sales in North America Increased 149%, Driven by Web Sales Increase of over 200% 3Q 2017 3Q 2016 %Change %Change Constant Currency(1) Net Sales $724.8 $
Slide 11: 2017 Plan and Near Term Priorities
11 2017 Plan and Near Term Priorities Adjusted EBITDA(7): $435 ‐ 450 million 2018 Comments 2017 Financial Targets(8) and Assumptions Grow Market Share around the Globe Robust Product Innovation Pipeline Significant Advertising Investments Operational Efficiencies/Margin Expansion Key Success Factors
Slide 12: Growing Revenues in North America
12 Growing Revenues in North America What gives us confidence to recapture: Premier portfolio of branded beds Over 94% of Tempur‐Pedic owners would recommend the product(9) Sealy has one of the highest brand awareness of any US mattress brand(9) Stearns & Foster had strong growth in 2016 & 2
Slide 13: Tempur Sealy's Variable Cost Structure
13 Tempur Sealy’s Variable Cost Structure(2) Current plan is to maintain cost structure to support recapturing the majority of lost sales with the expectation of lower operating efficiencies in the short term Tempur Sealy’s total cost structure is highly variable; approximately 75% in total Te
Slide 14: Debt Structure
14 Debt Structure In the near term, we anticipate EBITDA trailing down and using some of our cash flow to pay down debt Leverage ratio target: 3.5x Fixed rate debt represents ~60% of total debt; capital structure contains long‐dated maturities Continued expansion to share repurchase program;
Slide 15: Thank you for your interest in Tempur Sealy International
15 Thank you for your interest in Tempur Sealy International Improving the Sleep of More People Every Night, All Around the World For more information please email: investor.relations@tempursealy.com
Slide 16: Appendix
16 Appendix
Slide 17: Aspirational Plan
17 Aspirational Plan(12) On August 7, 2017, the Company implemented a new Aspirational Program in the form of performance restricted stock units tied to challenging performance targets. This Aspirational Program builds on the challenging goals and the structure established in our original Aspirati
Slide 18: Forward-Looking Statements
18 Forward‐Looking Statements This investor presentation contains "forward‐looking statements," within the meaning of the federal securities laws, which include information concerning one or more of the Company's plans, objectives, goals, strategies, and other information that is not historical info
Slide 19: Footnotes
19 Footnotes 1. This is a non‐GAAP financial measure. Please refer to “Use of Non‐GAAP Financial Measures and Constant Currency Information” 2. Management estimates. 3. Based on the Company's results for fiscal 2016 or 2017, as applicable. For more information please refer to the Annual Report on Fo
Slide 20: Use of Non-GAAP Financial Measures and Constant Currency Information
20 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, adjusted EPS, EBITDA, adjusted EBITDA, and consolidated funded debt less qualified
Slide 21: Adjusted EBITDA Reconciliation
21 Adjusted EBITDA Reconciliation (in millions) September 30, 2017 September 30, 2016 September 30, 2017 GAAP Net income 44.6$ 77.8$ 166.4$ Interest expense, net 32.0 20.5 96.4 Income taxes 20.3 33.7 74.6 Depreciation and amortization 26.9 23.0 89.1 EBITDA 123.8 155.0 426.5 Adjustments Customer term
Slide 22: Leverage Reconciliation
22 Leverage Reconciliation (in millions, except ratio) 3Q15 3Q16 3Q17 Total debt(1) 1,486.3$ 1,696.0$ 1,762.9$ Plus: Letters of credit outstanding 19.8 19.8 22.4 Consolidated funded debt 1,506.1 1,715.8 1,785.3 Less: Domestic qualified cash(2) 40.0 33.8 17.2 Less: Foreign qualified cash(2) 19.1 33.1
Slide 23: Adjusted Net Income and Adjusted EPS
23 Adjusted Net Income and Adjusted EPS (in millions, except per share amounts) September 30, 2017 September 30, 2016 GAAP net income 44.6$ 77.8$ Latin American subsidiary charges (1) 11.7 ‐ Other costs (2) 3.0 ‐ Tax adjustments (3) (4.4) ‐ Adjusted net income 54.9 77.8 Adjusted earnings per common
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