Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Pedic International — Investor Presentation (May 2005)
28 slides from Somnigroup International's investor presentation, May 13, 2005
Slide 1: Investor Presentation May 2005
Exhibit 99.1 Investor May 2005Presentation
Slide 2: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking expenditures, “believes,” various There are filings obligation Non-GAAP This the directly 1 beyond most presentation are with assumptions. comparable directly atoand the number the Financial update financing Company’s Securities variations comparable may includes Statements of financ
Slide 3: Company Overview
Company Bob 2 Trussell Overview Chief Executive Officer
Slide 4: Leading Global Premium Bedding Business
Business Leading Global Tempur Premium – 3 Temperature Proprietary #1 43.4% Sales Recommended Fastest-growing Represented visco-elastic sales in products producer CAGR Review segment 60primarily countries formula ~24% sensitive inby provide market of segment (>$1,000) the more premium ofand four und
Slide 5: Investment Highlights
Investment Global Superior Favorable 4 brand product secular Highlights recognition offering demand trends Diversified business model Track record of profitable growth
Slide 6: Industry & Business Overview
Industry Bryant Thomas 5 & Business President Overview
Slide 7: Business Focus and Growth Strategy
Business Focus Leverage Further penetration Continue Drive in Investment Expand employee 6 the U.S. new awareness onPenetrate manufacturing Strategy Core premium to vertically-integrated, base store to of Build Support the Products asgrowth of Existing growth healthcare Global mattress Tempur Growth
Slide 8: Attractive Consumer Growth Trajectory – U.S. Mattresses
Attractive Consumer – U.S. 45,000 15,000 Dollar $6,000 $7,000 1982 Units Source: 7 Aging Increased Replacement Units Dollars Mattresses 1985 Shipped Value 40,000 10,000 $5,000 increased International population increased Industry demand 1988 housing awareness (mm’s) (000’s) Dollar 35,000 5,000 $4,00
Slide 9: Tempur-Pedic Addresses the Fastest Growing U.S. Market Segment
Tempur-Pedic U.S. – The Over Under Tempur’s Source: Other 8 Over $500 Under premium market $1,000 $500 $1,000 –International $500 $1,000 Addressable addressable $500—$1,000 segments: market 35% Addresses 24% 41% Sleep grew market: Market Fastest 36% Products $3.6 in Growing 2004 billion Association,
Slide 10: U.S. Mattress Industry Seasonality
US Q2 Percent 30% 27% 24% Q1 Source: 9 Mattress 20% 25% 24% Q3 of International 10% total Q4Seasonality 0% 2002-2004 Sleep Quarterly Products Association, Average 2004Annual Report
Slide 11: Diversity Across Products
Diversity Mattresses Pillows Adjustable 2004 – 10Adjustable Other: Sales: $35 Across Beds $433.3 $138.1 $113.5 Beds: – $150 /Products Other $1,300 million –(16.6% (63.3% (20.1% $2,800of Total) Retail Price Price: $70 $1,000 – $165 – $3,000
Slide 12: Diversity Across Channels
Diversity Total % 90% 7.2% 76.1% 21.5% North 52.8% International Healthcare 2001 Retail Third Direct Note: 11 Share 80% 2004 Net 5.3% Party Channel American 79% 70% Healthcare 17% 4% 71.5% 100% of Sales 70% 1Q05 2% 13% 10.6% 13% Distributors Sales Net Splits 60% by Net Sales Channels 5.7% Channel 50
Slide 13: Focus on New Product Development
Focus – Deluxe 1. sales(1) 12 CelebrityBed Supreme Body Launched For quarter onMattressTM Pillow Core new Pillow new ended product –Products –supports EuroBed $3,000 – softest, and March development CelebrityBedTM price the by31, most stomach, Tempur-Pedic point 2005 luxurious andhips, product now p
Slide 14: Robust Growth in U.S. Retail Channel
Robust Sales Average Total Overall ~$ U.S. ($ Net Store 4,000 4,400 2,713 1,899 $24 13 4Q021Q032Q033Q034Q031Q042Q043Q044Q041Q05 in 5.6 Sales $20 Furniture millions) doors Count to 3,500 4,100 $71 2,018 billion Retail U.S. established $15 floor $71 targeted 3,000 3,900 $52 4,500 $100 mattress in Chan
Slide 15: Cost Effective Advertising Campaign
Cost Effective Tempur’s Television High Magazines Radio Includes Over Newspapers 14 2.2 756 581 74 profile million national billion million national events: Advertising “impressions” spots “impressions” advertising TheonApprentice, such to Build campaign per shows permonth Global month Oscar’s, as:d
Slide 16: Continue to Build Global Brand
Continue Clear, 15 product-oriented to Build Global advertising Brand and credible consumer industry endorsement communicate the Tempur proposition
Slide 17: Success Building Brand Awareness
Success ($ $45 $21 $33 2001 Tempur-Pedic % 90% 6.0% 26.0% 44.0% 60.0% 71.0% 2002 Unaided Note: 1. 16 Source: in$15 Share $40 80% millions) 2002 2003 4.0% Data in $35 Aided 100% 70% Northwestern Building 2003 2004 represents 1.0% $30 U.S. $50 60% 2004 2005 2.0% $25 Ad Brand Our 50% $20 brand Spending
Slide 18: Recommending Retail Customers
Recommending Almost 18% 42% 66% 95% Retail 0% 20% 40% 60% 80% 100% Recommended 1-5 6-10 11+ Purchase Q. How Source: 17 Have times times of 17% times many retail all Independent you resulted of times? recommended customers our Tempur-Pedic Tempur-Pedic customers from Has survey anyone recommendation
Slide 19: Significant Barriers to Entry
Significant Ahead – 18Two Proprietary 40 Over Brand Superior Marketing Distribution Established Medical design R&D in $100 awareness market endorsements quality Barriers lead and centers muscle million chemical relationship breadth time process acceptance product to dedicated capital inMarket formul
Slide 20: Financial Review
Financial Dale SVP 19 and Williams Chief ReviewFinancial Officer
Slide 21: Growing Net Sales and Operating Income
Growing Net $600 43.4 $298.0 $479.1 Historical ($ Operating $160 61% $151.0 2000 1. ended grants 20 Includes inSales % CAGR millions) $500 $140 2001 December and $221.5 $222.4 $97.1 CAGR Net $700 Net Operating Income acceleration $400 $120 2002 $9.8 Sales $49.4 Sales $162.0 million $300 $100 2003 31
Slide 22: Mattress Sales Growth Drivers
New Increasing Strong Successful 65% ($ Mattresses $450 52.9% $268.2 Mattress 2000 21 in growth millions) stores $400 2001 CAGR acceptance $156.0 Sales slots $350 2002 direct Key in $154.1 1Q05 Growth per $300 2003 marketing ofstore our $250 $116.8 2004 Driver high $200 1Q05 initiatives $79.3 MSRP $
Slide 23: Growing Pro-Forma Earnings per Share
Growing 2003 $0.55 Pro-Forma ($ $1.00 1Q04 $0.16 49% 69% 1. 2. 22 GAAP in 1QEPS EPS millions) 2004 1Q05 $0.90 Earnings full-year 1Q Growth EPS $0.80 Growth EPS of$0.70 EPS $0.11 of$0.60 $0.39 in 1Q2004 $0.50 in 2003 $0.40 andand $0.26 $0.30 $0.73 in$0.20 1Q in 2004 2005 $0.10 for for $0.00 an a 127%
Slide 24: Updated 2005 Guidance
Updated Prior –Pro-forma – The the 23Revenue Pro-forma Company’s Company 2005 FYrange: ~ Guidance EPS EPS 2005 $880 updated control. ~range: $880—$890 Guidance million $1.10its GAAP $1.10—$1.13 earnings Guidance million EPSper includes onshare earnings AprilUpdated amortization 21,per 2005 share FYa
Slide 25: Investment Highlights
Investment Global Superior Favorable 24 brand product secular Highlights recognition offering demand trends Diversified business model Track record of profitable growth
Slide 26: Supplemental Information
Supplemental To expense unearned share excludes net outstanding per prepayment The ongoing 25 further of share Company includes tax, of costs these includes, non-cash provide for $0.01 10-1/4% penalties the Information and $0.01 believes expenses. and quarter therefore investors and stock-based of S
Slide 27: Reconciliation
Reconciliation (Amounts Year December GAAP Stock-based Secondary Loss Proforma 1. respectively, 2. The costs 26 Amounts Pro Company Ended on and forma Net debt therefore Net are 31, public Income presented Quarter compensation and net extinguishment Income per 2004 believes ofincome $0.05 Net offeri
Slide 28: Investor Presentation May 2005
Investor May 2005Presentation
Tempur Pedic International — Investor Presentation (May 2005) on 6ix