Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (May 2021)
41 slides from Somnigroup International's investor presentation, May 7, 2021
Slide 1: Tempur Sealy International, Inc.
© 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: Who We Are
© 2021 Tempur Sealy International, Inc.2 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. Utilizing over a century of knowledge and industry-leading innovation, we deliver award
Slide 3: Industry, Consumer and Value Creation Drivers
© 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 pro
Slide 4: Competitive Advantages and Q1 2021 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 March 31st 2021 2020 Reported % Chan
Slide 5: 2021 Financial Targets and Assumptions
© 2021 Tempur Sealy International, Inc. 2021 Financial Targets and Assumptions Depreciation & Amortization $160M-$180M Capital Expenditures $125 to $140M (includes $75M maintenance) Interest Expense $50 to $55M U.S. Federal Tax Rate 26% Diluted Share Count 205M shares o 2021 full year sales growth t
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: Wholesale
© 2021 Tempur Sealy International, Inc.8 Wholesale • 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 our portfolio of brands T
Slide 9: Winning Online Through Our Wholesale and Direct Channels
© 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 10: Direct to Consumer
© 2021 Tempur Sealy International, Inc. $- $20 $40 $60 $80 $100 $120 $140 $160 $180 Q1 2019 Q1 2020 Q1 2021 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 62% in the
Slide 11: 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 12: International Markets
© 2021 Tempur Sealy International, Inc. International Markets 12 • 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 13: Successful International Joint Ventures
© 2021 Tempur Sealy International, Inc.13 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 14: Brands & Products
© 2021 Tempur Sealy International, Inc. Brands & Products 14 © 2021 Tempur Sealy International, Inc.
Slide 15: 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 16: Strong Brand Awareness and Marketing Budget
© 2021 Tempur Sealy International, Inc.16 TPX brands are supported by a $450 million global marketing budget with STRONG BRAND AWARENESS Brand Portfolio 45% 55% 65% 75% Apr-20 Jul-20 Oct-20 Jan-21 Tempur-Pedic U.S. Brand Awareness
Slide 17: 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 America(3) and the most trusted mattress brand in
Slide 18: Tempur-Ergo Smart Bases
© 2021 Tempur Sealy International, Inc. With AUTOMATIC response to snoring 18 •Heart Rate •Breathing Rate •Snore Detection Tempur-Ergo® Smart Bases 100% PASSIVE SENSORS Powered by
Slide 19: Tempur Sealy Compressed Offerings
© 2021 Tempur Sealy International, Inc. Tempur Sealy Compressed Offerings Compressed bedding sales grew over 100% in Q1’21 19 TEMPUR-Cloud®COCOON by Sealy™Sealy Posturepedic® Foam Value Mid-Level Premium Our compressed bedding products are an option for consumers shopping online through our direct b
Slide 20: World-Class Manufacturing Capabilities
© 2021 Tempur Sealy International, Inc. World-Class Manufacturing Capabilities 20 © 2021 Tempur Sealy International, Inc.
Slide 21: World-Class Manufacturing Capabilities
© 2021 Tempur Sealy International, Inc. 29 North American Facilities 37 International Facilities Wholly owned (29) Joint Venture (8) Licensee (26) World-Class Manufacturing Capabilities Tempur-Pedic Facility (3) 21 o 66 manufacturing facilities o 16 million square feet of manufacturing and distribut
Slide 22: Expanding Manufacturing Capacity
© 2021 Tempur Sealy International, Inc.22 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 23: Industry-Leading Balance Sheet & Cash Flow
© 2021 Tempur Sealy International, Inc. Industry-Leading Balance Sheet & Cash Flow 23 © 2021 Tempur Sealy International, Inc.
Slide 24: Strong Balance Sheet & Cash Flow
© 2021 Tempur Sealy International, Inc.24 Strong Balance Sheet & Cash Flow 1.00x 2.00x 3.00x 4.00x 1Q20 2Q20 3Q20 4Q20 1Q21 Leverage(2) $0 $150 $300 $450 $600 $750 2016 2017 2018 2019 2020 TTM 2021 Full Year Free Cash Flow(2) 0% 20% 40% 60% 80% 2016 2017 2018 2019 2020 TTM 2021 Full Year Free Cash F
Slide 25: Balanced Capital Allocation Strategy
© 2021 Tempur Sealy International, Inc. • Long-term target leverage ratio of 2.0 – 3.0x(2) • Continue to invest in the business • Disciplined approach to shareholder returns • Expects to repurchase at least 6% of shares outstanding in 2021 (5) • Initiated a quarterly cash dividend in Q1 2021 • Maint
Slide 26: Environmental, Social and Corporate Governance
© 2021 Tempur Sealy International, Inc.26 Environmental, Social and Corporate Governance © 2021 Tempur Sealy International, Inc.
Slide 27: 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 27
Slide 28: 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 29: 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 $11.5 million dollars over the last 5 years, and - 17,500+ products to aid in the COVID-19 crisis. Ranked a ‘S
Slide 30: Value Creation Drivers
© 2021 Tempur Sealy International, Inc.30 Value Creation Drivers Bedding market is a stable and growing industry globally with strong returns Omni-channel distribution strategy to be where the consumer wants to shop Importance of bedding will continue as consumers connect health and wellness w
Slide 31: 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 31
Slide 32: Appendix
© 2021 Tempur Sealy International, Inc. Appendix © 2021 Tempur Sealy International, Inc. 32
Slide 33: 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, adjusted EBITDA for 2021, and adjusted EPS for 2021 and subsequen
Slide 34: 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, adjusted EPS, EBITDA, adjusted EBITDA per cred
Slide 35: Debt Structure
© 2021 Tempur Sealy International, Inc. Debt Structure o At 3/31/2021, leverage(2) was 1.9x, slightly below the target range of 2.0-3.0x(6) o Capital structure contains long-dated maturities Rating Agency Ratings • Fitch : Stable outlook, reaffirmed BB as of April 2021 • S&P: Positive outlook. Reaff
Slide 36: Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. Adjusted EBITDA Reconciliation © 2021 Tempur Sealy International, Inc. 36
Slide 37: TTM Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. TTM Adjusted EBITDA Reconciliation © 2021 Tempur Sealy International, Inc. 37
Slide 38: Adjusted Net Income and Adjusted EPS
© 2021 Tempur Sealy International, Inc. Adjusted Net Income and Adjusted EPS 38
Slide 39: Leverage Reconciliation
© 2021 Tempur Sealy International, Inc. Leverage Reconciliation 39 *For a reconciliation of leverage to total debt, net for reporting periods in the years 2016-2021, please refer to the Company’s SEC filings.
Slide 40: 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 40 *For a reconciliation of adjusted EBITDA per credit facility to net income for reporting periods in the years 2016-2021, please refer to the Company’s SEC filings.
Slide 41: 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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