Leggett & Platt, Incorporated · NYSE:LEG
Leggett & Platt — Q2 2024 Earnings Presentation
28 slides from Leggett & Platt's earnings presentation, Aug 2, 2024
Slide 1: Second Quarter 2024 Summary Financial Information and Restructuring Update
Second Quarter 2024 Summary Financial Information and Restructuring Update August 1, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not historical in nature are “forward-looking.” These statements are identified either by the context in which they appear or by use of words such as “anticipate,” believe,” “estimate,” “expect,” “guidance,” “intend,” “may,” “plan,”
Slide 3: Financial Summary
Financial Summary
Slide 4: Overview
Overview o Q2 sales of $1.1 billion, an 8% decrease vs Q2-23 • Volume was down 4% • Raw material-related price decreases and currency impact reduced sales 4% o Q2 adjusted1 EBIT of $71 million, down $21 million vs adjusted1 Q2-23 EBIT o Adjusted1 EBIT margin 6.3%, down 120 bps vs Q2-23 adjusted1 EBI
Slide 5: Q2 2024 Financial Highlights
Q2 2024 Financial Highlights $’s in millions Reported Adj.1 Adj. Reported Adj.1 Adj. Change (except EPS) Q2-24 Q2-24 Q2-23 Q2-23 Sales $1,129 $1,129 $1,221 $1,221 (8%) EBIT (614) 685 71 96 (4) 92 (23%) EBIT Margin (54.4%) 6.3% 7.8% 7.5% (120 bps) EPS (4.39) 4.68 .29 .40 (.02) .38 (24%) Cash from Ope
Slide 6: Q2 2024 Sales & EBIT Bridge
Q2 2024 Sales & EBIT Bridge Sales: mln $’s % change 2nd Qtr 2023 $1,221 Approx volume decrease (48) (4%) Approx raw material-related pricing and currency impact (44) (4%) Organic Sales (92) (8%) Acquisitions — —% 2nd Qtr 2024 $1,129 (8%) EBIT: margin Adjusted1 2nd Qtr 2023 $92 7.5% Primarily lower v
Slide 7: Q2 2024 Earnings
Q2 2024 Earnings $’s in millions Reported Adj.1 Adj. Reported Adj.1 Adj. Change (except EPS) Q2-24 Q2-24 Q2-23 Q2-23 EBIT (614) 685 71 $96 ($4) $92 (23%) Net interest 20 20 22 22 Pre-tax earnings (634) 685 51 74 (4) 70 (27%) Income taxes (32) 44 11 20 (1) 19 Tax rate 22.3% 26.5% Net earnings (602) 6
Slide 8: Adjusted Working Capital
Adjusted Working Capital $’s in millions 6/30 3/31 6/30 2024 2024 2023 Cash & equivalents $307 $361 $272 Accounts receivable, net 649 635 703 Inventories, net 755 807 858 Other current assets 78 57 73 Total current assets 1,789 1,860 1,906 Current debt maturities (301) (304) (8) Current operating le
Slide 9: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA $’s in millions 6/30 3/31 6/30 2024 2024 2023 Long-term debt $1,702 $1,773 $2,016 Current maturities 301 304 8 Total debt 2,003 2,077 2,025 Less: Cash & equivalents (307) (361) (272) Net debt 1,696 1,715 1,752 EBIT, trailing 12 months (827) (117) 389 Depreciation & amorti
Slide 10: Cash Flow
Cash Flow $’s in millions 2nd Qtr YTD 2024 2023 2024 2023 Net earnings ($602) $54 ($571) $108 D&A 33 45 66 90 Impairment, write-offs & other 694 1 708 3 Other non-cash (50) — (52) 14 Changes in working capital: Accounts receivable (12) 11 (41) (27) Inventory 34 36 35 50 Other current assets (4) (7)
Slide 11: YTD 2024 Financial Highlights
YTD 2024 Financial Highlights $’s in millions Reported Adj.1 Adj. Reported Adj.1 Adj. Change (except EPS) 2024 2024 2023 2023 Sales $2,226 $2,226 $2,435 $2,435 (9%) EBIT (551) 686 135 185 (4) 181 (26%) EBIT Margin (24.8%) 6.1% 7.6% 7.5% (140 bps) EPS (4.16) 4.68 .52 .79 (.02) .77 (32%) Cash from Ope
Slide 12: YTD 2024 Sales & EBIT Bridge
YTD 2024 Sales & EBIT Bridge Sales: mln $’s % change YTD 2023 $2,435 Approx volume decrease (121) (5%) Approx raw material-related pricing and currency impact (88) (4%) Organic Sales (209) (9%) Acquisitions — —% YTD 2024 $2,226 (9%) EBIT: margin Adjusted1 YTD 2023 $181 7.5% Primarily lower volume an
Slide 13: YTD 2024 Earnings
YTD 2024 Earnings $’s in millions Reported Adj.1 Adj. Reported Adj.1 Adj. Change (except EPS) 2024 2024 2023 2023 EBIT ($551) $686 $135 $185 ($4) $181 (26%) Net interest 41 41 43 43 Pre-tax earnings (592) 686 94 142 (4) 138 (32%) Income taxes (21) 44 22 34 (1) 33 Tax rate 23.7% 24.1% Net earnings (5
Slide 14: 2024 Sales Guidance Lowered; Adjusted EPS Guidance Narrowed
2024 Sales Guidance Lowered; Adjusted EPS Guidance Narrowed o Sales: $4.3–$4.5 billion; down 5% to 9% versus 2023 (vs prior guidance of $4.35 –$4.65 billion) • Decrease primarily due to continued weak demand in residential end markets and global automotive market volatility as well as continued defl
Slide 15: 2024 Guidance (continued)
2024 Guidance (continued) o Depreciation and amortization ~$135 million o Net interest expense ~$80 million (vs prior guidance of $85 million) o Tax rate ~24% (vs prior guidance of ~25%) o Operating cash $300–$350 million o Cap-ex ~$110 million (vs prior guidance of $100–$120 million) o Dividends ~$
Slide 16: Restructuring Update
Restructuring Update
Slide 17: Restructuring Initiatives Progress
Restructuring Initiatives Progress Bedding Products Home Furniture Flooring Products Hydraulic Cylinders ✓ All U.S. Spring production ✓ Restructuring activity ✓ Closed one production ✓ Identified and initiated shifted to remaining complete line and transferred manufacturing locations ✓ Closed one pl
Slide 18: Restructuring Plan Is On Track
Restructuring Plan Is On Track o EBIT Benefit: • Annualized EBIT benefit of $40–$50 million realized after initiatives are fully implemented in late 2025 • Approximately $10–$15 million EBIT benefit expected in 2024 (vs prior estimate of $5–$10 million) • $3 million benefit realized in 2Q/YTD 2024 o
Slide 19: Segment Detail
Segment Detail
Slide 20: Q2 2024 Segment Summary
Q2 2024 Segment Summary Q2-24 Q2-24 ∆ vs Q2-23 Q2-24 ∆ vs Q2-23 Organic Adj. EBIT 2 Adj. EBIT 2 Adj. EBITDA 2 Adj. EBITDA 2 Sales Margin Margin Margin Margin Growth 1, 2 Bedding Products (13%) 0.1% -430 bps 3.4% -610 bps Specialized Products —% 11.1% +80 bps 14.3% +80 bps Furniture, Flooring & (6%)
Slide 21: Bedding Products
Bedding Products Trade Sales mln $’s % change 2nd Qtr 2023 $504 Organic Sales 1 (66) (13%) 2nd Qtr 2024 $438 (13%) 1 Lower volume (7%) and raw material-related selling price decreases (6%) mln $’s EBIT EBIT D&A EBITDA EBITDA margin margin Adjusted 2 2nd Qtr 2023 $22 4.4% $26 $48 9.5% Change 3 (22) (
Slide 22: Bedding – Key Points
Bedding – Key Points o Q2 organic sales were down 13%: • Volume decreased 7% from the earlier than expected loss of a customer and continued demand softness in U.S. and European bedding markets partially offset by higher trade rod sales • Raw material-related selling price decreases reduced sales 6%
Slide 23: Specialized Products
Specialized Products Trade Sales mln $’s % change 2nd Qtr 2023 $321 Organic Sales 1 (1) —% 2nd Qtr 2024 $320 —% 1 Raw material-related selling price increases were offset by currency impact mln $’s EBIT EBIT D&A EBITDA EBITDA margin margin 2nd Qtr 2023 $33 10.3% $10 $43 13.5% Change 2 2 — 2 Adjusted
Slide 24: Specialized – Key Points
Specialized – Key Points o Q2 organic sales were flat: • Volume was flat with growth in Aerospace offset by declines in Hydraulic Cylinders and Automotive • Raw material-related selling price increases were offset by currency impact o Sales trends: Q2 Q2 Organic Sales Volume1 Automotive (2%) (1%) Ae
Slide 25: Furniture, Flooring & Textile Products
Furniture, Flooring & Textile Products Trade Sales mln $’s % change 2nd Qtr 2023 $396 Organic Sales 1 (25) (6%) 2nd Qtr 2024 $371 (6%) 1 Lower volume (3%) and raw material-related price decreases (3%) mln $’s EBIT EBIT D&A EBITDA EBITDA margin margin Adjusted 2 2nd Qtr 2023 $36 9.1% $6 $42 10.5% Cha
Slide 26: Furniture, Flooring & Textile – Key Points
Furniture, Flooring & Textile – Key Points o Q2 organic sales were down 6%: • Volume decreased 3% primarily from declines in Geo Components and continued weak demand in residential end markets • Raw material-related selling price decreases reduced sales 3% o Sales trends: Q2 Q2 Organic Sales Volume1
Slide 27: Contact Us for Additional Information
CONTACT US FOR ADDITIONAL INFORMATION Ticker: LEG (NYSE) Website: www.leggett.com Email: invest@leggett.com Phone: (417) 358-8131 Cassie Branscum Kolina Talbert Vice President, Investor Relations Manager, Investor Relations Webcast replay and Company Fact Book are available at www.leggett.com
Slide 28: Non-GAAP Adjustments
Non-GAAP Adjustments $’s in millions Q2-24 Q2-23 YTD YTD (except EPS) 2024 2023 Non-GAAP Adjustments ($’s)1,2 Goodwill impairment 3 675 — 675 — Restructuring, restructuring-related and impairment charges 4 11 — 22 — CEO transition compensation costs 5 4 — 4 — Gain on sale of real estate 3 (5) — (13)