Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Pedic International — Investor Presentation (August 2005)
24 slides from Somnigroup International's investor presentation, Aug 3, 2005
Slide 1: Investor Presentation August 2005
Exhibit 99.1 Investor Presentation August 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain “forward-looking statements” which include information concerning the Company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical informatio
Slide 3: Industry & Business Overview
Industry & Business Overview Thomas Bryant President
Slide 4: Business Review
Business Review Leading producer of premium mattresses and pillows Proprietary formula and manufacturing process #1 visco-elastic market share Global sales under the “TEMPUR™” and “Tempur-Pedic ™” trademarks 43.4% CAGR in the four years ending December 31, Sales in 60 countries through 4 diverse cha
Slide 5: Business Strategy
Business Strategy Focus on Core Products Focus on premium mattress and pillow franchise Leverage vertically-integrated, proprietary manufacturing process Continue to improve and expand product line (e.g., Euro & Original) Further Penetrate Existing Channels Drive new store growth of the U.S. and Int
Slide 6: Diversity Across Products
Diversity Across Products Mattresses 1H05 Sales: $284.9 million (68.6% of Total) Queen Retail Price Point: $1,199 – $2,999 Pillows 1H05 Sales: $61.9 million (14.9% of Total) Retail Price: $70 – $165 Adjustable Beds / Other 1H05 Sales: $68.2 million (16.4% of Total) Retail Price: – Adjustable Beds: $
Slide 7: Attractive Industry Growth Dynamics
Attractive Industry Growth Dynamics Consumer demand for premium mattresses driven by: Increased housing purchases, especially by the baby-boomer generation Aging population with greater disposable income seeking health and sleep benefits Increased awareness of the health benefits of a better quality
Slide 8: Tempur-Pedic Addresses Fastest Growing Segment
Tempur-Pedic Addresses Fastest Growing Segment U.S. market segments: Over $1,000 24% $500 – $1,000 41% Under $500 35% Tempur-Pedic’s addressable market: $3.6 billion The premium market grew 36% in 2004 $5.6 Billion U.S. 2004 Market by Segment Tempur-Pedic’s Addressable Market Other Source: Internati
Slide 9: Seasonality in U.S. Retail Furniture
Seasonality in U.S. Retail Furniture Seasonally stronger quarters: 1Q: Pent-up demand from holiday season 3Q: Families move over the summer; pent-up demand from 2Q Seasonally slower quarters: 2Q: Summer and outdoors activities 4Q: Holiday shopping, less focus on furniture Sales Seasonality by Quarte
Slide 10: Robust Retail Channel Growth
Robust Retail Channel Growth Sales to established accounts increased 49% in 2004 – expect 30-35% in 2005 Average floor slots per store increased from 1.7 to 2.2 in 2004, up to 2.4 in 2Q05 Total doors targeted in U.S.: 10,000 Overall U.S. mattress market: ~$5.6 billion in 2004 U.S. Furniture Retail N
Slide 11: New Mattress Introductions
New Mattress Introductions The EuroBed by Tempur-Pedic™ Brought to U.S. following great performance in Europe Striking design elements Integrated two piece sleep system The OriginalBed by Tempur-Pedic™ Significantly expands addressable market Fills important price gap in premium category Outstanding
Slide 12: New Pillow Introductions
New Pillow Introductions Domestic The BodyPillow by Tempur-Pedic™ Supports stomach, hips, back and shoulders International September 2005 re-launch in Japan New packaging and formulation Follows successful futon roll-out
Slide 13: Cost Effective Advertising to Build Global Brand
Cost Effective Advertising to Build Global Brand Tempur-Pedic’s national advertising campaign drives over 3.6 billion consumer “impressions” per month Television Over 2.2 billion “impressions” per month High profile events: The Apprentice, Oscar’s, Emmy’s, Grammy’s Magazines Over 756 million “impres
Slide 14: Continue to Build Global Brand
Continue to Build Global Brand Clear, product-oriented advertising and credible consumer industry endorsement communicate the Tempur-Pedic proposition
Slide 15: Recommending Tempur-Pedic
Recommending Tempur-Pedic Almost all of our customers have recommended Tempur-Pedic, with about two-thirds reporting that they recommended Tempur-Pedic one to five times. 42% of retail customers report that someone purchased a Tempur-Pedic mattress as a result of their recommendation. Source: Indepe
Slide 16: Financial Review
Financial Review Dale Williams SVP and Chief Financial Officer
Slide 17: Growing Net Sales and Profitability
Growing Net Sales and Profitability Historical Net Sales ($ in millions) 43.4% CAGR 1H05 Historical Operating Income(1) ($ in millions) 61.1% CAGR 1H05 1. Includes $9.8 million in non-cash charges for the two months ended December 31, 2002 relating to the step-up in inventory as of November 1, 2002
Slide 18: Mattresses Key Growth Driver
Mattresses Key Growth Driver New stores Increasing slots per store Strong acceptance of our high MSRP products Successful direct marketing initiatives 53% growth in 1H05 Mattresses ($ in millions) 52.9% CAGR 1H05
Slide 19: Growing Earnings
Growing Earnings Pro-Forma EPS 49% EPS Growth Pro-Forma EPS ($ in millions) 1H04 1H05 50% 1H EPS Growth 1 GAAP full-year EPS of $0.39 in 2003 and $0.73 in 2004 for an 87% GAAP full-year EPS growth 2 GAAP 1H EPS of $0.28 in 1H 2004 and $0.50 in 1H 2005 for a 79% GAAP 1H EPS growth
Slide 20: FY 2005 Guidance
FY 2005 Guidance Revenue range: $880 - $890 million Pro-forma EPS range: $1.10 - $1.13 Confirmed July 21, 2005 The Company confirmed its Guidance on July 21, 2005 and notes that its expectations are based on information available at that time and are subject to changing conditions, many of which are
Slide 21: Investment Highlights
Investment Highlights Global brand recognition Superior product offering Favorable secular demand trends Diversified business model Track record of profitable growth
Slide 22: Supplemental Information
Supplemental Information To further provide investors useful information, pro forma net income per share is presented and represents the Company’s GAAP net income per share before non-cash stock-based compensation expense of $0.01 and $0.03 for the year to date period ended June 30, 2005 and 2004, r
Slide 23: Reconciliation of Net Income per Share to Pro forma Net Income per Share
Reconciliation of Net Income per Share to Pro forma Net Income per Share (Amounts are per Share) Year Ended Year to Date December 31, December 31, June 30, June 30, 2004 2003 2005 2004 GAAP Net Income per Share, Diluted $ 0.73 $ 0.39 $ 0.50 $ 0.28 Stock-based compensation expense $ 0.05 $ 0.05 $ 0.0
Slide 24: Investor
Investor Presentation August 2005
Tempur Pedic International — Investor Presentation (August 2005) on 6ix