Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (May 2017)
22 slides from Somnigroup International's investor presentation, May 12, 2017
Slide 1: Tempur Sealy International, Inc. (TPX) May 2017
1 May 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 • Industry is relatively concentrated in US and fra
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 6 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 Sealy Conform Adjustable bases Cocoon by Sealy Pillows TEMPUR-Cloud Stearns & Foster TEMPUR-Flex Sealy Hybrid Innerspring Hybrid Tempur Material Other Specialty Sealy Response TEMPUR-Contour Stearns & Foster
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 Worldwide Direct Business Company Owned Stores Web Call Center
Slide 9: Global Manufacturing Foot Print
9 Global Manufacturing Foot Print 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
Slide 10: First Quarter Highlights
10 First Quarter Highlights Excluding Mattress Firm, sales in North America grew over 13% in the first quarter Direct Sales in North America Increased 130%, Driven by Web Sales Increase of 200% 1Q 2017 1Q 2016 %Change %Change Constant Currency(1) Net Sales $722.1 $721.0 0.2% 0.7% Net Income 33.9
Slide 11: 2017 Plan and Near Term Priorities
11 2017 Plan and Near Term Priorities Adjusted EBITDA(6)(8): $400 - 450 million International Expansion Channel Expansion Growth Opportunities 2017 Financial Targets(6) and Assumptions Recapture Market Share in North America Expand Market Share Internationally Sealy Margin Expansion Successful New P
Slide 12: Recapturing Revenues in North America
12 Recapturing 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
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
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 represent ~60% of total debt; capital structure contains long dated maturities Continued expansion to share repurchase program; Authori
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: Forward-Looking Statements
17 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 are not historical inf
Slide 18: Footnotes
18 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 2015 or 2016, as applicable. For more information please refer to the Annual Report on Fo
Slide 19: Use of Non-GAAP Financial Measures and Constant Currency Information
19 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 20: Adjusted EBITDA Reconciliation
20 Adjusted EBITDA Reconciliation (in millions) March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016 Net income 33.9$ 39.6$ 196.4$ 89.7$ Interest expense 22.1 21.4 85.9 97.1 Loss on extinguishment of debt - - 47.2 - Income taxes 14.6 17.3 84.1 132.4 Depreciation and amortization 16.2 23.7 82.
Slide 21: Leverage Reconciliation
21 Leverage Reconciliation (in millions, except ratio) 1Q 15 1Q 16 1Q 17 Total debt(1) 1,602.6$ 1,496.2$ 1,869.1$ Plus: Letters of credit outstanding 17.3 18.8 22.9 Consolidated funded debt 1,619.9 1,515.0 1,892.0 Less: Domestic qualified cash(2) 15.7 6.3 11.5 Less: Foreign qualified cash(2) 17.6 18
Slide 22: Adjusted Net Income and Adjusted EPS
22 Adjusted Net Income and Adjusted EPS (in millions, except per share amounts) March 31, 2017 March 31, 2016 GAAP net income 33.9 39.6 Customer termination charges, net (1) 25.9 - Integration costs (2) - 1.0 Executive management transition (3) - 3.0 Tax adjustments (4) (7.6) (1.3) Adjusted net inco
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