Somnigroup International Inc. · NYSE:SGI

Somnigroup International — Tempur Sealy International — Investor Presentation (October 2021)

44 slides from Somnigroup International's investor presentation, Oct 28, 2021

1. Slide 1: Tempur Sealy International, Inc. TPX

   © 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

2. Slide 2: Who We Are

   © 2021 Tempur Sealy International, Inc. International Retail Value $50 Billion North America Estimated Tempur Sealy Share To Improve the Sleep of More People, Every Night, All Around the World 2 Who We Are As a global leader in the design, manufacture and distribution of bedding products, we know ho

3. Slide 3: TPX At a Glance

   © 2021 Tempur Sealy International, Inc. TPX At a Glance 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. ma

4. Slide 4: Recent Consumer Spending Trends

   © 2021 Tempur Sealy International, Inc. Recent Consumer Spending Trends 4 • Since 2008, consumers have been consistently under- investing their discretionary income in home and furnishings. • In the last year, consumers have invested a slightly larger portion of their discretionary income in the cat

5. Slide 5: Competitive Advantages

   © 2021 Tempur Sealy International, Inc. Competitive Advantages 5 • Established worldwide omni-channel presence • Iconic brand and product portfolio • World-class manufacturing capabilities • Industry-leading balance sheet and free cash flow(2) Adjusted earnings per share has grown at a CAGR of 40% o

6. Slide 6: Brands and Capabilities

   © 2021 Tempur Sealy International, Inc. Product Brands Mattresses / Pillows / Accessories DTC Retailer Brands Online / Offline Manufacturing Branded / OEM 6 Brands and Capabilities

7. Slide 7: Building Blocks to Future Growth

   © 2021 Tempur Sealy International, Inc. Building Blocks to Future Growth 7 Increase total addressable market internationally through new product launches in Europe & APAC Expand into OEM market to drive further sales growth Grow wholesale through existing and new retail relationships Invest in innov

8. Slide 8: Worldwide Omni-Channel

   © 2021 Tempur Sealy International, Inc. © 2021 Tempur Sealy International, Inc. 8 Worldwide Omni-Channel

9. Slide 9: Powerful Omni-Distribution Platform

   © 2021 Tempur Sealy International, Inc. Powerful Omni-Distribution Platform 9 • Significant worldwide sales growth • Highly profitable and expanding rapidly E-Commerce • Luxury Tempur-Pedic, Dreams, and multi- branded showroom experiences • Operate 600 stores worldwide with sales growth opportunity

10. Slide 10: Wholesale: Third-Party Retailers and U.S. OEM Opportunity

    © 2021 Tempur Sealy International, Inc. Third-Party Retailers • 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 sales force of over 500 people supporting our portfolio of b

11. Slide 11: Global Direct Sales

    © 2021 Tempur Sealy International, Inc. $- $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 $260 $280 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Global Direct Sales Intl NA Direct to Consumer 11 • High growth and high margin sales from web, call center, and company-owned stores • Strong growth w

12. Slide 12: Company-Owned Store Strategy

    © 2021 Tempur Sealy International, Inc. Company-Owned Store Strategy 12 TEMPUR® EuropeSealy Gallery Asia SOVA® SwedenSleep Outfitters® U.S. Tempur-Pedic® U.S. Tempur-Pedic® MexicoDreams UK OPERATING OVER 600 RETAIL STORES GLOBALLY We see opportunity to further increase our store count at a double-di

13. Slide 13: Brands & Products

    © 2021 Tempur Sealy International, Inc. Brands & Products 13 © 2021 Tempur Sealy International, Inc.

14. Slide 14: North America Markets

    © 2021 Tempur Sealy International, Inc. North America Markets 14 • Historically stable, growing bedding market, in which the market share of the largest three domestic bedding manufacturers has not materially changed over the last 5 years (1) • Branded bedding represents majority of products sold, e

15. Slide 15: International Markets

    © 2021 Tempur Sealy International, Inc. International Markets 15 • Highly fragmented with broad geographic diversity across Europe and Asia • Acquired Dreams, the leading bedding retailer in the UK • Developing new TEMPUR® line of mattresses to expand addressable market in 2022 • Tempur Sealy custom

16. Slide 16: Rapidly-Growing International Joint Ventures

    © 2021 Tempur Sealy International, Inc. Rapidly-Growing International Joint Ventures 16 United Kingdom • Acquired in 2020 • Full time employees : 250+ Asia • Founded in 2000 • Operates in 21 countries and territories • Top 3 international branded bedding manufacturer in China • Full time employees :

17. Slide 17: Brands & Products

    © 2021 Tempur Sealy International, Inc. Brands & Products 17 © 2021 Tempur Sealy International, Inc.

18. Slide 18: Portfolio of Global Brands

    © 2021 Tempur Sealy International, Inc. Tempur-Pedic – Dominant worldwide premium bedding market position • Tempur-Pedic uniquely adapts, supports and aligns to you to deliver truly life-changing sleep $2,199-$7,499 Stearns & Foster - High-end targeted brand • The world’s finest beds made with excep

19. Slide 19: Innovative Technologies

    © 2021 Tempur Sealy International, Inc. Innovative Technologies 19 Solution-driven innovation for today’s consumer Natural Comfort Snoring Support Climate Sleep health metrics

20. Slide 20: International 2022 TEMPUR Launch

    © 2021 Tempur Sealy International, Inc. International 2022 TEMPUR Launch 20 • Expect to launch an entirely new product lineup for Tempur in both the Europe and Asia-Pacific markets during 2022 • The underlying technology of the new lineup builds on the innovation that have already been very well rec

21. Slide 21: U.S. Product Launch Cycle

    © 2021 Tempur Sealy International, Inc. U.S. Product Launch Cycle 21 Our innovation cycle allows for the development of meaningful, consumer-centric products while also reducing floor conversion costs Surface-GuardSealyChill™ Featuring Industry- Leading Technologies Posturepedic Plus Posturepedic Es

22. Slide 22: World-Class Manufacturing Capabilities

    © 2021 Tempur Sealy International, Inc. World-Class Manufacturing Capabilities 22 © 2021 Tempur Sealy International, Inc.

23. Slide 23: World-Class Manufacturing Capabilities

    © 2021 Tempur Sealy International, Inc. 29 North American Facilities 38 International Facilities World-Class Manufacturing Capabilities 23 Leading Manufacturing Capabilities • 67 manufacturing facilities • 16 million square feet of manufacturing and distribution operations R&D Innovation • 75,000 sq

24. Slide 24: Expanding Manufacturing Capacity

    © 2021 Tempur Sealy International, Inc. Specialty Foam Pouring Facilities • Opening a new, state-of-the-art Tempur Pedic and OEM foam-pouring facility in Indiana by 2023 • Expanding three existing foam facilities in the U.S. by 2023 • Increasing our capacity to hold key chemical inputs and expand sa

25. Slide 25: Recent Performance

    © 2021 Tempur Sealy International, Inc.25 Recent Performance © 2021 Tempur Sealy International, Inc.

26. Slide 26: Third Quarter Performance

    © 2021 Tempur Sealy International, Inc.26 Three Months Ended September 30th 2021 2020 Reported % Change % Change Constant Currency(2) Net Sales $1,358.3 $1,132.3 20.0% 19.2% Net Income $177.4 $121.4 46.1% 44.2% Adjusted Net Income(2) $179.6 $155.4 15.6% 14.0% EPS $0.87 $0.57 52.6% 50.9% Adjusted EPS

27. Slide 27: 2021 Outlook and Recent Trends

    © 2021 Tempur Sealy International, Inc. • 2021 full year sales growth to exceed 35% • Full year adjusted EPS(2) between $3.20 and $3.30 • Implies adjusted 4Q’21 EBITDA(2) growth of over 30% at the mid-point • Expect atypical seasonality with net sales and profits higher in the fourth quarter than th

28. Slide 28: Recent Sales Growth Drivers

    © 2021 Tempur Sealy International, Inc. Recent Sales Growth Drivers(4) 28 • Estimating 2021 sales to grow about 60% over 2019 sales • Our sales and earnings growth has significantly outpaced the overall industry and can be clearly linked to our company initiatives o We estimate that our new retail p

29. Slide 29: Industry-Leading Balance Sheet & Cash Flow

    © 2021 Tempur Sealy International, Inc. Industry-Leading Balance Sheet & Cash Flow 29 © 2021 Tempur Sealy International, Inc.

30. Slide 30: Balanced Capital Allocation Strategy

    © 2021 Tempur Sealy International, Inc.30 Balanced Capital Allocation Strategy • Long-term target leverage ratio of 2.0 – 3.0x(2) • Continue to invest in the business • Disciplined approach to shareholder returns includes a quarterly dividend and opportunistic share repurchase • Maintain capacity fo

31. Slide 31: Strong Balance Sheet & Cash Flow

    © 2021 Tempur Sealy International, Inc. Strong Balance Sheet & Cash Flow 31 1.00x 2.00x 3.00x 4.00x 3Q20 4Q20 1Q21 2Q21 3Q21 Leverage(2) Credit ratings: Fitch – BB+ (August 2021) Moody’s – Ba1 (September 2021) S&P – BB+ (September 2021) $0 $200 $400 $600 $800 2016 2017 2018 2019 2020 Q3 TTM 2021 Ful

32. Slide 32: Environmental, Social and Corporate Governance

    © 2021 Tempur Sealy International, Inc.32 © 2021 Tempur Sealy International, Inc. Environmental, Social and Corporate Governance

33. Slide 33: Environmental, Social and Governance

    © 2021 Tempur Sealy International, Inc. Environmental, Social and Governance 33 TEMPUR SEALY IS COMMITTED TO PROTECTING AND IMPROVING OUR COMMUNITIES AND ENVIRONMENT

34. Slide 34: Environmental, Social and Governance

    © 2021 Tempur Sealy International, Inc. Environmental, Social and Governance 34 Environmental • Committed to achieving carbon neutrality for our wholly-owned global operations by 2040 • Achieved a 28% reduction in greenhouse gas emissions per unit produced at our wholly-owned manufacturing and logis

35. Slide 35: Ranked a 'Strong Buy with the Best ESG Score' by Raymond James

    © 2021 Tempur Sealy International, Inc. Ranked a ‘Strong Buy with the Best ESG Score’ by Raymond James Raymond James ranked Tempur Sealy in the top quartile for ESG out of all companies they consider a ‘Strong Buy’ Source: ‘Raymond James Strategy for ESG Investing’ published February 10, 2020 35 Cor

36. Slide 36: Thank You for Your Interest in Tempur Sealy

    © 2021 Tempur Sealy International, Inc. For more information please email: investor.relations@tempursealy.com Thank You for Your Interest in Tempur Sealy International 36

37. Slide 37: Appendix

    © 2021 Tempur Sealy International, Inc. Appendix © 2021 Tempur Sealy International, Inc. 37

38. Slide 38: Forward-Looking Statements

    © 2021 Tempur Sealy International, Inc. Forward-Looking Statements 38 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 adjus

39. Slide 39: 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 39 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 c

40. Slide 40: Adjusted EBITDA Reconciliation

    © 2021 Tempur Sealy International, Inc. Adjusted EBITDA Reconciliation 40

41. Slide 41: TTM Adjusted EBITDA Reconciliation

    © 2021 Tempur Sealy International, Inc. TTM Adjusted EBITDA Reconciliation 41

42. Slide 42: Adjusted Net Income and Adjusted EPS

    © 2021 Tempur Sealy International, Inc. Adjusted Net Income and Adjusted EPS 42

43. Slide 43: Leverage Reconciliation

    © 2021 Tempur Sealy International, Inc. Leverage Reconciliation 43 *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.

44. Slide 44: Footnotes

    © 2021 Tempur Sealy International, Inc. Footnotes 44 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

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