Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Q3 2019 Earnings Presentation
33 slides from Somnigroup International's earnings presentation, Nov 25, 2019
Slide 1: Tempur Sealy International, Inc. (TPX)
Tempur Sealy International, Inc. (TPX) “Success is strengthening our Iconic Brands while driving higher ROIC through focused execution” 1 © 2019 Tempur Sealy International, Inc.
Slide 2: Tempur Sealy International, Inc. Overview
Tempur Sealy International, Inc. Overview: (TPX) • Strong global brands serving all price points • Omni-channel distribution balanced between wholesale and direct to consumer • Global manufacturing footprint • Structural growth industry, with high ROIC and robust free cash flow • Industry is relativ
Slide 3: Long-term Focused
Long-term Focused Key initiatives: • Develop the highest quality bedding products in all the markets we serve • Promote our worldwide brands with compelling marketing • Optimize our powerful omni-distribution platform to be where consumers want to shop • Drive increases in EBITDA(1) (1) This financi
Slide 4: Global Manufacturing Footprint
Global Manufacturing Footprint 35 International Facilities 22 North American Facilities Wholly owned and Joint Venture Tempur-Pedic Facility Joint Venture Licensee 4 © 2019 Tempur Sealy International, Inc.
Slide 5: Powerful Omni-Distribution Platform
Powerful Omni-Distribution Platform Largest pillar of world-wide distribution Wholesale In process with significant distribution gains DTC Significant worldwide revenue growth Web Highly profitable and expanding gross margins DTC Company Luxury showroom experience Owned Significant world
Slide 6: Direct to Consumer
Direct to Consumer • Distribution network made up of high growth, high Global Direct Revenue margin, Web, Call Center, and Company-owned stores $120 • Strong growth within the direct channel, growing 62% $100 in the third quarter of 2019 $80 • Long-term direct target: 25% of consolidated net sales $
Slide 7: Winning Online
Winning Online 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 TPX proprietary Retail E
Slide 8: Company-Owned North American Store Strategy
Company-Owned North American Store Strategy High-End Targeted Opportunity Broad Based Opportunity – Strategic Representation Sleep Outfitters®: o Regional bedding retailer that is strategically important to the markets it serves for Tempur Sealy o Store count: 98 o Tempur, Sealy and Stearns & Foster
Slide 9: Brands & Products
BRANDS & PRODUCTS 9 © 2019 Tempur Sealy International, Inc.
Slide 10: Product Segments
Product Segments Three Months Ended Bedding Other Net Sales September 30, 2019 Products Products Consolidated $ 752M $ 69M $ 821M YoY Growth 12.1% 18.2% 12.5% North America $ 641M $ 41M $ 682M YoY Growth 13.8% 26.2% 14.5% International $ 112M $ 27M $ 139M YoY Growth 3.0% 7.9% 4.0% Nine Months Ended
Slide 11: U.S. Portfolio of Products
U.S. Portfolio of Products TEMPUR MATERIAL HYBRID INNERSPRING MEMORY FOAM TEMPUR® STEARNS & FOSTER® SEALY CONFORM® SEALY HYBRID® COCOON BY TEMPUR BREEZE® SEALY SEALY (Bed in a Box) (Bed in a Box) TEMPUR ADAPT™ STEARNS & FOSTER® SEALY RESPONSE® OTHER SPECIALTY ADJUSTABLE BASES PILLOWS 11 © 2019 Tempu
Slide 12: TEMPUR-PEDIC
TEMPUR-PEDIC® Launched the innovative, new breeze°, …designed to improve product mix, completes the largest rollout in Tempur history… with all night cooling. 12 © 2019 Tempur Sealy International, Inc.
Slide 13: Strongest Tempur-Pedic Product Offering
STRONGEST TEMPUR-PEDIC PRODUCT OFFERING TEMPUR-ADAPT® FAMILY TEMPUR-BREEZE® FAMILY ADAPT™ PROADAPT® LUXEADAPT™ PRObreeze°™ LUXEbreeze°™ SOFT SOFT SOFT MEDIUM MEDIUM MEDIUM FIRM FIRM FIRM HYBRID HYBRID HYBRID $2,199 $2,999 $3,699* $3,999* $4,699* Product Launched in 2018 Product Launched early 2019 *
Slide 14: New Tempur-LUXEbreeze
NEW TEMPUR-LUXEbreeze°™ NEXT LEVEL COOLING COMFORT – Up to 8° cooler* OUTSIDE SMARTCLIMATE® MAX DUAL COVER SYSTEM An enhanced zip-off cover with double the cool- to-touch power combined with a super-stretch inner layer so you feel cooler when you lie down INSIDE PURECOOL+™ Phase Change Material Excl
Slide 15: New Tempur-PRObreeze
NEW TEMPUR-PRObreeze°™ ADVANCED ALL-NIGHT COOLING - Up to 3° cooler* OUTSIDE SMARTCLIMATE® DUAL COVER SYSTEM A zip-off, cool-to-touch outer layer combined with a super-stretch inner layer so you feel cooler when you lie down INSIDE PURECOOL+™ Phase Change Material Exclusive, next-generation technolo
Slide 16: 2019 New Products
2019 New Products 16 © 2019 Tempur Sealy International, Inc.
Slide 17: Stearns & Foster Reinvented
Stearns & Foster Reinvented ALL-NEW & EXCLUSIVE Coil Technologies PROPRIETARY and EXCLUSIVE Memory Foam engineered by: ALL-NEW Natural + Cooling System 17 © 2019 Tempur Sealy International, Inc.
Slide 18: New Stearns & Foster Collection
NEW Stearns & Foster Collection: ESTATE™ Starting at $1,499 LUX ESTATE® Starting at $2,299 LUX ESTATE HYBRID™ Starting at $2,799 RESERVE™ Starting at $3,999 18 © 2019 Tempur Sealy International, Inc.
Slide 19: Recent Management Comments
RECENT MANAGEMENT COMMENTS 19
Slide 20: Third Quarter 2019 Highlights
Third Quarter 2019 Net Sales Increased 13%, Direct Channel Sales Increased 62% Margins Expanded, Net Income, EBITDA(1) and EPS Up Highlights Significantly Versus Third Quarter 2018 Three Months Ended September 30th Reported %Change 2019 2018 Constant %Change Currency(1) Net Sales $821.0 $729.5 1
Slide 21: Amended Credit Facility
The new facility decreases our borrowing costs, provides Amended Credit increased operating flexibility and significantly extends our debt maturities Facility This transaction represents the lowest interest rate spread on a like for like leverage in the company’s history Prior Structure New Amen
Slide 22: Debt Structure and Leverage
Leverage ratio (3) moving to lower end of 3.0x to 4.0x range Debt Structure Fixed rate debt represents around 2/3 of total debt; capital structure contains long dated maturities Capital Allocation: Invest in the highest ROIC opportunities . We believe in a consistent measured share repurchase
Slide 23: Revised 2019 Targets
Revised 2019 Targets 2019 Financial Targets(3) and Assumptions Adjusted EBITDA(1) $485 to $500 M Depreciation & Amortization $115 to $120 M Capital Expenditures $80 M ($60 M Maintenance) Interest Expense $85 to $90 M U.S. Federal Tax Rate Range 27% to 28% Diluted Share Count 56 M Shares (1) This fin
Slide 24: Environmental, Social, and Governance
Environmental, Social, and Governance Tempur Sealy is committed to protecting and improving our environment and communities. • In 2018, 72% of our North • Community Engagement • Majority of Directors on American facility waste • Since 2011, donated nearly the Board are Independent $300M of mattresse
Slide 25: Thank you for your interest in Tempur Sealy International
Thank you for your interest in Tempur Sealy International For more information please email: investor.relations@tempursealy.com 25 © 2019 Tempur Sealy International, Inc.
Slide 26: Appendix
- a TEMPUR+*SEALY Appendix
Slide 27: Aspirational Plan
Aspirational Plan(5) On August 7, 2017, the Company implemented a new Aspirational Program in the form of performance restricted stock units tied to challenging performance targets. This Aspirational Program builds on the challenging goals and the structure established in our original Aspirational
Slide 28: Forward-Looking Statements
Forward-Looking Statements This investor presentation contains statements that may be characterized as “forward-looking” within the meaning of the federal securities laws. Such statements might include those containing information concerning one or more of the Company’s plans; guidance; objectives;
Slide 29: Footnotes
Footnotes 1. Adjusted Net Income, EBITDA, adjusted EBITDA, leverage, leverage ratio, and constant currency are non-GAAP financial measures. Please refer to the "Use of Non- GAAP Financial Measures and Constant Currency Information" on slide 30 for more information regarding the definitions of adjust
Slide 30: Use of Non-GAAP Financial Measures and Constant Currency Information
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, EBITDA, adjusted EBITDA, consolidated funded debt less qualified cash, leverage and le
Slide 31: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 31
Slide 32: Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted EPS 32
Slide 33: Leverage Reconciliation
Leverage Reconciliation (in millions, except ratio) 3Q19 Total debt, net $s 1,569.6 Plus: Deferred financing costs”) $ 65 Consolidated indebtedness 1,576.1 Less: Netted cash” 51.2 Consolidated indebtedness less netted cash $ 1,524.9 Adjusted EBITDA” $ 473.6 Leverage 3.22x Notes (1) The Company prese
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