Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (January 2024)
40 slides from Somnigroup International's investor presentation, Jan 26, 2024
Slide 1: Resilience of our business model
We continue to demonstrate the resilience of our business model as we generate profits, invest in our business, return capital to shareholders, and outperform the global bedding industry. TEMPUR SEALY INTERNATIONAL, INC., TPX “ “ 1
Slide 2: Investment Thesis
2 History of market share gains across global omnichannel distribution Seasoned, well-aligned management with proven track record Legacy of strong value creation via capital allocation including share buybacks and acquisitions The leading vertically integrated global bedding company with iconic bran
Slide 3: Tenured Leadership Team
3 U.S. Market International Markets Tenured Leadership Team >185 YEARS COMBINED TPX EXPERIENCE 15 YEARS AVERAGE TPX TENURE Shared Services Scott Thompson Chairman, President & CEO Bhaskar Rao EVP, CFO Cliff Buster CEO, North America Diana Strickland SVP, Human Resources Kindra Bellis SVP, CIO David
Slide 4: Experienced Team's Value Creation
4 Experienced Team’s Value Creation Since management change in 2015, sales have increased 57%, adjusted EBITDA2 has nearly doubled, and GAAP EPS has increased more than 7.5x under current leadership Current TPX Management Track Record Since 2015 (in millions, except percentages, multiples, and per c
Slide 5: Award-Winning Products Spanning Key Retail Price Points
Award-Winning Products Spanning Key Retail Price Points VALUE PREMIUM $1,800 – $6,450 $2,200 – $9,000 $300 – $3,500 Private Label 5
Slide 6: Leading Manufacturing Capabilities
Leading Manufacturing Capabilities • 71 manufacturing facilities • 16 million square feet of manufacturing & distribution operations R&D Innovation • 75,000 square feet of research & development • 4 state-of-the art product-testing locations Wholly owned (32) Joint Venture (8) Licensee (27)Tempur-Pe
Slide 7: Successful Global Omni Distribution Platform
• Significant worldwide sales growth • Highly profitable and expanding rapidly • Direct customer relationships Ecommerce • Luxury Tempur-Pedic®, Dreams, and multi-branded showroom experiences • Operate over 750 stores worldwide and expanding direct customer relationships • Unlocks addressable market
Slide 8: North American Omnichannel Distribution
North American Omnichannel Distribution Wholesale E-commerce Owned Retail Stores OEM Alternative Channels Consumers THIRD PARTIES 8 • Costco • Sam's Club • Wayfair • Amazon
Slide 9: New Product Initiatives
New Product Initiatives TEMPUR#*SEALY 9
Slide 10: Stearns & Foster – What Comfort Should Be
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® • Expanding the universe of innerspring customers represents a significant long-term growth opportunity with high ASP and margin opportunity. • 2023’s comprehensive relaunch of products and new brand positioning began our journey to $1 Billion. • New technol
Slide 11: Stearns & Foster post-launch results
WHAT COMFORT SHOULD BE™ STEARNS & FOSTER® • Strong Retailer Advocacy - >20% floor model expansion • New products delivered strong growth in a challenging macro environment • Lux Estate and Reserve models delivered the highest growth • Investments in advertising to increase brand awareness drove subs
Slide 12: Tempur-Pedic: The most highly recommended brand in America
• The number two selling mattress brand in America3 • Repeat J.D. Power Award Winner3 • In-Store Mattress Purchases – 2017, 2019, 2020, 2021, 2022 • Online Mattress Purchases - 2021, 2022, 2023 Tempur-Pedic® The most highly recommended brand in America. 12
Slide 13: Tempur-Pedic – Deep, Undisturbed Sleep
• Continued focus on innovating around core consumer needs to drive success. • Building on over 30 years of innovation, the Tempur line focuses on three key needs: Tempur-Pedic® – Deep, Undisturbed Sleep® 13 4
Slide 14: Tempur-Pedic – Innovation That Performs
• The Tempur-Pedic® product re-launch began in 2023 with the launch of Breeze ® and Power Bases • Products were well received, with Breeze momentum driven by the LuxeBreeze® models • Power Base attach rate achieved an all time high in 2023 with innovative, industry-first features • Adapt® will begin
Slide 15: Tempur-Pedic – New ADAPT Collection
Tempur-Pedic® – New ADAPT Collection • The ultimate in ache and pain relief • 20% more TEMPUR® material paired with our new Ergonomic Support Layer • Enhanced merchandising includes a new Medium Hybrid to broaden appeal TEMPUR-LUXEADAPT® • Features Advanced Relief® material for up to 20% more pressu
Slide 16: New TEMPUR-PROADAPT
New TEMPUR-PROADAPT® • Features Advanced Relief® material for up to 20% more pressure relief • Best selling family • Our broadest range of feels to capture more consumers 16
Slide 17: New TEMPUR-LUXEADAPT
New TEMPUR-LUXEADAPT® • 20% more TEMPUR® material paired with our new Ergonomic Support Layer • The ultimate in ache and pain relief • Enhanced merchandising includes a new Medium Hybrid to broaden appeal 17
Slide 18: New TEMPUR-ACTIVEBREEZE
New TEMPUR-ACTIVEBREEZE® • New “halo” product • Dual Zone Climate Control allows each sleeper to personalize climate • ActiveAir Technology®, a patent-pending design that moves air evenly across the entire sleep surface • Powered by Sleeptracker-AI® 18
Slide 19: Operations
Operations TEMPUR#*SEALY
Slide 20: Operational Initiatives: Sourcing
Operational Initiatives Leveraging Scale to Drive Cost Efficiency and Optionality Through Sourcing Competitive RFQ efforts to derive savings from key inputs - springs, textiles, foam and chemicals Expanding supply chains globally to increase competition among suppliers Exploring alternative
Slide 21: Operational Initiatives: Logistics
Operational Initiatives Driving logistics productivity across Tempur Sealy’s fleet, ocean transportation and warehousing Further optimization of Tempur Sealy’s transportation fleet, reducing usage of third-party carriers Routing/scheduling optimization to lower fleet miles – cost and environme
Slide 22: Crawfordsville, Indiana
Crawfordsville, Indiana 750,000 sq ft facility to enhance our ability to service our customers by ensuring product availability to meet increased demand in the premium sector, creating shorter lead times and reduced per unit logistics cost in the Northeast market 22
Slide 23: Crawfordsville Equipment, High Bay Storage, Tank Farm
Crawfordsville Equipment High Bay StorageTank Farm 23
Slide 24: International Markets – TEMPUR Brand Overview
24 International Markets – TEMPUR Brand Overview TEMPUR sold in 90+ countries • 22 countries served through wholly owned subsidiaries, the rest by third- party distributors Selling direct via own stores and online channels, and wholesale via furniture and bedding retailers Key markets include German
Slide 25: International Markets – Historical Strategy & Performance
25 International Markets – TEMPUR Brand Historical Strategy & Performance • Focus on price points above $3,000 • Investments within narrow boundaries • Highly complex and individualized SKUs, and therefore highly complex and individualized manufacturing process Strategy 2023+ • Continue to grow segm
Slide 26: International Markets – Go-Forward Strategy – Mattresses
26 International Markets – TEMPUR Brand Go-Forward Strategy – Mattresses • Leveraging proven innovation that has met with success in the U.S. • Innovations: • Next generation/higher performance Tempur foams • Cooling yarns • Washable TEMPUR quilting • High airflow 3D fabric • To increase efficiency
Slide 27: Simplified SKU build
27 International Markets – TEMPUR Brand Go-Forward Strategy: Mattresses - Simplified SKU build Historical 2023 Common component platform: Late dedication:
Slide 28: Cutting Edge Sleep Technology
28 International Markets – Historical Segment Go-Forward Strategy: Mattresses – Cutting Edge Sleep Technology • Continue to appeal to historical segment, better channel/customer differentiation
Slide 29: Broadening Assortment
29 International Markets – Broadening Assortment Go-Forward Strategy: Mattresses – Wider range of consumer needs • Targeting new consumers
Slide 30: International Markets – New Pillows
30 International Markets – New Pillows Go-Forward Strategy • Continue to grow sales of most advanced pillows while broadening product offering
Slide 31: International Markets – New Bed Bases
31 International Markets – New Bed Bases Go-Forward Strategy • Continue to grow sales of most advanced bases while broadening product offering TEMPUR ONE™/EASE™ TEMPUR ARC™
Slide 32: International Markets – New Product Launches 2023/2024
32 International Markets – New Product Launches 2023/2024 New Product Rollout • Roll out started Q1 2023 • Subsidiary markets completed Q3 2023 • Distributors completed Q4 2023 • UK launches Q1 2024 • Products well received Q1 Q4Q3Q2 Subsidiaries Distributors UK 2023/2024 Roll Out Timing Q1 2023 202
Slide 33: Third Quarter and Trailing Twelve Month Performance
Third Quarter and Trailing Twelve Month Performance Sales by Type 33 69% 10% 8% 13% TTM 3Q’23 Sales North America Wholesale North America Direct-to- Consumer International Wholesale International Direct-to- Consumer Three Months Ended Trailing Twelve Months Ended (in millions, except percentages and
Slide 34: Environmental, Social, & Governance
Environmental, Social, & Governance 34
Slide 35: Investment Thesis
35 History of market share gains across global omnichannel distribution Seasoned, well-aligned management with proven track record Legacy of strong value creation via capital allocation including share buybacks and acquisitions The leading vertically integrated global bedding company with iconic bra
Slide 36: Thank you for your interest in Tempur Sealy International
For more information, please email: investor.relations@tempursealy.com 36 Thank you for your interest in Tempur Sealy International
Slide 37: Forward-Looking Statements; Use of Non-GAAP Financial Measures
37 Forward-Looking Statements Use of Non-GAAP Financial Measures In this investor presentation and certain of its press releases and SEC filings, the Company provides information regarding adjusted net income, EBITDA, and adjusted EBITDA, adjusted EPS, which are not recognized terms under U.S. Gener
Slide 38: Adjusted Net Income and Adjusted EPS
38 QTD Adjusted Net Income2 and Adjusted EPS2 *For a reconciliation net income to adjusted net income and adjusted EPS in prior reporting periods, please refer to the Company’s SEC filings. TTM Adjusted Net Income2 and Adjusted EPS2
Slide 39: TTM Adjusted EBITDA and Leverage Reconciliation
TTM Adjusted EBITDA2 39 *For a reconciliation net income to EBITDA and Adjusted EBITDA in prior reporting periods, please refer to the Company’s SEC filings. Leverage2 Reconciliation *For a reconciliation of leverage to consolidated indebtedness less netted cash in prior reporting periods, please re
Slide 40: Management estimates Adjusted net income, EBITDA, adjusted EBITDA and adjusted EPS are non-GAAP financial
40 1 Management estimates 2 Adjusted net income, EBITDA, adjusted EBITDA and adjusted EPS are non-GAAP financial measures. Please refer to the “Use of Non-GAAP Financial Measures” on a previous slide for more information regarding the definitions of adjusted net income, EBITDA, adjusted EBITDA, and
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