Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Pedic International — Investor Presentation (May 2008)
21 slides from Somnigroup International's investor presentation, May 6, 2008
Slide 1: Investor Presentation 2Q 2008
Exhibit 99.1 Investor Presentation 2Q 2008
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentationmay contain “forward-lookingstatements” 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 information.
Slide 3: Overview
Overview Worldwide leader in Premium Sleep, estimated to be 50% of the ~$13 billion wholesale mattress market Global sales under the “Tempur-Pedic®” and “TEMPUR®” trademarks in >70 countries Products provide greater overall comfort and better quality sleep Most profitable company in the industry Hig
Slide 4: Tempur-Pedic Swedish Sleep System
Tempur-Pedic Swedish Sleep System Pressure & Pain Management – 94% of owners experience a reduction in painful pressure points Open Cell Technology Body Conforming & Support – 92% of owners sleep better and wake more refreshed Safe and Healthy Maintenance Free Source: Independent survey commissioned
Slide 5: Seasoned Management Team
Seasoned Management Team Executive team has ~130 years managing large international businesses Prior Experience Consumer Name Position Prior Experience Products Inter'l Tom Bryant (1) President & CEO CEO, Stairmaster Sports & Medical Products President, Dunlop Maxfli Johnson & Johnson Rick Anderson
Slide 6: Global Presence
Global Presence International Subsidiary International Third Party Domestic Subsidiary Domestic Third Party 6
Slide 7: Global Sales
Global Sales Domestic represents ~66% of total sales while International represents ~34% Products sold through four distinct channels in three product categories US & European-based R&D centers focused on unique, regional preferences Brand building via advertising campaign to drive market share gain
Slide 8: Vertically Integrated
Vertically Integrated ——~s TEMPUR welcome to bed a Changing the way the world sleeps!
Slide 9: Manufacturing Facilities
Manufacturing Facilities Denmark (500K sq ft) Global, vertically integrated manufacturer State of the art, highly automated, ISO- certified plants > $200 million invested Goal: Improve output capacity every year without significant new capital investment Duffield, VA (500K sq ft) Albuquerque, NM (80
Slide 10: Building Brand Equity
Building Brand Equity ——~s TEMPUR welcome to bed in Changing the way the world sleeps!
Slide 11: “Welcome To Bed” Marketing Campaign
“Welcome To Bed” Marketing Campaign 11
Slide 12: Increasing Brand Awareness
Increasing Brand Awareness 86% 89% 90% 78% 80% 73% 70% 60% 60% 50% 44% Global Marketing Investment >$575 million 40% (since 2002) 26% 30% 20% 2002 2003 2004 2005 2006 2007 2008 Awareness % 12 1. Total Brand Awareness for mattresses based on study commissioned by Tempur-Pedic and completed in the fir
Slide 13: Consumer Passion
Consumer Passion ~95% Tempur-Pedic® consumers recommend the product ~65% of consumers recommended Tempur-Pedic up to 5 times 42% of consumers report someone purchased a Tempur-Pedic mattress as a result of their recommendation 100% 95% 80% 65% 60% 42% 40% 18% 17% 20% 0% Recommend 1-5 times 6-10 time
Slide 14: Growth Opportunities
Growth Opportunities Significant Unit Share Opportunity – Only represent ~2.3% of U.S. mattress units (‘07 est.) Slots Very Low Versus % of Retail Sales – Gaining “slots” with new models, key price points Investing in Marketing and Expanding Brand Awareness Targeting Key New Consumer Segments – Bell
Slide 15: Premium Mattress Consumer Research
Premium Mattress Consumer Research Based on third party research, we believe the following market factors will create favorable market conditions for the premium segment: Premium consumers are comparatively more likely to defer mattress purchases during an economic downturn Premium has reached >25%
Slide 16: Specialty Mattress Consumer Research
Specialty Mattress Consumer Research Among consumers who are likely to buy a premium mattress in the next five years: – ~80% say they are most likely to purchase specialty Specialty has reached >7% household penetration Specialty currently represents 40% of premium installed base – Innerspring curre
Slide 17: Worldwide Net Sales
Worldwide Net Sales ($ in millions) $1,200 $1,107 Revenue growth led by mattresses $1,000 $945 $837 1Q’08 sales down 7% as U.S. $800 macroeconomic environment $685 deteriorates $600 $479 $400 $298 $247 $222 $200 $0 2001 2002 2003 2004 2005 2006 2007 1Q '08 17 1. For a discussion of the Company’s per
Slide 18: Operating Income
Operating Income ($ in millions) Historically, operating leverage $250 $244 offset most of the prior Gross Margin erosion $209 $200 $191 Opportunities for SG&A leverage over the long term $150 $151 1Q’08 Operating margin declined primarily related to: $97 – Gross margin decline driven by $100 channe
Slide 19: Capital Expenditures & Cash Flow
Capital Expenditures & Cash Flow Capital Expenditures ($ in millions) $90 $85 Completed major capital $80 investments $70 Free cash flow opportunities $60 Cash cycle opportunities $50 $40 $35 $38 $37 Revised production plans to align $33 with sales expectations $30 $20 $16 Anticipate inventory will
Slide 20: Investment Highlights
Investment Highlights 1 #1 In The Fast Growing Viscoelastic Market 1 #1 In The Fast Growing Premium Mattress Market 2 #1 In The Premium Pillow Market #1 In International Operations of U.S. Bedding Manufacturers2 3 #1 In The Industry For Profitability #1 In U.S. Consumer Referrals for Mattresses 4 4
Slide 21: Investor Presentation 2Q 2008
Investor Presentation 2Q 2008
Tempur Pedic International — Investor Presentation (May 2008) on 6ix