Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (August 2021)
43 slides from Somnigroup International's investor presentation, Aug 4, 2021
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
Slide 2: Who We Are
© 2021 Tempur Sealy International, Inc.2 WHO WE ARE As a global leader in the design, manufacture and distribution of bedding products, we know how crucial a good night of sleep is to overall health and wellness. Utilizing over a century of knowledge and industry-leading innovation, we deliver award
Slide 3: Industry, Consumer and Tempur Sealy Value Creation Drivers
© 2021 Tempur Sealy International, Inc.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. market(1) • TPX pro
Slide 4: Strong Earnings Growth
© 2021 Tempur Sealy International, Inc.4 Strong Earnings Growth Adjusted earnings per share has grown at a CAGR of 40% over the last 5 years* * 2021 EPS based on the midpoint of Tempur Sealy's full year guidance $0.82 $0.74 $1.00 $1.94 $3.18 $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2017 2018 201
Slide 5: Competitive Advantages and Q2 2021 Results
© 2021 Tempur Sealy International, Inc. o Established worldwide omni-channel presence o Iconic brand and product portfolio o World-class manufacturing capabilities o Industry-leading balance sheet and free cash flow(2) Competitive Advantages: 5 Three Months Ended June 30th Three Months Ended June 30
Slide 6: 2021 Financial Targets and Assumptions
© 2021 Tempur Sealy International, Inc. 2021 Financial Targets and Assumptions Depreciation & Amortization $175M-$185M Capital Expenditures $150M to $165M Interest Expense Approximately $55M U.S. Federal Tax Rate 25% Diluted Share Count 204M shares o 2021 full year sales growth to exceed 35% o Full
Slide 7: Recent Sales Growth Drivers
© 2021 Tempur Sealy International, Inc.7 Recent Sales Growth Drivers(5) New Distribution Acquisitions, DTC OEM, Share Gains Industry • Estimating 2021 sales to grow about 60% over 2019 sales • Our sales and earnings growth has been significantly higher than the overall industry and can be clearly li
Slide 8: Recent Consumer Spending Trends
© 2021 Tempur Sealy International, Inc.8 2.8% 2.8% 2.8% 2.8% 2.8% 2.9% 2.8% 2.7% 2.4% 2.2% 2.1% 2.1% 2.0% 2.1% 2.1% 2.1% 2.2% 2.2% 2.2% 2.2% 2.2% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.2% 2.4% 2.6% 2.8% 3.0% 5,000 7,000 9,000 11,000 13,000 15,000 17,000 19,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2
Slide 9: Worldwide Omni-Channel
© 2021 Tempur Sealy International, Inc. © 2021 Tempur Sealy International, Inc. 9 Worldwide Omni-Channel
Slide 10: Powerful Omni-Distribution Platform
© 2021 Tempur Sealy International, Inc. Powerful Omni-Distribution Platform Company Owned Stores Wholesale E-Commerce Third-party retailers are our largest distribution channel Significant OEM opportunity Significant worldwide sales growth Highly profitable and expanding rapidly Luxury Tem
Slide 11: Wholesale
© 2021 Tempur Sealy International, Inc.11 Wholesale • 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 TPX sales force of over 500 people supporting our portfolio of brands
Slide 12: Winning Online Through Our Wholesale and Direct Channels
© 2021 Tempur Sealy International, Inc. 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
Slide 13: Direct to Consumer Sales Growth
© 2021 Tempur Sealy International, Inc. $- $20 $40 $60 $80 $100 $120 $140 $160 $180 Q2 2019 Q2 2020 Q2 2021 Global Direct Sales Intl NA Direct to Consumer • High growth and high margin sales from web, call center, and company-owned stores • Strong growth within the direct channel, growing 61% in the
Slide 14: Company-Owned Store Strategy
© 2021 Tempur Sealy International, Inc.14 Company-Owned Store Strategy TEMPUR® Europe Tempur-Pedic® U.S. Sealy Gallery Asia Operating over 600 retail stores globally SOVA® Sweden Sleep Outfitters® U.S.Tempur-Pedic® Mexico Dreams
Slide 15: North America Markets
© 2021 Tempur Sealy International, Inc. North America Markets 15 • Historically stable, growing bedding market • Branded bedding represents majority of products sold in-market annually, especially in premium price points • Sealy and Tempur-Pedic brands represent the #1 and #2 best selling mattress b
Slide 16: International Markets
© 2021 Tempur Sealy International, Inc. International Markets 16 • 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
Slide 17: Rapidly-Growing International Joint Ventures
© 2021 Tempur Sealy International, Inc.17 Rapidly-Growing International Joint Ventures UNITED KINGDOM • Acquired in 2020 • Full time employees : 250+ Our joint venture operations generated $225 million of unconsolidated net sales in 2020 ASIA • Founded in 2000 • Compound annual growth rate of 36% •
Slide 18: Brands & Products
© 2021 Tempur Sealy International, Inc. Brands & Products 18 © 2021 Tempur Sealy International, Inc.
Slide 19: Family of Brands and Capabilities
© 2021 Tempur Sealy International, Inc. 19 Product Brands Mattresses / Pillows / Accessories DTC Retailer Brands Online / Offline Manufacturing Branded / OEM Family of Brands and Capabilities
Slide 20: Portfolio of Global Brands
© 2021 Tempur Sealy International, Inc. Portfolio of Global Brands Stearns & Foster - High-end targeted brand • The world’s finest beds made with exceptional materials, time-honored craftsmanship and unparalleled design Sealy – No. 1 bedding brand in the U.S.(3) • Combines innovation, engineering an
Slide 21: U.S. 2021 Sealy Launch Update
© 2021 Tempur Sealy International, Inc. Posturepedic Plus Posturepedic Essentials Surface-Guard SealyChill™ U.S. 2021 Sealy Launch Update “We expect this launch will further our market share gains and extend Sealy's lead as the number one mattress brand in North America(3) and the most trusted mattr
Slide 22: Tempur-Ergo Smart Base
© 2021 Tempur Sealy International, Inc.22 Powered by 100% Passive Sensors • Heart rate • Breathing rate • Snore detection U.S. Tempur-Ergo® Smart Base
Slide 23: International 2022 TEMPUR Launch
© 2021 Tempur Sealy International, Inc.23 International 2022 TEMPUR Launch • Expect to launch an entirely new product lineup for Tempur in both the Europe and Asia-Pacific markets in 2022 • The underlying technology of the new lineup builds on the innovation that have already been very well received
Slide 24: World-Class Manufacturing Capabilities
© 2021 Tempur Sealy International, Inc. World-Class Manufacturing Capabilities 24 © 2021 Tempur Sealy International, Inc.
Slide 25: World-Class Manufacturing Capabilities
© 2021 Tempur Sealy International, Inc. 29 North American Facilities 38 International Facilities Wholly owned (30) Joint Venture (8) Licensee (26) World-Class Manufacturing Capabilities Tempur-Pedic Facility (3) 25 o 67 manufacturing facilities o 16 million square feet of manufacturing and distribut
Slide 26: Expanding Manufacturing Capacity
© 2021 Tempur Sealy International, Inc.26 Expanding Manufacturing Capacity Sherwood (OEM) West Coast facility Foam Pouring Facilities o Expanded Orlando plant production capacity by 60% in 2020 o Expect to open a 5th plant in the Northeast U.S. in the third quarter of 2021 o Opening a new, state-of-
Slide 27: Industry-Leading Balance Sheet & Cash Flow
© 2021 Tempur Sealy International, Inc. Industry-Leading Balance Sheet & Cash Flow 27 © 2021 Tempur Sealy International, Inc.
Slide 28: Balanced Capital Allocation Strategy
© 2021 Tempur Sealy International, Inc. • Long-term target leverage ratio of 2.0 – 3.0x(2) • Continue to invest in the business • Disciplined approach to shareholder returns • Expects to repurchase at least 6% of shares outstanding in 2021 (5) • Increased quarterly cash dividend 29% in Q3 2021 to $0
Slide 29: Strong Balance Sheet & Cash Flow
© 2021 Tempur Sealy International, Inc.29 Strong Balance Sheet & Cash Flow $0 $200 $400 $600 $800 2016 2017 2018 2019 2020 TTM 2021 Full Year Free Cash Flow(2) 1.00x 2.00x 3.00x 4.00x 2Q20 3Q20 4Q20 1Q21 2Q21 After Dreams Leverage(2) $0 $400 $800 $1,200 2016 2017 2018 2019 2020 TTM 2021 Full Year Ad
Slide 30: Environmental, Social and Corporate Governance
© 2021 Tempur Sealy International, Inc.30 Environmental, Social and Corporate Governance © 2021 Tempur Sealy International, Inc.
Slide 31: Environmental, Social and Governance
© 2021 Tempur Sealy International, Inc. Environmental, Social and Governance Tempur Sealy is committed to protecting and improving our communities and environment 31
Slide 32: Environmental, Social and Governance
© 2021 Tempur Sealy International, Inc. Environmental, Social and Governance Tempur Sealy is committed to protecting and improving our communities and environment Environmental • Committed to achieving carbon neutrality for our wholly-owned global operations by 2040 • Achieved a 28% reduction in gre
Slide 33: Corporate Social Value Highlights
© 2021 Tempur Sealy International, Inc. Corporate Social Value Highlights Tempur Sealy has donated… - an estimated $100 million in product over the last 10 years, - cash and stock valued at $11.5 million dollars over the last 5 years, and - 17,500+ products to aid in the COVID-19 crisis. Ranked a ‘S
Slide 34: Thank you for your interest in Tempur Sealy International
© 2021 Tempur Sealy International, Inc. Thank you for your interest in Tempur Sealy International For more information please email: investor.relations@tempursealy.com 34
Slide 35: Appendix
© 2021 Tempur Sealy International, Inc. Appendix © 2021 Tempur Sealy International, Inc. 35
Slide 36: Forward-Looking Statements
© 2021 Tempur Sealy International, Inc. 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 adjusted EPS for 2021 and subsequen
Slide 37: 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 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 cred
Slide 38: Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. Adjusted EBITDA Reconciliation © 2021 Tempur Sealy International, Inc. 38
Slide 39: TTM Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. TTM Adjusted EBITDA Reconciliation © 2021 Tempur Sealy International, Inc. 39
Slide 40: Adjusted Net Income and Adjusted EPS
© 2021 Tempur Sealy International, Inc. Adjusted Net Income and Adjusted EPS 40
Slide 41: Leverage Reconciliation
© 2021 Tempur Sealy International, Inc. Leverage Reconciliation 41 *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.
Slide 42: Free Cash Flow and Free Cash Flow / Adjusted EBITDA Reconciliation
© 2021 Tempur Sealy International, Inc. Free Cash Flow and Free Cash Flow / Adjusted EBITDA Reconciliation 42 *For a reconciliation of adjusted EBITDA per credit facility to net income for reporting periods in the years 2016-2021, please refer to the Company’s SEC filings.
Slide 43: Footnotes
© 2021 Tempur Sealy International, Inc. Footnotes 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 Con
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