Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — FY2019 Earnings Presentation
38 slides from Somnigroup International's earnings presentation, Feb 20, 2020
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 © 2020 Tempur Sealy International, Inc.
Slide 2: Purpose and Background
PURPOSE To Improve the Sleep of More People, Every Night, All Around the World BACKGROUND Tempur Sealy is a market‐leading, vertically integrated global company that develops, retails, both on and offline, manufacturers Three Months Ended Twelve Months Ended and markets bedding products. December 31
Slide 3: Product Sales
Product Sales Three Months Ended Bedding Other December 31, 2019 Net Sales (unaudited) Products Products Consolidated $ 791M $ 80M $ 871M YoY Growth 30.3% 16.1% 28.9% North America $ 670M $ 49M $ 719M YoY Growth 37.0% 27.7% 36.3% International $ 120M $ 32M $ 152M YoY Growth 2.6% 1.9% 2.4% Year Ended
Slide 4: Powerful Omni-Channel
POWERFUL OMNI‐CHANNEL 4 © 2020 Tempur Sealy International, Inc. © 2020 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: Wholesale Strategy – New Distribution
Wholesale Strategy – New Distribution Tempur Sealy’s wholesale business strategy: • grow market share with existing customers • win new business • expand into new channels of distribution Undergoing the largest expansion of doors in the Company’s history 6 © 2020 Tempur Sealy International, Inc.
Slide 7: Wholesale Strategy – Value Added Supplier
Wholesale Strategy – Value Added Supplier retailedge POWERED BY TEMPUR SEALY RetailEdge provides SHOPPER‐FOCUSED solutions that deliver a CONNECTED and PERSONALIZED experience across all phases of the purchase journey. 7 © 2020 Tempur Sealy International, Inc.
Slide 8: Winning Online: Wholesale and Direct to Consumer
Winning Online: Wholesale and Direct to Consumer Channel Type TempurPedic.com DIRECT TO Most profitable online bedding company in the world CONSUMER High growth and high margins Compressed Bedding Products OMNI‐ High‐end Mid‐level8 Value CHANNEL Tempur Cloud® Cocoon by Sealy™ Sealy‐to‐go (Testing) (
Slide 9: Direct to Consumer
Direct to Consumer • Distribution network made up of high growth, high margin, $120 Global Direct Revenue Web, Call Center, and Company‐owned stores • Strong growth within the direct channel, growing 62% in $100 the fourth quarter of 2019 $80 • Long‐term direct target: 25% of Tempur‐Pedic net sales
Slide 10: U.S. Company-Owned Store Strategy
U.S. COMPANY‐OWNED STORE STRATEGY Tempur‐Pedic® Retail Stores: Sleep Outfitters®: High‐End Targeted Opportunity Broad‐Based Opportunity Strategic Representation • Approximately 60 high‐end retail destinations, with complementary co‐tenants, in high demographic areas • Regional bedding retailer that
Slide 11: U.S. Retail Store Footprint
U.S. RETAIL STORE FOOTPRINT New Manhattan Store in Bloomberg Building Opening June 20202 ~60 Tempur‐Pedic Retail Stores 97 Sleep Outfitters Stores 11 © 2020 Tempur Sealy International, Inc.
Slide 12: Brands & Products
BRANDS & PRODUCTS 12 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 13: 13 © 2020 Tempur Sealy International, Inc.
13 © 2020 Tempur Sealy International, Inc.
Slide 14: Tempur rated #1 Most Reliable by Australian consumers
Tempur rated #1 Most Reliable and #1 Highest Customer Satisfaction by Australian consumers 14 © 2020 Tempur Sealy International, Inc.
Slide 15: New Products in 2020
New Products in 2020 ADVANCED SLEEP SENSING POWERED BY CLOUD AI NONINTRUSIVE & SECURE ACTIVEbreeze° 15 © 2020 Tempur Sealy International, Inc.
Slide 16: Complementary Product Strategy
Complementary Product Strategy Tempur Sealy has historically competed in Branded Bedding Estimated 75% of Industry Revenues ® Opportunity with Non‐Branded Bedding Estimated 25% of Industry Revenues 16 © 2020 Tempur Sealy International, Inc.
Slide 17: Portfolio of Brands
Portfolio of Brands Tempur‐Pedic • Tempur‐Pedic uniquely adapts, supports and aligns to you to deliver truly life‐changing sleep $2,199‐$7,499 Stearns & Foster • The world’s finest beds made with exceptional materials, time‐honored craftsmanship and unparalleled design $1,499‐$4,999 Sealy • Every Se
Slide 18: Global Manufacturing
GLOBAL MANUFACTURING 18 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 19: Global Manufacturing Footprint
GLOBAL MANUFACTURING FOOTPRINT 35 International Facilities 27 North American Facilities Wholly owned and Joint Venture Tempur‐Pedic Facility Joint Venture Licensee 19 © 2020 Tempur Sealy International, Inc.
Slide 20: Improvements in Manufacturing
IMPROVEMENTS IN MANUFACTURING GLUE BRIDGES HEMMERS PALLETIZATION COMPRESSION EQUIPMENT 20 © 2020 Tempur Sealy International, Inc.
Slide 21: Driving Shareholder Value
DRIVING SHAREHOLDER VALUE 21 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 22: Long-term Initiatives and Competitive Advantages
Long‐term 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) Competitive advantages: • Co
Slide 23: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Net Sales Increased 29% Direct Channel Net Sales Increased 62% Highlights Record Operating Cash Flow of $113M Three Months Ended December 31st % Change ($ in millions, except for Reported 2019 2018 Constant EPS and % values) % Change (unaudited) Currency(1) Net Sales $871.3
Slide 24: Full Year 2019 Highlights
Full Year 2019 Net Income Increased 89% Full Year EPS Increased 88% to $3.42 Highlights Repurchased Over $100M of Shares Year Ended December 31st % Change ($ in millions, except for Reported 2019 2018 Constant EPS and % values) % Change (unaudited) Currency(1) Net Sales $3,106.0 $2,702.9 14.9%
Slide 25: 2020 Targets
Expecting to deliver record full‐year net sales 2020 Targets Expecting gross margin expansion Making a record investment in advertising for 2020, which will drive share of voice in the marketplace, inclusive of increased cooperative advertising from new distribution(2) On‐going share repurch
Slide 26: Environmental, Social, and Governance
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE Tempur Sealy is committed to protecting and improving our communities and environment Environmental • In 2018, 72% of our North American facility waste was recycled ‐ 16,066 barrels of oil, 51,152 trees, 16,070,577 KW hours, 3,009 tons of CO2, 21,062,772 gallons
Slide 27: 2020 Environmental, Social, and Governance Highlights
2020 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE HIGHLIGHTS Raymond James ranked Tempur Sealy in the Investing in solar panel technology for our largest top quartile for ESG out of all companies they mattress manufacturing operation, located in consider a ‘Strong Buy’ Albuquerque, New Mexico The solar
Slide 28: 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 © 2020 Tempur Sealy International, Inc.
Slide 29: Appendix
Appendix 29 © 2020 Tempur Sealy International, Inc. © 2020 Tempur Sealy International, Inc.
Slide 30: Leverage and Debt Structure
Leverage ratio (1) decreased to below 3.0x, established new range of 2.5‐3.5x(4) Fixed rate debt represents around 2/3 of total debt; capital structure contains Debt Structure long dated maturities Capital Allocation: Invest in the highest ROIC opportunities We believe in a consistent measured
Slide 31: Leverage Reconciliation
Leverage Reconciliation 31 © 2020 Tempur Sealy International, Inc.
Slide 32: 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, which includes information concerning one or more of the Company's plans, guidance, objectives, goals, strategies, and other inf
Slide 33: 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 the subsequent slide for more information regarding the definitio
Slide 34: 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 35: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 35 © 2020 Tempur Sealy International, Inc.
Slide 36: Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted EPS 36 © 2020 Tempur Sealy International, Inc.
Slide 37: Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted EPS 37 © 2020 Tempur Sealy International, Inc.
Slide 38: Aspirational Program
Aspirational Program(5) The Company has an Aspirational Program which is a unique long‐term program designed to provide extraordinary compensation for extraordinary performance. The Company seeks to accomplish these goals in a way that rewards performance that is aligned with its stockholders’ int
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