Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (March 2017)
24 slides from Somnigroup International's investor presentation, Mar 3, 2017
Slide 1: Tempur Sealy International, Inc. (TPX) Investor Presentation
1 March 2017 “Success is strengthening our Iconic Brands while driving higher ROIC through focused execution” Tempur Sealy International, Inc. (TPX)
Slide 2: Global Bedding Products Company Investment Merits
2 Global Bedding Products Company Investment Merits Tempur Sealy is the premium market leader… • Strong brands across a complete portfolio of products • Global manufacturing foot print • Structural growth industry, with high ROIC and free cash flow • Industry is relatively concentrated in US and fra
Slide 3: Bedding Industry Market Opportunity
3 Bedding Industry Market Opportunity
Slide 4: Growing Global Mattress Industry
4 Growing Global Mattress Industry $ in billions Non-US world consumption data is impacted by exchange rate fluctuations, please see footnote 6 for source. US mattress sales growing at a 6% CAGR over last twenty years driven by consumer shift to higher priced mattresses Non-US mattress sales gre
Slide 5: Tempur Sealy Has Well Established Global Brands
5 Tempur Sealy Has Well Established Global Brands Tempur-Pedic • Nothing precisely adapts, supports and aligns like Tempur-Pedic for life-changing sleep Stearns & Foster • Finest beds made with exceptional materials and unparalleled craftsmanship Sealy • Featuring Posturepedic Technology providing s
Slide 6: Complete Portfolio Of Products
6 Complete Portfolio Of Products Sealy Conform Adjustable bases Cocoon by Sealy Pillows TEMPUR-Cloud Stearns & Foster TEMPUR-Flex Sealy Hybrid Innerspring Hybrid Tempur Material Other Specialty Sealy Response TEMPUR-Contour Stearns & Foster
Slide 7: New Products for 2017
7 New Products for 2017 The new Sealy featuring Posturepedic Technology™ provides targeted support where you need it most. Celebrating 25 years in sleep innovation with the limited-edition Tempur-Legacy mattress. Launching internationally, the new Tempur-Pedic Flagship line features improved aesthet
Slide 8: 2017 Tempur-Pedic Simplified Pricing
8 Price premium for Flex 2017 Tempur-Pedic Simplified Pricing We have also made Tempur-Pedic® pricing adjustments to simplify the structure. These updates will aide in increased velocities by reducing navigation complexities for retail sales associates and consumers. Aligned pricing for Cloud an
Slide 9: Worldwide Direct Business
9 Worldwide Direct Business Company Owned Stores Web Call Center
Slide 10: Global Manufacturing Foot Print
10 Global Manufacturing Foot Print North American and International operating models support domestic demand and global growth Driving for operational improvements on key metrics like product quality and on-time delivery 22 North American Facilities 34 International Facilities Wholly owned and J
Slide 11: Fourth Quarter and Full Year Highlights
11 Fourth Quarter and Full Year Highlights 7th consecutive quarter of double-digit EPS year-over-year growth Strong net income and record EBITDA for the quarter and full year Excluding Mattress Firm, sales in North America grew 4% for the full year and 7% for the fourth quarter 2016 2015 %Chan
Slide 12: Update North American Sales Trends
12 Update North American Sales Trends • We believe the Presidents’ Day holiday was solid for the bedding industry • Tempur Sealy brands performed well over the holiday period • In total, our order trends for the first two months of the year were up 2% • Orders excluding Mattress Firm were up approxi
Slide 13: 2017 Plan and Near Term Priorities
13 2017 Plan and Near Term Priorities 2017 Adjusted EBITDA(8): Target Debt: $400 - 450 million 3.5x leverage ratio(9) International Expansion Channel Expansion New Products Operational Efficiencies Growth Opportunities Financial Targets(7) Recapture Market Share in North America Expand Market Share
Slide 14: Recapturing Revenues in North America
14 Recapturing Revenues in North America What gives us confidence to recapture: Premier portfolio of branded beds Over 94% of Tempur-Pedic owners would recommend the product(12) Sealy has one of the highest brand awareness of any US mattress brand(12) Stearns & Foster had strong growth in 20
Slide 15: Tempur Sealy's Variable Cost Structure
15 Tempur Sealy’s Variable Cost Structure(2) Current plan is to maintain cost structure to support recapturing the majority of lost sales with the expectation of lower operating efficiencies in the short term Tempur Sealy’s total cost structure is highly variable; approximately 75% in total Te
Slide 16: Debt Structure
16 Debt Structure In the near term, we anticipate EBITDA trailing down and using some of our cash flow to pay down debt Leverage ratio target: 3.5x Fixed rate debt represent ~60% of total debt; capital structure contains long dated maturities Continued expansion to share repurchase program;
Slide 17: Thank you for your interest in Tempur Sealy International
17 Thank you for your interest in Tempur Sealy International Improving the Sleep of More People Every Night, All Around the World For more information please email: investor.relations@tempursealy.com
Slide 18: Appendix
18 Appendix
Slide 19: Forward-Looking Statements
19 Forward-Looking Statements This investor presentation contains "forward-looking statements," within the meaning of the federal securities laws, which include information concerning one or more of the Company's plans, objectives, goals, strategies, and other information that are not historical inf
Slide 20: Footnotes
20 Footnotes 1. This is a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures and Constant Currency Information” 2. Management estimates. 3. Based on the Company's results for fiscal 2015 or 2016, as applicable. For more information please refer to the Annual Report on Form 10-K
Slide 21: Use of Non-GAAP Financial Measures and Constant Currency Information
21 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, and consolidated funded debt and leverage ra
Slide 22: Adjusted EBITDA Reconciliation
22 Adjusted EBITDA Reconciliation (in millions) December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 Net income 63.4$ (11.3)$ 202.1$ 73.5$ Interest expense 20.2 22.0 85.2 96.1 Loss on extinguishment of debt - - 47.2 - Income taxes 26.6 81.8 86.8 125.4 Depreciation and amortization
Slide 23: Leverage Reconciliation
23 Leverage Reconciliation (in millions, except ratio) FY 14 FY 15 FY 16 Total debt(1) 1,602.3$ 1,479.6$ 1,901.0$ Plus: Letters of credit outstanding 18.2 19.8 23.0 Consolidated funded debt 1,620.5 1,499.4 1,924.0 Less: Domestic qualified cash(2) 25.9 121.8 12.7 Less: Foreign qualified cash(2) 21.9
Slide 24: Adjusted Net Income and Adjusted EPS
24 Adjusted Net Income and Adjusted EPS (in millions, except per share amounts) December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 GAAP net income 63.4 (11.3) 202.1 73.5 Loss on extinguishment of debt (1) - - 47.2 - German legal settlement (2) - - - 17.6 Interest expense and fin
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