Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Tempur Sealy International — Investor Presentation (May 2019)
31 slides from Somnigroup International's investor presentation, May 14, 2019
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 © 2019 Tempur Sealy International, Inc.
Slide 2: Tempur Sealy International, Inc. Overview
Tempur Sealy International, Inc. Overview: (TPX) • Strong global brands serving all price points • Omni-channel distribution balanced between wholesale and direct to consumer • Global manufacturing footprint • Structural growth industry, with high ROIC and robust free cash flow • Industry is relativ
Slide 3: Long-term Focused
Long-term Focused Key initiatives: • Develop the most innovative bedding products in all the markets we serve • Invest significant marketing dollars to promote our worldwide brands • Optimize worldwide distribution to be where consumers want to shop • Drive increases in EBITDA(1) (1) This financial
Slide 4: Global Manufacturing Foot Print
Global Manufacturing Foot Print 35 International Facilities 22 North American Facilities Wholly owned and Joint Venture Tempur-Pedic Facility Joint Venture Licensee 4 © 2019 Tempur Sealy International, Inc.
Slide 5: Powerful Omni-Distribution Platform
Powerful Omni-Distribution Platform ➢ Most important pillar of world-wide distribution Wholesale ➢ 6% Worldwide growth in 1Q19 ➢ Continued investment in ecommerce platform Web ➢ Over 30% 1Q19 sales growth in North America Company ➢ Luxury showroom experience Owned ➢ 15% 1Q19 same store sales growth
Slide 6: Direct to Consumer
Direct to Consumer Global Direct Sales • Distribution network made up of high growth, high 80 margin, Web, Call Center, and Company-owned stores 70 • Strong growth within the direct channel, growing 38% in the first quarter of 2019 60 • Long-term direct target: 25% of consolidated net sales 50 40 30
Slide 7: Winning on the Internet
Winning on the Internet TempurPedic.com Over 30% 1Q19 sales growth in North America Alternative Channels Dedicated sales team with over 100% 1Q19 Sealy eMarketplace sales growth Traditional Retailers TPX proprietary Retail Edge training providing shopper-focused solutions Compressed Bedding Tempur C
Slide 8: Company-Owned North American Store Strategy
Company-Owned North American Store Strategy High-End Targeted Opportunity Broad Based Opportunity – Strategic Representation Sleep Outfitters: o Regional bedding retailer that is strategically important to the markets it serves for Tempur Sealy o High market share for our brands within footprint o T
Slide 9: Brands & Products
BRANDS & PRODUCTS 9 © 2019 Tempur Sealy International, Inc.
Slide 10: Product Segments
Product Segments Bedding Other Products Products Net Sales Consolidated $ 630M $ 61M $ 691M YoY Growth 9.3% -0.5% 8.4% North America $ 514M $ 30M $ 544M YoY Growth 13.7% -9.5% 12.2% International $ 115M $ 32M $ 147M YoY Growth -6.7% 9.8% -3.6% 10 © 2019 Tempur Sealy International, Inc.
Slide 11: U.S. Portfolio of Products
U.S. Portfolio of Products TEMPUR MATERIAL HYBRID INNERSPRING MEMORY FOAM TEMPUR® STEARNS & FOSTER® SEALY CONFORM® SEALY HYBRID® COCOON BY TEMPUR BREEZE® SEALY SEALY (BED IN A BOX) (BED IN A BOX) TEMPUR ADAPT™ STEARNS & FOSTER® SEALY RESPONSE® OTHER SPECIALTY ADJUSTABLE BASES PILLOWS 11 © 2019 Tempu
Slide 12: Tempur-Pedic Breeze Launch
TEMPUR-PEDIC Launching the innovative, new breeze°, …designed to improve product mix, completes the largest rollout in Tempur history… with all night cooling. 12 © 2019 Tempur Sealy International, Inc.
Slide 13: Strongest Tempur-Pedic Product Offering
STRONGEST TEMPUR-PEDIC PRODUCT OFFERING TEMPUR-ADAPT FAMILY TEMPUR-BREEZE FAMILY ADAPT PROADAPT LUXEADAPT PRObreeze° LUXEbreeze° SOFT SOFT SOFT MEDIUM MEDIUM MEDIUM FIRM FIRM FIRM HYBRID HYBRID HYBRID $2,199 $2,999 $3,999 $3,799 $4,499 Launch to be completed by Product Launched in 2018 Memorial Day
Slide 14: New Tempur-LUXEbreeze
NEW TEMPUR-LUXEbreeze° NEXT LEVEL COOLING COMFORT - 8° cooler OUTSIDE SMARTCLIMATE MAX DUAL COVER SYSTEM An enhanced zip-off cover with double the cool- to-touch power combined with a super-stretch inner layer so you feel cooler when you lie down. INSIDE PURECOOL+ Phase Change Material Exclusive, ne
Slide 15: New Tempur-PRObreeze
NEW TEMPUR-PRObreeze° ADVANCED ALL-NIGHT COOLING - 3° cooler OUTSIDE SMARTCLIMATE DUAL COVER SYSTEM A zip-off, cool-to-touch outer layer combined with a super-stretch inner layer so you feel cooler when you lie down INSIDE PURECOOL+ Phase Change Material Exclusive, next-generation technology absorbs
Slide 16: 2019 New Products
2019 New Products 16 © 2019 Tempur Sealy International, Inc.
Slide 17: Stearns & Foster Reinvented
Stearns & Foster Reinvented ALL-NEW & EXCLUSIVE Coil Technologies PROPRIETARY and EXCLUSIVE Memory Foam engineered by: ALL-NEW Natural + Cooling System 17 © 2019 Tempur Sealy International, Inc.
Slide 18: New Stearns & Foster Collection
NEW Stearns & Foster Collection: ESTATE Starting at $1,499 LUX ESTATE Starting at $2,299 LUX ESTATE HYBRID Starting at $2,799 RESERVE Starting at $3,999 18 © 2019 Tempur Sealy International, Inc.
Slide 19: Recent Management Comments
RECENT MANAGEMENT COMMENTS 19
Slide 20: First Quarter 2019 Highlights
• Net Sales Increased 8%, Tempur North America Sales Increased 37% First Quarter 2019 • Global Direct Sales Increased 38%, North America Direct Sales Increased 36% Highlights • Net Income Increased 23%, EPS Increased 21% • Increased Full Year 2019 Guidance Three Months Ended March 31st %Change 2019
Slide 21: Debt Structure
• Leverage ratio midpoint(3): 3.5x with a range of 3.0x to 4.0x • Fixed rate debt represent ~60% of total debt; capital structure Debt Structure contains long dated maturities • Prioritize cash for business needs and bring down leverage ratio • Expect to opportunistically buyback shares • Active rep
Slide 22: Revised 2019 Targets and Near Term Priorities
Revised Outlook Assumptions 2019 Targets and ➢ North America: • Continued Tempur-Pedic growth Near Term Priorities • Sealy sales to be stable to slightly up • Improved merchandising mix ➢ International single digit constant currency growth ➢ Global incremental innovation investments of $15M ➢ Based
Slide 23: 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 23 © 2019 Tempur Sealy International, Inc.
Slide 24: Tempur Sealy
TEMPUR*SEALY
Slide 25: Aspirational Plan
Aspirational Plan(5) ➢ On August 7, 2017, the Company implemented a new Aspirational Program in the form of performance restricted stock units tied to challenging performance targets. This Aspirational Program builds on the challenging goals and the structure established in our original Aspirational
Slide 26: 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. Such statements might include those containing information concerning one or more of the Company’s plans; guidance; objectives;
Slide 27: 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 slide 28 for more information regarding the definitions of adjust
Slide 28: 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 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended Trailing Twelve Months Ended (in millions) March 31, 2019 March 31, 2018 March 31, 2019 GAAP Net income $ 28.4 $ 23.1 $ 105.8 Interest expense, net 22.4 22.7 92.0 Income taxes 16.9 10.0 56.5 Depreciation and amortization 28.6 27.1 115.2 EBITDA 96.3 8
Slide 30: Adjusted Net Income and Adjusted EPS
Adjusted Net Income and Adjusted EPS Three Months Ended (in millions, except per share amounts) March 31, 2019 March 31, 2018 GAAP net income $ 28.4 $ 23.1 Loss from discontinued operations, net of tax (1) 0.4 2.8 Other Income (2) (7.2) - Acquisition-related costs and other (3) 3.3 - Tax adjustments
Slide 31: Leverage Reconciliation
Leverage Reconciliation (in millions, except ratio) 3Q18 4Q18 1Q19 Total debt $ 1,689.0 $ 1,646.2 $ 1,659.6 Plus: Deferred financing costs(1) $ 8.1 7.6 7.2 Plus: Letters of credit outstanding 23.1 23.7 23.2 Consolidated funded debt $ 1,720.2 $ 1,677.5 $ 1,690.0 Less: Domestic qualified cash(2) 12.8
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