Somnigroup International Inc. · NYSE:SGI
Somnigroup International — Investor Presentation (February 2025)
49 slides from Somnigroup International's investor presentation, February 2025
Slide 1: Somnigroup Investor Presentation February 2025
NYSE: SGI FEBRUARY 2025
Slide 2: Somnigroup Investment Thesis
SOMNIGROUP INVESTMENT THESIS Leader in the $120 billion3 global bedding market. Broad, sustainable competitive advantages across iconic brands, capabilities, and scale; industry-leading design and manufacturing capabilities; vertically integrated operations; worldwide omni-channel distribution netwo
Slide 3: About Somnigroup
ABOUT SOMNIGROUP In February 2025, the Company was reimagined, and Somnigroup International Inc. was founded, reflecting the transformative nature of the Mattress Firm acquisition. Somnigroup provides sleep solutions with a portfolio of outstanding businesses with iconic brands. SOMN = sleep OMNI =
Slide 4: Somnigroup's Structure
SOMNIGROUP’S STRUCTURE High-level strategic direction • Corporate governance • Capital allocation Tactical go-to-market strategy • Operational excellence • Passionate customer service 4
Slide 5: Somnigroup: The world's largest bedding company
SOMNIGROUP The world’s largest bedding company, dedicated to enriching people’s lives through the power of a good night’s sleep. CONSUMER-CENTRIC DIVERSIFIED MANUFACTURING OMNI-CHANNEL INNOVATION PORTFOLIO & LOGISTICS RETAIL • Advanced R&D • Diverse brand • Global • Leading bedding capabilities driv
Slide 6: Uniquely positioned to optimize consumer experience
SOMNIGROUP Uniquely positioned to optimize consumer experience Optimize investments in sleep technology Improve targeted innovation Drive advertising share of voice Enhance consumer outcomes Accelerate continuous feedback loop 6
Slide 7: Somnigroup's Vertically Integrated Strategy
SOMNIGROUP’S VERTICALLY INTEGRATED STRATEGY 20,000 160+ associates E-commerce Manufacturing platforms and R&D facilities OPERATIONS FACILITIES SOMNIGROUP Tempur® ECOSYSTEM Distribution WITH retail stores centers 2,800+ RETAIL STORES Dreams retail stores Logistics fleet Mattress Firm retail stores 7
Slide 8: Somnigroup's Journey to Vertical Retailer
SOMNIGROUP’S JOURNEY TO VERTICAL RETAILER 2015 2024 Pro Forma4 Total Sales $3.2B $8.0B Adjusted EBITDA2 $0.5B $1.3B Stock Price $17.61 $66.80* DIRECT TO 2015 2024 9% CONSUMER 65% As a percentage of TOTAL SALES4 +56% 8 *SGI closing stock price on 2/19/25
Slide 9: Somnigroup Team's Value Creation
SOMNIGROUP TEAM’S VALUE CREATION Since the management change in 2015, sales have increased 56%, adjusted EBITDA2 has increased over 100%, and adjusted EPS2 has increased over 200%. Current TPX Management Track Record Since 2015 (in millions, except percentages, Year Ended Year Ended multiples, and p
Slide 10: Somnigroup Executive Team
SOMNIGROUP EXECUTIVE TEAM SCOTT THOMPSON CHAIRMAN, CEO SCOTT JONATHAN BHASKAR KINDRA DAVID CLIFF THOMPSON HIRST RAO BELLIS MONTGOMERY BUSTER EVP, GLOBAL BUS. CEO INTERIM CEO CEO EVP, CFO CIO DEVELOPMENT 10
Slide 11: Mattress Firm Acquisition: Price, Leverage, Multiple, Divestiture
+ CLOSED FEBRUARY 5, 2025 PRICE LEVERAGE2 MULTIPLE DIVESTITURE • $2.7B of cash • 3.5x at closing • 9 times Mattress • 73 Mattress Firm retail • 2.0-3.0x target Firm’s four-year locations • 34.2M shares of leverage range average • 103 Sleep Outfitters common stock • Share repurchases adjusted EBITDA1
Slide 12: Transaction Rationale
TRANSACTION RATIONALE 1. Expands consumer touchpoints to enhance ability to keep pace with evolving consumer preferences 2. Accelerates U.S. omni-channel strategy, enabling a seamless consumer experience 3. Simplifies consumer purchase journey, reducing friction at each touchpoint 4. Aligns new prod
Slide 13: Somnigroup's Robust Capital Allocation
SOMNIGROUP’S ROBUST CAPITAL ALLOCATION 5-year track record INVESTMENTS IN CAPITAL RETURNED GROWTH INITIATIVES TO SHAREHOLDERS $820M $5.6B4 $1.9B $300M 2x-3x invested in our invested in invested in invested in target leverage2 people, plants accretive M&A share quarterly range supported and processes
Slide 14: Tempur Sealy
TEMPUR*SEALY
Slide 15: Overview
OVERVIEW CORE OMNI-CHANNEL COMPETENCIES DISTRIBUTION Consumer-Centric Innovation Leading Product Brands 70% Wholesale PRODUCTS SOLD IN 100+ World-Class Manufacturing COUNTRIES Integrated WORLDWIDE Marketing 30% Direct-to-Consumer Extensive Logistics Capabilities 15
Slide 16: Competitive Differentiators
COMPETITIVE DIFFERENTIATORS SCALE DIVERSE ICONIC BRANDS PORTFOLIO MANUFACTURING Consumer preferred Extensive capabilities Wide range of price supported by advertising across 70+ plants points and technologies LOGISTICS R&D MARKETING Global integrated Advanced in-house Fully integrated logistics oper
Slide 17: Brand Portfolio
BRAND PORTFOLIO TEMPUR-PEDIC®: LEADING WORLDWIDE PREMIUM BEDDING BRAND Tempur-Pedic® uniquely adapts, supports, and aligns to you to deliver truly life- changing sleep. $2,200-$9,998* STEARNS & FOSTER®: HIGH-END-TARGETED BRAND The world’s finest beds that are made with exceptional materials, time-ho
Slide 18: Global Manufacturing Footprint
GLOBAL MANUFACTURING FOOTPRINT 71 manufacturing facilities 4 state-of-the-art product testing locations 20 million sq. ft. of manufacturing and distribution operations 75k sq. ft. R&D innovation Wholly owned (31) Tempur-Pedic® Facility (4) Joint Venture (9) Licensee (27) 18
Slide 19: Successful Omni-Distribution Platform
SUCCESSFUL OMNI-DISTRIBUTION PLATFORM • Third-party retailers are our largest distribution channel FY‘24 Sales Wholesale • Significant private label opportunity INTERNATIONAL • Valued win-win relationships with retailers DIRECT-TO-CONSUMER 15% INTERNATIONAL WHOLESALE 9% • Significant worldwide sales
Slide 20: Key Markets
KEY MARKETS NORTH AMERICA • $50B3 bedding market • Concentrated • Historically strong bedding industry growth, emerging from a prolonged downturn* • Market share leader with continued opportunities to expand through higher slot velocity, expansion into non-traditional channels, and growing DTC prese
Slide 21: Sales Growth Outlook
SALES GROWTH OUTLOOK Invest in innovation to meet customer demand. Grow wholesale through existing and new retail relationships. Expand into OEM market. Invest in U.S. Sealy and Stearns & Foster® products and marketing. Expand direct-to-consumer through e-commerce and company-owned stores. 21
Slide 22: Mattress Firm
@ MATTRESSFIRM
Slide 23: Overview
OVERVIEW LEADING OMNICHANNEL U.S. RETAILER 2,200+ brick-and-mortar retail stores integrated with e- commerce and sleep education platforms to enable a seamless consumer purchase journey STRONG CONSUMER ENGAGEMENT Robust consumer touchpoints with deep insight into evolving preferences to optimize the
Slide 24: Retail Footprint
RETAIL FOOTPRINT • 2,2005+ owned retail stores across 45 states • Integrated e-commerce capabilities with 75M+ website visitors6 annually Geographic Footprint 66 WA ND MT MN 10 29 5 ME 32 24 ID SD WI VT 22 1 OR 12 MI NH WY 117 NY 7 39 7 IA NE 68 91 220 92 21 22 45 PA 42 RI MA 55 OH CT 50 IL IN NJ 40
Slide 25: Mattress Firm's Diversified Product Offerings
MATTRESS FIRM’S DIVERSIFIED PRODUCT OFFERINGS • A leading retailer of Tempur-Pedic®, Sealy®, and Stearns & Foster® branded Somnigroup products Brands and • Retails Sleepy’s® private label bedding Mattress Firm Sales1 Private Label TTM 12/31/24 manufactured by Tempur Sealy Other Brands and Private La
Slide 26: Competitive Differentiators
COMPETITIVE DIFFERENTIATORS SCALE PRODUCT CONVENIENCE RETAIL EXPERTISE SELECTION Seamless experience Highly trained Diverse and curated nationwide on and offline Sleep Experts assortment EXPERIENCE CONSUMER LOGISTICS Personalized to TOUCHPOINTS Accelerated each consumer Data driven tools order-to-de
Slide 27: Sales Growth Outlook
SALES GROWTH OUTLOOK Leverage improving U.S. industry to drive market share Continuously align brick-and-mortar footprint to consumer demand Invest in stores and products to improve consumer shopping experience Drive conversion and AOV through enhanced RSA training Drive e-commerce traffic via strat
Slide 28: Dreams
Dreams
Slide 29: Overview
OVERVIEW LEADING UK BEDDING RETAILER 200+ brick-and-mortar retail stores, 2,000+ colleagues, and an integrated e-commerce platform attracting over 18M visitors6 annually VERTICALLY INTEGRATED In-house manufacturing, distribution and logistics operations result in Dreams producing and delivering the
Slide 30: Financials
FINANCIALS 30
Slide 31: Fourth Quarter and Full Year Performance
FOURTH QUARTER AND FULL YEAR PERFORMANCE Three Months Ended Year Ended Q4 ‘24 Sales by Channel* (in millions, except December December December December percentages and per % Change % Change 31, 2024 31, 2023 31, 2024 31, 2023 common share amounts) Net Sales $1,207.9 $1,170.5 3.2% $4,930.9 $4,925.4
Slide 32: 2025 Outlook
2025 OUTLOOK 7 2 Expect full-year adjusted EPS between $2.60 and $3.00 Projected Adjusted EPS2 CAGR of 19% $4.00 30 • On a reported basis, we expect sales between $7.5B Adjusted EPS U.S. Produced Mattress Units $3.19 and $7.8B $3.00 $2.80 • The global bedding industry stable versus the prior U.S. Pr
Slide 33: 2025 Outlook: Impact of Mattress Firm acquisition
2025 OUTLOOK 7 Impact of Mattress Firm acquisition ACQUISITION AND DIVESTITURE • The acquisition of Mattress Firm on February 5th • The planned divestiture of 103 Sleep Outfitters and 73 Mattress Firm stores on May 1st • The elimination of intercompany sales between Mattress Firm and Tempur Sealy, w
Slide 34: Long Term Perspective
LONG TERM PERSPECTIVE 7 2026-2028 Adjusted EPS2 INTERNAL TARGETS3 $6.00 • We are internally targeting sales to grow at a $4.85 compound annual rate of mid single digits starting in 2025. $4.00 • This indicates adjusted EPS2 would increase from the $2.80 midpoint for 2025 to $2.80 approximately $4.85
Slide 35: Synergies Outlook
EXPECTED RUN RATE SYNERGIES 20% SYNERGIES OUTLOOK3 35% 15% Enhanced visibility to consumer demand creates opportunities for agile and fortified supply chain 30% management while expanded scale and vertical integration drive operational efficiencies. Logistics Product Lifecycle Management Manufacturi
Slide 36: Strong Balance Sheet & Cash Flow
STRONG BALANCE SHEET & CASH FLOW Full-Year Adjusted EBITDA2 Leverage2 $1,200 4.0x $1,000 $800 3.0x $600 2.0x $400 $200 1.0x $0 4Q23 1Q24 2Q24 3Q24 4Q24 4Q'24 Pro 2020 2021 2022 2023 2024 Forma Target Range Leverage Full-Year Operating Cash Flow $800 $600 $400 $200 $0 2020 2021 2022 2023 2024 36
Slide 37: Capital Structure
CAPITAL STRUCTURE • The acquisition of Mattress Firm was funded with the $1.6B Term Loan B on hand and drawing on the $625M Delayed Draw Term A and $571M on our revolving credit facility • Pro forma 12/31/24 leverage2 was 3.5x and liquidity was ~$730M • We expect to return to our target leverage ran
Slide 38: Thank you for your interest in Somnigroup
Thank you for your interest in For more information, please email: [email protected] 38
Slide 39: Appendix
APPENDIX 39
Slide 40: U.S. Historical Industry Volumes
U.S. HISTORICAL INDUSTRY VOLUMES3 U.S. Produced Mattress Units 25.0 24.3 24.7 7.5% 24.1 24.0 23.5 23.6 23.5 22.5 7.0% 23.0 U.S. Produced Units / U.S. Population 22.0 6.5% U.S. Produced Units (Millions) 20.9 21.0 20.4 20.1 20.0 6.0% 19.0 18.1 18.0 5.5% 18.0 17.0 16.7 5.0% 16.0 15.0 4.5% 2009 2013 201
Slide 41: Sustainability Initiatives
SUSTAINABILITY INITIATIVES 2023 Updates Environmental • Achieved zero waste to landfill status at our Canadian and Mexican manufacturing operations and maintained our zero waste to landfill status at our U.S. and European manufacturing operations • Achieved zero waste to landfill status at 75% of ou
Slide 42: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This investor presentation contains statements regarding the Company’s expectations regarding the Mattress Firm acquisition, expectations regarding post-closing supply agreements, future performances, integration of the acquired companies with our business, expectations re
Slide 43: Use of Non-GAAP Financial Measures Information
USE OF NON-GAAP FINANCIAL MEASURES 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, free cash flow, consolidated indebtedness less netted cash, and lever
Slide 44: Adjusted Net Income and Adjusted EPS
ADJUSTED NET INCOME2 AND ADJUSTED EPS2 Three Months Ended (in millions, except per share amounts) December 31, 2024 December 31, 2023 Net income $ 71.9 $ 77.1 Customer-related transition charges (1) 26.7 — Transaction costs (2) 12.0 17.5 Transaction related interest expense, net (3) 9.8 — Supply cha
Slide 45: TTM Adjusted Net Income and Adjusted EPS
TTM ADJUSTED NET INCOME2 AND ADJUSTED EPS2 Trailing Twelve Months Ended (in millions, except per common share amounts) December 31, 2024 Net income $ 384.3 Transaction costs (1) 47.8 Customer-related transition charges (2) 26.7 Transaction related interest expense, net (3) 9.8 Supply chain transitio
Slide 46: Adjusted EBITDA
ADJUSTED EBITDA2 Three Months Ended (in millions) December 31, 2024 December 31, 2023 Net income $ 71.9 $ 77.1 Interest expense, net 26.5 30.9 Transaction related interest expense, net (1) 9.8 — Loss on extinguishment of debt (2) — 3.2 Income tax provision 23.1 9.9 Depreciation and amortization 53.0
Slide 47: TTM Adjusted EBITDA
TTM ADJUSTED EBITDA2 Trailing Twelve Months Ended (in millions) December 31, 2024 Net income $ 384.3 Interest expense, net 125.0 Transaction related interest expense, net (1) 9.8 Income tax provision 118.6 Depreciation and amortization 203.9 EBITDA $ 841.6 Adjustments: Transaction costs (2) 47.8 Cus
Slide 48: Leverage Reconciliation
LEVERAGE2 RECONCILIATION (in millions) December 31, 2024 Total debt, net $ 3,809.9 Plus: Deferred financing costs(1) 34.6 Total debt 3,844.5 Less: Netted cash(2) 1709.7 Consolidated indebtedness less netted cash $ 2,134.8 (1) We present deferred financing costs as a direct reduction from the carryin
Slide 49: Footnotes
FOOTNOTES 1 Any financial information included in this presentation for Mattress Firm prior to the acquisition date of February 5, 2025, is based on Mattress Firm’s historical financial reporting and has not been audited by the Company or the Company’s accountants 2 Adjusted net income, EBITDA, adju
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