COMPANY UPDATE
May 2023
LEG (NYSE)
www.leggett.com
FORWARD-LOOKING STATEMENTS
Statements in this presentation that are not historical in nature are "forward-looking." These statements include future sales, net trade sales and growth, product mix sales, Company and segment volume, EPS, EBIT, depreciation and amortization, net interest expense, tax rate, diluted shares, operating cash, capital expenditures, dividends, minimal acquisition and share repurchases, dividend growth and yield, dividend payout percentage of EPS and adjusted EPS, net earnings, return on invested capital, EBIT margins, segment EBIT margins, segment sales, acquisition sales growth, total shareholder return or TSR, adjusted EBIT, adjusted EBIT margins, adjusted EBITDA, adjusted EBITDA margin, adjusted earnings, adjusted EPS, net operating profit after tax, average invested capital, uses of cash, working capital, investment grade credit rating, inflationary and currency impacts, operating cash flow in excess of capital expenditures and dividends, raw material-related price decreases, lower metal margins in our Steel Rod business, and moderate pricing pressure from deflation. All such forward-looking statements are expressly qualified by the cautionary statements described in this provision. We do not have, and do not undertake, any duty to update any forward-looking statement. Forward-looking statements should not be relied upon as a prediction of actual future events or results. Any forward- looking statement reflects only the beliefs of Leggett at the time the statement is made. All forward-looking statements are subject to risks and uncertainties which might cause actual events or results to differ materially from the forward- looking statements. These risks and uncertainties include: the Russian invasion of Ukraine; global inflationary impacts; macro-economic impacts; pandemics; demand for our products and our customers' products; our manufacturing facilities' ability to remain open and fully operational; goodwill and long-lived asset impairment; inability to issue commercial paper or borrow under the credit facility; inability to collect receivables; inability to pass along raw material price increases; inability to maintain profit margins; conflict between China and Taiwan; changes in our capital needs; our capital expenditures; changing tax rates; market conditions; increased trade costs; foreign country operational risks; price and product competition; cost and availability of raw materials and labor and energy costs; cash generation to pay the dividend; political risks; ability to grow acquired businesses; amount of share repurchases; disruption to our rod mill; disruption to our operations and supply chain from weather-related events and other impacts; restructuring-related costs; foreign currency fluctuation; our ability to manage working capital; anti-dumping duties; data privacy; cybersecurity breaches; customer bankruptcies and losses; climate change regulations; ESG risks; cash repatriation; litigation risks; and other risk factors in Leggett's most recent Form 10-K and subsequent 10-Qs.
Market and Industry Data
Unless we indicate otherwise, we base the information concerning our markets/industry contained herein on our general knowledge of and expectations concerning those markets/industry, on data from various industry analyses, on our internal research, and on adjustments and assumptions that we believe to be reasonable. However, we have not independently verified data from market/industry analyses and cannot guarantee their accuracy or completeness.
2
LEGGETT DISTINCTIVES
Strong balance sheet and cash flow
Disciplined use of cash
~5.5% dividend yield; 52 consecutive annual increases Leader in most markets; few large competitors
Opportunities for long-termgrowth
Internal initiatives + market growth + acquisitions Large addressable markets
Management has "skin in the game"
Significant stock owners; forego comp in exchange for shares Incentive comp aligned with TSR focus
3
DIVERSE PORTFOLIO
Product Mix | Geographic Split | |||
(based on 2023 estimated net trade sales) | (based on production) | |||
Automotive | Mexico | Others | ||
18% | ||||
3% | ||||
Canada 5% | ||||
5% | ||||
Aerospace | China | |||
Bedding | 3% | |||
10% | ||||
42% | ||||
Hydraulic Cylinders | ||||
5% | ||||
Work Furniture | Europe | |||
12% | ||||
5% | U.S. | |||
65% |
Home Furniture
7%
Flooring & Textiles
20%
4
SEGMENTS
Bedding Products
- Mattress springs
- Private label finished mattresses, mattress toppers, pillows
- Specialty bedding foams
- Foundations
- Adjustable beds
- Drawn steel wire
- Steel rod
- Quilting & sewing machinery for bedding mfg.
- Mattress packaging and glue-drying equipment
Specialized Products
Automotive
Auto seat support & lumbar systems Motors, actuators & cables
Aerospace
Tubing
Tube assemblies Flexible joints
Hydraulic Cylinders
Hydraulic cylinders primarily for material handling, transportation & heavy construction equipment
% of 2023e net trade sales
Specialized | |
Bedding | 26% |
42% | Furniture, Flooring |
& Textile | |
32% |
Furniture, Flooring &
Textile Products
Home Furniture
Recliner mechanisms
Seating and sofa sleeper components
Work Furniture
Chair controls, bases, frames Private label finished seating
Flooring & Textiles
Flooring underlayment Textile converting
Geo components
5
MACRO MARKET EXPOSURE
Automotive
20%
Consumer
Commercial/ Durables
Industrial55% 25%
Key Economic Indicators
- Consumer confidence
- More crucial than home sales since majority (~2/3rds) of bedding/furniture purchases are replacement of existing product
- "Large ticket" purchases are deferrable
- Total housing turnover
- Combination of new and existing home sales
- Employment levels
- Consumer discretionary spending
- Interest rate levels
6
CURRENT TOPICS
1Q23 OVERVIEW
Sales $1.21B
EBIT | EBIT margin |
$89M | 7.4% |
EBITDA | EBITDA margin |
$135M | 11.1% |
EPS | |
$.39 | |
Cash from operations | |
$97M |
8
2023 GUIDANCE (ISSUED 5/1/23 AND NOT UPDATED SINCE)
- Sales: $4.8-$5.2 billion; down 7% to up 1% versus 2022, reflecting macro uncertainty across our markets
- Volume at the mid-point expected to be down low single digits:
- Down low single digits in Bedding Products Segment
- Up high single digits in Specialized Products Segment
- Down low single digits in Furniture, Flooring & Textile Products Segment
- Raw material-related price decreases and currency impact combined expected to reduce sales mid-single digits
- Acquisitions completed in 2022 expected to add ~3% to sales
- EPS: $1.50-$1.90
- Mid-pointreflects lower metal margins in our Steel Rod business, lower volume in some of our businesses, and moderate pricing pressure from deflation
- Implied EBIT margin of 7.5%-8.0%
9
2023 GUIDANCE (CONTINUED)
- Depreciation and amortization ~$200 million
- Net interest expense ~$85 million
- Tax rate ~24%
- Operating cash $450-$500 million
- Cap-ex$100 -$130 (vs. ~$100 million)
- Dividends ~$240 million
- Diluted shares ~137 million
- Minimal acquisitions and share repurchases
10
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Leggett & Platt Inc. published this content on 11 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2023 16:23:04 UTC.