Introduction - Investor Relations
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Introduction
Leggett Distinctives
⅓ Targeting Total Shareholder Return in top third of S&P 500
Strong balance sheet and cash flow
Disciplined use of cash
~4% dividend yield; 49 consecutive annual increases
Leader in most markets; few large competitors
Opportunities for long-term growth
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
Our Markets
Macro Market Exposure
Automotive
Product Mix
20% (based on 2019 trade sales)
Automotive
Consumer 18%
Durables
55%
Commercial
/Industrial Aerospace
25% 3%
Bedding Hydraulic Cylinders
46% 2%
Geographic Split Work Furniture
(based on production) 7%
Mexico Others
5% 2%
Canada
7% Home Furniture
7%
China
9%
Flooring & Textiles
17%
Europe
11% U.S.
66%
% of 2019 trade sales
Specialized
23%
Bedding
46%
Furniture,
Segments
Flooring & Textile
31%
Furniture, Flooring &
Bedding Products Specialized Products
Textile Products
Bedding Automotive Home Furniture
Mattress springs Auto seat support & lumbar Recliner mechanisms
Private-label finished mattresses, systems Seating and sofa sleeper
mattress toppers, pillows Motors, actuators & cables components
Specialty bedding foams
Foundations Aerospace Work Furniture
Tubing Chair controls, bases, frames
Wire Tube assemblies Private-label finished seating
Drawn steel wire
Steel rod Hydraulic Cylinders Flooring & Textiles
Hydraulic cylinders primarily for Flooring underlayment
Adjustable Bed material handling, transportation Textile converting
Adjustable beds & construction equipment Geo components
Machinery
Quilting & sewing machinery
for bedding mfg.
Mattress packaging and
glue-drying equipment
Leading U.S.-Based Manufacturer of:
Bedding Components
Automotive Seat Support and Lumbar Systems
Specialty Bedding Foams and Private-Label Finished Mattresses
Components for Home Furniture and Work Furniture
Flooring Underlayment
Adjustable Beds
Bedding Industry Machinery
Customers Include
In North America:
Adient HNI Mattress Firm Tempur Sealy
Ashley Furniture JLG (Oshkosh) MCF Tesla
Best Home Furniture Knoll Rooms-to-Go Toyota Boshoku
Berkshire Hathaway La-Z-Boy Sanyo Toyota Industrial Equip
Casper Lear Serta Tuft & Needle
Eaton Lincoln Electric Simmons United Technologies
Haworth Lowe’s Sleep Number Walmart
Herman Miller Magna Steelcase Wayfair
In Europe and Asia:
Dreams Hay Kuka Silentnight Beds
Eurasia Hilding Anders Natuzzi Steinhoff
Faurecia Himolla Nestledown Volkswagen
Fritz Hansen Howe Profim
Diverse Customer Base – Low Concentration
Macro Indicators
Consumer confidence
More crucial than home sales since majority (~2/3rds) of
bedding/furniture purchases are replacement of existing product
“Large ticket” purchases that are deferrable
Total housing turnover
Combination of new and existing homes sales
Employment levels
Consumer discretionary spending
Interest rate levels
Cost Structure
Costs are roughly 75% variable, 25% fixed
Incremental/decremental volume
25ꟷ35% contribution margin
Cost of Goods Sold composition (approximate):
60% Materials, composed of:
• Steel ~25% of RMs
• Chemicals ~15% of RMs
• Woven & non-woven fabrics ~10% of RMs
• Foam scrap, fibers ~3% of RMs
• Titanium, nickel, stainless ~2% of RMs
• Others, including sub-assemblies, hardware, components,
finished products purchased for resale, etc. ~45% of RMs
20% Labor (includes all burden and overhead)
20% Other, composed of:
• Depreciation, utilities, maintenance, supplies – each ~3% of COGS
• Shipping/transportation ~10% of COGS
• Other also includes rent, insurance, property tax, etc.
Steel Impact
Primary commodity exposure is steel; ~25% of RM’s
Main categories are scrap, rod, and flat-rolled
Many grades of scrap – market data is generally available
Limited credible data to track moves in other types of steel
Impact from inflation/deflation
Typically pass through; lag is ~90 days
LIFO accelerates inflation/deflation into COGS
Changes in metal margin (mkt price for rod - mkt price for scrap) also
impact earnings
Our scrap cost and rod pricing moves with the market; large swings could
cause Bedding segment earnings volatility
International Mix
Trade Sales, $mln1
2000
Europe China MX & Canada Other
1800
1600 2%
2%
1400 2%
2% 10% 10%
1200 2% 9%
2%
8%
1000 2%
8% 8%
800 8%
12%
11% 10%
10%
600 10% 10%
9%
400
12% 12% 11%
200 10% 11% 11%
10%
0
2013 2014 2015 2016 2017 2018 2019
1 Percentages in the chart are based on location of our production, which may differ
from the end markets in which finished products are eventually consumed.
Strong Peer Group
Diversified Manufacturers
w/ Ticker & Fortune 1000 Ranking (May 2020)
Leggett Ranking = 599
CSL Carlisle 570 ITW Illinois Tool Works 214
DHR Danaher 160 IR Ingersoll Rand n/a
DOV Dover 412 MAS Masco 366
ETN Eaton Corp n/a PNR Pentair n/a
EMR Emerson 178 PPG PPG Industries 205
Characteristics of the Group
Multiple Business Segments Primarily Manufacturers
Sell Mainly to Other Manufacturers In “Old Economy” Markets
Low Customer Concentration Complex; Hard to Grasp
Stamp, Cast & Machine Materials Old, Established Firms
Moderate Labor & Capital Intensity Diverse Products
Governance/Directors November 2020
9 Non-Management Directors (out of 11 total)
Only Non-Mgmt Directors on Key Board Committees
Non-Management Age Joined Position Firm
Mark Blinn 58 2019 Retired President & CEO Flowserve
Robert Brunner 63 2009 Retired EVP ITW
Mary Campbell 53 2019 Chief Merchandising Officer/ Qurate Retail Group/
Chief Commerce Officer QVC U.S.
Manuel Fernandez 74 2014 Managing Director SI Ventures
Joe McClanathan 68 2005 Retired President & CEO Energizer Household Products
Judy Odom 68 2002 Retired Chair & CEO Software Spectrum
Srikanth Padmanabhan 56 2018 Vice President Cummins Inc.
Jai Shah 54 2019 Group President Masco
Phoebe Wood 67 2005 Principal CompaniesWood
Management
Karl Glassman ‡ 62 2002 Chairman & CEO Leggett & Platt
Mitch Dolloff 54 2020 President & COO Leggett & Platt
† Lead Director
‡ Chairman of the Board
Committees: Audit Compensation Nominating & Corporate Governance
Compensation Rewards Strong Performance
Annual Incentive
Based on current year ROCE, free cash flow, and individual goals
Performance Stock Units
Long-term equity-based, significant portion of total comp for execs
Three-year performance period with two equal measures
• Relative TSR performance (vs. peer group of ~300 companies)
• Company or segment EBIT CAGR
Deferred Comp Program
Opportunity (in December) to forego a portion of next year’s cash salary
and bonus to buy stock units
Our Mission
At Leggett & Platt, we create innovative products that
enhance people’s lives, generate exceptional returns for
our shareholders, and provide sought-after jobs in
communities around the world.
Enhancing people’s lives for over 135 years.
Our Vision
Leggett & Platt enhances people’s lives worldwide by designing
and manufacturing innovative, distinctive products and
components for use in bedding, furniture, seating, homes, offices,
airplanes, and automobiles.
We efficiently turn ordinary materials into extraordinary products.
We strive to generate Total Shareholder Return for our
stockholders that ranks in the top third of the S&P 500, and we
provide sought-after jobs for a large number of men and women
in communities around the world.
Over time the company will grow and prosper as we expand or
obtain positions in attractive markets, develop inventive
proprietary products, and continuously improve production and
distribution efficiency.
Everyday, Everywhere When investors first learn about Leggett & Platt, they are sometimes surprised to find an S&P 500 company they haven’t discovered before – especially one with our track record and 137- year history. We are less well known because most of our products are sold to other manufacturers (as vital components found within their finished goods). Though our name may not be familiar to you, we’re fairly certain you use our products all the time. Below we highlight everyday settings where our components are found. You’ll quickly realize that our products are everywhere. Whether in the bedroom, living room, work environment, or car, it’s virtually certain that Leggett & Platt is there. Your bed likely contains Leggett & Platt components of some sort – springs, specialty foam, fabric, etc. And you may even sleep on one of our finished compressed mattresses sold by many leading bedding brands. If you sleep on an adjustable bed (one that allows the head and foot of the bed to raise into various comfort positions), we may have made it too. Many furniture makers use Leggett & Platt mechanisms in their motion furniture (chairs and sofas that recline). We also provide wire, springs, and other components used to produce upholstered furniture. You’ll find our products throughout your home. There’s a good chance our carpet pad is under your carpet and your draperies may be lined with our structural fabrics. If the chair you use in your work environment swivels, tilts, or adjusts, it’s possible that the mechanism or other components came from Leggett & Platt. We produce finished soft seating for several top work furniture brands so you may be using our products when you work in collaborative spaces. We may have also produced the pad beneath your office carpeting. Our components are found in vehicles produced by virtually all global OEMs. From the adjustable lumbar or massage units in your seat back to the wire suspension under your seat cushion, to the motors, actuators, and cables that allow powered features to work, your car almost certainly contains products made by us. We’re all around you! You’ll find Leggett & Platt components in airport seating, commercial airplanes, hotel rooms, along interstates and highways, and on construction sites. We’re in overhead garage doors, large farm machinery and lift trucks. We could continue on with other examples. Hopefully this helps you understand why we feel quite comfortable saying you probably encounter our products everyday, everywhere!
HIGHLIGHTS OF PAST 24 MONTHS
November 2020
November 2, 2020 – Leggett & Platt Reports Record EPS in 3Q and Announces 4Q Dividend
3Q EPS was a record $.77, an increase of $.03 vs 3Q19
3Q adjusted EPS was a record $.80, up $.04 vs 3Q19 adjusted EPS
3Q sales were $1.208 billion, down 3% vs 3Q19
3Q cash flow from operations was a record $261 million
Board declared fourth quarter dividend of $.40 per share
August 3, 2020 – Leggett & Platt Reports 2Q Results and Announces 3Q Dividend
2Q sales were down 30% vs 2Q19, significantly impacted by the COVID-19 pandemic
2Q EPS was ($.05), a decrease of $.69 vs 2Q19; 2Q adjusted EPS was $.16, down $.48 vs 2Q19
Liquidity at June 30, 2020 was $1.3 billion
Board declared third quarter dividend of $.40 per share
May 15, 2020 – Leggett Announces Dividend, Annual Meeting Results and Credit Agreement
Amendment
Second quarter dividend of $.40 per share
Indicated dividend yield of 5.9%, one of the highest among the S&P 500 Dividend Aristocrats
Annual meeting addressed four items of business; voting aligned with Board recommendations
Amended existing credit agreement to allow for additional liquidity
May 4, 2020 – Leggett & Platt Reports 1Q Results and COVID-19 Impacts
Crisis response team managing health and safety issues and a comprehensive plan for safe and
productive long-term operation
Sales remained at weekly average levels that were consistent with 2019 through mid-March; rapid
declines in last two weeks of first quarter have stabilized through the first three weeks of the
second quarter and are currently at approximately 55% of average levels
Aggressive cost reductions; aligned variable cost structure to current demand levels; eliminated
non-essential expenses; expect full year fixed cost reduction of $130ꟷ$150 million
Liquidity, as of March 31, of $734 million; $506 million of cash and $228 million in available
capacity under our commercial paper program, backed by a revolving credit facility
Reduced full year capital expenditure budget by over 60% to $60 million; halting acquisitions;
remaining 2020 debt maturities of $37.5 million with no significant debt maturities until August 2022
February 3, 2020 – Leggett & Platt Report 4Q and Full Year 2019 Results
4Q sales grew 9%, to $1.14 billion
4Q EPS was $.64 and 4Q adjusted EPS was $.68, increases vs 4Q18
2019 sales increased 11%, to $4.75 billion
2019 EPS was $2.47 and 2019 adjusted EPS was $2.57, increases vs 2018
2019 cash flow from operations was a record $668 million
November 5, 2019 – Leggett Announces Executive Promotions and New Segment Structure
Karl Glassman, the Company’s President and Chief Executive Officer will become Chairman of the
Board and will maintain his current position as Chief Executive Officer.
Mitch Dolloff will assume the role of President and will maintain his current position as Chief
Operating Officer. He will serve as President of the new Bedding Products segment until a
successor segment president is appointed. Mitch will also join Leggett’s Board of Directors.
Steve Henderson, Vice President and President of Leggett’s Automotive Group will become
Executive Vice President and President of the Specialized Products segment and the new
Furniture, Flooring & Textile Products segment.
November 5, 2019 – Leggett & Platt Announces Dividend and New Board Member
Fourth quarter dividend is $.40 per share, an increase of 5.3% versus 4Q 2018
Board of Directors announced the election of new board member, Mary CampbellOctober 28, 2019 – Leggett & Platt Reports 3Q Results
3Q sales grew 14%, to $1.24 billion
3Q EPS was $.74, an increase of $.07 vs. 3Q18; 3Q adjusted EPS of $.76, up $.10 vs 3Q18
3Q cash flow from operations was a strong $213 million
August 6, 2019 - Leggett Announces New Chief Financial Officer
Jeffrey L. Tate will join Leggett as Executive Vice President and Chief Financial Officer effective
September 3, 2019
July 29, 2019 – Leggett & Platt Reports 2Q Results
2Q sales grew 10%, to $1.21 billion
2Q EPS of $.64, an increase of $.01 vs 2Q18
2Q cash flow from operations of $172 million
July 18, 2019 – Leggett Announces Perry Davis to Retire
Perry Davis, Executive Vice President and President of Residential Products and Industrial
Products to retire in early 2020
May 7, 2019 – Leggett Announces Annual Meeting Results and Election of Two New Board
Members
Annual meeting addressed three items of business; voting aligned with Board recommendations
Board announced the election of two new Board members, Mark Blinn and Jai Shah
April 29, 2019 – Leggett & Platt Reports 1Q Results
1Q sales grew 12%, to $1.16 billion
1Q EPS of $.45; 1Q adjusted EPS of $.49, a decrease of $.08 vs 1Q18
1Q included restructuring-related charges and ECS transaction costs: $7 million (pretax) or $.04
per share
February 4, 2019 – Leggett & Platt Reports 4Q and Full-Year 2018 Results
4Q sales grew 6%, to $1.05 billion
4Q EPS of $.39, significantly impacted by restructuring-related and impairment charges
4Q adjusted EPS of $.62, up 5% vs 4Q17
2018 sales increased 8% to $4.27 billion
2018 EPS of $2.26; 2018 adjusted EPS of $2.48, up 1% vs 2017
Acquired Elite Comfort Solutions (ECS) in January; expected to add ~$675 million to 2019 sales
January 16, 2019 – Leggett & Platt Completes Acquisition of Elite Comfort Solutions
December 13, 2018 – Leggett & Platt Expects Fourth Quarter Charges
4Q restructuring-related charge of approx. $16 million (pretax); half non-cash
4Q note impairment charge of approx. $16 million (pretax)
4Q EPS impact of approx. $.19Company History
1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980
1901
Leggett & Platt is incorporated. 1970
1960 The Company begins producing
Harry M. Cornell Jr., J.P. Leggett’s steel motion hardware for the
grandson, elected President and Home Furniture market, allowing
1883 CEO, taking over for his father
American inventor J.P. Leggett upholstered seating to rock,
(J.P. Leggett’s son-in-law). recline, and swivel.
develops the idea for a spiral steel
coil bedspring and partners with
1947
Leggett & Platt operates four plants
blacksmith and future brother-in-law
in three states (Missouri, Kentucky,
C.B. Platt to form Leggett & Platt.
and Texas) and has 500 employees.
1926 LEG
Leggett & Platt completes
the construction of its new
combined manufacturing and 1967
Corporate office facility. Initial public offering
of Leggett & Platt stock. 1970
The Company begins drawing steel
wire primarily for internal use.
1953
Harry M. Cornell Sr.
becomes president.
1885 1933
The L&P bedspring is patented. The Company begins
Consisting of single cone spring manufacturing springs for
wire coils, formed and interlaced innerspring mattresses, paving the 1979
in a unique manner and mounted way for a diversified product lineup Leggett & Platt stock listed on the
on a wood slat base, it is used that would eventually include New York Stock Exchange.
as a resilient, durable base for rollaway beds, folding metal cots,
then-popular cotton, feather, and bed frames, and bed rails.
horsehair mattresses.1980 1990 2000 2010 2020
2007 2016 2020
The Company unveils a The Company successfully Today, Leggett & Platt
new strategic direction. divests a majority of its products can be found nearly
The Company focuses on underperforming businesses everywhere. Operations include
divesting underperforming and turns its attention to 140 production facilities in
businesses, improving margins profitably growing revenues. 18 countries.
1984 1993 1999 and returns, and returning The Company is the leading
The Company continues to The Company enters the The Company enters the cash to shareholders through US-based producer of:
build its global footprint by Non-Woven Fabric market. Adjustable Bed market, and increasing the dividend and
entering the Work Furniture is now the largest producer share buybacks. • Bedding components
market. Today L&P produces of adjustable beds in
components and select lines of North America. • Automotive seat support
private-label finished furniture. and lumbar systems
• Specialty bedding foams
and private-label
finished mattresses
2018 • Components for home
2012 The Company enters the and work furniture
1999 Leggett enters the Aerospace
Felix E. Wright is elected CEO Hydraulic Cylinders market. • Flooring underlayment
market, producing exotic
after Harry M. Cornell Jr.’s 2002 metal tubing and fabricated
1986 retirement. • Adjustable beds
L&P begins producing steel assemblies for fluid conveyance.
The Company enters the rod in Sterling, IL, primarily • Bedding industry
Flooring Products market. for use in the Company’s machinery
wire-drawing facilities.
S&P 500
2019
1999 L&P acquires Elite Comfort
Leggett & Platt becomes part Solutions, a leader in
2015 proprietary specialized foam
of the S&P 500 Index. Karl G. Glassman is elected CEO.
technology for the bedding and
1988 2006 furniture industries, for $1.25
The Company enters the David S. Haffner is elected CEO. billion – the Company’s largest
Automotive market by acquisition to date.
producing seating components.This page is left
intentionally
blank.You can also read
