Leggett & Platt at a Glance

  • Total Shareholder Return (TSR 1) is primary performance metric
  • TSR derived from: 1) revenue growth, 2) margin improvement, 3) dividend yield, and 4) share count reduction
  • Business units each assigned a specific role in portfolio (Grow, Core, Fix, or Divest) based upon their competitive advantages, market position, and financial health
  • TSR in top third of S&P 500 over rolling 3-year periods
  • Average annual TSR of 11-14%, from four sources:
    • » 6-9% from revenue growth
    • » 1% from margin increase (~ 10 basis points)
    • » 3% from dividend yield
    • » 1% from reduced share count (via stock buyback)
  • Steady dividend increases; 50-60% payout of adjusted earnings
  • 30-40% net debt to net capital
  • Targeting 6-9% average annual revenue growth (organic + acquisition)
  • Three avenues of growth:
    • 1. Recent sources: market growth + content gains + bolt-on acquisitions
    • 2. Implemented a Growth Identification Process to generate profitable growth initiatives in current markets
    • 3. Longer term: utilizing Styles of Competition to uncover new faster-growing markets
  • 1. Fund organic growth
  • 2. Pay dividends
  • 3. Fund strategic acquisitions
  • 4. Use remaining cash flow (if any) to repurchase stock
  • About $6 billion market cap; $7 billion enterprise value
  • 33.0% net debt to net capital 2 at December 31, 2017
  • 131.9 million shares outstanding at December 31, 2017
  • Authorization to repurchase up to 10 million shares annually
  • 3-year TSR (2014-2017) just below the midpoint of S&P 500
  • 10-year TSR (2007-2017) in the top 18% of S&P 500
  • 2017 sales of $3.94 billion; up 5% vs 2016
  • Continuing ops adjusted 2 EPS decreased 1% to $2.46
  • Adjusted 2 EBIT margin decreased to 11.9%
  • Cash from operations of $444 million
  • Listed on NYSE; ticker = LEG
  • Approximately 35,000 shareholders
  • Current indicated annual dividend of $1.44 per share
    • » Dividend yield = 3.0% (on $47.73 year-end stock price)
    • » Dividends increased for 46 consecutive years
  • One of Standard & Poor's "Dividend Aristocrats"
  • 2017 price range of $43.17 - $54.97
  • About 10-12% of stock owned by management and employees, directors, retirees, acquisition partners, and their family members
  • Financial stability, strong balance sheet, solid operating cash flow
  • Strong market positions
  • Broad customer base; mainly manufacturers
  • Few large competitors; almost none are public
  • Management with “skin in the game”
  • 4 reporting segments; 10 groups; 14 business units
  • ~22,000 employees, 120 manufacturing facilities in 18 countries
  • On Fortune's list of World's Most Admired Companies

S&P 500 diversified manufacturer that conceives, designs and produces a wide range of engineered components and products. Leading U.S. manufacturer of a variety of products including:

  • Components for bedding
  • Automotive seat support and lumbar systems
  • Components for home furniture and work furniture
  • Carpet cushion
  • Adjustable beds
  • High-carbon drawn steel wire
  • Bedding industry machinery
¹ TSR = (change in stock price + dividends)/beginning stock price; assumes dividends are reinvested.
² Please refer to Non-GAAP Reconciliations page.