Leggett & Platt
at a Glance

Financial Goals & Dividend Policy

  • Total Shareholder Return (TSR1) is primary performance metric
  • Goal is 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)
  • 3-year TSR (2016-2019) in bottom third of S&P 500
  • Steady dividend increases; ~ 50% payout of adjusted earnings
  • Approximately 2.5x debt to trailing 12-months EBITDA

Growth Framework

  • Targeting 6-9% average annual revenue growth (organic + acquisition)
  • Three avenues of growth:
    1. Increasing content and new programs
    2. Expanding addressable markets
    3. Identifying new growth platforms

Cash Use Priorities

  1. Fund organic growth
  2. Pay dividends
  3. Fund strategic acquisitions
  4. Repurchase stock with available cash
  • With the increase in leverage from the ECS acquisition, we are prioritizing debt repayment after funding organic growth and dividends

Capital Structure

  • About $6.5 billion market cap; $8.5 billion enterprise value
  • 131.8 million shares outstanding at December 31, 2019
  • Authorization to repurchase up to 10 million shares annually

2019 Highlights

  • 2019 sales were $4.75 billion, up 11% vs 2018
  • Adjusted2 EPS increased 4% to $2.57
  • Adjusted2 EBIT margin of 11.1%, flat with 2018
  • Adjusted2 EBITDA margin increased to 15.2%
  • Record cash from operations of $668 million

Stock Information

  • Listed on NYSE; ticker = LEG
  • Approximately 35,000 shareholders
  • Current indicated annual dividend of $1.60 per share
    • Dividend yield = 3.1% (on $50.83 year-end stock price)
    • Dividends increased for 48 consecutive years
  • One of Standard & Poor’s “Dividend Aristocrats”
  • 2019 price range of $34.95 - $55.42
  • About 10-12% of stock owned by management and employees, directors, retirees, acquisition partners, and their family members

Quick Facts

  • 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”
  • Active portfolio management
  • ~22,000 employees, 140 manufacturing facilities in 18 countries
  • On Fortune’s list of World’s Most Admired Companies

Profile

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

1 TSR = (change in stock price + dividends)/beginning stock price; assumes dividends are reinvested.

2 For non-GAAP reconciliations, please refer to Non-GAAP Reconciliations.