Leggett & Platt at a Glance

  • Total Shareholder Return (TSR1) is primary performance metric
  • Generate TSR from four activities: 1) revenue growth, 2) margin improvement, 3) dividend yield, and 4) share count reduction
  • Business units each have a specific role in portfolio (Grow, Core, Fix, or Divest) based upon their competitive advantages, market position, and financial health
  • Business unit bonus is tied to return on assets
  • Long-term growth relies on successful product innovation, market share gain, and development of new growth platforms
  • TSR in top third of S&P 500 over rolling 3-year periods
  • Average annual TSR of 12-15%, from four sources:
    • – 4-5% from revenue growth
    • – 2-3% from margin increase (of 20-30 basis points)
    • – 3-4% from dividend yield
    • – 2-4% from reduced share count (via stock buyback)
  • Steady dividend increases; 50-60% payout
  • 30-40% net debt to net capital
  • 4-5% annual revenue growth; ½ from normal market growth, ½ from new products, acquisitions, and market share gains
  1. Organic growth
  2. Dividends
  3. Strategic acquisitions
  4. Use excess cash flow (if any) to repurchase stock
  • About $6 billion market cap; $7 billion enterprise value
  • 34.5% net debt to net capital at December 31, 2015
  • 136 million shares outstanding at December 31, 2015
  • Standing authorization to buy back up to 10m shares annually
  • Listed on NYSE; ticker = LEG; approximately 35,000 shareholders
  • Current indicated annual dividend of $1.28 per share
  • Dividend yield = 3.0% (on $42.02 year-end stock price)
  • 2015 price range of $39.58 – $51.28
  • About 15% of stock owned by management and employees, directors, retirees, merger partners, and their family members
  • Compound annual TSR of 14% since 1967 IPO
  • 3-year TSR (2013-2015) in the top third of S&P 500 companies
  • Record Continuing Ops adjusted2 EPS; improved 31% vs 2014
  • Adjusted2 EBIT margin improved 270 basis points to 12.9%
  • 4% sales growth for Continuing Operations
  • Divested our steel tubing business
  • 8-year TSR (2008 – 2015) in top 11% of the S&P 500
  • Since late 2007 strategy change, stockholders’ investment grew to 3.5 times original value (with dividends reinvested)
  • Dividends increased by 13% annual average for 44 consecutive years – one of the best records among the S&P 500
  • Financial stability, strong balance sheet, solid operating cash flow
  • Strong market positions
  • Management with “skin in the game”
  • 2015 sales of $3.9 billion; 31% international
  • Broad customer base; mainly manufacturers
  • Few large competitors; almost none are public
  • 4 reporting segments; 10 groups; 17 business units
  • ~20,000 employees, 130 manufacturing facilities in 19 countries

S&P 500 diversified manufacturer that conceives, designs, and produces a wide range of engineered components and products that can be found in most homes, offices, and automobiles, and in many commercial aircraft. Leading U.S. manufacturer of a variety of products including:

  • Automotive seat support and lumbar systems
  • Components for bedding and residential furniture
  • Adjustable beds
  • Carpet cushion
  • Components for work furniture
  • Thin wall, large diameter, welded tubing for aerospace
  • High-carbon drawn steel wire
  • Bedding industry machinery

1 TSR = (Change in Stock Price + Dividends) / Beginning Stock Price.

2 For non-GAAP reconciliations, see Six-Year Financial Data.