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• Specsavers for sleep disorders
• Teladoc Health for sleep disorders
• Fresenius Medical Care for sleep disorders

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• Sleep Diagnostics: Provides comprehensive diagnostic services, including home sleep tests and polysomnography, to identify sleep disorders.
• Sleep Treatment & Therapy: Offers various treatment pathways and therapies, such as CPAP and auto-CPAP, for diagnosed sleep conditions.
• Clinical Consultations & Management: Delivers specialist consultations, follow-up care, and ongoing management programs for patients with sleep disorders.

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Somnigroup International (SGI) primarily sells its specialized healthcare services to other organizations rather than directly to individuals, making its business model predominantly B2B (Business-to-Business). While individuals are the ultimate recipients of care, the major paying customers are typically healthcare commissioning bodies and insurers.

Major Customers:

• National Health Service (NHS), UK: As a leading provider of sleep disorder diagnostics and treatments in the UK, a significant portion of Somnigroup's services are commissioned by or delivered under contracts with the NHS. The NHS is the publicly funded healthcare system of the UK and is not a public company with a stock symbol.
• Private Medical Insurers: Somnigroup works with various private medical insurance providers in the UK, receiving referrals and payments for services rendered to their policyholders. Major private medical insurers operating in the UK that are part of publicly traded groups include:
  • AXA Health: Part of the AXA Group (Symbol: EPA: CS)
  • Vitality Health: Part of Discovery Limited (Symbol: JSE: DSY)
  • Cigna Healthcare (UK operations): Part of Cigna Group (Symbol: NYSE: CI)
• Corporate Clients: Somnigroup may also provide services directly to companies for their employees as part of occupational health or wellness programs, although the specific names of these clients are not publicly disclosed.

While Somnigroup also serves self-paying private patients, the primary revenue streams and major customer relationships are with the institutional entities listed above.

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Scott L. Thompson, Chairman, President and Chief Executive Officer

Scott L. Thompson has served as Chairman of Somnigroup International's Board of Directors, President, and Chief Executive Officer since September 2015. Prior to joining Somnigroup International, he was the Chairman of the Board of Directors, Chief Executive Officer, and President of Dollar Thrifty Automotive Group, Inc., which was acquired by Hertz Global Holdings, Inc. in 2012. During his leadership at Dollar Thrifty Automotive Group, Inc., the company's stock experienced significant growth. Earlier in his career, Mr. Thompson co-founded Group 1 Automotive, Inc., a NYSE and Fortune 500 company, where he held the positions of Senior Executive Vice President, Chief Financial Officer, and Treasurer. He has served on six public company Boards and has been involved in numerous acquisitions and divestitures. Additionally, he founded four multi-million-dollar charities.

Bhaskar Rao, Executive Vice President and Chief Financial Officer

Bhaskar Rao was appointed Executive Vice President and Chief Financial Officer of Somnigroup International in October 2017. He joined the company in 2004 after a nine-year career at a major public accounting firm. Throughout his tenure at Somnigroup, Mr. Rao has held various leadership positions within the finance organization, including Senior Vice President and Chief Accounting Officer. He is a certified public accountant.

Kindel Nuno, Chief Human Resources Officer & General Counsel

Kindel Nuno was appointed Chief Human Resources Officer of Somnigroup International Inc. in May 2025 and expanded her role to also serve as General Counsel in October 2025. In this capacity, she is responsible for all legal matters, enterprise alignment of compensation and benefit programs, HR policies, and internal and external communications. Prior to her current role, Ms. Nuno served as Executive Vice President, Legal and General Counsel for Mattress Firm, a subsidiary of Somnigroup International.

Kindra Bellis, Chief Information Officer

Kindra Bellis has served as the Chief Information Officer at Somnigroup International Inc. since 2016. Her previous experience includes senior roles at Hertz Global Holdings, Inc. and Dollar Thrifty Automotive Group, Inc., where she focused on IT, PMO, financial management, and investor relations. Earlier in her career, she worked as a State Development Specialist and as an accountant and auditor. Ms. Bellis also served in the United States Army.

Steven H. Rusing, President and Chief Executive Officer of Mattress Firm Group LLC

Steven H. Rusing was appointed President and Chief Executive Officer of Mattress Firm, a Somnigroup International subsidiary, effective August 14, 2025. He previously served as President of Mattress Firm and has been with Somnigroup International since 1992. Prior to his appointment as CEO of Mattress Firm, he was Executive Vice President, President, U.S. Sales for Somnigroup. Scott Thompson, Somnigroup's Chairman, CEO and President, served as interim CEO of Mattress Firm before Mr. Rusing's expanded leadership role.

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1. Shifting Consumer Preferences and Weakening Discretionary Spending: A primary risk for Somnigroup International is a shift in consumer preferences away from durable goods, such as bedding products, towards experiences, alongside a potential weakening of discretionary spending. This trend could particularly impact younger consumers who may be moving away from significant home purchases. The bedding market has also been noted as weak, with volumes near a 30-year low.
2. High Debt Levels and Valuation Risk: Somnigroup International carries a substantial amount of debt, with net debt recorded at approximately US$4.42 billion as of September 2025, a significant increase from the previous year. While the company's interest coverage is considered reasonably strong, the elevated debt levels warrant close monitoring. Additionally, the stock is currently perceived as richly priced, exhibiting a high price-to-earnings ratio when compared to its fair value and industry average, suggesting a valuation risk.
3. Execution Risks from Acquisitions and Industry Headwinds: The company faces risks associated with the successful execution and integration of recent acquisitions, including Mattress Firm and the proposed all-stock acquisition of Leggett & Platt. Effective integration is crucial for realizing anticipated operational benefits. Furthermore, Somnigroup International is contending with a challenging U.S. bedding market and significant profit headwinds, notably $750 million in cost of goods sold (COGS) exposed to tariffs, which are projected to have a $120 million impact on profitability before mitigation.

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The following are clear emerging threats for Somnigroup International (SGI):

• Advanced Consumer Wearable Devices: The rapid improvement and widespread adoption of sophisticated consumer wearable devices (e.g., smartwatches, smart rings) offering advanced sleep tracking capabilities (including sleep stages, heart rate variability, and blood oxygen saturation). While not yet medical-grade diagnostic devices for conditions like sleep apnea or narcolepsy, these devices empower individuals with increasingly granular data about their sleep patterns. This trend could alter the initial patient pathway for sleep concerns, potentially reducing the demand for certain entry-level professional diagnostic services as consumers increasingly rely on personal device data for initial insights or screening. Furthermore, as these technologies advance and potentially gain medical certifications, they could directly compete with parts of Somnigroup's diagnostic offerings.
• Evolution of Home Sleep Testing (HST) and Telehealth Integration: The continuous advancement and growing adoption of highly convenient, miniaturized Home Sleep Testing (HST) devices, coupled with robust telehealth platforms for remote consultation, device management, and data interpretation. This trend facilitates a more patient-centric and often more cost-effective diagnostic pathway compared to traditional in-clinic or even community site polysomnography. Competitors, including technology companies or specialized telehealth providers, could leverage these advancements to offer seamless, end-to-end remote diagnostic and treatment services that challenge Somnigroup's current service delivery model and market share.

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Somnigroup International (SGI) operates within the global bedding industry, which is its primary addressable market. The main products and services offered by Somnigroup International include the design, manufacturing, distribution, and retail of bedding products such as mattresses, foundations, adjustable bases, pillows, and other accessories. The company's portfolio features prominent brands like Tempur-Pedic, Sealy, Stearns & Foster, and Sleepy's, along with retail brands such as Mattress Firm and Dreams.

The addressable market sizes for their main products and services are as follows:

• Global Bedding Industry: $120 billion
• North American Bedding Market: Approximately $50 billion
• International Bedding Market (excluding North America): Approximately $70 billion

Somnigroup's operations extend across more than 100 countries worldwide.

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Somnigroup International (SGI) is expected to drive future revenue growth over the next 2-3 years through several key initiatives and market trends:

1. Integration of Mattress Firm Acquisition and Synergies: The recent acquisition of Mattress Firm has significantly boosted Somnigroup's revenue, as seen in Q3 2025 where it contributed substantially to a 63.3% increase in total net sales. The company anticipates further growth through ongoing integration and the realization of acquisition synergies, aiming for at least $100 million in annual run-rate synergies by 2028. This acquisition also facilitates a strategic shift towards a direct-to-consumer model.
2. International Expansion and Performance: Somnigroup has demonstrated strong momentum in its international channels. International net sales increased by 10.9% year-over-year in Q3 2025 and 14.1% in Q4 2024, driven by expanded distribution and new product success. The company continues to prioritize global expansion as a key driver for sustained growth.
3. New Product Launches and Innovation: Continuous innovation and the introduction of new products are crucial for Somnigroup's revenue growth. Recent launches include high-tech mattresses like TEMPUR-Breeze, adjustable smart bed bases such as TEMPUR-Ergo Smart Base, and refreshed versions of Stearns & Foster mattresses. The all-new Sealy Posturepedic product is expected to be a significant growth driver. The company also invests in advanced sleep technology through partnerships, securing exclusive rights to embed Sleeptracker-AI technology in its products until 2036.
4. Growth in Omnichannel and Direct-to-Consumer (DTC) Sales: Somnigroup is actively pursuing omnichannel strategies and expanding its direct-to-consumer business. Following the Mattress Firm acquisition, direct sales as a percentage of net sales increased significantly to 65.2% in Q3 2025. This focus on owned distribution channels and e-commerce platforms is expected to enhance customer reach and drive sales.
5. Market Normalization and Pent-up Demand: Management expects future revenue growth to be supported by a normalization of the global bedding industry. This includes anticipated market recovery driven by factors such as GDP and population growth, housing turnover, and expansion in Average Selling Price (ASP). Additionally, pent-up demand resulting from deferred purchases in the bedding sector is expected to provide an additional boost to sales.

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Share Repurchases

• Somnigroup International expects share repurchases to remain minimal for the next year (2025) as the company focuses on debt repayment to normalize its leverage ratio.
• Starting in the first quarter of 2026, the company plans to allocate approximately 50% of free cash flow to capital returns to shareholders, which will include share repurchases.

Share Issuance

• In Q1 2025, Somnigroup International issued approximately 34.2 million shares of common stock as part of the consideration for the acquisition of Mattress Firm.

Outbound Investments

• Somnigroup International completed the acquisition of Mattress Firm in Q1 2025 for approximately $5.1 billion, consisting of about $2.8 billion in cash and 34.2 million shares of common stock.
• In Q2 2025, the company divested Sleep Outfitters and 73 Mattress Firm stores.
• Somnigroup International acquired a 25% passive interest in Kingstown, a North American luxury mattress manufacturer.

Capital Expenditures

• Projected capital expenditures for fiscal year 2025 are $175 million, with $25 million specifically allocated for Mattress Firm store refreshes.
• The company anticipates investing an additional $125 million over the next couple of years for further store refreshes.
• Long-term normalized annual capital expenditures are expected to be approximately $200 million.