What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-28 compared with 2024-02-16 · 115 added, 93 removed, 144 unchanged (59% of the section changed)

We are committed to improving the sleep of more people, every night, all around the world.

As a leading designer, manufacturer, distributor and retailer of bedding products, we know how crucial a good night of sleep is to overall health and wellness.

Utilizing over a century of knowledge and industry-leading innovation, we deliver award-winning products that provide breakthrough sleep solutions to consumers in over 100 countries.

Our highly recognized brands include Tempur-Pedic®, Sealy® and Stearns & Foster® and our non-branded offerings include private label and original equipment manufacturer ("OEM") products.

Our distinct brands allow for complementary merchandising strategies at a range of price points.

Our powerful distribution model operates through an omni-channel strategy.

Our products are sold through third-party retailers, our more than 750 company-owned stores and our e-commerce platforms.

We have a global manufacturing footprint with approximately 12,000 employees around the world.

Tempur Sealy has a strong competitive presence in the bedding marketplace with a leadership position that comes from product and service quality, culture, strategy and people, backed with financial strength and a disciplined approach to returning value to shareholders.

Somnigroup is the world's largest bedding company, dedicated to enriching people's lives through the power of a good night's sleep.

With superior capabilities in design, manufacturing, distribution and retail, we deliver breakthrough sleep solutions and serve the evolving needs of consumers in over 100 countries worldwide through our fully-owned businesses, Tempur Sealy, Mattress Firm and Dreams.

Our portfolio includes the most highly recognized brands in the industry, including Tempur-Pedic®, Sealy® and Stearns & Foster®, and our global omni-channel platform enables us to meet consumers wherever they shop, offering a personal connection and innovation to provide a unique retail experience and tailored solutions.

We seek to deliver long-term value for our shareholders through prudent capital allocation, including managing investments in our businesses.

We are guided by our core value of Doing the Right Thing and committed to our global responsibility to protect the environment and the communities in which we operate.

On February 5, 2025, we completed the previously announced acquisition of Mattress Firm, the nation's largest mattress specialty retailer.

The total purchase price was approximately $5.1 billion.

The transaction was funded by approximately $2.8 billion of cash consideration (subject to adjustments, including the repayment of Mattress Firm's debt and other customary items) and 34.2 million shares of common stock.

The cash payment was funded using a combination of cash on hand and proceeds from existing borrowings.

Mattress Firm was founded in 1986 and operates over 2,200 brick and mortar retail locations and a growing e-commerce platform.

Mattress Firm's highly trained retail sales associates provide personalized service to help consumers choose the ideal bedding products across their robust assortment of market-leading brands.

Due to the close proximity of the Mattress Firm acquisition to the filing of this Report, our assessment of the newly acquired business remains ongoing as of the date of this Report.

We will incorporate information on the Mattress Firm business as required beginning in the first quarter of 2025.

In connection with the closing of the Mattress Firm acquisition, we amended our Certificate of Incorporation to change our name to "Somnigroup International Inc." effective February 18, 2025.

The name Somnigroup reflects our position as a global holding company and provider of sleep solutions with a portfolio of bedding businesses.

Somnigroup's purpose is to drive long-term shareholder returns through sustainable competitive advantages and disciplined capital allocation as we oversee our investments in the $120 billion global sleep industry.

Our powerful distribution and retail model operates through an omni-channel strategy.

Somnigroup's combined global footprint includes approximately 2,800 retail stores, 30 e-commerce platforms, 71 manufacturing facilities and four state-of-the-art research and development facilities worldwide.

Our combined operations are supported by more than 20,000 employees with a collective focus on providing breakthrough sleep solutions to consumers.

Somnigroup has a strong competitive presence in the bedding marketplace with a leadership position that comes from product and service quality, culture, strategy and people, backed with financial strength and a disciplined approach to returning value to shareholders.

Our long-term strategy is to drive earnings growth with high return on invested capital and strong free cash flow, which is a non-GAAP financial measure.

4 unchanged sentences

When doing so, we seek to balance our assessment of the industry environment, our business outlook and the potential for further strategic expansion, while also prudently managing our business.

We operate in two segments:

In 2024, we operated in two segments:

North America and International.

Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results.

These segments are strategic business units that are managed separately based on geography.

The North America and International segments are strategic business units that are managed separately based on geography.

Our North America segment consists of manufacturing, distribution and retail subsidiaries and licensees located in the U.S., Canada and Mexico.

Our International segment consists of manufacturing, distribution and retail subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico).

Following the acquisition of Mattress Firm and beginning in the first quarter of 2025, we will operate in three segments:

Tempur Sealy North America, Tempur Sealy International and Mattress Firm.

Our principal executive office is located at 1000 Tempur Way, Lexington, Kentucky 40511 and our telephone number is (800) 878-8889.

Tempur Sealy International, Inc.

Somnigroup International Inc.

was incorporated under the laws of the State of Delaware in September 2002.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to such reports filed with or furnished to the Securities and Exchange Commission ("SEC") pursuant to Sections 13(a) or 15(d) of the Exchange Act, are available free of charge on our website at www.tempursealy.com as soon as reasonably practicable after such reports are electronically filed with the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to such reports filed with or furnished to the Securities and Exchange Commission ("SEC") pursuant to Section 13(a) of the Exchange Act, are available free of charge on our website at www.somnigroup.com as soon as reasonably practicable after such reports are electronically filed with the SEC.

Our website and its contents are not incorporated by reference into this Report.

4 unchanged sentences

We also routinely introduce new mattress models, launch new products and update our existing mattress products in each of our segments.

In order to achieve our goal to improve the sleep of more people, every night, all around the world, one of our strategic initiatives is to leverage and strengthen our comprehensive portfolio of iconic brands and products.

In order to achieve our goal of enriching the lives and improving the health of people worldwide through the power of a good night's sleep, one of our strategic initiatives is to leverage and strengthen our comprehensive portfolio of iconic brands and products.

Our portfolio of product brands includes many highly recognized brands, including Tempur-Pedic®, Sealy® and Stearns & Foster®, which are described below:

1 unchanged sentence

Our proprietary Tempur material precisely adapts to the shape, weight and temperature of the consumer and creates fewer pressure points, reduces motion transfer and provides personalized comfort and support.

Tempur-Pedic was awarded #1 in Customer Satisfaction for the online mattress segment in the J.D.

Tempur-Pedic was awarded #1 in Customer Satisfaction for both the in-store and online mattress segments in the J.D.

Power 2024 Mattress Satisfaction Report.

This is the third consecutive year winning the online mattress category and the fifth consecutive year winning at least one J.D.

This is the fourth consecutive year winning the online mattress category and the sixth consecutive year winning at least one J.D.

• Stearns & Foster ® - The Stearns & Foster brand offers our consumers high quality mattresses built by certified craftsmen who have been specially trained.

5 unchanged sentences

Bedding Producers methodology, which includes Stearns & Foster®.

• Cocoon by Sealy TM - The Cocoon by Sealy brand, introduced in 2016, is our offering in the below $1,000 e-commerce space, made with the high quality materials that consumers expect from Sealy, sold online at www.cocoonbysealy.com and delivered in a box directly to consumers' doorsteps.

• Sleepy's ™ - The Sleepy's brand is our private label brand offering at our Mattress Firm stores and online at www.mattressfirm.com.

Sleepy's competes in a space where customers look for quality and value and is positioned to provide high-quality mattresses, made from a wide range of materials, for the right price.

• Non-Branded - Our non-branded product offerings include private label and OEM products, including mattresses, pillows and other bedding products and components at a wide range of price points.

The addition of non-branded offerings expands our capabilities to service third-party retailers to capture manufacturing profits from bedding brands outside our own.

Our portfolio of retail brands includes Tempur-Pedic® retail stores, Sleep Outfitters®, Sleep Solutions Outlet®, Dreams®, SOVA and a variety of other retail brands internationally, which operate in various countries.

Our portfolio of retail brands includes Mattress Firm®, Dreams®, Tempur-Pedic® retail stores, SOVA and a variety of other retail brands internationally, which operate in various countries.

The retail brands named above are described below:

• Tempur-Pedic ® retail stores - Tempur-Pedic® retail stores are designed for the consumers that prefer to purchase directly from the manufacturer, and for those seeking a more personalized and educational sales experience.

These retail boutiques are strategically located in high traffic, premium retail centers with customer demographics that closely align to the Tempur-Pedic® customer profile.

• Sleep Outfitters ® - Sleep Outfitters is a regional bedding retailer with locations across five states in the U.S.

Sleep Outfitters is a specialty mattress retailer that serves consumers across a wide range of price points with its extensive selection of Tempur-Pedic®, Sealy® and Stearns & Foster® products.

• Sleep Solutions Outlet ® - Sleep Solutions Outlet stores serve as a channel of high-quality comfort returns, as well as discontinued or factory close-out mattresses and bases.

There are a limited number of stores across the U.S.

that sell these products, which reduces our disposal costs, and helps reduce the volume of products disposed of via landfill, thereby favorably impacting the environment.

• Mattress Firm ® - Mattress Firm is the leading multi-branded mattress specialty retailer in the U.S., helping to make better sleep a reality by matching consumers to their perfect mattress through its highly trained team of Sleep Experts® across its 2,200 stores and robust online operations.

Mattress Firm is a leading retailer of brands including Tempur-Pedic®, Sealy®, Stearns & Foster®, Sleepy's®, Beautyrest®, Serta®, Simmons®, Purple® and other leading mattress brands.

• Dreams ® - Dreams is the leading specialty bedding retailer in the United Kingdom ("U.K.").

1 unchanged sentence

In addition to operating over 200 brick-and-mortar stores and an e-commerce channel throughout the U.K., Dreams also manufacturers the majority of the bedding products it sells in-house.

These retail boutiques are strategically located in high traffic, premium retail centers with customer demographics that closely align to the Tempur-Pedic® customer profile.

• SOVA - SOVA is a highly respected and well-established premium bedding chain in Sweden.

1 unchanged sentence

The assortment primarily focuses on premium to ultra-premium brands and well trained sales staff targeting to sell quality beds with a very high average selling price.

In 2024, we are launching a new portfolio of Tempur-Pedic® Adapt mattresses in our North America segment.

This next-generation technology sets the standard for support, pressure relief and motion cancellation with Tempur material precisely responding to your body's weight, shape, and temperature in a way no other mattress does.

This collection was designed to complement the Tempur-Pedic® Breeze collection and Tempur-Ergo® Smart Bases launched in 2023 and finishes the complete reset of our core Tempur lineup.

In our International segment in 2024, we plan to complete the rollout of the new line of Tempur® products in over 90 markets through our wholly-owned subsidiaries and third-party distributors.

This new line of products will broaden Tempur®'s price range, with the super-premium price point ceiling maintained and the floor expanded into the premium category to expand our global addressable market.

In 2025, we are launching an all-new collection of Sealy Posturepedic® products in North America.

This reinvention of the Sealy Posturepedic® brand is strategically aimed at reigniting growth in the mid-to-entry level market, which has experienced outsize pressures relative to other price points in recent years.

The new collection incorporates innovative technologies, including our proprietary PrecisionFit™ coils that deliver superior support and exceptional comfort.

Omni-Channel Distribution

1 unchanged sentence

These channels align to the operating margin characteristics of our business and our marketplace.

One of Tempur Sealy's long-term initiatives is to be wherever the consumer wants to shop, and our wholesale business strategy brings this key business initiative to life by growing our share with existing customers, gaining new business and expanding into new channels of distribution.

In 2023, we continued to drive this initiative, as we increased the number of wholesale doors retailing our products and expanded our company-owned store footprint around the world.

We drive growth in our Wholesale business by growing our share with existing customers, gaining new business, expanding into new channels of distribution and driving slot velocity.

In 2024, we continued to drive this initiative, as we expanded with new third-party retail partners and expanded our company-owned store footprint around the world.

We are continuing to expand our Direct channel to strengthen our distribution footprint and provide alternatives to allow the customer to shop on their preferred terms — whether online or in-store.

Our Direct channel includes company-owned stores, online and call centers and represented 24.9% of net sales in 2024.

The Direct channel growth rate has surpassed the Wholesale growth rate over the last few years, and we anticipate the Direct channel will continue to grow as a percentage of net sales in future years.

Our expanded direct channel distribution complements our wholesale business, and we believe this balanced approach enhances the overall global sales potential and profitability of Tempur Sealy.

For consumers that prefer to purchase directly from the manufacturer and are seeking a more personalized and educational sales experience, we have over 750 retail stores worldwide, including our retail stores owned through our international joint venture operations.

As of December 31, 2023, we had over 100 Tempur-Pedic® retail stores throughout the U.S.

that provide a low-pressure environment to explore the comprehensive line up of our Tempur-Pedic® products.

Following the acquisition of Mattress Firm, we expect over 60% of our global sales will be direct-to-consumer and no customer will represent more than 5% of global sales.

Our expanded direct channel distribution complements our wholesale business, and we believe this balanced approach enhances the overall global sales potential and profitability of Somnigroup.

For consumers that prefer to purchase directly from the manufacturer and are seeking a more personalized and educational sales experience, we have over 2,800 retail stores worldwide, including our retail stores owned through our international joint venture operations, after giving effect to the anticipated divestitures in the second quarter of 2025 described below.

We operate Tempur-Pedic® retail stores worldwide that provide a low-pressure environment to explore the comprehensive line up of our Tempur-Pedic® products.

Each showroom features knowledgeable Brand Ambassadors who educate potential customers on Tempur-Pedic® products in a relaxed, comfortable environment.

Going forward, we expect our strategy for opening additional locations of Tempur-Pedic® retail stores to continue targeting high traffic, premium locations that complement our existing distribution.

In addition to our high-end Tempur-Pedic® retail stores, we operate Sleep Outfitters®, a regional bedding retailer that had over 100 stores in 2023.

Sleep Outfitters is a specialty mattress retailer that serves consumers across all price points with its extensive selection of Tempur-Pedic®, Sealy® and Stearns & Foster® products.

In addition to our high-end Tempur-Pedic® retail stores, we operate Sleep Outfitters®, a specialty mattress retailer that serves consumers across all price points with its extensive selection of Tempur-Pedic®, Sealy® and Stearns & Foster® products.

We expect to complete the previously announced divestiture of Sleep Outfitters®, which includes 103 specialty mattress retail locations and seven distribution centers, to MW SO Holdings Company, LLC ("Mattress Warehouse") in the second quarter of 2025.

We also operate Dreams®, which has developed a successful multi-channel sales strategy, with over 200 brick and mortar retail locations in the U.K., an industry-leading online channel, as well as manufacturing and delivery assets.

Our third-party retailers, Tempur-Pedic® retail stores, Dreams® and Sleep Outfitters®, and our other company-owned store concepts reach the vast majority of consumers who still prefer to touch and feel a mattress and speak to a retail sales associate prior to making a purchase decision.

Mattress Firm is the leading multi-branded mattress specialty retailer in the U.S., helping to make better sleep a reality by matching consumers to their perfect mattress through its highly trained team of Sleep Experts® across its 2,200 stores and robust online operations.

Our third-party retailers, Mattress Firm®, Tempur-Pedic® retail stores, Dreams® and our other company-owned store concepts reach the vast majority of consumers who still prefer to touch and feel a mattress and speak to a retail sales associate prior to making a purchase decision.

However, our consumer insights also demonstrate that there is a growing segment of the population that prefers to purchase products online and, to a lesser degree, via a call center.

As such, having an omni-channel presence is more important than ever, with most customers completing research and shopping both online and in-stores before making their purchase decision.

For customers that prefer the convenience of making purchases online and having their bedding products delivered right to their front door, we have evolved our distribution model to include multiple online options to reach those that want to

purchase our products without the need to go into a brick-and-mortar store.

We further expanded this initiative in 2022 with the opening of direct-to-consumer e-commerce platforms for Sealy® and Stearns & Foster® in the U.S.

Our overall marketing strategy is to drive consumer demand through the use of effective marketing.

2 unchanged sentences

We plan to drive net sales through continued investments in new products, marketing and other initiatives.

We advertise nationally on television, digitally and through consumer and trade print.

We advertise nationally on television, in digital media and through consumer and trade print.

In addition, we participate in cooperative advertising on a shared basis with some of our retail customers.

6 unchanged sentences

In 2023, we opened our newest and largest state-of-the-art manufacturing facility in Crawfordsville, Indiana.

The new facility has the capabilities to manufacture a wide variety of bedding products and components for branded and non-branded operations.

The facility's Midwest location enables us to balance manufacturing and distribution in the region, allowing us to more efficiently service our customers and capture the projected long-term demand to support our rapidly growing OEM business.

The facility has the capabilities to manufacture a wide variety of bedding products and components for branded and non-branded operations.

Our products are currently manufactured and distributed through our global network of facilities.

25 unchanged sentences

The primary distribution channels for bedding products are retail furniture and bedding stores, big-box retailers and online.

We encounter competition from a number of bedding manufacturers in both the highly concentrated domestic and highly fragmented international markets.

Participants in each of these markets compete primarily on price, quality, brand name recognition, product availability and product performance.

Mattress and pillow manufacturers and retailers are seeking to increase their channels of distribution and are looking for new ways to reach the consumer, including the expansion in the number of U.S.

We encounter competition from a number of bedding manufacturers.

The domestic market is highly concentrated, while the international market is highly fragmented and served by a large number of manufacturers, primarily operating on a regional and local basis.

Participants in the global bedding industry offer a broad range of mattress, bed base and pillow products and compete primarily on price, quality, brand name recognition, product availability and product performance.

Manufacturers and retailers in the global bedding industry are seeking to increase their channels of distribution and are looking for new ways to reach the consumer, including the expansion in the number of U.S.

and international companies pursuing online direct-to-consumer models for mattresses.

1 unchanged sentence

and internationally are increasingly seeking to offer their own private label products.

The international market is served by a large number of manufacturers, primarily operating on a regional and local basis.

These manufacturers offer a broad range of mattress and pillow products.

Entry-level bedding imports from Asia began to significantly increase during 2018 and are competing against certain of our products in the U.S.

In September 2018 and again in December 2019, petitions were filed with the U.S.

International Trade Commission and the U.S.

Department of Commerce, alleging that many of these imports were being dumped into the U.S.

market at prices less than fair value.

As a result of the petitions, the U.S.

Department of Commerce issued anti-dumping duty orders on December 16, 2019 for the 2018 petition and on May 14, 2021 for the 2019 petition and the U.S.

International Trade Commission affirmed a range of tariffs on these imports.

Intellectual Property

Patents, Trademarks and Licensing

We hold over one thousand U.S.

and foreign patents and patent applications regarding certain elements of the design and function of many of our mattress and pillow products.

As of December 31, 2023, we held hundreds of trademark registrations worldwide, which we believe have significant value and are important to the marketing of our products to retailers and consumers.

As of December 31, 2024, we held thousands of trademark registrations worldwide, which we believe have significant value and are important to the marketing of our products to retailers and consumers.

Tempur®, Tempur-Pedic®, Sealy®, Sealy Posturpedic® and Stearns & Foster® are our primary trademarks registered with the U.S.

Patent and Trademark Office, as are many other of our registered trademarks and pending applications.

Patent and Trademark Office and various foreign trademark offices, as are many other of our registered trademarks and pending applications.

trademark registration is renewable indefinitely as long as the trademark remains in use.

9 unchanged sentences

The regulations generally impose requirements as to the proper labeling of bedding merchandise, restrictions regarding the identification of merchandise as "new" or otherwise, controls as to chemical and other substances, hygiene and other aspects of product safety, handling, marketing and sale and penalties for violations.

New regulations can require us to change the way in which our products are labelled and marketed.

For example, the European Union's new General Product Safety Regulation, which came into force on December 13, 2024, required us to make changes to the way in which our products are labelled and to add product safety and manufacturer information to all of our online product listings.

government has recently introduced a new draft framework law on product regulation which may have a similar impact.

Consumer Product Safety Commission ("CPSC") has adopted rules relating to fire retardancy standards for the mattress industry.

Many foreign jurisdictions also regulate fire retardancy standards.

Future changes to these standards may require modifications to our products to comply with such changes.

For example, the UK is seeking to implement new regulations in October 2024, which will include measures to reduce the use of chemical fire retardants.

Future changes to these regulations and standards may require modifications to our products to comply with such changes.

For example, the U.K.

is considering new regulations which would include measures to reduce the use of chemical fire retardants.

We are also subject to environmental and health and safety requirements with regard to the manufacture of our products and the conduct of our operations and facilities.

9 unchanged sentences

We are not aware of any pending international or federal environmental legislation that would have a material impact on our operations, and have not been required to make, and do not expect to make, any material capital expenditures for environmental control facilities or other regulatory requirements in the foreseeable future.

In connection with sales of our products and operation of our business, we collect and process personal data from our customers and employees.

As such, we are subject to certain laws and regulations relating to IT security and personal data protection and privacy.

In connection with sales of our products and operation of our business, we collect and process personal data from our customers, business partners and employees.

As such, we are subject to certain laws and regulations relating to IT security, artificial intelligence ("AI") and personal data protection and privacy.

For example, the European Union ("EU") adopted the General Data Protection Regulation ("GDPR").

1 unchanged sentence

In addition, there are country-specific data privacy laws in Europe that impose additional requirements on data controllers and several of these laws are more stringent than the GDPR.

In recent years, several U.S.

states have adopted legislation offering similar protections for resident citizens, such as the California Privacy Rights Act (which amends the California Consumer Privacy Act ("CCPA")), the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Connecticut Data Privacy Act and the Utah Consumer Privacy Act (together the "U.S.

state privacy laws").

Several other states have recently introduced similar state privacy laws.

In recent years, U.S.

states have adopted legislation offering similar protections for resident citizens, such as the California Privacy Rights Act (which amends the California Consumer Privacy Act ("CCPA")).

Eighteen other states have introduced similar privacy laws.

state privacy laws grant consumers new rights over their personal information, such as access to and deletion of their personal information, placing strict data collection requirements on businesses, including ours.

2 unchanged sentences

The PIPL is widely considered one of the strictest personal data protection laws in the world, with significant restrictions placed on the transfer of personal information outside of China or use without separate citizen consent.

In response, we have implemented a global compliance system, appointed dedicated resources and have put measures in place to facilitate adherence to the continuing compliance requirements of applicable worldwide data privacy laws.

Environmental, Social and Corporate Governance ("ESG")

Recently the EU harmonized its existing laws governing AI with the introduction of the consolidated EU AI Act ("AI Act").

The AI Act regulates the development and/or use of AI and has extra-territorial reach.

The law places risk and technology-based obligations on companies deploying AI in their operations, such as ours.

To address the requirements, we have implemented a global AI policy and set up AI governance and controls through a new management committee and compliance program.

In response to the changing regulatory global landscape, we have implemented a global compliance system, appointed dedicated resources and have put measures in place to facilitate adherence to the continuing compliance requirements of applicable worldwide data privacy laws.

Sustainability and Corporate Social Values

We recognize that as a corporate citizen we have a responsibility to protect our communities and environment.

Our executive leadership and board members believe that our success as an organization must be inclusive of our impact on our communities, employees, customers and environment.

The Nominating and Corporate Governance Committee of our Board of Directors oversees our practices and positions relating to ESG issues.

Executive officers are held accountable for the Company's ESG performance through the Company's performance-based long-term equity incentive plan.

We believe that sound ESG practices can help identify, manage and mitigate risks while contributing to the financial success of our business.

Below are some highlights of the progress we made on certain of our ESG initiatives in 2023:

• Achieved zero waste to landfill status at our Canadian and Mexican manufacturing operations and maintained our zero waste to landfill status at our U.S.

and European manufacturing operations

• Achieved zero waste to landfill status at 75% of our corporate offices and R&D labs, in line with our goal to achieve zero landfill waste at our corporate offices and R&D labs by 2025

• Progressed towards our goal of achieving carbon neutrality by 2040 through reducing greenhouse gas emissions at our wholly owned manufacturing and logistics operations by 4%* compared to the prior year

• Summarized and published our approach to comprehensive chemical supply management in a Chemical Safety Policy

*This excludes the impact of new facilities opened in the trailing twelve-month period.

Including the impact of new facilities, we reduced greenhouse gas emissions at our wholly owned manufacturing and logistics operations by 1% compared to the prior year.

• Continued to bring industry-leading innovation to market that provides consumers with access to higher quality sleep at a variety of price points, including the new U.S.

product launches of Tempur-Breeze®, Tempur-Ergo® Smart Base, and Stearns & Foster®, and the new international launches of Tempur® products

• Contributed approximately $0.8 million through the Tempur Sealy Foundation and donated more than 12,100 mattresses worth approximately $16.9 million, bringing our ten-year donation total to over $100 million

• Increased transparency and expanded disclosures around Employee Health & Safety, Ethics Line, and Employee Satisfaction & Engagement

• Embedded ESG performance as a factor in executive leadership's 2023 compensation program

We believe that sound environmental, sustainability and corporate governance ("ESG") practices can help identify, manage and mitigate risks while contributing to the financial success of our business.

Additional details on our approach to sustainability can be found in our Corporate Social Values located on the Somnigroup Investor website at http://investor.somnigroup.com under the "Sustainability" tab.

Our website and its contents are not incorporated by reference into this Report.

In 2024, we shifted our annual sustainability reporting period to be aligned with our fiscal year.

We anticipate publishing the report covering the 2024 fiscal year period in late 2025.

The impact of any acquisitions will generally be integrated into our Sustainability and Corporate Responsibility disclosures and initiatives approximately 24 months after closing.

Sustainability Governance

The Nominating and Corporate Governance ("NCG") Committee, on behalf of the Company's Board of Directors (the "Board"), is responsible for reviewing the Company's practices and positions relating to ESG issues that may affect the Company's business and key stakeholders and for overseeing ESG matters.

The NCG Committee regularly reviews the effectiveness of management's strategies, programs and policy implementation with respect to responsible sourcing, climate change, waste management, energy initiatives, corporate governance practices and procedures and stakeholder management.

The Human Resources/Capital and Talent Committee has primary responsibility for oversight of risk related to compensation, equal opportunity employment initiatives and human rights considerations.

The Audit Committee reviews and discusses with management and internal audit the Company's risk management processes and system of internal control over the Company's disclosures surrounding its ESG efforts.

Our ESG Working Group is a cross-functional group tasked to operationalize ESG by working with subject matter experts across the Company.

This group is advised by a third party that brings external sustainability insights to help inform our strategic objectives and is overseen by the Chief Financial Officer.

Somnigroup's approach to managing our environmental impact is focused on three pillars:

resource conservation, product and packaging and waste management.

This approach helps to ensure compliance with relevant regulation, better position our products to meet evolving consumer expectations and drive cost savings through efficiency gains.

Our approach is grounded in our environmental management system ("EMS"), and we continue to pursue third-party validation of our EMS to ensure the effectiveness of our approach and create consistency across our manufacturing and logistics management systems.

Resource Conservation

We are investing in resource efficiency throughout our production and distribution processes.

This includes our efforts to manage risks associated with the transition to a lower-carbon economy by investing in renewable energy and reducing our greenhouse gas emissions.

We are committed to achieving carbon neutrality in our global wholly owned operations by 2040.

Our objective is to reduce or offset 100% of Scope 1 and 2 greenhouse gas emissions from our wholly owned manufacturing, retail and logistics operations.

Product and Packaging

In line with our unwavering focus on consumer and employee safety and meeting the regulations of different jurisdictions, we are building these regulatory requirements into our product plans.

This includes considering the entire lifecycle of our products, beginning with our supplier engagement and ensuring the safety of all materials used on our products.

Our Chemical Safety Policy demonstrates our commitment to maintaining a healthy and safe work environment for our employees and providing a safe product for our customers.

It also reflects our efforts to ensure safety through comprehensive chemical safety management, compliance with regulations, rigorous product testing and employee training and preparedness.

Waste Management

We are committed to reducing waste from our operations and improving the recyclability of our products.

We seek to achieve zero waste-to-landfill status across our global operations which not only can help reduce costs related to waste management but also reinforces our efforts to improve resource efficiency throughout our production and distribution processes.

Human Capital Management

1 unchanged sentence

We believe a key driver of long-term success is the strength of our workforce and we are committed to investing in our workforce.

As part of our commitment to our workforce, we focus on the following key areas noted below:

Diversity, Equity and Inclusion

As part of our commitment to our workforce, we focus on the following key areas:

Wellness, Health and Safety

With sleep, health and wellness at the core of what we do every day, we recognize the importance of employee well-being and offer a holistic suite of programs and initiatives to support employee's health.

We also strive to continue to be proactive in our operational health and safety initiatives.

We are focused on ensuring compliance with health and safety best practices, requiring employee health and safety training for 100% of our applicable employees, raising workplace awareness through safety initiatives and identifying risk elimination opportunities.

Equal Opportunity Employment

We have a diverse global workforce that includes a range of skill sets, perspectives, backgrounds, ethnicity, genders and qualifications.

7 unchanged sentences

• Participate in external, community-based activities sponsored by local organizations, including those that assist women, minorities and veterans

As part of ongoing efforts to provide transparency regarding initiatives to promote, track and measure our diversity, equity and inclusion efforts within our employee population, we disclosed additional metrics in our 2024 Corporate Social Values Report located on the Tempur Sealy Investor website at http://investor.tempursealy.com.

Our website and the 2024 Corporate Social Values Report are not incorporated by reference into this Report.

People Development and Training

Our goal is to design and offer development opportunities that improve Company performance and meet employees' individual learning and development needs and ultimately strengthen our culture by reinforcing Company values.

Our goal is to design and offer development opportunities that improve Company performance and meet employees' individual learning and development needs and strengthen our culture by reinforcing Company values.

We use the 70/20/10 learning and development model.

This approach gives employees the opportunity to develop their skills through a combination of job experience (70%), mentoring (20%) and formal training (10%).

Training at Tempur Sealy includes, but is not limited to, formal training programs, leadership development mentorships, professional and industry conferences, and education assistance.

Training at Somnigroup includes, but is not limited to, formal training programs, leadership development mentorships, professional and industry conferences and education assistance.

We offer employees access to a learning management system where they can take courses on a variety of individual and leadership development topics.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business