Leggett & Platt 8K Leggett & Platt Announces New Strategy Including Divestitures | LEG 14 Nov 07

CHANGING COURSE

Investor Day

November 14, 2007

Exhibit 99.2

11/13/2007

Forward Looking Statements

Statements in this presentation that are not historical in nature

are

“forward-looking.”

These

statements involve uncertainties

and risks, including the company’s ability to improve operations

and realize cost savings, price and product competition from

foreign and domestic competitors, changes in demand for the

company’s products, cost and availability of raw materials and

labor, fuel and energy costs, future growth of acquired

companies, general economic conditions, foreign currency

fluctuation, litigation risks, and other factors described in the

company’s latest Form 10-Q. Any forward-looking statement

reflects only the company’s beliefs when the statement is made.

Actual results could differ materially from expectations, and the

company undertakes no duty to update these statements.

11/13/2007

Presentation Topics

Leggett is Changing Course

Why Change?

New Strategic Direction

Key Changes

Expected Results

Presentation Team

Dave Haffner,

President and CEO

Karl Glassman,

Executive VP and COO

Matt Flanigan,

Senior VP and CFO

Dave DeSonier,

VP Strategy and IR

11/13/2007

Executive Summary

Becoming Better Stewards of

Shareholders’

Capital

Historically:

Revenue Driven

Future:

TSR Driven

(Total Shareholder Return)

Phase 1 (2-3 Years):

Improve Returns on Assets

Increase Free Cash Flow

Phase 2 (2010+):

Profitably Grow > GDP

11/13/2007

Why Change?

Poor Return to Shareholders

Inefficient Use of Capital

Not Hitting Financial Targets

Parts of Portfolio Weighing Us Down

11/13/2007

State of the Company

Strengths

Market Leadership

Low Cost Converters

Product Development

Customer Relationships

> 20% Foreign

Generate Lots of Cash

Weaknesses

Too Patient

Overly Optimistic

“We Can Fix It”

Strategic Planning

11/13/2007

Agenda: Key Changes

Phase 1: Clean Up Portfolio & Implement

More Rigorous Strategic Planning

(2-3 Years)

Success = TSR

Role-Based BU Management

Stronger BU-Level Strategic Planning

Eliminate Over 1/5 of Portfolio

Higher Returns on Base Portfolio

39% Dividend Increase + Buybacks

Phase 2: Profitably Grow > GDP

(2010+)

11/13/2007

Success = TSR

TSR = (

Price + Dividends) / Initial Price

Target Top 1/3 of S&P 500

Several Levers:

Earnings

= (

Revenue) x (

Margin)

Cash Yield

= Dividends + Repurchases

P/E Multiple

Exec and BU Incentives Linked to TSR

11/13/2007

Role-Based BU Management

Different Goals:

Grow:

Profitable Growth

Core:

Maximize Cash

Fix:

Rapidly Improve

Based on Strategy

and Returns

Capex Skewed

Grow

34%

Core

39%

Fix

Divest

18%

2007 Expected Revenue

11/13/2007

Rigorous BU Strategic Planning

More Formal Process

Influences BU “Role”

Assess BU Position and Advantages

3-Year Plan to Achieve

10% TBR / yr

11/13/2007

Eliminate 1/5 of Portfolio Revenue

$900m Divested: Aluminum & 6 BUs

$100m Pruned from Store Fixtures BU

$200m from Poor Performing Plants

Aim to Finish by End of 2008

11/13/2007

“Fix”

the Store Fixtures BU

Shrink to Higher Profitability Core

Prune ~$100m (20%)

of Low-Margin Sales

Eliminate ~$180m (31%) of Production Capacity

•

Closing 4 of 14 Facilities; Utilization Increases to ~80%

Urgency; Hard Targets and Deadlines

Attain Return

WACC

by Q4’08

250 Basis Point Higher Margin (run rate)

by March

11/13/2007

Prune Low Profitability BUs

$904

$854

$52

$16

30%

40%

50%

60%

70%

80%

90%

100%

Sales

Assets

EBIT

Cash Flow

Divest

Fix

Core + Grow

Net Trade Sales; Assets = Receivables + Inventory + Net PPE + Goodwill + Intangibles;

EBIT excludes Non-Recurring items; Cash Flow = EBITDA +

–

Capex

Estimated 2007 Results, in $millions

11/13/2007

Higher Returns on Base Portfolio

BU Bonus Linked to Returns

Initiatives:

Product Development

Pricing Discipline

Cost Reduction

Consolidation; Prune Underperforming Plants

Overhead

If BU Return < WACC, 1 Year to Improve

11/13/2007

Send More Cash to Shareholders

Generate Much More Free Cash

Increase Dividend by 39%

To $1.00 / year (from $0.72 / year currently)

Requires Additional ~$50m in Cash / Year

•

More Than Offset by Reduction in Capex, Acquisitions

10m Shares / yr Standing Authorization

Maintain Priority on Stock Repurchases

Use Proceeds from Divestitures

11/13/2007

Phase 2: Profitably Grow > GDP

Minimal Growth for 2-3 Years (Phase 1)

Focus is “Clean Up”, High Return

Longer Term: 4-5% Growth (Phase 2)

Base Opportunities Identified in Strategic Plans

Possible New BUs; Must Meet Rigorous Criteria

Seek Growth, But Not at Expense of TSR

11/13/2007

Agenda: Expected Results

Significant Restructuring Costs

Lower Sales, Higher Margin

40% Lower Capex, Acquisitions

Free Cash More Than Doubles

3-Yr TSR Exceeds Target Levels

11/13/2007

Restructuring-Related Costs

Cost Estimates Not Yet Finalized

$150 -

300 million, Virtually All Non-Cash

Update 4Q Guidance Once Resolved

Issue 2008 Guidance on Jan 24

Annual Guidance Only, Updated Quarterly

11/13/2007

Sales

$4.3B in 2010

Sales in $B

4.3

5.2

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

2007

"Divest"

"Fix"

Poor

Plants

Future

Growth

2010

ASSUMPTIONS:

•

Exit ~ $1.2 B in Sales

•

3% / year Total Sales Growth

•

Modest Acquisitions; No New BUs

11/13/2007

EBIT Margin

11% by 2010

Expected EBIT Margin %

7.5

2007

"Divest"

"Fix"

Poor

Plants

Initiatives

2010

Eliminate Poor

Performing

Plants in

Otherwise

Healthy BUs

•

Product Dev.

•

Efficiency

•

Purchasing

•

Pricing

excl non-recur

11/13/2007

170

124

137

157

160

135

125

117

290

252

120

181

105

159

148

128

164

166

100

150

200

250

300

350

400

450

'01

'04

07E

10E

Capex

Acquisitions

~40% Lower Capex and Acquisitions

3yr: $510m

3yr: $860m

11/13/2007

Free Cash Should More Than Double

’03-’06

’07-’10

Cash from Ops

1.6

1.8

On Smaller Asset Base

Divestitures

0.1

0.5

.08 Prime Foam; 0.40 Future

Capex

(0.6)

(0.5)

20% Lower in Future

Acquisitions

(0.4)

(0.2)

Assumes No New BUs

Free Cash Flow

0.7

1.6

> 2 Times as Large

Net Debt

0.3

(0.1)

$B to Shareholders

1.0

1.5

> $500m Increase

Dividends, $B

0.5

0.6

$1/share in ‘08; Annual Increase

Repurchases, $B

0.5

0.9

Buy 20-30m Shares ’08-’10

11/13/2007

New Strategy, Same Principles

Changing

Success = TSR

Portfolio Roles

Divesting Several BUs

Increased Urgency

39% Dividend Increase

Less Capex, Acquisition

Modest Growth Targets

New Financial Metrics

Strategic Plan Process

Annual Guidance

Continuing

Integrity

Down-to-Earth, Candid

Commitment to Improve

Product Innovation

Relationships Matter

Significant Cash Flow

Annual Dividend Growth

Clean Financials

Strong Balance Sheet

Mgmt Stock Ownership

11/13/2007

11/13/2007

BACK UP SLIDES

11/13/2007

New Mindset is Required

Future

Recent History

Overall Goal:

High TSR

Revenue Growth

Capex:

Judiciously Allocated

Not Adequately Constrained

BU Success:

Cash Flow Return

Revenue & EBIT Growth

Portfolio Mgmt:

Role Based on

Strategy

“1 Size Fits All”

Acquisitions:

Fewer, Strategy Driven

Opportunistic, “Good Deal”

Divestitures:

Part of Port. Mgmt.

Admitting Defeat

Urgency:

Meet Deadline or Exit

“We Can Fix It”

11/13/2007

Criteria for Role Assignments

GROW

CORE

FIX / DIVEST

1. COMPETITIVE

Advantaged

Solid, Stable

Tenuous or

POSITION

Disadvantaged

2. MARKET

Strong,

Attractive, But

Poor Or

ATTRACTIVE?

Growing

With Lower

Declining

Growth Potential

3. FIT w/ LEGGETT

Strong

Limited

4. RETURN (ROGI)

Consistently

Stable,

Erratic or

> 12%

9-12%

< WACC

5. BU SIZE &

Large,

Inconsequential,

MATERIALITY

Significant

Distracting

11/13/2007

BU Roles By Segments

% of Leggett Revenues

GROW

CORE

FIX / DIVEST

Residential

30%

14%

Commercial

12%

Aluminum

Industrial

10%

Specialized

13%

Total

34%

39%

27%

Target Mix

50%

11/13/2007

Expectations by Portfolio Role

All: Credible Path to

10% TBR Required, else Exit

Grow: Provide Profitable Growth; Return > WACC

Invest Capital in Competitively Advantaged Positions

Identify Major Organic, M&A, or Rollup Investments

Core: Send Cash

To Corporate; Return

WACC

Maintain Stable, Competitive Positions to Generate Cash

Aggressively Improve EBITDA and Free Cash Flow

Profitably Grow Market Share, But With Minimal Capex

Enhance Productivity; Reduce Costs, Overhead, Working Capital

Fix: Rapidly Restructure, else Exit

12 Months To Achieve Return

WACC, Else Divest / Liquidate

11/13/2007

Capex and Acquisition Guidelines

CAPEX: Reduced; Less Spent on Growth

GROW:

Available.

CORE:

Limited;

For Productivity Enhancement, but Not Expansion.

FIX / DIV:

Severely Restricted;

Maintenance Only.

ACQUISITIONS: Fewer, more strategic; higher “bar”

ALL:

Value Creating; TSR Accretive; Clear Strategic Rationale;

Sustainable Competitive Advantage; Attractive Market.

GROW:

Typical: Revenue > $50m, Historical ROGI > 15%;

If New Market, Growth > GDP.

CORE:

Rare;

Revenue > $15m; Adds Value at 15% Discount Rate;

Related to Current Served Market; Low Execution Risk.

FIX / DIV:

None

Allowed.

11/13/2007

Growth Discipline

Strat

Plan Process Identifies “Grow”

BUs

Advantaged Positions in Strategically Attractive Markets

Charter

Desire Growth, But Not At Expense of TSR

Growth Capex Purposely Skewed to the “Grow”

BUs

Encouraged to Explore R&D and Mktg

Investments

Acquisitions Allowed If Fits Strategic Plan, TSR Accretive

Discipline

BU Bonus Based on Return and EBIT (but not revenue)

BU Plans Approved Only if 3-Yr TBR > 10% cagr

11/13/2007

BU Incentives / Bonus

Historical:

EBIT based

2008:

Based on EBIT and

Return

new emphasis on returns

linked to BU TBR and LEG TSR Goals

2009+:

Linked to BU Strategic Plans

11/13/2007

New Financial Metrics

TSR: Total Shareholder Return

Total Benefit Investor Realizes from Owing Our Stock

Stock Price + Dividends

TBR: Total BU Return

Analogous to TSR, but at BU Level

BU Value + Free Cash Flow; (Value = EBITDA x Multiple)

ROGI: After-tax Return on Gross Investment

Proxy for Expected Return of Incremental Organic Growth

Measure of the “Health”

of BU; Basis for Role Assignment

(EBITA –

Taxes) / (WC + Gross PP&E)

FCF: Free Cash Flow

Amount of Cash, All In, the BU Returns to Corporate

EBITDA –

Taxes –

Capex –

WC –

Acquisitions + Sales Proceeds

11/13/2007

Formulae for Financial Metrics

(

Earnings x Multiple) + Dividends

TSR =

---------------------------------------------------

Total Shareholder

Initial Market Value

Return

(

EBITDA x Multiple) + FCF

TBR =

-------------------------------------------------

Total BU Return

Initial Market Value

EBITA -

taxes

ROGI =

-----------------------------

Return on

WC + Gross PPE

Gross Investment

FCF = EBITDA –

taxes –

capex –

Free Cash Flow

–

acquisition cost + sales proceeds

WC = working capital; PPE = property, plant, equipment;

EBITA = earnings before interest, taxes, and amortization

11/13/2007

TSR: Total Shareholder Return

Beginning

price

Quarterly

dividends

Ending

price

$23.90

$22.96

$0.16

$0.17

$0.94 of Price Change

Dividends + Price Change

0.67 + 0.94

22.96

= 7.0%

Beginning of year price

TSR =

Leggett’s TSR for 2006

11/13/2007

LEG, 2006

Revenue

Earnings

Margin

Market Cap

P/E Multiple

(8)%

Share Count

(e.g. share repurchases)

3. Cash Return

Dividend Yield

TSR

Several “Levers”

Drive TSR

11/13/2007

TBR: Total Business Return

TSR

TBR

Change in

Stock Price

Dividend

Yield

Change in

Value

Free Cash Flow

Yield

CORPORATE value creation:

Market based calculation of TSR

BUSINESS UNIT value creation:

Internal calculation of TBR

•

EBITDA

•

EV/EBITDA multiple

(= TSR multiple)

•

EBITDA

•

EV/EBITDA multiple

•

minus Debt

•

divide by # Shares

TBR is the BU Equivalent of TSR

11/13/2007

TSR and TBR are Analogous

TBR = Total Business Return = Return

Corporate

Receives on Its Investment

Leggett TSR

Business Unit TBR

2005

2006

2005

2006

2007

2008

EBITDA

567

657

EV Multiple

x 9.1

x 8.0

x9.1

x8.0

Value

5160

5256

190

458

163

231

Debt

(955)

(980)

OPER

Market Cap

4204

4276

LEVERS

# Shares Outst.

183

178

Share Price

$22.96

$23.90

3-yr

Change in Value

$0.94

268

(295)

% Change

4.1%

141%

(64)%

42%

Dividend

or FCF

$0.67

(29)

(3)

% Yield

2.9%

(15)%

11%

(0)%

% TSR or TBR

7.0%

126%

(62)%

53%

TSR

TBR

FCF = Free Cash Flow = EBITDA –

taxes –

capex –

WC –

acquis. cost + sale proceeds

11/13/2007

Anticipated Future Results

TSR of 12-15% per year

Dividend Payout of 50-60%

Sales Growth (in Phase 2) of ~ 4-5% / year

~11% EBIT Margin

Net Debt-to-Cap of 30-40%

11/13/2007

Future Portfolio Composition

% Sales

EBIT Mgn

Residential

~50%

10-11%

Commercial

~1/6

~ 9%

Industrial

~1/6

8-9%

Specialized

~1/6

10-11%

Total Company

100%

~11%

~ 30% Foreign Sales (vs. ~ 21% today)

Segment margins based on Trade + Intersegment

Sales; Company margin based on Trade Sales.

Leggett & Platt (LEG) 8-KLeggett & Platt Announces New Strategy Including Divestitures