Slide 1: Twin Disc, Inc Investor Presentation
TWIN DISC, INC Investor Presentation
Slide 2: Disclosures
DISCLOSURES Safe Harbor Statement This presentation contains statements that are forward-looking within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipates,” “believes,” “intends,” “estimates,” and “expects,” or similar anticipatory expressions, usua
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS A leader in global power transmission technology with an increasingly diversified IP-protected portfolio Well-positioned to benefit from tailwinds in defense markets and hybrid transmissions supported by robust backlog Margin enhancement and operational initiatives driving favo
Slide 4: Overview
OVERVIEW 4
Slide 5: Twin Disc Snapshot
TWIN DISC SNAPSHOT FY25 Revenue by Product Group FY25 Revenue by Geography Founding Year 1918 5% Headquarters Milwaukee, WI 12% 14% 27% Employees ~1,000 Reporting Segments Manufacturing 24% 59% 28% Distribution Revenue $340.7M 31% North America Gross Margin 27.2% Marine & Propulsion Systems Europe L
Slide 6: Twin Disc Evolution
TWIN DISC EVOLUTION 1918 1950s 1999 2006 2021 2024 - Present Twin Disc was Hydraulic marine Acquisition of Acquisition of BCS Sale of Swiss facility Acquisition of Katsa Oy founded transmission Rockford and and Kobelt Revolutionized tractor Technodrive Strategic focus on hybrid clutches that became
Slide 7: Product Group Overview
PRODUCT GROUP OVERVIEW Marine & Propulsion Land-Based Industrial Systems Tr a n s m i s s i o n Diesel powered planing & Diesel powered off-highway and all- Heavy duty industrial disconnect displacement vessels terrain specialty vehicles applications • Positioned to capitalize on paradigm • Increasi
Slide 8: Capturing Robust Defense Market Demand with Runway for Growth
CAPTURING ROBUST DEFENSE MARKET DEMAND WITH RUNWAY FOR GROWTH Robust TWIN Delivering Defense Activity Well Positioned Results Select Defense Products Defense as a +13% ~15% percentage of Total Backlog YoY Increase in 2026 US Defense Spending (1) Marine YoY Increase in +45% Transmissions, Transmissio
Slide 9: Marine & Propulsion Systems
MARINE & PROPULSION SYSTEMS Twin Disc’s Unique Position Veth & Kobelt acquisition provided complementary products and powerful new technologies In-house hybrid and electrification expertise Expansion into new markets and geographies Strong Veth and Rolla partnership encourages innovation and
Slide 10: Land-Based Transmission
LAND-BASED TRANSMISSION Twin Disc’s Unique Position Katsa acquisition provided complementary products and powerful new technologies Over a century of experience in power transmission product design and innovation Strong North American customer base provides a solid foundation for growth In-h
Slide 11: Industrial
INDUSTRIAL Twin Disc’s Unique Position Kobelt acquisition provided geographic expansion, complementary products and powerful new technologies Best-in-class quality Proprietary technology in controls, hybrid, EV In-house engineering capabilities Accelerating activity with new customers and
Slide 12: Strategy
STRATEGY 12
Slide 13: Long-Term Strategy
LONG-TERM STRATEGY Leading Hybrid/Electric solution provider for niche marine and land-based applications 2030 FY Targets Continued expansion of acquisitions to reach new markets and geographies $500M Revenue Rationalize global footprint for efficiency and customer response 30% Gross Margins Increas
Slide 14: Hybrid Electric Solutions
HYBRID ELECTRIC SOLUTIONS Transforming the global Off-Highway, Industrial, and Marine markets with our sustainable Hybrid and Electric powertrains, empowering customers to 5x to 10x meet business goals as well as regulatory requirements • Expertise in drive train technology provides edge in hybrid t
Slide 15: Case Study – Innovative Solutions for Hybrid Marine Vessel
CASE STUDY – INNOVATIVE SOLUTIONS FOR HYBRID MARINE VESSEL Challenge Solution Application Example • Affordability of hybridization for • Total ownership of hybrid pleasure craft users propulsion system 48-Foot Riviera • Reliability & quality • Integration of global support network • Availability & l
Slide 16: Veth Expansion
VETH EXPANSION Global supplier of main and auxiliary Marine propulsion products Veth Sales Strategic Fit $83 $74 • Complementary products and powerful new $53 technologies $45 • Enhances engineering talent and product development capabilities • Prior history working with Veth enables efficient FY22A
Slide 17: Optimize Geographic Footprint
OPTIMIZE GEOGRAPHIC FOOTPRINT $253.2 million Fiscal 2025 International Sales World-wide distribution network Seven countries with manufacturing operations Customers across 50+ countries Minimal tariff impact representing 1% of COGS Manufacturing location Company owned distribution / service
Slide 18: Pursue M&A Opportunities
PURSUE M&A OPPORTUNITIES Bolt-on & Transformational Acquisitions Framework M&A Priorities Marine Technology, Hybrid-focused Industrial Diversification away from Oil & Gas Strategic Fit Acquisition logic immediately evident Evident value creation potential Financial Fit Consistent business pe
Slide 19: Recent Acquisitions
RECENT ACQUISITIONS Katsa Oy Acquisition Overview Kobelt Acquisition Overview • Acquired Katsa Oy for €21 million (approximately $23 • Acquired Kobelt for ~$16.5M; transaction closed on million); transaction closed on May 31, 2024 February 14, 2025 • Leading European manufacturer of high-quality • O
Slide 20: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Debt Reduction Return Capital to Shareholders via Dividends Organic Growth Investments Bolt-On & Transformational Acquisitions Return Capital to Shareholders via Share Repurchases 20
Slide 21: Financial Overview
FINANCIAL OVERVIEW
Slide 22: Financial Performance
FINANCIAL PERFORMANCE NET SALES ($ in millions) Marine Land-Based Industrial Other $400.0 $340.7 $330.0 $295.1 $17.9 $280.0 $276.9 $300.0 $246.8 $242.9 $26.3 $19.2 $41.5 $218.6 $230.0 $5.3 $10.9 $25.7 $26.3 $9.5 $29.8 $80.2 $180.0 $32.1 $78.5 $200.0 $23.5 $62.7 $58.4 $64.9 $73.0 $130.0 DILUTED EARNI
Slide 23: Balance Sheet
BALANCE SHEET NET DEBT ($ in millions) $24.0 LEVERAGE RATIO $19.7 $15.3 5.5x $5.4 $5.7 FY21 FY22 FY23 FY24 FY25 EBITDA ($ in millions) 1.0x 0.8x $25.8 $26.5 $24.0 0.2x 0.2x $19.0 FY21* FY22** FY23 FY24 FY25 $3.6 FY21* FY22** FY23 FY24 FY25 23 * Unadjusted for change in accounting method; ** Adjusted
Slide 24: Reaffirming Medium-Term Targets
REAFFIRMING MEDIUM-TERM TARGETS 2030 TARGETS AND DRIVERS Revenue Gross Margin FCF Conversion $500M 30% $341M 27% 8% Maintain at least 60% CAGR FY 2025 FY 2030 FY 2025 FY 2030 Hybrid / Electric leadership European cost structure Supply chain processes Veth global expansion Operational effic
Slide 25: Investment Highlights
INVESTMENT HIGHLIGHTS A leader in global power transmission technology with an increasingly diversified IP-protected portfolio Well-positioned to benefit from tailwinds in defense markets and hybrid transmissions supported by robust backlog Margin enhancement and operational initiatives driving favo
Slide 26: Appendix
APPENDIX 26
Slide 27: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF TOTAL DEBT TO NET DEBT (In thousands; unaudited) FY25 FY24 FY23 FY22 FY21 Current maturities of 3,000 2,000 2,010 2,000 2,000 long-term debt Long-term debt 28,446 23,811 16,617 34,543 30,085 Total debt $31
Slide 28: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA (In thousands; unaudited) ` FY25 FY24 FY23 FY22** FY21* Net Income (loss) attributable to Twin Disc ($1,894) $10,988 $10,380 $10,467 ($29,719) Interest expense 2,646 1,443
Slide 29: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES NET DEBT TO EBITDA LEVERAGE RATIO CALCULATION FY25 FY24 FY23 FY22** FY21* Net debt $15,337 $5,741 $5,364 $24,022 $19,745 EBITDA 19,019 26,553 25,781 23,965 3,563 Leverage Ratio 0.8x 0.2x 0.2x 1.0x 5.5x 29 * Unadjusted for c