Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — FY2018 Earnings Presentation
40 slides from Titan International, Inc. (de)'s earnings presentation, Mar 20, 2019
Slide 1: Investor Presentation March 2019
Investor Presentation March 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement SAFE HARBOR STATEMENT: The accompanying material includes forward-looking comments and information concerning the company’s expectations and objectives for the future. Readers of this material should understand that these forward looking statements are based on the Company’s ex
Slide 3: Titan International Overview
Titan International Overview Titan International Inc. (TWI) is a publicly traded company on the New York Stock Exchange. Headquartered in the heartland of the U.S. in Quincy, Illinois, Titan has grown to become a top global manufacturer of off-highway wheels, tires, assemblies and undercarriage pr
Slide 4: Titan International Overview: Strategy
Titan International Overview: Strategy To become the worldwide leader in manufacturing and distribution of wheels, tires, assemblies and undercarriage products and to serve our customers’ needs through product innovation and quality service in our key markets: Agriculture Earthmoving/Constructio
Slide 5: Titan International Overview: Customers
Titan International Overview: Customers 5
Slide 6: Titan International Overview: Global Footprint
Titan International Overview: Global Footprint Europe Ceprano, Italy Kidderminster, UK Fanano, Italy Monreal del Campo, Spain Finale Emilia, Italy Potenza, Italy Flers, France St. Helens, UK Gevelsburg, Germany Valsamoggia, Italy Jesi, Italy Volgograd, Russia North America
Slide 7: Agriculture
Slide 8: Agriculture
AGRICULTURE Note: Certain amounts from prior years have been reclassified to conform to the current year’s presentation. 8
Slide 9: Agriculture: Market Summary
AGRICULTURE: Market Summary Large hp equipment (4WD tractors and Combines) remain well below historical averages. Ag-related commodity prices remain lower and have declined in the midst of tariffs and trade concerns. Farmer income has stabilized and is expected to be similar in 2019 as compare
Slide 10: Agriculture: Innovation Highlights
AGRICULTURE: Innovation Highlights 10
Slide 11: Agriculture: Low Sidewall Technology
AGRICULTURE: Low Sidewall Technology From planting trials to customer testimonials to growing sales – our LSW tires and wheels continue to prove themselves. 2018 was another banner year for one of our leading innovations. 11
Slide 12: Agriculture: Low Sidewall Technology
AGRICULTURE: Low Sidewall Technology 12
Slide 13: Agriculture: Low Sidewall Technology
AGRICULTURE: Low Sidewall Technology 13
Slide 14: Off-the-Road (OTR)
OFF-THE-ROAD (OTR) EARTHMOVING/ CONSTRUCTION/MINING ROS 6 ok ve mre ay. Dp a nln lates ad) As lydia DPR ald ong ee a
Slide 15: Off-the-Road (OTR)
OFF-THE-ROAD (OTR) Note: Certain amounts from prior years have been reclassified to conform to the current year’s presentation. 15
Slide 16: OTR: Market Summary
OTR: Market Summary Demand for larger construction equipment used for highways and infrastructure remains strong. Private construction spending for residential and non-residential remains strong. Overall mining equipment demand has strengthened within certain regions with commodity prices impr
Slide 17: OTR: ITM Products & Customers
OTR: ITM Products & Customers 17
Slide 18: OTR: ITM Product Applications
OTR: ITM Product Applications 18
Slide 19: OTR: Product & Innovation Highlights
OTR: Product & Innovation Highlights 19
Slide 20: OTR: Product Innovations
OTR: Product Innovations ACCELERATED CHANGE TECHNOLOGY (ACT) Titan's ACT wheel can reduce maintenance time by up to 50 percent by allowing technicians to rotate or change the inside tire without having to remove the outer wheel. This increases uptime for haul trucks, something that's critical for mi
Slide 21: OTR: Product Innovations
OTR: Product Innovations PLY RATINGS HAVE BIG IMPACT ON FORESTRY INDUSTRY Forestry equipment is getting heavier and higher-powered — 25-30 percent larger than a decade ago and equipped with massive grapples. If loggers choose a tire with too low of a ply rating, the tires are expected to wear faster
Slide 22: OTR: Product Innovations
OTR: Product Innovations AMK Mining - TrackAdvice™ ITM’s cloud-based undercarriage management system Undercarriage inspection data are collected in the field and uploaded via mobile app Data are stored to the cloud and reviewed by ITM experts Results are used to extend the component life and reduce
Slide 23: Consumer
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Slide 24: Consumer
CONSUMER Note: Certain amounts from prior years have been reclassified to conform to the current year’s presentation. 24
Slide 25: Consumer: Growing Opportunity
CONSUMER: Growing Opportunity The consumer market continues to present opportunities for Titan with products that have strong margins. The specialty products group had its first full year of operations in 2017, and saw significant sales increases for mud flaps and cattle mats for the dairy market. W
Slide 26: Financial Overview
Financial Overview
Slide 27: 2019 Outlook
2019 Outlook (Amounts in millions) 2018 Actual 2019 Outlook $1,698 – $1,722 6% – 7.5% Growth Net Sales $1,602 $722 – $736 (Ag) 4% – 6% (Ag) $801 – $812 (OTR) 8% – 9.5% (OTR) $170 – $174 (Con) 2.5% – 4.5% (Con) Gross Margin $198 $217 - $227 Between 12.8% – 13.2% SGA & RD $146 ~$150 EBITDA (excludes F
Slide 28: Financial Overview: Highlights & Challenges
Financial Overview: Highlights & Challenges Full-Year 2018 Financial Highlights Net sales increased $133.5 million, or 9.1% YOY, and net sales increased 11.3% on a constant currency basis Gross profit increased $38.0 million, a 23.7% YOY improvement SG&A expenses were $134.8 million (8.4% of n
Slide 29: Financial Overview: FY 2018 by Market
Financial Overview: FY 2018 by Market Agriculture: Tractors, combines, implements, irrigation Earthmoving/Construction: Mining, cranes, aerial lifts, haul trucks, scrapers Consumer: Light-truck tires, ATVs, turf equipment, specialty products (includes livestock mats and mud flaps) FY 2018 Segment Re
Slide 30: Financial Overview: Sales and Gross Margin
Financial Overview: Sales and Gross Margin 50 % $690 $694 $7 50 45 % $652 $583 $6 50 Net Sales: Up 1% FY ‘18 vs. FY ‘17 40 % $5 50 35 % 30 % Gross margin improved ~120 bps compared to FY ’17 $4 50 25 % 20 % $3 50 AG 43% 15 % 10 % $2 50 Unfavorable currency translation, primarily in Latin Ameri
Slide 31: Financial Overview: Summary Income & EPS
Financial Overview: Summary Income & EPS (Amounts in millions) 2018 2017 2016 2015 Sales $1,602.4 $1,468.9 $1,265.5 $1,394.8 Gross Margin $198.3 $160.3 $141.4 $136.6 Gross Margin % 12.4% 10.9% 11.2% 9.8% Operating Income (Loss) $42.2 ($11.2) ($22.4) ($25.5) Operating Income % 2.6% (0.8%) (1.8%) (1.8
Slide 32: Financial Overview: Income Reconciliation (Non-GAAP)
Financial Overview: Income Reconciliation (Non-GAAP) USD Amounts in Millions Q4 2018 Q4 2017 FY 2018 FY 2017 Net income (loss) appl. to common shareholders (13.4) (32.7) 3.9 (66.4) Remove redemption value adjustment (1.1) (2.4) (12.2) (6.4) Net income (loss) attributable to Titan (12.3) (30.3) 16.1
Slide 33: Financial Overview: EBITDA Reconciliation (Non-GAAP)
Financial Overview: EBITDA Reconciliation (Non-GAAP) USD Amounts in Millions Q4 2018 Q4 2017 FY 2018 FY 2017 Net income (loss) (14.1) (35.7) 13.0 (64.1) Provision for income taxes 3.0 5.2 6.8 11.2 Adjustments Interest expense 7.7 7.7 30.5 30.2 Debt termination expense - 18.6 - 18.6 Depreciation and
Slide 34: Appendix
Appendix
Slide 35: Sales – N. America vs. International
Appendix Sales – N. America vs. International -12 Quarters -8 Quarters -4 Quarters Current Quarter Full Year - Sales / Operating Income (Amounts in Millions) $1,800 5% $1,600 4% $1,400 946 869 3% $1,200 730 742 2.6% 2% Millions $1,000 1% $800 -0.8% 0% $600 664 656 -1% $400 523 600 $200 -2% -1.8% -1.
Slide 36: Working Capital / CCC
Appendix Working Capital / CCC Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Q4 - WORKING CAPITAL (Amounts in Millions) $700 30% $600 29% 29.3% 28% $500 340 27% $400 396 Millions 26.9% 272 26% $300 24.7% 24.7% 276 25% $200 24% $100 227 242 212 177 179 195 23% 123 14
Slide 37: YTD Cash & Activity
Appendix YTD Cash & Activity December 2018 300.0 3.1 2.6 2.3 6.3 250.0 13.0 18.4 18.7 23.1 36.1 200.0 39.0 57.6 Millions 150.0 77.9 100.0 $143.6 50.0 $81.7 - 37
Slide 38: Debt Structure
Appendix Debt Structure CASH / DEBT Q4 '18 Q3 '18 Q2 '18 Q1 '18 Q4 '17 Cash $82 $97 $106 $112 $144 Total Debt $461 $461 $462 $463 $451 6.50% Secured Notes Due 2023 $395 $395 $395 $394 $394 6.875% Secured Notes Due 2020 $0 $0 $0 $0 $0 Titan Europe Credit Facilities $35 $36 $34 $33 $33 Other $31 $30 $
Slide 39: Cost Structure
Appendix Cost Structure GP Cost Structure Breakdown Primary Raw Materials Steel Natural Rubber Overhead Raw ~30-35% Materials Synthetic Rubber ~50-55% Labor Carbon Black ~10-15% Nylon 39
Slide 40: Investor Relations
Investor Relations Titan Website: www.titan-intl.com todd.shoot@titan-intl.com SAFE HARBOR STATEMENT: The accompanying material includes forward-looking comments and information concerning the company’s expectations and objectives for the future. Readers of this material should understand that these