Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — Q3 2016 Earnings Presentation
38 slides from Titan International, Inc. (de)'s earnings presentation, Oct 3, 2017
Slide 1: Investor Presentation Q3 2016
Investor Presentation Q3 2016
Slide 2: Titan International Overview
Titan International Overview Titan International, Inc. 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 specialty tires, wheels and trac
Slide 3: Corporate Strategy
Titan International Overview Corporate 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/Co
Slide 4: Titan International: At a Glance
TITAN INTERNATIONAL: AT A GLANCE BY THE NUMBERS an ® Epes 6,000+ 44 EMPLOYEES, GLOBALLY COUNTRIES IN WHICH TITAN PRODUCTION / DISTRIBUTION SOLD PRODUCTS IN 2015 FACILITIES, GLOBALLY OTITAN a
Slide 5: Competitive Advantages
COMPETITIVE ADVANTAGES TITAN/GOODYEAR MICHELIN BRIDGESTONE GKN
Slide 6: Customers
Titan International Overview Customers
Slide 7: Global Footprint
B® NORTH AMERICA B® LATIN AMERICA / ® EUROPE B® ASIA / AFRICA ® AUSTRALIA GLOBAL = Quey USA SOUTH AMERICA - Caprara FR. aly Nadia an «era, LD, Astra (errant headgurtrs) Atibala SP, Bren Fanana, MO, Kaly ‘din Turkey Kalgoorlie, WA, Australia FOOTPRINT Brn USA gi Ge - el iby elgg, a tara Aaa * Des Moi
Slide 8: Agriculture
= Y om . aes : op \ ‘4 za | as | \ | a AGRICULT URE
Slide 9: Agriculture: Products/Brands
AGRICULTURE: Products/Brands /
Slide 10: Agriculture: Major 2015 Highlight
AGRICULTURE: Major 2015 Highlight
Slide 11: Agriculture: Product Innovations
AGRICULTURE: Product Innovations First line of text Bullet one goes here Bullet two goes here • Sub-bullet goes here • Sub-bullet goes here
Slide 12: Agriculture: Product Innovations
AGRICULTURE: Product Innovations
Slide 13: Agriculture: Product Innovations
AGRICULTURE: Product Innovations
Slide 14: Agriculture: Product Innovations
AGRICULTURE: Product Innovations
Slide 15: Agricultural Drivers
Market Summary Agricultural Drivers Mix Shift - Large hp equipment (4WD tractors and Combines) continue a cyclical downturn which began in 2014. Smaller hp tractor demand remains good, but at lower ASP and gross margins Grain prices remain low; resulting in lower farm income (although expected t
Slide 16: OTR
O7ITAN
Slide 17: OTR: Products/Brands
OTR: Products/Brands O7ITAN i "Factor en TITAN INTERTRACTOR ITM Tires and wheels produced in North Undercarriage parts produced in Undercarriage parts produced in America, Europe and Australia (wheels — Europe, Brazil, North America and Asia; — Europe, Brazil, North America and Asia; only), distribu
Slide 18: OTR: Major Highlight
OTR: Major Highlight TITAN TIRE RECLAMATION CORPORATION (TTRC) Disposal of giant mining tires is the responsibility of the end-user, and doing so responsibly has traditionally come with a significant cost, leading many in the industry to stockpile used tires until a less cost-prohibitive solution is
Slide 19: OTR: Product Innovations
OTR: Product Innovations MARKETS SERVED: European high-speed mobile crane SINGLE-PIECE WHEEL In 2015, Titan began production of a newly patented 25-inch single-piece wheel unlike anything on the market. The high- speed mobile crane market is a challenging one to build wheels for, and because of that
Slide 20: OTR: Product Innovations
OTR: Product Innovations ‘A November 2015 survey ofthe North American construction ‘segment (deployed via Construction Equipment magazine) aimed at identifying potential issues commonty experienced in the fed that could be rectified by using LSW. The results show thal, just as with the agricultural
Slide 21: OTR: Product Innovations
OTR: Product Innovations MARKETS SERVED: Global ® LOW SIDEWALL (LSW) TECHNOLOGY Based on the success of LSW Technology in the North American agricultural market, as Low Sidewall Technology™ . . well as the success of skid steer LSW sizes, significant research, development and testing are underway to
Slide 22: Earthmoving/Construction Drivers
Market Summary Earthmoving/Construction Drivers Private construction spending for resi and non-resi buildings continue to carry the industry Larger construction equipment used for highways and infrastructure have remained slow to recover Mining remains weak with commodity prices low Strong U
Slide 23: Consumer
O71TAN
Slide 24: Consumer: Products/Brands
CONSUMER: Products/Brands O71ITAN TITAN ATV, lawn & garden, tires & wheels produced in North America, distributed globally TITAN TRAILER COMPONENTS Assembled and distributed in North America (divested November 2015) MADE BY TITAN" GOODYEAR ATV Produced and distributed in North America GOODYEAR Light
Slide 25: Consumer: Products Innovations
CONSUMER: Products Innovations
Slide 26: Financial Performance
Financial Performance O7ITAN oo
Slide 27: Overview by Market Segment Q3 2016
Market Summary Overview by Market Segment Q3 2016 Agriculture: Tractors, combines, implements irrigation Earthmoving/Construction: Mining, cranes, aerial lifts, haul trucks, scrapers Consumer: Primarily light-truck tires, ATVs and select golf and turf equipment markets, brakes and actuators Q3 2016
Slide 28: Sales and Gross Margin by Market
Financial Performance Sales and Gross Margin by Market 60 % $4 00 50 % $3 50 Net Sales: Down (1%) Q3 ‘16 vs. Q3 ‘15 $273 $3 00 40 % Gross margin improved 235 basis points with every region showing $228 $2 50 30 % AG improvement from the same quarter to last year $2 00 45% $139 20 % $140 $1 50
Slide 29: Q3 Accomplishments & Challenges
Financial Performance Q3 Accomplishments & Challenges Accomplishments Improved overall gross margin rate performance (230 bps) for the quarter despite a 1% sales decline compared to prior year Latin America, Australia, Europe, ITM and Russia teams all improved results (sales & gross profit) in t
Slide 30: Financial Summary
Financial Performance Financial Summary (Amounts in millions) Q3 2016 Q3 2015 YTD 2016 YTD 2015 Sales $306.2 $308.8 $958.2 $1,087.0 Gross Margin $33.0 $26.2 $109.9 $120.0 Gross Margin % 10.8% 8.5% 11.5% 11.0% Operating Income (Loss) ($8.3) ($14.5) ($12.3) ($5.6) Operating Income % (2.7%) (4.7%) (1.3
Slide 31: Adjusted Income
Financial Performance Adjusted Income Q3 2016 USD Amounts in Millions Q3 2016 Q3 2015 YTD 2016 YTD 2015 Net loss applicable to common shareholders (11.3) (42.5) (29.5) (35.9) Remove redemption value adjustment 1.3 11.0 8.5 11.4 Net income (loss) attributable to Titan (10.0) (31.5) (21.0) (24.5) Adju
Slide 32: Adjusted EBITDA
Financial Performance Adjusted EBITDA Q3 2016 USD Amounts in Millions Q3 2016 Q3 2015 YTD 2016 YTD 2015 Operating income (loss) (8.3) (14.5) (12.3) (6.1) Adjustments Other income (expense) 3.6 0.8 10.5 6.3 Depreciation & amortization 14.3 16.4 44.9 53.0 Subsidiary currency correction (3.1) Italy res
Slide 33: Financial Appendix
Financial Appendix O7ITAN
Slide 34: Sales – N. America vs. International
Appendix Sales – N. America vs. International Q3 - Sales / Operating Income (Amounts in Millions) $600 8% $500 6% 215 4% $400 240 Millions 3.4% 2% $300 (0.6%) 164 188 0% 283 $200 (2.7%) 210 -2% $100 144 -4% 119 $0 (4.7%) -6% 2013 2014 2015 2016 Sales - N. America Sales - International Operating Prof
Slide 35: Working Capital
Appendix Working Capital Q3 - WORKING CAPITAL (Amounts in Millions) $700 29% 27.8% $600 28% 27% $500 376 375 25.3% 26% 25.3% $400 Millions 25% 287 278 $300 23.7% 24% $200 23% 290 248 $100 195 169 184 184 22% 128 152 $0 21% 2013 2014 2015 2016 AR Inventory AP Working Capital as % of Sales 2015 2016 Q
Slide 36: YTD Cash Activity
Appendix YTD Cash Activity September 2016 350.0 300.0 0.2 2.5 2.4 1.8 12.3 3.0 2.8 9.8 14.0 27.3 22.1 250.0 30.8 44.9 200.0 150.0 $215.5 100.0 $200.2 50.0 -
Slide 37: Debt Structure
Appendix Debt Structure CASH / DEBT Q3 '16 Q2 '16 Q1 '16 Q4 '15 Q3 '15 Cash $216 $207 $191 $200 $194 Total Debt $501 $504 $504 $507 $508 Titan International $456 $455 $456 $456 $455 Titan Europe Credit Facilities $37 $39 $40 $38 $40 Other $8 $10 $8 $13 $13 Net Leverage (Net Debt / Trailing 12 Mos EB
Slide 38: Cost Structure
Appendix Cost Structure Cost Structure Breakdown Primary Raw Materials Steel Overhead Natural Rubber 25% Raw Materials Synthetic Rubber 55% Labor Carbon Black 20% Nylon