Tennant Company · NYSE:TNC
Tennant — Q4 2023 Earnings Presentation
24 slides from Tennant's earnings presentation, Feb 22, 2024
Slide 1: Earnings Release Call: Fourth Quarter and Full Year 2023 Results
Earnings Release Call Fourth Quarter and Full Year 2023 Results Full Year 2024 Guidance February 22, 2024 INVESTORS.TENNANTCO.COM
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Certain statements contained in this document are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements do not relate to strictly historical or current facts and provide current expectations or forecasts of
Slide 3: Executive Summary
ExecutiveSummary Executive Summary Fourth-Quarter Results Full year organic sales growth of ~14% Net Sales Adj. EBITDA* Adj. Diluted EPS* ~9% price growth and 5% volume growth Full year adjusted EBITDA margin $311.4M $41.5M $1.92/share increased 330 bps to 15.5% +5.4% Organic Growth 13.3% Adj. E
Slide 4: Achieved Enterprise Strategy Targets in Four Years
Achieved Enterprise Strategy Targets in Four Years 2023 Accomplishments 2019–2023 Enterprise Strategy Results Targets Achievement Translated strategic investments to stabilize supply chain into net sales Established long-term sustainability Net Sales 2-3% ~3% goals which were validated by SBTi
Slide 5: Launching New Enterprise Strategy 2024-2026
Launching New Enterprise Strategy 2024-2026 GROWTH PERFORMANCE PEOPLE Customer-focused new product Modernize existing ERP systems Invest in our employee value innovation and create a scalable digital proposition to attract, retain and infrastructure develop top talent Channel expansion and new go- t
Slide 6: Focused M&A Framework
Focused M&A Framework Closing Product Gaps Defend & Grow and Strengthening our Cleaning Core Channel Position M&A Priorities Drive Value Grow Recurring Strategic Value Through Connected Revenue Potential Autonomy Operational Fit Financial Return Expand Equipment Leverage Existing Portfolio into Stre
Slide 7: Tennant and Brain Corp sign exclusive technology agreement
Tennant Company and Brain Corp sign exclusive technology agreement to accelerate robotic floor cleaning innovation and adoption Tennant invests $32 million in Brain Corp to fuel the next generation of AI-enabled robotic cleaning technologies, enhance customer Return on Investment, and accelerate Aut
Slide 8: Launching New Enterprise Strategy 2024-2026
Launching New Enterprise Strategy 2024-2026 GROWTH PERFORMANCE PEOPLE Customer-focused new product Modernize existing ERP systems Invest in our employee value innovation and create a scalable digital proposition to attract, retain and infrastructure develop top talent Channel expansion and new go- t
Slide 9: Long-Term Outlook
Long-Term Outlook Long-Term Growth Targets 3 to 5% Organic Net Sales Net Sales Growth 50 to 100 bps Adj. EBITDA EBITDA Margin Improvement Above market Continued margin Target 100% FCF 100% Free Cash improvement Cash growth ratesFlow Conversion Flow Conversion 9 Tennant Company Earnings Release Call
Slide 10: Financial Results Fourth Quarter and Full Year 2023
10 Tennant Company Financial Results Fourth Quarter and Full Year 2023 INVESTORS.TENNANTCO.COM 10
Slide 11: Fourth-Quarter and Full-Year Financial Performance
Fourth-Quarter and Full-Year Financial Performance Net Income Adjusted Diluted EPS* Net Income ► Record high full-year net income of $109.5M $6.57 $109.5 Increase of $43.2M from 2022 driven by strong operating performance and gross margin expansion through price realization $66.3 $4.10 ► Q4 2023 net
Slide 12: Fourth Quarter 2023 Results
Fourth Quarter 2023 Results Net Sales Adjusted EBITDA* Region** Product Categories ► Gross margin* improved to 42.2% Primarily driven by price realization, cost-out activities and $47 M productivity increases which offset inflationary pressure +7.3% Americas $42 M Service $69 M $67 M ► S&A* as a per
Slide 13: Full Year 2023 Results
Full Year 2023 Results Net Sales Adjusted EBITDA* Region** Product Categories ► Gross margin* improved to 42.5% Primarily driven by price realization, cost-out activities and $188 M productivity increases which offset inflationary pressure +18.9% Americas $165 M Service $280 M ► S&A* as a percent of
Slide 14: Capital Deployment
Capital Deployment YE 2022 YE 2022 Total Debt $300M $201M Net Leverage 1.67x 0.43x Revolver Availability: $336.8M Net cash provided by Capital expenditures of Debt paydown of Returned capital to operating activities of ~$23M in line with ~$100M reducing shareholders via ~$188M driven by operating gu
Slide 15: Full Year 2024 Guidance
15 Tennant Company Full Year 2024 Guidance INVESTORS.TENNANTCO.COM 15
Slide 16: 2024 Full-Year Guidance
2024 Full-Year Guidance 2024 Guidance Net Sales $1.27B - $1.295B Organic Net Sales Growth 2% - 4% Adjusted Diluted EPS(1) $6.05 - $6.65 Adjusted EBITDA(1) $198M - $213M Adjusted EBITDA Margin 15.6% - 16.4% Capital Expenditures(1) $20M - $25M Adjusted Effective Tax Rate(1) 22% - 27% (1) Excludes ERP
Slide 17: Questions?
Questions? Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 17
Slide 18: Thank you
Thank you Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 18
Slide 19: Appendix
Appendix Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 19
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation and the related conference call include presentation of Non-GAAP measures that include or exclude special items of a nonrecurring and/or nonoperational nature (hereinafter referred to as “special items”). Management believes that the Non-GAAP measures pr
Slide 21: Supplemental Non-GAAP Financial Tables
TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 21
Slide 22: Supplemental Non-GAAP Financial Tables
TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 22
Slide 23: Supplemental Non-GAAP Financial Tables
TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 23
Slide 24: Supplemental Non-GAAP Financial Tables
TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES Tennant Company Earnings Release Call | Fourth Quarter and Full Year 2023 24