Tennant Company · NYSE:TNC
Tennant — Q3 2023 Earnings Presentation
18 slides from Tennant's earnings presentation, Oct 31, 2023
Slide 1: Earnings Release Call Third Quarter 2023
Earnings Release Call Third Quarter 2023 October 31, 2023 I N V E S T O R S . T E N N A N T C O . C O M 1
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures 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 expe
Slide 3: Executive Summary
Executive Summary 2023 Q3 organic sales growth of 13.9% Q3 2023 Q3 2022 % Change • Net sales driven by 8.9% price growth and 5% volume Net Sales $304.7 $262.9 15.9% Adjusted Backlog of ~$214M $45.9 $33.8 35.8% EBITDA* • Reduced ~$41M from Q2 ‘23 Adjusted Over 100% FCF conversion from net EBITDA 15.1
Slide 4: Closing Out Enterprise Strategy a Year Early
Closing Out Enterprise Strategy a Year Early Strategic Pillars Targets Achievement* Win where we have a competitive advantage Revenue 2-3% ~3% ✓ Reduce complexity & build scalable processes EBITDA 6-10% ~9% ✓ EBITDA % 15% 15%+ ✓ Innovate for profitable growth Years 5 4 ✓ *Based on midpoint of 2023 g
Slide 5: Launching New Enterprise Strategy Pivot to Growth
Launching New Enterprise Strategy Pivot to Growth GROWTH PERFORMANCE PEOPLE Customer-focused new product Optimizing our global processes Attract, retain and develop innovation informed by our customer value top talent proposition Channel expansion and new go- Accelerate our Thriving People, to-marke
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 Expand Equipment Leverage Existing Strategic Value Portfolio into Strengths Beyond Select Adjacencies Cleaning Operational Fit Financial Return Drive Value Grow Recurring Thro
Slide 7: Financial Results Third Quarter 2023
Tennant Company Financial Results Third Quarter 2023 I N V E S T O R S . T E N N A N T C O . C O M Tennant Company Earnings Release Call | Third Quarter 2023 7
Slide 8: Third Quarter 2023 Financial Performance
Third Quarter 2023 Financial Performance Net Income Net Income Adjusted Diluted EPS* ► Q3 2023 net income of $22.9M, a $7.3M increase compared to the same period last year ► Driven by strong operating performance and gross margin expansion through $22.9 $1.34 price realization $0.98 ► Interest expen
Slide 9: Third Quarter 2023 – Net Sales Performance
Third Quarter 2023 – Net Sales Performance Net Sales ► Favorable volume impact of ~$13M Volume increases in all major geographies, except EMEA ► Favorable price realization of ~$24M Pricing realization impacting all geographies ► Favorable foreign currency impact of ~$5M, primarily in EMEA and APAC
Slide 10: Third Quarter 2023 – Adjusted EBITDA Performance
Third Quarter 2023 – Adjusted EBITDA Performance Adjusted EBITDA* 10.8% 17.9% Volume Improvement in S&A & Other Adjusted impact of gross margin increase due to EBITDA Margin* ~$5M contributed ~$24M higher variable improves to 15.1% of of the increase in employee costs net sales from 12.9% Adjusted E
Slide 11: Capital Deployment
Capital Deployment Q3 2023 YE 2022 Total Debt $222M $300M Operating Cash Flow: $54M Net Leverage* 0.64x 1.67x Revolver Availability: $317M Net cash provided by Capital expenditures of Debt paydown of ~$56M Returned capital to operating activities of ~$54M ~$4m in line with reducing exposure to share
Slide 12: Increase 2023 Full-Year Guidance
Increase 2023 Full-Year Guidance Updated 2023 Guidance Previous 2023 Guidance Net Sales $1.23B - $1.25B $1.2B - $1.25B Organic Net Sales Growth 12.5% - 14.5% 10% - 14% Diluted EPS $5.00 - $5.40 $4.30 - $4.95 Adjusted Diluted EPS(1) $5.70 - $6.10 $5.10 - $5.75 Adjusted EBITDA(1) $190M - $200M $175M -
Slide 13: Questions?
Questions? Tennant Company Earnings Release Call | Third Quarter 2023 Tennant Company Earnings Release Call | Third Quarter 2023 13
Slide 14: Thank you
Thank you Tennant Company Earnings Release Call | Third Quarter 2023 Tennant Company Earnings Release Call | Third Quarter 2023 14
Slide 15: Appendix
Appendix Tennant Company Earnings Release Call | Third Quarter 2023 15
Slide 16: 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 17: Supplemental Non-GAAP Financial Tables
TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES Tennant Company Earnings Release Call | Third Quarter 2023 17
Slide 18: Supplemental Non-GAAP Financial Tables
TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES Tennant Company Earnings Release Call | Third Quarter 2023 18