Cummins Inc. · NYSE:CMI
Cummins — Merger or Acquisition (February 2024)
33 slides from Cummins's merger presentation, Feb 29, 2024
Slide 1: Roadshow Presentation March 2024
Roadshow Presentation March 2024
Slide 2: Disclaimer
| 2 Disclaimer The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. Neither Cummins Inc. (“Cummins”) nor Atmus Filtration Technologies Inc. (the “Company”, “we”, or “Atmus”) or any
Slide 3: Today's Presenters
| 3 Today’s Presenters Steph Disher Chief Executive Officer Jack Kienzler Chief Financial Officer
Slide 4: Split-Off Exchange Summary
| 4 Split-Off Exchange Summary Issuer / Ticker / Exchange Atmus Filtration Technologies Inc. / ATMU / NYSE Offer to Exchange Up to 67,054,726 shares of ATMU common stock for outstanding shares of Cummins (CMI) common stock Target Discount on ATMU 7% based on the average of the VWAPs of ATMU and CMI
Slide 5: Today's Agenda
| 5 Today’s Agenda 1 Company Overview 2 Our Growth Strategy 3 Financial Overview 4 Conclusion A Appendix
Slide 6: Company Overview
| 6 01 Company Overview
Slide 7: We Are a Purpose-driven Company, Our Culture is Shaped by Our Shared Values
| 7 We Are a Purpose-driven Company, Our Culture is Shaped by Our Shared Values Creating a Build Trust Be Inclusive Have Courage Show Caring better future by protecting what is important Our purpose Our values
Slide 8: Atmus at a Glance
| 8 Atmus at a Glance A GLOBAL LEADER IN FILTRATION PRODUCTS FOR ON-HIGHWAY AND OFF-HIGHWAY MARKETS Power Generation United States & Canada Latin America FY’23 Net Sales: $1.6bn Europe, Middle East & Africa Asia Pacific Agriculture Construction Off-Highway On-Highway Mining N et S a l es b y G eo g
Slide 9: Product Leadership and Partnerships with Leading OEMs
| 9 Product Leadership and Partnerships with Leading OEMs On-Highway (60% of 2023 Net Sales) Off-Highway (40% of 2023 Net Sales) Air Lubrication Fuel Crankcase Ventilation Coolants & Chemicals Coolant Coolant Filters Fuel Stg 2 Air Crankcase Ventilation Lube Secondary Lube Fuel Stg 1 Hydraulic 10 MA
Slide 10: Our Strengths
| 10 Our Strengths OUR HISTORY MEANS WE UNDERSTAND OUR CUSTOMERS AND THE MARKETS THEY OPERATE IN II III Partnering with leading OEMs Iconic Fleetguard brand with premium products IV Multi-channel path to diverse global markets V I Technology leadership and deep industry knowledge enable us to delive
Slide 11: Why Invest in Atmus?
| 11 Why Invest in Atmus? Mission-Critical Product in Predictable & Growing End Markets Strong Positioning & Brand Recognition Clear Strategy for Growth as an Independent Company Consistent and Attractive Financial Results
Slide 12: Update on Atmus Since IPO
| 12 Update on Atmus Since IPO ATMUS HIT FY2023 TARGETS AND BEAT CONSENSUS ESTIMATES Key Milestones Since IPO Summary of FY2023 Earnings New global technical centers in Wuhan, China and Pune, India Established independent distribution centers in the US, Brazil and Mexico Evaluating a pipeline of ino
Slide 13: Our Growth Strategy
| 13 02 Our Growth Strategy
Slide 14: Our Growth Strategy
| 14 Our Growth Strategy Grow share in first-fit in core markets Transform our supply chain Expand into industrial filtration markets Accelerate profitable growth in the aftermarket 2 4 1 3
Slide 15: Financial Overview
| 15 03 Financial Overview
Slide 16: Financial Highlights
| 16 Financial Highlights • ~81% of net sales from aftermarket • Core on/off highway • ESG/emissions tailwinds • Global growth • Large and growing installed base with multi-year useful lives • Adj. FCF Conversion: ~89%1 • Adj. EBITDA Margin: ~19%2 1 Adj. FCF defined as Cash Flows from Operating Acti
Slide 17: Atmus Revenue Over Time
| 17 Atmus Revenue Over Time ATMUS HAS EXPERIENCED LESS VOLATILITY AND MORE GROWTH THAN SELECT OEMS OVER TIME OUR BUSINESS PROVIDES STABLE AND CONSISTENT GROWING REVENUE Source: Atmus historical data and OEM public filings; Note: Select OEMs are Cummins, PACCAR, Volvo, Komatsu and Caterpillar; 2023
Slide 18: Historical Financial Performance (2021-2023)
| 18 Historical Financial Performance (2021-2023) Net Sales Gross Profit and Margin Adj. EBITDA and Adj. EBITDA Margin1 Adj. FCF and FCF Conversion2 1 Adj. EBITDA defined as EBITDA adjusted for one-time separation costs. Adj. EBITDA Margin defined as Adj. EBITDA / Net Sales. 2 Adj. Free Cash Flow (“
Slide 19: Atmus Capital Structure
| 19 As of December 31, 2023 ($ in millions) Amount FY‘23 Adj. EBITDA1 Maturity Cash and Cash Equivalents $ 168 0.6 x - Term Loan Facility 600 2.0 Sep-27 Revolving Credit Facility Drawn2 0 – Sep-27 Total Debt $ 600 2.0 x Net Debt $ 432 1.4 x Atmus Capital Structure 1 Adj. EBITDA defined as EBITDA ad
Slide 20: Conclusion
| 20 04 Conclusion
Slide 21: Conclusion
| 21 Conclusion …And drive predictable, profitable, and cash generative growth Clear strategy for growth as an independent company… Our strengths position us to continue to win in our core markets… …Leading to consistent and attractive financial results 2 3 1 4
Slide 22: Q+A
ibdroot\projects\IBD-NY\cyamus2021A\679768_1\3. Roadshow Presentation\Consolidated\Atmus_Roadshow (March-2024)_v42 - Consolidated.pptx Q+A Atmus creates value for our customers through differentiated filtration solutions, a portfolio of quality products and the leading global distribution network
Slide 23: Appendix
| 23 A Appendix
Slide 24: Committed to Leading in Sustainability
| 24 Committed to Leading in Sustainability ✓ Diversity, Equity & Inclusion ✓ Health and Safety of Our Employees ✓ Community Engagement Social Governance ✓ Ethics ✓ Diverse and Skilled Board Environmental ✓ Critical to Customers Achieving Environmental Goals ✓ Reduce Waste ✓ Reduce Water Usage ✓ Red
Slide 25: Experienced and Diverse Board of Directors
| 25 Jane Leipold Non-Executive Director Gretchen Haggerty Non-Executive Director Experienced and Diverse Board of Directors • Board excludes current Cummins designees who will resign from the board upon completion of separation • Board includes two (2) additional independent board members who will
Slide 26: Experienced Leadership Team with Proven Track Record of Driving Growth
| 26 Experienced Leadership Team with Proven Track Record of Driving Growth ✓ Delivered strong revenue and EBITDA growth on average over the last three years ✓ Leadership of a global business through the COVID-19 pandemic, delivering for all stakeholders ✓ Development of a compelling growth strategy
Slide 27: Atmus Net Sales Breakdown (2023)
| 27 ~0% LIGHT VEHICLE ICE EXPOSURE On-Highway 60% Off-Highway 40% Atmus Net Sales Breakdown (2023) B y T y p e B y E nd M a r ket B y C ha nnel B y Pr o d uct HIGH AFTERMARKET EXPOSURE IN COMMERCIAL VEHICLE MARKETS PROVIDES STRONG, STABLE, RECURRING REVENUE BASE AND HIGH RETURNS LONG-TAIL VEHICLES
Slide 28: Our Joint Ventures Provide Strategic Benefits to Our Business
| 28 $10.2 $5.3 $5.9 2021 2022 2023 $16.4 $17.1 $21.5 2021 2022 2023 Joint Ventures ✓Increase market penetration in strategic geographic regions ✓Reduce capital spending ✓Optimize supply chain management ✓Develop technologies Our Joint Ventures Provide Strategic Benefits to Our Business Fleetguard F
Slide 29: Consolidated Statements of Net Income
| 29 Consolidated Statements of Net Income Years Ended December 31, ($ in millions) 2021 2022 2023 Net Sales1 $ 1,438.8 $ 1,562.1 $ 1628.1 (-) Cost of sales (1,089.5) (1,202.9) (1,195.4) Gross Margin 349.3 359.2 432.7 Operating Expenses and Income (-) Selling, General and Administrative Expenses (12
Slide 30: Non-GAAP Financial Metrics Reconciliation
| 30 Non-GAAP Financial Metrics Reconciliation Years Ended December 31, ($ in millions) 2021 2022 2023 Net Sales $ 1,438.8 $ 1,562.1 $ 1,628.1 Net Income 170.1 170.4 171.3 (+) Interest Expense 0.8 0.7 25.8 (+) Income Tax Expense 46.5 41.6 55.1 (+) Depreciation & Amortization 21.6 21.6 21.5 EBITDA (n
Slide 31: Non-GAAP Financial Metrics Reconciliation
| 31 Non-GAAP Financial Metrics Reconciliation Years Ended December 31, ($ in millions) 2021 2022 2023 Cash Flows from Operating Activities $ 209.9 $ 165.7 $ 189.0 (-) Capital Expenditures (33.4) (37.5) (45.8) Free Cash Flow (“FCF”) $ 176.5 $ 128.2 $ 143.2 (+) One-Time Separation Capital Expenditure
Slide 32: Non-GAAP Financial Metrics Reconciliation
| 32 Non-GAAP Financial Metrics Reconciliation As of December 31, 2023 ($ in millions) Term Loan Facility $ 600.0 (+) Revolving Credit Facility Drawn¹ – Total Debt $ 600.0 (/) FY2023 Adjusted EBITDA² $ 302.3 Gross Leverage 2.0 x Total Debt $ 600.0 (-) Cash and Cash Equivalents (168.0) Net Debt $ 432
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