Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — Investor Presentation (June 2023)
33 slides from Titan International, Inc. (de)'s investor presentation, June 2023
Slide 1: Investor Presentation June 2023
INVESTOR PRESENTATION JUNE 2023 NYSE: TWI
Slide 2: Forward-Looking Statements & Non-GAAP Metrics
Forward-Looking Statements & Non-GAAP Metrics Forward-Looking Statements 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 a
Slide 3: Why Invest in TWI Now?
Why Invest in TWI Now? Global Market • Leading manufacturer of off-highway tires, wheels and undercarriage equipment 1 Leadership • Key end markets: agriculture, forestry, construction, mining and consumer Strategically • Multi-year focus to transform culture, optimize portfolio & build “One Titan”
Slide 4: Valuation Not Reflective of Stronger TWI
Valuation Not Reflective of Stronger TWI Titan’s EV / Adj. EBITDA multiple is significantly below other benchmarks $300 EV / Adj. EBITDA TTM Strategic Transformation 10.9x 60x Forward 10.7x $250 TTM Adjusted EBITDA 9.4x 9.4x 8.9x EV / Adj. EBITDA 50x 7.8x $200 40x $150 4.1x 3.6x 30x $100 20x 5 Year
Slide 5: Strategic Actions Have Elevated The Baseline
Strategic Actions Have Elevated The Baseline Product Innovation New products Increased market penetration Operational Excellence Supply chain strengthening Quality improvements 80/20 optimization Focus on Core Sold underperforming assets Increased plant utilization Focus on market ni
Slide 6: Significantly Enhanced Financial Performance
Significantly Enhanced Financial Performance Revenue ($B) Gross Margin +14% +770 CAGR $2.2 $2.2 BPS 16.6% 17.0% $1.8 13.3% $1.4 $1.3 10.4% 8.9% 2019 2020 2021 2022 TTM 2019 2020 2021 2022 TTM Adj. EBITDA ($M) Adj. EPS +81% +$2.96 $2.29 $2.20 CAGR $264 $253 $0.85 $135 -$0.76 -$0.55 $54 $38 2019 2020
Slide 7: Strong Balance Sheet & FCF Supports Capital Optionality
Strong Balance Sheet & FCF Supports Capital Optionality Product innovation (R&D) Full-Year FCF & Leverage Ratio* One Titan team development Expand manufacturing capabilities Free Cash Flow Grow customer relationships 180 Leverage Ratio 12x Organic 11.5x Growth 160 10x 140 $152 120 8x Balance
Slide 8: Clear Market Leader in Core Markets
Clear Market Leader in Core Markets Manufacturing essential products for our customers, backed by industry leading engineering capabilities, tooling assets and a global manufacturing footprint TIRES WHEELS UNDERCARRIAGE AM AM AM OE 10% 30% Mix 50% 50% OE OE 70% 90% Primary: N.A., S.A. Primary: N. Am
Slide 9: Unmatched Global Footprint, High Barriers to Entry
Unmatched Global Footprint, High Barriers to Entry Serving customers regionally and locally provides significant competitive advantage North America Quincy, IL Europe / CIS $2.2B 7,500 Bryan, OH Dallas, TX Ceprano, Italy Kidderminster, UK Des Moines, IA Fanano, Italy Monreal del Camp
Slide 10: Three Complementary Business Segments
Three Complementary Business Segments Helping farmers feed the world, construction operators develop projects and miners extract resources is at the heart of what we do and who we are EARTHMOVING / AGRICULTURAL CONSUMER CONSTRUCTION (“EMC”) Agricultural wheels, tires and Wheels, tires and undercarri
Slide 11: Long-term Growth Strategy/Engine
Long-term Growth Strategy/Engine Collaborative 1 Customer Relationships Key Drivers 2 Leverage Multi-year secular trends Secular Trends + Preeminent partner to leading OEMs & Develop aftermarket companies Innovative Solutions + 5 Commitment to R&D and innovation 3 + Allocate Capital Into Competitive
Slide 12: Long-term Secular Tailwinds
Long-term Secular Tailwinds STRONG AG DEMAND REPLACEMENT CYCLE CONSTRUCTION SPENDING LOCALIZED PRODUCTION Supported by population growth strong Driven by aging equipment, technological Supported by global government Driven by supply chain challenges, commodity prices & elevated farmer innovation, an
Slide 13: Industry Leading Product Innovation
Industry Leading Product Innovation Deeply ingrained with our customers to engineer highly-tailored products that translate to increased performance and financial benefits AGRICULTURE EMC Ultimate Flex TechnologyTM Low Sidewall Technology® Wheel Life Doubled Undercarriage in Forestry (UFTTM) (LSW®)
Slide 14: Product Innovation: Low Sidewall Technology
Product Innovation: Low Sidewall Technology End-user enthusiasm and demand for industry leading technology remains high CONTINUING LSW MOMENTUM 53% IMPROVEMENT IN TOTAL CONTACT AREA Our Low Sidewall Technology (LSW) has been growing in Provides superior flotation due to weight being spread popul
Slide 15: Continued Focus on Operational Excellence
Continued Focus on Operational Excellence Recent investments in our plants globally are driving operational efficiencies and energy savings North America 8% improvement in press output in Des Moines, Iowa Increased capacity in Bryan, Ohio plant Invested in presses, production line and staffing
Slide 16: Commitment to ESG
Commitment to ESG ENVIRONMENTAL SOCIAL GOVERNANCE Policies and Board commitment to support Titan is developing a life cycle assessment diversity and inclusion Increased Board diversity (LCA) to enhance new product development Actively implementing policies and programs Highly independent B
Slide 17: Segment Overview / Background
Segment Overview / Background
Slide 18: Agricultural: Segment Overview
Agricultural: Segment Overview Key Segment Drivers Net Sales and Gross Margin1 ($ Millions) Large Ag retail demand continues at strong levels supported by replacement needs for aging equipment fleet $ 1,192 $ 1,188 $ 949 U.S. Farmer sentiment is strong, with net farm income well above historical
Slide 19: EMC: Segment Overview
EMC: Segment Overview Key Segment Drivers Net Sales and Gross Margin1 ($ Millions) $ 807 $ 805 Construction demand driven by commodity prices, road construction, infrastructure, $ 693 government appropriations, housing starts and other macroeconomic drivers 16.8 % 17.6 % $ 510 Construction and E
Slide 20: EMC – ITM Focus
EMC – ITM Focus ITM Facts Undercarriage System Full-service provider and manufacturer of ITM undercarriage systems and products Significant blue-chip OEM customer base Strong relationships in mining aftermarket channels and expanding into forestry markets Full range and lifecycle of applicat
Slide 21: Consumer: Segment Overview
Consumer: Segment Overview Segment Overview Net Sales and Gross Margin1 ($ Millions) Titan’s consumer segment manufactures bias truck tires and light truck tires outside of the US, $ 170 $ 169 custom mixing of rubber stock in the US, high speed brakes in Europe and Turf Tires. $ 137 $ 115 18.5 % 1
Slide 22: Financials
Kim – can you please add ITM picture FINANCIALS 22
Slide 23: Focused on Balanced Growth & Margin Enhancement
Focused on Balanced Growth & Margin Enhancement Revenue Mix/Trend Gross Margin Trend (in $ billions) 25% $1.4 $1.2 $1.8 $2.2 $2.2 $0.2 $0.2 20% $0.1 $0.8 $0.8 15% $0.1 $0.7 $0.1 10% $0.7 $0.5 $1.2 $1.2 $1.0 5% $0.6 $0.6 0% 2019 2020 2021 2022 TTM 2019 2020 2021 2022 TTM AG EMC Consumer Total AG EMC
Slide 24: 2021-2023 Quarterly Financial Trend
2021-2023 Quarterly Financial Trend Revenue by Quarter Q1 Revenue of $549M; +2% organically vs PY (excluding FX and Australia divestiture). Q1 Titan experienced normal seasonality, up sequentially from Q4 coming off holiday plant shutdowns / year end maintenance, etc. Gross Profit & GM% by Quart
Slide 25: Working Capital
Working Capital 2022 2023 Q1 Q2 Q3 Q4 Q1 Days Sales Outstanding (DSO) 51 48 49 48 54 Days A/P in Inventory (DPI) 84 85 87 86 81 Days Payable Outstanding (DPO) (60) (57) (55) (57) (57) Cash Conversion Cycle 75 76 81 77 78 Working Capital as % of Sales 19.4% 19.1% 20.7% 19.6% 20.0% Cash ($M) $98 $117
Slide 26: Net Leverage & Debt
Net Leverage & Debt Net Debt / TTM AEBITDA Leverage Ratio Trend Net Debt TTM AEBITDA Leverage Ratio ($M) 300 5.3x 6x 250 5x 4.1x 200 3.3x 4x 2.9x 150 2.6x 3x 253 264 210 236 100 2x 166 116 135 1.8x 50 95 1.4x 1x 71 1.1x 1.0x 0 0 Q1 ’21 Q2 ’21 Q3 ’21 Q4 ’21 Q1 ’22 Q2 ’22 Q3 ’22 Q4 ’22 Q1 ’23 $437M De
Slide 27: Flexible Operating Structure
Flexible Operating Structure COGS Structure Raw Materials Demonstrated ability to manage labor and variable overhead costs while Labor leveraging global buying power ~10% Other* ~30% Steel Significant coordination between ~40% supply chain inventory control, Overhead Raw production, operations,
Slide 28: Appendix
Kim – can you please add ITM picture APPENDIX 28
Slide 29: Diverse, Global Revenue Base
Diverse, Global Revenue Base Revenue by Segment Revenue by Geography Consumer Other 8% 4% Latin America 20% U.S. Earthmoving/ Agricultural 49% Construction (“EMC”) 55% 37% Revenue by Product Europe/CIS 27% Revenue by Channel Wheels Aftermarket 25% ("AM") Tires 35% 50% Original Equipment Undercarriag
Slide 30: Q1 2023 Cash Flow
Q1 2023 Cash Flow In $ Millions * “All Other” category primarily of income tax liabilities of $14M 30
Slide 31: Q1 Financial Overview
Q1 Financial Overview* 2020 2021 2022 2023 Sales $341M $404M $556M $549M Gross Profit $30M $53M $87M $96M Gross Margin % 8.7% 13.2% 15.6% 17.4% Adjusted EBITDA $9M $26M $57M $68M Adjusted EBITDA % 2.6% 6.5% 10.2% 12.3% Net income (loss) attrib. to Titan ($11M) $4M $28M $34M Adjusted EPS - Diluted ($
Slide 32: Q1 EBITDA Reconciliation
Q1 EBITDA Reconciliation Adj. EBITDA Reconciliation | Q1 2020-2023 ($ Millions) Q1 2020 Q1 2021 Q1 2022 Q1 2023 Net Income / (Loss) (27) 13 25 33 Provision for Income Taxes - 3 9 14 Interest Expense 8 8 8 6 Depreciation & Amortization 14 12 11 12 EBITDA (6) 36 53 66 Loss on Sale of Australian Wheel
Slide 33: Investor Contact Information
Investor Contact Information Investor Relations Contacts: Lisa Fortuna or Griffin Morris Phone: 312-445-2870 twi@alpha-ir.com 33
Titan International — Investor Presentation (June 2023) on 6ix