Tennant Company · NYSE:TNC
Tennant — Q1 2021 Earnings Presentation
22 slides from Tennant's earnings presentation, May 4, 2021
Slide 1: Earnings Release Call First Quarter 2021
Earnings Release Call First Quarter 2021 Tuesday, May 4, 2021
Slide 2: On the Call Today
On the Call Today Dave Huml Fay West President and CEO SVP and CFO 2
Slide 3: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Our remarks this morning and our answers to questions may contain forward- looking statements regarding the company’s expectations of future performance. Such statements are subject to risks and uncertainties, and our actual results may differ materiall
Slide 4: Tennant Company Financial Results Conference Call
Tennant Company Financial Results Conference Call First Quarter 2021 4
Slide 5: First Quarter 2021
First Quarter 2021 ▪ Strong first quarter results ▪ Organic growth across all regions ▪ Focused on serving our customers ▪ Continued investment in our enterprise strategy ▪ Raising full-year guidance that reflects: ▪ Strong Q1 demand and positive sales trends ▪ Operational improvements ▪ Commodity a
Slide 6: Challenges and Enterprise Strategy
Challenges and Enterprise Strategy ▪ Mitigating significant challenges to deliver financial results ▪ Challenges: commodity inflation, transportation-related issues, parts shortages, and supply base disruptions ▪ Enterprise strategy is yielding solid bottom-line results ▪ Examples: ▪ Value engineeri
Slide 7: Investments and Impact of Pandemic
Investments and Impact of Pandemic ▪ Continued investment through the pandemic is allowing Tennant to meet the needs of our customers ▪ Examples ▪ T16 AMR robotic scrubber ▪ Standard product offerings ▪ New commercial mid-tier offerings ▪ Future of industrial and commercial cleaning ▪ Importance of
Slide 8: Financial Review
Financial Review Financial Results Conference Call First Quarter 2021 8
Slide 9: First Quarter 2021 – Sales
First Quarter 2021 – Sales Enterprise Q1 ‘21 Organic Increase of +3.1% Americas EMEA APAC ▪ Sales decline 3.0% ▪ Sales increase 12.4% ▪ Sales increase 40.6% ▪ Reflects divesture of Coatings ▪ Fx impact of +10.1% ▪ Fx impact of +8.8% business and negative impact of Fx (-2.6% and -0.8% respectively) ▪
Slide 10: First Quarter 2021 – Adjusted Gross Margin
First Quarter 2021 – Sales | Adjusted Gross Margin Q1 '21 Q1 '20 CHANGE Sales $263.3 M $252.1 M +4.4% Gross Margin (% of sales) Adjusted* 43.0% 41.5% +150 bps ▪ Gross margin improvements driven by increased productivity, product mix and actions related to the Company’s enterprise strategy, including
Slide 11: First Quarter 2021 – Adjusted S&A Expense
First Quarter 2021 – Sales | Adjusted S&A Expense Q1 '21 Q1 '20 CHANGE Sales $263.3 M $252.1 M +4.4% S&A Expense (% of sales) Adjusted* 30.2% 31.8% -160 bps ▪ Results reflect: ▪ Continued expense management ▪ Temporary savings related to the suspension of most business travel and in-person tradeshow
Slide 12: First Quarter 2021 – Adjusted EPS/EBITDA
First Quarter 2021 – Adjusted EPS/EBITDA Q1 '21 Q1 '20 CHANGE Adjusted EPS* $1.17 $0.57 +105.3% Adjusted EBITDA* $40.7 M $26.1 M 55.9% Adjusted EBITDA Margin* 15.5% 10.4% +510 bps ▪ Results reflect: ▪ Strength in revenue, gross margin and S&A management ▪ Adjusted results in the quarter excluded the
Slide 13: First Quarter 2021 – Other Financial Metrics
First Quarter 2021 – Other Financial Metrics ▪ Adjusted effective tax rate of 21.4% vs. 20.5% last year, driven by: ▪ Decrease in discrete tax items in the quarter and mix of regional earnings ▪ Adjusted effective tax rate does not include amortization expense adjustment ▪ Cash from operations gener
Slide 14: 2021 Guidance – Raised
2021 Guidance – Raised Prior Guidance Updated Guidance Revenue $1.05B to $1.08B $1.09B to $1.11B Organic % 5.0% to 8.0% 9.0% to 11.0% GAAP EPS $2.50 to $2.95 $3.45 to $3.85 Adjusted EPS* $3.50 to $3.95 $4.10 to $4.50 Adjusted EBITDA* $130M to $140M $140M to $150M Capital Expenditures $20M to $25M $2
Slide 15: Questions?
Questions? COMPANY TENNANT | ane)
Slide 16: Tennant Company Financial Results Conference Call
Tennant Company Financial Results Conference Call First Quarter 2021 16
Slide 17: Appendix
Appendix COMPANY TENNANT | ane)
Slide 18: Enterprise Strategy – Global Positioning Strategy (GPS)
Enterprise Strategy – Global Positioning Strategy (GPS) Win where we have a Reduce complexity & build Innovate for profitable competitive advantage scalable processes growth 18
Slide 19: Win where we have a competitive advantage
Focus investments and resources where we can create the most value Focus Areas Win where 1 2 3 we have a competitive Simplifying the Strengthening Optimizing advantage product portfolio local advantage go-to-market 19
Slide 20: Reduce complexity & build scalable processes
Simplify and standardize to gain efficiency and leverage Focus Areas Reduce 1 2 3 complexity & build scalable Leveraging Our Advancing Our Capturing processes Platform Product Design Supply Chain – Local for Local Operating Model Efficiencies 20
Slide 21: Innovate for profitable growth
Thinking Differently to Maximize Value for Customers and Tennant Innovate for Customer- New Unlocking profitable Driven Insights Innovation Approach Value for Customers growth and Tennant 21
Slide 22: Capitalizing on the Strategy: 2024 Growth Targets
Capitalizing on the Strategy: 2024 Growth Targets 2-3% 6-10% 50-100 BPS Organic EBITDA EBITDA Sales Growth Leverage Annually Annually Annually Consistent and predictable results to drive total shareholder return 22