Tennant Company · NYSE:TNC
Tennant — Investor Presentation (August 2023)
27 slides from Tennant's investor presentation, August 2023
Slide 1: Tennant Company Investor Presentation
TENNANTCO.COM Tennant Company Investor Presentation Reinventing how the world cleans
Slide 2: Safe Harbor Statement
2 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 o
Slide 3: Our Investment Thesis
3 Our Investment Thesis We will lead our global industry in sustainable cleaning innovation that OUR VISION empowers our customers to create a cleaner, safer and healthier world Industry Leader Product Life Cycle & Service Innovation Growth Global product coverage, brand Value capture through entire
Slide 4: Global Coverage Through Tiered Brand and Product Range
Market 4 Leader Global Coverage Through Tiered Brand and Product Range GLOBAL NET SALES BY REGION (2022) AMERICAS EMEA APAC US/Canada/LatAm ~65% ~27% ~8% PREMIUM | MID-TIER PREMIUM | MID-TIER PREMIUM | MID-TIER PREMIUM & MID-TIER PRODUCTS for each region to meet diverse customer needs and uses
Slide 5: Access Target Markets with Multi-Channel Approach
Market 5 Leader Access Target Markets with Multi-Channel Approach CHANNELS Strategic Direct Distributor Service e-Commerce Accounts Sales 65% Direct (500+ reps) | 35% Distribution (100+ countries) CORE VERTICAL MARKETS Retail Healthcare Education Contract Cleaners Contract Cleaners Logistics & Wareh
Slide 6: Serving Customers Through the Entire Product Lifecycle
Product 6 Life Cycle & Service Serving Customers Through the Entire Product Lifecycle Our ecosystem meets customers’ evolving needs and positions Tennant to capture highly profitable business RECON BUSINESS NEW AND GLOBAL PARTS PRE-OWNED DIRECT AND EQUIPMENT SERVICE CONSUMABLES Commercial and 900+ E
Slide 7: A Broad Portfolio of Solutions
Product 7 Life Cycle & Service A Broad Portfolio of Solutions Equipment Technologies Commercial | Industrial | Vacuums | Pressure Washers | Tools | Aftermarket | Small Spaces Autonomous Mobile Robots Supported by the industry’s largest, factory-direct service organization
Slide 8: Industry-Leading Service: Trusted. Responsive. Local.
Product 8 Life Cycle & Service Industry-Leading Service Trusted. Responsive. Local. Get the best return on investment with high-quality Tennant floor cleaning equipment — backed by the best service available 500+ service techs serving North America licensed • bonded • insured 60 hours annual trainin
Slide 9: Focus on Solving Customer Problems and Disciplined Process
9 Innovation Focus on Solving Customer Problems and Disciplined Process Innovation Vectors: Solving For: Proof Point Innovation: Robotics Customer Problems T16AMR Business Growth Addresses common Electrification labor challenges, Market Trends reduces the need for Data pre-sweeping, drives efficienc
Slide 10: Innovative Products for Modern Problems
10 Innovation Innovative Products for Modern Problems How AMR Addresses Challenges Solve Labor Proof of Become a Enhance Return on Challenges Performance Technology Leader Experience Investment Give time back to employees Robots capture real- Robots are a clear sign of Clean buildings enhance Approx
Slide 11: Enterprise Strategy to Drive Long-Term Value 2020-2024
11 Growth Enterprise Strategy to Drive Long-Term Value 2020-2024 Strategy Pillars: Win where we have a Reduce complexity & build Innovate for competitive advantage scalable processes profitable growth 2020–2024 Annual 2-3% 50-100 bps 6-10% Growth Targets Organic Adjusted EBITDA** Adjusted EBITDA** S
Slide 12: Organic Growth Despite Macroeconomic Headwinds
12 Growth Organic Growth Despite Macroeconomic Headwinds Revenue EBITDA (adjusted)* EBITDA % (adjusted)* $ Millions $ Millions $182.5 $1,225 $1,138 $1,091 $1,092 14.9% $1,001 $136.9 $140.2 $133.7 12.9% $119.4 12.0% 11.9% 12.2% 2019 2020 2021 2022 2023** 2019 2020 2021 2022 2023** 2019 2020 2021 2022
Slide 13: Leveraging Strong Cash Position to Drive Shareholder Value
13 Growth Leveraging Strong Cash Position to Drive Shareholder Value Dividends and Share Repurchases $ Millions 2018 2019 2020 2021 2022 Invest in the Business Dividends Share Repurchase* $15.0 $5.0 Manage Debt $15.3 $16.0 $16.3 $17.5 $18.9 ‘18-‘22 1.5x to 2.5x leverage CAGR Dividends $0.85 $0.88 $0
Slide 14: Questions
COMPANY Questions
Slide 15: Appendix
COMPANY APPENDIX
Slide 16: Win where we have a competitive advantage
16 Win where we have a competitive advantage OUR LONG-TERM ENTERPRISE STRATEGY Simplifying our Strengthening Local Optimizing Go-to- Product Portfolio Advantage Market Streamlining, rationalizing Differentiated strategies to Aligning customer and investing in our product drive EBITDA and assess expe
Slide 17: Reduce complexity & build scalable processes
17 Reduce complexity & build scalable processes OUR LONG-TERM ENTERPRISE STRATEGY Leveraging Our Operations: In Capturing Operating Platform Product Region, For Region Model Efficiencies Design Win locally by delivering Strategically scaling from Platform approach to simplify superior customer “big”
Slide 18: Innovate for profitable growth
18 Innovate for profitable growth OUR LONG-TERM ENTERPRISE STRATEGY Thinking Differently to Maximize Value for Customers and Tennant Customer- New Unlocking Value Driven Innovation for Customers Insights Approaches and Tennant
Slide 19: Second Quarter 2023 Financial Performance
19 Second Quarter 2023 Financial Performance Net Income Net Income Adjusted Diluted EPS* ► Q2 2023 net income of $31.3M increased $14.7M compared to the same period last year ► Interest expense of $4.0M increased $2.8M in Q2 $1.86 $31.3 2023 compared to the prior-year period ► Effective tax rate of
Slide 20: Second Quarter 2023 – Net Sales Performance
20 Second Quarter 2023 – Net Sales Performance Net Sales ► Favorable volume impact of ~$16M Volume increases in all major geographies except EMEA ► Favorable price realization of ~$26M Pricing realization impacting all geographies ► Unfavorable foreign currency impact of ~$1M, primarily APAC Categor
Slide 21: Second Quarter 2023 – Adjusted EBITDA Performance
21 Second Quarter 2023 – Adjusted EBITDA Performance Adjusted EBITDA* Volume Improvement in gross S&A & Other Adjusted impact of margin contributed increase due to higher EBITDA Margin* improves ~$6M ~$28M of the increase variable employee to 17.9% of net sales from in Adjusted EBITDA costs 10.8% in
Slide 22: Second Quarter 2023 – Capital Deployment
22 Second Quarter 2023 – Capital Deployment Capital Deployment Operating Cash Flow: $39M Q2 2023 YE 2022 Total Debt $278M $300M Net Leverage* 1.0x 1.67x Revolver Availability: $262M AR $ (8) Inventories 0 AP (4) Emp. Comp. 6 Other 1 Total $ (5) Net cash provided by Capital expenditures of Returned c
Slide 23: 2023 Guidance
23 2023 Guidance Revised 2023 Guidance Original 2023 Guidance Net Sales $1.2B - $1.25B $1.115B - $1.155B Organic Net Sales Growth 10% - 14% 3% - 7% Diluted EPS $4.30 - $4.95 $3.10 - $3.90 Adjusted Diluted EPS(1) $5.10 - $5.75 $3.70 - $4.50 Adjusted EBITDA(1) $175M - $190M $140M - $160M Adjusted EBIT
Slide 24: Non-GAAP Financial Measures
24 Non-GAAP Financial Measures This presentation includes 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 provide useful information to
Slide 25: Supplemental Non-GAAP Financial Tables
25 TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
Slide 26: Supplemental Non-GAAP Financial Tables
26 TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
Slide 27: Supplemental Non-GAAP Financial Tables
27 TENNANT COMPANY SUPPLEMENTAL NON-GAAP FINANCIAL TABLES
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