Toro Company (the) · NYSE:TTC
Toro Company (the) — Q3 2023 Earnings Presentation
27 slides from Toro Company (the)'s earnings presentation, Sep 7, 2023
Slide 1: The Toro Company Q3 2023 Earnings Release
THE TORO COMPANY Q3 2023 EARNINGS RELEASE September 7, 2023
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements, which are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current assumptions and expectations of future events and
Slide 3: Overview
Overview 3 Q3 2023 EARNINGS RELEASE THE TORO COMPANY
Slide 4: The Toro Company: Built on Strong Relationships
The Toro Company: Built on Strong OUR OUR OUR Relationships and PURPOSE VISION MISSION Our Legacy of To help our customers enrich To be the most trusted leader in To deliver superior innovation and to Excellence the beauty, productivity and sustainability solutions for the outdoor environment. deliv
Slide 5: Q3 2023 Key Messages
Q3 2023 Key Messages Sharp reduction in homeowner demand for residential and professional segment lawn care products, due to a combination of macro factors and unfavorable weather patterns, which in turn led 1 to lower dealer channel replenishment orders and an acceleration of mass channel destockin
Slide 6: Q3 2023 Financial Highlights
Q3 2023 Financial Highlights (Year-over-year comparisons below) Decrease was largely due to lower shipments of -6.8% residential and professional segment lawn care solutions, partially offset by increased NET SALES shipments across the rest of the company’s GROWTH portfolio -10 bps Driven primarily
Slide 7: Q3 2023 Other Notable Highlights
Q3 2023 Other Notable Highlights The Toro Company is a leading provider of products and solutions for the outdoor environment, including: Strategic Partnership with Lowe’s 2022 Sustainability Report Turf & landscape maintenance Lowe’s leadership position in zero-turn Highlights progress made in supp
Slide 8: Financials
Financials 8 Q3 2023 EARNINGS RELEASE THE TORO COMPANY
Slide 9: Q3 2023 Consolidated Results
Q3 2023 Consolidated Results Lower-than-Expected Homeowner Demand for Lawn Care Solutions Driven by Macro Factors and Weather Continued Strength in Demand Across Construction, and Golf and Grounds Markets REPORTED ADJUSTED* Change from Change from Q3 23 Q3 22 Q3 23 Q3 22 Q3 22 Q3 22 Net Sales $1,081
Slide 10: Professional Segment Results
Professional Segment Results NET SALES SEGMENT EARNINGS RATE (in millions) (as a percentage of net sales) +1.1% -1730 bps $896.3 18.8% $886.2 1.5% Q3 22 Q3 23 Q3 22 Q3 23 Increase was primarily driven by higher shipments of underground Decrease was primarily due to gross non-cash impairment and spec
Slide 11: Residential Segment Results
Residential Segment Results NET SALES SEGMENT EARNINGS RATE (in millions) (as a percentage of net sales) (35.1%) (760 bps) $270.0 9.8% $175.3 2.2% Q3 22 Q3 23 Q3 22 Q3 23 Decrease was primarily driven by lower shipments of products Decrease was primarily driven by lower volume and unfavorable broadl
Slide 12: Strong Balance Sheet and Resilient Free Cash Flow
Strong Balance Sheet and Resilient Free Cash Flow Free Cash Flow* Free Cash Flow Conversion* Gross Debt to EBITDA Ratio* (Nine months ended) (Nine months ended) In millions Goal: 100% over 1.7x time $78.8 Target $56.1 Range: 1.0x- 24.2% 21.6% 2.0x YTD 22 YTD 23 YTD 22 YTD 23 Q3 23 Free cash flow res
Slide 13: Effective Capital Deployment
Effective Capital Deployment Consistent Strategy YTD 2023 Comments Capital expenditures supporting organic growth Invested $99M to fund new product investments, advanced 1 with high returns manufacturing technologies, and capacity for growth Company continues to evaluate potential acquisitions with
Slide 14: Updated Fiscal 2023 Guidance
Updated Fiscal 2023 Guidance Guidance 6/8/23 Guidance 9/7/23 Similar to Slightly Net Sales Growth (%) 7% to 8% Higher than Fiscal 2022 Flat to Slightly Down Adjusted Operating Earnings Margin* (%) Higher than Fiscal 2022 from Fiscal 2022 Adjusted Diluted EPS* ($) $4.70 to $4.80 $4.05 to $4.10 Capita
Slide 15: Investment Thesis
Investment Thesis Well positioned to win with deep expertise, 1 leading market share positions, and best-in- class distribution and service networks – all of which create high barriers to entry Favorable macro factors, steady replacement 2 cycle and customer-centric innovation drive future organic g
Slide 16: Appendix
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Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures calculated and presented in accordance with U
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Slide 27: Gross Debt to EBITDA Ratio
Gross Debt to EBITDA Ratio Q4 22 Q1 23 Q2 23 Q3 23 Total Short Term Debt - - - - - Long Term Debt $990,768 $1,091,015 $1,041,162 $1,061,309 $1,061,309 Gross Debt $990,768 $1,091,015 $1,041,162 $1,061,309 $1,061,309 Earnings Before Income Taxes $143,252 $131,314 $210,819 ($28,563) $456,822 Interest E