Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — Q4 2023 Earnings Presentation
34 slides from Titan International, Inc. (de)'s earnings presentation, Feb 29, 2024
Slide 1: Investor Presentation - February 2024
INVESTOR PRESENTATION - FEBRUARY 2024 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: Titan International Overview
Titan International Overview W H Y W E M AT T E R • We produce equipment to help farmers feed the world, construction operators develop projects & miners extract resources. • We have cultivated longstanding relations with blue-chip OEM customers who rely on us as a complete solutions provider. • For
Slide 4: Why Invest in TWI?
Why Invest in TWI ? • Long-standing relationships with blue-chip OEMs, dealers, and consumers Global Market • Recognized global brands Leadership • History of market share gains through new product development Titan’s Strong Foundation Long Term Global • Macro: Growing Global Ag and Infrastructure n
Slide 5: Strategic Actions Have Elevated The Baseline
Strategic Actions Have Elevated The Baseline Multi-Year Strategic Transformation 3 2 ▪ 2023 AEBITDA: $205M, 11% Product 1 Operational Innovation ▪ 2022 AEBITDA: $253M, 12% Focus on Core Excellence ▪ New products ▪ 2021 AEBITDA: $135M, 8% ▪ Supply chain ▪ Increased market ▪ Sold underperforming penet
Slide 6: Long-term Growth Strategy/Engine
Long-term Growth Strategy/Engine Collaborative Key Drivers Customer 1 Relationships 2 Multi-year secular trends Leverage + Secular Preeminent partner to leading OEMs & Trends aftermarket companies Develop + Innovative Commitment to R&D & innovation Solutions + 5 Allocate 3 Competitive advantage as a
Slide 7: Strong Balance Sheet & FCF Supports Capital Optionality
Strong Balance Sheet & FCF Supports Capital Optionality Full-Year FCF* & Leverage Ratio** ▪ Product innovation (R&D) ▪ One Titan team development Free Cash Flow ▪ Expand manufacturing capabilities ▪ Grow customer relationships Leverage Ratio 140 12x 11.5x Organic 120 10x Growth $114 $119 100 8x $80
Slide 8: Carlstar Acquisition: Combined Product Segment and Brand Coverage
Carlstar Acquisition: Combined Product Segment and Brand Coverage with Titan Titan and Carlstar Combined Offer the Most Comprehensive Specialty Tire and Wheel portfolio in the World Outdoor Power Power High Speed Agriculture / Construction Multiple / Other Equipment Sports Trailer Assemblies / Tires
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 ⚫ Bryan, OH Europe / CIS ⚫ Dallas, TX ⚫ Ceprano, Italy ⚫ Kidderminster, UK $1.8B 6,900 ⚫ ⚫ ⚫ ⚫ Des Moines, IA Elkhorn, WI Freeport, IL For
Slide 10: Carlstar Acquisition – Manufacturing Footprint
Carlstar Acquisition – Manufacturing Footprint Europe SE Asia India North America China Carlstar Manufacturing & Distribution 3 1 14 10 3 Carlstar Distribution Tire Wheel Strategic Partner Strategic Partner Strategic Partner Manufacturing Manufacturing Tire Steel Wheel Aluminum Wheel Carlstar Strate
Slide 11: Long-term Secular Tailwinds
Long-term Secular Tailwinds STRONG AG DEMAND REPLACEMENT CYCLE CONSTRUCTION SPENDING LOCALIZED PRODUCTION Supported by continued population Driven by aging equipment, technological Supported by global government Driven by supply chain challenges, growth and elevated grain demand from innovation, and
Slide 12: Industry Leading Product Innovation
Industry Leading Product Innovation Deep culture of product development and innovation to meet customers’ evolving needs, translating to increased performance and financial benefits Undercarriage in Ultimate Flex Single Piece Wheel AgraEDGE Forestry Technology TM (UFT TM) Innovation ▪ New Forestry s
Slide 13: AG – Low Sidewall Technology (LSW)
AG – Low Sidewall Technology® (LSW®) End-user enthusiasm and demand for industry leading technology remains high ▪ Industry Leading Technology: Performance-enhancing LSW wheel and tire assemblies make farmers’ equipment perform better. ▪ Continuing LSW Momentum: LSW has been growing in popularity si
Slide 14: Carlstar Operations – Products/Markets
Carlstar Operations – Products/Markets Outdoor Power Ag. / Construction High Speed Trailer Power Sports Equipment (28% of Sales) (23% of Sales) (13% of Sales) (33% of Sales) Carlstar - Sales by Market Segment Aftermarket / Original Equipment Manufacturer (“OEM”) 3% ~% of Net Sales ~% of Net Sales 24
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 Europe South America Asia 8% improvement in press 12% energy savings in output in Des Moines, Iowa Italian ITM facilities 11% increase in producti
Slide 16: Commitment to ESG
Commitment to ESG ENVIRONMENTAL SOCIAL GOVERNANCE • Titan is developing a life cycle assessment (LCA) to enhance new product development • Remain a dedicated signatory to UN Global • Increased Board diversity Compact • Remain dedicated to implementing • Separate Chairman of the Board and CEO respons
Slide 17: Segment Overview & Background
SEGMENT OVERVIEW & BACKGROUND 17
Slide 18: Agriculture Segment
Agriculture Segment Ag Segment Facts Revenue ($M) & Gross Margin (%) ▪ Wheels, tires, and undercarriage components for use on a variety $1,400.00 50 of agricultural equipment Tires and wheels produced in North America, Europe 45 ▪ Wide range of wheel and tire sizes including the largest $1,200.00 an
Slide 19: EMC Segment
EMC Segment EMC Segment Facts Revenue ($M) & Gross Margin (%) ▪ The majority of EMC revenue is undercarriage parts and complete $1,200.00 50 undercarriage solutions under the premium ITM brand, which Undercarriage parts produced in Europe, Latin 45 operates globally in both the OEM and aftermarket c
Slide 20: EMC – ITM Products and Customers
EMC – ITM Products and Customers OEM ITM Facts Undercarriage System ▪ Full-service provider and manufacturer of ITM undercarriage systems and products, including steel tracks ▪ Significant blue-chip OEM customer base ▪ Strong relationships in mining aftermarket channels and expanding into forestry m
Slide 21: Consumer Segment
Consumer Segment Consumer Segment Facts Revenue ($M) & Gross Margin (%) ▪ Bias truck tires and light truck tires outside of the US, customer mixing of rubber stock in the US, high speed breaks in Europe Tires and wheels produced Revenue $180.00 in North America, Europe 50 and Turf Tires and CIS and
Slide 22: Financials
FINANCIALS 22
Slide 23: Significantly Enhanced Financial Performance
Significantly Enhanced Financial Performance Revenue ($B) Gross Margin +6% CAGR +790 BPS $2.2 16.8% 16.6% $1.8 $1.8 13.3% $1.4 $1.3 10.4% 8.9% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Adj. EBITDA ($M) Adj. EPS +53% +$2.42 $2.20 CAGR $253 $1.59 $205 $0.60 $135 -$0.83 -$0.55 $54 $38 2019 2020
Slide 24: Focus on Balanced Growth & Margin Enhancement
Focus on Balanced Growth & Margin Enhancement Revenue Mix/Trend Gross Margin Trend (in $ billions) 25% $1.6 $1.4 $1.3 $1.8 $2.2 $1.8 $0.2 20% $0.1 $0.2 $0.8 15% $0.2 $0.1 $0.7 $0.7 $0.1 $0.7 10% $0.6 $0.5 $1.2 $0.9 $1.0 5% $0.7 $0.7 $0.6 0% 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Slide 25: 2021-2023 Quarterly Financial Trends
2021-2023 Quarterly Financial Trends Revenue By Quarter ($M) Gross Profit ($M) & GM % By AEBITDA ($M) & % of Sales by $573 Quarter $125.0 Quarter 20% 18% 19.1% $556 $549 $120.0 20% $105.0 17.9% $531 17.4% $510 16.5% 16.4% 18% 16% $488 $481 $110 $100.0 15.6% 14.3% 15.0% 15.0% 16% $450 $439 $85.0 14.0
Slide 26: Consistent Working Capital Management
Consistent Working Capital Management Net Q4 – Working Capital ($M) - - - - - - 2022 - - - - - - - - - - - - 2023 - - - - - - 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $880 Days Sales 24.5% 25% 51 48 49 48 54 53 54 51 $680 24.4% Outstanding (DSO) 20% Days A/P in $480 19.0% 19.6% Inventory (DPI) 84 85 87 86 81 90
Slide 27: Strong Growth, Supportive Balance Sheet
Strong Growth, Supportive Balance Sheet Net Debt / TTM AEBITDA ($M) $426M Debt Breakdown $300.0 Leverage Ratio Trend 6 as of December 31st, 2023 5.3x $250.0 $264 5 $396 $253 $236 $241 $200.0 4.1x $220 4 $210 $205 3.3x $150.0 $166 3 2.9x 2.6x $135 $23 $7 $0 $100.0 2 1.8x $95 7.0% Secured Titan Europe
Slide 28: 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 29: Appendix
APPENDIX 29
Slide 30: Diverse, Global Revenue Base
Diverse, Global Revenue Base Revenue by Segment Revenue by Geography Consumer Other 8% 3% Latin America 17% U.S. Agricultural Revenue by Product 48% Revenue by Channel* Earthmoving/ 52% Construction Europe/CIS (“EMC”) 31% 40% Wheels 25% Aftermarket Tires ("AM") 50% 35% Original Undercarriage Equipme
Slide 31: Dec 2023 YTD Cash Flow
Dec 2023 YTD Cash Flow In $ Millions Cash – Dec. 2022 Net Income Depreciation & Net Change in Net Payment of Repurchase of All Other* Cash – Dec. 2023 CAPEX Amortization Working Capital Debt Common Stock * “All Other” category primarily made up of gain on foreign currency translation $20M, prepaid a
Slide 32: Q4 Financial Overview
Q4 Financial Overview* 2020 2021 2022 2023 Sales $327M $488M $510M $390M Gross Profit $38M $63M $77M $58M Gross Margin % 11.8% 12.8% 15.0% 15.0% Adjusted EBITDA $17M $36M $53M $38M Adjusted EBITDA % 5.3% 7.4% 10.4% 9.8% Adjusted Net income (loss) attrib. ($6M) $9M $28M $21M to Titan Adjusted EPS - D
Slide 33: Q4 EBITDA Reconciliation
Q4 EBITDA Reconciliation Adj. EBITDA Reconciliation | Q4 2020-2023 ($ Millions) Q4 2020 Q4 2021 Q4 2022 Q4 2023 Net Income / (Loss) (19) 28 43 (1) Provision for Income Taxes 5 (9) (16) (2) Interest Expense, Excluding Interest Income 7 8 8 7 Depreciation & Amortization 14 12 10 11 EBITDA 6 39 45 15 F
Slide 34: Investor Contact Information
Investor Contact Information Investor Relations Contacts: Alan Snyder Phone: 630-251-0589 alan.snyder@titan-intl.com Jeremy Hellman Phone: 212-836-9626 jhellman@equityny.com 34
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