Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — Q1 2023 Earnings Presentation
35 slides from Titan International, Inc. (de)'s earnings presentation, May 4, 2023
Slide 1: Investor Presentation Q1 2023
Investor Presentation Q1 2023 NYSE: TWI
Slide 2: Safe Harbor Statement
Titan Website: www.titan-intl.com 1 Investor Relations twi@alpha-ir.com SAFE HARBOR STATEMENT: 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 forwar
Slide 3: Company Overview
Company Overview OTITAN —
Slide 4: Titan International Overview
Titan International Overview Business Overview Titan entered into the wheel market in 1983 and tires in 1993 and is evolving into a leading global supplier of wheels and tires for off-highway vehicles. Titan manufactures under the Goodyear Farm Tire and Titan Tire brands. ITM is a premium brand
Slide 5: Titan International Business At a Glance
Titan International Business At a Glance 1 Revenue by Market 1 Revenue by Segment 2 Consumer 8% Undercarriage 8% Tires Agricultural 25% 50% EMC 37% 55% 38% 54% 25% Wheels Revenue by Geography 1 Revenue by Channel 2 Other Latin 4% America AM 19% United States 35% 50% OE 65% 27% Europe / CIS 1 Dec YTD
Slide 6: Diverse, Global Footprint
Diverse, Global Footprint Titan’s broad manufacturing footprint allows the company to serve its customers regionally and locally, an advantage that separates us from our competition Europe / CIS Ceprano, Italy Kidderminster, UK Fanano, Italy Monreal del Campo, Spain Finale Emilia, Italy
Slide 7: Strong Position In Core Markets
Strong Position In Core Markets Titan’s strong market position is underpinned by a broad range of AG and EMC-focused production and engineering capabilities coupled with unmatched tooling assets that provides high barriers of entry Tires Wheels Undercarriage AM 10% AM OE 1 AM 50% 50% 30% OE 90% OE 7
Slide 8: Flexible Operating Structure
Flexible Operating Structure Demonstrated ability to manage labor and variable overhead costs while leveraging global buying power Management Commentary Summary COGS Structure Management has taken strong actions in the midst of market volatility to manage labor and variable costs within production
Slide 9: ESG Commitment
ESG Commitment OTITAN —
Slide 10: Titan's Inaugural CSR Report
Titan’s Inaugural CSR Report See Titan’s 2021 CSR report on our website at https://ir.titan-intl.com/ESG/default.aspx 10
Slide 11: Titan's ESG Journey
Titan’s ESG Journey ENVIRONMENTAL SOCIAL GOVERNANCE • Titan is developing a life cycle • Policies supporting diversity and • Increased Board diversity in 2021 assessment (LCA) to enhance new inclusion, including Board commitment product development. Initial to increase diversity • Highly independent
Slide 12: Titan's ESG Journey
Titan’s ESG Journey Titan is committed to being a positive force in the lives of our employees and customers and in the communities where we work and live NEW AND REVISED POLICIES We’ve made significant progress on environmental, social and governance (ESG) efforts by creating and updating enterpris
Slide 13: Segments Overview
Segments Overview OTITAN —
Slide 14: Agricultural: Segment Overview
Agricultural: Segment Overview Segment Overview Net Sales and Gross Margin1 ($ Millions) Titan’s agricultural wheels, tires, and undercarriage components are manufactured for use on various agricultural equipment including tractors, combines, skidders, plows, planters, and irrigation equipment.
Slide 15: Agricultural: Market Summary
Agricultural: Market Summary Summary Observations Key Indicators Large Ag retail demand continues at strong levels, as Corn Price Trend the drive for precision farming, replacement equipment and farmer income propels the growth Small Ag equipment levels are back around pre-Covid levels, which al
Slide 16: Agricultural: Low Sidewall Technology
Agricultural: Low Sidewall Technology End-user enthusiasm and demand for industry leading technology remains high CONTINUING LSW MOMENTUM 53% IMPROVEMENT IN TOTAL CONTACT Our Low Sidewall Technology (LSW) has been growing in AREA popularity since its introduction, and that trend is continuing Pr
Slide 17: Agricultural: Product Innovation
Agricultural: Product Innovation TITAN AgraEDGETM High-performing, cost competitive Radial R-1W tires Improved compounding, modern lug angle for optimum self-cleaning and traction 2022 line expansion to include sizes for mid-sized MFWD tractors TITAN HK 458 LAUNCH New wheel loader tire combi
Slide 18: EMC: Segment Overview
EMC: Segment Overview Segment Overview Net Sales and Gross Margin1 ($ Millions) Manufactures undercarriage systems, wheels, tires and components for various types of OTR earthmoving, mining, military, construction, road building, and forestry equipment for both OEM and Aftermarket channels ITM i
Slide 19: EMC: Market Summary
EMC: Market Summary Summary Observations Key Indicators EU Construction Spending | Year Over Year Growth Rate % Construction demand is driven by many variables, including commodity prices, road construction, infrastructure, government appropriations, housing starts and other macroeconomic drivers
Slide 20: EMC: Product Development
EMC: Product Development BIGGER THAN EVER Our Bryan, Ohio plant built its largest bias tire ever, the Titan 40.00-57 SM150 IND-4, for slag pot carriers in steel mill and gantry cranes TITAN STTR IN HIGH DEMAND ROLLER-WITH-CARTRIDGE SYSTEM New STTR steel-ply radial tire is dual-rated for earthmov
Slide 21: EMC: Undercarriage (ITM) Products & Customers
EMC: Undercarriage (ITM) Products & Customers 21
Slide 22: Consumer: Segment Overview
Consumer: Segment Overview Segment Overview Net Sales and Gross Margin ($ Millions) Titan’s consumer segment manufactures bias truck tires and light truck tires outside of the US, custom mixing of rubber stock in the US, high speed brakes in Europe and Turf Tires. Overview of Products and Brands T
Slide 23: Q4 / FY 2022 Financial Overview
Q4 / FY 2022 Financial Overview
Slide 24: Q4 2022 Financial Highlights
Q4 2022 Financial Highlights Net Sales Gross Margin % Adjusted EBITDA1 +220 bps +46% +5% $53M $488M $510M 15.0% 12.8% $36M Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Adj. EPS (Diluted) Free Cash Flow2 Net Debt Leverage As % of TTM Adj. EBITDA +$.30 +$46M 2.9x $0.44 $44M 1.1x $0.14 ($2M) Q4 2021
Slide 25: FY 2022 Financial Highlights
FY 2022 Financial Highlights Net Sales Gross Margin % Adjusted EBITDA1 +330 bps +87% +22% $253M $2.2Bn 16.6% $1.8Bn 13.3% $135M FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 Adj. EPS (Diluted) Free Cash Flow2 Net Debt Leverage As % of TTM Adj. EBITDA +$1.60 +$142M 2.9x $2.20 $114M 1.1x $0.60 ($28M
Slide 26: 2021-2022 Quarterly Financial Trend
2021-2022 Quarterly Financial Trend Revenue by Quarter Q4 Revenue of $510M; a record 4th quarter for Titan; up +$22M or +5% vs Q4 2021. Q4 Titan experienced normal seasonality, down sequentially from Q3 in terms of both revenue and profitability. Gross Profit & GM% by Quarter GM% 15.0% for Q4
Slide 27: Q4 Sales And Gross Margin by Segment
Q4 Sales And Gross Margin by Segment $275 5 0 % $ 3 0 0 4 5 % $265 4 0 % $ 2 5 0 Net Sales increased 4% Q4‘22 vs. Q4’21 (5% organically) 3 5 % AG 3 0 % $ 2 0 0 $161 55% 2 5 % 2 0 % $140 13% 14% 14% $ 1 5 0 Gross Margin decreased 40 bps YoY 7% 1 5 % 1 0 % $ 1 0 0 5 % 0 % $ 5 0 Q4 '19 Q4 '20 Q4 '2
Slide 28: Working Capital
Working Capital 2021 2022 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Days Sales Outstanding (DSO) 57 55 53 48 51 48 49 48 Days A/P in Inventory (DPI) 84 86 89 86 84 85 87 86 Days Payable Outstanding (DPO) (59) (59) (61) (61) (60) (57) (55) (57) Cash Conversion Cycle 82 82 81 73 75 76 81 77 Working Capital as % of
Slide 29: Net Leverage & Debt
Net Leverage & Debt Net Debt / TTM AEBITDA Leverage Ratio Trend 300 5.3x 6x 250 5x 4.1x 200 3.3x 4x 2.9x 150 2.6x 3x 236 253 100 210 2x 166 Net Debt 116 135 1.8x Leverage Ratio 50 95 1.4x 1x 71 1.1x TTM AEBITDA 0 0 ($M) Q1 ’21 Q2 ’21 Q3 ’21 Q4 ’21 Q1 ’22 Q2 ’22 Q3 ’22 Q4 ’22 $446M Debt Breakdown as
Slide 30: Appendix
Appendix O71ITAN
Slide 31: Full Year 2022 Cash Flow
Full Year 2022 Cash Flow In $ Millions 31
Slide 32: Q4 Financial Overview
Q4 Financial Overview* 2019 2020 2021 2022 Sales $302M $327M $488M $510M Gross Profit $18M $38M $63M $77M Gross Margin % 6.1% 11.8% 12.8% 15.0% Adjusted EBITDA ($3M) $17M $36M $53M Adjusted EBITDA % (1.1%) 5.3% 7.4% 10.3% Net income (loss) attrib. to Titan ($24M) ($6M) $9M $28M Adjusted EPS - Dilute
Slide 33: FY Financial Overview
FY Financial Overview* 2019 2020 2021 2022 Sales $1.4Bn $1.3Bn $1.8Bn $2.2Bn Gross Profit $129M $131M $238M $361M Gross Margin % 8.9% 10.4% 13.3% 16.6% Adjusted EBITDA $38M $54M $135M $253M Adjusted EBITDA % 2.6% 4.3% 7.6% 11.7% Net income (loss) attrib. to Titan ($50M) ($33M) $38M $140M Adjusted EP
Slide 34: Q4 EBITDA Reconciliation
Q4 EBITDA Reconciliation Adj. EBITDA Reconciliation | Q4 2019-2022 ($ Millions) Q4 2019 Q4 2020 Q4 2021 Q4 2022 Net Income / (Loss) (26) (19) 28 43 Provision for Income Taxes 3 5 (9) (16) Interest Expense 9 7 8 7 Depreciation & Amortization 13 14 11 11 EBITDA (2) 6 39 45 Foreign Exchange Loss / (Gai
Slide 35: FY EBITDA Reconciliation
FY EBITDA Reconciliation Adj. EBITDA Reconciliation | FY 2019-2022 ($ Millions) FY 2019 FY 2020 FY 2021 FY 2022 Net Income / (Loss) (52) (65) 50 179 Provision for Income Taxes 3 7 1 23 Interest Expense 33 30 32 30 Depreciation and Amortization 54 55 48 44 EBITDA 39 27 131 276 Income on Brazilian Ind
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