Timken Company (the) · NYSE:TKR
Timken Company (the) — Q4 2023 Earnings Presentation
37 slides from Timken Company (the)'s earnings presentation, Feb 5, 2024
Slide 1: 4Q 2023 Earnings Investor Presentation
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Earnings Investor Presentation February 5, 2024 The Timken Company
Slide 2: Agenda
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Agenda 2 Neil Frohnapple Introduction Head of Investor Relations Overview and Rich Kyle Business Update President an
Slide 3: Forward-Looking Statements Safe Harbor and Non-GAAP Financial Information
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Forward-Looking Statements Safe Harbor and Non-GAAP Financial Information 3 Certain statements in this presentation
Slide 4: Overview and Business Update
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Overview and Business Update Rich Kyle President and Chief Executive Officer The Timken Company
Slide 5: 4Q 2023 Performance Highlights
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Performance Highlights 5 Strong 4th quarter performance caps third straight year of record sales and adjuste
Slide 6: Acquisition of Lagersmit
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Acquisition of Lagersmit 6 Expands Timken’s Industrial Motion product portfolio ▪ Manufacturer of highly engineered
Slide 7: FY 2023 Performance Highlights
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason FY 2023 Performance Highlights 7 Posted record revenue of $4.8 billion, up 6% compared to 2022 ▪ Organic revenue gro
Slide 8: Initial Organic Growth Outlook – FY 2024 By Market/Sector
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Initial Organic Growth Outlook – FY 2024 By Market/Sector 8 (Market/Sector Placement Reflects Mid-Point of Guidance)
Slide 9: 2024 Outlook
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 2024 Outlook 9 Current 2024 Outlook (February 5, 2024) Current Outlook: Full Year 2024 vs. 2023 Sales down 3.5% at m
Slide 10: Looking Ahead
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Looking Ahead 10 Focused on delivering resilient performance in 2024 ▪ Expect lower results in 1H-24 versus prior ye
Slide 11: Consistent, Growing and Strong Performance
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Consistent, Growing and Strong Performance 11 Revenue ($B) Adj. EBITDA Margin Adj. EPS $4.8 19.7% 19.2% 19.0% $7.05
Slide 12: Financial Performance
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Financial Performance Phil Fracassa Executive Vice President and Chief Financial Officer The Timken Company
Slide 13: 4Q 2023 Financial Overview
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Financial Overview 13 Net Sales ($M) Adjusted EBITDA ($M) Earnings Per Share REPORTED (GAAP) ADJUSTED $195 $
Slide 14: 4Q 2023 Financial Highlights - Sales
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Financial Highlights - Sales 14 4Q-23 vs. 4Q-22 Sales by Geography – ORGANIC (Excludes Acquisitions (net) an
Slide 15: 4Q 2023 Financial Comparison – Adjusted EBITDA
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Financial Comparison – Adjusted EBITDA 15 $14 $5 ($6) ($9) $11 $195 $186 ($38) $32 17.2% 17.9% 4Q-22 Volume
Slide 16: 4Q and FY-23 Financial Comparison – Net Income & Diluted EPS
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q and FY-23 Financial Comparison – Net Income & Diluted EPS 16 4Q-22 4Q-23 FY-22 FY-23 $M EPS $M EPS $M EPS $M EPS
Slide 17: 4Q 2023 Segment Performance – Engineered Bearings
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Segment Performance 17 Engineered Bearings Sales of $724 million, down 2.4% from the same period Net Sales (
Slide 18: 4Q 2023 Segment Performance – Industrial Motion
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 4Q 2023 Segment Performance 18 Industrial Motion Sales of $367 million, up 8.0% from the same period last Net Sales
Slide 19: Cash Flow, Leverage & Capital Allocation
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Cash Flow, Leverage & Capital Allocation 19 Capital Structure ($M) ($M) 4Q-22 4Q-23 FY-22 FY-23 12/31/22 12/31/23 Ne
Slide 20: Disciplined Capital Deployment Focused on Value Creation
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Disciplined Capital Deployment Focused on Value Creation 20 Over $1.1 billion of capital allocated in 2023 to advanc
Slide 21: 2024 Outlook
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 2024 Outlook 21 Current 2024 Outlook (February 5, 2024) Current Outlook: Full Year 2024 vs. 2023 Sales down 3.5% at
Slide 22: Long-Term Financial Goals
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Long-Term Financial Goals* 22 Strong Top-Line Growth Organic Growth CAGR: 4-5% ▪ Positive macros (incl. new markets)
Slide 23: Appendix: Backup Slides and GAAP Reconciliations
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Appendix: Backup Slides and GAAP Reconciliations The Timken Company
Slide 24: Full Year 2023 Financial Overview
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Full Year 2023 Financial Overview 24 Net Sales ($M) Adjusted EBITDA ($M) Earnings Per Share REPORTED (GAAP) ADJUSTED
Slide 25: FY-23 Financial Overview – Sales and Adjusted EBITDA
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason FY-23 Financial Overview – Sales and Adjusted EBITDA 25 $245 ($23) $4,769 $50 $4,497 2022 Sales Organic Acquisitions
Slide 26: GAAP Reconciliation: Net Income & EPS
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 26 GAAP Reconciliation: Net Income & EPS Reconciliations of Adjusted Net Income to GAAP Net Income and Adjusted Earn
Slide 27: GAAP Reconciliation: 2019-2022 Net Income & EPS
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason GAAP Reconciliation: 2019-2022 Net Income & EPS 27 Reconciliations of Adjusted Net Income to GAAP Net Income and Adj
Slide 28: GAAP Reconciliation: EBITDA and EBITDA, After Adjustments to GAAP Net Income
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason GAAP Reconciliation: EBITDA and EBITDA, After Adjustments to GAAP Net28 Income Reconciliation of EBITDA to GAAP Net
Slide 29: GAAP Reconciliation: 2019-2022 EBITDA, and EBITDA, After Adjustments to Net Income
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason GAAP Reconciliation: 2019-2022 EBITDA, and EBITDA, After Adjustments 29 to Net Income Reconciliations of GAAP to Non
Slide 30: GAAP Reconciliation: Segment EBITDA & EBITDA Margin
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 30 GAAP Reconciliation: Segment EBITDA & EBITDA Margin Reconciliation of segment EBITDA, after adjustments, to segme
Slide 31: GAAP Reconciliation: Net Debt & Free Cash Flow
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 31 GAAP Reconciliation: Net Debt & Free Cash Flow Reconciliation of Total Debt to Net Debt, the Ratio of Net Debt to
Slide 32: GAAP Reconciliation: Adjusted NOPAT, Adjusted Invested Capital and Return
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason GAAP Reconciliation: Adjusted Net Operating Profit After Taxes, 32 Adjusted Invested Capital and Return on Adjusted
Slide 33: Supplemental Information: EBITDA Adjustments and D&A by Segment
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Supplemental Information: EBITDA Adjustments and Depreciation & 33 Amortization by Segment (Unaudited) (Dollars in m
Slide 34: Supplemental Information: EBITDA Adjustments and D&A by Segment
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason Supplemental Information: EBITDA Adjustments and Depreciation & 34 Amortization by Segment (Unaudited) (Dollars in m
Slide 35: GAAP Reconciliation: Adjusted EPS and Free Cash Flow Outlook
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason GAAP Reconciliation: Adjusted EPS and Free Cash Flow Outlook 35 Reconciliation of Adjusted Earnings per Share to GAA
Slide 36: GAAP Reconciliation: Net Sales to Organic Sales
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 36 GAAP Reconciliation: Net Sales to Organic Sales Reconciliation of Net Sales to Organic Sales (Unaudited) The foll
Slide 37: GAAP Reconciliation: Net Sales to Organic Sales
These materials were presented on Feb. 5, 2024 and have not been confirmed or updated. The Company disclaims any obligation to do so based on subsequent events or for any other reason 37 GAAP Reconciliation: Net Sales to Organic Sales Reconciliation of Net Sales to Organic Sales (Unaudited) The foll