Timken Company (the) · NYSE:TKR

Timken Company (the) — The Timken Company — Investor Presentation (November 2005)

28 slides from Timken Company (the)'s investor presentation, November 2005

  1. Slide 1: The Timken Company Investor Presentation

    The Timken Company Investor Presentation November 2005

  2. Slide 2: Safe Harbor

    Safe Harbor Certain statements in this presentation (including statements regarding the Company's forecasts, beliefs and expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions t

  3. Slide 3: Timken 2004 Accomplishments

    Timken 2004 Accomplishments ƒ Record Sales of $4.5 Billion ƒ EPS of $1.35 doubled from 2003 (a) – Leveraged volume – Improved productivity – Raw material cost recovery – Torrington synergies – $80 million ƒ Strong balance sheet – Lowered net debt/capital – Operating working capital/ sales improvemen

  4. Slide 4: Global Reach

    Timken Global Reach ƒ 26,000 associates in 26 countries North America Europe $3,300m Sales $800m Sales 16,000 Associates 6,000 Associates 61 Facilities 24 Facilities Asia Pacific $240m Sales 3,000 Associates Latin America 9 Facilities $120m Sales 1,000 Associates 5 Facilities Sales based on customer

  5. Slide 5: Timken Vision

    Timken Vision We are dedicated to improving our customers’ performance by applying our knowledge of friction management and power transmission to deliver unparalleled value and innovation all around the world. 5

  6. Slide 6: Timken – Where You Turn

    TIMKEN Where You Turn TIMKEN

  7. Slide 7: Market Positions

    Timken – Market Positions (a) Bearing #3 Global #1 North America #1 Global Tapered Bearing #2 Global Needle Bearing #2 Global Industrial Aftermarket Steel #1 Global Seamless Mechanical Tubing #1 Global Steel for Bearings (a) Company estimates, Freedonia Group and external financial reports. 7

  8. Slide 8: Industrial Group

    Timken Industrial Group ƒ Broad range of bearing products and services ƒ Integrated engineering solutions for OEM designs ƒ Strong distribution channels $1,800 14% 12% $1,700 10% ($ millions) $1,600 8% $1,500 6% 4% $1,400 2% $1,300 0% 2003 2004 Net Sales EBIT % 8

  9. Slide 9: Industrial Group: 2004 Net Sales by Market

    Timken Industrial Group ƒ 2004 Net Sales: $1.7 Billion ƒ Approximately 50% OEM and 50% Distribution Aerospace & Defense 7% Consumer & Super Precision Power 9% Transmission 31% Rail 10% Automotive Aftermarket 11% Heavy Industry Off Highway 11% 21% 9

  10. Slide 10: Automotive Group

    Timken Automotive Group ƒ Bearing and system design leadership ƒ Leading edge process capabilities ƒ Extensive material science knowledge ƒ Global manufacturing footprint $1,700 14% 12% $1,600 10% ($ millions) $1,500 8% $1,400 6% 4% $1,300 2% $1,200 0% 2003 2004 Net Sales EBIT % 10

  11. Slide 11: Automotive Group: 2004 Net Sales by Market

    Timken Automotive Group ƒ 2004 Net Sales: $1.6 Billion ƒ Designed into 9 of the top 10 selling US vehicles Medium & Heavy Truck 16% Light Truck 53% Passenger Car 31% 11

  12. Slide 12: Steel Group

    Timken Steel Group Timken ƒ High performance steel Performance Demand Steel Scope ƒ A leader in cost and quality High Applications Space Shuttle Landing Gear Tool & Die Steels $1,500 8% Bearings 6% Tire Cord Wire ($ millions) $1,000 Perforating Guns 4% Crankshafts 2% Axle Shafts $500 Gun Barrels 0%

  13. Slide 13: Steel Group: 2004 Net Sales by Market

    Timken Steel Group ƒ 2004 Net Sales: $1.4 Billion (a) ƒ Serve diverse markets across many industries Energy 6% Aerospace 6% Automotive 28% Distribution 10% Tool Steels 10% Bearing Industrial 22% 18% (a) Includes $162 million intersegment sales. 13

  14. Slide 14: Timken – Where You Turn

    TIMKEN Where You Turn TIMKEN

  15. Slide 15: Financial Overview

    TIMKEN Financial Overview

  16. Slide 16: Historical Sales

    Timken Historical Sales (a) ($ millions) CAGR 1991 - 2001: 4% $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 (a) 2003 includes Torrington acquisition as acquired February 2003. 16

  17. Slide 17: Historical Operating Income

    Timken Historical Operating Income (a) ($ millions) CAGR 1991 - 2001: 5% % to Operating Net Sales Income $300 12% $250 10% $200 8% $150 6% $100 4% $50 2% $0 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Operating Income % to Net Sales (a) Excludes special items, such as re

  18. Slide 18: Historical EPS

    Timken Historical EPS (a) ($ millions) Net Sales EPS $5,000 $3.00 $2.50 $4,000 $2.00 $3,000 $1.50 $2,000 $1.00 $1,000 $0.50 $0 $0.00 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Net Sales EPS (a) Excludes special items, such as restructuring and reorganization expenses, CDO

  19. Slide 19: Historical Net Debt

    Timken Historical Net Debt (a) ($ millions) Net Debt / Net Debt Capital $1,000 55% $900 50% $800 45% $700 40% $600 35% $500 30% $400 25% $300 20% $200 15% $100 10% $0 5% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Net Debt Net Debt / Capital (a) 2003 includes Torrington acq

  20. Slide 20: Nine Months 2005 Results

    Nine Months 2005 Results (a) ($ in millions, except per share amounts) 2005 2004 % Change Net Sales 3,887 3,326 17% EBIT 312 168 85% Margin (% to Net Sales) 8.0% 5.1% 290 bps Net Income 184 82 123% EPS 1.99 0.91 119% Net Sales EBIT Margin 1500 14% 1250 12% 10% 1000 8% 750 2005 6% 2004 4% 500 2% 250

  21. Slide 21: Conclusion

    Conclusion ƒ A leading worldwide manufacturer serving diverse customers and end markets ƒ Research and development capability provides a constant stream of new and enhanced products and services ƒ Global expansion ƒ Continued strong markets ƒ Improved operating performance 21

  22. Slide 22: Timken – Where You Turn

    TIMKEN Where You Turn TIMKEN

  23. Slide 23: Appendix

    TIMKEN Appendix

  24. Slide 24: Reconciliation to GAAP

    Reconciliation to GAAP ($ millions, except per share amounts) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 GAAP Operating Income (9) 42 14 132 203 247 280 225 133 106 (18) 79 98 237 Reorganization Expense in COGS - - - - - - - 15 - 4 8 9 3 5 Goodwill Amortization Expense 3 3

  25. Slide 25: Reconciliation to GAAP: 2003 Pro Forma Net Sales

    Reconciliation to GAAP Calculation of Timken Company 2003 Pro forma Net Sales (Thousands of U.S. Dollars) Year 04 Year 03 Timken Timken Impact of Timken Company, As Company, As Torrington Company, Pro Reported Reported Acquisition (1) forma Automotive Group Net sales to external customers $1 582,226

  26. Slide 26: Reconciliation to GAAP: Consolidated Statement of Income

    Reconciliation to GAAP CONSOLIDATED STATEMENT OF INCOME AS REPORTED ADJUSTED (1) (Thousands of U.S. dollars, except share data) 3Q 05 3Q 04 Nine Months 05 Nine Months 04 3Q 05 3Q 04 Nine Months 05 Nine Months 04 Net sales $1,258,133 $1,096,724 $3,887,351 $3,325,796 $1,258,133 $1,096,724 $3,887,351 $

  27. Slide 27: Reconciliation to GAAP: Business Segments

    Reconciliation to GAAP BUSINESS SEGMENTS (Thousands of U.S. dollars) 3Q 05 3Q 04 Nine Months 05 Nine Months 04 Industrial Group Net sales to external customers $467,774 $413,589 $1,433,746 $1,261,274 Intersegment sales 435 416 1,461 983 Total net sales $468,209 $414,005 $1,435,207 $1,262,257 Adjuste

  28. Slide 28: Reconciliation to GAAP: Total Debt to Net Debt

    Reconciliation to GAAP Reconciliation of Total Debt to Net Debt and the Ratio of Total Debt and Net Debt to Capital: (Thousands of U.S. Dollars) Sep 30, 2005 June 30, 2005 Dec 31, 2004 Short-term debt $269,441 $232,487 $158,690 Long-term debt 533,169 609,627 620,634 Total Debt 802,610 842,114 779,32

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