Toro Company (the) · NYSE:TTC
Toro Company (the) — Q3 2024 Earnings Presentation
33 slides from Toro Company (the)'s earnings presentation, Sep 5, 2024
Slide 1: The Toro Company Q3 2024 Earnings Release
THE TORO COMPANY Q3 2024 EARNINGS RELEASE September 5, 2024
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 2024 EARNINGS RELEASE THE TORO COMPANY
Slide 4: The Toro Company: Built on Strong Relationships and Legacy of Excellence
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 2024 Key Messages
Q3 2024 Key Messages Delivered top- and bottom-line growth in a very dynamic environment, with net sales up 7% and *adjusted diluted EPS 1 up 24%; net sales growth driven by residential segment mass channel, and professional segment golf and grounds, and underground construction businesses Successfu
Slide 6: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights (Year-over-year comparisons below) Increase driven by higher shipments to mass channel, increased shipments of golf and grounds 6.9% products and underground construction equipment, and net price realization; this was NET SALES partially offset by lower shipments of snow
Slide 7: Q3 2024 Other Notable Highlights
Q3 2024 Other Notable Highlights The Toro Company is a leading AMP Productivity Initiative New Product Pipeline As provider of products On Track, Driving Benefits Strong As Ever and solutions for the outdoor Successful supplier summit at HQ; Toro Groundsmaster® e3200 environment, including: executio
Slide 8: Amplifying Maximum Productivity ("AMP")
Amplifying Maximum Productivity (“AMP”) Major productivity initiative expected to result in more than $100M of incremental annual cost savings by fiscal 2027, a portion of which the company intends to prudently reinvest 3 Key Focus Areas for Transformation: Supply Base 1 Design-to-Value 2 Route-to-M
Slide 9: Financials
Financials 9 Q3 2024 EARNINGS RELEASE THE TORO COMPANY
Slide 10: Q3 2024 Consolidated Results
Q3 2024 Consolidated Results Strength of mass channel and businesses with elevated order backlog, along with productivity gains and net price realization, drove top- and bottom-line growth REPORTED ADJUSTED* Change from Change from Q3 24 Q3 23 Q3 24 Q3 23 Q3 23 Q3 23 Net Sales $1,156.9M $1,081.8M +6
Slide 11: Professional Segment Results
Professional Segment Results NET SALES SEGMENT EARNINGS RATE (in millions) (as a percentage of net sales) -1.7% +1730 bps 18.8% $896.3 $880.9 1.5% Q3 23 Q3 24 Q3 23 Q3 24 Decrease was primarily driven by lower shipments of snow and Increase in profitability was primarily due to last year’s $151.3 ic
Slide 12: Residential Segment Results
Residential Segment Results NET SALES SEGMENT EARNINGS RATE (in millions) (as a percentage of net sales) +52.6% +1000 bps 12.2% $267.5 $175.3 2.2% Q3 23 Q3 24 Q3 23 Q3 24 Increase was largely driven by net sales leverage, productivity Increase was primarily driven by higher shipments to our mass imp
Slide 13: 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 time 82.2% Target Range: 1.4x 1.0x- $270.5 2.0x 21.6% $56.1 Q3 23 Q3 24 Q3 23 Q3 24 Q3 24 Free cash flow conver
Slide 14: Effective Capital Deployment
Effective Capital Deployment Consistent Priorities Q3 YTD 2024 Actions Invested $59.3M to fund new product investments, Capital expenditures supporting organic growth advanced manufacturing technologies, and capacity for 1 with high returns growth within existing manufacturing footprint Company cont
Slide 15: Q4 2024 Outlook Commentary
Q4 2024 Outlook Commentary (All on a year-over-year basis unless noted) Total company up low double digits Net Sales Growth Professional segment up mid teens (%) Residential segment down low single digits Adjusted Diluted Meaningfully higher; $0.93 to $0.98 implied EPS* ($) Other Activities Similar
Slide 16: 2024 Net Sales and Adjusted Diluted EPS Guidance Revised
2024 Net Sales and Adjusted Diluted EPS* Guidance Revised See my Updated Guidance comment – Guidance as of as of need to have June 6, 2024 September 5, 2024 two columns (see 9 2022 Net Sales Growth (%) deck for Up Low Single-Digits Up About 1% format – I’ve copied that Adjusted Operating Earnings Ma
Slide 17: Well Positioned to Win
Well Positioned to Win 1 Leadership in attractive end-markets Brand heritage delivering excellence and 2 brand recognition creating trust Innovation synergies leveraged across 3 product categories Deep long-term customer and channel 4 relationships 5 Disciplined execution 6 Strong balance sheet 17 Q
Slide 18: 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 Attractive end markets, customer-centric 2 innovation, and steady replacement cycles drive future organic
Slide 19: Appendix
APPENDIX
Slide 20: Order Backlog
Order backlog at the end of fiscal 2023 was $1.97B, as 1 disclosed in our 10K This is elevated compared to historical levels, driven by 2 sustained demand in underground construction, and golf and grounds businesses Order backlog continues to improve from the $1.97B, and 3 Order at the end of Q3 202
Slide 21: Accounts Receivable and Floor Plan Financing
TTC’s accounts receivable balance consists of sales to 1 mass channel partners, irrigation customers, and many of our international dealers and distributors; balance was up in Q3, as expected, given partnership with Lowe’s Majority of US independent dealers and distributors take 2 Accounts advantage
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Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures calculated and presented in accordance with U
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Slide 33: Gross Debt to EBITDA Ratio
Gross Debt to EBITDA Ratio ($ millions) Q4 23 Q1 24 Q2 24 Q3 24 Total Long Term Debt, less current portion $1,031.5 $1,186.6 $1,016.8 $966.6 $966.6 Gross Debt $1,031.5 $1,186.6 $1,016.8 $966.6 $966.6 Earnings Before Income Taxes $86.9 $80.1 $179.2 $144.2 $490.4 Interest Expense $14.9 $16.2 $16.7 $14