38 slides from Titan International, Inc. (de)'s earnings presentation, Oct 11, 2017
Slide 1: Investor Presentation FY 2016
Investor Presentation FY 2016
Slide 2: Titan International Overview
Titan International Overview Titan International, Inc. Titan International Inc. (TWI) is a publicly traded company on the New York Stock Exchange. Headquartered in the heartland of the U.S. in Quincy, Illinois, Titan has grown to become a top global manufacturer of specialty tires, wheels and trac
Slide 3: Corporate Strategy
Titan International Overview Corporate Strategy To become the worldwide leader in manufacturing and distribution of wheels, tires, assemblies and undercarriage products and to serve our customers’ needs through product innovation and quality service in our key markets: Agriculture Earthmoving/Co
Slide 4: Titan International: At a Glance
TITAN INTERNATIONAL: AT A GLANCE BY THE NUMBERS an ® Epes 6,000+ 44 EMPLOYEES, GLOBALLY COUNTRIES IN WHICH TITAN PRODUCTION / DISTRIBUTION SOLD PRODUCTS IN 2015 FACILITIES, GLOBALLY OTITAN a
Slide 5: Competitive Advantages
COMPETITIVE ADVANTAGES TITAN/GOODYEAR MICHELIN BRIDGESTONE GKN
Slide 6: Customers
Titan International Overview Customers
Slide 7: Global Footprint
B® NORTH AMERICA B® LATIN AMERICA / ® EUROPE B® ASIA / AFRICA ® AUSTRALIA GLOBAL = Quey USA SOUTH AMERICA - Caprara FR. aly Nadia an «era, LD, Astra (errant headgurtrs) Atibala SP, Bren Fanana, MO, Kaly ‘din Turkey Kalgoorlie, WA, Australia FOOTPRINT Brn USA gi Ge - el iby elgg, a tara Aaa * Des Moi
Slide 8: Agriculture
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Slide 9: Agriculture: Products/Brands
AGRICULTURE: Products/Brands /
Slide 10: Agriculture: Major 2015 Highlight
AGRICULTURE: Major 2015 Highlight
Slide 11: Agriculture: Product Innovations
AGRICULTURE: Product Innovations First line of text Bullet one goes here Bullet two goes here • Sub-bullet goes here • Sub-bullet goes here
Slide 12: Agriculture: Product Innovations
AGRICULTURE: Product Innovations
Slide 13: Agriculture: Product Innovations
AGRICULTURE: Product Innovations
Slide 14: Agriculture: Product Innovations
AGRICULTURE: Product Innovations
Slide 15: Agricultural Drivers
Market Summary Agricultural Drivers Mix Shift - Large hp equipment (4WD tractors and Combines) continue a cyclical downturn which began in 2014. Smaller hp tractor demand remains good, but at lower ASP and gross margins Grain prices remain low; resulting in lower farm income (stabilized somewhat
Slide 16: Off-the-Road (OTR)
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Slide 17: OTR: Products/Brands
OTR: Products/Brands O7ITAN i "Factor en TITAN INTERTRACTOR ITM Tires and wheels produced in North Undercarriage parts produced in Undercarriage parts produced in America, Europe and Australia (wheels — Europe, Brazil, North America and Asia; — Europe, Brazil, North America and Asia; only), distribu
Slide 18: OTR: Major Highlight
OTR: Major Highlight TITAN TIRE RECLAMATION CORPORATION (TTRC) Disposal of giant mining tires is the responsibility of the end-user, and doing so responsibly has traditionally come with a significant cost, leading many in the industry to stockpile used tires until a less cost-prohibitive solution is
Slide 19: OTR: Product Innovations
OTR: Product Innovations MARKETS SERVED: European high-speed mobile crane SINGLE-PIECE WHEEL In 2015, Titan began production of a newly patented 25-inch single-piece wheel unlike anything on the market. The high- speed mobile crane market is a challenging one to build wheels for, and because of that
Slide 20: OTR: Product Innovations
OTR: Product Innovations ‘A November 2015 survey ofthe North American construction ‘segment (deployed via Construction Equipment magazine) aimed at identifying potential issues commonty experienced in the fed that could be rectified by using LSW. The results show thal, just as with the agricultural
Slide 21: OTR: Product Innovations
OTR: Product Innovations MARKETS SERVED: Global ® LOW SIDEWALL (LSW) TECHNOLOGY Based on the success of LSW Technology in the North American agricultural market, as Low Sidewall Technology™ . . well as the success of skid steer LSW sizes, significant research, development and testing are underway to
Slide 22: Earthmoving/Construction Drivers
Market Summary Earthmoving/Construction Drivers Private construction spending for resi and non-resi buildings continue to carry the industry Larger construction equipment used for highways and infrastructure have remained slow to recover Mining activity remains lower with low commodity prices
Slide 23: Consumer
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Slide 24: Consumer: Products/Brands
CONSUMER: Products/Brands O71ITAN TITAN ATV, lawn & garden, tires & wheels produced in North America, distributed globally TITAN TRAILER COMPONENTS Assembled and distributed in North America (divested November 2015) MADE BY TITAN" GOODYEAR ATV Produced and distributed in North America GOODYEAR Light
Slide 25: Consumer: Products Innovations
CONSUMER: Products Innovations
Slide 26: Financial Performance
Financial Performance O7ITAN oo
Slide 27: Overview by Market Segment: Sales
Market Summary Overview by Market Segment FY 2016 Agriculture: Tractors, combines, implements, irrigation Earthmoving/Construction: Mining, cranes, aerial lifts, haul trucks, scrapers Consumer: Primarily light-truck tires, ATVs and select golf and turf equipment markets FY 2016 Segment Revenue GP: 1
Slide 28: Sales and Gross Margin by Market
Financial Performance Sales and Gross Margin by Market 50 % $1,182 $1 ,2 50 45 % 40 % $924 $1 ,0 50 Net Sales: Down (11%) FY ‘16 vs. FY ‘15 Gross margin improved 187 basis points compared to prior year 35 % $8 50 30 % $652 $583 25 % $6 50 AG despite lower sales 20 % 46% 15 % $4 50 Continued re
Slide 29: Q4 Accomplishments & Challenges
Financial Performance Q4 Accomplishments & Challenges Accomplishments Improved overall gross margin by almost $15 million (480 bps) for the quarter despite a 1% sales decline compared to prior year Triple-digit increases in agriculture segment net sales were realized in Latin America (112%) with
Slide 30: Financial Summary
Financial Performance Financial Summary (Amounts in millions) 2016 2015 2014 2013 Sales $1,265.5 $1,394.8 $1,895.5 $2,163.6 Gross Margin $142.5 $137.8 $180.6 $295.2 Gross Margin % 11.3% 9.9% 9.5% 13.6% Operating Income (Loss) ($21.3) ($24.3) ($21.1) $102.4 Operating Income % (1.7%) (1.7%) (1.1%) 4.7
Slide 31: Adjusted Income
Financial Performance Adjusted Income Q4 2016 USD Amounts in Millions Q4 2016 Q4 2015 FY 2016 FY 2015 Net loss applicable to common shareholders (14.1) (57.4) (43.5) (93.3) Remove redemption value adjustment 1.1 6.3 9.6 17.7 Net income (loss) attributable to Titan (13.0) (51.2) (34.0) (75.6) Adjustm
Slide 32: Adjusted EBITDA
Financial Performance Adjusted EBITDA Q4 2016 USD Amounts in Millions Q4 2016 Q4 2015 FY 2016 FY 2015 Operating income (loss) (9.1) (18.2) (21.3) (24.3) Adjustments Other income (expense) 1.9 4.7 12.5 11.1 Depreciation & amortization 14.9 16.6 59.8 69.6 Subsidiary currency correction (3.1) Italy res
Slide 33: Financial Appendix
Financial Appendix O7ITAN
Slide 34: Sales – N. America vs. International
Appendix Sales – N. America vs. International Full Year - Sales / Operating Income (Amounts in Millions) $2,500 8% $2,000 6% 1,001 985 4% $1,500 4.7% Millions 730 2% $1,000 749 1,163 (1.7%) 0% 910 $500 665 -2% (1.1%) 516 (1.7%) $0 -4% 2013 2014 2015 2016 Sales - N. America Sales - International Oper
Slide 35: Working Capital
Appendix Working Capital Q4 - WORKING CAPITAL (Amounts in Millions) $700 27% 26.3% 27% $600 26% $500 385 25.1% 26% $400 Millions 331 25% 24.4% $300 270 269 25% 23.8% 24% $200 24% 263 $100 177 199 177 179 146 123 148 23% $0 23% 2013 2014 2015 2016 AR Inventory AP Working Capital as % of Sales 2015 20
Slide 36: YTD Cash & CDs Activity
Appendix YTD Cash & CDs Activity December 2016 350.0 4.0 3.7 0.3 0.7 300.0 16.8 9.7 16.7 22.6 17.3 250.0 36.1 59.8 41.9 200.0 150.0 100.0 $200.2 $197.8 50.0 -
Slide 37: Debt Structure
Appendix Debt Structure CASH / DEBT Q4 '16 Q3 '16 Q2 '16 Q1 '16 Q4 '15 Cash & CDs $198 $216 $207 $191 $200 Total Debt $506 $501 $504 $504 $507 Titan International $456 $456 $455 $456 $456 Titan Europe Credit Facilities $34 $37 $39 $40 $38 Other $16 $8 $10 $8 $13 Net Leverage (Net Debt / Trailing 12
Slide 38: Cost Structure
Appendix Cost Structure Cost Structure Breakdown Primary Raw Materials Steel Overhead Natural Rubber 25% Raw Materials Synthetic Rubber 55% Labor Carbon Black 20% Nylon