Twin Disc, Incorporated · NASDAQ:TWIN
Twin Disc — Investor Presentation (February 2023)
32 slides from Twin Disc's investor presentation, Feb 23, 2023
Slide 1: Twin Disc, Inc. Investor Presentation
a TWIN DISC, INC Investor Presentation
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMEN This presentation contains statements that are forward-looking within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management's current expectations that are based on assumptions that are subject to risks and uncert
Slide 3: Twin Disc Overview
TWIN DISC OVERVIEW e>
Slide 4: Twin Disc at a Glance
TWIN DISC AT A GLANCE = Founded in 1918 = Headquartered in Racine, WI — 7800 employees = Designer and manufacturer of heavy duty power transmission equipment = Aglobal company - Manufacturing operations n the U.S., Belgium, Netherlands, Italy, Switzerland and Japan (JV) - World-wide distributor netw
Slide 5: Geographic Diversity
GEOGRAPHIC DIVERSITY > ‘# Manufacturing location © Company ovmed distribution / servcelocation © Purchasing / sourcing offices = Focus on European structure * simplification and back office ae * consolidation. e e & Sold Swiss facility in FY22. id '= Sold one italian facility in FY22. e ‘= Sold sell
Slide 6: Twin Disc Strategic Priorities
TWIN DISC STRATEGIC PRIORITIES Twa 01s Leading hybrid/electric solution provider for niche marine and land-based applications. Continued expansion of Veth product reach to new markets and geographies. Rationalize global footprint for efficiency and customer response. Increased focus on controls and
Slide 7: Hybrid Electric - Land Based / E-Frac
HYBRID ELECTRIC - LaNp BASED / E-FRAC * Initial E-Frac applications achieving performance beyond expectations. * Significant volume anticipated starting in late FY23. * Signed 18 month exclusive agreement with Sewart Supply Grizzly Manufacturingis excited to be partnering with Sewart ines Supply Inc
Slide 8: Hybrid Electric - Pleasure Craft
HYBRID ELECTRIC - pleasure CRAFT a ° =e rite < es Eon, “SO HINCKLEY YACHTS Confidential = Hinckley Silent Jet combines benefits of diesel/electric propulsion Seamless transition between diesel and electric power. Benefits of silent operation under electric power or high performance diesel propulsion
Slide 9: Hybrid Electric - Passenger Vessel
HY! ID ELECTRIC PASSENGER VESSEL Niagara Falls - M of the Mist Confidential = Two all-electric catamarans launched in 2020. Utilizing Veth L-Drives powered by lithium-ion batteries and sourced from Niagara Falls. No diesel fumes, no exhaust stacks obscuring views and no noise to compete with the fal
Slide 10: Marine & Propulsion - Work Boat / Commercial
MARINE & PROPULSION - work BoaAT / COMMERCIAL MARINE TPT SM Diesel powered planning & displacement vessels 30-250". Products - transmissions Asimuth })Thrasters - propellers fpr - MCD's = European market remains stable — Asian growth rebounded in FY18/19. = Long term growth in Asia, Latin America an
Slide 11: Marine & Propulsion - Pleasure Craft
MARINE & PROPULSION - PLEASURE CRAFT Ge SE High speed diesel powered planing & placement yachts 50’ - 150". Products @ 3 2, Coo) es ‘Systems Controls. — Market remains stable but off historic highs, some market share gains recently. — EJS™ establishing strong market Market Dynamics acceptance. — Est
Slide 12: Marine & Propulsion - Patrol Craft
MARINE & PROPULSION - patroL cRAFT Ge SE High speed diesel powered planing & displacement yachts 50’ - 150. Products @ surface Daves — Experienced growth in FY17-FY19 as demand for coastal security applications has increased globally. eecanciiems — Expect long term growth to continue. = Demand for h
Slide 13: Land Based Transmission Products
LAND BASED TRANSMISSION PRODUCT: FT Diesel powered off-highway and a specialty vehicles 400hp ~ 3000hp. Products a > ‘TA008501 Fracking _TAGO.7500Fracking _TDSI-1190 ARFF “ransmission Transmission "ransmision Pressure Pumping: Traditionally eylical market Weak NA market in F120 and into 21, folowing
Slide 14: Industrial Products
INDUSTRIAL PRODUC FT em Heavy duty industrial disconnect applications. Products 3 — ‘Mechanical & hydrauli ‘sP3t4 & ‘clutch North American Enerey Related: =" Cyclical marist with strong share = Limited market activity through FY20, into FY21 ‘+ Ieigation & Pumping Appliations: = "Poste take-off and
Slide 15: Financial Overview
FINANCIAL OVERVIEW e> 15
Slide 16: Net Sales and Earnings Per Share
NET SALES Sinmsion 300 aso 08838 asi 20 EARNINGS PER SHARE ° = : | vn : 5 ks TWAIN DISC - STRICTLY CONFIDENTIAL 19 FINANCIAL PERFORMANCE m™ nase 200 150 100 so ° Fran re m™ Confidential Weak O&G demand in FY20 and FY21, growing through FY22. All markets negatively impacted by COVID- 19 pandemic. All
Slide 17: Net Sales Diversity
NET SALES DIVERSITY NET SALES BY CATEGORY p00 WMarine wland-Based windustal w Other Fr20 ran ra ™ NET SALES MIX BY GEOGRAPHY TWIN DISC - STRICTLY CONFIDENTIAL 19 Confidential Marine segment includes marine transmissions, controls, azimuth thrusters, surface drives, propellers ‘and boat management sy
Slide 18: Historical Financial Performance
HISTORICAL FINANCIAL PERFORMANCE GROSS MARGIN Reduced volume, due to impact of COVID-19 on global demand, along with poor product mix impacted GP%. Product performance issue recorded in Q1 impacted FY20 by 226% ae 660 basis points. Excluding this, margin at 22.9% suffered ‘with lower volume and poor
Slide 19: Targets - Medium Term
TARGETS - MEDI 60% FCF Conversion $400M Revenue * Hybrid/electric * European cost structure | |* Supply chain processes leadership * Operational efficiencies * Manufacturing footprint * Veth global expansion * Greater pass-through * Capital spending * Industrial focus content (lower margin) discipli
Slide 20: Product Images
PRODUCT IMAGES <> 20
Slide 21: Marine & Propulsion Products
MARINE & PROPULSION PRODUCTS Oucid a a SE snr’ Tove pat thle Tet ble Marine Transmission Marine Transmission ‘Marine Control Drive MGX5065 MGX'5600 (co) 270hp-570hp 1300hp~ 2100hp 5 Models 215hp— 6035hp
Slide 22: Marine & Propulsion Products - Controls
MARINE & PROPULSION PRODUCTS Controls EC 300 TWAIN DISC - STRICTLY CONFIDENTIAL a ROLLA Express Joystick
Slide 23: Marine & Propulsion Products - Veth
MARINE & PROPULSION PRODUCTS - VETH = db Tunnel Thrusters Z-Drives L-Drives VethJet Diesel Engines / Electronics Generator Sets
Slide 24: Transmission Products
TRANSMISSION PRODU TA90-8501 TA90-7500 1061-1180 Fracing Transmission Fracing Transmission AREF Transmission 3000p (2300kW) 2600hp (1939kW) 7OShp (526kW) TWAIN DISC - STRICTLY CONFIDENTIAL
Slide 25: Frac Rig Diagram
Frac Rig Diagram
Slide 26: Industrial Products
INDUSTRIAL PRODU Released 3/16 Clutch Gear Box Universal Control Drive, TWAIN DISC - STRICTLY CONFIDENTIAL
Slide 27: Hybrid System - Sample Schematic
HYBRID SYSTEM - SAMPLE SCHEMATIC Fown(os) SHORE aes 7 yb Conte Team +e peer a Poremeuseneee es ‘Sales / Product Management He. men ron frist na = frat wean ne pee ae 178 eben Ecce TWIN DSC - STRICTLY CONFIDENTIAL a 27
Slide 28: Drivers Impacting Marine Hybrid Adoption
DRIVERS IMPACTING MARINE HYBRID ADOPTIO 1. Regulation to reduce emissions + International Maritime Can enon (UN) sulfur reduction initiative shipping industry +” Reduce emissions by 50% by 2050 + "Black smoke" reduction initiatives in urban areas and major ports/waterways—invest only in vessels for
Slide 29: Appendix
APPENDIX <>
Slide 30: Reconciliation of Net Income to EBITDA
RECONCILIATION OF NET INCOME TO EBITDA (sieves) etSses ss02603 sane sasasen sunny TWN DISC - STRICTLY CONFIDENTIAL B Confidential
Slide 31: Income Statement Summary - Q2
INCOME STATEMENT SUMMARY - Q2 Crm(oisc) ise 9 / oe) » ans (69 m9 1010 ssn, on 2a89 so oo oo 03) aon (s2029) (53509) (179) sue Confidential
Slide 32: Non-GAAP Financial Disclosures
NON-GAAP FINANCIAL DISCLOSURES Non-GAAP Financial Disclosures Financial information excluding the impact of certain significant items in this presentation are not measures that are defined in U.S. Generally Accepted Accounting Principles ("GAAP"). These items are measures that management believes ar