Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — Q3 2023 Earnings Presentation
32 slides from Titan International, Inc. (de)'s earnings presentation, Nov 2, 2023
Slide 1: Investor Presentation November 2023
INVESTOR PRESENTATION NOVEMBER 2023 NYSE: TWI
Slide 2: Forward-Looking Statements & Non-GAAP Metrics
Forward-Looking Statements & Non-GAAP Metrics Forward-Looking Statements The accompanying material includes forward-looking comments and information concerning the company’s expectations and objectives for the future. Readers of this material should understand that these forward-looking statements a
Slide 3: Titan International Overview
Titan International Overview W H Y W E M AT T E R • We produce equipment to help farmers feed the world, construction operators develop projects & miners extract resources. • We have cultivated longstanding relations with blue-chip OEM customers who rely on us as a complete solutions provider. • For
Slide 4: Why Invest in TWI?
Why Invest in TWI ? • Long-standing relationships with blue-chip OEMs, dealers, and consumers Global Market • Recognized global brands Leadership • History of market share gains through new product development Titan’s Strong Foundation Strong Global • Macro: Growing Global Ag and Infrastructure need
Slide 5: Strategic Actions Have Elevated The Baseline
Strategic Actions Have Elevated The Baseline Multi-Year Strategic Transformation 3 2 ▪ 2022 AEBITDA: $253M, 12% Product 1 Operational Innovation ▪ 2021 AEBITDA: $135M, 8% Focus on Core Excellence ▪ New products ▪ Supply chain ▪ Increased market ▪ Sold underperforming penetration strengthening assets
Slide 6: Long-term Growth Strategy/Engine
Long-term Growth Strategy/Engine Collaborative Key Drivers Customer 1 Relationships 2 Multi-year secular trends Leverage + Secular Preeminent partner to leading OEMs & Trends aftermarket companies Develop + Innovative Commitment to R&D & innovation Solutions + 5 Allocate 3 Competitive advantage as a
Slide 7: Strong Balance Sheet & FCF Supports Capital Optionality
Strong Balance Sheet & FCF Supports Capital Optionality Full-Year FCF* & Leverage Ratio** ▪ Product innovation (R&D) ▪ One Titan team development Free Cash Flow ▪ Expand manufacturing capabilities ▪ Grow customer relationships Leverage Ratio 160 12x 11.5x Organic 140 10x Growth $143 120 8x 100 6.4x
Slide 8: Unmatched Global Footprint, High Barriers to Entry
Unmatched Global Footprint, High Barriers to Entry Serving customers regionally and locally provides significant competitive advantage North America ⚫ Quincy, IL ⚫ Bryan, OH Europe / CIS ⚫ Dallas, TX ⚫ Ceprano, Italy ⚫ Kidderminster, UK $1.9B 7,500 ⚫ ⚫ ⚫ ⚫ Des Moines, IA Elkhorn, WI Freeport, IL For
Slide 9: Long-term Secular Tailwinds
Long-term Secular Tailwinds STRONG AG DEMAND REPLACEMENT CYCLE CONSTRUCTION SPENDING LOCALIZED PRODUCTION Supported by population growth strong Driven by aging equipment, technological Supported by global government Driven by supply chain challenges, commodity prices & elevated farmer innovation, an
Slide 10: Industry Leading Product Innovation
Industry Leading Product Innovation Deep culture of product development and innovation to meet customers’ evolving needs, translating to increased performance and financial benefits Undercarriage in Ultimate Flex Single Piece Wheel AgraEDGE™ Forestry Technology TM (UFT TM) Innovation ▪ New Forestry
Slide 11: AG – Low Sidewall Technology (LSW)
AG – Low Sidewall Technology® (LSW®) End-user enthusiasm and demand for industry leading technology remains high ▪ Industry Leading Technology: Performance-enhancing LSW wheel and tire assemblies make farmers’ equipment perform better ▪ Continuing LSW Momentum: LSW has been growing in popularity sin
Slide 12: Continued Focus on Operational Excellence
Continued Focus on Operational Excellence Recent investments in our plants globally are driving operational efficiencies and energy savings North America Europe South America Asia 8% improvement in press 12% energy savings n output in Des Moines, Iowa Italian ITM facilities 11% increase in productio
Slide 13: Commitment to ESG
Commitment to ESG ENVIRONMENTAL SOCIAL GOVERNANCE • Titan is developing a life cycle assessment (LCA) to enhance new product development • Remain a dedicated signatory to UN Global • Increased Board diversity Compact • Remain dedicated to implementing • Separate Chairman of the Board and CEO respons
Slide 14: Segment Overview & Background
SEGMENT OVERVIEW & BACKGROUND 14
Slide 15: Agriculture Segment
Agriculture Segment Ag Segment Facts Revenue ($M) & Gross Margin (%) ▪ Wheels, tires, and undercarriage components for use on a variety $1,400.00 50 of agricultural equipment Tires and wheels produced in North America, Europe 45 ▪ Wide range of wheel and tire sizes including the largest $1,200.00 an
Slide 16: EMC Segment
EMC Segment EMC Segment Facts Revenue ($M) & Gross Margin (%) ▪ The majority of EMC revenue is undercarriage parts and complete $1,200.00 50 undercarriage solutions under the premium ITM brand, which Undercarriage parts produced in Europe, Latin 45 operates globally in both the OEM and aftermarket c
Slide 17: EMC – ITM Products and Customers
EMC – ITM Products and Customers OEM ITM Facts Undercarriage System ▪ Full-service provider and manufacturer of ITM undercarriage systems and products, including steel tracks ▪ Significant blue-chip OEM customer base ▪ Strong relationships in mining aftermarket channels and expanding into forestry m
Slide 18: Consumer Segment
Consumer Segment Consumer Segment Facts Revenue ($M) & Gross Margin (%) ▪ Bias truck tires and light truck tires outside of the US, customer mixing of rubber stock in the US, high speed breaks in Europe Tires and wheels produced Revenue $180.00 in North America, Europe 50 and Turf Tires and CIS and
Slide 19: Financials
FINANCIALS 19
Slide 20: Significantly Enhanced Financial Performance
Significantly Enhanced Financial Performance Revenue ($B) Gross Margin +14% +770 CAGR $2.2 BPS 16.6% 16.7% $1.8 $1.9 13.3% $1.4 $1.3 10.4% 8.9% 2019 2020 2021 2022 TTM 2019 2020 2021 2022 TTM Adj. EBITDA ($M) Adj. EPS +81% +$3.03 $2.20 CAGR $1.69 $253 $220 $0.60 $135 -$0.83 -$0.55 $54 $38 2019 2020
Slide 21: 2023 Financial Outlook
2023 Financial Outlook Revenue (in $B) Adj. EBITDA (in $M) Free Cash Flow (in $M) $2.17 $253 $110 - $120 $1.85 - $1.9 $114 $200 - $210 FY 2022 Actual FY 2023 Outlook FY 2022 Actual FY 2023 Outlook FY 2022 Actual FY 2023 Outlook Market / Financial Context: ▪ Net Sales: While underlying macroeconomic
Slide 22: Focus on Balanced Growth & Margin Enhancement
Focus on Balanced Growth & Margin Enhancement Revenue Mix/Trend Gross Margin Trend (in $ billions) 20% $1.6 $1.4 $1.3 $1.8 $2.2 $1.9 $0.2 15% $0.2 $0.1 $0.8 $0.2 $0.1 $0.7 $0.7 10% $0.1 $0.7 $0.6 $0.5 5% $1.2 $1.1 $0.9 $0.7 $0.7 $0.6 0% 2018 2019 2020 2021 2022 TTM 2018 2019 2020 2021 2022 TTM AG EM
Slide 23: 2021-2023 Quarterly Financial Trends
2021-2023 Quarterly Financial Trends Revenue By Quarter ($M) Gross Profit ($M) & GM % By AEBITDA ($M) & % of Sales by $573 Quarter $125.0 Quarter 20% 18% 19.1% $556 $549 $120.0 20% $105.0 17.4%17.9% $531 $510 16.5% 16.4% 18% 16% $488 $481 $110 $100.0 15.6% 14.3% 15.0% $450 16% $439 $85.0 14.0% 14% $
Slide 24: Consistent Working Capital Management
Consistent Working Capital Management Net Q3 – Working Capital ($M) - - - - - - 2022 - - - - - - 2023 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 $880 26.8% 25.2% Days Sales 25% 51 48 49 48 54 53 54 $680 Outstanding (DSO) 21.1% 20.7% 20% Days A/P in 84 85 87 86 81 90 101 $480 Inventory (DPI) $413 $280 $373 $360 15% Da
Slide 25: Strong Growth, Supportive Balance Sheet
Strong Growth, Supportive Balance Sheet Net Debt / TTM AEBITDA ($M) $427M Debt Breakdown $300.0 Leverage Ratio Trend 6 as of September 30th, 2023 5.3x $250.0 $264 5 $396 $253 $236 $241 $200.0 4.1x $220 4 $210 3.3x $150.0 $166 3 2.9x 2.6x $135 $24 $7 $0 $100.0 2 1.8x $95 7.0% Secured Titan Europe Oth
Slide 26: Flexible Operating Structure
Flexible Operating Structure COGS Structure Raw Materials ▪ Demonstrated ability to manage labor and variable overhead costs while Labor leveraging global buying power ~10% Other* ~30% Steel ▪ Significant coordination between ~40% supply chain inventory control, Overhead Raw production, operations,
Slide 27: Appendix
APPENDIX 27
Slide 28: Diverse, Global Revenue Base
Diverse, Global Revenue Base Revenue by Segment Revenue by Geography Consumer Other 8% 4% Latin America 20% U.S. Earthmoving/ Agricultural Revenue by Product 49% Revenue by Channel* Construction (“EMC”) 55% Europe/CIS 37% 27% Wheels 25% Aftermarket Tires ("AM") 50% 35% Original Undercarriage Equipme
Slide 29: Sept 2023 YTD Cash Flow
Sept 2023 YTD Cash Flow In $ Millions Cash – Dec. 2022 Net Income Depreciation & Net Change in Net Payment of Repurchase of All Other* Cash – Sep. 2023 CAPEX Amortization Working Capital Debt Common Stock * “All Other” category primarily of prepaid and other assets of $18M and other current liabilit
Slide 30: Q3 Financial Overview
Q3 Financial Overview* 2020 2021 2022 2023 Sales $305M $450M $531M $402M Gross Profit $31M $60M $88M $66M Gross Margin % 10.3% 13.4% 16.5% 16.4% Adjusted EBITDA $14M $35M $61M $41M Adjusted EBITDA % 4.7% 7.8% 11.5% 10.1% Net income (loss) attrib. to Titan ($13M) $11M $43M $19M Adjusted EPS - Diluted
Slide 31: Q3 EBITDA Reconciliation
Q3 EBITDA Reconciliation Adj. EBITDA Reconciliation | Q3 2020-2023 ($ Millions) Q3 2020 Q3 2021 Q3 2022 Q3 2023 Net Income / (Loss) (13) 11 43 20 Provision for Income Taxes 0 5 11 5 Interest Expense, excluding Interest Income 8 8 8 7 Depreciation & Amortization 13 11 10 10 EBITDA 8 36 72 41 Foreign
Slide 32: Investor Contact Information
Investor Contact Information Investor Relations Contacts: Alan Snyder Phone: 630-251-0589 alan.snyder@titan-intl.com Jeremy Hellman Phone: 212-836-9626 jhellman@equityny.com 32
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