Toro Company (the) · NYSE:TTC
Toro Company (the) — Q4 2023 Earnings Presentation
29 slides from Toro Company (the)'s earnings presentation, Dec 20, 2023
Slide 1: The Toro Company Q4 2023 Earnings Release
THE TORO COMPANY Q4 2023 EARNINGS RELEASE December 20, 2023
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 Q4 2023 EARNINGS RELEASE THE TORO COMPANY
Slide 4: The Toro Company: Built on Strong Relationships and Our 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: Q4 2023 Key Messages
Q4 2023 Key Messages Exceeded expectation for fourth-quarter *adjusted diluted EPS, a 1 testament to strength of portfolio and a result of swift actions to align production and costs with current market conditions Stabilizing supply of key components enabled increased output for underground and spec
Slide 6: Q4 2023 Financial Highlights
Q4 2023 Financial Highlights (Year-over-year comparisons below) Decrease was primarily due to lower shipments of residential and contractor-grade lawn care -16.1% and snow products, partially offset by higher NET SALES shipments of underground and specialty DECLINE construction products, and golf an
Slide 7: 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 8: Q4 2023 Other Notable Highlights
Q4 2023 Other Notable Highlights The Toro Company is a leading Continued to Strengthen Leveraging Technology provider of products Innovation Leadership Investments and solutions for the outdoor Prioritized investments aligned with Expanded line of Workman® utility environment, including: market tren
Slide 9: Financials
Financials 9 Q4 2023 EARNINGS RELEASE THE TORO COMPANY
Slide 10: Q4 2023 Consolidated Results
Q4 2023 Consolidated Results Strength in businesses with elevated backlog offset by continued caution in homeowner markets REPORTED ADJUSTED* Change from Change from Q4 23 Q4 22 Q4 23 Q4 22 Q4 22 Q4 22 Net Sales $983.2M $1,172.0M -16.1% $983.2M $1,172.0M -16.1% Gross Profit ($) $329.6M $398.8M -17.4
Slide 11: Professional Segment Results
Professional Segment Results NET SALES SEGMENT EARNINGS RATE (in millions) (as a percentage of net sales) -12.3% -180 bps 16.8% $944.7 15.0% $828.9 Q4 22 Q4 23 Q4 22 Q4 23 Decrease was primarily driven by lower shipments of contractor- grade lawn care equipment and snow products, and increased Decre
Slide 12: Residential Segment Results
Residential Segment Results NET SALES SEGMENT EARNINGS RATE (in millions) (as a percentage of net sales) -33.6% -480 bps 7.8% $223.5 $148.4 3.0% Q4 22 Q4 23 Q4 22 Q4 23 Decrease was primarily driven by higher inventory reserves, Decrease was primarily driven by lower shipments of products unfavorabl
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* (Twelve months ended) (Twelve months ended) In millions Goal: 100% over 1.8x time $164.4 49.9% Target $153.7 34.7% Range: 1.0x- 2.0x F22 F23 F22 F23 F23 Free cash flow conversion*
Slide 14: Effective Capital Deployment
Effective Capital Deployment Consistent Strategy FY2023 Comments Invested $142M to fund new product investments, Capital expenditures supporting organic growth advanced manufacturing technologies, and capacity for 1 with high returns growth Company continues to evaluate potential acquisitions with S
Slide 15: Fiscal 2024 Guidance
Fiscal 2024 Guidance Net Sales Growth (%) Low Single-Digit Growth Adjusted Operating Earnings Margin* (%) Slightly Higher than 2023 Adjusted Diluted EPS* ($) $4.25 to $4.35 Capital Expenditures ($) ~$125M Depreciation & Amortization ($) $120M to $130M Interest Expense ~$59M Adjusted Effective Tax Ra
Slide 16: Investment Thesis
Investment Thesis Well positioned to win with deep expertise, 1 leading market share positions, and best-in- class distribution and service networks – all of which create high barriers to entry Attractive end markets, customer-centric 2 innovation, and steady replacement cycles drive future organic
Slide 17: Appendix
APPENDIX
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Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures calculated and presented in accordance with U
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Slide 29: Gross Debt to EBITDA Ratio
Gross Debt to EBITDA Ratio ($ millions) Q1 23 Q2 23 Q3 23 Q4 23 Total Short Term Debt - - - - - Long Term Debt $1,091.0 $1,041.2 $1,061.3 $1,031.5 $1,031.5 Gross Debt $1,091.0 $1,041.2 $1,061.3 $1,031.5 $1,031.5 Earnings Before Income Taxes $131.3 $210.8 ($28.6) $86.9 $400.5 Interest Expense $14.1 $