Titan International, Inc. (de) · NYSE:TWI
Titan International, Inc. (de) — Q3 2018 Earnings Presentation
38 slides from Titan International, Inc. (de)'s earnings presentation, Nov 2, 2018
Slide 1: Investor Presentation Third Quarter 2018
Investor Presentation Third Quarter 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement SAFE HARBOR STATEMENT: 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 are based on the Company’s ex
Slide 3: Titan International Overview
Titan International Overview 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 off-highway wheels, tires, assemblies and undercarriage pr
Slide 4: Titan International Overview: Strategy
Titan International Overview: 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/Constructio
Slide 5: Titan International Overview: Customers
Titan International Overview: Customers 5
Slide 6: Titan International Overview: Global Footprint
Titan International Overview: Global Footprint Europe Ceprano, Italy Kidderminster, UK Fanano, Italy Monreal del Campo, Spain Finale Emilia, Italy Potenza, Italy Flers, France St. Helens, UK Gevelsburg, Germany Valsamoggia, Italy Jesi, Italy Volgograd, Russia North America
Slide 7: Agriculture
Slide 8: Agriculture: 2017 at a Glance
AGRICULTURE 2017 AT A GLANCE NET SALES AMOUNTS IN MILLIONS 1,250 aig) =a 750 = 500 2013 2014 REGIONAL HIGHLIGHTS 9 Gh NORTH AMERICA SOUTH AMERICA > New Increase in dealers, several tire and in key Brazilian wheel sales agriculture zones | GP EUROPE/RUSSIA hss Of all \> ag tires in Russia produced by
Slide 9: AGRICULTURE: Market Summary
AGRICULTURE: Market Summary Large hp equipment (4WD tractors and Combines) remain well below historical averages Ag-related commodity prices remain lower and have declined further with tariff concerns Farmer income has stabilized, although still expected to be slightly lower versus last year
Slide 10: AGRICULTURE: Innovation Highlights
AGRICULTURE: Innovation Highlights 10
Slide 11: AGRICULTURE: Low Sidewall Technology
AGRICULTURE: Low Sidewall Technology 11
Slide 12: AGRICULTURE: Low Sidewall Technology
AGRICULTURE: Low Sidewall Technology 12
Slide 13: AGRICULTURE: Low Sidewall Technology
AGRICULTURE: Low Sidewall Technology 13
Slide 14: Off-the-Road (OTR) Earthmoving/Construction/Mining
OFF-THE-ROAD (OTR) EARTHMOVING/ CONSTRUCTION/MINING ROS 6 ok ve mre ay. Dp a nln lates ad) As lydia DPR ald ong ee a
Slide 15: OTR: Earthmoving/Construction/Mining
OTR: Earthmoving/Construction/Mining 15
Slide 16: OTR: Market Summary
OTR: Market Summary Demand for larger construction equipment used for highways and infrastructure has been strong Private construction spending for residential and non-residential remains strong Overall mining equipment demand has strengthened within certain regions with commodity prices impro
Slide 17: OTR: Product & Innovation Highlights
OTR: Product & Innovation Highlights 17
Slide 18: OTR: Mining Rebound
OTR: Mining Rebound The mining industry showed signs of recovery in 2017. There were also many positive indicators at Titan in 2017. 34y, INCREASE IN UNDERCARRIAGE SALES TO THE MINING MARKET AUSTRALIAN strona COKING COAL PRICES DROVE DEMAND FOR MINING AND DE M A N D CONSTRUCTION FLEET REFURBISHMENTS
Slide 19: OTR: Product Innovations
OTR: Product Innovations ACCELERATED CHANGE TECHNOLOGY (ACT) Titan's ACT wheel can reduce maintenance time by up to 50 percent by allowing technicians to rotate or change the inside tire without having to remove the outer wheel. This increases uptime for haul trucks, something that's critical for mi
Slide 20: OTR: Product Innovations
OTR: Product Innovations PLY RATINGS HAVE BIG IMPACT ON FORESTRY INDUSTRY Forestry equipment is getting heavier and higher-powered — 25-30 percent larger than a decade ago and equipped with massive grapples. If loggers choose a tire with too low of a ply rating, the tires are expected to wear faster
Slide 21: Consumer
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Slide 22: Consumer: 2017 at a Glance
CONSUMER 2017 AT A GLANCE NET SALES AMOUNTS IN MILLIONS an <n : rs nog eee 0 2013 2014 2015 2016 2017 SPECIALTY PRODUCTS DIVISION 2017 HIGHLIGHTS 5 3 o Sales increase of mud flaps, used on semi-trucks and 2 Gg fe} Sales increase of mats in the dairy market. Titan Yo dump trucks, due to the developme
Slide 23: CONSUMER: Growing Opportunity
CONSUMER: Growing Opportunity 23
Slide 24: Financial Overview
Financial Overview
Slide 25: Financial Overview: Highlights & Challenges
Financial Overview: Highlights & Challenges Q3 Financial Highlights Net sales increased $13.7 million to $384.7 million, up 3.7% year-over-year; the seventh consecutive YOY quarterly increase Absent currency headwinds, sales were up nearly 10% YOY and would have increased in all three segments
Slide 26: Financial Overview: Q3 2018 by Market
Financial Overview: Q3 2018 by Market Agriculture: Tractors, combines, implements, irrigation Earthmoving/Construction: Mining, cranes, aerial lifts, haul trucks, scrapers Consumer: Light-truck tires, ATVs, turf equipment, specialty products (includes livestock mats and mud flaps) Q3 2018 Segment Re
Slide 27: Financial Overview: Sales and Gross Margin
Financial Overview: Sales and Gross Margin % 50 90 $1 % 45 $171 $163 70 $1 % 40 Net Sales: Down (4.4%) Q3 ‘18 vs. Q3 ‘17 % 35 $140 $139 50 $1 % 30 % 25 30 $1 AG Gross margin improved 103 basis points compared to Q3 ’17 42% Unfavorable currency translation, primarily from Latin America 10 $1 %
Slide 28: Financial Overview: Summary Income & EPS
Financial Overview: Summary Income & EPS (Amounts in millions) Q3 2018 Q3 2017 YTD 2018 YTD 2017 Sales $384.7 $371.0 $1,239.0 $1,092.9 Gross Margin $43.7 $40.1 $161.6 $124.4 Gross Margin % 11.4% 10.8% 13.0% 11.4% Operating Income (Loss) * $4.8 $1.8 $43.2 ($0.3) Operating Income % * 1.3% 0.5% 3.5% (0
Slide 29: Financial Overview: Income Reconciliation
Financial Overview: Income Reconciliation Q3 2018 USD Amounts in Millions Q3 2018 Q3 2017 YTD 2018 YTD 2017 Net income (loss) appl. to common shareholders (1.8) (12.9) 17.3 (33.7) Remove redemption value adjustment (4.0) (0.9) (11.1) (4.0) Net income (loss) attributable to Titan 2.3 (12.0) 28.4 (29.
Slide 30: Financial Overview: EBITDA Reconciliation
Financial Overview: EBITDA Reconciliation Q3 2018 USD Amounts in Millions Q3 2018 Q3 2017 YTD 2018 YTD 2017 Net income (loss) 2.7 (11.2) 27.1 (28.3) Adjustments Provision for income taxes 2.8 2.4 3.7 6.0 Interest expense 7.6 7.5 22.8 22.6 Depreciation and amortization 13.2 14.5 43.4 44.0 EBITDA 26.3
Slide 31: 2018 Outlook
2018 Outlook (Amounts in millions) 2017 Actual 2018 Guidance 2018 Outlook Net Sales $1,469 9% – 12% Growth $1,601 - $1,645 Gross Margin $158 25% – 40% Growth $198 - $221 At or below 10% of SGA & RD $161 $160 - $165 Net Sales EBITDA $54.4 80% – 100% Growth $98 - $109 CAPEX $32.6 $35 - $40 $35 - $40 3
Slide 32: Appendix
Appendix
Slide 33: Sales – N. America / Rest of World
Appendix Sales – N. America / Rest of World -12 Quarters -8 Quarters -4 Quarters Current Quarter Q3 - Sales / Operating Income (Amounts in Millions) $450 5% $400 3% $350 226 223 $300 1% 164 186 Millions $250 1.3% 0.5% -1% $200 $150 -2.1% -3% 144 148 159 $100 120 -5% $50 -5.0% $0 -7% 2015 2016 2017 2
Slide 34: Working Capital / CCC
Appendix Working Capital / CCC Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Q3 - WORKING CAPITAL (Amounts in Millions) $700 29% 28% $600 28.3% 28.1% 28% $500 382 27% $400 331 Millions 27% 293 282 25.8% $300 26% 26% $200 25.6% 25% 236 259 $100 184 184 184 208 128 15
Slide 35: YTD Cash & Activity
Appendix YTD Cash & Activity September 2018 300.0 250.0 3.7 1.9 0.9 3.7 11.8 6.1 18.0 26.5 200.0 27.1 52.8 43.4 Millions 150.0 62.6 100.0 $143.6 50.0 $96.8 - 35
Slide 36: Cash / Debt
Appendix Cash / Debt CASH / DEBT Q3 '18 Q2 '18 Q1 '18 Q4 '17 Q3 '17 Cash & CDs $97 $106 $112 $144 $156 Total Debt $461 $462 $463 $451 $447 6.50% Secured Notes Due 2023 $395 $395 $394 $394 $0 6.875% Secured Notes Due 2020 $0 $0 $0 $0 $396 Titan Europe Credit Facilities $36 $34 $33 $34 $34 Other $30 $
Slide 37: Cost Structure
Appendix Cost Structure GP Cost Structure Breakdown Primary Raw Materials Steel Natural Rubber Overhead Raw ~30-35% Materials Synthetic Rubber ~50-55% Labor Carbon Black ~10-15% Nylon 37
Slide 38: Titan Website: www.titan-intl.com
Investor Relations Titan Website: www.titan-intl.com todd.shoot@titan-intl.com SAFE HARBOR STATEMENT: 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