The Goodyear Tire & Rubber Company · NASDAQ:GT
The Goodyear Tire & Rubber — Investor Presentation (November 2023)
21 slides from The Goodyear Tire & Rubber's investor presentation, Nov 15, 2023
Slide 1: Goodyear Forward: Raising the Bar and Driving Shareholder Value
GOODYEAR FORWARD RAISING THE BAR AND DRIVING SHAREHOLDER VALUE INVESTOR PRESENTATION NOVEMBER 15, 2023 GOODfyEAII.
Slide 2: Important Disclosures
IMPORTANT DISCLOSURES Forward-Looking Statements Certain information contained in this presentation constitutes forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our
Slide 3: Agenda for Today's Call
AGENDA FOR TODAY'S CALL [W] Strategic & Operational Review > Overview of Process and Scope EI Our Plan: Goodyear Forward > Raising the Bar and Driving Shareholder Value @ | Portfolio Optimization: Sharpening our Focus @ | Margin Expansion: Creating Fuel for Growth @ = Addressing Leverage: Strengthen
Slide 4: Strategic & Operational Review Process
STRATEGIC & OPERATIONAL REVIEW PROCESS COMMITTEE TOOK A COMPREHENSIVE APPROACH TO EVALUATING STRATEGIC, OPERATIONAL AND FINANCIAL ALTERNATIVES AND OPPORTUNITIES TO MAXIMIZE SHAREHOLDER VALUE CREATION Formed Strategic & Operational Review Committee Assessed All Potential Pathways to Value Creati Full
Slide 5: Comprehensive Workstreams to Identify Value Creation Opportunities
COMPREHENSIVE WORKSTREAMS TO IDENTIFY VALUE CREATION OPPORTUNITIES LEVERAGING INDUSTRY-LEADING ADVISORS TO ENSURE A FULL ASSESSMENT OF ALL POTENTIAL PATHS FORWARD Identify and Action Identify and Capture Capture Market Growth and Portfolio Optimization Cost Out Opportunities Refine Go-To-Market Stra
Slide 6: Leveraging Our Strengths to Meet Our Goals
LEVERAGING OUR STRENGTHS TO MEET OUR GOALS Y Strengthening competitive position as #1 North Unmatched Brand American tire manufacturer generation Tire Profit Pools v Balance sheet leverage on par with other auto suppliers Operational Excellence & Capabilities Y Positioned for growth in traditional m
Slide 7: Our Plan: Goodyear Forward
Portfolio Optimization: Sharpening our Focus Margin Expansion: Creating Fuel for Growth Addressing Leverage: Strengthening our Profile OUR PLAN: GOODYEAR FORWARD . RAISING THE BAR AND DRIVING SHAREHOLDER VALUE Portfolio Optimization Sharpening our Focus v Three Major Assets Selected for Strategic Re
Slide 8: Portfolio Optimization: Sharpening Our Focus
PORTFOLIO OPTIMIZATION: SHARPENING OUR FOCUS WITH THE SUPPORT OF OUR FINANCIAL ADVISORS AND THIRD-PARTY CONSULTANTS, THE BOARD AND REVIEW COMMITTEE CONDUCTED A COMPREHENSIVE ASSESSMENT OF ALL GOODYEAR ASSETS Guiding Principles Announcing Strategic Reviews of Strategic and Competitive * Focus on valu
Slide 9: Portfolio Optimization: Sharpening Our Focus (Cont'd)
PORTFOLIO OPTIMIZATION: SHARPENING OUR FOCUS (conT’D) Today We Announce Strategic Reviews for These Assets Chemical ° Off-the-Road BRAND Annual revenue of Annual revenue of Annual revenue of ~$1.0B' ~$0.7B ~$0.7B Primary SOI Impact Primary SOI Impact Primary SOI Impact Americas Europe Asia Pacific T
Slide 10: U.S. Retail Provides Strategic Benefits and Profitability Upside
U.S. RETAIL PROVIDES STRATEGIC BENEFITS AND PROFITABILITY UPSIDE RETAIL’S NATIONWIDE FOOTPRINT AND STRONG BRAND AWARENESS ENHANCE OUR U.S. CONSUMER REPLACEMENT BUSINESS AND POSITION GOODYEAR TO CAPTURE ADDITIONAL VALUE CREATION OPPORTUNITIES ee | “—=—- > a ee ee ; . 0 4 Be = S Benefits Today Positio
Slide 11: Margin Expansion: Initiatives for ~$300M Annual Incremental SOI
MARGIN EXPANSION: INITIATIVES FOR ~$300M ANNUAL INCREMENTAL SOI CLEAR PATH TO CAPTURE SIGNIFICANT MARGIN OPPORTUNITIES PRIMARILY VIA PRICE-MIX IN NORTH AMERICA Optimize Brand Portfolio * Pricing * SKU Rationalization Address Low Margin Business + Fix or Exit . Optimize brand/tier positioning (Goodye
Slide 12: Margin Expansion: $1B Cost Reduction
MARGIN EXPANSION: $1B COST REDUCTION WORKSTREAMS WITH CLEAR LINE-OF-SIGHT TO 100% OF THE COST SAVINGS BY 2025 ENABLED BY ~$1.1 BILLION OF RESTRUCTURING TO ACHIEVE THE COST REDUCTION Footprint Actions and A 5 + Initiatives driving + Reduction in raw + Growth in low cost / off- * Digital inventory and
Slide 13: Margin Expansion: Creating Fuel for Growth
MARGIN EXPANSION: CREATING FUEL FOR GROWTH FOCUSED ON ACCOUNTABILITY WITH DETAILED ACTIONS AND CLEAR TIMELINE TO ACHIEVE 10% SOI MARGIN AND OPTIMIZE GOODYEAR’S STRATEGIC AND COMPETITIVE POSITIONING 1.5% 12.5% (2.5%) +$0.3B SOI 10.0% ($0.2B) Sales ($0.5B) Sor 6.5% ~7.0% (1.0%) ($0.3B) SOI +$1.0B SOl
Slide 14: Addressing Leverage: Strengthening Our Profile
ADDRESSING LEVERAGE: STRENGTHENING OUR PROFILE THE COMBINATION OF DEBT REDUCTION AND EBITDA GROWTH WILL BRING OUR NET LEVERAGE IN-LINE WITH U.S. AUTO SUPPLIERS Goodyear Net Leverage ~4.0x \ * 2.0x-2.5x net leverage by 2025, mo \ in-line with leverage profile of \ publicly listed U.S. auto suppliers
Slide 15: Goodyear Forward: Paving the Way
GOOD YEAR FORWA RD: PAVING THE WAY Leveraging Our Existing Strengths... Y Rich legacy of trusted products and services ¥ Industry-leading technology bolstered by two world-class innovation centers ¥ Largest tire company in North America ¥ Expansive network of distribution partners ...To Position Our
Slide 16: Goodyear Forward: Key Financials Summary
PAN GOODYEAR FORWARD: KEY FINANCIALS SUMMARY ase] % - Volume Growth ~(5%) Low single-digit growth Segment Operating Income $0.9B ~$1.9B % - Margin ~5% ~10% Adjusted EBITDA ~$1.8B ~$2.7B %- Margin ~9% ~14% Adjusted Free Cash Flow = ~$100M $600-$700M Net Leverage ~4.0x 2.0x-2.5x * Estimates based on s
Slide 17: Goodyear Forward: Driving Shareholder Value
GOODYEAR FORWARD: DRIVING SHAREHOLDER VALUE THE INITIATIVES ANNOUNCED TODAY ARE A KEY MILESTONE ON OUR JOURNEY TO DRIVE MEANINGFUL VALUE CREATION Streamlined portfolio, resulting in incremental value unlock Y Executing strategic review for selected assets, targeting gross proceeds in excess of $2.0B
Slide 18: Appendix
APPENDIX GOODFYEAR
Slide 19: Use of Historical and Forward-Looking Non-GAAP Financial Measures
USE OF HISTORICAL AND FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES This presentation includes non-GAAP financial measures, including Total Segment Operating Income and Margin, Free Cash Flow, Adjusted Free Cash Flow, Adjusted EBITDA and Margin, and Net Leverage, which are important financial measures
Slide 20: Reconciliation of Segment Operating Income & Margin
RECONCILIATION OF SEGMENT OPERATING INCOME & MARGIN Three Months Ended Six Months Ended June 30, September 30, dune 30, (inmiltions) 2023 2023 2023 Total Segment Operating Income $ Bs $ 4 $ 336 $ 249 Less: Ratlonalizations 32 72 198 104 Interest Expense 127 138 138 265 Other(Income) Expense 25 36 2
Slide 21: GOODS YEAR
GOODS YEAR
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