Timken at a Glance Ticker NYSE: TKR Legacy c. 1899 2014 Sales 3.1B Employees 14,000 worldwide Global Footprint Headquarters in North Canton, OH Operations in 28 countries Dividend Payout every quarter since IPO in 1922…
An Attractive Business Profile End-Market Sectors Product Offering Channel Overview Industrial Machinery 19% Power Transmission Automotive 15% Products Distribution/ Rail 11% 9% End User Heavy Truck 8% Services Energy 7% 9%…
Mobile Industries Overview Snapshot 2014 Financial Results Sales 1.7B EBIT Margin* 3.9% Adj. EBIT Margin 10.5% (* Includes Aerospace impairment and restructuring charges of 122 million) 2014 Business Mix Market Sector…
Process Industries Overview Snapshot 2014 Financial Results Sales 1.4B EBIT Margin 19.2% Adj. EBIT Margin 19.4% 2014 Business Mix Channel Sales By Geography LatAm Distribution/ 7% Services APAC 33% OEM 23% NA 54%…
The Timken Business Model Growth Markets Challenging Driven by Strong Technology & Applications Macros Know How for Attractive Opportunities Competitive Differentiators Disciplined Filter Aftermarket Business & Rebuild…
The Growth Plan: What You Can Expect Capture Share and 1. Outgrow Our End Markets Market Growth Grow International Sales and 2. Win Globally Focus on Emerging Markets Leverage Technology and 3. Accelerate Product…
1. Capture Share and Market Growth Apply Timken Business Model Focus on Markets with Challenging Applications Strong Macro Fundamentals High costs of failure Mission-Critical, Demanding High costs of substitution Applications…
1. Capture Share and Market Growth Outgrowth Initiatives Wheel Hub Bearings: Launching new Light truck hub bearing for auto OE Timken Power Systems: New high-speed gear drive manufacturing facility in Houston Housed Units:…
1. Capture Share and Market Growth A Rapidly Developing Portfolio of Industrial Services Bearing Repair & Gearbox repair & Electric motor & Remanufacturing on-site services generator repair and controls Timken Power Systems…
2. Win Globally A Growing International Footprint EMEA 18% Russia Canada U.K. Germany Poland NA Czech Republic France Japan 57% Spain ItalyRomania China U.S. Turkey LatAm South Korea India Mexico 8% U.A.E. Taiwan APAC…
3. Leverage Technology and Know How to Grow Organically Accelerate Product Development Rate Potential for Continued Penetration of 60B Bearings Market Still Very High Current: Global Leader in Tapered Roller Bearings Aspiration:…
3. Leverage Technology and Know How to Grow Organically Bearing Housed Unit Portfolio Transformation UC Series Ball Bearing Type E Ball bearing Split roller housed units SNT Plummer housed units Spherical roller bearing steel…
4. Pursue Strategic Bolt-On Acquisitions Market and Product Expansion Our Market Space is Broader than Bearings Adjacent Products & Services Chains, belts, gear drives, couplings, brakes, sprockets, clutches, lubrication, condition…
Investment Summary Why Own Timken Differentiated Business Model delivers strong financial results Fragmented, diverse end-markets and customers Attractive mix drives margins Global growth opportunity Strong, results-oriented…
Financial Review 18
2014 Financial Accomplishments Revenue Adj. EBIT Margin Adj. EPS ( in Billions) Other Highlights Up 1% Up 140 bps Up 23% Process Industries sales up 10.4% vs. 2013 SG&A expense improved 40 bps 3.0 3.1 10.8% 12.2% 2.07 2.55 (%…
Capital Allocation Priorities Disciplined Approach to Drive Shareholder Value Capital Expenditures Organic Growth and Margin Improvement CapEx: 4% of Sales Dividend Target: 25 35% Payout Ratio Acquisitions Share…
Balance Sheet and Leverage Balance Sheet (3/31/15) ( Millions) Net Debt/Capital Capital Structure ( Millions) Net Debt Net Debt/ Capital 800 40% Cash 169 Target: 30 40% Debt 523 600 30% Net Debt 354 20% 400 20% Equity 1,416…
M&A Strategy Our Objectives: Pursue a pipeline of strategic targets; 2010 2014 emphasis on bolt-ons Focus on bearings, adjacent power Total Total Sales transmission products and industrial of Deals Spent Acquired services 9…
Portfolio Transformation Building for Growth Sales: 30M Electric motor repair, related Sales: 18M services and up- Electric motor repair Sales: 17M and related services Sales: 85M tower wind Electric motor repair Industrial…
Key Take-Aways Strong financial performance in 2014; progress made toward long-term financial targets Sales up 1% Adj. EBIT margins up 140 bps Adj. EPS up 23% Executing capital allocation plan Total dividends paid in 2014 of…
Appendix 26
Timken Transformation Timken Improved Financial The Timken Transformation 2007 - 2014 Performance (Ex. Steel)1 5-Year Avg. 5-Year Avg. 2007 2004 2008 2010 2014 Exited automotive business that did not Sales: 3.1B Sales: 3.7B meet…
Capital Spending Long-Term Target: 4.0% of Sales Outlook 2% Increased focus on growth Organic Growth New products Capacity expansions Growth CapEx IRRs 1 2% generally 20% Performance Performance improvement Improvement…
2015 Incentive Compensation Plan Annual Long-Term Short-term Operational 3-Year Strategic Long-term Shareholder Objective Business Priorities Business Priorities Value Creation 130 Senior 330 Leadership 330 Leadership…
Large, Highly Fragmented Addressable Market 1 or 2 in Key Targeted End-Markets Competitive Landscape Industry-Leading Positions NORTH AMERICA Peer 1 Roller bearings Peer 2 Aftermarket bearings 51% Peer 3 Gear drive repair…
GAAP Reconciliation: Segment Adjusted EBIT Reconciliation of EBIT After Adjustments and EBIT as a Percentage of Sales: The following reconciliation provides additional relevant information about the Company's performance. Management…
GAAP Reconciliation: Sales Excluding Planned Program Exits & Currency Effects Reconciliation of Net Sales After Planned Program Exits and Currency Effects to Net Sales The following reconciliation is provided as additional relevant…
GAAP Reconciliation: Consolidated EBIT & EBIT Margin Reconciliation of EBIT Margin, After Adjustments, to Net Income as a Percentage of Sales and EBIT, After Adjustments, to Net Income: The following reconciliation is provided as…
GAAP Reconciliation: EPS Reconciliation of Earnings Per Share and Earnings Per Share After Adjustments to Net Income; excluding the Steel Business: The following reconciliation provides additional relevant information about the…
GAAP Reconciliation: Adjusted ROIC Reconciliation of Adjusted Return on Invested Capital (ROIC): The following reconciliation provides additional relevant information about the Company's performance. Management believes that ROIC,…
GAAP Reconciliation: Net Debt/Capital Reconciliation of Net Debt to Total Debt and the Ratio of Net Debt to Capital: This reconciliation is provided as additional relevant information about the Company's financial position. Capital,…
GAAP Reconciliation: 2004-2014 Reconciliation of Sales, EBIT to Net Income, EBIT After Adjustments to Net Income , EBIT as a Percentage of Sales and EBIT After Adjustments as a Percentage of Sales; all excluding the Steel Business:…
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