4Q 2014 Earnings Investor Presentation January 29, 2015
EARNINGS CALL DETAIL Timken 4Q 2014 Earnings Conference Call Conference Call: Thursday, Jan. 29, 2015 11:00 a.m. Eastern Time Live Dial-In: 888-211-4542 or 816-581-1736 (Call in 10 minutes prior to be included.) Conference ID:…
AGENDA Overview & Business Update Rich Kyle President and CEO Financial Review Phil Fracassa Executive Vice President and CFO Question/Answer 4
4Q 2014 HIGHLIGHTS Sales of 762 million, up 2% from prior-year 4Q despite strong dollar Sales increase 12% in Process Industries Mobile Industries sales down 7%; more than half of decline related to planned program exits Net income…
REVOLVO LTD. ACQUISITION Strong Strategic Fit Strengthens Timken bearing offering in the global housed unit market sector with addition of split roller housed units and precision products Core industrial market sectors include:…
2014 POSITIONS TIMKEN FOR GROWTH Completed Spinoff of TimkenSteel mid-year Launched DeltaX, a multi-year initiative to accelerate product development and line expansion efforts, enhancing the Timken collaborative technical sales…
2014 OUTGROWTH INITIATIVES Expanded line of Timken housed unit bearings Invested with new part in new numbers and technologies designs to advance high-speed gear sales. New and improved designs revitalize Timken spherical…
2015 MARKET OUTLOOK DRIVERS Negative Neutral Positive Currency Industrial Machinery Light Vehicle Agriculture Mining / Metals Rail Energy (Oil & Gas) Construction Wind Energy Defense Heavy Truck Aerospace Civil Europe North…
2015 OUTLOOK HIGHLIGHTS 2015 Outlook Sales (Mid-point) 3.1 Billion YOY Change Up 1% (+4% growth, largely offset by currency) GAAP EPS 0.85 to 0.95 Adjusted EPS 2.65 to 2.75 Adj. EPS YOY Change (Mid-point) Up 6% Adj. EBIT Margin…
Financial Review
4Q 2014 FINANCIAL HIGHLIGHTS SALES ( Millions) 4Q 14 4Q 13 B/(W) % B/(W) Sales 762.2 749.5 12.7 2% Sales of 762 million, up 2% from a year ago Driven by growth in OE sectors (including wind energy and rail) and the industrial…
4Q 2014 EARNINGS COMPARISON Adjusted EBIT of 89 million or 11.7% of sales compares with 76 million or 10.2% of sales in the same period a year ago Driven by volume and lower manufacturing costs, partially offset by currency…
4Q 2014 NET INCOME AND DILUTED EPS 4Q 14 4Q 13 in Millions EPS in Millions EPS Net Income from Continuing Operations 38.9 0.43 33.7 0.35 - Pension settlement charges 33.0 0.37 0.5 0.01 - Aerospace impairment and restructuring 3.7…
RESEGMENTATION OVERVIEW Current quarter and prior period financial results have been re-segmented to reflect: Elimination of Aerospace segment; financial results reported primarily in Mobile Industries segment Reallocation of…
MOBILE INDUSTRIES 4Q Performance 4Q YOY Commentary ( Millions) Sales decrease of 7% driven by light 2014 2013 Change vehicle sector program exits (15M), Sales 389.5 418.1 (28.6) lower aerospace and agriculture demand, and currency,…
PROCESS INDUSTRIES 4Q Performance 4Q YOY Commentary ( Millions) Sales increase of 12% due to market 2014 2013 Change growth and share gains in OE sectors Sales 372.7 331.4 41.3 (wind energy & marine), the industrial aftermarket, as…
2014 CASH FLOW OVERVIEW ( Millions) 2014 2013 Income from Continuing Operations 147.0 175.5 Change in working capital (67.1) 30.9 Pension & OPEB expense 62.0 55.1 Pension & OPEB contributions / payments (49.9) (93.4)…
CAPITAL ALLOCATION Balance Sheet (12/31/14) ( Millions) Net Debt / Capital Capital Structure ( Millions) Net Debt Net Debt/ Capital 500 40% Target: Cash 294 30 40% 400 Debt 530 30% Net Debt 236 300 236 20% Equity 1,589 181…
PENSION STRATEGY & DE-RISKING UPDATE Focus on de-risking initiatives to protect fully-funded status, reduce earnings volatility and manage obligations down over time with minimal cash flow impact Pension plans are well-funded, and…
2015 FULL-YEAR OUTLOOK Sales: Up approximately 1% Sales (vs. 2014) Organic Net Driven by organic growth in light vehicle, Growth Currency Sales wind energy, marine and the industrial Mobile Industries +1 to 3% (3)% Flat to Down 2%…
2015 ADJ. EPS OUTLOOK WALK FROM 2014 2015 Adjusted EPS Guidance Range: 2.65 - 2.75 Positives: 0.35 (0.15) 2.70 Core organic sales growth of 4% with (6)% operating leverage and margin expansion (0.05) Mid-point of +14% (0.05)…
Appendix
2014 GEOGRAPHIC SALES VS. 2013 Sales of 3.1 billion, up 1% year-over-year Currency had a negative impact of 1% EMEA -1% (flat excluding Russia APAC impact of currency) +12% (+14% excluding Canada U.K. Germany impact of…
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: SEGMENT EBIT & EBIT MARGIN Reconciliation of segment EBIT Margin, After Adjustments, to segment EBIT as a Percentage of Sales and segment EBIT, After Adjustments, to segment EBIT: The following reconciliation is…
GAAP RECONCILIATION: NET INCOME & EPS Reconciliations of Adjusted Net Income from Continuing Operations and Net Income from Continuing Operations to GAAP Income from Continuing Operations and Adjusted Earnings Per Share to GAAP Earnings…
GAAP RECONCILIATION: NET DEBT & FREE CASH FLOW Reconciliation of Total Debt to Net Debt and the Ratio of Net Debt to Capital: This reconciliation is provided as additional relevant information about the Company's financial position.…
GAAP RECONCILIATION: SALES EXCLUDING PLANNED PROGRAM EXITS & CURRENCY IMPACT Reconciliation of Net Sales After Planned Program Exits for the Total Company and Mobile Industries Segment to Net Sales The following reconciliation is…
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