Post on 24-Mar-2018
FY 2014 INVESTOR PRESENTATION
2
Titan International Products
Titan Strategy
Wheels
Undercarriage components (ITM)
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 / Construction
Consumer
Tires, and Assemblies Undercarriage components (ITM)
85%
15%
OEM Aftermarket
60%
40%
OEM Aftermarket
75%
25%
OEM Aftermarket
3
Titan/
Goodyear
40%
Others
<5% ea
27%
* Source: Modern Tire Dealer
Market Leader North American Ag
TIRES:
OEM 48%; REPLACEMENT 29%*
WHEELS:
OEM & REPLACEMENT > 75%
®
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Market Summary
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Overview by Market Segment - FY 2014
Agriculture
Consumer
Earthmoving / Construction
FY 2014 Segment Revenue
Agricultural: Tractors, combines, implements, irrigation
Earthmoving / Construction: Mining, cranes, aerial lifts, haul trucks, scrapers
Consumer: Primarily light-truck tires, ATVs and select golf and turf equipment markets, brakes and actuators
Total: $1.9 billion
14% decrease vs. FY 2013
18% decrease vs. FY 2013
15% increase vs. FY 2013
54% 32%
14%
GP Margin: 6.1%
GP Margin: (1.2)% GP Margin: 13.2%
20
13
20
13
20
13
20
13
20
14
20
14
20
14
20
14
$0
$100
$200
$300
$400
Q1 Q2 Q3 Q4
Agriculture
Sales by Market ($M)
6
20
13
20
13
20
13
20
13
20
14
20
14
20
14
20
14
$0
$20
$40
$60
$80
Q1 Q2 Q3 Q4
Consumer
20
13
20
13
20
13
20
13
20
14
20
14
20
14
20
14
$0
$50
$100
$150
$200
$250
Q1 Q2 Q3 Q4
Earthmoving/Construction
20
13
20
13
20
13
20
13
20
14
20
14
20
14
20
14
$0
$200
$400
$600
$800
Q1 Q2 Q3 Q4
Total Sales
7
Agricultural Drivers Ag Drivers 2014
Mix Shift - Large Ag equipment (4WD and Combines) experienced a cyclical downturn after 3 good
years of massive growth. Smaller hp tractors sales are increasing but are lower priced and less
profitable
Reinstatement of the Section 179 tax deduction
Grain prices are low; Corn crop revenue is at a 5 year low
Interest rates are low for equipment purchases
Inventory levels are still considered high
Source: farmdoc.illinois.edu , Ag Equipment Intelligence January 2015
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
Pr/BusselFarm Commodity Prices
Corn Soybeans
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011 2012 2013 2014E
Global Ag Machinery Production
Europe Americas Asia Rest of the World
Year over year U.S. construction spending rose from one year ago
Private construction spending for resi and no-resi buildings continue to carry the industry
Larger construction equipment used for highways and infrastructure are slow to recover
Mining remains weak with commodity prices low
Strong U.S. dollar
8
Earthmoving / Construction Drivers Earthmover/Construction Drivers in 2014
Source: Caterpillar website, US Consensus Bureau
$200
$450
$700
$950
$1,200
U.S. Construction Spending
Private Public
Ubillion
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%Asia/Pacific EAME Lat Am N Am World
Cat Retail Machine Sales
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Why Titan?
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Our Global Footprint
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The Titan Advantage
* MTD Jan 2014; all other market share figures are approximate/estimated
TIRES WHEELS UNDER-
CARRIAGE SERVICE CENTERS
RECLAMATION
TITAN INTERNATIONAL PROVIDES THE TOTAL SYSTEM.
LSW (Low Sidewall) tire/wheel systems feature a larger rim diameter and smaller tire sidewall
Today’s equipment is getting larger and more powerful. This design offers: smoother ride,
improved stability, speed/fuel efficiencies, increase in operator safety.
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TTRC-Recycling venture
10 year agreement with Suncor to recycle used tires
Oil, Carbon black and steel reclaimed
First location, Fort McMurray, Canada to be in operation in 2015
Simplified design
Ease of wheel offset changes
Superior durability and long-term reliability
Reduced wheel wobble and hop
Innovation
technology
Waffle Wheel
Visit: lswadvantage.com
“ONE TITAN”
• Maximize collaboration between wheel and tire business units to accelerate market penetration
• Exercise one common strategy across company divisions
WHEEL/TIRE
SYSTEM
ADVANTAGE
•Exploit our competitive advantage as the only wheel/tire assembly solution provider in North America
•Accelerating adoption of our unique “system” solution “One stop” supplier
PROFIT
OPTIMIZATION
•Measure, Evaluate and drive Net Economic Profit
•Align investments with “One Titan” strategy
•Drive decision making through detailed understanding of “Cost to Serve”
2014/15 Objectives
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= INCREASE SHAREHOLDER VALUE
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Financial Performance
Significant headcount reduction
Established a profit optimization framework whereby executive team identified key initiatives for immediate focus in 2H 2014
Introduction of EVA (Economic Value Added) performance management framework
Traction on LSW receptiveness
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2014 Highlights
Accomplishments
Challenges
Large Ag products (higher ASP and margin) are in a downward cycle after 3 robust years
Weak mining market conditions which Impacts-North American, ITM and Australia business units
Impairment recorded of $23.2M on mining equipment and inventory writedowns of $18.2M
Inventory destocking and pricing pressures for EMC product continues
Russia contributed $86.4M in sales with no profit flow through
Raw material prices declined thus price concessions were passed through
Goodwill impairment of $36.6M impacting each segment
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Financial Summary (M$)
(Amounts in millions)
2011 2012
2013 2014
Sales $1,487.0 $1,820.7 $2,163.6 $1,895.5
Gross Margin $232.1 $294.2 $295.2 $140.6
Gross Margin % 15.6% 16.2% 13.6% 7.4%
Adjusted Net Income $75.8 $101.2 $46.0 $(17.6)
Adjusted EPS – Diluted $1.51 $1.93 $0.82 $(0.33)
Note: Net Income and EPS adjusted for Currency Exchange, Noncontrolling Interest, and non GAAP items.
$1,487 $1,821 $2,164 $1,896
8.9%
9.6% 4.7%
-5.2%-10%
0%
10%
20%
$0
$1,000
$2,000
$3,000
2011 2012 2013 2014
Sales Operating Income
Adjusted Income
17
Adjusted EBITDA
18
19
Sales and Gross Margin by Market ($M)
Note: Consumer sales shown post the Latin American farm/;consumer plant acquisiton (April 2011)
Net Sales: Down (14%) ‘14 vs. ‘13
Volume on Large Ag in a cyclical downturn
Lower OEM demand for products
Russia Ag revenue contribution = $71M
AG
54%
Net Sales: Up 15% ‘14 vs. ‘13
New sales in Russia and Titan Europe increased brake sales
Volume increase of 14% offset partially by FX devaluation of (8%)
Consumer
14%
EMC
32%
Net Sales: Down (18%) ‘14 vs. ‘13
Super Giant Mining tires down ($88M) YoY
Mining equipment impairment and inventory write-down of $39.9M
$961$1,080
$1,182$1,017
18% 19% 17%13%
$0
$200
$400
$600
$800
$1, 000
$1, 200
$1, 400
-4%
6%
16%
26%
36%
46%
56%
66%
2011 2012 2013 2014
$307
$502
$749
$611
13%
15% 11%
-1%
$0
$100
$200
$300
$400
$500
$600
$700
$800
-15%
-5%
5%
15%
25%
35%
45%
55%
65%
75%
2011 2012 2013 2014
$219$239 $232
$268
9% 7% 7% 6%
$0
$50
$100
$150
$200
$250
$300
-2%
8%
18%
28%
38%
48%
58%
68%
78%
2011 2012 2013 2014
$1,487$1,821
$2,164$1,896
$0
$1,000
$2,000
$3,000
2011 2012 2013 2014
SalesIn millions
Titan performance: 2011-2014
20
$397
$632$798
$590
$0
$500
$1,000
2011 2012 2013 2014
Shareholder EquityIn millions
$184$244
$197
$86
$0
$100
$200
$300
2011 2012 2013 2014
Adjusted EBITDAIn millions
50% domestic;
50% International
APPENDIX
Sales – North America vs. International
22
Working Capital
23
Cash Activity
24
Debt Structure
25
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Cost Structure
Raw
Materials
55%
Overhead
25%
Labor
20%
Primary Raw Materials Cost Structure Breakdown
Steel
Natural Rubber
Synthetic Rubber
Carbon Black
Nylon
Company Website:
www.titan-intl.com
Investor Relations todd.shoot@titan-intl.com
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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 expectations and subject to a number of risks and uncertainties, certain of which are beyond the Company’s control. Actual results may differ materially from those projected in these forward looking statements as a result of certain factors which are contained in the Company’s most recent 10K filing. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this document will in fact transpire.