NN (NNBR) investor relations material

Operational transformation and business performance

• Completed phase one of turnaround, eliminating unprofitable sales, reducing headcount by 20%, and achieving positive free cash flow.

• Increased EBITDA by 45% over two years, with gross margins at 18.8% and adjusted EBITDA at 11.9% year-to-date.

• Streamlined operations through plant closures, SG&A consolidation, and improved operating leverage.

• Launched over 150 new customer programs, representing more than $100 million in annualized sales and expected to add $40-50 million in 2026.

• Automotive remains the largest segment, with 40% of revenue, and the China automotive business is the most profitable.

Market dynamics and growth strategy

• Diversified across automotive, grid management, defense, and medical markets, with defense and electronics showing strong growth.

• Grid and commercial vehicle markets experienced delays due to federal funding volatility, but long-term demand remains strong.

• China operations include two wholly owned facilities and a JV, with BYD as the largest customer and $130 million in sales (2025 estimate).

• Active pipeline of $850 million, double the company’s size, with a 24% hit rate and a 40-person engineering team supporting development.

• Targeting $65 million in new business wins annually, on track for $200 million in new business to backfill capacity.

Financial engineering and capital structure

• Current capital structure includes $100 million each in preferred and common stock, and $135 million in net debt.

• Engaged in constructive discussions with stakeholders for recapitalization, aiming to keep leverage below 4x.

• Initiated preferred equity refinancing to support sustained M&A and common equity value accretion.

• M&A is a key part of phase two, with a focus on equity-based deals and potential partnerships; several candidates are being evaluated.

• Considering sale of 49% JV stake in China as a liquidity option, following recent market transactions.