Timken Company (TKR) investor relations material

Strategic vision and pillars

• The strategy targets accelerated profitable growth, margin expansion, and shareholder value through 2028, built on disciplined portfolio management, focus on high-growth markets, and regional penetration.

• The 80/20 mindset is central, emphasizing resource allocation to top-performing products and customers, complexity reduction, and active management of underperforming segments.

• Transformation plan executed in three time horizons: core transformation (2026+), model evolution (2027+), and scaling advantage (2028+).

• Divestiture of the belts business and exit from low-margin automotive OE to structurally improve margins.

• Integration of Bijur Delimon acquisition accelerates growth in strategic verticals.

Operational initiatives and execution

• Over 75% of the organization will be trained on 80/20 by quarter-end, with early initiatives already impacting margins.

• Simplification of cost structures, SKU harmonization, and redeployment of resources are underway, aiming for margin uplift and working capital improvements.

• Pricing strategies are being tailored by customer and product segment, with targeted price increases for low-volume, low-profit segments.

• Timken Operating System deployed globally to drive lean manufacturing and operational excellence.

• Commercial organization restructured for a unified market approach, enhancing operational efficiency and customer engagement.

Growth, M&A, and capital allocation

• M&A is focused on portfolio accretion, alignment with high-growth markets, and regional synergies, supported by a strong pipeline of opportunities.

• Portfolio management includes both acquisitions and divestitures, with disciplined capital allocation balancing M&A, share buybacks, and dividends.

• Over 80% of incremental capital and resources targeted to strategic verticals.

• Strong balance sheet and projected $1.6 billion cash generation over three years provide flexibility for future investments.

• Net leverage target reaffirmed at 1.5x–2.5x net debt to adjusted EBITDA.