Atmus Filtration Technologies (ATMU) Investor presentation summary

Business profile

• Global filtration supplier serving on- and off-highway markets; FY2023 net sales were $1.6bn, with 81% from aftermarket.

• FY2023 sales mix by geography: United States and Canada 51%, Europe/Middle East/Africa 18%, Asia Pacific 18%, Latin America 13%.

• 10 manufacturing facilities plus 10 at joint ventures; 5 technical centers plus 2 at joint ventures; ~4,500 employees and 1,250+ issued or pending patents.

• End markets were 60% on-highway and 40% off-highway; 10 major customers had relationships exceeding 10 years.

Growth strategy

• Priorities: grow first-fit share in core markets, transform the supply chain, accelerate profitable aftermarket growth and expand into industrial filtration.

• Opened technical centers in Wuhan and Pune and established independent distribution centers in the US, Brazil and Mexico.

• Evaluating a pipeline of inorganic opportunities in industrial filtration markets.

• Joint ventures in China and India support regional market penetration, lower capital spending, supply-chain optimization and technology development.

Financial performance

• FY2023 net sales were $1.628bn, up ~4% YoY; gross margin was 26.6%, up ~360 bps YoY.

• FY2023 adjusted EBITDA was $302.3m and adjusted EBITDA margin was 18.6%, up ~300 bps YoY.

• FY2023 adjusted free cash flow was $152m, with ~89% adjusted FCF conversion.

• From 2021 to 2023, net sales CAGR was 6.4%, gross profit CAGR 11.3% and adjusted EBITDA CAGR 12.5%.

• At year-end 2023, debt was $600m, cash was $168m, net debt was $432m, gross leverage was 2.0x and net leverage was 1.4x.