Tennant Company (TNC) Small-Cap Virtual Conference summary

Market position and growth drivers

• Global floor-care equipment market TAM ~$9B; regional TAM ~$4B Americas, ~$3B EMEA, remainder Asia Pacific. Share: 25% Americas, ~10% EMEA, single digits Asia Pacific; global share ~14%.

• Durable tailwinds include labor cost and availability pressures, modernization of cleaning, electrification, and sustainability; management expects these trends to persist over the next 10+ years.

• Long-term model targets 3%-5% organic revenue growth, 50-100 bps EBITDA margin expansion, and 100% free cash flow conversion; a three-year inorganic growth placeholder is $150M.

Robotics and product innovation

• TNC Robotics launched at end-2025 to accelerate product development and go-to-market; plan calls for 10 new robotics products over two years, with X16 SWEEP launched and X2 ROVR launching for smaller store formats.

• First-half 2026 robotic sales rose 56% YoY to $57M, versus $85M AMR revenue in FY2025; target is $250M robotic sales by 2028. Management cited strong demand and confidence in the target.

• X16 SWEEP deliveries had begun; X2 ROVR deliveries had not. Both had orders and were expected to contribute strongly in H2, alongside large fleet deployments.

• Sensor-component availability poses a supply-chain risk to production ramp, with greater risk expected in 2027-2028; inventory hedging is underway. Brain Corp is the exclusive floor-cleaning navigation software partner.

• Robotics market estimates are being reassessed from just under $400M and ~15% growth, with management expecting a larger, faster-growing market; factory-direct service and installed-base relationships differentiate the offer.

ERP recovery and financial outlook

• North American ERP recovery continued: customer demand and NPS recovered, orders were up double digits YTD and 7% in Q2; gross margin rose from 38.1% in Q1 to 39.5% in Q2.

• Q4 is the key proof point: management targets exit margin above 40%, progressing toward 41% in Q4 and normal 41%-42% levels in 2027; North American industrial production ramp and higher-margin backlog conversion are central.

• ERP recovery costs were ~$10M in H1, with a targeted ~$2M tail in Q3; H2 plan includes reducing backlog by ~$27M to just under $100M. Management said guidance remained within reach, subject to production ramp and supply-chain execution.

• EMEA ERP deployment was halted with no definitive restart timing, while resources focus on North American optimization and growth.