Tennant Company (TNC) Small-Cap Virtual Conference summary

Business overview and market positioning

• Operates in a $9 billion global floor care equipment market, with a differentiated product and service portfolio and a strong aftermarket service offering.

• Holds a 25% share in the Americas, 10% in EMEA, and single-digit share in Asia Pacific, with significant growth opportunities in all regions.

• Faces competition from two major European players and numerous smaller competitors, with potential for growth via acquisitions.

• Mega trends fueling growth include automation, labor scarcity, modernization, electrification, and sustainability.

• Committed to 3%-5% organic top-line growth, 50-100 bps EBITDA margin expansion, and $150 million in acquisitions over three years.

Innovation and robotics strategy

• Focused on disruptive innovation, especially in robotics, with a dedicated TNC Robotics venture to accelerate product development.

• Plans to launch 10 new robotics products in two years, targeting $250 million in robotic sales by 2028.

• Robotics sales grew 56% year-over-year in the first half, with $85 million in AMR revenue in 2025 and $57 million in the first half of 2026.

• New products like X16 SWEEP and X2 ROVR are expanding into smaller space cleaning and new verticals.

• Exclusive partnership with Brain Corp for navigation software, with Clean 2.0 and SelfPath AI enhancing performance.

Financial performance and operational updates

• Strong balance sheet supports organic growth, innovation, and strategic acquisitions, with $20-$25 million annual CapEx needs.

• ERP implementation in North America caused disruption but is recovering, with margins improving from 38.1% to 39.5% and a target to exceed 40% by Q4.

• EMEA ERP deployment is paused to focus on North America optimization.

• Capital allocation prioritizes organic investment, debt management, dividends, and disciplined share buybacks, especially during share price dips.

• M&A strategy focuses on defending and growing the core, expanding go-to-market footprint, and robotics, with recent successful acquisitions in Eastern Europe and Scandinavia.