Timken Company (TKR) Investor presentation summary

Business overview and market positioning

• Over 125 years of engineering expertise with 2025 net sales of $4.6B, 19,000 employees in 45 countries, and a 17.4% adjusted EBITDA margin.

• Sales split: 66% engineered bearings, 34% industrial motion, with a strong presence in aerospace, defense, automation, and infrastructure sectors.

• Strategic focus on high-growth verticals such as commercial aerospace, defense, renewable energy, automation, and robotics.

• Positioned to leverage megatrends including automation, AI-driven power demand, electrification, and urban infrastructure buildout.

• Aggressive regional expansion targets >10% growth in key platforms and regions like the US, Brazil, China, and India.

Strategic initiatives and operational transformation

• Three strategic pillars: optimize the portfolio, focus resources on strategic verticals, and leverage a multinational footprint.

• Portfolio optimization includes divesting low-margin businesses (e.g., belts) and acquiring high-margin, strategic assets (e.g., Bijur Delimon).

• 80/20 mindset drives resource allocation, complexity reduction, and customer focus, with 25% of SKUs identified for harmonization.

• Targeting >80% of incremental capital and resources to strategic verticals, with disciplined M&A and technology-led growth.

• Timken Operating System deployment and lean manufacturing initiatives aim to complete within 36 months.

Financial performance and targets

• 2025 adjusted EPS of $5.33 and free cash flow of $406M, with a 3-year FCF yield of 6.4%.

• 2028 targets: $5.0–5.2B sales, 21–23% adjusted EBITDA margin, >55% EPS growth, and ~$1.3B cumulative free cash flow.

• Margin expansion of ~500 bps expected by 2028, driven by portfolio optimization, strategic verticals, and global expansion.

• Net leverage target maintained at 1.5x–2.5x net debt to adjusted EBITDA, supporting investment-grade balance sheet.

• Capital deployment priorities: invest in core business, strategic M&A, attractive dividends, and share repurchases.