Timken(US:TKR)2022-12-16 04:53Company Overview and Financial Performance - The Timken Company, founded in 1899, reported $4.1 billion in revenue, $718 million in adjusted EBITDA, and $4.72 in adjusted EPS for 2021[6] - The company's adjusted EBITDA margin was 17.4% in 2021, with free cash flow of $239 million and a dividend yield of 2.1% as of September 30, 2022[6] - In Q3 2022, sales reached $1.14 billion, a 9.6% increase from Q3 2021, with an adjusted EBITDA margin of 18.8%, up 160 bps from Q3 2021[52] - Third quarter adjusted EPS of $1.52 per diluted share, up 29% from 3Q-21[52] - The company has generated approximately $1.5 billion of free cash flow over the last 5 years[55] Market Mix and Growth Strategy - North America accounted for 45% of sales in 2021, followed by Europe, Middle East, and Africa at 25%, and Asia Pacific at 24%[7] - Process Industries represented 52% of sales, while Mobile Industries accounted for 48% in 2021[7] - Engineered Bearings made up 68% of sales, and Industrial Motion contributed 32% in 2021[7] - "Newer" markets, including Renewable Energy, Automation, Industrial Services, and Marine, have tripled annual revenue to over $1.2 billion, representing 30% of total sales in 2021 compared to 13% in 2014[14] Capital Allocation and Future Outlook - The company targets a 20-30% dividend payout ratio over the cycle and has a dividend yield of 2.1% as of September 30, 2022[59, 73] - The company anticipates over $4 billion in capital deployment over the next 5 years (2022-2026), compared to approximately $3 billion in 2017-2021[64] - The company targets organic growth CAGR of 4-5%, inorganic growth CAGR of 2-3%, and total growth CAGR of 6-8%[81]