Timken Reports Fourth-Quarter and Full-Year 2024 Results-Wafangdian Guangyang Bearing Group Co., Ltd.

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Timken Reports Fourth-Quarter and Full-Year 2024 Results

Release Time：08 Feb,2025

<img src="/ueditor/php/upload/image/20250208/1739020535118763.png" title="1739020535118763.png" alt="4.png"/>Sales of $1.07 billion in the fourth quarter, down 1.6 percent from last year Fourth-quarter diluted EPS of $1.01; adjusted EPS of $1.16 Full-year 2024 diluted EPS of $4.99; adjusted EPS of $5.79 Cash from operations of $476 million; free cash flow of $306 million for the full year Company provides initial estimate for 2025 EPS of $4.30-$4.80, with adjusted EPS of $5.30-$5.80The Timken Company (NYSE: TKR; www.timken.com), a global technology leader in engineered bearings and industrial motion, today reported fourth-quarter 2024 sales of $1.07 billion, down 1.6 percent from the same period a year ago. The decrease was driven primarily by lower end-market demand in Europe and unfavorable foreign currency translation, partially offset by the benefit of acquisitions. Organically, sales were down 2.6 percent from last year. Timken posted net income in the fourth quarter of $71.2 million or $1.01 per diluted share. This compares to net income of $58.7 million or $0.83 per diluted share for the same period a year ago. The company's net income margin in the quarter was 6.6 percent, compared to 5.4 percent in the fourth quarter of last year. Excluding special items (detailed in the attached tables), adjusted net income in the fourth quarter was $81.5 million or $1.16 per diluted share. This compares to adjusted net income of $97.3 million or $1.37 per diluted share for the same period in 2023. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the quarter were $178.2 million or 16.6 percent of sales, compared with $195.4 million or 17.9 percent of sales in the fourth quarter of last year. Net cash provided by operations in the quarter was $178.5 million, and free cash flow was $124.9 million. During the quarter, Timken returned $33.0 million of cash to shareholders through dividends and the repurchase of 120 thousand shares of company stock. "We delivered a good finish to the year with strong cash flow in the fourth quarter," said Tarak Mehta, president and chief executive officer. "Overall, our team achieved solid results in 2024 in a challenging environment. Our diverse product portfolio, differentiated technology, and performance culture create a strong foundation for profitable growth led by customer-centric innovation." 2024 Full-Year Results and Highlights For 2024, sales were $4.6 billion, down 4.1 percent compared with 2023. The decrease was primarily driven by lower end-market demand, including a significant decline in renewable energy in China and broad weakness in Europe, and unfavorable currency translation, partially offset by the benefit of acquisitions (net) and the impact of higher pricing. Organically, 2024 sales were down 5.8 percent versus 2023. Net income was $352.7 million or $4.99 per diluted share for the year, compared with net income of $394.1 million or $5.47 per diluted share a year ago. The company's net income margin for the year was 7.7 percent, compared to 8.3 percent in 2023. Excluding special items, adjusted net income was $409.4 million or $5.79 per diluted share in 2024. This compares with adjusted net income of $508.1 million or adjusted earnings of $7.05 per diluted share in 2023. Adjusted EBITDA for the year was $844.8 million or 18.5 percent of sales, compared with $939.7 million or 19.7 percent of sales in 2023. Net cash from operations for the full year was $475.6 million, and free cash flow was $305.6 million. During the year, the company reduced total debt by $333.2 million and net debt by $287.5 million. Timken ended the year with net debt to adjusted EBITDA at 2.0 times, well within its 1.5-to-2.5 times target range. Among other highlights in 2024, the company: Expanded its Industrial Motion segment with the acquisition of CGI, Inc., a manufacturer of precision drive systems for the high-growth medical robotics and automation sectors; Increased its quarterly dividend, with 2024 marking its eleventh consecutive year of higher annual dividends. In total, Timken returned $136.6 million to shareholders during the year through dividends and the repurchase of 500 thousand shares of company stock; Executed a CEO succession plan and welcomed Tarak Mehta to Timken as its new president and CEO in September; and Was named one of the world's most innovative companies by Fast Company, and one of the World's Most Ethical Companies? for the 13th time by Ethisphere Institute, reflecting the company's continued commitment to customer-centric innovation and corporate social responsibility. Fourth-Quarter 2024 Segment Results1 Engineered Bearings sales of $707.7 million decreased 2.3 percent from the same period a year ago. The decrease was driven primarily by lower demand in Europe and unfavorable foreign currency translation, partially offset by higher industrial distribution demand in the Americas and Asia. Adjusted EBITDA in the quarter was $122.0 million or 17.2 percent of sales, compared with $132.5 million or 18.3 percent of sales in the fourth quarter of last year. The decrease in adjusted EBITDA was driven primarily by the impact of lower volume, higher manufacturing and logistics costs, and unfavorable foreign currency, partially offset by favorable price/mix. Industrial Motion sales of $365.9 million decreased 0.3 percent compared with the same period a year ago, as higher drive systems revenue and the benefit of acquisitions was slightly more than offset by lower demand across most other platforms. Adjusted EBITDA in the quarter was $70.7 million or 19.3 percent of sales, compared with $81.6 million or 22.2 percent of sales in the fourth quarter of last year. The decrease in adjusted EBITDA was driven primarily by lower volume and higher manufacturing costs compared to last year, partially offset by favorable price/mix, lower SG&A expenses and the benefit of acquisitions. 2025 Outlook Given the continued economic uncertainty across the globe, the company is planning for 2025 revenue in the range of -4% to -1% in total compared to 2024, including unfavorable foreign currency translation. Timken is setting an initial outlook for 2025 earnings per diluted share in the range of $4.30 to $4.80 and adjusted earnings per diluted share in the range of $5.30 to $5.80. The company is implementing cost reduction actions that are expected to generate gross savings of approximately $75 million in 2025. "We expect global economic conditions to remain challenging to start the year," said Mehta. "Our team is focused on operational excellence and other initiatives to deliver resilient performance in 2025. We expect margins to be supported by cost-reduction actions and are planning to generate higher free cash flow with improved working capital performance." Mehta concluded, "We believe margins are near trough levels, and Timken is well positioned to capitalize on an industrial recovery when it occurs. Looking ahead, I see many opportunities to strengthen our product portfolio, improve our performance, and deliver higher returns for Timken shareholders."