The Timken Company Jefferies Global Industrials Conference 2026

Great. Yeah, happy to do so. Thank you, and good morning, everyone. Our Elevate to Outperform strategy, as Stephen mentioned, is really deploying our 80/20 mindset to accelerate profitable growth, and we're really focused on structurally increasing margins and driving value for shareholders. The strategy itself is based on three pillars, again, which we rolled out. First pillar, optimizing our portfolio. Secondly, focusing resources to our strategic verticals like robotics and automation to increase growth. Then better leveraging our multinational footprint as we operate as one Timken, and I'll hopefully get into that a little bit more. The execution of the strategy is well underway, and we're operating with urgency to achieve the 2028 financial targets we laid out, which include mid-single-digit organic sales growth, a 500 basis point increase in adjusted EBITDA margins, and adjusted earnings per share of around $8.50.

Yeah, we're really excited about the new strategy. We just had our leadership team together, kind of the top 100 last week, and I can tell you the excitement is there across the board. Really happy to get going on this new strategy and looking forward to delivering our 2028 targets.

Yeah, sure. Where we are, to this point, one way to measure that is how much we've kind of rolled 80/20 out to the company. At this point, we've covered about 60% of the enterprise with training, and we have long, excuse me, work streams launched, 80s and 20s work streams launched across all of those businesses that have been trained. By the end of the quarter, by the end of this month, we should be much closer to 75% of the revenue covered. We continue rolling this out, and by the end of the year, we will have our entire company covered with training. Just speaking a little more about 80/20 personally, I'm really excited about 80/20. I think it's a significant opportunity for Timken.

We believe that this will lead to faster growth, and maybe not something you hear as much on 80/20, but for us, 80/20 is absolutely a growth initiative, as we are able to free up resources and dedicate them to the pillars I just talked about, focusing on strategic verticals. We think this is really a catalyst to our growth initiative. Of course, we also expect to generate higher margins, and we will free up some working capital as well. An interesting stat, and we said this at our investor day back in May, but within Engineered Bearings, so our largest business, about two-thirds of our revenue, our data showed that 50% of our customer count and 50% of our SKUs generate about 1% of revenue. From a complexity standpoint, highly complex, long tail, perfect for 80/20. Our goal is now serve these customers differently.

Focus on those top customers, make sure we are serving them differently, and start working on addressing the complexity. We have implemented so far, or we are in the midst of implementing minimum order value, one of the first things we are implementing, which when we went and looked at the data, we realized that we did not have minimum order values, even though we thought we did, and customers were ordering below what really was the processing cost, even the order intake cost for an order. Just some simple things like that will help with simplicity, with simplification, excuse me. Price increases, again, another lever you pull early on in 80/20, which is making sure that our Quad 4, Quad 3 customers are being treated differently, and we have implemented price increases across those. 80/20 is in full swing.

We expect to see benefits accrue to the margin line, if you will, beginning, call it first half of 2027. Of course, growth takes a little bit longer to kick in, but certainly believe that 2027 is when we will start to see the benefits of the refocused efforts on growth from 80/20 as well.