Timken Reports $4.6 Billion Sales in 2024 Sales Amid Market Challenges

Timken Reports Fourth-Quarter and Full-Year 2024 Results

NORTH CANTON, Ohio, Feb. 5, 2025 – Timken 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 2024. 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 13^th 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.”

Conference Call Information

Timken will host a conference call today at 11 a.m. Eastern Time to review its financial results. Presentation materials will be available online in advance of the call for interested investors and securities analysts.

About The Timken Company
The Timken Company, a global technology leader in engineered bearings and industrial motion, designs a growing portfolio of next-generation products for diverse industries. For more than 125 years, Timken has used its specialized expertise to innovate and create customer-centric solutions that increase reliability and efficiency. Timken posted $4.6 billion in sales in 2024 and employs approximately 19,000 people globally, operating from 45 countries.

Certain statements in this release (including statements regarding the company’s forecasts, estimates, plans and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the company’s future financial performance, including information under the heading “2025 Outlook,” are forward-looking.

The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the finalization of the company’s financial statements for the fourth quarter and full-year of 2024; fluctuations in customer demand for the company’s products or services; unanticipated changes in business relationships with customers or their purchases from the company; changes in the financial health of the company’s customers, which may have an impact on the company’s revenues, earnings and impairment charges; logistical issues associated with port closures, delays or increased costs; the impact of changes to the company’s accounting methods; political risks associated with government instability; recent world events that have increased the risks posed by international trade disputes, tariffs, sanctions and hostilities; strained geopolitical relations between countries in which we have significant operations; weakness in global or regional general economic conditions and capital markets (as a result of financial stress affecting the banking system or otherwise); changes in wages, shipping costs, raw material costs, energy and fuel prices, and other production costs; the company’s ability to satisfy its obligations under its debt agreements and renew or refinance borrowings on favorable terms; fluctuations in currency valuations or interest rates; changes in the expected costs associated with product warranty claims; the ability to achieve satisfactory operating results in the integration of acquired companies, including realizing any accretion, synergies, and expected cashflow generation within expected timeframes or at all; the company’s ability to effectively adjust prices for its products in response to changing dynamics; the impact on the company’s pension obligations and assets due to changes in interest rates, investment performance and other tactics designed to reduce risk; the introduction of new disruptive technologies; unplanned plant shutdowns; the effects of government-imposed restrictions, commercial requirements, and company goals associated with climate change and emissions or other sustainability initiatives; unanticipated litigation, claims, investigations remediation, or assessments; the rapidly evolving global regulatory landscape and the corresponding heightened operational complexity and compliance risks; restrictions on the use of, or claims or remediation associated with, per- and polyfluoroalkyl substances or polytetrafluoroethylene; the company’s ability to maintain positive relations with unions and works councils; the company’s ability to compete for skilled labor and to attract, retain and develop management, other key employees, and skilled personnel; negative impacts to the company’s operations or financial position as a result of pandemics, epidemics, or other public health concerns and associated governmental measures; and the company’s ability to complete and achieve the benefits of announced plans, programs, initiatives, acquisitions, capital investments, and cost reduction actions. Additional factors are discussed in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact:
Media Relations:
Scott Schroeder
234.262.6420
scott.schroeder@timken.com

Investor Relations:
Neil Frohnapple
234.262.2310
neil.frohnapple@timken.com

¹ Following a review of the metrics management utilizes to evaluate segment performance, the company has changed its primary measurement of segment profit and loss to segment adjusted EBITDA and segment adjusted EBITDA margin instead of segment EBITDA and segment EBITDA margin, which were used previously.