Titan’s Taylor discusses 2013 goals
The ‘Grizz’, Titan International chairman and CEO Maurice Taylor, has issued a statement on the tyre maker’s 2013 guidance. In the statement, Taylor writes that “2012 was again record revenue, net income, gross margins, operation margins, just everything. The only negative is we could have done better and I’m the one who didn’t keep a better eye on the changes taking place in Bryan.” This final comment referred to reduced production in the Bryan, Ohio factory due to the plant’s new computer system.
As for next year, Taylor said “2013 is a totally different story and a new chapter. Farm will be good in North America and our capacity expansion should increase Titan’s overall market percentage. South America’s farm sales should grow more than ten per cent and again, with our capacity expanding, we should increase our market share. We believe Europe will be down and that is the one negative spot worldwide. Russia should be a big growth area over the next five years and is a great opportunity.
“The construction market will likely continue to be in a sorry state except in Russia and Brazil, which should turn advantageous for Titan. The earthmoving business still has life and is going to be good for Titan as long as we take care of production. The other large event will be the growth of the Titan Mining Service business with new locations in Chile, Peru, South Africa, Australia and Eastern Canada. We are very excited about building this business.”
New company acquisitions will be announced either before the end of the year or shortly after, Taylor stated. He added that Titan International’s goal is to reach a run rate of US$4 to $4.5 billion before 2015. “If you look at the last few years, you can see this is a very doable goal, 2010 revenue was $866 million; 2011 revenue was $1.487 billion; and 2012 revenue is going to be approximately $1.8 to $1.9 billion.”
Taylor has set the following 2013 goals for Titan’s management group: Revenue $2.4 to $2.7 billion, EBITDA $340 to $400 million, capital expenditure $72 million, research and development $11 million. “This is the first time I’ve shown R&D,” the chairman and CEO observed. “The reason is at Titan’s dealer meeting in November everyone was shocked how many new tyres and wheels we have coming to market and I was asked if we would announce these items ahead of time and I agreed. It is my goal not only to get to $4.5 billion before 2015, but bring new tyre and wheel designs to the farming, construction and mining industries that make the equipment perform better.
Allowing himself a hint of smugness, Taylor commented: “On an ‘I told you so’ moment, last year I said farm income would set a record this year. It has. I said Deere would set records. They did! I also said construction would be soft. It is.” He added that next year’s farm income will be equal to last year and Deere’s 2013 performance will beat 2012. “Why? Deere’s chairman is putting in his new team. The wind is at his back and he is a real competitor. Plus his golf handicap is lower than mine and no CEO from Deere in the last 40 years has had a lower handicap than me.”
Prior to wishing everyone all the best for the coming festive season, Taylor reminded readers that he will answer questions about his 2013 goals during a conference call scheduled for 6 December 2012.
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