Investor presentation march_2017

TENNANTCO.COM

REINVENTINGthe future of cleaning.

INVESTOR PRESENTATIONMarch 2017

Safe HarborStatement

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This presentation contains certain statements that are considered “forward-looking

statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements generally can be identified by the use of forward-looking

terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,”

“project,” or “continue” or similar words or the negative thereof. These statements do not

relate to strictly historical or current facts and provide current expectations of forecasts of

future events. Any such expectations or forecasts of future events are subject to a variety of

factors. We caution that forward-looking statements must be considered carefully and that

actual results may differ in material ways due to risks and uncertainties both known and

unknown. Information about factors that could materially affect our results can be found in

Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended

December 31, 2016. Shareholders and potential investors are urged to consider these factors

in evaluating forward-looking statements and are cautioned not to place undue reliance on

such forward-looking statements.

We undertake no obligation to update or revise any forward-looking statement, whether as a

result of new information, future events or otherwise. Investors are advised to consult any

further disclosures by us in our filings with the Securities and Exchange Commission and in

other written statements on related subjects. It is not possible to anticipate or foresee all risk

factors, and investors should not consider any list of such factors to be an exhaustive or

complete list of all risks or uncertainties.

AboutTennant Company

Tennant Company, a Minnesota

corporation founded in 1870 and

incorporated in 1909, is a world leader

in designing, manufacturing and

marketing solutions that empower

customers to achieve quality cleaning

performance, significantly reduce

environmental impact and help create

a cleaner, safer, healthier world.

72consecutive years of cash dividends

45consecutive years of increase in annual cash dividend payout

Balance sheet

NYSE Symbol:

TNC

2016 Revenues:

$809M

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2016 Employees:

3,236

OUR VISION

We will lead our global industry in

sustainable cleaning innovation that

empowers our customers to create a

cleaner, safer and healthier world.

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Broad Portfolio of Quality ProductsC

OM

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BIO

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STRONG DIRECT SALES& SERVICE ORGANIZATIONS

Strong Direct Sales & Service Organizations

Global Sales Employees Global Direct Service EmployeesGlobal Revenue by Sales Channel

25%

75%

Distribution

Direct

Distribution PartnersMore than 80 countries

around the world

Global Strategic AccountsCross-functional teams &

market specialists

Factory-Service DirectLocally based & factory-trained

service technicians

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0

100

200

300

400

500

600

700

800

900

2012 2013 2014 2015 2016

Americas EMEA APAC

0

100

200

300

400

500

600

2012 2013 2014 2015 2016

Americas EMEA APAC

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Broad Range of Global Customers

MARKETS

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2016 Revenue of $809M

75%

16%

9%Americas

EMEA

APACNet Sales by Geography

21%

14%

61%

4%

Service & Other

Equipment*

Coatings

Net Sales by Product Group

Parts & Consumables

*Equipment MixCommercial | 52%Industrial | 46%Outdoor | 2%

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We remain committed to organic

Sales goal of $1 Billion and 12% or

above Operating Profit Margin

Growth Strategy

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• Reach new markets and new customers

• Deliver a strong product & technology pipeline

• Build Tennant’s e-Business capabilities

• Be disciplined about improving margins &

controlling expenses

$1B

$752M

GDP Growth

$60M (2%)

Go-To-Market

$70M (up to 3%)

New Products$80M (up to 3%)

Emerging Markets

$40M (up to 2%)

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Our Journey to $1 Billion

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Strategic Priorities

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.

Sales & Service CoverageIncreasing our Presence

×Education Healthcare

Industrial Retail

ENHANCEDGO-TO-MARKET STRATEGY3 COMPONENTS OF

MARKET SHARE

Product Portfolio

Market Coverage(Presence)

HitRate

VERTICAL MARKETS & MARKETING ANALYTICS

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Emerging Markets

China

Latin America

• Focused approach

• Long-term growth potential

despite economic headwinds

Organic Sales Growth

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20146.5%

2015(5.5%)

201415%

20155.5%

Organic Sales Growth

2016(5%)

201613.0%

Operations EfficiencyStrategy Deployment to Drive Four Key Initiatives

VELOCITY & LEAN

Be the absolute leader for serving the customer!

SERVICE LEVELS

SUPPLY CHAIN OPTIMIZATION

QUALITY FOCUS

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CRM & Marketing AutomationPerpetual Lead Generation

Speed-to-Lead• Better lead visibility and new

processes mean we can convert leads faster

• Keep the lead pipeline full with automated marketing capabilities embedded inside CRM

Prospecting• Leverage deep history to

prioritize the known

• Visualize the potential to discover the new

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e-CommerceCleaning solutions made easy online

• Empower our customers

• Anticipate their needs

• Enhance their experience

Good Experience Increase Revenue• New customers

• New geographies

• Expand products

Lower Cost of Sale• Self-service

• Reduce manual interventions

• Cost avoidance

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Reconditioned EquipmentAttracting a New Set of Customers

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New Commercial Recon Facility New e-Commerce Website

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Attract & Retain Talent

Tennant Employee Value Proposition

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2

3

Build a world-class talent acquisition function

Develop leadership & key talent capabilities

Align high-performance culture with business strategy

Talent Management Focus

A Focus on Stewardship

Strong Legacy

Rewarding work with opportunity

for career growth

4 Reward performance that creates value

Commitment to Innovation

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Sustainable Enterprise

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Tennant Corporate Sustainability Report

DISCLOSURE SCORE 80 53

PERFORMANCE BAND C C

DISCLOSURE SCORE 68 49

PERFORMANCE BAND D C

2013

2014

2015 DISCLOSURE SCORE 95 60

PERFORMANCE BAND C D

2016 SCORE B D

Tennant Company

Industry Average

Our Focus Areas

912012-2015

102016

New Product DevelopmentStrongest Product Pipeline Ever!

312017 Plan

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– Launched new family of T500 commercial walk-behind scrubbers comprised of 20 new products and product variants

• Five unique scrubbing heads on four different models

• Smart-Fill™ automatic battery watering system

• ec-H2O NanoClean® technology option

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Tennant CompanyNew Products

IRIS®

Web-based Fleet Management System

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– Launched enhanced system

• Monitor and manage machines with full visibility of user’s fleet

• Track machine productivity and maintenance needs

• Lower cost to clean

• Pro-Panel™ LCD touch screen with on-demand tutorials

• Zone Settings™ to help deliver predictable cleaning results

ec-H2O NanoClean ®

The Responsible Way to Clean

Next generation ec-H2O | Cleans more soils in more applications

HOW IT WORKS:ec-H2O™ SCRUBBERS | 2008 thru 2016

$1.1 billion+cumulative revenue

8,000+customers

30,000+ sites

88,000+machines

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Sales of $155M in 2016

ORBIO® TechnologiesOn-Site Generation Technology

FOCUS ON “3Cs”CAMPUS | CHAINS | CONTRACTORS

Improving health and safety for the environment, employees and people in their care while reducing costs.

GENERATEScleaner & disinfectant/sanitizer on-site

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Customer InsightsReinventing the Way the World Cleans

EMOTIONAL BENEFITS

FUNCTIONAL BENEFITS

FEATURES & BENEFITS

PRODUCTS SOLUTIONS

Traditional ApproachVoice of customer & needs

identification to shape new

product development

NEW Thinking• Acknowledge the reality of our customer’s business

• Deploy new tools for better insights

• Think solutions, not just products

• Objective research from innovation experts

• Challenge status quo – new lens for opportunities

• Embrace a holistic view of our customers

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• Lithium-Ion, Fuel Cell, etc.

• Improving cost & availability

• ROI for customer

• Reduced weight & footprint size

• Sustainability

• Productivity

• Game-changing solution

– +

Water RecyclingBattery Technologies Robotics (AGV)Asset Management

• Manage cleaning

programs better

• Fleet management

• Lower cost-to-clean

• Addresses labor costs

• Largest potential growth

opportunity

Advanced Product DevelopmentFuture Technologies

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AcquisitionsStrategic Filters

Sales & Service Coverage

Technology Platforms

Complementary Products

Underserved Markets

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• Acquired Florock® Brand

• Expanded our commercial floor coatings business

• Combination of Tennant Coatings and Florock opens new markets and strengthens value proposition

• Acquired Assets of Dofesa Barrido Mecanizado

• Long-time distributor of Tennant equipment in central Mexico

• Acquisition is a key investment for growth in Latin America

• Enhances Tennant’s sales and service capabilities

2016 Third Quarter Acquisitions

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• Signed definitive agreement with private equity fund Ambienta

• All-cash transaction $350M or €330M

• IPC Group – privately held designer and manufacturer of innovative professional cleaning equipment, tools and other solutions, based in Italy

• IPC Group 2016 annual sales of about $203M or €192M

• Largest acquisition in Tennant Company history

• Anticipate acquisition will be accretive to 2018 full year earnings per share

Pending 2017 Acquisition of IPC Group

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IPC Group Overview

Revenue by Geography

Key Facts and Figures

Geographic Coverage

IPC Group produces machines and equipment for the professional cleaning sector

—Cleaning machines: floor sweepers and scrubbers, vacuum cleaners, high- pressure washers and related aftermarket parts and services

—Cleaning tools and supplies: trolleys, window cleaning tools and consumables

2016A Revenue: €192mm

2016A Adjusted EBITDA: €28mm (~14% margin)

4 manufacturing plants; 11 international branches with sales to over 100 countries

~1,000 Employees

EagleEagan, Minnesota

Industria e ComercioPinhais Parana

Cleaning EspañaBarcelona

ICAÉpône Cedex

Soteco BeneluxWommelgem

GansowUnna

Foma NorgeLanghus

China Trade CorporationFo Shan, Guangdong

Western Floor PVTNew Delhi

2016A Revenue Mix

2016A Revenue by Product

2016A Revenue by Type

Sweepers & Scrubbers42%

Vacuum Cleaners21%

Cleaning Tools and Supplies

19%

High Pressure18%

Machinery59%

Machinery Aftermarket22%

Tools and Supplies19%

EMEA

80%

Americas

11%

RoW

9%

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Overview of IPC Group Product Portfolio

Equipment

IPC Sweepers and Scrubbers

IPC Pressure Washers

IPC Vacuum Cleaners

IPC Tools

Ride On Walk-Behind

ScrubberSweeperScrubberSweeper

Dry Wet & Dry Industrial

Hot Water Cold Water

Hydro-cleaners with high temperature water jets and

internal heaters

Hydro-cleaners with cold water jets

TrolleysMops and

Cloths

Carts formanual tools

Window and mirrorsurface cleaning

Surface and

floor cleaning

Dry Vacuum Cleaners: 750W to 1,400W Wet & Dry Vacuum Cleaners: 1,300W to 3,600W Single motor to three motor models

Scrubbers: 15L to 230L (tank size) Sweepers: 460mm to 1,200mm (brush size) Multiple Power Systems: Electric cables, batteries,

diesel, petrol and hybrid

Range of 2.5HP to 13HP– Diesel versions up to 900 liters per hour– Gasoline versions up to 1,260 liters per hour

IPC Group sells its products under the brand names IPC, IPC Foma, IPC Eagle, IPC Gansow, ICA, Vaclensa, Portotecnica, Sirio and Soteco, Readysystem, Euromop, and Pulex.

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FINANCIALSummary

Reinventing the future of cleaning.

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Q4’16

SALES

GROSS MARGIN

R&D EXPENSE (% of sales)

Adjusted*S&A EXPENSE (% of sales)

Adjusted*

OPERATING PROFITAdjusted*

OPERATING PROFIT MARGINAdjusted*DILUTED EPS

Q4’15 CHANGE

$211.7 M

44.2%

4.7%

28.8%

$22.6 M

10.7%

$0.85

$205.9 M

42.4%

3.9%

28.9%

$19.7 M

9.6%

$0.78

+2.9%

+180 bps

+80 bps

(10 bps)

+14.5%

$110 bps

+9.0%

*Q4’15 results are adjusted to exclude restructuring charge in S&A of $2.0M pre-tax ($0.09 loss per diluted share) and asset impairment favorable tax true-up of $0.7M ($0.04 per diluted share).

2016 Fourth QuarterOrganic Sales Growth 3.2% | Organic Sales up 4.8% in Americas, up 3.7% in EMEA

2016

SALES

GROSS MARGIN

R&D EXPENSE (% of sales)

Adjusted*S&A EXPENSE (% of sales)

Adjusted*

OPERATING PROFITAdjusted*

OPERATING PROFIT MARGINAdjusted*DILUTED EPS

2015 CHANGE

$808.6 M

43.5%

4.3%

30.7%

$68.5 M

8.5%

$2.59

$811.8 M

43.0%

4.0%

30.6%

$68.1 M

8.4%

$2.49

(0.4%)

+50 bps

+30 bps

+10 bps

+0.6%

+10 bps

+4.0%

*2015 results are adjusted to exclude restructuring charge in S&A of $3.7M pre-tax ($0.17 per diluted share) and non-cash long-lived asset impairment of $11.2M pre-tax ($0.58 per diluted share).

2016 Full YearOrganic Sales Growth 1.1% | Organic Sales up 2.4% in Americas, up 0.2% in EMEA

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SALES

GROSS MARGINAdjusted*OPERATING PROFITAdjusted*

OPERATING PROFIT MARGINAdjusted*

DILUTED EPS

2016 2015 CHANGE

CONSTANT(1)

CURRENCY

2016

AS REPORTED

(1)“Constant Currency”: estimated income statement which assumes no change in exchange rates from prior year.

*2015 results are adjusted to exclude restructuring charge in S&A of $3.7M pre-tax ($0.17 per diluted share) and non-cash long-lived asset impairment of $11.2M pre-tax ($0.58 per diluted share).

$816.4 M

43.5%

$69.9 M

8.6%

$2.63

$811.8 M

43.0%

$68.1 M

8.4%

$2.49

+0.6%

+50 bps

+2.6%

+20 bps

+5.6%

$808.6 M

43.5%

$68.5 M

8.5%

$2.59

2016 Full Year “Constant Currency” View(excludes estimated foreign exchange impact)

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2016 Organic Sales Growth of 1.1%: excluding change in exchange rates from prior year and impact from acquisition and divestiture.

1.1% Organic Sales Growth in 2016 Full Year

APACEMEAAmericas2016 Organic Sales

2.4%2016 Organic Sales

0.2%2016 Organic Sales

(10.0%)

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TENNANT COMPANY

Strong Balance Sheet

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History of Sales Growth2010-2016 Average Organic Sales Growth of 6%

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Improved Profitability & Balance Sheet LeverageReturn on Invested Capital Improvement 2009 – 2016*

*On a “Constant Currency” basis, 2016 ROIC would have been 27.9%.

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AV

ER

AG

E IN

VE

ST

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CA

PIT

AL

Operating Profit Margin Goal

Drive organic revenue growth in mid- to high-

single digits

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Remain committed to at least 12% OP Margin

Hold fixed costs essentially flat in

manufacturing as volume rises

Strive for zero net inflation

at gross profit line

Standardize & simplify

processes to improve

scalability of business model

Continue to invest in

innovative new products

& technologies

S, G & A Expense

27-28%

R&D

3-4%

Gross Margins

43-44%

Sales Growth

5-9%

2017 EPS & Sales Guidance

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2016ACTUAL

As Reported$2.59 EPS

$808.6M SALES

2017 Financial OutlookAs Adjusted “Constant Currency” $2.60 to $2.80/$817M to $832M

As Reported $2.20 to $2.43/$810M to $830M

KEY EXPECTATIONS FOR 2017 (does not yet include the impact of the IPC Group acquisition)

• Net sales in the range of $810M to $830M versus $808.6M in 2016.• Stable economy in North America, modest improvement in Europe, and challenging environment in

APAC.• Unfavorable foreign currency impact on sales in the range of 1% to 2%.• Sales increase from 2016 Florock acquisition of approximately 0.8%.• Organic sales growth, excluding foreign currency exchange impact and acquisition, in the range of

1% to 3%.• Foreign currency exchange headwinds estimated to negatively impact operating profit by

approximately $2.5M, or approximately $0.10 EPS.• Restructuring Actions in 1Q17 in the range of $7M to $8M pre-tax, or $0.27 to $0.30 EPS.• Gross margin performance in the range of 43% to 44%. • R&D expense of approximately 4% of sales.• Effective tax rate of approximately 31%.• Capital expenditures in the range of $20M to $25M.

Summary

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Anticipate foreign currency & global economic volatility remain challenging

Tennant has never been positioned better in the market with its innovative product and technology portfolio and go-to-market strategy

We remain committed to our goals of $1 Billion in organic sales & a 12% or above operating profit margin

$1B

Investor presentation march_2017

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