CANTON, Ohio -- Revenue from the planned spin-off of TimkenSteel is expected to increase by 20% to 25% for full year 2014 compared to The Timken Co.'s Steel Segment's 2013 revenue, driven by strong demand in the energy and industrial sectors. Growth at TimkenSteel is expected to come from product innovation, expanding markets, organic investments and potential acquisitions, members of the executive management team said at an investor meeting yesterday.
TimkenSteel focuses on special bar quality steel and seamless mechanical tubing -- high-end alloy steel designed for demanding applications in smaller, but more profitable, niches within the overall market, officials said. These products as well as its value-added supply chain products and services are tailored for each customer need.
"We focus on customizing SBQ solutions for the most demanding applications that endure high temperature, stress, torque or corrosion," said Ward J. "Tim" Timken Jr., chairman, CEO and president, told analysts. "That's where we deliver the most value. We have a problem‐solving culture geared toward addressing these tough challenges, whether they're five miles under the ocean's surface drilling through corrosive environments, or 200 feet in the air inside a 40,000 pound wind turbine, facing extreme conditions. As a result of our innovation and expertise, 30% of our product offerings were introduced within just the past five years. We also see growth opportunities from our recent capital investments, which expand our capabilities to serve our target markets. We'll also continue to evaluate acquisitions that leverage our base business."
The company is targeting a dividend payout ratio of 20% to 30%. Full-year 2014 expected capital expenditures are set at $165 million to $175 million, and expected 2015 incremental stand-alone costs to be $40 million to $45 million, including costs transferred from The Timken Co.
On June 30, one share of TimkenSteel common stock will be distributed for every two shares of The Timken Co. common stock held by Timken shareholders of record as of June 23 (READ STORY). TimkenSteel shares have begun to trade on the New York Stock Exchange under the ticker symbol of TMST on a "when issued basis," and "regular way trading" will begin on July 1, when the securities will be issued.
SOURCE: TimkenSteel Corp.
Published by The Business Journal, Youngstown, Ohio.
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