ITT Inc. · NYSE:ITT
ITT — ITT Industries — Corporate Update (December 2003)
14 slides from ITT's corporate update, Dec 17, 2003
Slide 1: 2004 Outlook Discussion
2004 Outlook Discussion December 17, 2003
Slide 2: Agenda
Agenda v Reconfirming 4Q03 and FY03 Guidance v 2004 Economic Environment Assumptions v 2004 Outlook By Segment v 2004 Summary 1
Slide 3: 4Q03 Business Update
4Q03 Business Update Fluid Technology • Launched public offer for WEDECO • Robust W/WW bid activity (39% of revenues) • Positive trends in Asia Pacific industrial markets Defense Electronics • All segments contributing to growth in 4Q (31% of revenues) • Strong backlog provides visibility for growth
Slide 4: 2003 Guidance
2003 Guidance Reconciliation to GAAP 1Q03A 2Q03A 3Q03A 4Q03E FY03E Adjusted EPS $0.83 $1.02 $0.96 $1.03 - 1.05 $3.84 - 3.86 Other 0.17 0.08 0.21 0.11 0.57 Restructuring (0.08) (0.04) (0.01) (0.10) (0.23) GAAP EPS $0.92 $1.06 $1.16 $1.04 - 1.06 $4.18 - 4.20 Guidance 4Q03E FY03E Revenues +17 – 19% +10
Slide 5: Economic Assumptions
2004 Economic Assumptions • Accelerating recovery in the US, European economies lagging while the Asia Pacific region exhibits continued growth • Domestic capital spending likely to trail in the economic rebound as a result of overcapacity and the shift of manufacturing to low cost areas • Risk that
Slide 6: Fluid Technology 2004 Outlook
Fluid Technology 2004 Outlook Revenue Growth Operating Margin $2,320- 2,365 13.0 - 13.5% $2,210 - 2,250 12.5 - 12.8% +4 - 6% +20 - 100 bps 2003 2004 2003 2004 2004 Highlights Long Term Growth Drivers • Expanding product offering and market • Aging infrastructure and stricter regulations fundamentals
Slide 7: Defense Electronics & Services 2004 Outlook
Defense Electronics & Services 2004 Outlook Revenue Growth Operating Margin $1,725-1,765 $1,875-1,925 10.2 - 10.4% 10.0 - 10.5% +8 - 10% Flat 2003 2004 2003 2004 2004 Highlights Long Term Growth Drivers • Broader Defense Service offering to meet • Key technologies at the sweet spot of DoD growing ne
Slide 8: Motion & Flow Control 2004 Outlook
Motion & Flow Control 2004 Outlook Revenue Growth Operating Margin $945 - 965 $935 - 975 13.9 - 14.1% 14.5 – 15.0% 0 - (2)% +40 - 110 bps 2003 2004 2003 2004 2004 Highlights Long Term Growth Drivers • Decline in Auto Tubing due to platform losses • New applications for quick connects and decreasing
Slide 9: Electronic Components 2004 Outlook
Electronic Components 2004 Outlook Revenue Growth Operating Margin $600 - 640 6.0 - 7.0% $595 - 610 2.0- 4.0% +2 - 4% +200 - 500 bps 2003 2004 2003 2004 2004 Highlights Long Term Growth Drivers • Modest growth in most end markets • Improved customer service offering • New products to contribute 35%
Slide 10: Pension Outlook
2004 Pension Outlook Pension Plan Assumptions Current Projected Return on Plan Assets 9.00% 9.00% Discount Rate 6.50% 6.00% - 6.25% Pension EPS Impact $US Million except per share 2003 2004E Operating Income $ (30.4) $ (66) – (76) CAS412 8.9 12.0 Pension Income/(Expense) (21.5) (54) – (64) Per Share
Slide 11: EPS Walkforward
2004 EPS Walkforward 2003E $3.84 – 3.86 Pension (0.23) – (0.30) Healthcare (0.08) – (0.10) Taxes (0.05) Foreign Exchange 0 Restructuring Benefits 0.17 – 0.25 Total $3.65 – 3.66 Core Expansion 0.40 – 0.59 +10-15% Core Growth From 2004E $4.05 – 4.25 Segments 10
Slide 12: Guidance
2004 Guidance FY04 Impacts Low End High End • Electronic Components (Seasonality) • Favorable Economic Trends • Decline in Consumer Spending • Defense Wins • Pension (Discount Rate) • Electronic Components • New Products 2004 2003E Outlook Guidance Revenues $5,485-5,595 $5,730-5,900 +3 to 7% Operati
Slide 13: Summary
Summary • Solid Performance in 2003 – Market Share Gains and New Products Fuel Organic Growth – Strength in Defense and W/WW Offset Weakness at Electronics – Strong Cash Flow Performance and Solid Balance Sheet • Growth in 2004 Despite Non-Operating Headwind – Favorable Fundamentals Continue in Defe
Slide 14: ITT Industries
& ITT Industries