Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver — Investor Presentation (November 2007)
42 slides from Ingersoll Rand's investor presentation, Nov 27, 2007
Slide 1: Investor Presentation November 2007
Investor Presentation November 2007 Exhibit 99.1
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Statements in this presentation or made orally in connection with it, other than historical facts, are considered forward-looking and made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. A list of uncertainties and factors that could c
Slide 3: The Gardner Denver Story
The Gardner Denver Story The Setting The global market segment for Gardner Denver's industrial products is >$7.8B growing at 3-5% annually (1) The Company The recognized leader in all key products The Future Continue to execute the same strategies that have delivered for 10+ years consistent growth
Slide 4: The Performance Record
Revenues 10-Year CAGR Cash Flow (2) 10-Year CAGR DEPS 10-Year CAGR The Performance Record Our Strategy has Delivered 10-year CAGR: 1996 - 2006 An excellent platform to build on 22.6% 17.3% 16.3%
Slide 5: Agenda
Agenda 1 The company 2 The strengths 3 The performance 4 The future
Slide 6: Gardner Denver at a Glance
Gardner Denver at a Glance Global ranking in major products #1 or #2 Manufacturing facilities worldwide 38 Employees worldwide 6,000 Acquisitions last 10 years 20 Market capitalization ~$2B Management ownership 3%
Slide 7: A Company On the Move
2001 2007E (3) A Company On the Move Segment operating earnings as a percentage of revenues (6) 9.1% ~15.0% Revenues $420M $1.8B % of revenues outside U.S. 30% ~60% % of revenues from U.S. upstream oil and gas 21% ~14% DEPS $0.70 (4) $3.49 to $3.54 (5)
Slide 8: Changing the Company Profile - Higher Growth, Lower Risk
Changing the Company Profile - Higher Growth, Lower Risk Global Footprint U.S. Higher Lower Cyclicality of end-market segments Gardner Denver Expanding internationally Moving into stable growth market segments such as - environmental - medical
Slide 9: Building on Two Strong Segments
Building on Two Strong Segments Europe strong Plant rationalizations ? savings Organic growth in 2007E ~4-5% $7.8B (1) 7-10% Outlook: growth moderating Organic growth in 2007E ~16-18% >$1.7B (1) 15-20% Compressor and Vacuum Products 78% of Q3 2007 YTD revenue Fluid Transfer Products 22% of Q3 2007 Y
Slide 10: Diversified Revenue Base
Industrial Manuf Medical Paper Energy Environmental Printing Food & Bev Transportation Chemical Automotive Services Other 0.23 0.07 0.03 0.23 0.06 0.03 0.06 0.14 0.05 0.02 0.08 United States Canada Latin America Europe Asia Other 458.5 236.7 81.6 56.6 601.8 191.8 42.2 Diversified Revenue Base By Ind
Slide 11: The Broadest Product Range
Loading Arms Well Stimulation Pumps Well Drilling Pumps Industrial Compressors Mobile Blowers Industrial Blowers Liquid Ring Pumps Specialty Components to OEMs The Broadest Product Range Compressor & Vacuum Products Segment Fluid Transfer Products Dresser Inc. SIHI/Sterling Fluid Systems Gardner Den
Slide 12: Agenda
Agenda 1 The company 2 The strengths 3 The performance 4 The future
Slide 13: Our Business Model Builds on our Strengths
Our Business Model Builds on our Strengths 2. Develop differentiated solutions 3. Low cost manufacturing 4. Grow organically, acquisitions 1. Leverage strong market segment position
Slide 14: Leverage Market Segment Position: Strong Global Platform
1. LEVERAGE MARKET SEGMENT POSITION Strong Global Platform... Leading brands > 1,000 reps, distributors and dealers / key OEM relationships - often exclusive Strong distribution network and OEM alliances ~ 20-25% of revenue from aftermarket parts and services Large installed equipment base
Slide 15: Leverage Market Segment Position: Broadest Product Range
1. LEVERAGE MARKET SEGMENT POSITION .... With the Broadest Product Range From the largest drilling pump... .... to the smallest air sampling pump
Slide 16: Develop Differentiated Solutions
2. DIFFERENTIATED SOLUTIONS Develop Differentiated Solutions Close customer relationships + Proprietary products + New technologies Differentiated, higher margin solutions
Slide 17: Continue to Reduce Costs
3. LOW COST MANUFACTURING Continue to Reduce Costs Key Initiatives Global sourcing Lean enterprise techniques Acquisition integration Profitability improvement initiatives Investment in efficiency- enhancing capital projects Results Net material cost reduction opportunities 492,000 ft2 space reducti
Slide 18: Grow Organically and Through Selective Acquisitions
4. GROWTH Grow Organically and Through Selective Acquisitions Organic growth long term industry growth rates ~ GDP Excellent record of integrating acquisitions immediately accretive, consistently meet or exceed earnings targets
Slide 19: Blowers Highlight our Success in Acquisitions (Before: 1994)
4. GROWTH Blowers Highlight our Success in Acquisitions 50 25 15 10 7 5 3 1 3.0 1.5 1.0 0.7 0.5 0.3 0.2 0.06 Bar PSI 100 500 1000 3000 10,000 100,000 cfm 175 875 1750 5250 17,500 175,000 m 3/hr 3 15 30 90 300 3000 m 3/min - -0.5 - -2.5 - -5.0 - -7.3 - -9.8 - -13.3 - -13.8 - -14.7 - -0.03 - -0.15 - -
Slide 20: Blowers Highlight our Success in Acquisitions (After: 2007)
4. GROWTH Blowers Highlight our Success in Acquisitions 50 25 15 10 7 5 3 1 3.0 1.5 1.0 0.7 0.5 0.3 0.2 0.06 Bar PSI 100 500 1000 3000 10,000 100,000 cfm 175 875 1750 5250 17,500 175,000 m 3/hr 3 15 30 90 300 3000 m 3/min - -0.5 - -2.5 - -5.0 - -7.3 - -9.8 - -13.3 - -13.8 - -14.7 - -0.03 - -0.15 - -
Slide 21: Agenda
Agenda 1 The company 2 The strengths 3 The performance 4 The future
Slide 22: Strong Revenue and DEPS Record
Strong Revenue and DEPS Record 2001 2002 2003 2004 2005 2006 East 420 418 440 740 1215 1669 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 ($ in millions, except per share data) Revenues YTD Q3 '07: up 10.5% 2001 2002 2003 2004 2005 2006 East 0.7 0.61 0.64 0.96 1.37 2.49 West 30.6 38.6 34.6 31.6 N
Slide 23: Impressive Working Capital Improvements
Impressive Working Capital Improvements Inventory Turnover DSO 1995 1996 1997 1998 1999 2000* 2001 2002* 2003 2004* 2005 2006 2007 DSO 76.1 79.2 77.6 65.7 80.7 70.5 71 66 64.2 62.5 57.2 55 59.4 North 45.9 46.9 45 43.9 1995 1997 1999 2001 2003 2005 2007 DSO 76.1 79.2 77.6 65.7 80.7 70.5 71 66 64.2 62
Slide 24: The Resources to Grow
The Resources to Grow 2001 2002 2003 2004 2005 2006 East 44 53 46 76 115 167 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Growing Cash Flow (2) ($M) Low Net Debt to Cap Ratio A powerful cash generation engine 6/30/05 9/30/2007 2003 2004 2005 2006 East 0.465 0.18 46 76 115 167 West 30.6 38.6 34.6
Slide 25: Agenda
Agenda 1 The company 2 The strengths 3 The performance 4 The future
Slide 26: Our Seven Strategies For Growth
Our Seven Strategies For Growth Reduce costs Pursue international markets Manufacture proprietary products Accelerate new product development Embrace new technologies Develop our people Pursue strategic acquisitions A proven formula for success
Slide 27: Gardner Denver Earnings Drivers 2001 to 2006
Gardner Denver Earnings Drivers 2001 to 2006 Faster growing global market segments Selective acquisitions New products Margin improvements Industry annual growth rate Gardner Denver earnings CAGR
Slide 28: Outlook by End Market Segments
Outlook by End Market Segments (3) North America: slowing growth Europe, Asia: continued growth 23% Industrial Manufacturing Comment Outlook Market Segment 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 77 23 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 % of Revenues (7) a Upstream: mixed-to-down
Slide 29: A Closer Look at Acquisitions
EARNINGS GROWTH DRIVERS A Closer Look at Acquisitions Proven record as successful consolidator in compressor and vacuum products Next target market segment industrial pumps: Why we like the Industrial Pump Market Segment Size of worldwide market $29B + Industrial pump market segment size vs. compres
Slide 30: Consolidation Opportunity in Industrial Pumps
Consolidation Opportunity in Industrial Pumps Estimated 2006 Pump Sales of Top 10 Companies (10) ITT $2.7B Ebara $1.7B Grundfos $1.7B Flowserve $1.6B Sulzer $1.4B Weir $1.4B KSB $1.2B Wilo AG $1.2B Roper Industries $1.1B Putzmeister $0.7B $29B Market Segment Worldwide (10) 1st Qtr 2nd Qtr East 50 50
Slide 31: A Closer Look at Operating Leverage from Organic Growth
EARNINGS GROWTH DRIVERS A Closer Look at Operating Leverage from Organic Growth(11) Organic increase in revenues of: 1% Margin on incremental revenues: 20 to 25% Increase in DEPS: $0.04 to $0.05
Slide 32: Current Low Valuation
Current Low Valuation P/E based on 2008E consensus (12) Gardner Denver Peer group median East 9.5 14.5 CIRCOR International Crane Co. EnPro Flowserve Gorman-Rupp Graco IDEX Ingersoll Rand Nordson Parker Hannifin Pentair Roper Industries Robbins & Myers Watts Water Technologies Peer group includes:
Slide 33: Acquisitions: A Long Runway for Growth
Acquisitions A Long Runway for Growth Faster growing market segments in Europe, Asia Steady organic growth Powerful cash flow engine
Slide 34: Why Invest in Gardner Denver
Why Invest in Gardner Denver Well positioned in large global market segments leading positions, global footprint, steady growth Impressive performance record 10-year DEPS growth of 16.3%, acquisition expertise, deliver on commitments The future looks bright powerful cash flow engine to fund continue
Slide 35: Investor Presentation November 2007
Investor Presentation November 2007
Slide 36: Segment Revenues by Industries Served
Segment Revenues by Industries Served Industrial Manuf Medical Drilling & Production Other Energy Environmental Printing Food & Bev Transportation Chemical Automotive Services Other 31353 0 233848 50466 1338 0 0 23203 14332 0 3000 Fluid Transfer Products (7) Industrial Manuf Medical Paper Energy Env
Slide 37: Current Conditions-Fluid Transfer Products
Current Conditions-Fluid Transfer Products Demand driven by increasing rig counts, utilization and day rates Declining production per rig results in increasing wells drilled 1/1/1981 2/1/1981 3/1/1981 4/1/1981 5/1/1981 6/1/1981 7/1/1981 8/1/1981 9/1/1981 10/1/1981 11/1/1981 12/1/1981 1/1/1982 2/1/19
Slide 38: Recent Developments
Recent Developments EBT Orders ($ millions, except per share data) On October 24, 2007 Gardner Denver Reported Q3 Results Q3 YTD 06 Q3 YTD 07 Dollars 1229.6 1358.5 Q3 YTD 06 Q3 YTD 07 Dollars 1.79 2.62 Revenue Diluted EPS Q3 YTD 06 Q3 YTD 07 Dollars 142.7 188 Q3 YTD 06 Q3 YTD 07 Dollars 1300.1 1401.
Slide 39: Strong Balance Sheet
Strong Balance Sheet ($ in millions) Pro Forma(9) 6/30/05 09/30/07 Cash and equivalents $118.4 $ 88.8 Total Revolver 117.0 90.8 Term Loan A 380.0 79.8 Other Debt 35.0 30.8 Senior Subordinated Notes 125.0 125.0 Total Debt 657.0 326.4 Stockholders' equity 618.9 1,081.3 Total capitalization $1,275.9 $1
Slide 40: Significant Operating Leverage
Significant Operating Leverage ($ in millions, except per share data) 2006 revenues $1,669 Illustrative 1% revenue increase (organic growth) $17 20-25% margin on incremental revenues $3.3-$4.2 Incremental after-tax earnings (14) $2.3-$2.9 Pro forma shares outstanding 54,400 Incremental EPS Impact of
Slide 41: Strategic Acquisitions
Strategic Acquisitions Date Business Products Region 1996 TCM Oilfield pumps US Lamson Centrifugal blowers, exhausters US 1997 Tamrotor Rotary screw compressors Europe 1998 Wittig Vane compressors, vacuum pumps Europe Geoquip Oilfield and jetting pumps, aftermarket US Champion Reciprocating compress
Slide 42: Presentation Notes
Presentation Notes Note 1: Company estimates Note 2: From operating activities Note 3: Outlook by end market segments and 2007 estimates reflects the Company's views as of the third quarter 2007 earnings release on October 24, 2007 Note 4: Adjusted for a 2-for-1 stock split completed in 2006 Note 5:
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