Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver — Investor Presentation (May 2012)
30 slides from Ingersoll Rand's investor presentation, May 2, 2012
Slide 1: Gardner Denver Investor Presentation
Gardner Denver Investor Presentation May 2012
Slide 2: Safe Harbor Disclosure
All of the statements made by Gardner Denver in this presentation or made orally in connection with it, other than historical facts, are forward-looking statements. As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relating
Slide 3: Gardner Denver Overview
Gardner Denver Overview
Slide 4: Gardner Denver Overview
Gardner Denver Overview Early stages of transformation to a high quality, high margin Industrial Company with Energy exposure ?Leading brands and technologies … strong distribution ?New, operationally focused team driving “The Gardner Denver Way” ?$2.4B global Company with diverse and attractive end
Slide 5: A global leader in compressed air and gas, vacuum and fluid transfer technologies
A global leader in compressed air and gas, vacuum and fluid transfer technologies We serve a wide range of industries with efficient & reliable products Energy Medical Mining Transportation Food & Beverage
Slide 6: Two business segments aligned to effectively serve our customers
Two business segments aligned to effectively serve our customers Engineered Products Group Industrial Products Group 2011 Sales by segment ~$1.3~$1.1B B Great portfolio of brands and businesses ??Petroleum pumps ??Liquid ring pumps ??Loading arms ??OEM compressors ??Compressors (>50psi) ??Blowers (<
Slide 7: Well established sales channels
Well established sales channels Distribution 9% Direct 60% OEM 31% Engineered Products Group(1) Industrial Products Group(1) Distribution 42% Direct 39% OEM 19% Products designed for customer specific applications Primarily standard configuration products (1) Company estimates (see note on p. 30)
Slide 8: Highly diversified and global
Highly diversified and global End Markets Geographic 2011 Revenue by End User Canada 3% United States 39% Latin America 3% Europe 31% Other 7% Asia 17% 2011 Revenue by Geography Visibility to a large cross section of global economy Industrial Manufacturing (28%) Upstream Energy (19%) Downstream Ener
Slide 9: Exposed to multiple phases of the economic cycle
Exposed to multiple phases of the economic cycle Early Cycle (1-18 months) Late Cycle (36+ months) Mid Cycle (18-36 months) ??Engineered packages ??Infrastructure projects ??Industrial air compressor??OEM s ??Aftermarket
Slide 10: Prepared for economic volatility
Prepared for economic volatility Announced global restructuring program in April 2012 Strong track record on cost reductions since 2008 Headcount (23)% reduction / 2,700 employees Footprint Closed 8 plants One ERP 71% + 450 bps Operating Margins
Slide 11: Growth Strategy
Growth Strategy
Slide 12: Simple, focused 5-point strategy
• Strengthen presence in attractive end markets & emerging markets 4. Selective acquisitions • Access to faster growing end markets and generate synergies Strategy Focus 2. Aftermarket growth • Higher margin, less cyclical 5. Margin expansion • Cost reductions and operational excellence 3. Innovativ
Slide 13: Organic growth
’11 $670 Organic growth Keys to organic growth • Leading brands & technologies Orders • Diverse end markets … strong distribution channels ‘10 $553 Backlog ’11 $2,474 ‘10 $2,062 ‘09 $1,570 ‘09 $395 • Growing emerging markets presence • Higher growth end markets • Aftermarket ($’s in millions) 1Q’12
Slide 14: Build out the aftermarket
Build out the aftermarket Key growth drivers • Large installed base Aftermarket as % of sales • Opportunity in pressure pumping repair and fluid ends ‘10 31% ‘09 29% ‘08 26% • Remote monitoring capabilities • Design in proprietary features Goal 40-45% • Extended warranty and service agreements ‘11 3
Slide 15: A more innovative Company
A more innovative Company ??Voice of customer differentiates products from competition ??Value proposition based on customer needs ??2011 product launches across multiple divisions demonstrate progress PZ-2400 Drilling PumHoffman Revolution p Quantima Compressor Goal: ~10% of annual revenues from ne
Slide 16: Strong track record on analyzing & integrating acquisitions
24 acquisitions over 15 years Strong track record on analyzing & integrating acquisitions 1996 2011 Engineered Products Group Industrial Products Group TCM Twentieth Century Mfg. Water Jetting • Butterworth • CRS Power Flow • Jetting Systems
Slide 17: IPG Margin Expansion
IPG Margin Expansion 1Q09 1Q10 2.0% 2Q09 3Q09 4Q09 Track record of Margin Expansion(2) 2Q10 2Q13Q10 4Q10 1Q11 1 3Q11 2.5% 6.8% 7.5% 8.3% 8.6% 9.4% 10.1%11.3% 11.7%13.1% Goal 14% Committed to 14% operating earnings by 2014: Restructuring … 27% reduction in employment since Oct ’08, new 2012 program P
Slide 18: EPG Margin Expansion
EPG Margin Expansion 1Q09 1Q10 19.5% 2Q09 3Q09 4Q09 EPG Margin Expansion(2) 2Q10 2Q13Q10 4Q10 1Q11 1 3Q11 19.7% 17.8% 20.9% 16.0% 19.5% 19.7% 24.0% 22.9% 23.3%23.6% +50 bps of margin expansion annually w/ no volume growth: Restructuring … reduced employment by 15% since ’08 with 15% increase in reve
Slide 19: Financial Results
SF P OWER P OINT T EMPLATE 03-27-08/19 F INANCIAL R ESULTS
Slide 20: A decade of financial performance
$379 $1,215 $1,895 Revenue $3.28 2012005 0 $1.37 $0.60 2000 2000 $31 $115 $202 Cash Flow from Operations A decade of financial performance 17% CAGR Strong track record 19% CAGR 21% CAGR ($’s in millions) DEPS
Slide 21: 2011 financial results
$1.9B $2.4B Revenue $5.51 2012010 1 $3.39 Adjusted DEPS(2) $202M $300M 2011 financial results 25% 63% 1.1 x Net Income A record year on key financial metrics Cash Flow from Operations (2) Adjusted DEPS (see note on p. 30)
Slide 22: Strong cash generation
Strong cash generation $237 $169 $169 Cash Flow Disciplined capital deployment FCF CFOA $278 $211 $202 $300 $244 FCF Conv. 143% N/M 98% 87% ($’s in millions) Capital expenditures… organic growth and productivity Financial objectives… reduce debt, strong balance sheet Selective acquisitions… inorgani
Slide 23: Internal long term operating goals
Internal long term operating goals progress • Grow 2 x GDP Operating goals 2011 Results • Margin expansion • FCF Conversion • Increase ROIC • Lean cost structure + + + / + + • Revenue up 25% • DEPS up 63% • 87%.target 100% • ROIC 18.3% • 16.7% SG&A to sales Good progress in 2011… more to do
Slide 24: 2012 earnings growth framework
2012 earnings growth framework Tailwinds: + Margin expansion “The Gardner Denver Way” + Orders momentum / EPG backlog + Aftermarket growth + Accretive M&A … Robuschi + Reduced share count / buyback program + Restructuring Headwinds: – Macro uncertainty incl. China, Europe – Pressure pumping capex de
Slide 25: The Gardner Denver Way
The Gardner Denver Way
Slide 26: Strategy supported by The Gardner Denver Way
Aftermarket growth Innovative products Selective acquisitions Margin expansion Organic growth CUSTOMERS Innovation High Velocity VALUE COMMITMENT RESOURCES Strategy supported by The Gardner Denver Way SHAREHOLDERS EMPLOYEES Execution requires superior human resources
Slide 27: Building a high performance culture
Building a high performance culture Operationally focused team Policy deployment Operating rhythms Clear accountability Continuous improvement New, operationally focused management team driving transformation
Slide 28: Gardner Denver Summary
Gardner Denver Summary Early stages of transformation to a high quality, high margin Industrial Company with Energy exposure ?Leading brands and technologies … strong distribution ?New, operationally focused team driving “The Gardner Denver Way” ?$2.4B global Company with diverse and attractive end
Slide 29: Gardner Denver May, 2012
Gardner Denver Investor Presentation May, 2012
Slide 30: Presentation notes
Presentation notes • Note 1: Company estimates • Note 2: Adjusted Operating Income, Adjusted Operating Margins, Adjusted Net Income and Adjusted DEPS are financial measures that are not in accordance with US GAAP. Adjusted Operating Income, Adjusted Operating Margins and Adjusted DEPS exclude the im