ITT Inc. · NYSE:ITT
ITT — ITT Industries — 14th Annual Pump, Valve & Motor Symposium 2004
25 slides from ITT's conference presentation, February 2004
Slide 1: Presentation to The 14th Annual Pump, Valve & Motor Symposium
Bob Ayers, President, ITT Fluid Technology Presentation to The 14th Annual Pump, Valve & Motor Symposium February 4-5, 2004
Slide 2: Agenda
Agenda ITT Industries - 2003 & Outlook 2004 FTC - Continuing Our Path Strengthening Leadership Positions Living the VBSS Culture Penetrating Strong Growth Markets Expanding Our Core
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this report, that are not historical facts, constitute “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, in general, predict, forecast, indicate or imply futu
Slide 4: Corporate Vision
Corporate Vision ITT Industries' Vision is to be a premier multi- industry company known for its management talent, market leadership, and operational excellence.
Slide 5: ITT Industries Today
ITT Industries Today REVENUE PROFILE (2003: $5.6 Billion ) • Global Multi-Industry Company Fluid Defense • Strong Positions/Attractive Technology Electronics 40% & Services Markets 32% • “Engineered Solutions” Focus Electronic Motion & Components Flow Control • Disciplined Management 10% 18% Process
Slide 6: Defense Electronics & Services
Defense Electronics & Services 2004 Outlook Revenue Growth Operating Margin $1,900 - 1,950 $1,791 10.5% 10.0 - 10.5% Up 8 to10% 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 needs in tr
Slide 7: Motion & Flow Control
Motion & Flow Control 2004 Outlook Revenue Growth Operating Margin $992 $935 - 975 14% 14.5 – 15.0% Down 2 to 6% Up 50 to 100 bps 2003 2004 2003 2004 2004 Highlights Long Term Growth Drivers • Decline in Auto Tubing due to platform • New applications for quick connects losses and decreasing “Big 3”
Slide 8: Electronic Components
Electronic Components 2004 Outlook Revenue Growth Operating Margin $600 - 640 6.0 - 7.0% $601 3.3% Flat to Up 6% Up 300 to 400 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% of
Slide 9: 2004 ITT Industries Outlook
2004 ITT Industries Outlook 1Q-04 FY-04 Revenue $1,380 - $1,420M $5,885 - $6,055M Segment Operating 10.2 – 10.4% 11.25 – 11.75% Margin - % EPS $0.85 - $0.89 $4.05 - $4.25 FCF $0 - $50M $400 - $450M Free Cash Flow = Cash from Operations (before pension pre-funding)-Capital Expenditures Note: Forecast
Slide 10: Fluid Technology 2003 & Outlook
Fluid Technology 2003 & Outlook REVENUE BY MARKET REVENUE BY GEOGRAPHIC PROFILE PRODUCT CATEGORY W & WW Treatment Other Water Engineered 10% 19% 6% Systems 16% Asia North Bio- Pacific Waste- Pumps America Pharm Service 8% Water 66% 53% 6% 4% 33% Europe Industrial 33% Building Trades 18% Repairs 14%
Slide 11: Growth in Attractive Markets
Growth in Attractive Markets 2000 YE 2003 YE W & WW Treatment W & WW 10% Treatment Water Water 6% 18% 19% Waste- Bio- Water Pharm Bio- Waste- 31% $1.8Bn 2% Water 33% $2.3Bn Pharm 6% Industrial 26% Building Trades Industrial 17% 18% Water/Wastewater 55% to Building 62% 14% Total Trades Growth from $1
Slide 12: Attractive W/WW Market Drivers
Attractive W/WW Market Drivers •Population Growth & Urbanization •50% in 20 Years to >8Bn •70% in Urban areas by 2015 vs. 50% Today •Aging Population Growth •Regulatory Drivers •US EPA 2000 •Enhanced Surface Water Treatment (LT2 & SW2) •US EPA 2003 • Draft Policy Safeguards for Combined Sewer Outflo
Slide 13: Moving Closer to the Customer
Moving Closer to the Customer 2000 2003 Engineered Engineered Systems Systems 5% 16% Service Pumps Pumps 4% & & Repairs 14% $1.8Bn Access. 77% Service $2.3Bn Access. 66% 4% Repairs 14% Engineered/Package Systems Growth from $90M to ≈$350M
Slide 14: Market Leadership Fundamentals
Market Leadership Fundamentals Fluid Control Sector: Leading Brands / Market Share Low Cost Manufacturing Technology Pacesetter Regional Global Customer-Centric Business Models - Solution Provider
Slide 15: Customer Centric Culture
Customer Centric Culture ITT Fluid Technology 2003 Sales: $2.3Bn Flygt Sanitaire WTG FHD IPG WW EPSG 34% 5% 24% 13% 15% 9% Wastewater Water Building Trades Industrial BioPharm
Slide 16: Transforming Value Based Six Sigma
Transforming Value Based Six Sigma Our Economic Engine 0 120% 2002 100% 0 % cumulative Producing Results … 2003 Savings >$100M 80% 0 60% VBSS VBSS Operational Operational Excellence Excellence 0 •• Minimize 40% MinimizeRestructuring RestructuringininDown DownEconomic EconomicTimes Times •• Minimize
Slide 17: Value Based Product Development for Greater Organic Growth
Value Based Product Development for Greater Organic Growth 14% Up $150M 10.5% •Sanitaire “MBR” % Net Up $80M •PumpSmart 200 Condition Monitoring Sales 8% •Sludge Handling •MF/UF WW Reuse •Flygt “N Pump” Filtration •WTG Hydrovar •Pure-Flo Valves 2000 2003 2006F
Slide 18: Accelerating Global Growth
Accelerating Global Growth All FT Units In China HQ Fluid Technology Asia - Pacific 2003 vs. 2002 Orders Up 60% Orders Up 45% Sales Up 53% Sales Up 38%
Slide 19: ITT Hengtong AWT - 2004
ITT Hengtong AWT - 2004 •Shanghai based, $8M Sales revenue with •Enhanced China Platform for Water Treatment & Filtration Systems •Core Competencies: - Systems application engineering - China Sales Channel - Membrane filtration systems and post-RO De-ionization (ultra-pure) Bao Steel Project
Slide 20: WEDECO - 2004
WEDECO - 2004 •$140M Sales Revenue, European HQ Facilities Germany, France, Italy, Hungary, USA & Korea •Global Leader in oxidation and ultraviolet disinfection for water and wastewater treatment Influent Biological Biological Membrane Disinfection Membrane Disinfection Treatment Treatment Filtratio
Slide 21: Global W/WW Treatment Transformation
Global W/WW Treatment Transformation $45M $72M $120M $300M+ 2000 2004 2004 Wedeco Disinfection 2003 PCI / Portacel 2004 HengTong AWT Membrane Treatment Membrane & Ultrapure & Fyne Process 2000 Sanitaire Biological Treatment 2002 WET & C’Treat Membrane Filtration & Desalination
Slide 22: 2000 – Largest Global Pump Company
2000 – Largest Global Pump Company $25Bn Served Market Fluid Industry Adjacencies Core BioPharm Pump Systems Products Biological Treatment Advanced Filtration
Slide 23: 2003 - Building with Adjacencies
2003 - Building with Adjacencies ••Served Served Market Now $50 - $60 Bn Fluid Industry Adjacencies Core BioPharm ••What’s What’s Next ? Pump Systems Rental Products Biological Treatment Advanced Disinfection Filtration Monitoring & Control Sludge Process
Slide 24: 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 25: ITT Industries
ITT Industries Engineered for life e ITT Industries Engineered for life
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