Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Q1 2020 Earnings Presentation
36 slides from Ingersoll Rand's earnings presentation, May 12, 2020
Slide 1: Ingersoll Rand Q1 2020 Earnings Presentation
Ingersoll Rand Q1 2020 Earnings Presentation May 12, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including s
Slide 3: Today's Agenda
Today’s Agenda Our Top Priorities Company Highlights Segment Highlights Key Takeaways Q&A Q& 3
Slide 4: Thank You to Our Essential Workers for Delivering Critical Products
THANK YOU to Our Essential Workers for Delivering Critical Products 4
Slide 5: Three Key Priorities and Today's Framework
Three Key Priorities and Today’s Framework ENSURING THE SAFETY OF EMPLOYEES, CUSTOMERS AND COMMUNITIES 01 • Living our Purpose and Values • Strong and Swift Company Response to COVID-19 • Employee Response STRONG FOCUS ON INTEGRATION AND EXECUTION 02 • Accelerating Synergy Delivery: Structural Cost
Slide 6: Coming Together as One Company and During COVID-19, Enabled by Strong Purpose
01 Coming Together as One Company and During COVID-19, Enabled by Strong Purpose Our Values are an Integral Part of IR Execution Excellence (“IRX”) We Are Committed to Making We Foster Inspired Teams Our Customers Successful We Are Bold in Our Aspirations While Moving We Think and Act Like Owners Fo
Slide 7: Safety of Employees and Communities: COVID-19 Response
01 Safety of Employees and Communities: COVID-19 Response Employee Health, Safety and Support SUPPORTING EMPLOYEES “I am proud to see the level of engagement and communications from leadership…” Daily tracking of status of all employees by global EHS team Increasing health benefits for employees
Slide 8: Strong Focus on Integration: Accelerating Pace of Synergy Delivery
02 Strong Focus on Integration: Accelerating Pace of Synergy Delivery1 Synergy $350M+ SYNERGY DELIVERY UPDATE Funnel Synergy funnel built in excess of $350M with continued room for growth Accelerating pace of delivery Run-Rate ~$250M2 • $90M of annualized structural reductions already executed w
Slide 9: Managing the Situation: Incremental Cost Actions While Continuing to Invest in Future
02 Managing the Situation: Incremental Cost Actions While Continuing to Invest in Future Decremental Margins1 Limited to <30% for …Due to Our Aggressive Focus on Total Company Despite 15% Revenue Decline2 … Cost Management Q1’20 Adj EBITDA MANAGING MARGINS2 2020 COST ACTIONS (Incremental to Deal Syn
Slide 10: Strong Focus on Integration and Execution: Prioritizing Cash and Liquidity
02 Strong Focus on Integration and Execution: Prioritizing Cash and Liquidity Key Debt and Liquidity Statistics Areas of Opportunity Working Capital: Debt Summary March 31, 2020 • Utilizing IRX to drive inventory reductions New Term Loan B Priced at L+175 $1,900M • Deploying AR/AP best practices t
Slide 11: Executing Five Points of Strategy; Introducing Sustainability as a New Pillar
03 Executing Five Points of Strategy; Introducing Sustainability as a New Pillar • Ownership culture Deploy Talent • Highly engaged employees • Speed of innovation in selected niche markets Accelerate Growth • Execution of Demand Generation • Grow aftermarket revenue stream (40%+) Expand Margins • I
Slide 12: Q1 2020 Financial Performance – As Reported
Q1 2020 Financial Performance – As Reported1 ($M, excl. EPS) Orders Revenue Net Income EPS Up 38% Up 29% Down 178% Down $0.36 $844 $47 $800 $0.23 $620 ($37) $614 $(0.13) Q1 2019 Q1 2020 • Q1’20 includes $197 million of pre-tax amortization, restructuring and related business transformation costs, ac
Slide 13: Q1 2020 Financial Performance – Supplemental Financial Information
Q1 2020 Financial Performance – Supplemental Financial Information1 ($M, excl. EPS) Adjusted Orders Adjusted Revenue Adjusted EBITDA Further Adj Diluted EPS2 Down 8%; Down 7% ex-FX Down 15%; Down 14% ex-FX Down 24% Down $0.12 $275 $30 0.00 $1,531 $1,500 $25 0.00 $0.37 $208 $20 0.00 $1,405 $15 0.00 1
Slide 14: Q1 2020 Financial Performance
Q1 2020 Financial Performance ($M, excl. Leverage) Free Cash Flow1 Leverage2 Commentary On As Reported Basis (Net Debt / LTM Adjusted EBITDA) Capex: All spend approved by CEO/CFO; targeting spend reduction to <1.5% of 4.2x sales (as opposed to ~2% $68 $(8) historically) $60 2.9x Capital allocati
Slide 15: Industrial Technologies and Services Q1 2020 Highlights
Industrial Technologies and Services Q1 2020 Highlights Q1 2020 Financials – Supplemental Financial Info ($M) Q1 2020 Supplemental Financial Info Revenue/Orders Bridge Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Adjusted Orders Adjusted Revenue $795.8 $976.2 (18.5)% (16.8)% (9.5)%
Slide 16: Precision and Science Technologies Q1 2020 Highlights
Precision and Science Technologies Q1 2020 Highlights Q1 2020 Financials – Supplemental Financial Info ($M) Q1 2020 Supplemental Financial Info Revenue/Orders Bridge Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Adjusted Orders Adjusted Revenue $192.2 $213.6 (10.0)% (8.6)% 1.1% (1.6
Slide 17: Specialty Vehicle Technologies Q1 2020 Highlights
Specialty Vehicle Technologies Q1 2020 Highlights Q1 2020 Financials – Supplemental Financial Info ($M) Q1 2020 Supplemental Financial Info Revenue/Orders Bridge Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Adjusted Orders Adjusted Revenue $185.4 $173.9 6.6% 7.0% 8.2% (0.3)% 0.0% 7
Slide 18: High Pressure Solutions Q1 2020 Highlights
High Pressure Solutions Q1 2020 Highlights Q1 2020 Financials – Supplemental Financial Info ($M) Q1 2020 Supplemental Financial Info Revenue/Orders Bridge Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Adjusted Orders Adjusted Revenue $96.4 $135.9 (29.0)% (28.6)% (25.4)% (0.4)% 0.0%
Slide 19: Current Business Trends and Scenario Analysis
Current Business Trends and Scenario Analysis Current Business Trends Scenario Analysis April 2020 Performance Cash Breakeven Scenario • Stress testing balance sheet against across multiple Order Rates Stabilizing but down ~20% YoY1… Book to Bill >1 scenarios based on different revenue levels to ass
Slide 20: Key Takeaways – Investing with Ingersoll Rand
Key Takeaways – Investing with Ingersoll Rand Creating a Premier Industrial Company with Iconic Brands and Market Leading Positions in 01 Early Stages of Transformation 02 Multiple Levers for Value Creation while Executing our Top Priorities • Safety of Our Employees and Communities • Strong Focus o
Slide 21: Appendix
am) Ingersoll Rand Appendix
Slide 22: As Reported Financials: Reconciliation of Net (Loss) Income and EPS to Adjusted
As Reported Financials: Reconciliation of Net (Loss) Income and Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share 22
Slide 23: As Reported Financials: Reconciliation of Net (Loss) Income to Adjusted EBITDA and Free Cash Flow
As Reported Financials: Reconciliation of Net (Loss) Income to Adjusted EBITDA and Adjusted Net Income and CFOA to Free Cash Flow 23
Slide 24: As Reported Financials: Reconciliation of Segment Adjusted EBITDA to Income Before Taxes
As Reported Financials: Reconciliation of Segment Adjusted EBITDA to (Loss) Income Before Income Taxes 24
Slide 25: Unaudited Supplemental Adjusted Combined Financial Information
Unaudited Supplemental Adjusted Combined Financial Information Ingersoll Rand is providing the below unaudited supplemental historical financial information of the Company on a non-GAAP adjusted basis for the quarterly periods ended March 31, 2020 and 2019 as if the Transaction was completed on Janu
Slide 26: Table 1: Supplemental Adjusted Combined Financial Information by Segment
Table 1: Unaudited Supplemental Adjusted Combined Financial Information by Segment INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT (Dollars in millions, per share amounts in whole dollars) For the Three Month Period Ended March 31, 2020
Slide 27: Table 2: Supplemental Adjusted Revenue and Order Growth by Segment
Table 2: Unaudited Supplemental Adjusted Combined Revenue and Order Growth / (Decline) by Segment1 INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION UNAUDITED SUPPLEMENTAL ADJUSTED REVENUE AND ORDER GROWTH / (DECLINE) BY SEGMENT For the Three Month P
Slide 28: Table 3: Reconciliation of Supplemental Adjusted Net Income and Diluted EPS
Table 3: Reconciliation of Unaudited Supplemental Adjusted Net Income and Supplemental Adjusted Diluted EPS to Supplemental Further Adjusted Net Income and Supplemental Further Adjusted Diluted EPS INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RE
Slide 29: Table 4: Reconciliation of Supplemental Adjusted Diluted EPS to Further Adjusted
Table 4: Reconciliation of Supplemental Adjusted Diluted EPS to Supplemental Further Adjusted Diluted EPS INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF SUPPLEMENTAL ADJUSTED DILUTED EPS TO SUPPLEMENTAL FURTHER ADJUSTED DILUTED E
Slide 30: Table 5: Reconciliation of Supplemental Adjusted Net Income to Adjusted EBITDA
Table 5: Reconciliation of Supplemental Adjusted Net Income to Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF SUPPLEMENTAL ADJUSTED NET INCOME TO SUPPLEMEN
Slide 31: Table 6: Supplemental Adjusted Revenue by Segment and Segment EBITDA Reconciliation
Table 6: Supplemental Adjusted Revenue by Segment and a Reconciliation of Supplemental Segment Adjusted EBITDA to Supplemental Adjusted Income Before Income Taxes INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION SUPPLEMENTAL ADJUSTED REVENUE BY SEGM
Slide 32: Table 7: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment
Table 7: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment and for the Company and Segment Adjusted EBITDA to Supplemental Segment Adjusted EBITDA INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF GAAP REVEN
Slide 33: Table 8: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA
Table 8: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA and Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED
Slide 34: Table 9: Reconciliation of GAAP Diluted EPS to Further Adjusted Diluted EPS
Table 9: Reconciliation of GAAP Diluted EPS to Supplemental Further Adjusted Diluted EPS INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO SUPPLEMENTAL FURTHER ADJUSTED DILUTED EARNINGS PER SHARE (
Slide 35: Notes to Tables 3, 4, 5 of Supplemental Adjusted Combined Financial Information
Notes to Tables 3, 4, 5, and 6 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 28 – 31 All unaudited supplemental adjusted financial information presented in this document represents the newly combined Ingersoll Rand giving effect to the Merger as if it happened on Ja
Slide 36: Notes to Tables of Supplemental Adjusted Combined Financial Information (continued)
Notes to Tables 3, 4, 5, and 6 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 28 – 31 (continued) (e) Represents insurance recoveries of our shareholder litigation settlement in 2014. (f) Adjusted other adjustments are comprised of the following items: i. estimated e