Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — Roper Industries — Merger or Acquisition (October 2003)
35 slides from Roper Technologies's merger presentation, Oct 22, 2003
Slide 1: Roper Industries, Inc. Investor Meeting
Roper Industries, Inc. Investor Meeting October 22, 2003
Slide 2: Safe Harbor Statement
Safe Harbor Statement The information provided in this presentation contains forward looking statements within the meaning of the federal securities laws. These forward looking statements include, among others, statements regarding our proposed acquisition of Neptune Technology Group Holdings Inc. (
Slide 3: Meets Disciplined Criteria/Adds Scale
Meets Disciplined Criteria/Adds Scale 7 = Antomatic Meter Reading (AMR) Technology/Engineered Content «= Rugged/Fortable Instruments YRS = Software Protocol = Consultative Selling High Gross Margins YES EBITDA Margin Capture YES Across Product Lines 29% EBITDA Margin + Product Development + AMR Grow
Slide 4: Accretive to Roper's Growth
fe) Accretive to Roper’s Growth Net Sales EBITDA aaens) $845+ (ions) $180+ $650+ a - L Roper 2003E 2003E Roper 2003E 2003E Combined Combined * Acquired Businesses Expect 2003 Net Sales of $195-$205 Million and 4-8% Growth in 2004 * Acquired Businesses Forecasting $57-$60 Million of EBITDA in 2003 as
Slide 5: Accretion Prospects for 2004
fe) a $0.10 Accretion Prospects for 2004 Diluted EPS Low Cap-Ex Requirements (Typically 2-3% of Net Sales) Build-to-Order Business Model Yields Low Net Working Capital Requirements Diluted EPS Excludes Charges Related to Purchase Accounting Inventory Revaluation ease 22,2003 ‘Note: 2004 estimates as
Slide 6: Expands Roper's EBITDA Margins
fe) Expands Roper’s EBITDA Margins Raper’s Segments I Gross Margin % WH EBITDA Margin % ake 58.6% 52.3% 54.1% 35-55% 46.2% 23% 275%) 21.7% 21.1% wep * MOIR paatelinetng Roper ‘xsber 22,2003 reoggrn mergh faaror Bhenbar.
Slide 7: Provides New Growth Platform
Provides New Growth Platform Neptune Roper Combined Indu Handheld Industrial Imaging + = some Instrumentation Energy struments Systems Energy Smear vey & Controls 2003E: $195+ Million 2003E: $650+ Million 2003E Combined: $845+ Million Adds Scale and Cash Earnings Power Ocaber 22,2003 7
Slide 8: Balanced Portfolio in Attractive End Markets
ee Balanced Portfolio in Attractive End Markets Pro Rata Net Sales Other eee 3% Refrigpration #0) Automative #5 ‘Note: 1992 an 2002 reflect ical year daa, 2002 conahined rete Repers eal yar daa combined with 8 Ocasber 22, 2003 ‘Neptune's calendar year dats.
Slide 9: Acquisition Financing
Acquisition Financing * Approximately $475 Million to Be Paid in Cash at Closing * Within Roper’s Historic Price-EBITDA Acquisition Range * $150 to $200 Million Roper Common Stock + $150 to $200 Million of Convertible Subordinated Notes mene + $300 Million of Bridge Financing Committed = $450 Millio
Slide 10: Water will be more important than oil this century
fe) “Water will be more important than oil this century.” — Boutros Boutros Ghali, Former Secretary General of the United Nations Water is Strategic June 2003 Infrastructure Polic cane cy Investment + The EPA is supporting + The EPA estimates up to + Need for more frequent, “strategic pricing” as a
Slide 11: Water Management Is Becoming Increasingly Important to Utilities
fe) * Water Management Is Becoming Increasingly Important to Utilities — Water Pricing and Water Conservation Efforts Have Increased Significantly — Utilities Need to Measure Water Consumption More Frequently, More Accurately and More Efficiently — Modernizing Water Monitoring Equipment Is Critical
Slide 12: North American AMR Market
fe) North American AMR Market AMR Market (Water Utilities) Key Drivers 180 * Operational Efficiency 160 gS . 140 & * Customer Service oh 120 * Meter Reader Safety H 100 * Eliminate Estimated Bills zs 60 * Shorter Billing Cycles “0 20 0 A) The Seo Rept nd Nepae Biaugenae, Ocaber 22,2003 ° Rare
Slide 13: North American Water Meter Market
fe) North American Water Meter Market Water Meter Market Key Drivers 400 “y OB —— * Technology Upgrades 350) 300 + Installed Base 3 250 * Conservation & 200 B * Privatization ~ 150 * Two-Thirds of Sales are 100 Replacements/Upgrades 50 $360 M Market in 2002, Pr oxsber 22,2003 ©) Sees: Pepritay Publi
Slide 14: Neptune: Consistent Revenue Growth
fe) 2 8 8 a Neptune Net Sales (SMillians) a a 125 100 Neptune: Consistent Revenue Growth © = Periods of Economic Recession 1972 1977 1982 1987 1992 1997 2002 table Through Cycle: ease 22,2003 14
Slide 15: Technology Migration Opportunity
fe) Technology Migration Opportunity © Driving Value Through Technology and : Hybrid oft Product Differentiation System State-of-the-Art © Capture New Customers and Maintain Existing Customer Base Drive-by RF Walk-by RF © Offers a Complete Migration Strategy Walk-by Probe Foundation E-Coder and Abso
Slide 16: Customers Gain Through Technology Upgrades
a) Customers Gain Through Technology Upgrades Dt Lo ‘Walk-by Handheld RF ‘¢R900) ‘Walle by Handheld, Probed Entry Walle by Handheld, Keyed Entry ‘Walle by Route Bask | 0 1000 =. 2000» 3000» 4000» 5000 ©6000 Daily Meter Reads per Person pelling Produc! 16 ease 22,2003
Slide 17: Full Range of Capabilities
fe) Full Range of Capabilities Walk-By Application DAP Poae00 4 Handheld Mobile Applicati EzDive R900 Radio Frequency = é T!10 Water Meter Hast Software EZRouteMAPS Route Management Software Neptune Produc ease 22,2003 17
Slide 18: The Complete Solutions Leader
fe) The Complete Solutions Leader Company Meters Walkby Driveby Network Hybrid Encoders RF RF RF RF Rugged Handheld Computers eating Software Invensys Badger AMCO (formerly ABB) Hersey Master Meter tron RAMAR Hexagram SchlumbergerSerra (soon patt of ATOS) Neptune Serves All omer Need: ease 22,2003 1
Slide 19: Experienced Management Team; Competitive Advantages
fe) « Experienced Management Team — Average Tenure of 20+ Years Competitive Advantages ¢ Strong Brand Name Recognition and Quality Reputation + Installed Base of 27 Million Meters * 35% Market Share in North American Residential Water Meter Market ¢ Continued Stream of New Product Development ¢ Nati
Slide 20: Four Growth Businesses
fe) Four Growth Businesses 2003E Net Sales: $195+ Million ‘Water AMR m AMR net sales doubled since ‘99 m 89% of total water AMR market still untapped m= Rapid growth ‘Water Meters m 27 million installed residential water meters in North America 2/3 of sales from meter replacements, upgrades Steady g
Slide 21: Expanding Share of Growing Water AMR Market
fe) Expanding Share of Growing Water AMR Market + AMR Has Grown at 25% CAGR « RF Segment of AMR Has Grown Faster * Neptune Gaining Share * 89% of Total North American Market Remains to Be Upgraded * Presents Compelling Case for Customers — Productivity — Service — Accelerated Billing Cycles — Conser
Slide 22: Leading Position in Stable Water Meter Market
fe) Leading Position in Stable Water Meter Market « Access to Over 56,000 Utilities - and Water Systems Throughout x an — North America * Two-Thirds of Sales from Meter Replacements, Upgrades * Strong Market Position — Distribution Channels — Automated Production Creates Cost Advantages — Long Histo
Slide 23: A Leader in Fully Rugged Handheld Computers
fe) A Leader in Fully Rugged Handheld Computers Fully Rugged Handheld Computers Meet Rigorous Environmental Performance Standards * 1998-2002 Net Sales CAGR of 20% * DAP Technologies Leads the Market — Very Rugged and Reliable — Strong Distribution, VAR Relationships — High Level of Customer Service
Slide 24: DB Microware Software for Meter Reading
fe) * DB Microware Designs, Markets, Customizes, Installs and Maintains a Software for Meter Reading, Work & DB Microware, Inc Order Management and Route a Optimization Growing Software Opportunity * Enhances Water Market End-to-End Solution Offering — Access to Expanded Customer Base, Including Lar
Slide 25: Leverages Instrumentation Segment Strengths
fe) Leverages Instrumentation Segment Strengths [strategy [operating Companies + Tightening quality, performance and environmental stmdards oreate 3 wre the growing opportunities for the Instrumentation segment This segment is focused on Asines AACTON furthering its leading market positions through
Slide 26: Adding Scale Benefits to Industrial Technology
fe) Adding Scale Benefits to Industrial Technology [strategy + Provides products and solutions for improving customer productivity Current segment initiatives are global sourcing, geographic expansion, asset velocity improvement and capture of internal and external synergies [operating Companies HAN
Slide 27: Great Fit with Roper
fe) ¢ Great Fit with Roper © Meets Disciplined Acquisition Criteria © Offers Opportunities in Adjacent Markets Compelling Opportunity « Acquisition Immediately Adds: © 30%+ to Roper’s 2003 Net Sales * 45%+ to Roper’s 2003 EBITDA « Financing Creates More Flexible Capital Structure « Expands Roper’s G
Slide 28: Appendix
Appendix ease 22,2003
Slide 29: Roper's Long Track Record of Success
fe) Roper’s Long Track Record of Success Pret sates” [ vitutea EPs erm a (Millions) | cAcR=24% $2.08 $617 Scientlc& Indureta Tnaeing ‘romanian nergy Stans & Contos Cindwith Tedoebey ‘san > “A afl 92 93 94 95 96 97 98 9 WO Ol 02 92 93 94 95 96 97 98 99 OO OI 02 Consistent Strategy and Results * Highl
Slide 30: Roper's Operating Segments
Roper’s Operating Segments Sophisticated products and sofutions that: * Prepare material samples for analysis + Test fluid products for physical and elemental properties + Detect leaks in consumer and industrial products + Dispense fluids with extremely high precision + Perform spectrographic analys
Slide 31: Instrumentation Segment
fe) Instrumentation Segment I Overview + These businesses provide sophisticated solutions ‘that prepare material samples for analysis, test fluid products for physical and elemental properties, detect leaks in consumer and industrial products, and dispense fluids with extremely high precision + Serv
Slide 32: Industrial Technology Segment
fe) Industrial Technology Segment I Overview Offerings include centrifugal, gear, progressing cavity and diaphragm pumping solutions; refrigeration controls and systems ;rotating machinery and process controls;and precision metering and measurement valves for specialty applications + Provides soluti
Slide 33: Energy Systems & Controls Segment
fe) I Overview | Operating Companies «Energy Systems & Controls provides service and COMPRESSOR ZETEC solutions to improve quality, safety and efficiency GONTROLS forcustomer equipment and processes, primarily in energy markets with strong long-term growth potential + Provides control, monitoring an
Slide 34: Scientific & Industrial Imaging Segment
fe) Scientific & Industrial Imaging Segment I Overview | Operating Companies The Scientific In dustnal ixaging segment provides solutions that enable global esearch in Gotan, aP K~S) life and physical sciences : —< REDLAKE + Key products are digital imaging cameras, spectrographic systems, electron
Slide 35: Reconciliations and Definitions
Reconciliations and Definitions (Amourts in $Milins) zon [003 [04 baistial Tetnology Segment EBM DAMgi one [0m [04 Cheri Prot Fal oper uri, o,EBITOA, it aed A : Ne Esmings $4) 055 Higa cy er sna Pac ae Loss Fram Dissonanued Opes ‘ol si fifo Sindethal raging Segment EBITDA it ise Ee ESAMESTESE Sasso
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