ITT Inc. · NYSE:ITT
ITT — Q2 2014 Earnings Presentation
22 slides from ITT's earnings presentation, Jul 31, 2014
Slide 1: ITT Corporation Q2 2014 Earnings Call
ITT Corporation Q2 2014 Earnings Call July 31, 2014
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 (the “Act”). No forward-looking statement can be guaranteed, and actual results may differ materially from th
Slide 3: Q2 2014 Overview
Q2 2014 Overview Strong Execution Global Energy and Mining Project Pumps Growth +9% Total Revenue Growth Auto Brake Pad Market Share Gains and Aftermarket Growth +8% Organic Revenue Growth Global KONI Rail Growth 14.1% Adjusted Segment Operating Margin Adjusted Segment +100 bps Operating Mar
Slide 4: Q2 2014 Strategic Execution Update
Q2 2014 Strategic Execution Update Market +9% Emerging Market Organic Growth Expansion +7% Developed Market Organic Growth On Time Delivery Improvement Differentiated Customer State-of-the-Art Testing Capabilities Experience Customer Supplier Awards Accelerating LEAN Transformation Operational $4M R
Slide 5: Q2 2014 ITT Results
Q2 2014 ITT Results Continuing Operations (unaudited) Q2 $ millions except per share amounts 2014 vs. 2013 Revenue $663 +9% Adjusted Segment Operating Income $93 +17% Adjusted EPS $0.60 +18% Orders $674 +9% +9% Total Revenue; +8% Organic Revenue +17% Adjusted Segment Operating Income Oil & Gas Pro
Slide 6: Revenue by Market Growth
Q2 2014 Revenue by Market +30% Q2 2014 vs. Q2 2013 Total +9% Organic +8% +25% Energy +17% Transportation +8% Mining Industrial +1% +20% Q2 2014 vs. Q2 2013 Energy +15% Growth Auto, Rail & +10% Other Trans General Industrial Emerging +5% Markets +9% Aero & Defense 0% $50M $100M Chem & Ind’l $150M $20
Slide 7: Total Revenue by Major Geographies
Q2 2014 Total Revenue by Major Geographies US & Canada Europe Emerging Markets +9% Total +7% Total +9% Total Oil & Gas Project Pumps Oil & Gas Project Pumps Middle East Oil & Gas Energy (Bornemann) Project Pumps Timing of Auto Brake Pad Aftermarket Auto Brake Pads from Auto Brake Pad Mar
Slide 8: Q2 2014 Adjusted Segment Operating Margins
Q2 2014 Adjusted Segment Operating Margins +100 bps Expansion Strong Operating Productivity Vs. PY LEAN Transformation Q2 2013 Adjusted Segment Turnaround of Interconnect 13.1% Solutions & KONI Businesses Operating Margin Restructuring Savings from Volume, Mix, Productivity & Other +140 bps
Slide 9: 2014 Guidance Update
2014 Guidance Update 2014 Revenue Guidance Previous Revised Organic +4% to 6% +5% to 6% Total +4% to 6% +5% to 7% 2014 Adjusted EPS Guidance Previous 2014 Adjusted EPS Mid-Point Guidance $2.32 Operational Impacts $0.07 Global Auto Brake Pad Volume KONI Volume & Turnaround Benefits Higher Pump
Slide 10: Supplemental Financial Data
Supplemental Financial Data
Slide 11: Q2 2014 Industrial Process
Q2 2014 Industrial Process Q2 $ millions (unaudited) 2014 vs. 2013 Revenue $289 +8% Adjusted Segment Operating Income $27 (-12%) Q2 Results +8% Organic Revenue Q2 Highlights +21% Oil & Gas Project Pumps 1.01x Book-to-Bill, Backlog +3% vs. Q4 2013 +24% Mining Project Pumps Driven by +6% Total
Slide 12: Q2 2014 Motion Technologies
Q2 2014 Motion Technologies Q2 $ millions (unaudited) 2014 vs. 2013 Revenue $198 +16% Adjusted Segment Operating Income $35 +37% Q2 Results +11% Organic Revenue Q2 Highlights +10% Auto Brake Pads Driven by Share Gains in +20% Organic Order Growth China and Aftermarket in Europe +14% Auto Brake
Slide 13: Q2 2014 Interconnect Solutions
Q2 2014 Interconnect Solutions Q2 $ millions (unaudited) 2014 vs. 2013 Revenue $104 +3% Adjusted Segment Operating Income $15 +92% Q2 Results +2% Organic Revenue Q2 Highlights +23% Global Aerospace Growth +660 bps Adjusted Operating Margin Expansion +6% Global Oil & Gas and General Industrial
Slide 14: Q2 2014 Control Technologies
Q2 2014 Control Technologies Q2 $ millions (unaudited) 2014 vs. 2013 Revenue $74 +5% Adjusted Segment Operating Income $16 +5% Q2 Results +5% Organic Revenue Q2 Highlights +9% General Industrial Growth Driven by 1.05x Book-to-Bill Energy Absorption Market +5% Organic Order Growth +3% Aerospa
Slide 15: Q2 2014 ITT Segment Performance
Q2 2014 ITT Segment Performance Industrial Motion Interconnect Control Total Process Technologies Solutions Technologies Segments Q2 2014 Total Revenue vs PY 7.7% 15.5% 3.4% 5.0% 8.8% FX 0.5% -4.2% -1.2% 0.0% -1.2% Acquisition/Disposition -0.3% 0.0% 0.0% 0.0% -0.1% Q2 2014 Organic Revenue vs PY 7.9%
Slide 16: Appendix
Appendix itt ENGINEERED FOR LIFE
Slide 17: Key Performance Indicators and Non-GAAP Measures
Key Performance Indicators and Non-GAAP Measures Management reviews key performance indicators including revenue, segment operating income and margins, earnings per share, order growth, and backlog, among others. In addition, we consider certain measures to be useful to management and investors when
Slide 18: Non-GAAP Reconciliation: Reported vs. Organic Revenue / Order Growth
ITT Corporation Non-GAAP Reconciliation Reported vs. Organic Revenue / Order Growth Second Quarter 2014 & 2013 (In Millions) (As Reported - GAAP) (As Adjusted - Organic) (A) (B) (C) (D) (E) = B-C-D (F) = E / A Acquisition / Change % Change Divestitures FX Impact Change % Change 3M 2014 3M 2013 2014
Slide 19: Non-GAAP Reconciliation: Adjusted Segment Operating Income & Margin
ITT Corporation Non-GAAP Reconciliation Reported vs Adjusted Segment Operating Income & Operating Margin Second Quarter of 2014 & 2013 (In Millions) 3M 2014 3M 2014 3M 2014 3M 2013 3M 2013 3M 2013 % Change % Change As Reported As Adjusted As Reported Special Items As Adjusted As Reported Special Ite
Slide 20: Non-GAAP Reconciliation: Adjusted Income and Adjusted EPS
ITT Corporation Non-GAAP Reconciliation Reported vs. Adjusted Income from Continuing Operations & Adjusted EPS Second Quarter of 2014 & 2013 (In Millions, except per share amounts) Percent Change Q2 2014 Non-GAAP Q2 2014 Q2 2013 Non-GAAP Q2 2013 2014 vs. 2013 2014 vs. 2013 As Reported Adjustments As
Slide 21: Non-GAAP Reconciliation: Operating Cash vs. Adjusted Free Cash Flow
ITT Corporation Non-GAAP Reconciliation Net Cash - Operating Activities vs. Adjusted Free Cash Flow Conversion Second Quarter 2014 & 2013 (In Millions) 6M 2014 6M 2013 Net Cash - Operating Activities 84.3 68.8 Capital Expenditures 45.7 36.8 Free Cash Flow, including Transformation 38.6 32.0 Transfor
Slide 22: Non-GAAP Reconciliation: GAAP vs. Adjusted EPS Guidance
ITT Corporation Non-GAAP Reconciliation GAAP vs. Adjusted EPS Guidance Full Year 2014 2014 Full-Year Guidance Low High Earnings Per Share - GAAP Basis $ 1.58 $ 1.69 Asbestos Related Expense, Net of Tax 0.44 0.41 $ 2.02 $ 2.10 Restructuring and Realignment Costs, Net of Tax 0.27 Repositioning Costs,