Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Investor Presentation (April 2020)
41 slides from Ingersoll Rand's investor presentation, Apr 15, 2020
Slide 1: Ingersoll Rand: Charting the Course for Continued Stakeholder Value Creation
Ingersoll Rand Charting the Course for Continued Stakeholder Value Creation April 15, 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: Health and Safety: Activated COVID-19 Task Force Early
Health and Safety: Activated COVID-19 Task Force Early; Applied Early Learnings from Asia-Pacific Formed COVID-19 Response Teams early. We continue to add enhanced protocols in response to COVID-19, including recommendations and requirements issued by the Centers for Disease Control and Prevention (
Slide 4: Protecting Our Employees, Our Business and Our Future
Protecting Our Employees, Our Business and Our Future Employee Health, Safety & Support / Executing Downturn Playbook; Business Continuity Implementing Prudent Actions to Preserve Cash Modified production work flows in plants to allow for 6 feet of employee Reduced senior executive salaries and
Slide 5: Exciting Runway Ahead with a Track Record for Capturing Opportunity
Exciting Runway Ahead with a Track Record for Capturing Opportunity Merging two strong cultures to form a talented global workforce powered by an entrepreneurial spirit, ownership 1. mindset and sustainability focus Enhancing scale and reach of innovative and leading brands centered around mission-c
Slide 6: Ingersoll Rand at a Glance (NYSE: IR)
Ingersoll Rand at a Glance (NYSE: IR) Portfolio of Mission-critical Flow Creation and Industrial Technologies with Leading Brands Powered by Employee Ownership, Execution Rigor and ESG Mindset 2019 KEY STATS & FINANCIAL METRICS1 Davidson, NC $10.9B ~18,000 ~$6.2B ~$1.2B 19.4% $2.3B ~2% Headquarters
Slide 7: Industrial Technologies and Services Snapshot
Industrial Technologies and Services Snapshot Description Key Brands & Select Product Examples • Global business executing under five main P&Ls: • Ingersoll Rand Industrial CTS business and Gardner Denver Industrials business (including Emco Wheaton fuel systems); run as three regional business unit
Slide 8: Precision and Science Technologies Snapshot
Precision and Science Technologies Snapshot Description Key Brands & Select Product Examples • Consists of Ingersoll Rand’s Industrial Fluid Management (PFS/ARO) business unit as well as Gardner Denver’s Medical business unit and Gardner Denver’s Specialty Pumps • Broad portfolio of positive displac
Slide 9: Specialty Vehicle Technologies Snapshot
Specialty Vehicle Technologies Snapshot Description Key Brand & Select Product Examples • Consists of Ingersoll Rand’s Industrial Club Car business • Global provider of utility, consumer, and golf vehicles and aftermarket services • Utility: Fit to task, 4 x 2, AWD and multi-passenger transport vehi
Slide 10: High Pressure Solutions Snapshot
High Pressure Solutions Snapshot Description Key Brand & Select Product Examples • Consists of Gardner Denver’s Upstream Energy business • Highly engineered frac and drilling pumps and associated aftermarket parts, consumables and services for oil and gas development operations PUMPS FLUID ENDS CONS
Slide 11: We Have Significantly Transformed Our Company
We Have Significantly Transformed Our Company Legacy Legacy Ingersoll Rand Gardner Denver Gardner Denver Today2 (TY 2015) (TY 2019)1 Revenue $2.1B $2.5B $6.2B % Aftermarket Revenue 36% 38% 38% % Upstream Energy of Total Revenue 18% 19% <10% Adj. EBITDA $0.4B $0.6B $1.2B Adj. EBITDA Margin 19.7% 23.0
Slide 12: Continuing to Execute Our Simple Strategy and Adding Sustainability as a New Pillar
Continuing to Execute Our Simple Strategy and Adding 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
Slide 13: We Are Building a High-Performance Culture; IRX Is a Competitive Differentiator
We Are Building a High-Performance Culture; IRX Is a Competitive Differentiator IRX IS OUR ACCELERATOR TO DRIVE THE BUSINESS • IRX is our execution engine, providing employees with a simple process to drive high performance • With IRX, we instill our values and execute our strategic areas of focus i
Slide 14: Expanded Total Addressable Market: ~65% Larger
Expanded Total Addressable Market: ~65% Larger Our Combined $41B Competitive Advantages Mission-critical technologies with low cost relative to overall system Broad spectrum of technologies MARKET DRIVERS centered on flow ‘creation’ INDUSTRIAL TECHNOLOGIES & SERVICES Energy Efficiency & Total Co
Slide 15: Enhanced End Market Balance and Diversity
Enhanced End Market Balance and Diversity Industrial Specialty Upstream Chemical Food & Manufacturing Vehicles Energy (Process & Dosing) Beverage 28% 13% 9% 7% 5% Medical & Transportation Downstream Midstream Automotive Laboratory (Land & Marine) Energy Energy Services 4% 4% 3% 3% 3% Environmental M
Slide 16: Leading Product Portfolio Covers Broad Range of Technologies and Applications
Leading Product Portfolio Covers Broad Range of Technologies and Applications HIGH Reciprocating Vane / Oil Less Recip Bottle Blowing - Reciprocating Centrifugal – Engineered Air PRESSURE Compressors 1-Stage 2-Stage Centrifugal – Plant Air Small Recip Small Recip 1-Stage Rotary Screw 2-Stage Rotary
Slide 17: Complementary Product Portfolios Create Full Suite of Technologies and Solutions
Complementary Product Portfolios Create Full Suite of Technologies and Solutions OIL-FREE TECHNOLOGY COVERAGE Legacy Gardner Denver Legacy Ingersoll Rand Complementary NOW BETTER POSITIONED TO CAPTURE OIL-FREE MARKET OPPORTUNITY A leading player in the fast growing $3B+ oil free market with breadth
Slide 18: Focus on Demand Generation is Creating Significant Pull-Through Opportunity
Focus on Demand Generation is Creating Significant Pull-Through Opportunity Optimizing Opportunity Capture through Global, Seamless “Real-Time” Case Study Contact and Lead Collection Across All Channels and Real-Time Ventilator Demand Generation Lead Distribution • Proprietary engine to digitally co
Slide 19: Integrating Two Great Organizations: Key Observations as CEO
Integrating Two Great Organizations: Key Observations as CEO Strong complementary cultures that are excited to come together and achieve 01 greater heights as one company COVID-19 crisis accelerating integration and bringing teams together quicker 02 with notable collaboration Strength and depth of
Slide 20: Multi-Year Integration Effort Underway: First 100 Days Strategy, Goals and Results
Multi-Year Integration Effort Underway: First 100 Days Strategy, Goals and Results COMPLETE To-Date Results Milestone Events STATUS PHASE 1 PHASE 2 PHASE 3 Day 1 Celebration and Global Town Hall Global Product Planning Summit (Virtual) i2V IR Kick-off Scheduled May ‘19 – Nov ‘19 Dec ‘19 – Feb ‘2
Slide 21: Strong Additions to Our Seasoned Leadership Team
Strong Additions to Our Seasoned Leadership Team Functional Leadership VICENTE EMILY CRAIG ANDY MIKE CHRIS CESARE REYNAL WEAVER MUNDY SCHIESL WEATHERRED NEUBAUER TRABATTONI CEO SVP and CFO SVP, HR, SVP, General Counsel, SVP, IRX, Strategy and VP, Global Sourcing and VP, Demand Generation, Talent and
Slide 22: Engaged and Accountable Board of Directors
Engaged and Accountable Board of Directors PETER STAVROS KIRK ARNOLD ELIZABETH CENTONI WILLIAM DONNELLY Chairman | Partner, Former CEO, SVP, Retired EVP, Co-Head of Americas Data Intensity Emerging Technology & Mettler-Toledo Private Equity; Incubation, Co-Chair, Inclusion Cisco Systems, Inc and Div
Slide 23: Merging Strong Cultures to Enhance Our Competitive Advantages
Merging Strong Cultures to Enhance Our Competitive Advantages Our Purpose: Lean On Us To Help You Make Life Better Our Values: We Think and Act We Are Committed to Making Like Owners Our Customers Successful For 160 years we have been waking up every day to help make life better. We pride ourselves
Slide 24: Increasing Our Focus on ESG – It is Now a Strategic Imperative
Increasing Our Focus on ESG – It is Now a Strategic Imperative SAFETY SUSTAINABILITY DIVERSITY & INCLUSION A safety-focused, zero-incident culture is Committed to sustainability in the work Nurturing and celebrating a culture that a priority for all of us we do and the way we work embraces diverse p
Slide 25: Initiatives in Place to Capture Value Creation through Synergies
Initiatives in Place to Capture Value Creation through Synergies Run-Rate Synergy Estimate Manufacturing ~$250M1 • Detailed database created for 14M+ sq. ft. of facilities to develop roadmap • Phase 1 manufacturing optimization defined and under analysis Manufacturing • Initial observations indicate
Slide 26: Strong Liquidity with Multiple Levers to Unlock Cash
Strong Liquidity with Multiple Levers to Unlock Cash Credit Rating • Ba2 (Positive) / BB+ (stable) from Moody’s and S&P, respectively • Total debt of $3.5B with legacy Gardner Denver debt amended/extended at the same time as placement of new debt (all occurred in Feb. 2020) Debt Structure and • Exis
Slide 27: Multiple Catalysts for Future Value Creation – Invest with Us
Multiple Catalysts for Future Value Creation – Invest with Us 01. ENHANCED MARKET GROWTH OPPORTUNITY o Expanded addressable market – ~65% larger o Expansive installed base with opportunity to capture greater value o Continued thoughtful portfolio optimization 02. COMPOUNDING POTENTIAL OF TWO GREAT O
Slide 28: Appendix
am) Ingersoll Rand Appendix
Slide 29: Sources of Financial Data
Sources of Financial Data • Supplemental Financial Information – furnished in Current Report on Form 8-K filed with SEC on April 15, 2020 • Source of financial information of the combined company in this presentation • Excel model included on the investor section of www.irco.com • Management’s view
Slide 30: Supplemental Financial Information: 2019 Condensed Combined Statement of Operations
Supplemental Financial Information: 2019 Condensed Combined Statement of Operations INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION CONDENSED COMBINED STATEMENT OF OPERATIONS (Dollars and Shares in millions, except per share amounts) Adjusted Combined Pro Forma
Slide 31: Supplemental Financial Information: 2018 Condensed Combined Statement of Operations
Supplemental Financial Information: 2018 Condensed Combined Statement of Operations INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION CONDENSED COMBINED STATEMENT OF OPERATIONS (Dollars and Shares in millions, except per share amounts) Adjusted Combined Pro Forma
Slide 32: Supplemental Financial Information: 2019 and 2018 Combined Financial Information by Segment
Supplemental Financial Information: 2019 and 2018 Combined Financial Information by Segment INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT (Dollars and Shares in millions, except per share amounts) Year ended Quarter ended Year ended Dec 31, 2019 De
Slide 33: Supplemental Financial Information: Combined Revenue Growth / (Decline) by Segment
Supplemental Financial Information: 2019 and 2018 Combined Revenue Growth / (Decline) by Segment INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED REVENUE GROWTH / (DECLINE) BY SEGMENT (Dollars and Shares in millions, except per share amounts) Year ended Quarter ended Year ended Dec 3
Slide 34: Reconciliation of Adjusted Net Income and Diluted EPS to Further Adjusted
Supplemental Financial Information: 2019 and 2018 Reconciliation of Adjusted Net Income and Diluted EPS to Further Adjusted Net Income and Further Adjusted Diluted EPS INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF ADJUSTED NET INCOME AND DIL
Slide 35: Reconciliation of Adjusted Diluted EPS to Further Adjusted Diluted EPS
Supplemental Financial Information: 2019 and 2018 Reconciliation of Adjusted Diluted EPS to Further Adjusted Diluted EPS INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF ADJUSTED DILUTED EPS TO FURTHER ADJUSTED DILUTED EPS (Share amounts in mil
Slide 36: Reconciliation of Adjusted Net Income to Adjusted EBITDA
Supplemental Financial Information: 2019 and 2018 Reconciliation of Adjusted Net Income to Adjusted EBITDA and Further Adjusted Net Income INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF ADJUSTED NET INCOME TO ADJUSTED EBITDA AND FURTHER ADJUS
Slide 37: Reconciliation of Segment Adjusted EBITDA to Adjusted Income Before Income Taxes
Supplemental Financial Information: 2019 and 2018 Reconciliation of Segment Adjusted EBITDA to Adjusted Income Before Income Taxes INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF SEGMENT ADJUSTED EBITDA TO ADJUSTED INCOME BEFORE INCOME TAXES (
Slide 38: Notes to Slides 34-37 - Adjusted Combined Financial Information
Supplemental Financial Information: Notes to Slides 34-37 - Adjusted Combined Financial Information All supplemental financial information presented in this document represents the newly combined Ingersoll Rand giving effect to the Merger as if it happened on January 1, 2018. (a) Amortization expens
Slide 39: Notes to Slides 34-37 - Adjusted Combined Financial Information (Continued)
Supplemental Financial Information: Notes to Slides 34-37 - Adjusted Combined Financial Information (Continued) (f) Other adjustments are comprised of the following items: i. estimated environmental remediation costs and losses relating to a former production facility; ii. certain expenses related t
Slide 40: Reconciliation of Net (Loss) Income to Adjusted EBITDA for Legacy Gardner Denver
Reconciliation of Net (Loss) Income to Adjusted EBITDA for Legacy Gardner Denver Legacy Gardner Denver ($ M) FY 19 FY15 Net (Loss) Income $159.1 ($352.0) Plus: Interest Expense $88.9 $162.9 (Benefit) Provision for Income Taxes $31.8 ($14.7) Depreciation Expense $53.8 $47.6 Amortization Expense $124.
Slide 41: Net Debt to Adjusted EBITDA Leverage Ratio
Net Debt to Adjusted EBITDA Leverage Ratio Ingersoll Rand Legacy Gardner Denver FY 19 FY 19 FY15 Senior Secured bank debts $3,502 $1,602 $2,274 Senior Unsecured notes $575 Mortgages/Cap Lease/Other $18 $18 $18 Gross Debt1 $3,520 $1,620 $2,867 Less: Cash & Cash Equivalents 2 ($456) ($505) ($228) Net