Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Merger or Acquisition (July 2019)
20 slides from Parker-hannifin's merger presentation, Jul 29, 2019
Slide 1: Parker to Acquire Exotic Metals Forming Company to Enhance Aerospace Group Product Portfolio
Parker to Acquire Exotic Metals Forming Company to Enhance Aerospace Group Product Portfolio July 29, 2019 Exhibit 99.2
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. These stat
Slide 3: Agenda
Agenda Transaction Overview Strategic Rationale Introduction to Exotic Metals Forming Company Summary and Q&A Financials
Slide 4: Transaction Summary
Transaction Summary Transaction Description1 Transaction Consideration Expected Financial Impact Closing 1. CY19 forecast as of 6/30/19 2. Excludes one-time costs 3: Subject to customary closing conditions and required regulatory approvals Acquisition of 100% of Exotic Metals Forming Company Leader
Slide 5: Strategic Rationale
Strategic Rationale Top tier financial profile – visibility for continued growth through long-term agreements Expected to be accretive to organic sales growth, margins, EPS and cash flow1 Strategic portfolio acquisition – greatly expands aerospace engine portfolio Complementary products with perform
Slide 6: Sales Growth and Margin Accretive
Sales Growth and Margin Accretive Adjusted EBITDA Margin (%) 2016-19 Sales CAGR (%) Note: Parker financials pro forma for prior acquisitions for all years. Parker Sales and adjusted EBITDA exclude business realignment charges, costs to achieve, and net loss on sale and write down of assets CY19 fore
Slide 7: Exotic Metals Forming Company Introduction
Engine Airframe Aftermarket Recognized leader in performance critical components for engine and airframe systems Founded in 1966 and has demonstrated a consistent track record of success Custom solutions for blue-chip customers (95% of revenue is sole-sourced) Well positioned across key, high growth
Slide 8: Exotic Metals Products
Exotic Metals Products Specialty alloy high temperature air and exhaust management products High Pressure Bleed Air Ducting Engine Build-up (EBU) Ducting Engine Exhaust Nozzles APU Exhaust Ducting Water / Waste Tubes Engine Hot Section Assemblies Airframe Engine APU = Auxiliary Power Unit
Slide 9: Exotic Metals Product Applications
Exotic Metals Product Applications High pressure air & exhaust management throughout the aircraft Anti-Ice Telescopic Ducts Airframe Bleed Air Ducting Primary Exhaust Nozzle & Plug Door Thresholds Vacuum Water / Waste Tubes APU Bleed Air Ducting Wing Leading Edge Anti-Ice Ducting Engine Anti-Ice Duc
Slide 10: Exotic Metals Blue Chip Customers
Exotic Metals Blue Chip Customers Sole-source positions and significant long-term agreements Long Standing Customer Relationships
Slide 11: Exotic Metals Commercial Engine Products
Exotic Metals Commercial Engine Products Primary offerings are engine ducting and exhaust systems Engine Build-up (EBU) Ducting Exhaust Nozzle 737NG/MAX 737NG/MAX & A320neo CFM56/LEAP & PW1100G (GTF) Exhaust Nozzle GTF = Geared Turbo Fan
Slide 12: Exotic Metals F135 (F-35) Engine Products
Exotic Metals F135 (F-35) Engine Products Complex engine hot section products with growing aftermarket sales Combustor Liners Turbine Exhaust Boxes Tailcone Exhaust Nozzle & Afterburner Ring Turbine Exhaust Case Augmentor (Afterburner) Liner Bleed Air Ducting Aft Ring
Slide 13: Exotic Metals Strategic Fit
Exotic Metals Strategic Fit Complementary technologies and product offerings Airframe Combined Engine Bleed Air & Anti-Ice Ducting Auxiliary Power Unit Exhaust Ducting Water / Waste Tubes Hydraulic Tubes Hoses Fuel Tubes Engine Build-up Ducting Exhaust Nozzles Hot Section Assemblies Note: Symbols es
Slide 14: Strategic Alignment of Engine Products
Strategic Alignment of Engine Products EBU Ducting Exhaust Nozzles Hot Section Assemblies Oil Pumps Fuel Nozzles Oil Tanks Hoses & Tubes Actuation Flex Joints EBU Components Comparison EBU = Engine Build-up = =
Slide 15: Aerospace Group Portfolio: Current State and Proforma
Aerospace Group Portfolio Current State Proforma with Exotic Metals Flight Controls Fuel & Inerting Hydraulics Engine Fluid Mechanical Wheels & Brakes (3%) Flight Controls Fuel & Inerting Hydraulics Engine Fluid Mechanical Wheels & Brakes (2%) Engine & EBU Technologies Airframe Conveyance Engine & E
Slide 16: Achievable Synergies
Achievable Synergies Anticipated Areas of Synergies Pre-Tax Run-Rate Synergy Estimate Synergies $13M (Run-rate by Fiscal Year 2023) Estimated One-time Costs to Achieve ~$5M Win Strategy Implementation Supply Chain Operating Leverage
Slide 17: Great Value for Parker Shareholders
Great Value for Parker Shareholders EPS expected to be accretive in first 12 months1 High single-digit ROIC expected in year 5 with continued expansion1 Exotic Metals’ adjusted EBITDA margin at 29.6%2 Proforma EBITDA margin forecasted to improve by more than 400 bps by year 5, including LORD and Exo
Slide 18: Listed NYSE: PH
PH LISTED NYSE
Slide 19: Appendix
Appendix
Slide 20: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations