ITT Inc. · NYSE:ITT
ITT — Q1 2009 Earnings Presentation
16 slides from ITT's earnings presentation, Apr 24, 2009
Slide 1: First Quarter 2009 Investor Review
First Quarter 2009 Investor Review April 24, 2009
Slide 2: Safe Harbor
Safe Harbor Safe Harbor Statement” under the Private Securities Litigation Reform Act of 1995 (“the Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995
Slide 3: Highlights
Highlights +$0.14 Q1 EPS of $0.72 vs Guidance Mid-Point • +$0.09 All Segments Exceed Operational Expectations Fluid Acquires Laing GmbH • Broadens Portfolio of Energy-Efficient Plumbing and HVAC Pumps 128% Free Cash Flow Conversion (ratio excludes $58M non-cash special tax item) • $165 Million Year-
Slide 4: Secretary Gates' Recommendations
Secretary Gates’ Recommendations ITT Products & Services ITT Opportunity ITT Impacts/Risks Tactical Radios; Troop Increase Night Vision Special Forces Increase Adding $500M Foreign Military Equipment Electronic Warfare; Extending F-18 Production Structures Reduce F-22 Increase F-35 (JSF) Cancel CSAR
Slide 5: Q1 ITT Results
Q1 ITT Results 1Q 08 1Q 09 Revenues -5% Organic Growth $2,806 • Defense Flat; Fluid -6%; Motion -18% $2,557 • ITT Organic Orders +1% - 9% Segment Operating Segment Operating Margin -130 bps Income • Lower volumes $323 • Higher pension & restructuring expense $261 • Productivity initiatives on-track
Slide 6: Q1 ITT Financial Position
Q1 ITT Financial Position Free Cash Flow* +128% Free Cash Flow Conversion (ratio excludes $58M non-cash special tax item) $185 • 190 bps Working Capital Improvement $165 - 11% • Strong inventory turn performance 1Q 08 1Q 09 Net Debt to Net Capital +260 bps Reduction in Net Debt to Net Capital Ratio
Slide 7: Fluid Technology
Fluid Technology Q1 Results Q1 Revenue vs Expectations 2008 2009 Change Revenues $881 $744 -16% Municipal Above Operating Income $102 $69 -32% Industrial In-line Operating Margin 11.6% 9.2% -240 bps Residential Below Restructuring & Realignment* -$3 -$11 -$8 Commercial Below (*Included in Op Inco me
Slide 8: Fluid Technology: Key Market Overview & Revenue Guidance
Fluid Technology Key Market Overview & Revenue Guidance Key Fluid Markets Current Revenue Forecast vs Prior Year Prior Forecast Municipal ~ flat ▲ Industrial ▼ high teens ▼ Commercial ▼ mid teens ▼ Residential ▼ mid teens ▼ Emerging Mkts ▲ mid-single n/c Revenue 2009 Guidance vs 2008 Forecast Curren
Slide 9: Motion & Flow Control
Motion & Flow Control Q1 Results Q1 Revenue vs Expectations 2008 2009 Change Revenues $421 $306 -27% Aerospace/Defense Above Operating Income $68 $28 -59% Automotive Below Operating Margin 16.2% 9.1% -710 bps General Industrial Below Restructuring* -$1 -$2 -$1 (*Included in Op Inco me & M argin) Q1
Slide 10: Motion & Flow Control: Key Market Overview & Revenue Guidance
Motion & Flow Control Key Market Overview & Revenue Guidance Key Motion Markets Current Revenue Forecast vs Prior Year Prior Forecast Aerospace/Defense flat n/c Automotive ▼ low-twenties ▼ General Industrial ▼ mid-twenties ▼ Revenue 2009 Guidance vs 2008 Forecast Current Prior 2009 Organic ~ (20% )
Slide 11: Defense Electronics & Services
Defense Electronics & Services Q1 Results 2008 2009 Change Revenues $1,508 $1,509 - Backlog (Q4 '08 vs Q1 '09) $5,240 $5,221 - Operating Income $153 $164 7% Operating Margin 10.1% 10.9% 80 bps Q1 Performance Flat Organic Revenue: +15% Organic Orders $317M CREW 2.1 IED Jammers +12% Electronic Syste
Slide 12: 2009 EPS Guidance Roll-Forward
2009 EPS* Guidance Roll-Forward Low Mid High Previous Full Year 2009 EPS Guidance $ 3.60 $ 3.80 $ 4.00 Q1 Performance $ 0.14 Q2-Q4 Lower Fluid and Motion Volume & Mix $ (0.44) Outlook Before Additional Actions $ 3.30 $ 3.50 $ 3.70 Additional Restructuring & Acquisition Charges $ (0.10) Revised Full
Slide 13: ITT 2009 Outlook
ITT 2009 Outlook Second Quarter 2009 Consolidated Guidance Yr/Yr Organic Q209 Growth* Growth ITT - Revenues (in billions) $ 2.6 - $ 2.7 -14% -8% Earnings Per Share** $ 0.75 - $ 0.85 -32% Full Year 2009 Guidance Yr/Yr Organic 2009 Growth* Growth ITT - Revenues (in billions) $ 10.6 - $ 11.0 -8% -4% Ea
Slide 14: Appendix
Appendix Q1 2009 Earnings Presentation April 24, 2009 P14
Slide 15: Q1 ITT 2009 Segment Performance
Q1 ITT 2009 Segment Performance Fluid Motion & Flow Defense ITT Q1 '09 Organic Rev vs PY -6.0% -18.3% 0.2% -4.5% FX -9.6% -8.0% -0.1% -4.2% Acquisition/Divest 0.0% -1.0% 0.0% -0.2% Q1 '09 Total Rev vs PY -15.6% -27.3% 0.1% -8.9% Q1 '08 Margin 11.6% 16.2% 10.1% 11.5% Operational, Investments, Other -
Slide 16: Q1 Non-GAAP Reconciliation – EPS & FCF
Q1 Non-GAAP Reconciliation – EPS & FCF EPS - Reconciliation 1Q08 1Q09 Reported EPS $ 0.93 $ 1.01 Discontinued Ops. $ - $ 0.01 Reported EPS - Continuing Ops. $ 0.93 $ 1.02 Special Items Tax/Other $ (0.02) $ (0.30) Adjusted EPS - Continuing Ops. $ 0.91 $ 0.72 FCF - Reconciliation YTD 2008 YTD 2009 Net