Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver — Investor Presentation (August 2011)
27 slides from Ingersoll Rand's investor presentation, Aug 16, 2011
Slide 1: Investor Presentation August 2011
Investor Presentation August 2011
Slide 2: Safe Harbor Disclosure
2 All of the statements made by Gardner Denver in this presentation or made orally in connection with it, other than historical facts, are forward-looking statements. As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relati
Slide 3: Agenda
3 Agenda Status Update Overview Growth Strategy Potential
Slide 4: Today: Profit Expansion Despite Economic Headwinds
4 Today: Profit Expansion Despite Economic Headwinds • Upside from broad industry, product, geographic exposure • Execution of multi-year margin expansion • Benefit of improving aftermarket mix • Culture of innovation driving share gains Key drivers Momentum is Building
Slide 5: Profit Expansion Despite Economic Headwinds: The Evidence
13.7% 17.1% 2010 2Q11 5 Today: Profit Expansion Despite Economic Headwinds: The Evidence $1.9B 2010 2Q11 TTM $3.39 2010 2011E Despite Stable Revenues... Adjusted Operating Margins(1) are Expanding... Driving Growth in Adjusted DEPS(1) (1) See note on slide 28 $5.20-$5.30 $2.2B
Slide 6: Tomorrow: Exceptional Potential as Strategy Execution Builds
6 Tomorrow: Exceptional Potential as Strategy Execution Builds 1. Organic growth • Faster growth in attractive end markets and regions like Asia 4. Selective acquisitions • Access faster growing end markets and generate synergies Strategy Potential 2. Aftermarket growth • Higher margins, less cyclic
Slide 7: Agenda
7 Agenda Status Update Overview Growth Strategy Potential
Slide 8: Leading Market Presence
8 Leading Market Presence Global leader in major products Industrial Products Group • 54% of revenues* • Compressors (>50psi) • Blowers (<50psi) Engineered Products Group • 46% of revenues* • Petroleum pumps • Liquid ring pump packages • Loading arms • OEM compressors and pumps * Revenues for six mo
Slide 9: A Truly Global Presence
9 Gardner Denver: A Truly Global Presence Revenues by Geography Canada 4% United States 35% Latin America 3% Europe 35% Other 7% Asia 16% (2010 Revenues)
Slide 10: Well Established Sales Channels
11 Well Established Sales Channels Distribution 48% Direct 33% OEM 19% Industrial Products Group (2) Distribution 10% Direct 57% OEM 33% Engineered Products Group (2) • Primarily standard configuration products • Primarily products designed for specific customer applications (2010 Revenues) (2) See
Slide 11: Businesses to Capitalize on all Stages of the Economic Cycle
12 Businesses to Capitalize on all Stages of the Economic Cycle Early Cycle (1-18 months) Late Cycle (36+ months) Mid Cycle (18-36 months) _ Engineered package _ Industrial air s compressors _ OEM _ Aftermarket
Slide 12: Market Outlook Snapshot
Economic Indicator OutlooToday k Market Outlook Snapshot U.S. Industrial Production E.U. Industrial Production Oil and Gas China growth OEM applications Stable to positive; aftermarket products and services driven Well servicing and drilling pump demand strong Positive Positive Six months ago 13
Slide 13: Agenda
14 Agenda Status Update Overview Growth Strategy Potential
Slide 14: Five Point Growth Strategy for the Future
15 Five Point Growth Strategy for the Future 2. Aftermarket growth 3. Innovative products 4. Selective acquisitions 5. Margin improvements 1. Organic growth CUSTOMERS SHAREHOLDERS EMPLOYEES Innovation High Velocity VALUE COMMITMENT RESOURCES Employee development — a key enabler
Slide 15: Strategy #1: Organic Growth
16 Strategy #1: Organic Growth Progress • Order rates _ strong momentum • Well positioned in higher growth end markets • Expanding in faster growing markets — Asia Pacific, Brazil, India Focus • Higher-growth markets — Medical — Life sciences — Environment — Energy • New innovative products • Afterm
Slide 16: Strategy #2: Aftermarket Growth
17 Strategy #2: Aftermarket Growth Progress Focus • Broaden direct service and remanufacture capabilities • Monitoring functionality • Design in proprietary features • Extended warranties 26% 29% 404-34%5% 31% 2008 2009 2010 Goal Aftermarket % of total revenues
Slide 17: Strategy #3: Innovative Products
18 Strategy #3: Innovative Products Progress • Voice of customer _ differentiates products from competition • Value proposition based on customer needs • Product launches across multiple divisions demonstrate success Example: Revolutionary Offshore PZ-2400 Drilling Pump
Slide 18: Strategy #3: Innovative Products Future Focus
19 Strategy #3: Innovative Products Future Focus • Continue to incorporate voice of the customer to drive innovation 1. Global input from customer 2. Establish appropriate company priorities 3. Test concepts 4. Assess feasibility and commercial viability 5. Engage customer commitment Rigorous custom
Slide 19: Strategy #4: Selective Acquisitions
20 Strategy #4: Selective Acquisitions Strong pipeline globally • Strong balance sheet and cash generation • Proven track record Future • Building pipeline of opportunities in large global markets • Adding portfolios of product technologies serving growth industries
Slide 20: Strategy #5: Margin Improvement
21 Strategy #5: Margin Improvement Progress • Reduced manpower by 2,300 or 27% since October 2008 — CompAir integrated — 8 facility rationalizations — 28 SAP R/3 or Business One implementations Cumulative Annual Savings from Facility Rationalizations (invested $70M to realize savings) $70M $65M $40M
Slide 21: Strategy #5: Margin Improvement — Industrial Products Group
22 Strategy #5: Margin Improvement — Industrial Products Group Adjusted Operating Margin(1) Goal “14 x 14” 9.0% 2.3% 8.5% 9.7% 11.5% 14% 7.2% 2008 1H09 2H09 1H10 2H10 1H11 2014 Goal • Adding 150 BPS annually going forward — $0.21 DEPS per year (based on 2009 revenues) • Three key elements 1. Restruc
Slide 22: Strategy #5: Margin Improvement — Engineered Products Group
24.5% 28.5% Last Peak Future Peak 23 Strategy #5: Margin Improvement — Engineered Products Group Increasing Adjusted Operating Margins(1) (1) See note on slide 28 • Adding 50 BPS per year 2011-2014 • Three key elements 1. Restructuring 2. Productivity 3. Sourcing 23.3% 2Q11
Slide 23: Agenda
24 Agenda Status Update Overview Growth Strategy Potential
Slide 24: The Gardner Denver Way and Why it is Delivering Such Powerful Results
25 The Gardner Denver Way and Why it is Delivering Such Powerful Results Why Such Powerful Results CUSTOMERS SHAREHOLDERS EMPLOYEES Innovation High Velocity VALUE COMMITMENT RESOURCES The Gardner Denver Way _ Opportunity-rich environment _ Extremely fast adoption _ Corporate culture _ Beyond shop-fl
Slide 25: Why Invest in Gardner Denver
26 WHY INVEST IN GARDNER DENVER Delivering Growth Today for the Future Today: Profit Expansion Despite Economic Headwinds _ Upside from faster growing markets _ Early stages of margin expansion initiative _ Growing aftermarket _ Innovation contributions _ Strong cash flow Future: Exceptional Potenti
Slide 26: Investor Presentation August 2011
Investor Presentation August 2011
Slide 27: Presentation Notes
Presentation Notes • Note 1: Adjusted Operating Income, Adjusted Operating Margins, Adjusted Net Income and Adjusted DEPS are financial measures that are not in accordance with US GAAP. Adjusted Operating Income, Adjusted Operating Margins and Adjusted DEPS excludes the net impact of expenses incurr