Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — EPG Annual Spring Conference 2019
18 slides from Roper Technologies's conference presentation, May 21, 2019
Slide 1: Roper Technologies Overview
A DIVERSIFIED TECHNOLOGY COMPANY ROPER TECHNOLOGIES OVERVIEW EPG ANNUAL SPRING CONFERENCE MAY 21, 2019 SIMPLE IDEAS. POWERFUL RESULTS.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The information provided in this presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans,
Slide 3: Consistent Roper Strategy
CONSISTENT ROPER STRATEGY STRATEGY RESULTS Win in Niche Markets with Diverse Portfolio of Significant Growth Platforms Software and Engineered Products & Solutions • Leadership in Favorable Markets • Diverse End Markets, Broad Customer Base High Gross Margins Recurring Revenue Asset-Light Business M
Slide 4: CRI Discipline Drives Cash Flow
CRI DISCIPLINE DRIVES CASH FLOW Cash Earnings Net Income + D&A – C ash = Maintenance Cap-Ex R eturn on Gross Investment Net Working Capital* + Net PP&E + Accumulated Depreciation I nvestment • Common Metric throughout Roper Businesses • Focuses Businesses on Cash Flow Growth & Disciplined Asset Inve
Slide 5: Roper Business Model
ROPER BUSINESS MODEL Decentralized Centralized Capital Business Type Operating Structure Deployment • Niche • Nimble Execution • CRI-Driven • Market Leader • Local Resource • Strategy Centered on • Recurring Revenue Allocation Decisions Business Model vs. • Strategic Discipline End Market • Compete
Slide 6: Governance Process Enhances Growth and Drives Financial Discipline
GOVERNANCE PROCESS ENHANCES GROWTH AND DRIVES FINANCIAL DISCIPLINE • Cash Return on Investment Focus • Group Executives Provide Strategic Leadership for Businesses • Product, Placement, Hit Rate Analysis • Consistent & Rigorous Strategy Deployment • Talent Offense • Operating Reviews with Detailed P
Slide 7: Disciplined Acquisition Strategy Focused on High Quality Targets
DISCIPLINED ACQUISITION STRATEGY FOCUSED ON HIGH QUALITY TARGETS • We Only Acquire High CRI Deployed $10B+ in Acquisitions Over Businesses; Primarily Software Last Nine Years (2011- 2019 YTD) and Networks $6.9 • Acquisitions Funded by Excess Cash Flow and Investment Grade Debt • Leaders in Niche Mar
Slide 8: Foundry Acquisition
FOUNDRY ACQUISITION • Purchase Price: £410 Million; Immediately Cash Accretive • First 12 Months Financial Impact Meets All Acquisition Criteria – ~$75M of Revenue Strong Cash Flow Characteristics – ~$25M of Unlevered Free Cash Flow • Strong History of Revenue, EBITDA and Cash Asset Light (Negat
Slide 9: Asset-Light Business Model
ASSET-LIGHT BUSINESS MODEL NET WORKING CAPITAL(1)(2) AS % OF Q1(3) ANNUALIZED REVENUE 3/31/09 3/31/14 3/31/19 (10 Yrs Ago) (5 Yrs Ago) (Today) (I) Inventory 9.2% 6.3% 4.5% (1,650) Bps (R) Receivables 20.1% 18.3% 16.6% 13.2% (P) Payables & 12.8% 11.4% 10.8% Accruals 6.9% (D) Deferred 3.4% 6.2% 13.5%
Slide 10: Executing Our High Performance Model
EXECUTING OUR HIGH PERFORMANCE MODEL EBITDA OPERATING CASH FLOW $1,806 $1,430 TOTAL SHAREHOLDER RETURN (2003 - 2018) $130 $71 1,084% 2003 2018 2003 2018 ASSET INTENSITY CASH RETURN ON INVESTMENT Net Working Capital Gross Fixed Assets / Sales / Sales 300%+ 18% 20% 207% 8% S&P 500 ROP ~30% (3)% 2003 2
Slide 11: Full Year 2018 Growth
FULL YEAR 2018 GROWTH EBITDA OPERATING CASH FREE CASH FLOW FLOW +13% +16% +17% $1,806 $1,430 $1,371 $1,605 $1,234 $1,175 2017 2018 2017 2018 2017 2018 % OF REVENUE 34.4% 34.7% 26.5% 27.5% 25.2% 26.4% In $ Millions. PAGE 11 Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this p
Slide 12: 2018 Segment Performance
2018 SEGMENT PERFORMANCE Revenue $1,706 $1,461 $1,345 EBITDA* $688 $578 $582 $567 $246 Application Network Measurement Process Software Software & Analytical Technologies & Systems Solutions** EBITDA Margin* 40% 43% 33% 36% • Vertical Software & • Network Software & • Data Collection & • Control Sys
Slide 13: Roper Technologies Today
ROPER TECHNOLOGIES TODAY • Diversified Technology Company – Independent Businesses with Leadership Positions in Niche Markets – Highly Profitable: 63% Gross Margin, 35% EBITDA Margin – Asset Light Model: Negative Working Capital and Minimal Cap Ex Requirements – Greater than 50% of Revenue is Recurr
Slide 14: Total Shareholder Return
TOTAL SHAREHOLDER RETURN COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN Roper Technologies, Inc. S&P 500 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Creating Long-Term Shareholder Value Note: Chart depicts $100 invested in IPO vs. S&P 500 PAGE 14
Slide 15: Appendix
APPENDIX
Slide 16: Reconciliations I
RECONCILIATIONS I Adjusted Segment & Consolidated Financials Reconciliation ($M) (Unaudited) Network Measurement FY 2018 Application Software & & Analytical Process Software Systems Solutions* Technologies GAAP Revenue $ 1,453 $ 1,345 $ 1,706 $ 688 Purchase accounting adjustment to acquired deferred
Slide 17: Reconciliations II
RECONCILIATIONS II Adjusted EBITDA Reconciliation ($M) Free Cash Flow Reconciliation ($M) FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 GAAP Revenue $ 4,607 $ 5,191 Operating Cash Flow $ 964 $ 1,234 $ 1,430 Purchase accounting adjustment to acquired Add: Cash Paid for Taxes on Sale of ABEL 37 - - deferred
Slide 18: A Diversified Technology Company
A DIVERSIFIED TECHNOLOGY COMPANY
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