Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Regal Beloit — Investor Day (March 2017)
37 slides from Regal Rexnord's investor day presentation, Mar 10, 2017
Slide 1: Regal Beloit Corporation Investor Day 2017 Segment Breakout Sessions
Regal Beloit Corporation Investor Day 2017 Segment Breakout Sessions March 10, 2017 ©2017 Regal Beloit Corporation
Slide 2: Commercial & Industrial Systems
Commercial & Industrial Systems Regal Beloit Corporation Investor Day 2017 March 10, 2017 Mike Wickiser Eric McGinnis Mike Logsdon Senior Vice President Vice President Vice President Commercial Motors Industrial Motors and Power Generation Technology ©2017 Regal Beloit Corporation
Slide 3: Agenda
Agenda C&I Systems Overview Growth Progress – 2016 & 2017 Core Products and Energy Legislation Update New Products to Drive Growth Questions March 10, 2017 ©2017 Regal Beloit Corporation 3
Slide 4: Commercial & Industrial Systems Overview
Commercial & Industrial Systems Overview Sales by Product Sales by Geography 2016 Sales Drives & Controls ROW $1,531M Switchgear Europe Generators Fractional Asia HP Pacific Improving Industrial Environment Large HP U.S. & Mexico Canada Integral Primary Brands HP Sales by End Market Production by Re
Slide 5: C&I Systems Products
C&I Systems Products Motors and Controls Power Generation Drive & Control Systems March 10, 2017 ©2017 Regal Beloit Corporation 5
Slide 6: Commercial & Industrial Systems End Markets and 2017 Outlook
Commercial & Industrial Systems 2016 End Markets 2017 Outlook NA/China Industrial NA/China Industrial Oil and Gas Oil and Gas Price / MPF Price / MPF Transport Refrig. Transport Refrig. Commercial HVAC Commercial HVAC Residential Pool Residential Pool Data Centers Data Centers Growth Driven by Impro
Slide 7: Energy Efficiency Sales Impact
Energy Efficiency TRENDS REGULATIONS Higher Efficiencies Commercial HVAC – 2018 Sales Variable Speed Resi Pool Pumps – 2019 Impact $20M System Integration C&I Pumps – 2021 Energy Efficiency Trends Drive Growth March 10, 2017 ©2017 Regal Beloit Corporation 7
Slide 8: Drives and Controls
Drives and Controls Oil Well Pumping Oil and Gas Solutions Motor Starter and Low Voltage Drives 80% of Rightsizing Complete in 2016 – Evaluating Further Restructuring Diversified Product Capabilities to Serve Other Markets Improving Environment in Oil and Gas End Markets Business Rightsized –
Slide 9: C&I Global Industrial Motor Growth
C&I Global Industrial Motor Growth World Class Manufacturing Facilities New Global Integral Motor Design Platform Single Global Industrial Management Team Adding Incremental Sales Resources Focus on Key OEMs and the Distribution Channel Regal Wuxi, China Growing the Core With Simplified De
Slide 10: Technology as Growth Driver
Technology as Growth Driver SyMAX® SyMAX-i® Fixed Speed Permanent Magnet PM Motors with Induction (PM) Motors Integrated Control SyMAX® Regal Continues to Lead This Transformation March 10, 2017 ©2017 Regal Beloit Corporation 10
Slide 11: Presenting UlteMAX
Presenting UlteMAX™ 5” Thick 10hp Motor with Modular Control Pods 10hp Induction Motor & Separate 10hp Regal UlteMAXTM Control Plus Supporting Structure Axial Motor and Integrated Control (>250 lbs) (<50 lbs) Axial Form Factor Changing the Game in Air Moving - $70M Sales Over 7 Years March 10, 2017
Slide 12: C&I Systems Key Takeaways
C&I Systems Key Takeaways End Markets Improving Energy Efficiency Trends are a Tailwind Industrial Motors Global Platform Complete Emerging Custom Drives & Controls Segment Exciting New Products March 10, 2017 ©2017 Regal Beloit Corporation 12
Slide 13: Climate Solutions
Climate Solutions Regal Beloit Corporation Investor Day 2017 March 10, 2017 John Kunze Paul Selking Vice President Business Leader Climate Solutions HVAC ©2017 Regal Beloit Corporation
Slide 14: Agenda
Agenda Climate Solutions Overview HVAC Market Outlook Energy Legislation Update New Products to Drive Growth Questions March 10, 2017 ©2017 Regal Beloit Corporation 14
Slide 15: Climate Solutions Overview
Climate Solutions Overview 2016 Sales Sales by Product Sales by Geography $960M Other Middle ROW East Blower Europe Systems Mexico USA & Fractional Canada HP Motors Diversity in Served Segments Sales by End Market Production by Region General USA Global Foot Print Industries Europe Comm Ref Resi & A
Slide 16: Key Products and Applications
Key Products and Applications Products Applications March 10, 2017 ©2017 Regal Beloit Corporation 16
Slide 17: North America Resi. HVAC Demand Outlook
North America Resi. HVAC Demand Outlook Units 10M • Strong base demand from new housing • Pent up demand continuing to provide growth 8.6 • Replacing peak year of 2005 8 7.4 7.0 7.1 7.0 6.9 6.8 6.3 6.4 6.4 6.2 6.2 6.0 5.8 6 5.5 5.6 5.2 5.2 4 2 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 F 1
Slide 18: Resi. HVAC Sector Transitioning to Higher SEER
Resi. HVAC Sector Transitioning to Higher SEER AHRI units by SEER mix 100% More efficient 15 SEER+ 80 60 40 14 SEER 20 13 SEER Less efficient 0 2013 2014 2015 2016F 2017F 2018F 2019F Product Mix Shift Toward Higher Efficiency Presents Opportunity for Regal Source: AHRI; JP Morgan HVAC Industry Repor
Slide 19: Furnace Fan Regulation Impact
Furnace Fan Regulation Impact Industry Units by Motor Type (million units) 3.1 2.9 Fan Energy Rating (FER) New National Furnace Standard High Eff Electrical Efficiency Requirement Standard High Efficiency Motor Mandate 7/1/19 Effective Date 2016 2020 Significant Industry Mix Shift by 2020
Slide 20: Four Paths To Meet FER Regulation
Four Paths To Meet FER Regulation 100% Heat Exchanger 93% Gas Modulation 82% Blower Housing 70% Blower Motor % of Volume March 10, 2017 ©2017 Regal Beloit Corporation 20
Slide 21: New Products Driving Growth
New Products Driving Growth Draft Inducer Pre-Mix DEC Star® Regal Axial Technology Provides Differentiation March 10, 2017 ©2017 Regal Beloit Corporation 21
Slide 22: AHR Expo 2017 – Customer Highlights
AHR Expo 2017 – Customer Highlights March 10, 2017 ©2017 Regal Beloit Corporation 22
Slide 23: ECM Proliferation Now Needs Service
ECM Proliferation Now Needs Service Installed Base Contractor Tools Product Solutions Millions of units 30 20 10 2000 2016 March 10, 2017 ©2017 Regal Beloit Corporation 23
Slide 24: Climate Solutions Key Takeaways
Climate Solutions Key Takeaways Leader in NA HVAC, Water Heating & Commercial Refrigeration Positive Market Growth Drivers Energy Efficiency Provides Tailwinds Innovative New Products Taking Hold March 10, 2017 ©2017 Regal Beloit Corporation 24
Slide 25: Power Transmission Solutions
Power Transmission Solutions Regal Beloit Corporation Investor Day 2017 March 10, 2017 Jerry Morton Dave Brick Vice President Vice President Power Transmission Solutions PTS Technology ©2017 Regal Beloit Corporation
Slide 26: Agenda
Agenda Power Transmission Solutions Overview Integration and Synergy Update Growth Drivers New Products Questions March 10, 2017 ©2017 Regal Beloit Corporation 26
Slide 27: Power Transmission Solutions Overview
Power Transmission Solutions Overview Sales by Product Sales by Geography 2016 Sales Conveying Asia Pacific $734M EMEA Couplings Gearing Mexico Global Footprint U.S. & Components Canada Primary Brands Bearings Sales by End Market Production by Region HVAC Asia Pacific EMEA Material Handling Premier
Slide 28: PTS Established Brand Portfolio
PTS Established Brand Portfolio Est. Installed Base Product Brands Key Products ($M) BEARINGS $1,740 Mounted Bearing Cam Follower GEARING $1,250 Worm Gearing Shaft Reducer COUPLINGS $1,000 Disc Couplings Gear Coupling CONVEYING $525 Chain Guide Conveyor Chain COMPONENTS $450 V-Belt Drive TorqGard™ L
Slide 29: PTS Integration Complete
PTS Integration Complete Integration of Regal's Largest and Most Complex Acquisition Now Complete Delivered $20 Million of Synergies through Year Two Forecasting $30 Million in Total Synergies By End of Year Three – Ahead of Original Four Year Plan Executed Double Integration - Synergies Are A
Slide 30: PTS Growth Drivers
PTS Growth Drivers Performance Excellence Customer Care Commercial Excellence New Products Prospects Inquiries Proposals New Sales March 10, 2017 ©2017 Regal Beloit Corporation 30
Slide 31: Performance Excellence Impact
Performance Excellence Impact 25% Past Due Backlog Daily Focus to Executive Level of Past Due by SKU Implemented Pull Systems Jan-15 Dec-16 14% % Available in Stock Strategically Invested in the Right Inventory Customer Driven Portfolio Review Drove Supply Chain Refinement Jan-15 Dec-16 33%
Slide 32: Customer Care Improvement
Customer Care Improvement Acting on Customer Feedback – Nineteen Total Associates Added to U.S. Based Teams – Actions Completed in 2016 Customer Care Actions Helped Drive an Improved Net Promoter Score 12 Points 2015 2016 Net Promoter Score New Customer Care Team Baggage Handling Application Del
Slide 33: Commercial Excellence
Commercial Excellence Commercial Coverage – Identified Sales Coverage Gap and Opportunities to Further Penetrate and Grow – Adding/Reallocating 30% More Resources to Field Sales Force Heat Map Example – Complete in 2017 Increasing Effectiveness of Commercial Teams – Increase Utilization of Custo
Slide 34: PTS Technology Update
PTS Technology Update ©2017 Regal Beloit Corporation
Slide 35: New Product Success
New Product Success New Product for Utility Scale Solar Improves the Efficiency of the Panels as They Track the Sun Acquired PTS Acquisition Enabled the Scale and Speed ‒ Delivered ~$30M in Sales in 2 Years Next Generation Products Are in Development with Global Opportunities Innovation and Sy
Slide 36: New Products for Growth Industries
New Products for Growth Industries Material Handling Integrated Gearmotors – High Efficiency and Power Density Mounted Bearing – TIME SAVINGTM Technology Modular Transfer System - MODSORTTM – Improves Warehouse & Distribution Operations Energy Fracking Pump Gearbox – 20% More HP - Fits Exist
Slide 37: Key Takeaways
Key Takeaways Key End Markets Are Turning Integration Complete – Synergies Ahead of Schedule Renewed Focus on the Customer Commercial Excellence on Track Technology and New Product Teams Are Driving Growth March 10, 2017 ©2017 Regal Beloit Corporation 37