Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Q4 2020 Earnings Presentation
51 slides from Ingersoll Rand's earnings presentation, Feb 23, 2021
Slide 1: Q4 and Full Year 2020 Earnings Presentation
Ingersoll Rand Q4 and Full Year 2020 Earnings Presentation February 23, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including s
Slide 3: A Premier Industrial Company with Iconic Brands and Market-Leading Positions
A Premier Industrial Company with Iconic Brands and Market-Leading Positions Accelerated Our Transformation During 2020; 1 Pivoted to Growth and Portfolio Optimization Unlocking Our True Potential through Portfolio 2 Optimization and Strategic Growth Investments Strong Performance by Our Business Se
Slide 4: Strong and Consistent Execution to Deliver on Commitments
1 Strong and Consistent Execution to Deliver on Commitments PHASE 1 PHASE 2 PHASE 3 Strong Foundation Pivot to Growth Portfolio Optimization Nurturing single culture through Purpose & Values / Engagement / Diversity & Inclusion Added ‘domain expertise’ talent Executing on talent priorities Deploy Ta
Slide 5: Accelerated Our Strategy During 2020; Pivoted to Growth and Portfolio Optimization
1 Accelerated Our Strategy During 2020; Pivoted to Growth and Portfolio Optimization 2020 Accomplishments 2021+ Areas of Strategic Focus Closed Ingersoll Rand Industrial Acquisition • Integration: ahead of plan as we enter year two • Synergies: over-delivered cost synergies in 2020 Awarded $150M equ
Slide 6: Unlocking Our True Potential Through Portfolio Optimization and Strategic Growth Investments
2 Unlocking Our True Potential Through Portfolio Optimization and Strategic Growth Investments Portfolio Transformation Pivoted to Growth Enhancement of Portfolio • Major wins in strategic end markets and new products • Materially reduced our upstream oil and gas exposure to − Hydrogen <2% of 2021 p
Slide 7: Growing Sustainably with Relentless Focus on Our People and Planet
2 Growing Sustainably with Relentless Focus on Our People and Planet Introduced 2030 and 2050 Environmental Goals Most Material Factors to the Company 1. Energy use 2. Product stewardship, new product development and innovation 3. Our employees: investments in safety, employee ownership and culture
Slide 8: IRX is our Competitive Differentiator – Q4 Highlights
3 IRX is our Competitive Differentiator – Q4 Highlights • Synergy Execution: Executed ~$175M in annualized cost synergies… increasing overall 3-year cost synergy target to $300M1 • Continued sequential momentum on orders and revenue2 • Orders: Up 5% Y/Y and up 8% ex-HPS; Up 12% from Q3’20 • Revenue:
Slide 9: Q4 2020 Financial Performance vs. Q4 2019 Supplemental Financial Information
Q4 2020 Financial Performance vs. Q4 2019 Supplemental Financial Information1 ($M, excl. EPS) Orders Revenue Adj. EBITDA & Margin2 Adj. Diluted EPS3 Up 5%; Up 2% ex-FX Down 5%; Down 7% ex-FX Up 10% Up $0.09 30. 0% $37 0.00 $344 28. 0% $35 0.00 $0.53 $1,588 $1,530 $1,511 $33 0.00 26. 0% $1,461 $314 2
Slide 10: FY 2020 Supplemental Financial Performance vs. FY 2019
FY 2020 Supplemental Financial Performance vs. FY 2019 Supplemental Financial Information1 ($M, excl. EPS) Orders Revenue Adj. EBITDA & Margin2 Adj. Diluted EPS3 Down 9% as reported and ex-FX Down 13% as reported and ex-FX Down 10% Down $0.15 $6,036 $6,165 $1.64 $1,197 $1.49 25. 0% $5,509 $5,380 $37
Slide 11: Q4 2020 Financial Performance
Q4 2020 Financial Performance ($M, excl. Leverage) Free Cash Flow1 Leverage2 Cash Flows from Operations less Capex (Net Debt / LTM Adjusted EBITDA) Liquidity & Leverage $429 $414 Total available liquidity of 4.2x RMT Transaction Completed $173 ($15) $2.7B including: $173 ‒ Cash and Cash Equivalent
Slide 12: Strong Execution on Synergy Delivery and Cost Control
Strong Execution on Synergy Delivery1 and Cost Control Synergy Delivery Update Managing Margins $350M+ Commentary Limited FY’20 Decremental Margins4 to 15% for Total Company Synergy Funnel with Continued Margin Improvement in Q4’20 Increasing expected cost synergy target by $50M to $300M ~$300M2 A
Slide 13: Industrial Technologies and Services Q4 2020 Highlights
Industrial Technologies and Services Q4 2020 Highlights Q4 2020 vs. Q4 20191 ($M) Q4 2020 vs. Q4 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $1,012.0 $1,069.8 (5.4)% (7.8)% Orders Growth 1.2% 2.8% 0.4% 4.4% Adj. EBITDA $264.4 $236.0 12.0% - Reve
Slide 14: Precision and Science Technologies Q4 2020 Highlights
Precision and Science Technologies Q4 2020 Highlights Q4 2020 vs. Q4 20191 ($M) Q4 2020 vs. Q4 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $206.5 $213.2 (3.1)% (6.3)% Orders Growth 4.8% 3.8% 1.2% 9.8% Adj. EBITDA $63.5 $59.4 6.9% - Revenue Growt
Slide 15: Specialty Vehicle Technologies Q4 2020 Highlights
Specialty Vehicle Technologies Q4 2020 Highlights Q4 2020 vs. Q4 20191 ($M) Q4 2020 vs. Q4 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $246.1 $226.4 8.7% 8.3% Orders Growth 20.6% 0.5% 0.0% 21.1% Adj. EBITDA $45.9 $32.9 39.5% - Revenue Growth 8.3
Slide 16: High Pressure Solutions Q4 2020 Highlights
High Pressure Solutions Q4 2020 Highlights Q4 2020 vs. Q4 20191 ($M) Q4 2020 vs. Q4 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $46.1 $79.0 (41.6)% (41.4)% Orders Growth (50.6)% (0.3)% 0.0% (50.9)% Adj. EBITDA $2.5 $16.0 (84.4)% - Revenue Growth
Slide 17: 2021 Guidance
2021 Guidance Guidance Estimates Based on FY Ingersoll Rand Excluding HPS Segment Adjusted Phasing Revenue Growth1 Revenue Growth1 EBITDA H1: up LDD TOTAL INGERSOLL RAND up HSD to LDD $1,230M - $1,260M H2: up HSD Organic (Before FX & M&A): up MSD Industrial Technologies & Services up MSD Precision &
Slide 18: Key Takeaways – Investing with Ingersoll Rand
Key Takeaways – Investing with Ingersoll Rand Successfully executing through COVID-19 with momentum continuing in Q1; 2021 is poised 01 to be a strong year 02 Continuing to differentiate Ingersoll Rand as an investment: • Focusing the portfolio • Investing for growth • Becoming more sustainable 03 U
Slide 19: Appendix
am) Ingersoll Rand Appendix
Slide 20: Q4 2020 Financial Performance – As Reported
Q4 2020 Financial Performance – As Reported ($M, excl. EPS) Orders Revenue Net Income1 EPS2 Up 182% Up 149% Up 488% Up $0.24 $152 $1,530 $1,511 $0.36 $26 $606 Q4 2019 Q4 2020 $543 $0.12 • Q4’20 includes $179 million of pre-tax amortization, restructuring and related business transformation costs, ac
Slide 21: FY 2020 Financial Performance – As Reported
FY 2020 Financial Performance – As Reported ($M, excl. EPS) Orders Revenue Net Income1 EPS2 Up 111% Up 100% Down 121% Down $0.85 $159 $4,948 $4,910 $0.76 $2,452 $2,348 ($33) FY 2019 FY 2020 • FY’20 includes $810 million of pre-tax amortization, restructuring and related business transformation costs
Slide 22: Reconciliation of Net (Loss) Income and EPS to Adjusted Net Income and Adjusted EPS
As Reported Financials: Reconciliation of Net (Loss) Income and (Loss) Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share 22
Slide 23: Reconciliation of Net (Loss) Income to Adjusted EBITDA and CFOA to Free Cash Flow
As Reported Financials: Reconciliation of Net (Loss) Income to Adjusted EBITDA and Adjusted Net Income and CFOA to Free Cash Flow 23
Slide 24: Reconciliation of Segment Adjusted EBITDA to (Loss) Income Before Income Taxes
As Reported Financials: Reconciliation of Segment Adjusted EBITDA to (Loss) Income Before Income Taxes 24
Slide 25: Unaudited Supplemental Adjusted Combined Financial Information
Unaudited Supplemental Adjusted Combined Financial Information 25
Slide 26: Table 1: Supplemental Adjusted Combined Financial Information by Segment
Table 1: Unaudited Supplemental Adjusted Combined Financial Information by Segment 26
Slide 27: Table 1A: Supplemental Adjusted Combined Financial Information by Segment
Table 1A: Unaudited Supplemental Adjusted Combined Financial Information by Segment 27
Slide 28: Table 1B: Supplemental Adjusted Combined Financial Information by Segment
Table 1B: Unaudited Supplemental Adjusted Combined Financial Information by Segment 28
Slide 29: Table 1C: Supplemental Adjusted Combined Financial Information by Segment
Table 1C: Unaudited Supplemental Adjusted Combined Financial Information by Segment 29
Slide 30: Table 1D: Supplemental Adjusted Combined Financial Information by Segment
Table 1D: Unaudited Supplemental Adjusted Combined Financial Information by Segment 30
Slide 31: Table 2: Supplemental Adjusted Combined Revenue and Order Growth by Segment
Table 2: Unaudited Supplemental Adjusted Combined Revenue and Order Growth / (Decline) by Segment1 31
Slide 32: Table 3: Reconciliation of Supplemental Adjusted Net Income and Diluted EPS
Table 3: Reconciliation of Unaudited Supplemental Adjusted Net Income and Supplemental Adjusted Diluted EPS to Supplemental Further Adjusted Net Income and Supplemental Further Adjusted Diluted EPS 32
Slide 33: Table 3A: Reconciliation of Supplemental Adjusted Net Income and Diluted EPS
Table 3A: Reconciliation of Unaudited Supplemental Adjusted Net Income and Supplemental Adjusted Diluted EPS to Supplemental Further Adjusted Net Income and Supplemental Further Adjusted Diluted EPS 33
Slide 34: Table 4: Reconciliation of Supplemental Adjusted Net Income to Adjusted EBITDA
Table 4: Reconciliation of Supplemental Adjusted Net Income to Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income 34
Slide 35: Table 4A: Reconciliation of Supplemental Adjusted Net Income to Adjusted EBITDA
Table 4A: Reconciliation of Supplemental Adjusted Net Income to Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income 35
Slide 36: Table 5: Supplemental Adjusted Revenue by Segment and EBITDA Reconciliation
Table 5: Supplemental Adjusted Revenue by Segment and a Reconciliation of Supplemental Segment Adjusted EBITDA to Supplemental Adjusted Income Before Income Taxes 36
Slide 37: Table 6: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment
Table 6: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment and for the Company and Segment Adjusted EBITDA to Supplemental Segment Adjusted EBITDA 37
Slide 38: Table 6A: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment
Table 6A: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment and for the Company and Segment Adjusted EBITDA to Supplemental Segment Adjusted EBITDA 38
Slide 39: Table 7: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA
Table 7: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA and Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income 39
Slide 40: Table 7A: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA
Table 7A: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA and Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income 40
Slide 41: Table 8: Reconciliation of GAAP Diluted EPS to Further Adjusted Diluted EPS
Table 8: Reconciliation of GAAP Diluted EPS to Supplemental Further Adjusted Diluted EPS 41
Slide 42: Table 8A: Reconciliation of GAAP Diluted EPS to Further Adjusted Diluted EPS
Table 8A: Reconciliation of GAAP Diluted EPS to Supplemental Further Adjusted Diluted EPS 42
Slide 43: Notes to Tables 3, 3A, 4, 4A on Slides 32–36
Notes to Tables 3, 3A, 4, 4A, and 5 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 32 – 36 43
Slide 44: Notes to Tables 3, 3A, 4, 4A (continued)
Notes to Tables 3, 3A, 4, 4A, and 5 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 32 – 36 (continued) 44
Slide 45: Notes to Tables 3, 3A, 4, 4A (continued)
Notes to Tables 3, 3A, 4, 4A, and 5 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 32 – 36 (continued) 45
Slide 46: Supporting Materials for IR as Adjusted for the HPS Transaction
Supporting Materials for IR as Adjusted for the HPS Transaction
Slide 47: Supplemental Adjusted Revenue and EBITDA, Further Adjusted for HPS Transaction
Supplemental Adjusted Revenue and Supplemental Adjusted EBITDA, Both Further Adjusted for HPS Transaction 47
Slide 48: Adjusted Operating Working Capital
Adjusted Operating Working Capital 48
Slide 49: HPS Transaction Table 1: Reconciliation of Net Income (Loss) to Adjusted EBITDA
HPS Transaction Table 1: Reconciliation of Net Income (Loss) to Adjusted EBITDA 49
Slide 50: HPS Transaction Table 2: Reconciliation of Net Income (Loss) to Adjusted EBITDA
HPS Transaction Table 2: Reconciliation of Net Income (Loss) to Adjusted EBITDA and Supplemental Adjusted EBITDA 50
Slide 51: HPS Transaction Table 3: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue
HPS Transaction Table 3: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment and for the Company and Segment Adjusted EBITDA to Supplemental Adjusted EBITDA 51