Regal Rexnord Corporation · NYSE:RRX

Regal Rexnord — Regal Beloit — Robert W. Baird and Co. Industrial Conference 2013

32 slides from Regal Rexnord's conference presentation, Nov 4, 2013

  1. Slide 1: Regal Beloit Corporation Investor Relations Presentation

    Regal Beloit Corporation Investor Relations Presentation November 4, 2013 Mark J. Gliebe Jonathan Schlemmer Chuck Hinrichs John Perino President Chief Operating Officer Vice President Vice President Chief Executive Officer Chief Financial Officer Investor Relations

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our management’s judgment regarding future events. In many cases, you can identify forward-looking statements by term

  3. Slide 3: Non-GAAP Financial Measures

    Non-GAAP Financial Measures We prepare financial statements in accordance with accounting principles generally accepted in the United States (GAAP). We also disclose adjusted diluted earnings per share (EPS), adjusted gross profit, adjusted gross profit as a percentage of net sales, adjusted income

  4. Slide 4: Overview: Building a Premier Global Enterprise

    Overview  Getting to Know Regal  Best in Class Industrial Performance  Growth Catalysts  Financial Performance Building a Premier Global Enterprise p4

  5. Slide 5: Overview: Building a Premier Global Enterprise

    Overview  Getting to Know Regal  Best in Class Industrial Performance  Growth Catalysts  Financial Performance Building a Premier Global Enterprise p5

  6. Slide 6: Company Overview

    Company Overview Founded 1955 Sales by Product/Platform Sales by End Market Beloit, WI Drives Other Mechanical Revenues Industrial Residential $3.2B Generators Blowers Small Revenue Growth Large Motors 7-Year CAGR Motors 14.2% 2011, 2012, YTD 2013 Free Cash Flow Exceeds Commercial Net Income Sales b

  7. Slide 7: Necessary and Innovative Products

    Necessary and Innovative Products Electric Motors Power Generation Electronic Controls Power Transmission p7

  8. Slide 8: Diverse Applications

    Diverse Applications p8

  9. Slide 9: Global Foot Print

    Global Foot Print Able to Meet Customer Demands Anywhere In the World Aligning with Faster Growing Economies p9

  10. Slide 10: Overview: Building a Premier Global Enterprise

    Overview  Getting to Know Regal  Best in Class Industrial Performance  Growth Catalysts  Financial Performance Building a Premier Global Enterprise p 10

  11. Slide 11: Financial Performance Profile

    Financial Performance Profile 2007 – 2012 Sales CAGR 20.0% 11.9% 10.6% 9.3% 7.5% 7.3% 10.0% 1.7% 0.0% RBC DHR AME IEX ROP EMR 2007 – 2012 Free Cash Flow / NI 200.0% 137.5% 134.8% 133.3% 120.0% 116.0% 108.1% 0.0% ROP RBC IEX AME DHR EMR Performance Consistent With Best In Class Industrials __________

  12. Slide 12: Regal Compass Operating System

    Regal Compass Operating System Lean Six Sigma Tools Leadership Tools  Quality  Talent Management  Cost  Long Range Plans  Delivery  Compliance/Safety  Cap Ex  Risk Management  Cash Cycle  Customer Care  New Products  Integrations Near Term Income Long Term Statement Growth p 12

  13. Slide 13: Overview: Building a Premier Global Enterprise

    Overview  Getting to Know Regal  Best in Class Industrial Performance  Growth Catalysts  Financial Performance Building a Premier Global Enterprise p 13

  14. Slide 14: Energy Efficiency Mega-Trend

    Energy Efficiency Mega-Trend Energy Efficient Product Sales* $700 $600 $500 $400 $300 $200 $100 $0 2005 2006 2007 2008 2009 2010 2011 2012 Regional SEER Update EISA Expansion  Future HVAC Efficiency  Anticipated Effective 2017 Standards Under Review  Expands NEMA Requirements to  Proposed Furnac

  15. Slide 15: New Products

    New Products New Product Introductions 60 60 50 50 Aluminum Wound Variable Speed 40 HVAC Motor Pool Motor 30 22 20 10 2008 2011 2012 Large Frame IEC Motor HERA-MAX Gear Motor Develop New Products with Focus on Energy Efficiency p 15

  16. Slide 16: Successful Acquirer and Integrator

    Successful Acquirer and Integrator 2013  Rigorous Evaluation and 2012 Integration Process Drives Return On Investment  Aligning Footprint with 2011 Faster Growing End HARGIL PTY. DYNAMICS LTD. Markets and Economies 2010  Acquisition Pipeline Continues to Be Active Consistent and Successful Acquir

  17. Slide 17: Successful Acquirer and Integrator: Acquisitions Driving Growth

    Successful Acquirer and Integrator Evaluating Acquisition Opportunities that Meet our Strategic and Financial Requirements Strategic Goals Financial Goals  Technology and Energy  EPS Accretive in First Year Efficiency  Cash Flow Positive in First  Expand Geographic Footprint Year  Margin Improv

  18. Slide 18: Simplification Initiative

    Simplification Initiative Reduction Targets 2011 2012 Next 3 Years ERPs 3 3 ~ 6 Factories 2 4 ~ 6 Warehouses 0 6 ~ 10 Design Platforms 2 2 ~ 8 Entities 10 20 ~ 30 Suppliers 50 120 ~ 500 Brands 2 2 ~ 10 Improve Margins, Easier to do Business p 18

  19. Slide 19: Investing in Emerging Markets

    Investing in Emerging Markets Hermetic Motors - Taicang Generators - Shanghai Visual Management Lean Production p 19

  20. Slide 20: Growth Catalyst Summary

    Growth Catalyst Summary  Energy Efficiency Trends  Introducing New Products  Consistent and Successful Acquirer  Simplification Initiative  Investing in Emerging Markets 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

  21. Slide 21: Overview: Building a Premier Global Enterprise

    Overview  Getting to Know Regal  Best in Class Industrial Performance  Growth Catalysts  Financial Performance Building a Premier Global Enterprise p 21

  22. Slide 22: Sales and EPS Growth

    Sales and EPS Growth $3,500 $5.00 $4.50 $3,000 $4.00 $2,500 Sales EPS $3.50 $3.00 $ Thousands $2,000 $2.50 $1,500 $2.00 $1,000 $1.50 $1.00 $500 $0.50 $0 $0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2011 and 2012 are adjusted EPS. See Non-GAAP reconciliation in Appendix Strong Tr

  23. Slide 23: Balance Sheet Strength

    Balance Sheet Strength 60% 50% Total Debt / Total Capital 40% 30% 20% 10% Current Debt/Cap at 27% LTM Debt / EBITDA at 1.9x 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Strong

  24. Slide 24: Consistent Cash Flow and Growth Investment

    Consistent Cash Flow and Growth Investment Free Cash Flow Capex FCF% of Net Income $400 300% $350 250% $300 200% $250 $200 150% $150 100% $100 50% $50 $0 0% 2005 2006 2007 2008 2009 2010 2011 2012 Cash Div($M) $14.7 $16.6 $18.1 $19.4 . $21.6 $25.1 $26.8 $30.8 _____________________ Note: Free Cash Fl

  25. Slide 25: Investment Thesis

    Investment Thesis  Global Leader in Key Markets – “Best in Class” Performance – Innovative Product Leadership – Operating System Driving Results  Growth Drivers – New Products with Focus on Energy Efficiency – Well Positioned in Emerging Markets – Successful and Disciplined Acquirer  Executing on

  26. Slide 26: Thank You

    Thank You Mark J Gliebe President Chief Executive Officer Jonathan Schlemmer Chief Operating Officer Chuck Hinrichs Vice President Chief Financial Officer John Perino Vice President Investor Relations p 26

  27. Slide 27: Appendix Non-GAAP Reconciliations

    Appendix Non-GAAP Reconciliations ADJUSTED DILUTED EARNINGS PER SHARE First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year 2012 GAAP Diluted Earnings Per Share $ 1.16 $ 1.49 $ 1.29 $ 0.70 $ 4.64 Purchase Accounting Costs 0.01 — — — 0.01 Restructuring Costs — 0.01 0.08 0.06 0.15 Gain

  28. Slide 28: Appendix Non-GAAP Reconciliations

    Appendix Non-GAAP Reconciliations ADJUSTED DILUTED EARNINGS PER SHARE* Three Months Ended Nine Months Ended Sep 28, Sep 29, Sep 28, Sep 29, 2013 2012 2013 2012 GAAP Diluted Earnings Per Share $ 1.16 $ 1.29 $ 3.38 $ 3.94 Restructuring Costs 0.02 0.08 0.05 0.09 Gain on Disposal of Real Estate — — — (0

  29. Slide 29: Appendix Non-GAAP Reconciliations

    Appendix Non-GAAP Reconciliations EBITDA Reconciliation (Dollars in Millions) 1Q 2012 2 Q2012 3Q 2012 4Q 2012 FY 2012 Net Income $ 48.7 $ 62.7 $ 54.3 $ 29.9 $ 195.6 Plus: Minority Interest 1.2 1.6 0.9 1.0 4.7 Plus: Taxes 17.8 28.2 17.9 5.7 69.6 Plus: Interest Expense 11.8 11.2 10.6 10.9 44.5 Plus: I

  30. Slide 30: Appendix Non-GAAP Reconciliations

    Appendix Non-GAAP Reconciliations EBITDA Reconciliation Dollars in Millions 4Q 2012 1Q 2013 2Q 2013 3Q 2013 LTM Net Income $29.9 $49.5 $51.1 $52.6 $183.1 Plus: Minority Interest 1.0 1.2 2.5 1.9 6.6 Plus: Taxes 5.7 15.3 17.9 15.0 53.9 Plus: Interest Expense 10.9 10.6 10.7 10.6 42.8 Less: Interest Inc

  31. Slide 31: Appendix Non-GAAP Reconciliations

    Appendix Non-GAAP Reconciliations Free Cash Flow Reconciliation (Dollars in Millions) 2005 2006 2007 2008 2009 2010 2011 2012 Cash Flow from Operation $ 112.2 $ 93.5 $ 200.6 $ 154.2 $ 314.9 $ 175.4 $ 265.3 $ 351.7 Capital Expenditures (28.3) (52.5) (36.6) (52.2) (33.6) (45.0) (57.6) (91.0) Grants Re

  32. Slide 32: Appendix Non-GAAP Reconciliations

    Appendix Non-GAAP Reconciliations Dollars in Millions p 32

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