Slide 1: Baird Analyst Day 2015
Baird Analyst Day 2015 HEATH MITTS SVP, CFO
Slide 2: Today's Discussion Topics
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries • Overview of IDEX Growth Strategies and Levers Andrew Silvernail, IDEX Chairman and CEO • IDEX’s Winning Playbook Eric Ashleman, IDEX SVP, COO • IDEX’s Approach to Acquisitions Dan Sallio
Slide 3: Overview of Growth Strategies and Levers
Overview of Growth Strategies and Levers ANDREW SILVERNAIL CHAIRMAN & CEO
Slide 4: IDEX Corporate Overview
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries $2 billion supplier of highly engineered industrial & technology solutions for niche markets worldwide 3 IDEX Corporate Overview FMT HST FSD Segments North America Europe Emerging Mkts. Other
Slide 5: History of Superior Profitability and Performance
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 4 History of Superior Profitability and Performance 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 IEX S&P 500 •
Slide 6: Strategy
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries We generate double-digit compound earnings growth through a cycle by delivering highly engineered applications that solve mission critical problems within superior niche markets. We empower e
Slide 7: Strategy
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries We generate double-digit compound earnings growth through a cycle by delivering highly engineered applications that solve mission critical problems within superior niche markets. We empower e
Slide 8: Strategy
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries We generate double-digit compound earnings growth through a cycle by delivering highly engineered applications that solve mission critical problems within superior niche markets. We empower e
Slide 9: Strategy
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries We generate double-digit compound earnings growth through a cycle by delivering highly engineered applications that solve mission critical problems within superior niche markets. We empower e
Slide 10: Strategic Capabilities
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries Portfolio Management: Niche Market Leadership Great Teams: Living IDEX Values and Op Model Disciplined Capital Deployment M&A: Idea to Integration 9 Strategic Capabilities Superior Total Shar
Slide 11: IDEX Growth Levers
IDEX Proprietary & Confidential Growth Levers Elements of Value Financial Impact Sales • Organic 2–3 pts above IDP 2–4% • M&A 3–5% Total Top Line Goal 5–9% OP Margin • 30–35% incremental on organic 50–80 bps per yr EPS • Organic + M&A+ Repurchase 10–15% Dividend • ~30% of Net Income 1.5–2% Yield | 1
Slide 12: A Winning Playbook
A Winning Playbook ERIC ASHLEMAN SVP, COO
Slide 13: IDEX Values – Our Compass
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 12 IDEX Values – Our Compass The IDEX Values guide our actions in all macro environments. TRUST TEAM EXCELLENCE • Operate with integrity • Collaborate enthusiastically • Make and keep commitm
Slide 14: Teams and Talent – IDEX Learning Academy
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 13 Teams and Talent – IDEX Learning Academy • Advanced leadership concepts • Target: GM’s, top functional leaders, high-potentials • Status: 41 graduates with 12 active now • Basics of manage
Slide 15: IDEX Operating Model – The Playbook
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 14 IDEX Operating Model – The Playbook • Optimization & • Transformational bursts • What game are we playing? • How do we win? • Talent as a competitive weapon • The basics • Strong foundatio
Slide 16: Breakthrough – Growth in Emerging Markets at Dispensing
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 15 Breakthrough – Growth in Emerging Markets at Dispensing Strategy & Innovation Teams & Talent • Leveraging our site in Vadodara, India − Doubled capacity in 2015 − Highly engaged employees
Slide 17: Breakthrough – Growth in Bio at Health & Science
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 16 Breakthrough – Growth in Bio at Health & Science Strategy & Innovation Fluidics & Optical Components Fluidics & Optical Subsystems Teams & Talent • 3 Segment Leaders are LEP graduates • Si
Slide 18: Breakthrough – Growth with e-Technology at Rescue
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 17 Breakthrough – Growth with e–Technology at Rescue Strategy & Innovation Teams & Talent The Basics • GM is LEP first wave graduate • 3 MEP graduates on leadership team • Top quartile in IDE
Slide 19: Basic Blocking & Tackling – FMT
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 18 Basic Blocking & Tackling – FMT • Each GM is an IDEX Leader Excellence Program graduate • Smart deployment of focused innovation o LACT Skids at Viking o Data acquisition software o Motor
Slide 20: Winning in All Environments
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 19 Winning in All Environments Today’s Examples • Consumer–facing business that is holding up well • Action: Maximize global growth potential • Municipal spending drives business • Some regio
Slide 21: Foundation for the Future – Complexity Reduction
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 20 Foundation for the Future – Complexity Reduction •Focus on critical customers and products •Simplify organizations •Deploy modular product frameworks •Improve flow of products and informat
Slide 22: Summary – Our Playbook
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries 21 Summary – Our Playbook Great companies in superior market niches A simple set of guiding principles A proven operating model A unique and simple formula that drives powerful results
Slide 23: Approach to Acquisitions
Approach to Acquisitions DAN SALLIOTTE SVP, STRATEGY, ACQUISITIONS & TREASURY
Slide 24: Today's Discussion Topics
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries • Our 10 Year growth / Why acquisitions matters • Our disciplined approach to screening acquisition targets & value creation • Five year enterprise growth; role of M&A going forward • Summary
Slide 25: Acquisitions: A Key IDEX Growth Driver
Acquisitions: A Key IDEX Growth Driver Acquisitions have been critical to our success. Transactions completed over the last 10 years represent ~40% of IDEX revenue • 29 Completed acquisitions over past decade • $800M Revenue • $175M EBITDA
Slide 26: Core Competencies Shape Our M&A Strategy
IDEX Proprietary & Confidential 25 Core Competencies Shape Our M&A Strategy M a n a g em en t ca p a b ili ti es O p er a ti n g ca p a b ili ti es P ro pr ie ta ry as se ts Supply Chain and Logistics Production and Operations Go-to-Market Organic Innovation & Commercialization Customer Intimacy Tec
Slide 27: Our Rigorous Selection Criteria
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries Our Rigorous Selection Criteria We then utilize a rigorous methodology to screen all acquisition targets globally…. Markets Solutions Portfolio Company 1 Niche markets ($200M - $1.5B) 1 Criti
Slide 28: How We Create Excess Returns
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries How We Create Excess Returns Value Creation 10% 15% 20% 25% 30% Starting EBITDA Op Model Mgmt Controls Talent Where / How IDEX Creates Value: Ability to apply the right operating tool to eac
Slide 29: Five Year Growth Plan; How M&A Fits
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries Five Year Growth Plan; How M&A Fits 28 • Continued investment across growth portions of portfolio • Highest risk adjusted return • Differentiator in slower growth macro environment • Clear li
Slide 30: Enterprise Growth Thru 2020
IDEX Proprietary & Confidential 29 Enterprise Growth Thru 2020 ($ in M) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 2015 2020 Flow H&S F&R Diversified Adjacency • Fiscal 2015; Rev~$2.0B & EBITDA~$0.5B • Primary M/A focus: Severe Duty Flow Health & Science Fluidics Core Fire
Slide 31: IDEX M&A Summary
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries • Significant & consistent 10 year track record of growth via M&A •We have a disciplined approach to M&A that has been well developed over the last 10 – 20 years •We understand deeply where a
Slide 32: Q&A
JP=w 7 “aN CORPORATION Q&A CHOICES Angee Fle i.