Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver — Investor Presentation (February 2011)
30 slides from Ingersoll Rand's investor presentation, Feb 14, 2011
Slide 1: Investor Presentation February 2011
Investor Presentation February 2011 (Unaudited)
Slide 2: Safe Harbor Disclosure
2 All of the statements made by Gardner Denver in this presentation or made orally in connection with it, other than historical facts, are forward-looking statements. As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relati
Slide 3: Agenda: Preface, Position, Progress, Potential
3 Agenda Preface Position Progress Potential
Slide 4: Today: Profit Expansion Despite Economic Headwinds
4 Today: Profit Expansion Despite Economic Headwinds Upside from broad industry, product, geographic exposure Execution of multi-year margin expansion Benefit of improving aftermarket mix Culture of innovation driving share gains Key drivers Momentum is Building
Slide 5: Profit Expansion Despite Economic Headwinds: The Evidence
2009 2010 East 0.11 0.137 5 Today: Profit Expansion Despite Economic Headwinds: The Evidence 2009 2010 East 1.778145 1.895104 2009 2010 East 2.4 3.39 Despite Stable Revenues... Adjusted Operating Margins(1) are Expanding... Driving Growth in Adjusted DEPS(1) (1) See note on slide 30
Slide 6: Tomorrow: Exceptional Potential as Strategy Execution Builds
6 Tomorrow: Exceptional Potential as Strategy Execution Builds Organic growth Faster growth in attractive end markets and regions like Asia Selective acquisitions Access faster growing end markets and generate synergies Strategy Potential Aftermarket growth Higher margins, less cyclical Margin impro
Slide 7: Agenda: Position
7 Agenda Preface Position Progress Potential
Slide 8: Leading Market Presence
8 Leading Market Presence Global leader in major products Industrial Products Group 58% of revenues* Compressors (>50psi) Blowers (<50psi) Engineered Products Group 42% of revenues* Petroleum pumps Liquid ring pump packages Loading arms OEM compressors and pumps * Revenues for twelve months ending D
Slide 9: Gardner Denver: A Truly Global Presence
9 Gardner Denver: A Truly Global Presence Revenues by Geography Canada 4% 1st Qtr East 34 66 United States 34% Latin America 4% Europe 35% Other 7% Asia 16% 1st Qtr East 4 96 1st Qtr East 4 96 1st Qtr East 35 65 1st Qtr East 7 93 1st Qtr East 16 84 9 (2010 Revenues)
Slide 10: Exposure to a Wide Range of Global Industries and Applications
10 Exposure to a Wide Range of Global Industries and Applications Industrial Manufacturing Transportation Food and Beverage Mining and Construction Energy Printing Auto Svcs Med Enviro Chem Other 0.39 0.11 0.09 0.08 0.07 0.04 0.04 0.03 0.03 0.03 0.09 Industrial Products Group (2) Upstream Energy Dow
Slide 11: Well Established Sales Channels
11 Well Established Sales Channels Distribution Direct OEM 48 33 19 Industrial Products Group (2) Distribution Direct OEM 10 57 33 Engineered Products Group (2) Primarily standard configuration products Primarily products designed for specific customer applications (2010 Revenues) (2) See note on sl
Slide 12: Businesses to Capitalize on all Stages of the Economic Cycle
12 Businesses to Capitalize on all Stages of the Economic Cycle Early Cycle (1-18 months) Late Cycle (36+ months) Mid Cycle (18-36 months) Engineered packages Industrial air compressors OEM Aftermarket
Slide 13: Market Outlook Snapshot
Economic Indicator Outlook Today Market Outlook Snapshot U.S. Industrial Production E.U. Industrial Production Oil and Gas China growth OEM applications Stable to positive; aftermarket products and services driven Well servicing and drilling pump demand strong Positive Positive Six months ago 13
Slide 14: Agenda: Progress
14 Agenda Preface Position Progress Potential
Slide 15: Five Point Growth Strategy for the Future
15 Five Point Growth Strategy for the Future 2. Aftermarket growth 3. Innovative products 4. Selective acquisitions 5. Margin improvements 1. Organic growth CUSTOMERS SHAREHOLDERS EMPLOYEES Innovation High Velocity VALUE COMMITMENT RESOURCES Employee development - a key enabler
Slide 16: Strategy #1: Organic Growth
16 Strategy #1: Organic Growth Progress Order rates ? gaining ground Channel leverage CompAir and Gardner Denver compressors Expanding in faster growing markets Asia Pacific, Brazil, India Future Focus New higher-growth markets Medical Life sciences Environment New innovative products Aftermarket
Slide 17: Strategy #2: Aftermarket Growth
17 Strategy #2: Aftermarket Growth Progress Future Focus Broaden direct service and remanufacture capabilities Monitoring functionality Design in proprietary features Extended warranties 2008 2009 2010 Goal East 0.26 0.29 0.31 0 0.43 Aftermarket % of total revenues
Slide 18: Strategy #3: Innovative Products
18 Strategy #3: Innovative Products Progress Voice of customer ? differentiates products from competition Value proposition based on customer needs Product launches across multiple divisions demonstrate success Example: Revolutionary Offshore PZ-2400 Drilling Pump
Slide 19: Strategy #3: Innovative Products - Future Focus
19 Strategy #3: Innovative Products Future Focus Continue to incorporate voice of the customer to drive innovation Global input from customer Establish appropriate company priorities Test concepts Assess feasibility and commercial viability Engage customer commitment Rigorous customer- driven proces
Slide 20: Strategy #4: Selective Acquisitions
20 Strategy #4: Selective Acquisitions Progress Environment improving Acquired ILMVAC in 3Q10 Strengthened balance sheet to enable future financing Proven track record Future Building pipeline of opportunities in large global markets Adding portfolios of product technologies serving growth industrie
Slide 21: Strategy #5: Margin Improvement
21 Strategy #5: Margin Improvement Progress Reduced manpower by 2,300 or 27% since October 2008 CompAir integrated 8 facility rationalizations 28 SAP R/3 or Business One implementations Cumulative Annual Savings from Facility Rationalizations (invested $70M to realize savings) 2009 2010 Future years
Slide 22: Strategy #5: Margin Improvement - Industrial Products Group
22 Strategy #5: Margin Improvement - Industrial Products Group Adjusted Operating Margin(1) Goal "14 x 14" 2008 1H09 2H09 1H10 2H10 2014 Goal East 0.09 0.023 0.074 0.085 0.097 0.14 Adding 150 BPS annually going forward $0.21 DEPS per year (based on 2009 revenues) Three key elements Restructuring Pro
Slide 23: Strategy #5: Margin Improvement - Engineered Products Group
Last Peak Future Peak East 0.245 0.285 23 Strategy #5: Margin Improvement - Engineered Products Group Increasing Adjusted Operating Margins(1) (1) See note on slide 30 Adding 50 BPS per year 2011-2014 Three key elements Restructuring Productivity Sourcing 4Q10 East 0.24
Slide 24: Agenda: Potential
24 Agenda Preface Position Progress Potential
Slide 25: The Gardner Denver Way and Why it is Delivering Powerful Results
25 The Gardner Denver Way and Why it is Delivering Such Powerful Results Why Such Powerful Results CUSTOMERS SHAREHOLDERS EMPLOYEES Innovation High Velocity VALUE COMMITMENT RESOURCES The Gardner Denver Way Opportunity-rich environment Extremely fast adoption Corporate culture Beyond shop-floor appl
Slide 26: Improvements in Inventory Turns Leads to Higher ROIC
Improvements in Inventory Turns Leads to Higher ROIC Inventory Turnover Target 7 to 8 turns 0.5 turn improvement per year Will free up ~$60M additional cash (2) Will add 80 BPS to pre-tax ROIC (2,3) 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 DSO Inventory Turnover 4.85 4.76 4.89 4.91 5.41 5.17 5.4
Slide 27: Solid Balance Sheet and Cash Flow
27 Solid Balance Sheet and Cash Flow Liquidity - cash, unused credit $452M Debt to total capitalization 2010 Free cash flow* 95% of Adjusted Net Income(1) $169M Cash to be applied to: Acquisitions Share buybacks Debt repayments Dividends * Free cash flow is defined as "cash flow provided by operatin
Slide 28: Why Invest in Gardner Denver
28 WHY INVEST IN GARDNER DENVER Delivering Growth Today for the Future Today: Profit Expansion Despite Economic Headwinds Upside from faster growing markets Early stages of margin expansion initiative Growing aftermarket Innovation contributions Strong cash flow Future: Exceptional Potential as Stra
Slide 29: (Unaudited)
29 Investor Presentation February 2011 (Unaudited)
Slide 30: Presentation Notes
Presentation Notes Note 1: Adjusted Operating Income, Adjusted Operating Margins, Adjusted Net Income and Adjusted DEPS are financial measures that are not in accordance with US GAAP. Adjusted Operating Income, Adjusted Operating Margins and Adjusted DEPS excludes the net impact of expenses incurred
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