Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver Holdings — Q2 2019 Earnings Presentation
20 slides from Ingersoll Rand's earnings presentation, Aug 1, 2019
Slide 1: Gardner Denver Q2 2019 Earnings Presentation
Gardner DenverQ2 2019 Earnings Presentation August 1, 2019
Slide 2: Replay Information
Replay Information 2 Dial toll-free: +1.877.344.7529 International: +1.412.317.0088 Conference ID: #10133603 Log on to: https://investors.gardnerdenver.com
Slide 3: Disclaimer
Disclaimer 3 Non-GAAP Financial MeasuresIncluded in this presentation are certain non-GAAP financial measures designed to supplement, and not substitute, the financial information presented in accordance with generally accepted accounting principles in the United States of America because management
Slide 4: Agenda
Agenda 2 Company HighlightsGardner Denver/Ingersoll Rand Industrials Integration UpdateStrategy UpdateSegment HighlightsGuidanceQ&A
Slide 5: Q2 2019 Highlights
Q2 2019 Highlights1 Revenue of $629M, down 3% excluding FXAdjusted EPS of $0.43 and Adjusted EBITDA of $148M with margin of 23.5%2GDP-exposed businesses (represents ~80% of revenue)3Revenue up 4% excluding FXTriple digit Adjusted EBITDA margin expansion in Industrials and Medical segmentsUpstream En
Slide 6: Gardner Denver/IR Industrials Transaction Update
Gardner Denver/IR Industrials Transaction Update 6 Provides Greater Scale and Reach through Leading Brands and Market PositionEnhances End Market Balance and Diversity(Upstream energy reduced from ~25% to ~10% of revenue) Broadens Portfolio of Technologies and Solutions Strong Recurring Service and
Slide 7: Integration: 4-Step Plan Governed by GDX
Integration: 4-Step Plan Governed by GDX Step 1: Charter Critical day 1 priorities by function and sub-functionPrecise scope definition Step 2: Blue Print Current state processes (value stream mapping) and capabilitiesDesired future state value stream map Step 3: Work Plan New IR future operating mo
Slide 8: Our Strategy
Our Strategy Deploy TalentExpand Margins Accelerate Growth Allocate Capital Effectively 10
Slide 9: Industrials Segment – Q2 Highlights
Industrials Segment – Q2 Highlights (Dollars in millions) Highlights: Orders flat ex-FXRevenue up 5% ex-FXPositive orders performance in Americas & Europe ex-FX; negative performance in Asia due to Runtech order placed in previous yearSolid performance in core oil lubricated compressors and blowers
Slide 10: Energy Segment – Q2 Highlights
Energy Segment – Q2 Highlights (Dollars in millions) Highlights:Orders down 30% ex-FXUpstream orders down 35% due to minimal original equipment activity and overall market activity impacting aftermarket Revenue down 17% ex-FXUpstream revenue down 26%Mid/downstream down 3% ex-FX Adjusted EBITDA margi
Slide 11: Medical Segment – Q2 Highlights
Medical Segment – Q2 Highlights (Dollars in millions) Highlights: Orders up 9% ex-FXRevenue up 12% ex-FXStrong broad-based performance across all product technologies and geographiesAdjusted EBITDA margin up 260 bps driven by volume growth and operational efficiencies As Reported Prior Year YOYChang
Slide 12: Revised 2019 Guidance
Revised 2019 Guidance 12 1 All revenue outlook commentary expressed in percentages2 Excluding the impact of any potential M&A activity or share repurchases3 Represents the expectation of weighted average diluted shares outstanding for the balance of the year based on ending share count and share pri
Slide 13: Appendix
Appendix
Slide 14: Q2 2019 Financial Performance
Q2 2019 Financial Performance 14 1 Adjusted EPS is defined as adjusted net income divided by adjusted diluted average shares outstanding $629 Q2 2018 Q2 2019 $162 $148 Q2 2018 Q2 2019 Adjusted EPS1 $0.44 $0.43 Q2 2018 Q2 2019 Revenue Down 6%Down 3% ex-FX$668 Adjusted EBITDA Down 9%Margin Down 70 bps
Slide 15: Q2 2019 Financial Performance: Free Cash Flow, Working Capital, Leverage
2.4x 2.0x 2.0x Q2'18 Q1'19 Q2'19 Q2 2019 Financial Performance 15 Free Cash Flow 1 Working Capital (Op. Working Capital as % of LTM Sales) Leverage (Net Debt / LTM Adjusted EBITDA) 205% 113% Q2 2018 Q2 2019 Increased 40 bps Improved 0.4x Y/Y ¹ Free Cash Flow is defined as cash flows from operations
Slide 16: Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS
Reconciliation of Net Income and Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share 1 Adjusted diluted share count and adjusted diluted earnings per share include incremental dilutive shares, using the treasury stock method, which are added to average shares outstanding. GARDN
Slide 17: Reconciliation of Net Income to Adjusted EBITDA and CFOA to Free Cash Flow
Reconciliation of Net Income to Adjusted EBITDA and Adjusted Net Income and CFOA to Free Cash Flow GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTEDNET INCOME AND CASH FLOWS - OPERATING ACTIVITIES TO FREE CASH FLOW(Dollars in millions) (Unaud
Slide 18: Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes
Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes GARDNER DENVER HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF SEGMENT ADJUSTED EBITDA TO INCOME BEFORE INCOME TAXES(Dollars in millions) (Unaudited) For the Three MonthPeriod Ended For the Six MonthPeriod Ended June 30, June
Slide 19: Forward-Looking Statements
Forward-Looking Statements 1 FORWARD-LOOKING STATEMENTSThis communication 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 Re
Slide 20: Important Additional Information and Where to Find It
Important Additional Information and Where to Find it 2 IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND ITIn connection with the proposed transaction, Gardner Denver and Ingersoll Rand Industrial will file registration statements with the SEC registering shares of Gardner Denver common stock and
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