Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Merger or Acquisition (September 2022)
29 slides from Parker-hannifin's merger presentation, Sep 28, 2022
Slide 1: Meggitt Acquisition Update Presentation
Parker Hannifin Corporation Meggitt Acquisition Update Presentation September 28, 2022 Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but
Slide 3: 3
3
Slide 4: Parker Welcomes Meggitt: Day Events
4 Parker Welcomes Meggitt: Day 1 Events
Slide 5: Positioned for Growth Opportunities from Secular Trends
Positioned for Growth Opportunities from Secular Trends Electrification Clean Technology 5 DigitalAerospace
Slide 6: Global Aerospace Trends
Global Aerospace Trends Aerospace Meggitt Significantly Expands our Aerospace Business 19k+ Anticipated new commercial airplane deliveries 2021-20301 77% Commercial transport fleet renewal over the next 20 years1 1: Boeing 2022 Current Market Outlook. 2: Company estimates. 4x Increase in F-35 repair
Slide 7: Transforming our Portfolio
Transforming our Portfolio Revenue by Technology Platform FY15 Revenue $12.7 Billion FY23G Revenue with Meggitt1 $17.9 Billion Flow & Process Control $4.0B Motion Systems $3.6B Aerospace $2.3B Filtration & Engineered Materials $2.8B $5B Aerospace, Filtration & Engineered Materials ~2X Growth 1. Park
Slide 8: Expanding Longer Cycle and Secular Trend Exposure
Longer Cycle Shorter Cycle Industrial Aftermarket Longer Cycle Shorter Cycle Industrial Aftermarket FY15 FY23E Expanding Longer Cycle and Secular Trend Exposure Revenue Mix 8 Longer Cycle + Secular Trends FY27 Illustration Longer Cycle + Secular Trends Shorter Cycle Industrial Aftermarket
Slide 9: Parker and Meggitt: A Powerful Aerospace Combination
Parker and Meggitt A Powerful Aerospace Combination 9 Highly complementary technologies and platforms on premier programs Increases Aerospace aftermarket mix by 500bps Highly engaged team with similar heritage and culture Poised to benefit from Aerospace market recovery Well positioned to
Slide 10: Well Balanced and Diverse Aerospace Portfolio
10 Well Balanced and Diverse Aerospace Portfolio Sales by Customer GeographySales by Application 62%27% 11% North America EMEA Rest of World 28% 30%13% 11% 10% 8% Commercial Transport Business & General Aviation Military Fixed Wing & Other Military Regional Transport Helicopters Energy & Power Gener
Slide 11: Meggitt Strengthens Aftermarket Mix
64% 36% Meggitt Strengthens Aftermarket Mix by 500 bps Increased Aftermarket Enhances Resilience Parker Aerospace Meggitt Combined After- market OEM MRO OEM OEM 11 After- market 54%46% OEM 59% 41% Aftermarket OEM AftermarketAftermarket Note: FY22 Proforma Sales
Slide 12: Complementary Airframe Products & Systems
Complementary Airframe Products & Systems Integrated Systems and Components Across the Platform Braking Systems Avionics & Sensors Fire Protection & Safety Electric Power Fuel Tanks & Bladders Door Seals Flight Control Actuation Fuel Tank Inerting Vibration Control Fluid Conveyance Hydraulics Wing S
Slide 13: Expansion of Engine Products
Expansion of Engine Products Integrated Systems and Components Across the Platform Composites Fire Protection Thermal Management Valves Sensors Seals Turbine Exhaust & Exhaust Nozzles Fluid Conveyance Engine Buildup Ducting Fuel Nozzles Engine Actuation Oil Pumps & Tanks Parker Meggitt Engine Mounts
Slide 14: Meggitt Adds New System & Component Capabilities
14 Meggitt Adds New System & Component Capabilities Note: Symbols estimate the degree of product capabilities, not market share. This table is not an exhaustive list of competing solutions that customers may purchase. Reflects AWB divestiture September 2022. Product Area Combined Comments Braking Sy
Slide 15: A Proven Approach to Synergy Capture
A Proven Approach to Synergy Capture 15 Structured and Deliberate Process to Value Creation Integration teams in place with key leaders from both Parker & Meggitt Over 20 cross-functional integration and synergy teams engaged Program governance with robust operating cadence, tools and processe
Slide 16: Regulatory Commitments to the United Kingdom
Regulatory Commitments to the United Kingdom Include 16 Maintain Meggitt’s Ansty Park center of excellence1 Retain existing UK technical capabilities1 Maintain ~1,400 UK technical jobs & increase apprenticeships by 20%1 Increase UK R&D spend & invest 2/3 in sustainable initiatives1 Uphold
Slide 17: Clear Path to Expand Meggitt EBITDA Margins
$60 $150 $250 $300 $70 $150 $200 $240 FY23E FY24E FY25E FY26E Clear Path to Expand Meggitt EBITDA Margins Pre-Tax Synergy Estimate $2.1 Adjusted numbers include certain non-GAAP financial measures. See Appendix for additional details and reconciliations. Synergies Cumulative Cost to Achieve 17 Syner
Slide 18: Track Record of Rapid Deleveraging
Acquisition Gross Debt to EBITDA at Close Gross Debt to EBITDA ~2 Years Post-Close 3.6x (February 2017) 1.9x1 (June 2019) 4.0x (October 2019) 2.1x (June 2021) Track Record of Rapid Deleveraging Demonstrated Commitment to Gross Debt to EBITDA Target of ~2x 18 + 1. Excludes pre-funding for LORD acquis
Slide 19: Meggitt Transaction Overview
Meggitt Transaction Overview 19 Transaction Consideration: $8.9B • Payment to shareholders and settlement of forward contracts Funding Sources: • Cashflow accumulated since August 2021: $1.8B • Acquisition financing debt: $7.1B Weighted-average interest rate 3.9% $3.5B debt serviceable for prepa
Slide 20: Meggitt Acquisition and AWB Divestiture EPS Accretion
Meggitt Acquisition and Aircraft Wheel & Brake Divestiture EPS Accretion Forecasted FY23 and 1st Twelve Months Preliminary Meggitt Forecast Aircraft Wheel & Brake $M ~9 Months1 FY23 Meggitt 1st 12 Months Meggitt ~9 Months2 FY23 AWB Sales $1,800 $2,400 ($55) Segment Operating Income (As Reported) ($8
Slide 21: Compelling Value Creation for Parker Shareholders
21 Compelling Value Creation for Parker Shareholders EPS expected to be accretive in FY231 $300M expected synergies by FY26 High single-digit ROIC anticipated in year 5 with continued expansion Strategic capital deployment driving long-term shareholder value Dividend: Expect to maintain 5-year avera
Slide 22: Upcoming Event Calendar
Upcoming Event Calendar Annual Meeting of Shareholders October 26, 2022 1Q FY23 Earnings November 3, 2022 2Q FY23 Earnings February 2, 2023 3Q FY23 Earnings May 4, 2023 4Q FY23 Earnings August 3, 2023
Slide 23: Appendix
Appendix • Supplemental Revenue Estimates • Reconciliation of Forecasted Segment Operating Margin • Reconciliation of EBITDA to Adjusted EBITDA • Reconciliation of Gross Debt to EBITDA • Reconciliation of Forecasted EPS 23
Slide 24: Supplemental Revenue Information
Supplemental Revenue Information 24 1: FY22 Proforma Sales. 33% 26% 25% 16% Military OEM Commercial Aftermarket Commercial OEM Military Aftermarket ~70% ~20% ~5% ~5% USD GPB CHFEUR Meggitt Revenue by CurrencyParker Aerospace + Meggitt Combined1
Slide 25: Reconciliation of Forecasted Segment Operating Income
*Totals may not foot due to rounding Reconciliation of Forecasted Segment Operating Income 25 (Unaudited) (Dollars in millions) FY23 Preliminary Forecast 1st 12 Months Acquisition of Meggitt Acquisition of Meggitt Forecasted segment operating income (86)$ (50)$ Estimated Adjustments: Acquisition-rel
Slide 26: Reconciliation of Forecasted Adjusted EBITDA
*Totals may not foot due to rounding Reconciliation of Forecasted Adjusted EBITDA 26 (Unaudited) (Dollars in millions) ~9 Months FY231 Acquisition of Meggitt Forecasted Net Sales 1,800$ Forecasted net income (240)$ Income taxes (72) Depreciation 70 Amortization 206 Interest Expense 225 Forecasted EB
Slide 27: Reconciliation of Gross Debt to TTM EBITDA
RECONCILIATION OF GROSS DEBT TO TTM EBITDA (Unaudited) (in millions) Parker Hannifin at CLARCOR close 12 Months ended 2/28/17 Parker Hannifin at Exotic Metals/LORD close 12 Months ended 10/31/20 Gross Debt $ 6,082 $ 9,987 Net Income 928 1,434 Income Taxes 354 418 Depreciation and Amortization 284 42
Slide 28: Reconciliation of Gross Debt to TTM EBITDA
Reconciliation of Gross Debt to TTM EBITDA 28 (Unaudited) (in millions) 12 Months ended 6/30/19 12 Months ended 6/30/21 Gross Debt $ 7,183 $ 6,646 less prefunding for LORD acquisition (2,375) - Adjusted Gross Debt $ 4,808 $ 6,646 Net Income 1,525 1,747 Income Taxes 424 500 Depreciation and Amortizat
Slide 29: Reconciliation of Forecasted Earnings Per Share
*Totals may not foot due to rounding Reconciliation of Forecasted Earnings Per Share 29 (Unaudited) (amounts in dollars) FY23 Preliminary Forecast 1st 12 Months Acquisition of Meggitt Acquisition of Meggitt Forecasted earnings per diluted share - midpoint (1.83)$ (2.00)$ Estimated Adjustments: Acqui
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