ITT Inc. · NYSE:ITT
ITT — Prudential Equity Group Conference (September 2006)
19 slides from ITT's conference presentation, Sep 27, 2006
Slide 1: Inside Our Best Ideas – Customer Value
Inside Our Best Ideas – Customer Value Prudential Equity Group Conference George Minnich Senior Vice President & CFO September 27, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements “Safe Harbor Statement” under the Private Securities Litigation Reform Act of 1995 (“the Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statem
Slide 3: ITT Corporation - Today
ITT Corporation - Today REVENUE PROFILE (2005 $7.4 Billion) • Multi-Industry Company with Outstanding Organic Growth Fluid Defense • 2004 & 2005 Achieved 12% Technology Electronics Organic Revenue Growth 38% & Services 43% • Leading Positions in Attractive Electronic Motion & Markets with Long-Term
Slide 4: Financial Results
Financial Results 1H05 1H06 $3,630 $3,955 Revenues • Organic Growth 9.5% +8.9% ¾ All segments contributed $481.3 • Margin expansion at FTC & $410.3 Defense Segment OI +17.3% • Electronic Components continues improvement $1.42 • Performance exceeded $1.21 expectations EPS +17.4% • +21% excluding SFAS
Slide 5: Consistent Financial Performance
Consistent Financial Performance REVENUES ($mm) SEGMENT OPERATING MARGIN $8,130 12.3% 12.3% $7,389 11.6% 11.5% 11.8% $6,293 $5,130 $4,464 2002 2003 2004 2005 2006E 2002 2003 2004 2005 2006E EARNINGS PER SHARE FREE CASH FLOW CONVERSION $2.95-3.00 163% $2.59 $2.16 123% 126% $1.69 $1.80 104% 106% 100%
Slide 6: Fluid Technology
Fluid Technology 2005 REVENUE - $2.8B WATER/WASTEWATER - REVENUE Water/ $1,955 +$2,100 Waste Water 68% $1,777 $1,449 $1,189 Building Trades 11% Industrial & Biopharm 21% 2002 2003 2004 2005 2006E POSITION OF STRENGTH • Leading Water/Wastewater Equipment Supplier • Premier Brands – several +100 years
Slide 7: Global Water Vision – $45 Billion Equipment Market
Global Water Vision – $45 Billion Equipment Market DISINFECTION DISTRIBUTION RESIDENTIAL PUMP STATIONS FILTRATION COMMERCIAL WASTEWATER TREATMENT PLANT MBR INDUSTRIAL SLUDGE INTAKE MANAGEMENT STATIONS DESALINATION DISINFECTION WELL SURFACE SALT MBR WATER WATER WATER Opportunities OpportunitiesAvaila
Slide 8: Fluid Technology Growth Strategy
Fluid Technology Growth Strategy Enhance EnhanceCore Core + Expand ExpandCore Core Geographic Expansion Treatment New Product Controls & Development Instrumentation Operational Excellence Services Leveraging Leveragingthe theIndustry’s Industry’s#1 #1Transport TransportPosition Position
Slide 9: Industry Leading Water/Wastewater Capabilities
Industry Leading Water/Wastewater Capabilities Strong legacy positions Customer intimacy The “right” technologies Brand leadership Superior global reach An AnOutstanding OutstandingPlatform PlatformPositioned Positionedfor forGrowth Growth 8
Slide 10: Our Defense Business Areas
Our Defense Business Areas Communications & Space & Intelligence Advanced Engineering Electronics Systems Systems & Services Communications Meteorological, Communications and networking systems, navigational and engineering services, airborne electronic self- sensor payloads, advanced protection sys
Slide 11: Defense
Defense 2005 REVENUE - $3.2B REVENUE ($Billion) Satellite $3.7 Payloads O&M Services 20% 23% $3.2 Electronic $2.4 Systems $1.8 11% Engineering $1.5 Services 10% Night Vision 10% Advanced Engineering Tactical 9% Communications 2002 2003 2004 2005 2006E 17% GROWTH DRIVERS • Special Ops and Joint Effor
Slide 12: Significant Market Expansion Opportunities
Significant Market Expansion Opportunities ITT Night Vision’s Share of ITT Night Vision’s Share of Image Intensification EO/IR Visioning ITT ITT ITT Defense’s Share of DoD Spend ITT A/CD’s Share of Army ITT A/CD’s Share ITT VHF Tactical Comms DoD Comms ITT ITT <1% Total Market Share ITT Systems Shar
Slide 13: Motion & Flow Control; Electronic Components
Motion & Flow Control Electronic Components 2005 REVENUE - $0.7B 2005 REVENUE - $0.7B Friction Connectors Materials 50% 44% Leisure Switches Marine 50% 32% Aerospace Controls Koni/Shocks 11% 13% REVENUE ($mm) REVENUE ($mm) $697 $709 $730 $670 $698 $634 $563 $586 $545 $465 2002 2003 2004 2005 2006E 2
Slide 14: Creating Superior Customer Value
Creating Superior Customer Value Product ProductDifferentiation Differentiation Operational OperationalExcellence Excellence Market Segmentation Global Sourcing Voice of the Customer Footprint Realignment Value Based Product Development Six Sigma & Lean Execution/ Time to Market Value
Slide 15: Importance of Market Segmentation
Importance of Market Segmentation Allows ITT to prioritize served markets Focus on the most attractive markets Participate in markets appropriate for ITT Matching customer needs with ITT capabilities Create differentiated value proposition through “Voice of Customer” Determine the approp
Slide 16: Case Study: Flygt Dewatering Pumps
Case Study: Flygt Dewatering Pumps Dewatering market: Market Segmentation +$3 Billion growing at 2-3x GDP Shifting from ownership to rental & service Customer needs: Voice of the Customer Consistent hydraulic performance over time & wear resistance Ease of maintenance Value Based Product Com
Slide 17: Case Study: Flygt Dewatering Pumps
Case Study: Flygt Dewatering Pumps Voice of the Customer Revisited Wear Resistance New Zealand: Mine dewatering – These pumps operate in harsh environments, needing refurbishment frequently. The BS2670 has lasted four times the standard pump so far. Customer is “absolutely wrapped” Ease of Mainten
Slide 18: Operational Excellence
Operational Excellence Strong traction employing the ITT Management System Key Initiatives Footprint Six Sigma & Global Sourcing Realignment Lean Global Sourcing Example (% Material Sourced From Low Cost Regions) 30 – 35% 25% 10% Current 2009 Premier Standard Opportunity Opportunityfor for$100 $10
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