Slide 1: 4Q CY20 December Quarter Financial Results
4Q CY20 DECEMBER QUARTER FINANCIAL RESULTS February 16, 2021
Slide 2: Cautionary Statement Under the Private Securities Litigation Reform Act
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT Forward-Looking Statements This presentation and discussion contains certain “forward-looking statements” that are subject to the Safe Harbor and Cautionary language contained in the press release we issued on February 16, 2021,
Slide 3: 4Q CY20 Performance Update
4Q CY20 PERFORMANCE UPDATE Consolidated Rexnord • 4Q reported net sales were ~flat year over year – core growth(1) decreased by (2%), M&A was +1% • Adjusted EBITDA(1) was $96 million • Free cash flow(1) established new annual record of $276 million in CY20 Water Management (WM) • 4Q net sales increa
Slide 4: Merger Transaction Overview
MERGER TRANSACTION OVERVIEW • 38.6% ownership of combined entity by Rexnord shareholders • Rexnord shareholders retain: ü Process & Motion Control + Regal Beloit Corporation ü 100% ownership of Water Management platform ü 38.6% ownership of Regal/PMC, including $0.3 billion dividend • Regal to issue
Slide 5: Premier Pure-Play Water Management Profile
PREMIER PURE-PLAY WATER MANAGEMENT PROFILE • Pure-play investment in water control, safety and conservation with attractive ESG profile • Positioned to be the leading provider of smart water solutions that deliver value to facility owners • Leader in IoT-connected product solutions: touchless hygien
Slide 6: Water Management Competitive Advantages
WATER MANAGEMENT COMPETITIVE ADVANTAGES ü Specification-driven product portfolio ü Industry-leading innovation Ø IoT-connected touchless hygienic, backflow, drainage, ü Industry’s broadest solutions offering interceptors monitored through plumbSMART user portal Ø inSpec digital specification tool Ø
Slide 7: Water Management 2020 Update
WATER MANAGEMENT 2020 UPDATE Achieved +8% sales growth, +4% core growth(1) in CY20 Achieved >100% sales growth in touchless products • Click-to-Install online order & installation app Achieved adjacent market outgrowth • Fire protection systems • SiteWorks / stainless drains Significantly increased
Slide 8: Our Water Products Promote Sustainability
OUR WATER PRODUCTS PROMOTE SUSTAINABILITY Water conservation Water system safety Ultra Low Flow washrooms backflow prevention Stormwater & greywater management Water system reliability linear drainage, interceptors, control products acid neutralization systems Low-carbon building heat Green roof / C
Slide 9: Technologies for Complete Washroom Solutions
TECHNOLOGIES FOR COMPLETE WASHROOM SOLUTIONS Hadrian is a strong strategic fit • Growth-oriented culture = history of outgrowth • Strength in institutional building sectors (e.g., education) • Industry innovator: enhanced privacy, durability • Adds annual sales of approximately $57 million • High re
Slide 10: Best-in-Class Performance Drives Value Proposition
BEST-IN-CLASS PERFORMANCE DRIVES VALUE PROPOSITION ü 100% Scaled Water Pure Play ü Track record of consistent organic growth ü Technology leadership ü Sustainable competitive advantages ü Sector-leading profitability ü Action plan to offset stranded costs ü Expected net debt leverage of ~2x at 12/31
Slide 11: 4Q CY20 Summary
4Q CY20 SUMMARY (1) Non-GAAP measure defined, reconciled, and discussed in the earnings release included in the Form 8-K filed with the Securities and Exchange Commission on February 16, 2021. Rexnord Corporation 11
Slide 12: 4Q CY20 Platform Results
4Q CY20 PLATFORM RESULTS PMC • Excluding aerospace, core sales decreased by 3% year over year • 80/20 product line simplification reduced sales growth by 100 bps WM • Strong demand growth for touchless and hygienic products • Introduced portable touchless handwash station (see image) • Connected bat
Slide 13: Cash Flow & Balance Sheet
CASH FLOW & BALANCE SHEET Transitioned fiscal year end to December 31 in 2020 – pro forma CY18/CY19/CY20 quarterly & annual financials on website (1) Free Cash Flow is defined as Cash from Operations less Capital Expenditures, and is a Non-GAAP measure defined, reconciled, and discussed in the earni
Slide 14: March Quarter Outlook
MARCH QUARTER OUTLOOK Water Management • Sales increase by +HSD(1) year over year • Adjusted EBITDA(2) margin in 25%-26% range(3) Process & Motion Control • Sales decrease by (LDD)(1) year over year • Adjusted EBITDA(2) margin in 22.5%-23.5% range(3) Corporate and Other • Corporate expense of ~$10 m
Slide 15: The Year Ahead
THE YEAR AHEAD • Completing transformative transaction • Unlocking the value we’ve built into our Process & Motion Control platform • Establishing a pure-play Best-in-Class Water Management growth platform • Sustaining elevated investment in advanced technologies, new product development • Deliverin
Slide 16: Addendum – CY20 Platform Sales by End Market
ADDENDUM – CY20 PLATFORM SALES BY END MARKET Rexnord Corporation 16