Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — Merger or Acquisition (June 2022)
16 slides from Roper Technologies's merger presentation, Jun 1, 2022
Slide 1: Investor Call
INVESTOR CALL JUNE 1, 2022 SIMPLE IDEAS. POWERFUL RESULTS.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The information provided in this presentation contains forward-looking statements within the meaning of the federal securities laws. These forward- looking statements may include, among others, statements regarding operating results, the success of our internal operating plans,
Slide 3: Today's Announcement
TODAY’S ANNOUNCEMENT • Final Step in Multi-Year Divestiture Strategy to Reduce Cyclicality and Asset Intensity Industrial Businesses in M&AS Segment • Selling Majority Stake in Our 16 Remaining Cyclical Businesses to Clayton, Dubilier & Rice (“CD&R”) • ~$2.6B of Upfront Cash Proceeds, Retaining 49%
Slide 4: Transaction Details
TRANSACTION DETAILS • Selling Majority Stake in Industrial Businesses to CD&R – Total Upfront, Pre-Tax Cash Proceeds of ~$2.6B – Roper Retains 49% Minority Interest in New Standalone Entity – CD&R Successful History of Corporate Partnerships • Beginning in Q2’22, Industrial Results Excluded from Gui
Slide 5: Quality of Roper's Portfolio Meaningfully Enhanced
QUALITY OF ROPER’S PORTFOLIO MEANINGFULLY ENHANCED • Higher and More Resilient Organic Revenue Growth; Less Cyclical – ~75% Vertical Software; ~25% Medical & Water Products – ~80% of Vertical Software is Recurring Revenue – High Level of Reoccurring Revenue in Product Businesses • Improved Working C
Slide 6: Multi-Year Portfolio Optimization
MULTI-YEAR PORTFOLIO OPTIMIZATION (REVENUE MIX) ‘19 & ‘21 Divestitures Medical & Water Products 18% ~25% Industrial (’22 Transaction) 21% Vertical Software ~75% Strategic Divestitures (2019 – 2022) Medical & Water Products (~80% Recurring) 20% • Gatan & Scientific Imaging Businesses (2019) • TransCo
Slide 7: More Durable & Improved Organic Revenue Growth
MORE DURABLE & IMPROVED ORGANIC REVENUE GROWTH 10% GO-FORWARD PORTFOLIO HISTORICAL AVERAGE = +6% 8% 6% 4% 2% 0% Today’s Transaction Greatly (2)% Reduces Cyclicality (4)% (6)% (8)% (10)% 2014 2015 2016 2017 2018 2019 2020 2021 2022E Go-Forward Portfolio* As Reported** Results are presented on an Adju
Slide 8: Negative Net Working Capital Enhances Cash Conversion
NEGATIVE NET WORKING CAPITAL ENHANCES CASH CONVERSION NET WORKING CAPITAL* AS % OF Q4 ANNUALIZED REVENUE 6% 4% 3% (3)% (3)% (5)% (8)% (9)% (18)% 2014 2015 2016 2017 2018 2019 2020 2021 Go-Forward Portfolio*** As Reported** * Defined as Inventory + A/R + Unbilled Receivables – A/P – Accrued Liabiliti
Slide 9: Roper's Go-Forward Portfolio
ROPER’S GO-FORWARD PORTFOLIO REVENUE & EBITDA* VERTICAL SOFTWARE (~75% of Revenue, 18 Businesses) (in $ billions) ~$5.2 $4.8 Guidance Mid-Point $4.0 $3.6 ~$2.1 $1.9 Guidance $1.6 Mid-Point $1.4 MEDICAL & WATER PRODUCTS (~25% of Revenue, 8 Businesses) 2019 2020 2021 2022E** Margin 38% 39% 40% ~40% Re
Slide 10: Consistent Roper Strategy
CONSISTENT ROPER STRATEGY We compound cash flow by acquiring and growing niche, market-leading technology businesses. PAGE 10
Slide 11: Roper Value Creation & Governance Model
ROPER VALUE CREATION & GOVERNANCE MODEL Market-Leading Businesses in Defensible Niches • Substantial Excess Free Cash Flow • Resilient Organic Growth • Investment Grade Leverage • High Recurring Revenue Mix • Centralized Capital Deployment • Strong Margins • Customer Intimacy Redeploy Capital to Acq
Slide 12: Summary
SUMMARY • Final Step in Multi-Year Divestiture Strategy to Reduce Cyclicality and Asset Intensity • Quality of Roper’s Portfolio Meaningfully Enhanced; Less Cyclical – Higher & More Resilient Organic Growth – Improved Working Capital Drives Strong Cash Conversion • $7B+ of Near-Term M&A Firepower •
Slide 13: Appendix
APPENDIX
Slide 14: Industrial Businesses
INDUSTRIAL BUSINESSES (IN-SCOPE FOR THIS TRANSACTION) REVENUE & EBITDA* (in $ billions) ~$1.06 $1.02 Guidance $0.94 Mid-Point $0.83 $0.33 ~$0.32 $0.26 Guidance $0.23 Mid-Point 2019 2020 2021 2022E** Revenue EBITDA Results are presented on an Adjusted (Non-GAAP) basis. 2020 excludes $14m restructurin
Slide 15: Reconciliations
RECONCILIATIONS In $ billions. Note: Numbers may not foot due to rounding. * Presented on an Adjusted (Non-GAAP) basis; See financial disclosures from each respective period for reconciliations to GAAP results; As Reported includes discontinued operations PAGE 15 ** Preliminary estimates; subject to
Slide 16: Roper Technologies
Roper TECHNOLOGIES
Roper Technologies — Merger or Acquisition (June 2022) on 6ix