Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — RBC Global Industrials Conference 2015
27 slides from Roper Technologies's conference presentation, Sep 9, 2015
Slide 1: RBC Global Industrials Conference
Roper Technologies, Inc. RBC Global Industrials Conference September 9, 2015
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 include, among others, statements regarding operating results, the success of our internal operating plans, and
Slide 3: Creating Shareholder Value
Creating Shareholder Value Strategy Results Engineered Content for Diverse Niche Markets Significant Growth Platforms • Leadership in Favorable Markets • Diverse End Markets, Broad Customer Base High Gross Margins Recurring Revenue Strong Operations Management Outstanding Cash Flow/Conversion • Stro
Slide 4: Creating Shareholder Value: Cumulative Total Shareholder Return
Creating Shareholder Value Comparison of Cumulative Total Shareholder Return Roper Technologies, Inc. S&P 500 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 IPO 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Note:
Slide 5: The Roper Strategy
The Roper Strategy » Win in Niche Markets Through a Diverse Set of Businesses with Leading Market Positions » Focus on Proprietary and Differentiated Customer Solutions to Generate High Gross Margin Recurring Revenue Streams » Maintain an Asset-Light Business Model to Deliver Exceptional Cash Perfor
Slide 6: Roper's Strategic Evolution
Roper’s Strategic Evolution 1992 - 2002 2003 - 2009 3 Businesses at IPO IPO; Joined S&P Joined Small Cap 600 S&P 500 A Diversified Growth Company » Roper IPO in February 1992: » Roper Governance Processes Enhance Organic Growth • $70 Million Revenue, $14 Million EBITDA • Focus on Free Cash Flow, Ass
Slide 7: Roper's Strategic Evolution: 2010 - Today
Roper’s Strategic Evolution 2010 - Today Roper Technologies Today » Diversified Technology Company • ~40+ Separate Businesses with Leadership A Diversified Growth Company Positions in Niche Markets » From 2010 – 2Q 2015 (5 1/2 Years Cumulative): • Enterprise-wide Governance Processes to Drive Growth
Slide 8: Governance Process Enhances Growth and Drives Financial Discipline
Governance Process Enhances Growth and Drives Financial Discipline » Operating Reviews with Detailed Performance Analysis » Break-Even Analysis Drives Better Decision Making » Sales & Operating Leverage; Working Capital Efficiency » Incentives Tied to Continuous, Sustained Performance Improvements;
Slide 9: CRI Discipline Drives Cash Flow
CRI Discipline Drives Cash Flow Cash Earnings C ash Net Income + D&A – A Diversified Growth Company Maintenance Cap-Ex Gross Investment R eturn on = Click to edit Master Ititle nvestment Net Working Capital* + Net PP&E + style Accumulated Depreciation » Common Metric throughout Roper Businesses » Fo
Slide 10: Executing Our High Performance Model
Executing Our High Performance Model In $ Millions EBITDA Operating Cash Flow $840 $1,201 22% Compound Annual 25% CAGR CAGR Shareholder Return (2003 - 2014) $130 $71 19% 2003 2014 2003 2014 Asset Intensity* Cash Return on Investment (NWC + Gross Fixed Assets) / Sales 8% 38% ~130% (2,000 Bps) 4.3x 18
Slide 11: Asset-Light Business Model
Asset-Light Business Model Working Capital* as % of Q2 Annualized Net Sales 06/30/13 06/30/14 06/30/15 (I) Inventory 6.3% 6.0% 5.5% (350 Bps) 7.5% 6.2% (R) Receivables 19.7% 17.6% 16.6% 4.0% (P) Payables & 18.6% 17.4% 18.1% Accruals Total (I+R-P) 7.5% 6.2% 4.0% 2013 2014 2015 Note: Percentages may n
Slide 12: Compelling Cash Conversion
Compelling Cash Conversion In $ Millions $900 » 17 Consecutive $800 Years of Free Cash GAAP Net Income Free Cash Flow* $700 Flow > Net Income $600 » Free Cash Flow $500 Conversion of 136% from 2004-2014 $400 $300 $200 $100 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cash Flow Consisten
Slide 13: Sales Growth & Margin Expansion
Sales Growth & Margin Expansion In $ Millions Revenue* 0.55 0.65 0.5 $3,552 Gross 59.3% 0.6 58.6% $3,272 0.45Margin* $3,003 56.0% $2,797 0.55 54.2% 0.4 53.4% EBITDA $2,386 0.35Margin* 33.8% 32.8% 0.5 30.8% 28.7% 0.3 26.7% 0.45 0.25 0.4 0.2 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Governance
Slide 14: Q2'15 TTM Segment Performance
Q2’15 TTM Segment Performance In $ Millions $1,155 A Diversified Growth Company $978 $803 $656 Revenue* Click to edit Master title style $516 EBITDA* $262 $346 $212 Energy Ind. Tech RF Tech Medical • Control Software • Data Collection / • Electronic Tolling • Medical Software • Sensors Metering Tech
Slide 15: Medical Solutions
Medical Solutions Medical Software / Services (~40% of Segment Revenue) Segment Q2’15 TTM % of » Leading Provider of Laboratory Software Solutions for Roper EBITDA* Large Hospitals, IDNs, and Anatomic Pathology » Leading Provider of ServicesAand Diversified Growth Technologies to Company Alternate S
Slide 16: RF & Software Technology
RF & Software Technology Toll & Traffic (~50% of Segment Revenue) Segment Q2’15 TTM % of » Leading Provider of Electronic Tolling Solutions, Roper EBITDA* including Design, RF Tags, Operations & Service A Diversified Growth Company » RF Tags: Rail, Asset Tracking, & Parking Control Software (~40% of
Slide 17: Industrial Technology
Industrial Technology Segment Q2’15 TTM % of Water Meter & Technology (~40% of Segment Revenue) Roper EBITDA* » Automatic Meter Reading & Water Meter Devices A Diversified Growth Company Fluid Handling (~35% of Segment Revenue) 17% 19% » Pumps for Energy, Water, Agriculture and Click to edit Master
Slide 18: Energy Systems & Controls
Energy Systems & Controls Oil & Gas (~60% of Segment Revenue) Segment Q2’15 TTM % of Roper EBITDA* » Control Systems, Software and Service for Compressors & Turbines in LNG, Pipeline and 13% A Diversified Growth Company 16% Upstream Applications » Analytical Instrumentation Serving Refining & Click
Slide 19: We Acquire Outstanding Companies
We Acquire Outstanding Companies » Key Criteria • High CRI • Gross Margin > 50%; Delivers Value for Customers • Leader in a Niche Market; Competitive Advantages • Management Teams Committed to Continued Growth » Accelerate Growth • Incentives Linked to Commitments • Preserve Core Values; Stimulate P
Slide 20: Roper Technologies
Roper Technologies » Leadership Positions in Diverse Niche Markets » Broad Customer Base » Superior Profitability through Outstanding Execution » Asset Light Businesses Allow Nimble Execution » Strong Cash Conversion » Capital Deployment Compounds Cash Flows and Drives Additional Shareholder Value »
Slide 21: Appendix
Appendix 21
Slide 22: Reconciliations I
Reconciliations I (in Thousands) Q2 2015 TTM Industrial Energy Systems & Medical & Scientific Margin Reconciliation RF Technology Technology Controls Imaging GAAP Revenue $802,525 $655,927 $1,149,181 $977,456 Add: IPA / DI / SHP / SoftWriters / Strata A Diversified Growth Company 0 0 6,024 0 Purchas
Slide 23: Reconciliations II
Reconciliations II 2014 Reconciliation of GAAP to Adjusted; Revenue, Gross Profit, and EBITDA Adjustments SHP Purchase FoodLink Purchase Accounting IPA Acquisition Accounting 2014 2014 GAAP A Diversified Growth Company Adjustment to Acquired Deferred Related Inventory Step-up Charge Adjustment to Ac
Slide 24: Reconciliations III
Reconciliations III 2013 Reconciliation of GAAP to Adjusted; Revenue, Gross Profit, and EBITDA Adjustments MHA Purchase Sunquest Fair Accounting Vendor-Supplied Value Adjustment 2013 2013 GAAP A Diversified Growth Company to Acquired Adjustment for Acquired Revenue Component Quality Issue Adjusted D
Slide 25: Reconciliations IV
Reconciliations IV 2012 Reconciliation of GAAP to Adjusted; Revenue, Gross Profit, and EBITDA Adjustments Sunquest Fair Sunquest Value Adjustment Debt 2012 2012 GAAP A Diversified Growth Company Acquisition-Related Expenses to Acquired Deferred Revenue Extinguishment Charge Adjusted (All Numbers are
Slide 26: Reconciliations V
Reconciliations V FY’11 Reconciliation of EBITDA Adjustment (All Numbers are In Thousands) 2011 Full Year Remeasurement Gain 2011 Full Year EBITDA Reconciliation GAAP on Intercompany Debt Adjusted Net Earnings A $427,247 Diversified Growth (4,698) Company $422,549 Taxes 177,740 (2,211) 175,529 Inter
Slide 27: Roper Technologies, Inc.
Roper Technologies, Inc.
Roper Technologies — RBC Global Industrials Conference 2015 on 6ix