Slide 1: Baird Analyst Day November 7, 2016
IDEX Proprietary & Confidential BAIRD ANALYST DAY November 7, 2016
Slide 2: Presenters
IDEX Proprietary & Confidential Presenters • Mike Yates, Interim CFO & Chief Accounting Officer • Andrew Silvernail, Chairman and CEO • Eric Ashleman, Sr. VP and Chief Operating Officer • Marc Uleman, Group President, IDEX Sealing Solutions 2
Slide 3: Andrew Silvernail, Chairman & CEO
IDEX Proprietary & Confidential Andrew Silvernail, Chairman & CEO
Slide 4: Corporation Overview
IDEX Proprietary & Confidential IDEX Corporation Overview $2 BILLION SUPPLIER of highly engineered industrial and technology solutions for mission critical niches Global strategy to build defensible, differentiated positions in niche GROWTH BUSINESSES that are enabled by OUTSTANDING TEAMS Our object
Slide 5: Global Footprint
IDEX Proprietary & Confidential Global Footprint 7000+ Employees 60+ Business units 5
Slide 6: IDEX At A Glance
IDEX Proprietary & Confidential 2015 REVENUE $861 $739 $424 % OF TOTAL 43% 36% 21% 2015 OPERATING MARGIN* 25% 22% 27% 2015 EBITDA MARGIN* 28% 28% 29% BUSINESS PLATFORMS Industrial Water Energy Agriculture Valves Scientific Fluidics Optics & Photonics Material Processing Sealing Solutions Industrial
Slide 7: Timeline: Strategic Evolution
IDEX Proprietary & Confidential Timeline: Strategic Evolution 7 2000 – 2011 2011–2016 2016–2021 VS. S&P 500 79th Percentile • Vision & Values • Talent & team development • Formalized IDEX Operating Model • Organic performance • Disciplined capital & resource deployment • Globalization • Professional
Slide 8: Our Purpose
IDEX Proprietary & Confidential 8 Our Purpose
Slide 9: Strategy: Where We're Going
IDEX Proprietary & Confidential Strategy: Where We’re Going 9
Slide 10: 2017–2019 Strategy
IDEX Proprietary & Confidential 1. Accelerate organic performance in “Integrated Growth” “Targeted Growth” businesses 2. Improve positioning and profit profile of underperforming businesses 3. Build Business Segments in Fluids, Health & Science, Safety, and Engineered Fastening through M&A Double–di
Slide 11: Portfolio Update – Progress Report
IDEX Proprietary & Confidential Portfolio Update – Progress Report 11 Portfolio 2015 % of Rev. 2016 Actions 2016 % of Rev. Status Integrated Growth 26% • Acquired Akron & AWG • Healthy innovation pipeline 32% Targeted Growth 39% • Industrial/Energy macro headwinds • Expanding margin >100 bps • Acqui
Slide 12: Five Year M&A Strategic Focus
IDEX Proprietary & Confidential Five Year M&A Strategic Focus Significant opportunities to continue to expand via M&A in our core niche markets FLUID TECHNOLOGIES $20B Market HEALTH & SCIENCE $2.5B Market SAFETY $3.0B Market ENGINEERED FASTENERS & CONNECTORS $3.0B Market 12
Slide 13: M&A Implementation Plan
IDEX Proprietary & Confidential M&A Implementation Plan Multi–pronged approach to developing and executing on M&A pipeline • Cultivate and execute on strong history and deep relationships through years of market knowledge and company interactions • Analyze and engage targeted private equity holdings
Slide 14: Five Year Capital Availability
IDEX Proprietary & Confidential IDEX Five Year Capital Availability 14 • Organic rev growth of 2–4%, total rev growth of 8–10% per annum • 5 Year Total EBITDA: $3,900M • Operating Cap Ex & W/C: ($420M) • Taxes: ($760M) • Dividends: ($720M) • Interest: ($300M) • Debt Capacity: $1,000M @ 2.0–2.5x gros
Slide 15: IDEX Summary
IDEX Proprietary & Confidential OBJECTIVES: Double-digit EPS CAGR, strong CASH CONVERSION and SUPERIOR RETURNS STRATEGIC POSITIONING in highly engineered, mission critical niches OUTSTANDING TEAMS who deliver with our Values and Operating Model Strong balance sheet, cash flow and capital deployment
Slide 16: Fire & Rescue Platform
IDEX Proprietary & Confidential Fire & Rescue Platform
Slide 17: Fire & Rescue Overview
IDEX Proprietary & Confidential Fire & Rescue Overview 17 IDEX Fire & Rescue: • Deployed $275M of capital with Akron Brass and AWG • Leading position within $1.4B product available market of pumps, water distribution, electronics, and rescue tools • Serves stable markets that perform well over the l
Slide 18: Platform Overview
IDEX Proprietary & Confidential Platform Overview 18 We have assembled nearly $400M of critical scale within Fire & Rescue Pumps 26% Pump Accessories 10% Valves 5% Monitors & Nozzles 16% Lighting 11% Rescue Tools 24% Industrial Products 8% Competitive Advantage Via Scale • 1200 employees • 330 techn
Slide 19: Fire Suppression Portfolio
IDEX Proprietary & Confidential Fire Suppression Portfolio 19 FIRE SUPPRESSION SHARE POSITION DESCRIPTION PRODUCTS COMPANY #1 Pumps N.A. #1 Modules N.A. #1 Nozzles N.A. #1 Monitors N.A. #1 Valves N.A. #1 Multiplexing N.A. #1 Pressure Governor N.A. #1 Pumps UK/Europe #1 Nozzles Europe #1 Monitors Eur
Slide 20: Product Breadth – Mobile Mechanical Components
IDEX Proprietary & Confidential Product Breadth – Mobile Mechanical Components 20 Full coverage of all fire suppression components
Slide 21: Portfolio Breadth – Systems & Connectivity
IDEX Proprietary & Confidential Portfolio Breadth – Systems & Connectivity 21 Breakthrough opportunities to innovate and integrate
Slide 22: 2016 Acquisitions – Integration Update
IDEX Proprietary & Confidential 2016 Acquisitions – Integration Update 22 Dedicated integration resources are ahead of plan • IDEX Operating Model 8020 Lean Enterprise • Value Drivers Infrastructure Facilities Sourcing Commercial Coverage Technology • Breakthrough Growth Innovation P
Slide 23: Innovation Snapshot – Integration & Automation
IDEX Proprietary & Confidential Innovation Snapshot – Integration & Automation 23 EP = NP + FL + EL + AL What line was that? GPM = 29.7 x d² x √NP Problem • 69% of firefighters in the US are volunteer ….. Numbers are shrinking fast • Higher training demands and requirements • Emergency calls continu
Slide 24: Innovation Snapshot – Akron Brass UltraJet
IDEX Proprietary & Confidential Innovation Snapshot – Akron Brass UltraJet 24 • Providing firefighters the most versatile firefighting nozzle • Ideal for Water, Foam & CAFS Applications • Operates like traditional nozzles
Slide 25: Rescue Technologies Platform
IDEX Proprietary & Confidential Rescue Technologies Platform 25 Hydraulic Cutters & Spreaders Battery Technology Portable Power Telescoping Rams Re–railing Equipment Electronics Hydraulic Cutters & Spreaders Battery Technology Portable Power Handheld Rescue Telescoping Rams H
Slide 26: Innovation Snapshot – eDraulic Rescue Tools
IDEX Proprietary & Confidential Innovation Snapshot – eDraulic Rescue Tools 26 Solved a critical problem and created an entirely new segment i–eDRAULIC Intelligent Rescue tools 2010 2012 2014 2015 2017 Ev o lu tio n eDRAULIC facelift & Portfolio completion First battery driven telescopic ram Dinglee
Slide 27: Innovation Snapshot – StrongArm Rescue Tool
IDEX Proprietary & Confidential Innovation Snapshot – StrongArm Rescue Tool 27 Gaining strong momentum since 2015 introduction • Smaller, hand–held rescue device • Interchangeable tips • Targeted Rapid Intervention Teams in Fire markets • Adjacent market entry for SWAT and specialty law enforcement
Slide 28: Global Footprint
IDEX Proprietary & Confidential Global Footprint 28 Global footprint touches all major markets Erlangen, Germany Ballendorf, Germany Tianjin, China Warwick, UK Ravensburg, Germany Additional EM access within IDEX India & China shared mfg. Akron, OH Columbus, OH Shelby, NC Ocala, FL
Slide 29: Growth in Emerging Markets
IDEX Proprietary & Confidential Growth in Emerging Markets 29 Actively moving resources to these regions Tianjin, China Suzhou, China (Open 12/16) Vadodara, India • Developing high–end import markets and local–for–local • Rising standards of living drive technology adoption • Full range of technolog
Slide 30: Summary
IDEX Proprietary & Confidential Summary 30 More room to grow organically and inorganically • Global markets are stable • IDEX is the global market leader • Integration driving value quickly • Growth through innovation, emerging markets penetration, strong execution
Slide 31: So much more than a tagline …
IDEX Proprietary & Confidential 31 So much more than a tagline …
Slide 32: Sealing Solutions Platform
IDEX Proprietary & Confidential Sealing Solutions Platform
Slide 33: IDEX Sealing Solutions at a Glance
IDEX Proprietary & Confidential 33 3 IDEX Sealing Solutions at a Glance: 700 employees, 175+ MUS$ Precision Polymer Engineering SFC Koenig FTL Technology Novotema S.p.A High Performance Materials for Critical Applications Complex profiles in high performance elastomers for demanding applications Cus
Slide 34: Sealing Solutions Span Mission Critical Applications
IDEX Proprietary & Confidential 34 IDEX Sealing Solutions Span a Wide Range of Mission Critical Applications Oil and Gas
Slide 35: IDEX Journey in Sealing Solutions and Global Footprint
IDEX Proprietary & Confidential 35 35 PPE–Acquired by IDEX Corporation 2010 PPE – Manufacturing Facility opens in Brenham, TX, US 2014 Novotema – Acquired by IDEX Corporation 2015 SFC – Acquired by IDEX Corporation 2016 PPE–New offices open in Houston, TX, US 2013 FTL –Acquired by IDEX Corporation I
Slide 36: Global Sealing Market Deep Dive
IDEX Proprietary & Confidential Global Sealing Market Deep Dive 36 Mechanical Seals Elastomer Seals Engineered Plastic Seals Metallic Gaskets & Seals Non–Metallic Gaskets & Seals Other Seals $3,290M Main Application Areas Oil & gas exploration and production, semiconductors, safety critical sealing
Slide 37: IDEX Model
IDEX Proprietary & Confidential 37 IDEX Model
Slide 38: Marine Diesel & Gas Engines Example
IDEX Proprietary & Confidential Marine Diesel & Gas Engines Example Innovation • Environmental legislation (IMO) needs to be adhered to for engine emissions • This drives requirement for dual fuel and alternative fuel capability • PPE created a specifically designed material for multi–fuel operation
Slide 39: Pharmaceutical Innovation Example
IDEX Proprietary & Confidential Pharmaceutical Innovation example Innovation • With Steam in Place requirements for Bio–Pharma applications, existing material technology was limited • A new material has been developed in accordance with FDA and USP Class VI requirements • Custom designed profile in
Slide 40: Semiconductor Example
IDEX Proprietary & Confidential Semiconductor Example PPE Semiconductor Sales and Elastomer Market We are growing faster than the average market growth CAGR 2015-2020 by Application Within semiconductor we are focused on the highest growth applications, laying the foundation for further accelerated
Slide 41: Organic Growth – Texas Investment
IDEX Proprietary & Confidential Organic Growth – Texas Investment Ground-breaking 2nd April 2014 Production 17th November 2014 • IDEX has invested in manufacturing capability in Texas to capture US growth • This investment creates the organic growth capability to double our US revenue over 3 years 4
Slide 42: Latest Acquisition – SFC Koenig Product Portfolio
IDEX Proprietary & Confidential 42 Current product portfolio of SFC mainly comprises expander sealing solutions • Check valves are new products SFC product portfolio Latest Acquisition – SFC KOENIG Sealing Solutions Flow control Installation Push–type expanders: Sealing solutions for medium / high p
Slide 43: Latest Acquisition – SFC Koenig Markets
IDEX Proprietary & Confidential Latest Acquisition – SFC KOENIG SFC serves automotive (PC,CV) hydraulics markets, with newer entry into medical and aerospace business Passenger Cars (PC) Passenger cars and light commercial OEM units below 6 tons Application of expanders: primarily in powertrains (e.
Slide 44: Inorganic Growth Options
IDEX Proprietary & Confidential 44 Inorganic Growth Options • IDEX Sealing Solutions has been growing significantly over the last years with 4 acquisitions and one major facility expansion. • Further M&A opportunities exist in three key areas: M&A FUNNEL Enhanced Elastomer Offering PLATFORM Enhanced
Slide 45: Key Take-Aways IDEX Sealing Solutions
IDEX Proprietary & Confidential Key Take–Aways IDEX Sealing Solutions • IDEX has developed this platform in 6 years from no presence to a global organization consisting of 7 sites and approximately 700 employees, with above IDEX average profitability. This growth has been accelerating over the last
Slide 46: IDEX Proprietary & Confidential 46
IDEX Proprietary & Confidential 46
Slide 47: Q&A
IDEX Proprietary & Confidential Q&A 47