Slide 1: Regal Beloit Corporation
Regal Beloit Corporation August 7, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward looking statements represent our management Forward-looking management’s s judgment regarding future events. events In many cases, cases you can i
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures We prepare financial statements in accordance with accounting principles generally accepted in the United States (GAAP). We also disclose adjusted dil t d earnings diluted i per share h (EPS) adjusted (EPS), dj t d gross profit, fit adjusted dj t d gross profit fit as a p
Slide 4: Overview
Overview Getting to Know Regal Best in Class Industrial Performance Growth Catalysts Financial Performance Building a Premier Global Enterprise p4
Slide 5: Overview
Overview Getting to Know Regal Best in Class Industrial Performance Growth Catalysts Financial Performance Building a Premier Global Enterprise p5
Slide 6: Company Overview
Company Overview Founded 1955 Sales by Product/Platform Percentage of Sales Beloit, WI Drives Other Mechanical Revenues Industrial Residential $3.2B Generators Blowers Small 34% 39% Revenue Growth Large Motors 7Y 7-Year CAGR Motors 14.2% 27% Total Shareholder Returns 7-Year TSR Commercial 111% Sales
Slide 7: Necessary and Innovative Products
Necessary and Innovative Products Electric Motors Power Generation Electric Controls Power Transmission p7
Slide 8: Diverse Applications
Diverse Applications p8
Slide 9: Global Foot Print
Global Foot Print Abl to Able t Meet M t Customer C t Demands D d Anywhere A h InI the th World W ld Aligning with Faster Growing Economies p9
Slide 10: One Regal
One Regal Unifies Employees with a Simple, Bold, Dynamic Corporate Brand Presents One Face to the Customer, with Strong Global Product Brands p 10
Slide 11: Overview
Overview Getting to Know Regal Best in Class Industrial Performance Growth Catalysts Financial Performance Building a Premier Global Enterprise p 11
Slide 12: Total Shareholder Returns
Total Shareholder Returns Seven Year History y 200% hareholder Return n 150% 136.4%Best in Class Industrials1 (AME, DHR, EMR, ROP, IEX) 100% R Cumulative Sh 67.6% Regal Beloit 50% 28.9% S&P 500 Total 7-YR 0% (50%) 6/28/06 8/28/07 10/27/08 12/27/09 2/26/11 4/27/12 6/28/13 Performance Consistent With
Slide 13: Financial Performance Profile
Financial Performance Profile 2007 – 2012 Sales CAGR 20.0% 11 9% 11.9% 10 6% 10.6% 9.3% 7.5% 7.3% 10.0% 1.7% 0.0% RBC DHR AME IEX ROP EMR 2007 – 2012 Free Cash Flow / NI 200.0% 137.5% 134.8% 133.3% 120.0% 116.0% 108.1% 0.0% ROP RBC IEX AME DHR EMR Performance Consistent With Best In Class Industrial
Slide 14: Regal Compass Operating System
Regal Compass Operating System Lean Six Sigma Tools Leadership Tools Quality Talent Management Cost Long Range Plans Deliveryy p y Compliance/Safety Cap Ex Risk Management Cash Cycle Customer Care N New P d t Products Integrations Near Term Income Long Term Statement Growth p
Slide 15: Overview
Overview Getting to Know Regal Best in Class Industrial Performance Growth Catalysts Financial Performance Building a Premier Global Enterprise p 15
Slide 16: Energy Efficiency Mega-Trend
Energy Efficiency Mega-Trend Energy Efficient Product Sales* $700 $600 $500 $400 $300 $200 $100 $0 2005 2006 2007 2008 2009 2010 2011 2012 Regional SEER Update US Small Motor Standard Update Future F t Efficiency Effi i Standards St d d Anticipated A ti i t d Effective Eff ti 2015 Under Review
Slide 17: New Products
New Products New Product Introductions 60 60 50 50 Aluminum Wound Variable Speed 40 HVAC Motor Pool Motor 30 22 20 10 2008 2011 2012 Large Frame IEC Motor HERA-MAX Gear Motor Develop New Products with Focus on Energy Efficiency p 17
Slide 18: Successful Acquirer and Integrator
Successful Acquirer and Integrator 2013 Acquisition Strategy Technology and Energy Efficiency 2012 Expand Geographic Footprint Margin Improvement Rigorous Evaluation and 2011 Integration g Process Drives HARGIL PTY. DYNAMICS LTD LTD. Return On Investment 2010 A Acquisition i iti PiPipeli
Slide 19: Synergy Program Update
Synergy Program Update Gross Synergy Run Rate - As Presented 8/23/2011 Gross Synergy Run Rate – Current View ($ in millions) ($ in millions) $38 $38 $35 $30 $25 $20 $12 $10 Yr 1 Yr 2 Yr 3 Yr 4 Yr 1 Yr 2 Yr 3 Yr 4 Capital and Expense – As Presented 8/23/2011 Capital and Expense – Current View ($ in m
Slide 20: Simplification Initiative
Simplification Initiative Reduction Targets 2011 2012 Next 3 Years ERPs 3 3 ~ 6 Factories 2 4 ~ 6 Warehouses 0 6 ~ 10 Design Platforms 2 2 ~ 8 Entities 10 20 ~ 30 Suppliers 50 120 ~ 500 B d Brands 2 2 ~ 10 Improve Margins, Margins Easier to do Business p 20
Slide 21: Investing in Emerging Markets
Investing in Emerging Markets Hermetic Motors - Taicang Generators - Shanghai Visual Management Lean Production p 21
Slide 22: Growth Catalyst Summary
Growth Catalyst Summary Energy Efficiency Trends Introducing New Products Consistent and Successful Acquirer Simplification Initiative Investing g in Emerging g g Markets 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Slide 23: Overview
Overview Getting to Know Regal Best in Class Industrial Performance Growth Catalysts Financial Performance Building a Premier Global Enterprise p 23
Slide 24: Sales and EPS Growth
Sales and EPS Growth $3,500 $5.00 $4.50 $3 000 $3,000 $4.00 $2,500 Sales EPS $3.50 $3.00 ds $2,000 $ Thousand $2.50 $1,500 $2.00 $1,000 $1.50 $1.00 $500 $0.50 $0 $0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2011 and 2012 are adjusted EPS. See Non-GAAP reconciliation in Appendix
Slide 25: Balance Sheet Strength
Balance Sheet Strength 60% 50% pital 40% Total Debt / Total Cap 30% 20% 10% Current Debt/Cap at 27% LTM Debt / EBITDA at 1.9x 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2004 2005 2006 2007 2008 2009 2010 2011 2012 Strong Free
Slide 26: Consistent Cash Flow and Growth Investment
Consistent Cash Flow and Growth Investment Free Cash Flow Capex FCF% of Net Income $400 300% $350 250% $300 200% $250 $200 150% $150 100% $100 50% $50 $0 0% 2005 2006 2007 2008 2009 2010 2011 2012 Cash Div($M) $14.7 $16.6 $18.1 $19.4 . $21.6 $25.1 $26.8 $30.8 _____________________ Note: Free Cash Fl
Slide 27: Investment Thesis
Investment Thesis Global Balanced Business Model – “Best Best in Class” Class Performance – Innovative Product Leadership – Operating System Driving Results Accelerating A l ti G Growth th D Drivers i – Energy Efficiency and New Products – Consistent and Successful Acquirer q – Well Positioned i
Slide 28: Thank You
Thank You Mark Gliebe Chairman Chief Executive Officer Jon Schlemmer Chief Operating Officer Chuck Hinrichs Vice President Chief Financial Officer John J h PPerino i Vice President Investor Relations p 28
Slide 29: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations ADJUSTED DILUTED EARNINGS PER SHARE First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year 2012 GAAP Diluted Earnings Per Share $ 1.16 $ 1.49 $ 1.29 $ 0.70 $ 4.64 Purchase Accounting Costs 0.01 — — — 0.01 Restructuring Costs — 0.01 0.08 0.06 0.15 Gain
Slide 30: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations ADJUSTED DILUTED EARNINGS PER SHARE* Three Months Ended Six Months Ended Jun 29, Jun 30, Jun 29, Jun 30, 2013 2012 2013 2012 GAAP Diluted Earnings Per Share $ 1 13 1.13 $ 1 49 1.49 $ 2 22 2.22 $ 2 65 2.65 Purchase Accounting Costs — — — 0.01 Restructuring Costs 0.02
Slide 31: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations EBITDA Reconciliation (Dollars in Millions) 1Q 2012 2 Q2012 3Q 2012 4Q 2012 FY 2012 Net Income $ 48.7 $ 62.7 $ 54.3 $ 29.9 $ 195.6 Plus: Minority Interest 1.2 1.6 0.9 1.0 4.7 Plus: Taxes 17.8 28.2 17.9 5.7 69.6 Plus: Interest Expense 11.8 11.2 10.6 10.9 44.5 Plus: I
Slide 32: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations EBITDA Reconciliation D ll Dollars iin Milli Millions 3Q 2012 4Q 2012 1Q 2013 2Q 2013 LTM Net Income $54.3 $29.9 $49.5 $51.1 $184.8 Plus: Minority Interest 0.9 1.0 1.2 2.5 5.6 Plus: Taxes 17.9 5.7 15.3 17.9 56.8 Plus: Interest Expense 10.6 10.9 10.6 10.7 42.8 Less:
Slide 33: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations Free Cash Flow Reconciliation (Dollars in Millions) 2005 2006 2007 2008 2009 2010 2011 2012 Cash Flow from Operation $ 112.2 $ 93.5 $ 200.6 $ 154.2 $ 314.9 $ 175.4 $ 265.3 $ 351.7 Capital Expenditures (28.3) (52.5) (36.6) (52.2) (33.6) (45.0) (57.6) (91.0) Grants Re
Slide 34: Appendix Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations Free Cash Flow* Three Months Ended Six Months Ended Jun 29, 29 Jun 30, 30 Jun 29, 29 Jun 30, 30 Dollars in Millions 2013 2012 2013 2012 GAAP Net Cash Provided by Operating Activities $ 91.3 $ 135.9 $ 157.3 $ 204.4 Additions to Property Plant and Equipment (26.6) (25