ITT Inc. · NYSE:ITT
ITT — ITT Industries — RW Baird Conference 2002
18 slides from ITT's conference presentation, Nov 12, 2002
Slide 1: RW Baird Conference
RW Baird Conference November 12, 2002 Bob Ayers President, Fluid Technology
Slide 2: ITT Industries Today
ITTIndustriesToday REVENUE PROFILE (2002E: $4.9 Billion) • Global Multi-Industry Company Defense Fluid Technology Electronics • Strong Positions/Attractive 39% & Services 31% Markets • “Engineered Solutions” Focus Electronic Motion & Components Flow Control • Disciplined Management 12% 18% Processes
Slide 3: ITT Key Characteristics
ITT Key Characteristics Consistency • Balanced and diversified portfolio • 16 continuous quarters of y/y earnings growth • 4+ years of margin improvement Credibility • Grounded forecasts • Delivering on expectations • Clear, understandable reporting Continuous Improvement • ITT Management System • V
Slide 4: Financial Track Record (1999-2002E)
Financial Track Record (1999-2002E) REVENUES ($mm) SEGMENT OPERATING MARGIN $4,829 $4,950 $4,632 $4,676 11.7% 12.0% 11.3% 10.1% 1999 2000 2001 2002E 1999 2000 2001 2002E EARNINGS PER SHARE FREE CASH FLOW ($mm) $3.66 $350+ $2.94 $3.05 $303 $2.53 $234 $115 1999 2000 2001 2002E 1999 2000 2001 2002E Not
Slide 5: Increasing Cash Flow
Increasing Cash Flow WC % OF SALES CAPITAL EXPENDITURES 19.5% $228 19.0% $181 $174 18.5% $145 18.0% 1999 2000 2001 2002E 1999 2000 2001 2002E FCF % OF SALES CASH REDEPLOYMENT 7.0% 6.5% • Acquisitions 4.9% • Debt Reduction 2.5% • Share Repurchase • Dividends 1999 2000 2001 2002E 5
Slide 6: ITT Management System
ITT Management System™ Portfolio ConsistentResults Management • Value-Based Management • Long-Term Targets • Invest in Strong Cores • Grounded Forecasts • Global Market • Contingency Plans Development • In-Depth Operational • Ongoing Reviews Transformation Growth Leadership Operational Excellence •
Slide 7: Value-Based Six Sigma
Value-Based Six Sigma PROGRAM HIGHLIGHTS SAVINGS $175 • EVA Driven Project Prioritization $125 • Global Deployment 300+ Black Belts • Training Ground for Future Managers $22 • Reward System Tied to Results 2000 2001 2002 SELECTED SUCCESS STORIES Business Area Metric Benefit Est Savings Night Vision
Slide 8: Value-Based Product Development
Value-Based Product Development OBJECTIVES KEY ELEMENTS • Increase New Product Success to 80%+ • Voice of Customer • 15-20% Faster Time to Market • Early and Fact-Based Specifications • 25% + of Sales from New Products • Focus on Value-Added Functions • $1+B of New Products/Year • Robust Design Tech
Slide 9: Invest in Strong Cores
Invest in Strong Cores Focused Growth Initiatives • Value-Based Product Development • Adjacent Acquisitions • Geographic Market Expansion Defense Electronics ElectronicComponents & Services Fluid Technology • Leading Switch Position • Battlefield Communications • Leading Pump Position • New Connecto
Slide 10: The World of Fluid Technology
The World of Fluid Technology Water Wastewater Industrial Building Trades BioPharm 10
Slide 11: Fluid Technology's Profile
Fluid Technology’s Profile REVENUE PROFILE GEOGRAPHIC PROFILE Water/ North America Wastewater Europe 58% 58% 30% BioPharm Industrial 6% 19% Asia Pacific Building Trades Other 6% 17% 6% FINANCIAL PERFORMANCE ($mm) 1999 2000 2001 2002E Net Sales 1,814.3 1,834.2 1,829.7 1,920 - 1,940 Growth Rate (%) -1
Slide 12: Leading Positions - Our Growth Platform
Leading Positions - Our Growth Platform LEADING GLOBAL BRANDS DIVERSE SERVED MARKETS Brand Market Position Commercial Water Wastewater 16% Flygt Wastewater #1 Residential Municipal Goulds Water-North America #1 15% 38% Lowara/Vogel Water-Europe #2 Agricultural & Other Industrial 15% 13% Sanitaire Ae
Slide 13: Expanding our Core - Water and Wastewater
Expanding our Core - Water and Wastewater Core Reinforcing Core Adjacencies Water Water&&Wastewater Complementary Aeration/SBR Wastewater Complementary Aeration/SBR Pumps WastewaterEquipment (Sanitaire) Pumps WastewaterEquipment (Sanitaire) Wastewater Other WastewaterTreatment Treatment OtherPumps P
Slide 14: Building Our BioPharm Business
Building Our BioPharm Business KEY INDUSTRY DRIVERS Capital spending for new capacity • 50 new pharmaceutical products in next 5 years • Pharmaceutical manufacturing capacity shortfalls • 8-10% Growth rate DIA DIAFLO FLO Pennsylvania Pennsylvania COTTER COTTER SHEROTEC SHEROTEC California California
Slide 15: BioPharm Market Applications
BioPharm Market Applications Hygienic Applications Major Brands: Pure-Flo Pure-Flo Cotter Pure-Flo Precision 15
Slide 16: Clear Vision, Trust, Execution
LeadershipStrength Clear Vision Trust Execution Passion 16
Slide 17: Summary
Summary v Delivering in Difficult Environment v Implementing ITT Industries Management System vInvesting in Strong Cores v Creating Long Term Value 17
Slide 18: ITT Industries
& ITT Industries