Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver — Q4 2019 Earnings Presentation
21 slides from Ingersoll Rand's earnings presentation, Feb 18, 2020
Slide 1: Q4 and Full Year 2019 Earnings Presentation
Gardner Denver Q4 and Full Year 2019 Earnings Presentation February 18, 2020
Slide 2: Replay Information
Replay Information ▪ Dial toll-free: +1.877.344.7529 ▪ International: +1.412.317.0088 ▪ Conference ID: #10138870 ▪ Log on to: http://investors.gardnerdenver.com 2
Slide 3: Disclaimer
Disclaimer Forward-Looking Statements During the course of this presentation, we may make “forward-looking statements” within the meaning of the US federal securities laws. In fact, all statements made during this presentation other than statements of historical fact are forward-looking statements.
Slide 4: Agenda
Agenda ▪ Company Highlights ▪ Gardner Denver/Ingersoll Rand Industrial Integration Update ▪ Strategy Update ▪ Segment Highlights ▪ Guidance ▪ Q&A 4
Slide 5: Q4 2019 Highlights
1 Q4 2019 Highlights Revenue of $606M, down 14% excluding FX Adjusted EPS2 of $0.37 and Adjusted EBITDA of $135M with margin of 22.3% Upstream Energy (represents ~15% of revenue) Revenue down 50%; performance above expectations due to strong commercial execution, limiting sequential revenue
Slide 6: 2019 Adjusted EBITDA Bridge
1 2019 Adjusted EBITDA Bridge Industrials + Mid/Down + Medical: 2018 to 2019 Adjusted EBITDA Bridge 50%+ Adj EBITDA flow through from commercial (innovation, aftermarket, etc.) and operational Revenue Adj EBITDA initiatives (i2V, pro-active restructuring, cost control) 2018A $2,690M $682M despit
Slide 7: Gardner Denver/IR Industrial Transaction Timeline
Gardner Denver/IR Industrial Transaction Timeline Gardner Denver and US Antitrust New Financing Expected Ingersoll Rand Waiting Period SEC Filings Fully Closing Announcement Expired Q4 2019 – Q1 2020 Committed FEBRUARY 29 APRIL 30, 2019 JUNE 29, 2019 FEBRUARY 7, 2020 WE ARE HERE PFS I N T E G R A T
Slide 8: Our Strategy
Our Strategy Deploy Talent Expand Margins Accelerate Growth Allocate Capital Effectively 8
Slide 9: Industrials Segment – Q4 & FY Highlights
Industrials Segment – Q4 & FY Highlights (Dollars in millions) Q4 2019 FY 2019 As YOY Ex-FX YOY As YOY Ex-FX YOY Reported Change Change Reported Change Change Revenue $333.1 (1.3)% 0.1% Revenue $1,301.3 (0.2)% 3.1% Adj EBITDA $78.8 0.8% 2.2% Adj EBITDA $296.6 2.9% 6.2% Adj EBITDA Margin 23.7% 50 bps
Slide 10: Energy Segment – Q4 & FY Highlights
Energy Segment – Q4 & FY Highlights (Dollars in millions) Q4 2019 FY 2019 As YOY Ex-FX YOY As YOY Ex-FX YOY Reported Change Change Reported Change Change Revenue $205.8 (33.0)% (32.1)% Revenue $870.2 (22.4)% (20.8)% Adj EBITDA $53.5 (43.9)% (43.0)% Adj EBITDA $225.1 (33.4)% (32.3)% Adj EBITDA Margin
Slide 11: Medical Segment – Q4 & FY Highlights
Medical Segment – Q4 & FY Highlights (Dollars in millions) Q4 2019 FY 2019 As YOY Ex-FX YOY As YOY Ex-FX YOY Reported Change Change Reported Change Change Revenue $66.9 (1.8)% (0.4)% Revenue $280.4 5.7% 8.6% Adj EBITDA $20.6 -- 1.5% Adj EBITDA $84.4 12.5% 16.3% Adj EBITDA Margin 30.8% 60 bps Adj EBI
Slide 12: 2020 Guidance – Revenue & EBITDA
2020 Guidance – Revenue & EBITDA 1 Revenue Adjusted Phasing Growth2 EBITDA Revenue Growth2 Excluding impact of FX: Industrials flat to down LSD Medical up LSD Mid and Downstream Energy flat to up LSD Upstream Energy down ~20% Corporate -- Total Gardner Denver H1: down HSD down LSD ~$547M - $577M H2:
Slide 13: 2020 Guidance – Other Key Metrics
2020 Guidance – Other Key Metrics Capital Expenditures ~$45M - $55M Free Cash Flow $280M - $300M Tax Rate 22% to 23% Average Shares Outstanding1 ~209M 1 Represents the full year expectation of weighted average diluted shares outstanding based on 2019 year end share count and share price. Outlook doe
Slide 14: Appendix
Appendix
Slide 15: Q4 2019 Financial Performance
Q4 2019 Financial Performance (Dollars in millions, excl. EPS) Revenue Adjusted EBITDA Adjusted EPS1 Down 15% Down 29% Down 20 Cents Margin Down 430 bps $713 $190 $0.57 $135 $606 $0.37 26.6% Margin 22.3% Margin Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 1 Adjusted EPS is defined as adjusted net
Slide 16: FY 2019 Financial Performance
FY 2019 Financial Performance (Dollars in millions, excl. EPS) Revenue Adjusted EBITDA Adjusted EPS1 Down 9% Down 17% Down 30 Cents Down 6% ex-FX Margin Down 230 bps $2,690 $682 $1.89 $565 $2,452 $1.59 25.3% 23.0% Margin Margin 2018 2019 2018 2019 2018 2019 Industrials +3% ex-FX Industrials +70 bps
Slide 17: FY 2019 Financial Performance
FY 2019 Financial Performance (Dollars in millions) Working Capital Free Cash Flow 1 Leverage (Op. Working Capital as % of LTM Sales) (FCF Conversion in % and FCF in $) (Net Debt / LTM Adjusted EBITDA) Increased 60 bps Improved 0.1x Y/Y 24.6% 189% 24.0% 2.1x 146% 2.0x $300M $392M 2018 2019 2018 2019
Slide 18: Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS
Reconciliation of Net Income and Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share 18
Slide 19: Reconciliation of Net Income to Adjusted EBITDA and CFOA to Free Cash Flow
Reconciliation of Net Income to Adjusted EBITDA and Adjusted Net Income and CFOA to Free Cash Flow 19
Slide 20: Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes
Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes 20
Slide 21: Important Additional Info and No Offer or Solicitation
Important Additional Info and No Offer or Solicitation IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the pending merger transaction between Gardner Denver and Ingersoll Rand Industrial, Gardner Denver and Ingersoll Rand Industrial have filed registration statements with th