Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Q2 2020 Earnings Presentation
33 slides from Ingersoll Rand's earnings presentation, Aug 4, 2020
Slide 1: Ingersoll Rand Q2 2020 Earnings Presentation
Ingersoll Rand Q2 2020 Earnings Presentation August 4, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including s
Slide 3: Today's Agenda
Today’s Agenda Integration Update Company Highlights Segment Highlights Key Takeaways Q&A Q& 3
Slide 4: Execution Culture and Intranet
EXECUTION 150 IRX weekly sessions provide mentoring to >2,000 leaders globally CULTURE | Owning Our Future Forum 2020 Live engagements reaching >6,000 employees globally in last 30 days Purpose and Values Activation 1,100 participants to date (Goal: 100% by October 2020); highly rated - 4.7 out of 5
Slide 5: Strong and Consistent Execution to Deliver on Commitments
Strong and Consistent Execution to Deliver on Commitments PHASE 1 PHASE 2 PHASE 3 Strong Foundation Pivot to Growth Portfolio Optimization Nurturing single culture through Purpose & Values / Engagement / Diversity & Inclusion Added ‘domain expertise’ talent Executing on talent priorities Deploy Tale
Slide 6: Sustainability as a Strategic Imperative
Sustainability as a Strategic Imperative Embedding Environmental, Social, Governance (ESG) into Our Way of Life Diversity and Inclusion Starts at the Top Published 2019 Sustainability Report • 50% Board Diversity ‒ 2 Hispanics ‒ 2 Women ‒ 1 African American Protect Ourselves, Each Other, Our Complet
Slide 7: IRX is our Competitive Differentiator: Q2 2020 Highlights
IRX is our Competitive Differentiator Q2 2020 Highlights • Synergy Execution: Continue to accelerate actions in support of structural cost reductions; $125M of annualized cost reductions already executed1 • Adjusted EBITDA of $241M with margin of 19.1% ‒ Down 50 bps YoY but up 270 bps sequentially f
Slide 8: Q2 2020 Financial Performance vs. Q2 2019
Q2 2020 Financial Performance vs. Q2 2019 Supplemental Financial Information1 ($M, excl. EPS) Orders Revenue Adj. EBITDA & Margin Adj. Diluted EPS3 Down 23%; Down 21% ex-FX Down 21%; Down 19% ex-FX Down 23% Down $0.13 $35 0.00 50. 0% $313 45. 0% $1,596 $30 0.00 $1,566 $0.44 40. 0% $25 0.00 $241 35.
Slide 9: Q2 2020 Financial Performance
Q2 2020 Financial Performance ($M, excl. Leverage) Free Cash Flow1 Leverage2 Liquidity Cash Flows from Operations less Capex (Net Debt / LTM Adjusted EBITDA) Total available liquidity of $2.2B including: $290 $273 4.2x RMT Transaction Completed ‒ Cash and Cash Equivalents: $433 $1,174M $(17) $433
Slide 10: Strong Execution on Synergy Delivery and Cost Control
Strong Execution on Synergy Delivery1 and Cost Control SYNERGY DELIVERY UPDATE MANAGING MARGINS $350M+ Limited Decremental Margins4 to <30% for Total Company and Synergy Funnel Commentary Improved Sequentially Synergy funnel remains in excess of ~$250M2 Adj. EBITDA Run-Rate $350M with continued ro
Slide 11: Industrial Technologies and Services Q2 2020 Highlights
Industrial Technologies and Services Q2 2020 Highlights Q2 2020 vs. Q2 20191 ($M) Q2 2020 vs. Q2 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $829.6 $1,027.5 (19.3)% (17.2)% Orders Growth (22.7)% (2.4)% 0.1% (25.0)% Adj. EBITDA $183.8 $199.5 (7.9
Slide 12: Precision and Science Technologies Q2 2020 Highlights
Precision and Science Technologies Q2 2020 Highlights Q2 2020 vs. Q2 20191 ($M) Q2 2020 vs. Q2 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $195.8 $215.5 (9.1)% (7.8)% Orders Growth (6.5)% (1.5)% 0.2% (7.8)% Adj. EBITDA $59.3 $63.4 (6.5)% - Reven
Slide 13: Specialty Vehicle Technologies Q2 2020 Highlights
Specialty Vehicle Technologies Q2 2020 Highlights Q2 2020 vs. Q2 20191 ($M) Q2 2020 vs. Q2 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $217.5 $233.0 (6.6)% (6.5)% Orders Growth 5.3% (0.1)% 0.0% 5.2% Adj. EBITDA $41.0 $37.6 9.0% - Revenue Growth
Slide 14: High Pressure Solutions Q2 2020 Highlights
High Pressure Solutions Q2 2020 Highlights Q2 2020 vs. Q2 20191 ($M) Q2 2020 vs. Q2 2019 Revenue/Orders Bridge1 Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $21.5 $119.5 (82.0)% (81.9)% Orders Growth (86.8)% (0.1)% 0.0% (86.9)% Adj. EBITDA $(15.2) $32.6 (146.6)% - Revenue G
Slide 15: Current Business Trends and Q3 2020 Assumptions
Current Business Trends and Q3 2020 Assumptions Current Business Trends Q3 2020 Assumptions July 2020 Orders Performance • Expecting slow market recovery coupled with typical Q3 seasonality (European holidays, SVT golf cycle) Continued signs of stabilization Total IR Down mid-teens YoY1 • Continue t
Slide 16: Key Takeaways – Investing with Ingersoll Rand
Key Takeaways – Investing with Ingersoll Rand Creating a Premier Industrial Company with Iconic Brands and Market Leading Positions in 01 Early Stages of Transformation 02 Executing the Phases of our Multi-Year Transformation • Phase 1: Create a Solid Foundation • Phase 2: Pivot Organization to Grow
Slide 17: Appendix
am) Ingersoll Rand Appendix
Slide 18: Q2 2020 Financial Performance – As Reported
Q2 2020 Financial Performance – As Reported ($M, excl. EPS) Orders Revenue Net Income1 EPS2 Up 99% Up 101% Down 496% Down $0.64 $1,264 $45 $1,210 $0.21 $607 $629 ($178) Q2 2019 Q2 2020 • Q2’20 includes $258 million of pre-tax amortization, restructuring and related business transformation costs, acq
Slide 19: Reconciliation of Net Loss and EPS to Adjusted Net Income and EPS
As Reported Financials: Reconciliation of Net (Loss) Income and (Loss) Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share INGERSOLL RAND INC. AND SUBSIDIARIES RECONCILIATION OF NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE TO ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHA
Slide 20: Reconciliation of Net Loss to Adjusted EBITDA and Free Cash Flow
As Reported Financials: Reconciliation of Net (Loss) Income to Adjusted EBITDA and Adjusted Net Income and CFOA to Free Cash Flow INGERSOLL RAND INC. AND SUBSIDIARIES RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME AND CASH FLOWS - OPERATING ACTIVITIES TO FREE CASH FLO
Slide 21: Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes
As Reported Financials: Reconciliation of Segment Adjusted EBITDA to (Loss) Income Before Income Taxes INGERSOLL RAND INC. AND SUBSIDIARIES RECONCILIATION OF SEGMENT ADJUSTED EBITDA TO (LOSS) INCOME BEFORE INCOME TAXES (Dollars in millions) (Unaudited) For the Three For the Six Month Period Ended Mo
Slide 22: Unaudited Supplemental Adjusted Combined Financial Information
Unaudited Supplemental Adjusted Combined Financial Information Ingersoll Rand is providing the below unaudited supplemental historical financial information of the Company on a non-GAAP adjusted basis for the quarterly period ended June 30, 2019 as well as select financial information for the period
Slide 23: Table 1: Supplemental Adjusted Combined Financial Information by Segment
Table 1: Unaudited Supplemental Adjusted Combined Financial Information by Segment INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT (Dollars in millions, per share amounts in whole dollars) For the Three Month Period Ended June 30, 2019 I
Slide 24: Table 1A: Supplemental Adjusted Combined Financial Information by Segment
Table 1A: Unaudited Supplemental Adjusted Combined Financial Information by Segment INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT (Dollars in millions, per share amounts in whole dollars) For the Three Month Period Ended March 31, 2020
Slide 25: Table 2: Supplemental Revenue and Order Growth by Segment
Table 2: Unaudited Supplemental Adjusted Combined Revenue and Order Growth / (Decline) by Segment1 INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION UNAUDITED SUPPLEMENTAL ADJUSTED REVENUE AND ORDER GROWTH / (DECLINE) BY SEGMENT For the Three Month P
Slide 26: Table 3: Reconciliation of Supplemental Adjusted Net Income and EPS
Table 3: Reconciliation of Unaudited Supplemental Adjusted Net Income and Supplemental Adjusted Diluted EPS to Supplemental Further Adjusted Net Income and Supplemental Further Adjusted Diluted EPS INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RE
Slide 27: Table 4: Reconciliation to Supplemental Adjusted EBITDA
Table 4: Reconciliation of Supplemental Adjusted Net Income to Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF SUPPLEMENTAL ADJUSTED NET INCOME TO SUPPLEMEN
Slide 28: Table 5: Supplemental Adjusted Revenue by Segment
Table 5: Supplemental Adjusted Revenue by Segment and a Reconciliation of Supplemental Segment Adjusted EBITDA to Supplemental Adjusted Income Before Income Taxes INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION SUPPLEMENTAL ADJUSTED REVENUE BY SEGM
Slide 29: Table 6: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue
Table 6: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment and for the Company and Segment Adjusted EBITDA to Supplemental Segment Adjusted EBITDA INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF GAAP REVEN
Slide 30: Table 7: Reconciliation of GAAP Net Loss to Adjusted EBITDA
Table 7: Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA and Supplemental Adjusted EBITDA and Supplemental Further Adjusted Net Income INGERSOLL RAND INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED
Slide 31: Table 8: Reconciliation of GAAP Diluted EPS to Further Adjusted EPS
Table 8: Reconciliation of GAAP Diluted EPS to Supplemental Further Adjusted Diluted EPS (1) This amount represents the impact of adjusting the GAAP weighted average shares outstanding for the period by the additional shares outstanding as if the acquisition of the Ingersoll Rand Industrial Segment
Slide 32: Notes to Tables 3, 4, and 5
Notes to Tables 3, 4, 5 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 26 – 28 Notes to Tables 3, 4, and 5 of the Adjusted Combined Financial Information All supplemental financial information presented in this document represents the newly combined Ingersoll Rand gi
Slide 33: Notes to Tables 3, 4, and 5 (continued)
Notes to Tables 3, 4, 5 of the Unaudited Supplemental Adjusted Combined Financial Information on Slides 26 – 28 (continued) (c) Restructuring and related business transformation costs consisted of the following. For the Three Month Period Ended June 30, 2019 Restructuring charges $ 13.9 Severance, s