Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — Q2 2019 Earnings Presentation
25 slides from Roper Technologies's earnings presentation, Jul 25, 2019
Slide 1: Q2 2019 Financial Results
A DIVERSIFIED TECHNOLOGY COMPANY Q2 2019 FINANCIAL RESULTS JULY 25, 2019 SIMPLE IDEAS. POWERFUL RESULTS.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The information provided in this presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans,
Slide 3: Reg. G Disclosure
REG. G DISCLOSURE Today’s Conference Call Will Discuss Results Primarily on an Adjusted (Non-GAAP) Basis. The Q2 Results are Adjusted for the Following Items: (1) Acquisition-Related Intangible Amortization Expense (2) Purchase Accounting Adjustment to Acquired Deferred Revenue (3) Transaction-Relat
Slide 4: Roper Conference Call
ROPER CONFERENCE CALL • Q2 Enterprise Highlights and Financial Results • Segment Detail & Outlook • Q3 & FY 2019 Enterprise Guidance • Q&A PAGE 4
Slide 5: Q2 2019 Enterprise Highlights
Q2 2019 ENTERPRISE HIGHLIGHTS • Record Q2 Results: Revenue, EBITDA, Net Earnings, Cash Flow • Revenue +3% to $1.33B; Organic +2% • Gross Margin +90 Bps to 64.0% • EBITDA +5% to $471M; EBITDA Margin +70 Bps to 35.3% • DEPS +6% to $3.07 • Operating Cash Flow +13% to $301M; Free Cash Flow +14% to $286M
Slide 6: Q2 Income Statement Metrics
Q2 INCOME STATEMENT METRICS Q2’18 Q2’19 Revenue $1,296 $1,332 +3%; Organic +2% Gross Profit $818 $852 Gross Margin 63.1% 64.0% +90 bps EBITDA $449 $471 +5% EBITDA Margin 34.6% 35.3% +70 bps Interest Expense $43 $45 Tax Rate 23.1% 21.9% Net Earnings $302 $323 DEPS $2.89 $3.07 +6% In $ millions, excep
Slide 7: Asset-Light Business Model
ASSET-LIGHT BUSINESS MODEL NET WORKING CAPITAL (1)(2) AS % OF Q2 ANNUALIZED REVENUE HI S TO RI CAL TRE ND 6/30/13 6/30/16 6/30/19 (I) Inventory 6.3% 5.1% 4.3% (R) Receivables 19.7% 16.9% 17.3% 8.0% (P) Payables & 11.3% 10.6% 10.5% Accruals 3.9% (D) Deferred 6.7% 7.5% 13.5% Revenue Total (I+R-P-D) 8.
Slide 8: Compounding Cash Flow
COMPOUNDING CASH FLOW • Q2 Operating Cash Flow: $301M TTM OPERATING CASH FLOW in $ millions – +13% vs Prior Year +23% • Q2 Free Cash Flow: $286M – +14% vs Prior Year • TTM Operating Cash Flow: $1.51B* $1,513 – +23% vs Prior Year $1,232 – 28% of Revenue Q2 2018 Q2 2019* Cash Remains the Best Measure
Slide 9: Strong Financial Position
STRONG FINANCIAL POSITION 6/30/18 6/30/19 V to PY Cash $422 $321 Gross Debt $5,623 $4,721 ($902) Net Debt $5,202 $4,400 TTM EBITDA $1,686 $1,877 +$191 Gross Debt-to-EBITDA (TTM) 3.3x 2.5x Net Debt-to-EBITDA (TTM) 3.1x 2.3x Undrawn on $2.5B Revolver $765 $1,860 Well Positioned for Continued Capital D
Slide 10: Segment Detail & Outlook
SEGMENT DETAIL & OUTLOOK
Slide 11: Application Software
APPLICATION SOFTWARE Q2 HIGHLIGHTS Q2 RESULTS 29% of Roper Revenue • Accelerated Adoption of Deltek SaaS Offerings for Professional Services and +9% vs PY Revenue $391 GovCon End Markets; Greater Mix of SaaS vs +2% Organic Prior Year - as Expected +3% vs PY EBITDA $155 • Double-Digit Aderant Growth;
Slide 12: Network Software & Systems
NETWORK SOFTWARE & SYSTEMS Q2 HIGHLIGHTS Q2 RESULTS 28% of Roper Revenue • Outstanding and Continued Growth at Freight Matching SaaS Businesses; Strong Demand +10% vs PY Revenue $368 for Rate Data Offering +6% Organic • Network Expansion and New Contracted +14% vs PY EBITDA $159 Product Growth at MH
Slide 13: Measurement & Analytical Solutions
MEASUREMENT & ANALYTICAL SOLUTIONS Q2 HIGHLIGHTS Q2 RESULTS 31% of Roper Revenue • Another Record Quarter for Neptune; Customer Intimacy and Product Innovations Drove (4)% vs PY Revenue $408 Continued Share Gains +2% Organic • NDI Continued Strong Growth from Optical and +1% vs PY EBITDA $140 Electr
Slide 14: Process Technologies
PROCESS TECHNOLOGIES Q2 HIGHLIGHTS Q2 RESULTS 12% of Roper Revenue • Upstream O&G Businesses Declined, as Expected, Against Challenging Comps (6)% vs PY Revenue $164 (5)% Organic • Nimble Execution Drove Strong Segment Margin Performance (1)% vs PY EBITDA $60 36.6% Margin • CCC LNG New Project Pipel
Slide 15: Guidance Update
GUIDANCE UPDATE
Slide 16: Guidance Update
GUIDANCE UPDATE • Updating Full Year 2019 Guidance – Adjusted DEPS: $12.94 - $13.06 • Previously $12.70 - $13.00 • Now Includes Gatan for Full Year – FY Organic Revenue Growth Outlook: ~4% • Previously 4 – 5% – Tax Rate: ~21% for 2nd Half • Establishing Q3 2019 Guidance – Adjusted DEPS: $3.16 - $3.2
Slide 17: Q2 2019 Summary
Q2 2019 SUMMARY • Diversified Portfolio of Businesses Delivered Another Excellent Quarter – EBITDA +5% to $471M; EBITDA Margin +70 Bps to 35.3% – DEPS +6% to $3.07 – Operating Cash Flow +13% to $301M; Free Cash Flow +14% to $286M – Organic Growth, High Recurring Revenue, Margin Expansion, Negative N
Slide 18: Appendix
APPENDIX
Slide 19: Reconciliations I
RECONCILIATIONS I Adjusted Revenue Growth Reconciliation Network Measurement Q2 2019 Application Software & & Analytical Process Software Systems Solutions Technologies Roper Organic Growth 2% 6% 2% (5%) 2% Acquisitions/Divestitures 8% 4% (5%) - 2% Foreign Exchange (1%) - (1%) (2%) (1%) Rounding - -
Slide 20: Reconciliations II
RECONCILIATIONS II Adjusted EBITDA Reconciliation ($M) Q2 2018 Q2 2019 V% / Bps GAAP Revenue $ 1,294 $ 1,330 3% Purchase accounting adjustment to acquired A deferred revenue 2 2 Adjusted Revenue $ 1,296 $ 1,332 3% GAAP Net Earnings 228 250 Taxes 85 73 Interest Expense 43 45 Depreciation 13 12 Amorti
Slide 21: Reconciliations III
RECONCILIATIONS III Adjusted Net Earnings Reconciliation ($M) C Q2 2018 Q2 2019 V% GAAP Net Earnings $ 228 $ 250 9% Purchase accounting adjustment to acquired deferred A revenue 1 1 Amortization of acquisition-related intangible assets D 61 68 Transaction-related expenses for the Foundry acquisition
Slide 22: Reconciliations IV
RECONCILIATIONS IV Adjusted DEPS Reconciliation C Q2 2018 Q2 2019 V% GAAP DEPS $ 2.19 $ 2.38 9% Purchase accounting adjustment to acquired deferred A revenue and commission expense 0.01 0.01 Amortization of acquisition-related intangible assets D 0.58 0.65 Transaction-related expenses for the Foundr
Slide 23: Reconciliations V
RECONCILIATIONS V Adjusted Segment Reconciliation ($M) Measurement & Analytical Application Software Network Software & Systems Process Technologies Solutions Q2 2018 Q2 2019 Q2 2018 Q2 2019 Q2 2018 Q2 2019 Q2 2018 Q2 2019 GAAP Revenue $ 358 $ 391 $ 334 $ 367 $ 426 $ 408 $ 176 $ 164 Add: Onvia, Powe
Slide 24: Footnotes
FOOTNOTES A. Q2'19 acquisition-related fair value adjustment to deferred revenue related to the acquisition of Foundry ($2M pretax, $1M after-tax). B. Transaction-related expenses for the Foundry acquisition ($3M pretax, $3M after-tax). C. All 2018 and 2019 adjustments taxed at 21%, except for the g
Slide 25: A Diversified Technology Company
A DIVERSIFIED TECHNOLOGY COMPANY