Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver Holdings — Q3 2019 Earnings Presentation
20 slides from Ingersoll Rand's earnings presentation, Oct 30, 2019
Slide 1: Gardner Denver Q3 2019 Earnings Presentation
Gardner DenverQ3 2019 Earnings Presentation October 29, 2019
Slide 2: Replay Information
Replay Information Dial toll-free:+1.877.344.7529 International:+1.412.317.0088 Conference ID:#10136110 Log on to:https://investors.gardnerdenver.com2
Slide 3: Disclaimer
DisclaimerForward-Looking Statements Duringthecourseofthispresentation,wemaymake“forwardlookingstatements”withinthemeaningoftheUSfederalsecuritieslaws.Infact,allstatementsmadeduringthispresentationotherthanstatementsofhistoricalfactareforwardlookingstatements.Wordssuchas“expects,”“anticipates,”“beli
Slide 4: Agenda
Agenda Company Highlights Guidance Segment Highlights Strategy Update Gardner Denver/Ingersoll Rand Industrials Integration Update Q&A 4
Slide 5: Q3 2019 Highlights
Q3 2019 Highlights Revenue of $597M, down 11% excluding FX Adjusted EPS2of $0.41and Adjusted EBITDA of $142M with margin of 23.8% Adjusted EBITDA margin expansion of 30 bps sequentiallyvs Q2’19 with $32M less revenue Upstream Energy (represents ~20% of revenue) Revenue down 46%; Q3 market conditions
Slide 6: 2019 Adjusted EBITDA Bridge
2019 Adjusted EBITDA Bridge 1,2 2018 to2019 Adjusted EBITDA Bridge 2018A $682M Industrials+ Mid/Down + Medical +28M Upstream Energy (115M) FX (20M) Corporate (15M) 2019E $560M (Range $550M -$570M) Industrials + Mid/Down + Medical: Solid flow through from commercial (innovation, aftermarket, etc.) an
Slide 7: Revised 2019 Guidance
Revised 2019 Guidance 2019 Guidance (July 2019) Revised 2019 Guidance (October 2019) Revenue1Growth (ex-FX)Growth (ex-FX) Industrials up MSD up LSD Medical up MSD up MSD Mid & Downstream Energy up MSD flat Upstream Energy down ~30% down ~35-40% Total Gardner Denver down LSD down MSD FX Impact down L
Slide 8: Industrials Segment – Q3 Highlights
Industrials Segment –Q3 Highlights (Dollars in millions) Highlights: Orders up 3% ex-FX… on top of 8% growthin prior year Revenue up 1% ex-FX… on top of 13% growthin prior year Global market conditions softening with quarter end ramp not materializing (most notably in the US) Americas & EMEA positiv
Slide 9: Energy Segment – Q3 Highlights
Energy Segment –Q3 Highlights (Dollars in millions) As Reported Prior Year YOY Change Ex-FX YOY Change Revenue $208.5 $298.8 (30.2)% (29.0)% AdjustedEBITDA $55.4 $94.9 (41.6)% (40.7)% Adjusted EBITDAMargin 26.6% 31.8% (520) bps Highlights: Orders down 20% ex-FX Upstream orders down 37% ex-FX in line
Slide 10: Medical Segment – Q3 Highlights
Medical Segment –Q3 Highlights (Dollars in millions) As Reported Prior Year YOY Change Ex-FX YOY Change Revenue $72.3 $70.5 2.6% 4.8% AdjustedEBITDA $22.4 $20.5 9.3% 12.2% Adjusted EBITDAMargin 31.0% 29.1% 190 bps Highlights: Orders down 8% ex-FX… on top of 21% growthin prior year Decline due largel
Slide 11: Our Strategy
Our Strategy Deploy Talent Expand Margins Accelerate Growth Allocate Capital Effectively 11
Slide 12: Integration Planning Process: Procurement Example
Integration Planning Process: Procurement Example Similar Process Across Other Areas (Operations, G&A, etc.) to Deliver $250M Cost Synergies1 Synergy Funnel Development: Procurement Example Data request Data & interviews Data request Data & interviews Clean Team Suppliers Ingersoll Rand Industrials
Slide 13: Gardner Denver/IR Industrials Transaction Timeline
Gardner Denver/IR Industrials Transaction Timeline Gardner Denver and Ingersoll Rand Announcement APRIL 30, 2019 US AntitrustWaiting Period Expired JUNE 29, 2019 SEC Filings Q4 2019 –Q1 2020 Expected Closing EARLY 2020 PFS WE ARE HERE INTEGRATION PLANNING Ingersoll Rand Closed Acquisition of Precisi
Slide 14: Appendix
Appendix
Slide 15: Q3 2019 Financial Performance
Q3 2019 Financial Performance (Dollars in millions, excl. EPS) Revenue $689 $597 Q3 2018 Q3 2019 Adjusted EBITDA $182 $142 Q3 2018 Q3 2019 Adjusted EPS1 $0.49 $0.41 Q3 2018 Q3 2019 Down 13% Down 11% ex-FX Down 22% Margin Down 260 bps Down 8 Cents 23.8% Margin 26.4% Margin Industrials +1% ex-FX Medic
Slide 16: Q3 2019 Financial Performance
Q3 2019 Financial Performance Leverage Free Cash Flow 1 Working Capital (Op. Working Capital as % of LTM Sales) (Net Debt / LTM Adjusted EBITDA) 128% 254% Q3 2018 Q3 2019 2.2x 2.0x 1.9x Q3'18 Q2'19 Q3'19 Improved 130 bps Improved 0.3x Y/Y ¹ Free Cash Flow is defined as cash flows from operations les
Slide 17: Reconciliation of Net Income and EPS to Adjusted Net Income and EPS
Reconciliation of Net Income and Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share 2019201820192018Net Income41.3$ 72.2$ 133.4$ 174.9$ Basic Earnings Per Share (As Reported)0.20$ 0.36$ 0.66$ 0.87$ Diluted Earnings Per Share (As Reported)0.20$ 0.35$ 0.64$ 0.83$ Plus:Provision
Slide 18: 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 2019201820192018Net Income41.3$ 72.2$ 133.4$ 174.9$ Plus:Interest expense23.2 24.4 68.0 76.5 Provision for income taxes9.0 22.6 29.2 63.2 Depreciation expense12.7 13.4 40.3 41.2 Amortization expense30.
Slide 19: Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes
Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes 2019201820192018RevenueIndustrials315.9$ 320.0$ 968.2$ 965.7$ Energy208.5298.8664.4814.1Medical72.370.5213.5197.3Total Revenue596.7$ 689.3$ 1,846.1$ 1,977.1$ Segment Adjusted EBITDAIndustrials70.1$ 72.1$ 217.7$ 210.0$ Energy55.4
Slide 20: 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 will file registration statements with the
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