GLOBAL INDUSTRIAL CONFERENCE November 2018 SAFE HARBOR STATEMENTS - PowerPoint PPT Presentation

BAIRD 2018 GLOBAL INDUSTRIAL CONFERENCE November 2018

SAFE HARBOR STATEMENTS This presentation contains “forward - looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, any projections of financial information; any statements about historical results that may suggest trends for our business; any statements of the plans, strategies and objectives of management for future operations; any statements of expectation or belief regarding future events, technology developments or enforceability of our intellectual property rights; and any statements of assumptions underlying any of the foregoing. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from our current expectations as a result of many factors, including but not limited to: the impact of our indebtedness; our competitive environment; general economic and business conditions, market factors and our exposure to customers in cyclical industries; performance, and potential failure, of our information and data security systems, including potential cyber security threats and breaches; the costs related to strategic acquisitions or divestitures or the integration of recent and future acquisitions into our business; the costs and uncertainties related to our anticipated divestiture of the VAG business within our Water Management platform; the effect of local, national and international economic, credit and capital market conditions on the economy in general, and on our customers and the industries in which we operate in particular; risks associated with our international operations; the loss of any significant customer; dependence on independent distributors; increases in cost of our raw materials, including as a result of tariffs, trade wars and other trade protection matters, and our possible inability to increase product prices to offset such increases; impact of weather on the demand for our products; changes in technology and manufacturing techniques; the costs of environmental compliance and/or the imposition of liabilities under environmental, health and safety laws and regulations; legislative, regulatory and legal developments involving taxes; the costs associated with asbestos claims and other potential product liability; our access to available and reasonable financing on a timely basis; changes in governmental laws and regulations, or the interpretation or enforcement thereof, including for environmental matters; reliance on intellectual property; work stoppages by unionized employees; loss of key personnel; changes in pension funding requirements; and potential impairment of goodwill and intangible assets. These and other risks and uncertainties associated with our business are described in our Annual Report on Form 10-K for the year ended March 31, 2018, and in our periodic filings with the Securities and Exchange Commission. We assume no obligation and do not intend to update these forward-looking statements. In addition to U.S. GAAP financials, this presentation includes certain financial measures on a non-GAAP basis as defined in the Form 8-K filed with the Securities and Exchange Commission on October 30, 2018. These historical and forward-looking non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. Our SEC filings contain additional information about these non-GAAP measures, why we use them, and why we believe they are helpful to investors, and contain reconciliations to GAAP data. 2

REXNORD PROFILE $4.6 $1.85 20.9% 104% Enterprise Revenue Adjusted Free Cash Flow Value ($B) ($B) EBITDA Margin Conversion Concentrated Multi-Platform Industrial Sustainable Competitive Advantages Rexnord Business System Solving Smarter Note: Data are Fiscal Year 2018 Continuing Operations. Adjusted EBITDA, Free Cash Flow, Adjusted Net Income are non-GAAP measures and are defined in our SEC filings. Enterprise value = recent market value of equity + total debt – cash. Free Cash Flow Conversion = FCF / Adjusted Net Income. 3

PLATFORM APPROACH Process & Motion Control 1400 28% 1200 26% The best provider of industrial digi-mechanical productivity 1000 24% and reliability solutions 800 22% 600 20% 400 18% • Amplifying competitive advantages in scale & scope 200 16% • Expanding in product adjacencies, consumer-driven markets 0 14% FY17 FY18 6MFY18 6MFY19 • Accelerating innovation, digitally-connected products Revenue ($mm) Adj EBITDA Margin Water Management 800 28% 600 26% The leader in engineered water solutions for the 400 24% building construction industry 200 22% • Amplifying competitive advantages in scale & scope 0 20% • Expanding in adjacent site works, fire protection end markets FY17 FY18 6MFY18 6MFY19 Revenue ($mm) Adj EBITDA Margin • Accelerating innovation, digitally-connected products 4 Note: continuing operations only

REXNORD BUSINESS SYSTEM Integrated strategic planning & operational management system Structured approach to 17 Core Business Processes Four guiding principles: People Plan Process Performance • Health & Safety • Strategic • Continuous • Customer Planning Improvement Experience • Total Associate Engagement • Strategy • Visual Daily • Internal & 1. Voice of the Customer Deployment Management External • Talent Measurement Management • Budget Process • Problem Solving • Product • Advanced 2. Associate Engagement Lifecycle Manufacturing Management • Demand Management 3. Process-Based = Scalable Execution • Acquisitions • Innovation 4. Culture of Continuous Improvement • Core Market Growth 5

RBS FOCUS: AMPLIFY , EXPAND, ACCELERATE • Competitive Advantages • Customer Satisfaction AMPLIFY • Adjacent Products & Targeted Verticals • Strategic Acquisitions EXPAND • Innovation • Structural Cost Reduction ACCELERATE Leveraging trusted brands, customer value delivery, scale & scope 6

SOLVING SMARTER We Advance the Efficient Use of Resources through Smarter Solutions • Highly-engineered components • Specification for the application by end user • Small contribution to system cost • Large contribution to system reliability • Distribution channel complexity • Unmatched product scope Scalable platforms with shared characteristics 7

DIRXN = ‘DIRECTION’ = DIGITAL REXNORD Launching DiRXN digitally-connected component retrofit solutions 8

KEY TAKEAWAYS • Rexnord Business System is a Differentiator • Amplify Competitive Advantages, Customer Satisfaction • Expand in Adjacencies via Focused Investments • Accelerate Innovation, Structural Cost Reduction • Digital Enterprise Strategy Leverages Competitive Advantages • Platforms with Above-Market Growth Strategies • Better Positioned to Perform Through Cycles Amplify Competitive Advantages – Expand Growth – Accelerate Innovation 9

APPENDIX

REXNORD PLATFORM PROFILES PROCESS & MOTION CONTROL WATER MANAGEMENT Mechanical Power Transmission Solutions Specification-Grade Commercial Plumbing Products • Plastic, Metal & Hybrid Modular Conveying Chain • Linear Drainage & Effluent Separation • Woven Metal Mesh Conveying Chain • Backflow Prevention & Potable Water Safety • Gearing & Gear Drives, IIoT Connected Gear Drives • Specification & Light Commercial Drainage • Couplings for Motor, Engine, Turbine-Driven Applications • Fire, Pressure Management & Temperature Control Valves • Mounted Industrial Bearings, Industrial Chain • PEX Piping Systems, Fixture Carrier Systems • Aerospace Bearings & Seals • Finish Plumbing [Faucets, Flush Valves & Fixtures], Dryers FY18 Revenue: $1.2 billion FY18 Revenue: $0.6 billion FY18 Adjusted EBITDA Margin: 22% FY18 Adjusted EBITDA Margin: 25% FY18 PF Sales by End Market FY18 PF Sales by Geography FY18 PF Sales by Channel FY18 PF Sales by Geography FY18 PF Sales by Application FY18 PF Sales by End Market Food & Nonresidential US & Beverage General Canada Construction: Industrial & 17% Institutional 59% OEM & Replacement Process Industrial 34% Aerospace End User / Retrofit 34% US & Distribution Nonresidential 13% Direct 35% Canada New 45% Asia- Construction: 55% ROW 5% 95% Construction Pacific & Commercial & Residential Power 65% ROW Industrial Construction Gen 10% Latin 14% 42% 17% America Europe Water- Const 7% 20% works Materials & Eqpt 7% Mining & Auto- 6% Paper & Natural Marine- Forest Resources Rail Products 6% 7% 7% 11 Note: FYE March 31. Platform margins exclude corporate expenses, include Continuing Operations only. Adjusted EBITDA is a non-GAAP measure and is defined in our SEC filings. (Pro forma PMC data assumes full-year results from Centa (acquired Feb 2018); pro forma WM data assumes full-year results from World Dryer (acquired Oct 2017).

REXNORD VALUE CREATION MODEL 12