ITT Inc. Investor Presentation
Safe Harbor This presentation contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our business, future financial results and the industry in which we operate, and other legal, regulatory and economic developments. These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe the company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future events and future operating or financial performance. We use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “future,” “may,” “will,” “could,” “should,” “potential,” “continue,” “guidance” and other similar expressions to identify such forward-looking statements. Forward-looking statements are uncertain and to some extent unpredictable, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements. Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is based on current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that the expectation or belief will occur or that anticipated results will be achieved or accomplished. More information on factors that could cause actual results or events to differ materially from those anticipated is included in the Risk Factors section of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the Securities and Exchange Commission. The forward-looking statements included in this presentation speak only as of the date hereof. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. All Results are Unaudited 2 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Global Diversified Industrial Leader Geography Market Revenue & Adj Margins $ Millions Adj Op Margin % 2,900 9% 10% 16.5% 2,800 2,745 16% 2,700 39% 15.1% 15.5% 2,585 31% 2,600 59% +200 bps 14.5% 2,500 13.6% 2,405 2,400 36% 13.1% 13.5% Aero & Rail 2,300 2,200 12.5% 2016 2017 2018 North America Transportation Europe Industrial $2.75B $367M 101% Asia Pacific Energy Annual Sales Adjusted 3-Yr Average Rest of World Operating Adjusted FCF Income Conversion 30+ 1,000+ 10,000 1,000 Active U.S. Patents Employees in Engineers Leading Global 35 Countries Brands All Results are Unaudited 3 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Q1 2019 Strategic Highlights EFFICIENT OPERATIONAL CUSTOMER CAPITAL EXCELLENCE CENTRICITY DEPLOYMENT Execution + + Accountability Speed High Performance Culture All Results are Unaudited 4 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Effective Capital Deployment Capital Deployment Philosophy Balanced Deployment Track Record Maintain Investment Grade ~$800M ~$900M ~$1,000M Balance Sheet in acquisitions in repurchases and in organic dividends investments Fund Organic Investments 2012-2019E Aggregate Deployment • Capital Expenditures That Drive ROIC Expansion • Geographic Expansions in China & North America • Investments In Auto for Awarded Platforms • Connected Technologies i-Alert & SmartPad • New Market Expansions into EV & Rotorcraft Targeted Acquisitions • Financial Metrics Delivered • Close-to-Core & Selected Adjacencies • All VCs Ready for Inorganic Growth • Intensified Cultivation of Targets Growth Dividend *Includes Both Capital Expenditures & Strategic Investments All Results are Unaudited 5 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Motion Technologies Revenue & Adj Margins Long-Term Growth Drivers $ Millions Adj Op Margin % Growing Global Transportation Powerhouse 1,400 18.5% 1,274 18.1% • Outgrow Global Markets on Share Gains 1,176 1,200 18.0% L-T Platform Visibility & ~35% Aftermarket 983 Provide Solid Annual Revenue Foundation 1,000 17.5% 17.2% World-Class Manufacturing & R&D 16.9% 800 17.0% • Including Ground-Breaking Material Science, Electric Vehicle Friction, and Rail Technologies 600 16.5% 2016 2017 2018 2018 Revenue Breakdown Rail & Other 63% 15% Europe North MT America 21% Asia 1% Automotive ROW All Results are Unaudited 6 6 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Connect & Control Technologies Revenue & Adj Margins Long-Term Growth Drivers $ Millions Adj Op Margin % ~60% Aerospace & Defense 660 20.0% 647 • Expand Rotorcraft, Composite, & Aftermarket Portfolio • Leverage Scale at Manufacturing Centers of Excellence 640 16.0% ~40% Gen Industrial, Transportation, Medical, O&G 620 15.0% 606 +360 bps • Enhanced Product Offerings, Including Medical, Electric 596 Vehicle and O&G Connectors 600 13.5% Driving Significant Margin Expansion in 2019 12.4% 580 10.0% 2016 2017 2018 2018 Revenue Breakdown Aerospace & Defense 21% 63% Europe North CCT America 13% Asia 3% General O&G Industrial ROW All Results are Unaudited 7 7 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Industrial Process Revenue & Adj Margins Long-Term Growth Drivers $ Millions Adj Op Margin % Strong Goulds Pumps Brand & Reputation in NA 850 15.0% with Significant Opportunities to Expand Globally 830 827 13.0% Leader in North American Chemical & GI Markets 807 11.1% Leader in Industrial Health Monitoring Technology 800 11.0% +340 bps >40% Aftermarket Revenues 9.0% 7.7% Driving Global Execution 8.9% • Targeting Triple-Digit Margin Expansion in 2019 750 7.0% 2016 2017 2018 2018 Revenue Breakdown Oil & Gas 7% 58% Europe North Chemical & IP America Industrial 10% Pumps Asia 16% Mining M. East 9% & Africa Latin America All Results are Unaudited 8 8 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Innovation at ITT Ultra-Fast EV Charging Capabilities Advanced Industrial Monitoring Equipment • ITT connector technology enables high-power • ITT IoT technology enables near real-time & ultra-fast charging capabilities health monitoring of industrial rotating equipment • This technology allows charging for a 400km range in 15 min and renders e-mobility a • This technology allows predictive maintenance reality and provides increased productivity and safety • Total EV growth in 2018 +68% • 40K units installed Advancing Innovation in Growth Markets All Results are Unaudited 9 9 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
Innovation at ITT Eliminates Need for Gas Flaring Improved Safety & Fuel Efficiency • ITT twin-screw boosting pump technology • ITT SmartPad and Rotor coating programs aim enables the elimination of gas flaring to improve braking safety and reduce dust • Increases production, extends well life, and • Residual drag reduction drives fuel efficiency simplifies footprint • Real-time performance data • Lowers capital & maintenance costs by as much as 60% • $77M of orders in 2018 Advancing Innovation in Growth Markets All Results are Unaudited 10 10 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
ITT Brand Recognition CONNECT & CONTROL MOTION TECHNOLOGIES INDUSTRIAL PROCESS TECHNOLOGIES Rheinhutte Pumpen Acquisition Announced in February 2019 and Closed in April 2019 All Results are Unaudited 11 11 For non-GAAP reconciliations, refer to appendix and www.itt.com/investors
ITT Inc. Supplemental Data
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