Roper Technologies, Inc. Q2 2015 Financial Results July 27, 2015
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 include, among others, statements regarding operating results, the success of our internal operating plans, and the prospects for newly acquired businesses to be integrated and contribute to future growth, profit and cash flow expectations. Forward-looking statements A Diversified Growth Company may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes" or "intends" and similar words and phrases. These statements reflect management's current beliefs and are not guarantees of future performance. They involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and Click to edit Master title style uncertainties include our ability to integrate our acquisitions and realize expected synergies. We also face other general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions, unfavorable changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, difficulties in making and integrating acquisitions, risks associated with newly acquired businesses, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, environmental compliance costs and liabilities, risks and cost associated with asbestos related litigation and potential write-offs of our substantial intangible assets, and risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products. Important risks may be discussed in current and subsequent filings with the SEC. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. We refer to certain non-GAAP financial measures in this presentation. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found within this presentation. 2
Reg. G Disclosure Today’s Conference Call will Discuss Income Statement Results Primarily on an Adjusted (Non-GAAP) Basis. The Q2 2015 Adjusted Results Exclude the Following Items: A Diversified Growth Company (1) Purchase Accounting Adjustment to Acquired Deferred Click to edit Master title style Revenue (Data Innovations, SHP, SoftWriters, Strata, Foodlink) See Appendix for Reconciliation from GAAP to Adjusted Results 3
Roper Conference Call » Q2 Enterprise Financial Results A Diversified Growth Company » Segment Detail & Outlook Click to edit Master title style » Q3 and FY 2015 Guidance » Q&A 4
Q2 2015 Enterprise Financial Results » Achieved Record Second Quarter Results – Orders, Revenue, Net Earnings, EBITDA, Cash Flow » Revenue +1% to $892M – Organic Flat; FX Headwind (3%) – Growth Led by Medical +13% and RF Technology +4% – Declines in Industrial (9%) and Energy (12%) » Gross Margin +100 Bps to 60.1% » Operating Margin +60 Bps to 28.5% » Net Earnings +10% to $173M; DEPS $1.70 » Free Cash Flow +24% to $162M Record Results Despite FX and End Market Headwinds Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 5
Q2 Income Statement In $ Millions Q2’14 Q2’15 Note: Amounts may not total due to rounding Orders $874 $881 +1%; Book-to-Bill: 0.99x A Diversified Growth Company Revenue $885 $892 +1%; Organic Flat, FX (3%) Gross Profit $523 $536 Gross Margin 59.1% 60.1% +100 Bps Click to edit Master title style Operating Income $247 $254 +3% Operating Margin 27.9% 28.5% +60 Bps Interest Expense $20 $20 Other Income/(Expense) $(1) $(2) Earnings Before Tax $226 $233 Tax Rate 30.4% 25.7% Resolution of State Tax Matter Net Earnings $157 $173 +10% DEPS $1.56 $1.70 Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 6
Compounding Cash Flow In $ Millions 1 st Half Operating Cash Flow » Q2 Operating Cash Flow: $173M • 23% Increase $433 » Q2 Free Cash Flow: $162M $353 $311 • 24% Increase » 1 st Half Free Cash Flow: $412M • 23% of Revenue • 126% Conversion 2013 2014 2015 Note: Free Cash Flow = Operating Cash Flow – Capital Expenditures We Believe Cash is the Best Measure of Performance Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 7
Asset-Light Business Model Working Capital* as % of Q2 Annualized Net Sales 06/30/13 06/30/14 06/30/15 (350 Bps) (I) Inventory 6.3% 6.0% 5.5% 7.5% 6.2% (R) Receivables 19.7% 17.6% 16.6% 4.0% (P) Payables & 18.6% 17.4% 18.1% Accruals Total (I+R-P) 7.5% 6.2% 4.0% 2013 2014 2015 Note: Percentages may not sum correctly due to rounding Roper Governance Process Drives Working Capital Focus * Defined as Inventory + A/R + Unbilled Receivables – A/P – Accrued Liabilities; Sales and Working Capital Related to Acquisitions Completed in Each Quarter Removed from Calculation 8
Strong Financial Position In $ Millions 06/30/14 06/30/15 Cash $565 $679 Undrawn Revolver $1,470 $1,185 Cash and Undrawn Revolver $2,035 $1,864 Gross Debt $2,245 $2,525 Shareholders’ Equity $4,548 $5,019 Gross Debt to Capitalization 33.0% 33.5% TTM EBITDA $1,153 $1,232 Gross Debt-to-EBITDA (TTM) 1.9x 2.0x Deployed >$1B in Last 12 Months; Active Acquisition Pipeline Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 9
Segment Detail & Outlook 10
Q2 2015 Segment Performance In $ Millions $305 $256 $186 Revenue $145 $139 EBITDA* $92 $57 $43 Energy Ind Tech RF Medical * Excludes Corporate Expenses Medical and RF Segments Represented 70% of Q2 EBITDA* Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 11
Energy Systems & Controls Q2 2015 • Organic Revenue (7%); FX (5%) Q2’15 ($M) V to PY A Diversified Growth Company • Oil & Gas Markets Weaker Than Expected, Revenue $145 (12)% Primarily Impacting Upstream Applications Op Profit $38 (16)% • Other Served Markets Flat Click to edit Master title style • OP Margin 26.0% (100) Bps Businesses Executing Well; Additional Cost Actions Taken Segment Q2’15 % of Roper EBITDA* 2H 2015 • No Improvement in Oil & Gas Markets 13% • Modest Growth in Other Served Markets • FX Headwinds Persist • High Single Digit Organic Decline for Segment * Excludes Corporate Expenses Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 12
Industrial Technology Q2 2015 • Organic Revenue (4%); FX (5%) Q2’15 ($M) V to PY • Oil & Gas Markets Weaker Than Expected, A Diversified Growth Company Revenue $186 (9)% Primarily Impacting Upstream Fluid Handling Applications Op Profit $52 (14)% • Material Analysis Double Digit Organic Growth Click to edit Master title style OP Margin 28.0% (150) bps • Neptune Toronto Project Virtually Complete Segment Q2’15 % of Roper EBITDA* 2H 2015 • No Improvement in Oil & Gas Markets • Material Analysis Remains Strong 17% 20% • Neptune Grows in the U.S. Market • Toronto Project Completion Headwind • Mid Single Digit Organic Decline for Segment * Excludes Corporate Expenses Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 13
RF Technology Q2 2015 • Organic Revenue +6%, FX (1%), Acq./Div. (1%) • Strong Toll & Traffic Growth Continues Q2’15 ($M) V to PY – Multiple Toll Expansion and Upgrade Projects A Diversified Growth Company Revenue $256 +4% – Riyadh Traffic Project Started – Op Profit $80 +12% Double Digit Growth in Tag Shipments • Software Growth Led By Subscriber Additions at Click to edit Master title style OP Margin 31.3% +230 bps Freight Match • Strength in RF Products Led by Senior Care, Submetering and UK Water Applications Segment Q2’15 % of Roper EBITDA* 2H 2015 • Backlog and Proposal Activity Remain Strong for Toll and Traffic Projects • Continued Subscriber Growth in SaaS Businesses • Acquired On Center Software on July 20th for $157M; SaaS and Licensed Software Solutions for 28% 27% Construction Automation Management • Mid Single Digit Organic Growth for Segment * Excludes Corporate Expenses Results are presented on an Adjusted (Non-GAAP) basis. See appendix of this presentation for reconciliations from GAAP to Adjusted results. 14
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