2013 Pentair Ltd. Investor & Analyst Event

131 Pages·2013·5.75 MB·English

PENTAIR: DIFFERENTIATED GROWTH
PENTAIR INVESTOR & ANALYST EVENT
Randall J. Hogan
Chairman and Chief Executive Officer
November 13, 2013
PENTAIR 2013HoustonInvestor&AnalystEvent 1
FORWARD-LOOKING STATEMENTS
CAUTION CONCERNINGFORWARD-LOOKING STATEMENTS
Thiscommunicationcontainsstatementsthatwe believetobe“forward-lookingstatements”within themeaningofthe
Private Securities LitigationReformActof1995.All statements,otherthanstatementsofhistorical factare forward-looking
statements. Withoutlimitation, anystatementsprecededorfollowedbyorthatincludethewords"targets,”"plans,”
"believes,”"expects,”"intends,”"will,” "likely,”"may,” "anticipates,”"estimates,” "projects,”"should,”"would,”
"positioned,”"strategy,”"future"orwords, phrasesorterms ofsimilar substanceorthenegativethereof,are forward-
lookingstatements.Theseforward-lookingstatementsare notguaranteesoffutureperformance andaresubjecttorisks,
uncertainties,assumptionsandotherfactors, someofwhichare beyondourcontrol,whichcouldcauseactualresults to
differmaterially from thoseexpressedorimplied bysuchforward-lookingstatements. Thesefactorsincludetheabilityto
successfullyintegratePentair, Inc. andtheFlowControlbusinessandachieveexpectedbenefitsfromtheMerger; overall
globaleconomicandbusinessconditions;competitionandpricingpressuresinthemarkets we serve; thestrengthof
housingandrelated markets; volatility incurrencyexchangerates andcommodity prices;inability togeneratesavingsfrom
excellencein operationsinitiativesconsistingofleanenterprise, supplymanagementandcashflow practices;increased
risks associatedwithoperatingforeignbusinesses;theability todeliverbacklogandwin futureprojectwork; failure of
markets toacceptnew productintroductionsandenhancements;theimpact ofchangesin lawsandregulations,including
thosethatlimit U.S. tax benefits;theoutcomeoflitigationandgovernmentalproceedings;andtheabilitytoachieveour
long-termstrategicoperatinggoals.Additionalinformation concerningtheseandotherfactorsis containedinourfilings
with theU.S. Securities andExchangeCommission, includinginourQuarterly ReportonForm10-Qforthequarterended
September28,2013andour2012AnnualReportonForm10-K.All forward-lookingstatementsspeakonlyasofthedateof
thiscommunication.PentairLtd.assumesnoobligation,anddisclaims anyobligation,toupdatetheinformation contained
inthiscommunication.
PENTAIR 2013HoustonInvestor&AnalystEvent 2
KEY DEFINITIONS FOR TODAY’S PRESENTATION
• All 2015T References Represent Our 2015 Long Term Goals
• All 2013F References Represent Our 2013 Full Year Expected Results
• All References to 2012 are Presented on a Pro Forma Basis to Include the Results of
Flow Control for the Full Year
• All References to 2011 are Presented on a Pro Forma Basis to Include the Results of
Flow Control for the Full Year
• All 2013, 2012, and 2011 Amounts are Presented on an Adjusted Basis and Exclude
the Impact of Severance, Asset Impairment, Deal-Related, and Other Costs
Please Refer to the Appendices for Reconciliations of Non-GAAP Measures and Pro Forma Results
PENTAIR 2013HoustonInvestor&AnalystEvent 3
AGENDA
1) Strategy Overview & Trends Randy Hogan 8:30 – 9:15
2) Thermal Management Overview Alok Maskara 9:15 – 10:00
3) Valves & Controls Overview David Dunbar 10:15 – 11:00
4) Q&A Leadership Team 11:00 – 11:30
5) Transportation to Pasadena 11:45 – 12:30
6) Pasadena Service Center Tour 12:45 – 2:00
Welcome!
PENTAIR 2013HoustonInvestor&AnalystEvent 4
LAST YEAR’S THEME AND KEY MESSAGES
• MoreBalanced
• MoreGlobal
A Stronger
• MoreDiversified
Company
1
• SmartCapitalDeployment
Setting &
The New More
Meeting
4 2
Opportunities
Expectations Pentair
• Aggressive&Achievable • Growth
• Cost
3
• Standardization
Proven
Operating
Disciplines • PIMS:FocusonLeanEnterprise
A New Company Building Off Proven Platforms for Success
PENTAIR 2013HoustonInvestor&AnalystEvent 5
PROGRESS TO DATE …
+ Added to S&P 500
+ Share Price up 53% (+31% versus S&P 500)
+ Recognized in Bloomberg BusinessWeek Top 50
A Stronger
Company
+ Recognized Forbes Top 100 Innovators
+ Two Shingo Silver Medallion Awards in 12 months
+ 30,000 Employees … Leadership in Key Verticals
Many Indicators of Our Strength
PENTAIR 2013HoustonInvestor&AnalystEvent 6
PROGRESS TO DATE …
+ Integration Synergies Expected to be $120M in 2013
• Original Target ~ $90M
More
• Overdriving Lean / Sourcing and Standardization
Opportunities
+ PIMS Aggressively Adopted
• All 100+ Mfg. Facilities Driving PIMS’ Lean Enterprise
• Standardization Actions Underway for ’14 & ’15
Proven
Operating + Solid Financial Returns YTD
Disciplines
• Adj. EPS* Up 18% … Free Cash Flow >100% of NI
• Adj. Operating Margins* Up 120 Basis Points
• Smart Capital Allocation: Buy Backs = $875 Million
of $1.2 Billion
Setting &
+ Significant Opportunities Remain
Meeting
Expectations
• G&A Complexity and ERP Consolidations
• More Growth Synergies Anticipated as Programs Take Off
• Capital Deployment Flexibility
A Successful Year One
PENTAIR 2013HoustonInvestor&AnalystEvent *SeeAlAlypepaern-doivxefro-yreraercocnocmilpiaatrioisnonosfangoaniGnsAtA2P01m2eaadsujursetse.dresultsonaproformabasisfortheFlowControlacquisition. 7
PENTAIR STRATEGY – CONSISTENT APPROACH
• Successfully Integrate Company
‒ PIMS … One Pentair Culture / Win Right … Aligned Verticals
‒ Targeting Synergies and Base Performance to Deliver ~$5.00 EPS in ’15
• Higher Organic Growth: Verticals & Innovation Focus
‒ Where We Lead and Can Drive Differentiated Growth
‒ Aligned with Growth Trends
• Drive Operational Excellence
‒ Known as World-Class in Lean and Growth
‒ Destination Company for Customers and Top Talent
Continue to Execute These Strategic Imperatives
PENTAIR 2013HoustonInvestor&AnalystEvent 8
PENTAIR: A BALANCED & DIVERSE PORTFOLIO
By Reporting Segment By Geography By Vertical
Food&Beverage,
Developed ~9%
Technical
Non-U.S.,
Solutions, Water & U.S.and Infrastructure, Energy,
Fluid ~15% ~13% ~28%
~23% Western Canada,
Solutions,
Europe, ~42%
~44%
~18% Resi/Comm,
Valves &
Fast ~24% Industrial,
Controls,
Growth, ~26%
~33%
~25%
100%=2012sales*of$7.3B
•Long & Short Cycle •Balanced Geographic •Balanced Across Verticals
Balanced Portfolio Exposure with 25% in Fast •Current Trends: Strength in
Growth Regions North American Residential
•Global Solutions Leader /
Recognized Brands •Current Trends: US and Food & Beverage;
Strength and Western Industrial has Stabilized;
•Largest “Valve Company”
Europe has Stabilized Energy Mixed
Globally
Broad Diversification
PENTAIR 2013HoustonInvestor&AnalystEvent *2012sales.AdjustedresultsonaproformabasisfortheFlowControlacquisition. SeeappendixforreconciliationofnonGAAPmeasures. 9
KEY GROWTH VERTICALS
• Oil & Gas • Chemical • Commercial • Municipal • Agriculture
• Residential • Telecom &
• Power • Pharma • Aquaculture
Networks
• Recreation &
• Mining • Manufacturing • Food & Beverage
Leisure • Transport
%of
~28% ~26% ~24% ~13% ~9%
Sales*
Long-Term
Growth ~4-6% ~2-3% ~5-8% ~Flat ~6-8%
Rate**
Leveraging Global Mega Trends
*2012sales.AdjustedresultsonaproformabasisfortheFlowControlacquisition. SeeappendixforreconciliationofnonGAAPmeasures.
PENTAIR 2013HoustonInvestor&AnalystEvent **PNRestimates. 10