Second Quarter 2003 Results July 17, 2003 - PowerPoint PPT Presentation

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Second Quarter 2003 Results July 17, 2003

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Please refer to March 30, 2003 Form 10Q for details on ... Monroe. Spokane. Detroit. Houston. Memphis. Minneapolis. Oklahoma City. Albuquerque. Salt Lake City ... – PowerPoint PPT presentation

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Title: Second Quarter 2003 Results July 17, 2003


1
Second Quarter2003 ResultsJuly 17, 2003
2
Safe Harbor
Forward looking statements that involve risks.
Please refer to March 30, 2003 Form 10Q for
details on factors that influence results.
3
Second-Quarter EPS
Discontinued
Continuing
.89
(.08)
Total
.81
.63
.10
Discontinued
.53
Continuing
2003
2002
EPS from continuing operations exceeded guidance
4
Second-Quarter 2003 Results
  • Activity levels improved, key industrial and
    construction markets sluggish
  • Outgrowing end markets by share gains and
    recurring-revenue growth
  • Strong operating performance in second quarter
  • Earnings increased by 30
  • Organic revenue up 6
  • Operating margins improved to 8.7
  • Strong position to reach full-year earnings
    target of 3.10 to 3.30
  • Strengthened balance sheet

Strong second quarter
5
Second-Quarter 2003
IR is a global industrial enterprise with market
leading brands We are dedicated to driving
Shareholder Value by achieving
Dramatic Growth ...
by focusing on innovative solutions for our
customers
Operational Excellence ...
by pursuing continuous improvement in all our
operations
Dual Citizenship ...
by bringing together the talents, energy and
enthusiasm of all IR people
6
Dramatic Growth
  • Delivering innovative products and solutions
  • Growing recurring revenue
  • Leveraging bolt-on acquisitions

Organic revenue growth of 6 in challenging
environment
7
Innovation Magnum Refrigerated Container
  • Capability to hold temperatures at -30o
    Fahrenheit
  • Advanced Fresh Air Management System
  • Maintains higher humidity levels
  • Protects cargo from dehydration and shrinkage
  • Using technology to create innovation that
    improves customers revenues and profits

8
Innovation Toolcat
9
Innovation Nirvana Air Compressor
  • Shipped 1,000th unit in June
  • Added to Dutch governments energy investment
    allowance list
  • Customers can qualify for tax deduction equal to
    entire unit cost
  • Nirvana, other new products and customer
    solutions have fueled growth in depressed markets

15 order improvement in the Second Quarter
10
Innovation Energy Systems
  • Combined industrial generation and microturbine
    products
  • 8 Million in second quarter orders (3.56 MW)
  • 12 250-kW machines
  • 8 70-kW machines
  • First 250-kW units shipping in August
  • Focused on environmental markets and cogeneration

11
Innovation Dual Biometric Recognition Systems
  • Innovative product for airline industry
  • Combines hand geometry and face recognition
  • Use of Interflex software
  • System can quickly process high volumes of people

12
Recurring Revenue Total Ingersoll-Rand
Millions
609
542
476
2003 2Q
2002 2Q
2001 2Q
28 Growth compared to 2001
13
Recurring Revenue Hussmann
National Service Contracts
4,400
3,900
3,300
800
2001 Year end
2002 Year end
2003 1Q
2003 2Q
Recurring revenue comprised 34 of sales
14
Recurring Revenue Air Solutions
of AirCare Contracts
10,500
8,500
3,447
1,039
2002 Year end
2001 Year end
2000 Year end
2003 2Q
48 of Air Solutions revenues came from
aftermarket
15
Bolt-on Acquisitions ETC
Nationwide Operations
Key enabler for growth of security solutions
business
16
Operational Excellence
  • Restructuring on target for full-year EPS of
    0.25
  • Managing cost and inventories
  • Improving working-capital management
  • Maintaining high customer-service levels

17
Operational Excellence Lean Branch Initiative
  • Capture and establish best-practice branch
    procedures
  • Focused on three areas
  • Back-office consolidation
  • Technician productivity
  • Parts sourcing
  • Low and highly variable operating margins
  • Operating margins 6 in second quarter

Target to reach 15 operating margin during 2004
18
Dual Citizenship IR Retail Solutions
  • 2002 Total revenue 32 Million
  • YTD 2003 revenue 40 Million
  • Target for full-year 2003 revenue 85 - 90
    Million
  • More than 25 of 2003 year-to-date revenue comes
    from supermarket customers purchasing Security
    and Safety products

Dual citizenship fueling revenue growth
19
Second-Quarter 2003
  • A successful quarter
  • Outpacing initial earnings target
  • Demonstrating value of innovation and operational
    excellence
  • Building a stronger company able to perform
    well in all market conditions

We are executing our strategy
20
Second Quarter 2003 Results
millions, except EPS
Revenues 2,525.1 Operating Income 219.5 Margin
8.7 Interest Expense (44.0) Other
Expense 2.6 Earnings before taxes, continuing
operations 178.1 Taxes, continuing
operations (25.0) Earnings after taxes,
continuing operations 153.1 Discontinued
operations, net of tax (13.8) Net Earnings
139.3 EPS Diluted Continuing
Operations 0.89 Discontinued Operations (0.08)
0.81
21
Revenues Continuing Operations
2003 Q2 Results Year-over-year change
Revenue gains in most major geographic regions
22
Climate Control
Revenues, Millions
  • Hussmann
  • Revenues declined 1
  • Continuing restricted capital spending by U.S.
    supermarket chains offset by gains
    internationally
  • Thermo King
  • Revenues up 16
  • (9 excluding currency)
  • Key drivers
  • North American trailer
  • European truck
  • Worldwide containers and bus
  • Recurring revenues

656
615
Operating Margins
8.4
6.1
2003 2002
23
Air and Productivity Solutions
Revenues, Millions
  • Air Solutions
  • Revenue improved 10
  • New products and services
  • Strong recurring revenues
  • Productivity Solutions
  • Revenue improved 9
  • Margin improvements
  • Price realization
  • Favorable mix
  • Operational improvements

353
323
Operating Margins
6.1
4.3
2003 2002
24
Dresser-Rand
Revenues, Millions
  • Revenues improved 44
  • 34 excluding buyouts
  • Strong completes growth
  • Operational excellence program driving improved
    results

337
235
Operating Margins
0.1
2.4
2003 2002
25
Infrastructure
Revenues, Millions
  • Revenues improved 8
  • Market-share gains at Bobcat and Club Car
  • 12 revenue growth in Bobcat from new product
    introductions, rental account growth, and
    stabilized pricing
  • 3 revenue growth in Club Car, driven by market
    share gains and GM Pathway Program

791
729
Operating Margins
12.7
12.3
2003 2002
26
Security and Safety
Revenues, Millions
  • Revenues improved 7
  • Strong performance in North American residential
    business
  • Strong backlog in Q2
  • Margins impacted by one-time costs and continued
    investments

388
364
Operating Margins
17.2
17.7
2003 2002
27
Manage for CashWorking Capital as a of
Revenues
Continuing Operations
  • Working Capital
  • A/R Inventory - A/P

15
11.8
10.8
10.8
10
Working Capital of Revenues
6.1
10.1
10.0
2003
2002
5
0
Q1
Q2
Q3
Q4
Improved working capital management
Quarterly revenues annualized. Excludes Morgan
discounting program.
28
Balance Sheet Indicators
Q2 2003
Q2 2002
Total Debt Debt to Capital Capital
Expenditures
2.5 B 39.0 25 M
3.6 B 49.7 31 M
29
2003 Earnings Outlook Third Quarter
Third Quarter DEPS Continuing Operations .74 -
.79 Discontinued Operations (.04) Total .70 -
.75
Third-quarter DEPS 0.70 - 0.75
30
2003 Earnings Outlook Full Year
Full Year DEPS Operations 3.10 3.30 Gain on
sale of Engineered Solutions .31 Full
year 3.41 - 3.61
Maintaining our forecast
31
Second-Quarter Successes
  • Positive quarter with strong progress toward
    long-range plan
  • Organic revenue growth 6 top end of 4 - 6
    target
  • Improved operating margins moving toward 15
    goal
  • Strengthened balance sheet below 40
    debt/capital target
  • On track for full-year earning and cash-flow
    targets

Executing our strategy
32
Proven source. Proven solutions.
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