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Industrial Technologies Sector

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Industrial customers moving to low cost countries. Energy efficiency ... Specially designed for general industrial, construction, mining, and oil & gas markets ... – PowerPoint PPT presentation

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Title: Industrial Technologies Sector


1
Industrial Technologies Sector
  • Jim Bolch

2
Industrial Technologies Products and Services
Air Solutions
Process
Industrial
Commercial
Productivity Solutions
Material Handling
Fluid Handling
Tools
Energy Systems
Combined Heat And Power (CHP)
Environmental
Process
3
Agenda
  • Business Overview
  • Global Channels/Emerging Markets
  • New Product Development
  • Recurring Revenue
  • Lean Operations

4
Building on our Business Model


Diversified Markets
Global Footprint
Installed Base
5
17
37
63
52
26
North America
North America
European Served Area
European Served Area
Asia Pacific
Latin America
Well Diversified By Market And Geography With A
Healthy Service Base
5
Industrial Technologies Revenue Operating
Income
RevenueMillions
Operating IncomeMillions
Operating Income
2001 2005 Performance CAGR Organic Revenue
8 CAGR Operating Income 48 Strong Operatin
g Leverage
12.9
11.6
7.6
5.3
3.7
Track Record Of Consistent, Profitable Growth
6
Diversified Business Base
Geography
6
Air Solutions Strong Market Position Diverse Glo
bal Business Opportunities in Developing Economie
s
Strong Service Footprint
22
41
5
17
31
Productivity Solutions Strong North America Prese
nce Significant Growth Opportunities in Asia Str
ong Brand Performance Channel Development in Euro
pe
2
8
52
17
26
73
Energy Systems Primary Focus is US Gaining Tract
ion in Asia Global Reference Sites External Eco
nomics Improving

7
Positioning for Consistent Performance Through
All Economic Cycles
Factory Utilization
Note Factory Utilization in 2001 Indexed to 100
8
Global Channels/Emerging Markets
  • Macro Trends
  • Industrial customers moving to low cost
    countries
  • Energy efficiency and reliability are key
  • Service capability is essential
  • Developed Economies
  • Strong double digit growth in North America in
    2005 and 2006 YTD
  • Simplifying channels to achieve sector
    enterprise leverage
  • Market share opportunity in Europe
  • Strong installed base will continue to drive
    service business
  • Emerging Markets
  • 20 revenue CAGR 2001-2005
  • 20 of total revenues in 2005
  • Substantial footprint in China and India and
    growing
  • Growing installed base will drive future service
    revenues

9
Developed Economies - Industrial Technologies
ChannelsPrior State
Business Units
Productivity
Air
Vehicle
Assembly
Commercial
Industrial
Process
Industrial
Hoist Winch
Channels
Channels
Distribution Company Stores Strategic Accounts
NIS
Jobbers WDs Garage Solutions Natl Accts Ret
ail
Air Centers Distribution Dealers Direct Strate
gic Accounts
Complex Business and Channel Structure
10
Developed Economies - Industrial Technologies
Channels Future State
Business Units
Industrial Technologies
Channels
Strategic Accounts
Direct
Distribution
Leverage Customer Relationships Across Products
and Channels
11
Emerging MarketsStrong Sales Service Network
in China
Hei Long Jiang
Inner - Mongolia
Ji Lin
Beijing
Liao Ning
Xin Jiang
Tian Jin
Gan Su
Ning Xia
He Bei
Shan Xi
Shan Dong
He Nan
Qing Hai
Jiang Su
ShanXi
He Fei
Tibet
Shanghai
Si Chuan
Hu Bei
Chong Qing
Zhe Jiang
Jiang Xi
Hu Nan
Chen Du
Gui Zhou
Fu Jian
Yun Nan
Guang Dong
Legend
Guang Xi
Existing Customer Center IR factory
Guang Zhou
Direct Footprint Expected to Double in Next 5
Years
12
Emerging Markets - Investing in PeopleChina
Customer Center Manager Development Program
General Manager / Entrepreneur
?
Channel Development Management
?
Finance Module for Branch Manager
?
Service Module for Branch Mgr
Management Leadership education
Develop IR Managers
?
Business Acumen
?
Ingersoll Rand University
Leadership
Marketing for IR Manager
Customer Center Manager Training School
Sales and Service Leader
?
Customer Center Manager
Finance for non-finance Manager
?
Branch Supervisor
Module ?
IR Manager
Sales/ Service Career Pathing
Other Career Development
Team Leadership
?
High Performance Culture
13
New Product DevelopmentInvesting For Growth
  • 80 Million in net revenue from new products in
    2005
  • Incremental investment of 7 Million in 2006
  • Key Focus Areas
  • Products for Emerging Markets
  • Innovative Technologies
  • Product Line Simplification/Cost Reduction
  • Recurring Revenue

14
New Product Development
Oil-Free Nirvana
Infinity
Energy Efficiency Improves Customer Value
Emerging Markets Growth
Cordless
Energy Systems
Bringing New Technology to our Industrial
Customers
New Markets and Business Models
15
Product Development TracksOptimizing for Market
Effectiveness
Traditional
Product Cost
Time
New Approach Delivers Products With A Better
Value Proposition For Global Markets
16
InfinityValue and Quality for Emerging Markets
17
Cordless Tool Market
Leveraging Our Strength in Air Tools for
Industrial Markets
Other
2.7B Global Cordless Tool Sales 10 YOY growth
Engine
3
7
Corded
32
Air
26
405
1,080
Asia Pacific
Cordless
European Served Area
1,020
32
North America
Millions
108
Africa
81
Latin America
Source Fredonia Power Tool Report
18
Product Innovation - Cordless
Redefine the Market with Unique Value Propositions
  • Tools
  • 1st cordless tools designed specifically for
    service production industries
  • best in class durability, power, ergonomics
    size
  • revolutionary controls and protection
  • Batteries
  • patented battery interface
  • intelligent batteries
  • superior battery life
  • Chargers
  • intelligent charger
  • complete compatibility input output
  • designed to handle future technologies

19
New Products Best in Class
Torque
1/2 Impact
Ingersoll Rand
Best In Class
Snap-On 18V Ni Cad
Tool Durability Battery Durability
Torque Power/Weight Power/Size
Dewalt 18V Ni Cad
ML 18V Ni Cad
MIL 28V Lithium
0 50 100 150 200 250 300 350
(ft-lbs.)
Mechanism Durability
Battery Life
Ingersoll Rand
Ingersoll Rand
Snap-On 18V Ni Cad
Snap-On 18V Ni Cad
Dewalt 18V Ni Cad
Dewalt 18V Ni Cad
ML 18V Ni Cad
ML 18V Ni Cad
MIL 28V Lithium
MIL 28V Lithium
0 50 100 150 200 250
Cycles
(Removed Bolts Tightened to 200 ft-lbs per Charge)
Tool Weight
Tool Length
Ingersoll Rand
Ingersoll Rand
Ingersoll
Snap-On 18V Ni Cad
Snap-On 18V Ni Cad
Dewalt 18V Ni Cad
Dewalt 18V Ni Cad
ML 18V Ni Cad
ML 18V Ni Cad
MIL 28V Lithium
MIL 28V Lithium
6 7 8 9 10 11 12 13
Lbs.
Inches
20
Pro Series Pumps
Full range of diaphragm pumps for price sensitive
customers (12 lower cost than prior product)
Increased productivity Premium reliability Speci
ally designed for general industrial,
construction, mining, and oil gas markets
Manufactured in Asia to better serve emerging
regions 26 average increase per month on unit sa
les YTD Spare parts revenue increasing proportion
ally as installed base becomes industry standard
21
250 kW MicroturbineFirst and only to achieve
CARB 2007 Certification
CARB 2007 Benefits Qualifies MT250 as ultra-cle
an and low-emission Only non-fuel cell Distribu
ted Generation (DG) technology certified by CARB
as meeting the stringent 2007 emissions limits
Required after January 1, 2007 in at least
certain California Air Districts
Helps expedite permit process in other areas
Air Quality Data
Emissions Inventory
Air Quality Model
22
Energy SystemsInitial Microturbine Installations
in China
Production Facility
Hospital
Manufacturing Facility
Environmental Government mandates - interconnect
and power rate subsidy 100,000 MW of power from
renewable energy by 2020
Value drivers Power reliability Energy cost E
nvironmental compliance Infrastructure spending o
ffset
Combined Heat and Power (CHP Annual GDP growth 7
China 2010 Goal Reduce energy consumption by
20.
23
Recurring Revenue
Service
Parts/Accessories
Pay for Use
Remanufacturing
24
Recurring Revenue
Double-digit for 5 straight years 37 total rev
enues

Dramatic Growth
Globalization
49 outside US 18 growth in Asia YTD
Recurring revenue service contracts
Accessories Competitive parts service Energy s
avings
Performance enhancements
Growth Drivers
Driving Consistent Revenue Growth
25
Recurring RevenueAligning with Our Customers
Interests
Customer Benefits
Ingersoll Rand Benefits
Asset Management
Customer Retention
Pay for Use
Comprehensive Service Contracts
Margin Enhancement
Risk Management
Break/Fix and PM Service
Revenue Predictability
Cost Management
System Upgrades
Customer Intimacy
Energy Management
Audits
Volume Growth
Energy Awareness
Completes/Parts

Predictable, sustainable service growth
26
Remanufactured Equipment
  • Create a profitable used/remanufactured equipment
    business
  • Leverage existing repair facilities (US, Europe,
    and Asia)
  • Offer adjacent services
  • Calibration, Installation, Performance
    enhancements, Rental

Target Segments
Air Compressors Large system components Dispense
, Winch Fastening Systems
27
Lean OperationsKey to Customer Satisfaction and
Margin Improvement
  • Rollout of Lean Policy across Sector as part of
    IRBOS
  • Common Certification / Selection Process for all
    Black Belt/Green Belts implemented in 2006
  • Targeted at all activities in the value stream
  • Lean is a key enabler for
  • Quality Improvement
  • Customer Satisfaction
  • Margin Expansion
  • Working Capital Reduction

28
Lean OperationsTypical Manufacturing Example
Shanghai Air Compressor Plant
Rotary Compressor Line Results
Distanced Traveled Reduction 90
Production Space Reduction 40
Cycle Time Reduction 25
29
Industrial Technologies
  • Strong Organic Growth
  • Leveraging customer relationships
  • Well positioned in emerging markets
  • New product development
  • Profitability
  • Good leverage of existing assets
  • Simplification of sales channels
  • Lean operations drive improvements
  • Sustainable Performance
  • Strong financial track record
  • Diversified business base
  • Continued growth of recurring revenue

30
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