Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - IDEX CORP /DE/ | iex-20170131xex992.htm |
| 8-K - 8-K - IDEX CORP /DE/ | iex-20170131x8k.htm |
IDEX Proprietary & Confidential
Fourth Quarter & Full Year 2016 Earnings
January 31, 2017
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
• IDEX’s Outlook
• Q4 & FY 2016 Financial Performance
• Segment Performance
• Fluid & Metering
• Health & Science
• Fire & Safety / Diversified Products
• 2017 Guidance
• Bridge
• Summary
• Q&A
1
AGENDA
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
• Dial toll–free: 877.660.6853
• International: 201.612.7415
• Conference ID: #13652250
• Log on to: www.idexcorp.com
2
Replay Information
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
Cautionary Statement Under the Private Securities Litigation Reform Act; Non-GAAP Measures
This presentation and discussion will include forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995, as amended. These statements may relate to, among other things, capital expenditures, acquisitions, cost
reductions, cash flow, revenues, earnings, market conditions, global economies and operating improvements, and are
indicated by words or phrases such as “anticipate,” “estimate,” “plans,” “expects,” “projects,” “forecasts,” “should,” “could,”
“will,” “management believes,” “the company believes,” “the company intends,” and similar words or phrases. These
statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those
anticipated at the date of this news release. The risks and uncertainties include, but are not limited to, the following: economic
and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in
the U.S. and other countries around the world; pricing pressures and other competitive factors, and levels of capital spending
in certain industries – all of which could have a material impact on order rates and IDEX’s results, particularly in light of the low
levels of order backlogs it typically maintains; its ability to make acquisitions and to integrate and operate acquired businesses
on a profitable basis; the relationship of the U.S. dollar to other currencies and its impact on pricing and cost competitiveness;
political and economic conditions in foreign countries in which the company operates; interest rates; capacity utilization and
the effect this has on costs; labor markets; market conditions and material costs; and developments with respect to
contingencies, such as litigation and environmental matters. Additional factors that could cause actual results to differ
materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk
Factors” section included in the company’s most recent annual report on Form 10-K filed with the SEC and the other risks
discussed in the company’s filings with the SEC. The forward-looking statements included in this presentation and discussion
are only made as of today’s date, and management undertakes no obligation to publicly update them to reflect subsequent
events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking
statements when evaluating the information in this presentation and discussion.
This presentation contains non-GAAP financial information. Reconciliations of non-GAAP measures are included either in this
presentation or our earnings release for the three- and twelve-month periods ending December 31, 2016, which is available on
our website.
3
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
4
IDEX 2016 Financial Performance
Sales Adjusted EPS*
Adjusted Operating Margin* Free Cash Flow
Free Cash Flow of $362 million was up 12 percent and 125 percent of adjusted net income
(Dollars in millions, excl. EPS)
* Operating data adjusted for restructuring costs ($3.7M in Q4 and FY 2016; $6.5M in Q4 2015 and $11.2M in FY 2015); Loss/Gain on Divestitures ($20.2M loss
in Q4 2016 and $22.3M loss in FY 2016; $18.1M gain in FY 2015); and a pension settlement charge ($3.6M in Q4 and FY 2016).
$0
$500
$1,000
$1,500
$2,000
$2,500
Q4 Year
$500
$2,021
$530
$2,113
2015 2016
$0.00
$1.00
$2.00
$3.00
$4.00
Q4 Year
$0.94
$3.55
$0.96
$3.75
2015 2016
16.0%
18.0%
20.0%
22.0%
Q4 Year
21.0% 21.0%
20.5%
20.6%
2015 2016
$0
$100
$200
$300
$400
Q4 Year
$88
$322
$106
$362
2015 2016
Organic: Flat
Organic: 1% decrease
2% increase
6% increase
50 bps decrease 40 bps decrease
12% increase
20% increase
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
5
Fluid & Metering
Orders Sales
Q4 Sales Mix: Organic -
Divestiture -3%
FX -1%
Reported Sales -4%
Q4 & Full Year Highlights:
Water market is solid with growth expected to continue
Pumps & Valves (Industrial) stabilized during the year with improving demand
late in Q4 and early January 2017
Energy market remains challenged
Agriculture market has stabilized with improving demand in Q4
Adjusted Operating Margin*
Excellent Execution and Productivity - Q4 Adjusted Operating Margin up 190 bps
* Operating margin data adjusted for restructuring costs ($0.9M in Q4 and FY 2016; $4.6M in Q4 2015 and $7.1M in FY 2015) and a pension settlement charge ($2.0M
in Q4 and FY 2016.)
$0
$200
$400
$600
$800
$1,000
Q4 Year
$217
$868
$205
$845
2015 2016
$0
$200
$400
$600
$800
$1,000
Q4 Year
$215
$861
$207
$849
2015 2016
20.0%
22.0%
24.0%
26.0%
28.0%
Q4 Year
25.3%
24.6%
27.2%
25.6%
2015 2016
Organic: 2% decrease
Organic: 3% decrease Organic: 1% decrease
Organic: flat
100 bps increase 190 bps increase
(Dollars in millions)
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
6
Health & Science
Orders Sales Adjusted Operating Margin*
Q4 Sales Mix: Organic -1%
Acquisition/Divestitures 5%
FX -3%
Reported Sales
1%
Q4 & Full Year Highlights:
Acquired SFC in our Sealing Group, segment margins negatively
impacted by $7.3 of inventory step-up charges
Scientific Fluidics experienced a strong year across all markets
Sealing group is winning in Semiconductor market
MPT won a large pharma order in Q4
Organic order growth of 7 percent in Q4
* Operating margin data adjusted for restructuring costs ($1.1M in Q4 and FY 2016; $1.6M in Q4 2015 and $3.4M in FY 2015) .
(Dollars in millions)
$0
$200
$400
$600
$800
$1,000
Q4 Year
$182
$734
$201
$761
2015 2016
$0
$200
$400
$600
$800
$1,000
Q4 Year
$187
$739
$188
$745
2015 2016
16.0%
18.0%
20.0%
22.0%
24.0%
Q4 Year
22.3% 21.8%
19.0%
20.8%
2015 2016
Organic: 7% increase
Organic: 2% increase
Organic: 1% decrease
Organic: 1% decrease
330 bps decrease 100 bps decrease
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
7
Fire & Safety / Diversified Products
Orders Sales Adjusted Operating Margin*
Q4 & Full Year Highlights:
2016 margins negatively impacted by acquisitions, including $7.5 million of
inventory step-up charges
Dispensing had a strong 2016 driven by the continued momentum of the X-
Smart product
Fire and Safety global demand was strong in Q4
Band-it continues to see strength in the transportation market and some
positive activity in the upstream energy market
Organic order growth of 9 percent in Q4
Q4 Sales Mix: Organic 3%
Acquisitions 37%
FX -3%
Reported Sales 37%
* Operating margin data adjusted for restructuring costs ($1.4M in Q4 and FY 2016; $0.3M in Q4 2015 and $0.6M in FY 2015) and a pension settlement charge
($0.5M in Q4 and FY 2016.)
(Dollars in millions)
$0
$200
$400
$600
Q4 Year
$97
$412
$141
$527
2015 2016
$0
$200
$400
$600
Q4 Year
$98
$424
$135
$520
2015 2016
22.0%
24.0%
26.0%
28.0%
Q4 Year
25.3%
27.4%
23.8% 23.8%
2015 2016
150 bps decrease
360 bps decrease
Organic: 9% increase
Organic: 2% increase
Organic: 3% decrease
Organic: 3% increase
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
8
2017 Guidance Bridge
2017 Growth Expectations
• 1% – 2% organic revenue growth
• Future acquisitions not contemplated below
Sales ($M) EPS
FY 2016 - GAAP 2,113$ 3.53$
2016 Adjustments - 0.22
FY 2016 - Adjusted 2,113$ 3.75$
Organic Growth ~ 20 - 40 ~ .15 - .23
FX (Translation & Transaction) (43) (0.12)
Acquisitions/Divestitures, net 40 0.24
Higher Share Count, net (0.03)
Restructuring Savings 0.03
Corporate Expenses (Earn-Out and CFO Departure) (0.06)
Inflation/Productivity, net 0.02
Growth Investments (0.11)
FY 2017 Plan $2,130 - $2,150 $3.87 - $3.95
IDEX Proprietary & Confidential
Brand names shown in this presentation are registered trademarks of IDEX Corporation and/or its subsidiaries
Q1 2017
• EPS estimate range: $0.91 - $0.93
• Organic revenue growth: 1% - 2%
• Operating margin: 20.5% - 21.0%
• Tax rate: ~ 27%
• FX impact: ~2% topline headwind based on December 31, 2016 FX rates
• Corporate costs: ~ $17M
FY 2017
• EPS estimate range: $3.87 - $3.95
• Organic revenue growth: 1% - 2%
• Operating margin: ~ 21.5%
• FX impact: ~2% topline headwind based on December 31, 2016 FX rates
• Corporate costs: ~ $66M
• Other modeling items:
• Tax rate: ~ 27.5%
• Cap Ex: ~ $45M
• Free Cash Flow will be ~120% of net income
• EPS estimate excludes all future acquisitions and associated costs and future restructuring charges
9
2017 Guidance Summary