2012 Pentair Ltd. Investor & Analyst Day

131 Pages·2012·5.8 MB·English

Pentair Investor & Analyst Day
November 27, 2012
PENTAIR 2012 INVESTOR & ANALYST DAY
FORWARD-LOOKING STATEMENTS
CAUTION CONCERNINGFORWARD-LOOKING STATEMENTS
This communication contains statements that Pentair believes to be "forward-looking statements" within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including,
without limitation, statements regarding the anticipated benefits of the merger or Pentair's anticipated financial results, are
forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets",
"plans", "believes", "expects", "intends", "will", "likely", "may", "anticipates", "estimates", "projects", "should", "would",
"expect", "positioned", "strategy", "future" or words, phrases or terms of similar substance or the negative thereof, are
forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to
risks, uncertainties, assumptions and other factors, some of which are beyond Pentair's control, which could cause actual
results to differ materially from those expressed or implied by such forward-looking statements. These factors include the
ability to successfully integrate Pentair and the flow control business and achieve expected benefits from the merger;
overall global economic and business conditions; competition and pricing pressures in the markets Pentair serves; the
strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate
savings from excellence in operations initiatives consisting of lean enterprise, supply management and cash flow practices;
increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work;
failure of market to accept new product introductions and enhancements; the impact of changes in laws and regulations,
including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to
achieve Pentair's long-term strategic operating goals. Additional information concerning these and other factors is
contained in Pentair's filings with the U.S. Securities and Exchange Commission ("SEC"), including in Pentair’s Quarterly
Report on form 10-Q for the quarter ended September 29, 2012. All forward-looking statements speak only as of the date of
this communication. Pentair assumes no obligation, and disclaims any obligation, to update the information contained in
this communication.
PENTAIR 2012 INVESTOR & ANALYST DAY
KEY DEFINITIONS FOR TODAY’S PRESENTATION
• All References to 2015 Represent Our Long Term Strategic Goals
• All References to 2013 Represent Our Full Year Expected Results
• All References to 2012 Represent Our Full Year Expected Results, 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 2012 INVESTOR & ANALYST DAY
TODAY’S AGENDA
8:30 – 8:35 Welcome & Agenda Jim Lucas
8:35 – 9:25 Industry Depth, Worldwide Impact Randy Hogan
9:25 – 9:55 More Opportunities Todd Gleason
9:55 – 10:15 Break
10:15 – 10:45 Proven Operating Disciplines Mike Schrock
10:45 – 11:15 Setting & Meeting Expectations John Stauch
11:15 – 12:00 Q&A and Closing Remarks Randy Hogan
WELCOME
PENTAIR 2012 INVESTOR & ANALYST DAY
WELCOME … WHAT YOU’LL HEAR TODAY
From Randy: We Have a Solid Foundation, Vision & Strategic Roadmap
Why We are Better Positioned Today
We Have a Great Culture & Tremendous Energy
From Todd: Successful Integration … 30,000 Employees Embracing Change
More Synergies and Opportunities
We are Off to a Great Start Capturing Synergies
From Mike: Pentair Integrated Management System (PIMS) Delivers Value
Lean Enterprise Already Being Deployed / Adopted
PIMS a Key Enabler to Delivering Synergies Quickly
From John: Committed to Our Targets … Roadmap to Deliver
Smart & Aggressive Deployment of Capital
A New Company Building Off Proven Platforms for Success
PENTAIR 2012 INVESTOR & ANALYST DAY
Pentair: Industry Depth, Worldwide Impact
Pentair Investor & Analyst Day
Randall J. Hogan
Chairman & Chief Executive Officer
November 27, 2012
PENTAIR 2012 INVESTOR & ANALYST DAY
CURRENT ENVIRONMENT – 2012 UPDATE
2012 Q3 Year-to-Date Summary Pentair / Flow Control (FC) Integration
• “Day 1” Better Than Anticipated and
• YTD Core Sales Growth of 1% (Price
Planned
Offsetting Sluggish Volume)
• Minimal Major Transition Service
• YTD Margin* Expansion of 70bps to 12.7%
Arrangements with Tyco
Driven by Productivity
• Already Visited over 30 Flow Control Sites
• Announced 37th Consecutive Annual
and Spoke to ~25% of FC Employees
Dividend Increase
• Increased Confidence in Opportunities
• Closed Flow Control (FC) Merger as
Related to Functional Structures, Pentair
Scheduled on September 28th
Integrated Management System, Global
• Market / Global Economic Comment Sourcing, and IT
+ US Residential Steadily Improving
• Revenue Synergy Opportunities Identified …
+ Municipal Backlog Building
Energy, Food & Beverage, Pumps, Filtration
+ Fast Growth Regions Still Growing
Systems, and Fast Growth Regions
— Western Europe Remains Challenged
— Industrial Deceleration Globally
Macro Less Certain … Internal Levers to Pull
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PENTAIR 2012 INVESTOR & ANALYST DAY
FINANCIAL TARGETS
Revenue ($B) Op Income ($M) EPS
~$8.6
~$1.3B ~$5.00
$3.10 to
~$7.7
~$7.5 ~$950
~$790 $3.30
5% 19% ~$2.52 >25%
CAGR CAGR CAGR
+3% +20% +27%
2012 2013 2015 2012* 2013* 2015 2012* 2013* 2015
Guidance Goal Guidance Goal Guidance Goal
ROS 10.6% ~12% ~15%
• Revenue Growth Accelerating
–
Higher Exposure to Energy … NA Residential Tailwind
• Op Income Growth & EPS Driven by Base and IST
– ~
10% CAGR on Base + Benefit of Integration & Standardization Team (IST)
Now Let Us Tell You How
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PENTAIR 2012 INVESTOR & ANALYST DAY
WHAT YOU’LL HEAR TODAY
• More Balanced
• More Global
A Stronger
• More Diversified
Company
1
• Smart Capital Deployment
Setting &
The New
More
Meeting
4 2
Opportunities
Pentair
Expectations
• Aggressive & Achievable • Growth
• Cost
3
• Standardization
Proven
Operating
Disciplines • PIMS: Focus on Lean Enterprise
A New Company Building Off Proven Platforms for Success
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PENTAIR 2012 INVESTOR & ANALYST DAY
A STRONGER COMPANY TODAY
More Balanced … More Global … More Diversified
Solid Foundation Better Portfolio Great Future
•History of Change •In Great Vertical Markets •Operational Cost Synergies
•Well Positioned •More Diverse •Real Growth Synergies
•Global Scale •More Balanced •PIMS Adoption Starting
•Vision & Strategy •Leading Brands •Steady Financial Outlook
Let’s Review Why …
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PENTAIR 2012 INVESTOR & ANALYST DAY