Title: First Quarter 2005 Results
1First Quarter2005 Results
2Safe Harbor
Todays presentation includes forward looking
statements that involve risks. Please refer to
Form 10K for the year 2004 for details and
factors that may influence results.
2
3First Quarter Results
- Continuing EPS 1.33, total EPS 1.28
- Exceeded EPS guidance
- Continuing EPS up 45
- Revenue growth 16
- Double-digit growth each month
- Bobcat, Club Car, Construction Technologies and
Industrial Technologies had strong results - Executing strategies
- Innovation and recurring revenue growth
- Reducing cyclical profile
- Improving productivity and lowering costs
Capitalizing on Improving Markets
4Ingersoll-Rand Revenue by Business
- of Total Revenue
- 1984 1994 2004
- Business Sold
- Automotive Components 19 25 -
- Mining and Process 44 31 -
- 63 56 -
- Climate Control Technologies - - 30
- Bobcat and Club Car - - 24
- 54
- Security Technologies 11 11 19
- Industrial Technologies 18 21 16
- Construction Technologies 8 12 11
- 37 44 46
- 100 100 100
Primarily Pumps, Dresser-Rand, Drills and
Underground Mining Equipment
Substantial Upgrade of Portfolio
52004 Revenue from Continuing Operations
Climate Control Technologies 30
Construction Technologies 11
Industrial Technologies 16
Bobcat and Club Car 24
Security Technologies 19
10 Billion Diversified Industrial Company
6Innovation
Target 250 in Net Revenue From Innovation in 2005
7Wal-Mart Supply Agreement
- Supply agreement to become Wal-Marts primary
display case supplier in the United States - Covers two-year period beginning June 2005
- First shipments in first quarter of 2006
- Next step Become supplier of refrigeration
systems - Continuation of goal to become key partner with
Wal-Mart
8First Quarter Recurring Revenue
Millions
5
466
442
387
356
2004
2005
2002
2003
Recurring Revenue Increased 5 Compared to 2004
9Acquisitions of CISA and ITO
- CISA - Italy based
- Founded 1926
- Manufactures and sells a wide array of security
products - Electronic locking systems and cylinders
- Door openers and closers
- Safes and padlocks
- 2004 Revenues 270 million, operating margin
approximately 15 - ITO Turkey based
- Markets and sells mechanical locks and
architectural hardware - Products sold in Eastern Europe and Middle East
Expand World-class Portfolio of Security Products
10Superay
- Pneumatic tool manufacturer in China
- High-quality, cost competitive products built in
emerging markets for local and international
customers - Production tripled since initial investment in
2002 - Leverage Superays manufacturing and engineering
to expand presence in China
Expand Presence In Chinas High-growth Markets
11Operational Excellence
First Quarter Operating Margin
1.5 Point Gain
10.6
2004
Progressing Toward 15 Target
12Balance Sheet
Debt to Capital
25.9
2005 1Q
2.0
Total Debt ( Bil)
Maintained Strong Balance Sheet in First Quarter
2005
13Cash Deployment
- Repurchased 3 million shares during the first
quarter - Repurchased an additional 2.5 million shares in
April - 2.5 million shares available for repurchase
- Expect to complete purchase of remaining shares
during 2005
Deploying Cash to Create Shareholder Value
14First Quarter 2005
- Excellent first quarter, expecting excellent year
- Positioned to deliver
- Profitable growth
- Strong cash flow
- Deploying cash to generate value for shareholders
- Diversified business portfolio and lean business
model will dampen impact of future market cycles
Successfully Executing Sound Long-term Strategy
15First Quarter 2005 Results
16Revenues
First Quarter Year-Over-Year Growth, Excludes CISA
26
14
13
12
7
Asia Pacific
Latin America
Europe
North America
Total Ingersoll-Rand
Revenue Gains in All Geographic Regions
17Bobcat Club Car
- Bobcat
- Revenue up more than 30
- Strong North American markets
- New Product Introductions
- Aftermarket and attachments
- Club Car
- Revenue up 23
- Strong growth for Precedent
- Introduction of 4x4 Vehicle
- Operating Margin Improvement
- Volume leverage
- New Product margins
- Operational Improvement programs
- Component cost and availability challenges
Millions
661
30
506
Operating Margins
16.4
14.4
2005
2004
18Climate Control Technologies
Millions
- Climate Control Americas
- Revenue up 3
- Continued strength in transport
- Display case volume remains weak
- Climate Control International
- Revenue down 4
- Strong European truck and bus
- Lower trailer and display case volume
- Improved Asia bus business
- Operating Margin Improvement
- Improved product mix
- Productivity improvement
639
638
Operating Margins
9.4
9.1
2005
2004
19Construction Technologies
Millions
- Road Development
- Revenue up 22
- Strong North America and European markets
- National Accounts growth
- Utility Equipment
- Revenue up 22
- Strength in North America
- Operating Margin Improvement
- Volume leverage
- Productivity improvement program
- Adverse impact of material cost and availability
270
22
220
Operating Margins
9.5
8.4
2005
2004
20Industrial Technologies
Millions
- Air Solutions
- Revenue up 20
- Recurring revenue up 14
- Strong North American markets
- New Product growth
- Productivity Solutions
- Revenue up 13
- Growth in industrial markets and vehicle service
business - Operating margin improvement
- Revenue leverage and cost control
- New product margins
- Productivity improvement
403
17
343
Operating Margins
11.7
9.8
2005
2004
21Security Technologies
Millions
- Revenue up 17 (5 ex CISA)
- Solid North American residential and commercial
growth at 6 - Integrated Systems Solutions growth in North
America - Operating Margins
- North America remains strong
- Productivity offset material cost inflation
- Costs related to manufacturing sourcing
footprint transition - CISA purchase accounting and integration cost
22Security Technologies Margin
Millions
Q1 2005 CISA CISA Mfg/Sourcing Q1
2005 Reported Operations Acquisition Footprint Ad
justed
Revenue 485.8 65.6 420.2 OI
69.1 11.1 (8.6) (6.7) 73.3 OI
14.2 16.9 17.4
23Balance Sheet Indicators
2005
2004
Inventory Turns Receivables (DSO) Payables
(DPO) Total Debt Debt to Capital Capital
Expenditures Depreciation and Amortization
5.0 64 40 2.0 B 26 29 M 52 M
5.7 63 39 2.3 B 33 22 M 42 M
242005 Earnings Outlook Second Quarter
Second Quarter EPS Continuing Operations 1.60 -
1.70 Discontinued Operations (0.05) Total
Operations 1.55 - 1.65
Continuing Operations Improvement of 18 to 25
252005 Earnings Outlook Full Year
Full Year EPS Continuing Operations 5.75 -
5.95 Discontinued Operations (0.20) Total
Operations 5.55 5.75
Full Year 2005 EPS of 5.55 to 5.75
26Proven Source. Proven Solutions.