2014 annual shareholders meeting final
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Transcript of 2014 annual shareholders meeting final
1
2014 Annual Shareholders Meeting February 26, 2014
Pursuing Growth • Building Value
a global diversified industrial company
2014 Hillenbrand
Forward-Looking Statements and Factors That May Affect Future Results
Throughout this presentation, we make a number of “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. As the words imply, these are statements about future plans, objectives, beliefs, and expectations that might or might not happen in the future, as contrasted with historical information. Forward-looking statements are based on assumptions that we believe are reasonable, but by their very nature are subject to a wide range of risks.
Accordingly, in this presentation, we may say something like,
“We expect that future revenue associated with the Process Equipment Group will be influenced by order backlog.”
That is a forward-looking statement, as indicated by the word “expect” and by the clear meaning of the sentence.
Other words that could indicate we are making forward-looking statements include:
This is not an exhaustive list, but is intended to give you an idea of how we try to identify forward-looking statements. The absence of any of these words, however, does not mean that the statement is not forward-looking.
Here is the key point: Forward-looking statements are not guarantees of future performance, and our actual results could differ materially from those set forth in any forward-looking statements. Any number of factors, many of which are beyond our control, could cause our performance to differ significantly from what is described in the forward-looking statements.
For a discussion of factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading “Risk Factors” in Item 1A of our Form 10-Q for the period ended December 31, 2013, located on our website and filed with the SEC. We assume no obligation to update or revise any forward-looking statements.
Disclosure regarding forward-looking statements
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2014 Hillenbrand
Foundational Strengths
Strategy
Leverage our strong financial foundation and core competencies to deliver sustainable
growth and long-term value.
Goals for Creating Shareholder Value• Grow organically and through acquisitions• Maintain strong balance sheet and superior cash generation
Strategy Management
LeanBusiness
Intentional TalentDevelopment
Focus on long-term objectives that generate the
greatest growth and value
Flow value to the customer, drive out waste and
pursue perfection to deliver
superior results
Recruit and retain top talent by
providing key employees with
development opportunities that
stretch their abilities
Stable Cash Flow and Earnings • Culture of Execution • Experienced Management Team
Criteria for future acquisition candidates include:
●Attractive margins, strong cash generation and multiple pathways for growth
●Good market positions, strong brand and good growth prospects in its defined space
● Strong strategic fit with Hillenbrand
• Tuck-in• Adjacent• Other industrial company
●Ability to benefit from our core competencies and share its own competitive strengths
Our strategy focuses on diversified growth – organic and through acquisition – and creating shareholder value
3
2014 Hillenbrand
Executing our strategy to diversify through acquisitions has led to robust revenue growth
2008 2009 2010Hillenbrand, Inc. (parent of Batesville Casket Company)
begins operation April 1, 2008
K-Tron acquisition (includes
TerraSource) April 1, 2010
2011Rotex acquisition
September 1, 2011
2012Coperion
acquisition December 1,
2012
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2013
$0
$300
$600
$900
$1,200
$1,500
$1,800
FY09 FY10 FY11 FY12 FY13
Revenue Since 2009 ($ millions)
2014 Hillenbrand
0%
50%
100%
FY09 FY14 Estimate
Death Care Plastics Other
We have transformed into two attractive platforms that provide diversification by end markets and geography
• Multiple pathways/end markets for growth
• Diversified revenue sources
• Parts and service revenue ~ 1/3 of total
• Historical Adj EBITDA* margin > 25%
• Strong, predictable cash flow
Batesville
TerraSource
Process Equipment Group
5
(K-Tron merged with Coperion effective
10/1/2013)
Food, Chemicals,
Potash, Coal, Minerals and Mining, Frac
Sand, Pulp/Biomass and Pharma
0%
50%
100%
FY09 FY14 Estimate
Americas EMEA ASIA
0%
50%
100%
FY09 FY14 Estimate
Death Care
Process Equipment
* See our form 10Kfor fiscal year 2013 filed with the SEC and available on our website at http://ir.hillenbrandinc.com/sec.cfm
2014 Hillenbrand
Hillenbrand’s FY 13 financial performance…
*** Net Debt is Total Debt less Cash6** Free cash flow is defined as operating
cash flow less capital expenditures
FY10 includes K-Tron acquisition
($369m Net purchase price)
FY11 includes Rotex
acquisition
($240m Net purchase
price)
* See our form 10K for fiscal years 2012 and 2013 filed with the SEC and available on our website at http://ir.hillenbrandinc.com/sec.cfm
$-
$500
$1,000
$1,500
$2,000
FY 12 FY 13
Revenue $ in millions
$-
$100
$200
$300
FY 12 FY 13
Adjusted EBITDA* $ in millions
$0
$100
$200
$300
$400
$500
$600
$700
$800
FY12 FY13
Net Debt***
$0
$100
$200
FY12 FY13
Free Cash Flow**
FY13 includes Coperion
acquisition
($512m net purchase price,
including $130m pension liability)
2014 Hillenbrand
… fuels a capital deployment strategy that focuses on creating shareholder value
Reinvestment for long-term growth– Organic growth investments– Acquisitions
Meaningful dividend– $0.78 per share in 2013
(41% payout ratio)
– Annual $0.01 increase per share per year (6 consecutive years)
– Attractive dividend yield: 2.7.% (2/24/14)
Reinvestment for
Long-Term Growth
Working Capital
and CapEx
Dividends
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2014 Hillenbrand
Shareholder returns have outperformed the markets since we acquired Coperion
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10/15/12
11/15/12
12/15/12
1/15/13
2/15/13
3/15/13
4/15/13
5/15/13
6/15/13
7/15/13
8/15/13
9/15/13
10/15/13
11/15/13
12/15/13
1/15/14
2/15/14$50
$75
$100
$125
$150
$175
Value of $100 Investment on October 15, 2012 with dividend reinvestment
Hillenbrand, Inc. S&P 500 Stock Index S&P 600 Small Cap Stock Index
2014 Hillenbrand
We expect attractive revenue and earnings growth in 2014
2014 Guidance Summary 2013 2014
Revenue (millions) $1,553 $1,700
Adjusted EPS* $1.88 $2.00 - $2.10
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* See our form 10K for fiscal year 2013, and our form 10Q for the first quarter of fiscal year 2014 each filed with the SEC and available on our website at http://ir.hillenbrandinc.com/sec.cfm.
2014 Hillenbrand2014 Hillenbrand
Our path forward includes continued attractive growth
$ 0.6Billion
2013 2017 Vision2009
$1.6Billion
Organic Revenue
24% CAGR 60% Process Equipment40% Death care Products
Double digit growth targets
100%Death care Products
PEG will continue to become a larger portion of our portfolio due to higher growth than Batesville
Additional growth from acquisitions
10
2014 Hillenbrand 11
Thank you for your investment
a global diversified industrial company
Pursuing Growth • Building Value