2017 Investor Presentation -...
Transcript of 2017 Investor Presentation -...
2017 Investor Presentation
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This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally use
words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning
the future. It is possible that our future performance may differ materially from current expectations expressed in these forward-looking statements, due to a variety of factors
such as: increasing price and product/service competition by foreign and domestic competitors, including new entrants; technological developments and changes; the ability to
continue to introduce competitive new products and services on a timely, cost-effective basis; our mix of products/services; increases in raw material costs which cannot be
recovered in product pricing; domestic and foreign governmental and public policy changes including environmental and industry regulations; threats associated with and efforts
to combat terrorism; protection and validity of patent and other intellectual property rights; the successful integration and identification of our strategic acquisitions; the cyclical
nature of our businesses; and the outcome of pending and future litigation and governmental proceedings. In addition, such statements could be affected by general industry and
market conditions and growth rates, the condition of the financial and credit markets, and general domestic and international economic conditions including interest rate and
currency exchange rate fluctuations. Further, any conflict in the international arena may adversely affect general market conditions and our future performance. We refer you to
the documents we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these
and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this
press release. We undertake no obligation to update any forward-looking statement.
Forward Looking Statements
Use of Non-GAAP Financial Measures
All financial and percentage comparisons in this presentation are made to the same quarter of the previous year, unless otherwise stated. Certain full year 2016 measures of
operating performance are measured on a non-GAAP basis. The measures of operating performance of CBF segment EBIT and EBIT margin are presented to exclude the
impairment charges at Carlisle Brake & Friction. Management believes adjusted results more accurately portray the ongoing operational performance and fundamentals of the
underlying business and present a more useful comparison between current results and results in prior operating periods. Management also uses the non-GAAP financial
measures in making financial, operating and planning decisions and in evaluating the Company’s performance.
See appendix for the reconciliation of these measures to the most directly comparable GAAP measures. Throughout the presentation each non-GAAP measure is denoted with
an *.
Carlisle Strategic Vision and Targets
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Carlisle Companies Incorporated is a diversified,
global portfolio of niche brands and businesses
with highly engineered and high margin products.
Carlisle is committed to generating superior
shareholder returns by combining a unique
management style of decentralization,
entrepreneurial spirit, active M&A, and a
balanced approach to capital deployment, all
with a culture of continuous improvement as
embodied in the Carlisle Operating System.
5 Business Segments
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Self-Adhering
and Fluid-Applied
Air and Vapor
Barriers
Roof Garden Assemblies
Above Grade
Waterproofing
Systems
Wall Insulation
Below Grade
Waterproofing and
Drainage Systems
HVAC Sealants
and Adhesives
Single-Ply
Roofing Systems
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CCM: Building Envelope 2016 Sales: $2Bn, 10-year Sales CAGR: 4%,
2016 EBIT 21%
Passenger Cabin:
Wi-Fi, Galley, Overhead
& Underfloor Equipment
Racks, In-Seat
Interconnect Solutions
In-Seat:
Fiber Optic Cable, High
Speed Digital and Data
Cables, Octax®, Backshells
and Harness Assemblies
Connectivity:
ARINC 791, Direct Mount,
IGA, HGA, ATG Installation
Solutions
Flight Deck:
Electronic Flight Bag,
Avionics and Aircraft
Systems Management
Interconnect Solutions
Aircraft Systems Management:
Data Bus, Power and Video
Assemblies, Specialty Connectors,
Instrument Control Panels, Fiber
Optic Cable, Blanking Plates and
Surrounds, Backlit Switch Panel
Engine:
Power and Grounding,
Lightning Strike
Protection, Engine
Control and Sensing, APU
Whole Aircraft
Power and Grounding:
Engine, Thermazone and
Swamp Wire, Composite
Aerospace Wire, Bonding
Straps and Lugs, Terminal
Blocks, Power Feeder
Assemblies
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CIT: Commercial Aerospace2016 Sales: $835M, 10-year Sales CAGR: 22%,
2016 EBIT 17.3%
Ultrasound
Cardiac, Trans-esophageal,
General Imaging and
Imaging Catheter Assemblies
Surgical
Video Endoscopy,
Arthroscopy Shavers,
Power Hand Instruments
Interventional
EP Mapping Ablation,
Pain Management,
Pacing
Patient Monitoring
Disposable Lead-wire
Assemblies,
ECG & EKG, SpO2,
Defibrillation
Medical Suite
Interconnects
CT/MRI/X-Ray, Suite
Infrastructure,
Medical Bed Harness
Electrosurgical
Bipolar/Monopolar,
Resection,
Cut/Coagulation
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CIT: Medical
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Storage, Handling, Transport
and Food Bars
Food Prep,
Cookware, Catering
Equipment and
Bar Supplies
Dinnerware, Drinkware,
Tabletop Accessories,
Tablecoverings and
Displayware
Warewashing,
Cleaning Tools,
Floor Care and
Waste Management
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CFS: FoodService2016 Sales: $250M, 10-year Sales CAGR: 3%,
2016 EBIT 12.6%
Healthcare
Meal Delivery, Induction Heating
Systems and Traytop Wares
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Mixing, Metering,
and Color Change
Systems
Applicator
Safety
equipment
Curing
Systems
Air Filtration Systems
Robotic
Electrostatic
Atomizers
Fluid
Delivery
and Pump
Systems
Manual Spray
Applicators
CFT: Transportation
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2016 Sales: $269M, 2016 EBIT 12.3%
Electrostatic Manual Spray
Guns, Low Pressure Pump
systems, Applicator Safety
equipment
Manual Spray Guns,
pressure tanks and pressure cups
Manual Spray Guns, pressure
tanks and pressure cups
Interior: on wood or plastic
Air-Assist Airless spray equipment
and heavy duty pump systems
CFT: Industrial
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Master Cylinders
Power Transmission
Materials
Integrated SAHR
Park Brakes
RT Series
Brakes
Dual Accumulator
Charge Valves
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CBF: Construction2016 Sales: $268M, 10-year Sales CAGR: 9%,
2016 EBIT 2.2%*
2100 Series
Power Valve
Hydraulic Slack Adjuster
Brake Control
Manifold
G Series Parking Brake
Brake MaterialsHeavy Duty Mining Haulage
Service Brakes
CBF: Mining
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2017 Q3 Highlights
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($ millions, except per share amounts) Q3 ’17 Q3 ‘16 Δ
Net Sales $1,089.1 $991.0 +9.9%
Income from Continuing Operations,
net of Tax$86.4 -$9.5 +1,009.5%
Adjusted Income from Continuing
Operations, net of Tax*$86.4 $113.1 -23.6%
Diluted EPS $1.37 -$0.15 1,013.3%
Adjusted Diluted EPS* $1.37 $1.74 -21.3%
EBIT $142.9 $36.4 +292.5%
Adjusted EBIT* $142.9 $177.9 -19.6%
Special Items After-Tax on EPS $0.25 $0.03 +733.3%
Free Cash Flow $125.2 $143.8 -12.9%
2017 Notable Items
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• CCM– YTD growth outpacing favorable U.S. Non-Residential market growth rates
– Announced the acquisition of Accella Performance Materials for $670M, the largest in Carlisle’s history
• CIT– Transition within in-flight entertainment connectivity technology in commercial aerospace markets– Ramp up of SatCom business on track
– Medical pipeline robust
• Capital Deployment‒ Share repurchases of $266M YTD
‒ Deployed nearly $1B YTD on 4 acquisitions
• 2017 Outlook‒ Expect $45-50M of restructuring, facility rationalization, and acquisition related charges in 2017
‒ Expect total sales growth in high single digits
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A Premier Specialty
Polyurethane Growth Platform
The $670 million acquisition of Accella,
adds Roof Coatings, Spray Foam, and
Silicone Products to Carlisle Construction
Materials’ product suite in the $15B global
construction related polyurethane market
Part of our well-established strategy of
providing customers with high quality,
innovative solutions for building envelope
applications.
Acquisition of Accella Performance Materials
-100.00%
-50.00%
0.00%
50.00%
100.00%
150.00%
S&P MidCap 400 S&P 500 Carlisle Companies Inc
10-Year Total Shareholder ReturnCSL vs S&P500 and S&P Midcap 400
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21.0% EBIT
17.3% EBIT
CSL 106%
S&P500 65%
S&P400 MidCap 81%
Lean and Six Sigma principles
to maximize performance and eliminate
waste
Inspires a culture of
continuous improvement
Provides exceptional
value for our customers and shareholders
Carlisle Operating System (COS): Accumulated savings of over $220 million since 2008 launch
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Consistent Strategy for Creating Value Since 2008
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Drive Growth Through Investment in a Diversified Platform of High Margin Businesses
• Approximately $800M of Capital Expenditures
Aggressively Seek Complementary Acquisition Opportunities
• Deployed approximately $3.4Bn with significant additional capacity to acquire
Return Cash through a Flexible Share Repurchase Program and a Consistent Dividend
• Approximately $600M of dividends and $500M of share repurchases
5 Reasons to Invest in Carlisle
Strong platforms
A balance sheet with capacity to support future growth
A compelling capital deployment strategy
A culture of Continuous Improvement
A track record of success
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Appendix
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Reconciliation of GAAP to Non-GAAP MeasuresRelated to Impairment Charges
Year Ended December 31, 2016
Carlisle Companies Incorporated Carlisle Brake & Friction
Diluted Income Income from Earnings (in millions, except percentages EBIT Tax Continuing per Share from EBIT
and per share amounts) EBIT
Margin Impact
Operations
Cont. Ops.
EBIT Margin
As Reported $ 441.1 12.0 % $ 159.7 $ 250.8 $ 3.83 $ (135.7) (50.5) %
Impairment charges 141.5 3.9 8.8
(1)
132.7 2.03 141.5 52.7
Excluding goodwill and intangible Impairments $ 582.6 15.9 % $ 168.5 $ 383.5 $ 5.86 $ 5.8 2.2 %
(1) The reconciling item related to income tax expense for the full year 2016 reflects the tax benefit of the impairment charges, with the
fourth quarter reconciling item reflecting the difference between the full year tax benefit of $8.8 million and the first nine months of $18.9 million, resulting in tax expense of $10.1 million in the fourth quarter of 2016.
This selected Non-GAAP financial information for the full year 2016 are presented to exclude the impairment charges at Carlisle Brake & Friction. Management believes adjusted results more accurately portray the ongoing operational performance and fundamentals of the underlying business and present a more useful comparison between current results and results in prior operating periods. Management also uses the non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.
Carlisle Companies Incorporated GAAP to Non-GAAP Reconciliation