ITT : Bank of America Global Industrials Conference 2025 Presentation

Published: 2025-03-18 12:41:05 ET ITT

Bank of America

Global Industrials

Conference 2025

March 18, 2025

ITT AT A GLANCE

BUSINESSES

END MARKETS

GEOGRAPHY

27%

34%

Connect & Control

Motion

41%

31%

Technologies

29%

North

Europe

Chemical and

America

$3.6B

31%

29%

Industrial

Pumps

REVENUE

Automotive

AFTERMARKET

EMERGING

MARKETS

12%

39%

Rail

Defense

Industrial

18%

Process

Aerospace

10%

General

Energy

ROW

Asia Pacific

Industrial

Represents composition of pro forma revenue for 2024 to include recent acquisitions and divestitures

Leading manufacturer of critical components for harsh environment applications

Outperforming in attractive end markets

Differentiation through operational excellence and innovation

Value creation through growth and margin expansion

All results unaudited, except revenue.

ITT BUSINESSES

LEADING PORTFOLIO OF DIFFERENTIATED CRITICAL COMPONENTS AND SOLUTIONS

MOTION

TECHNOLOGIES

Other

INDUSTRIAL

PROCESS

Mining

CONNECT & CONTROL

TECHNOLOGIES

Energy

Rail

General

Industrial

Aerospace

General

Industrial

$1.4B

REVENUE

Automotive

Energy $1.4B

REVENUE

Chemical

$0.8B

REVENUE

Defense

Represents composition of revenue for 2024; graphs are pro forma for the portfolio changes in 2024 from M&A.

2024 | GROWTH, EXECUTION, TRANSFORMATION

+11% TOTAL REVENUE GROWTH; +7% ORGANIC

•

+9% CCT on connectors share gains and defense strength

+8% IP delivering robust pump project backlog

+5% MT driven by Friction OE outperformance

FY MARGIN ECLIPSED LONG-TERM TARGET

•

17.7% operating margin expanded 80 bps vs prior year

+230 bps from volume, productivity and price / cost accretion 16% OI growth, more than double organic revenue growth

PORTFOLIO SHIFT THROUGH ACCELERATED CAPITAL DEPLOYMENT

•

$865M deployed to high-growth flow and connector acquisitions Reduced automotive exposure through strategic divestiture Compounding above-market organic growth with M&A contribution

For non GAAP reconciliations, refer to appendix.

2025 | COMPOUNDING GROWTH

Value creation through organic growth and margin expansion continues

Sustaining differentiation through outstanding execution and innovation

Compounding organic value creation with acquisition contributions

Actionable M&A pipeline

Q1 2025 OUTLOOK

Orders up led by pumps and connectors, partially offset by lower Boeing activity

Sales tracking with share gains (pump projects, auto) offsetting lower industrial activity

Margin expansion continues; expect Motion Technologies above 20%

EPS in line with expectations, overcoming loss of income from Wolverine and higher interest

Strong cash generation funding growth investments and acceleration of buybacks

KEY PERFORMANCE INDICATORS & NON-GAAP MEASURES

Management reviews a variety of key performance indicators including revenue, operating income and margin, earnings per share, order growth, and backlog. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for measures determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators for purposes of our reconciliation tables.

Organic Revenues and Organic Orders are defined, respectively, as revenue and orders, excluding the impacts of foreign currency fluctuations, acquisitions, and divestitures that may or may not qualify as discontinued operations. Current year activity from acquisitions is excluded for twelve months following the closing date of acquisition. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Prior year revenue and orders are adjusted to exclude activity during the comparable period for twelve months post-closing date for divestitures that do not qualify as discontinued operations. We believe that reporting organic revenue and organic orders provide useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.

Adjusted Operating Income is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, and unusual or infrequent operating items. Special items represent charges or credits that impact current results, which management views as unrelated to the Company's ongoing operations and performance. Adjusted Operating Margin is defined as adjusted operating income divided by revenue. We believe these financial measures are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.

Adjusted Income from Continuing Operations is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, income tax settlements or adjustments, and unusual or infrequent items. Special items represent charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company's ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred and the tax deductibility under local tax rules. Adjusted Income from Continuing Operations per Diluted Share (Adjusted EPS) is defined as adjusted income from continuing operations divided by diluted weighted average common shares outstanding. We believe that adjusted income from continuing operations and adjusted EPS are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.

Free Cash Flow is defined as net cash provided by operating activities less capital expenditures. Free Cash Flow Margin is defined as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin provide useful information to investors as it provides insight into a primary cash flow metric used by management to monitor and evaluate cash flows generated by our operations.

ITT Inc. Non-GAAP Reconciliation Statements

(In millions; all amounts unaudited)

Reconciliation of Revenue to Organic Revenue

Full Year 2024

CCT

Elim

Total

2024 Revenue

1,447.8

1,361.0

825.1

(3.2)

3,630.7

Less: Acquisitions

156.2

73.9

230.1

Less: FX

(9.7)

(13.0)

(2.0)

(24.7)

2024 Organic revenue

1,457.5

1,217.8

753.2

(3.2)

3,425.3

2023 Revenue

1,457.8

1,129.6

699.4

(3.8)

3,283.0

Less: Divestitures

68.7

10.2

0.1

79.0

2023 Organic revenue

1,389.1

1,129.6

689.2

(3.9)

3,204.0

Organic Revenue Growth - $

68.4

88.2

64.0

221.3

Organic Revenue Growth - %

4.9%

7.8%

9.3%

6.9%

Reported Revenue Growth - $

(10.0)

231.4

125.7

347.7

Reported Revenue Growth - %

(0.7%)

20.5%

18.0%

10.6%

Reconciliation of Orders to Organic Orders

Full Year 2024

CCT

Elim

Total

2024 Orders

1,471.6

1,484.6

833.0

(3.5)

3,785.7

Less: Acquisitions

206.0

61.8

267.8

Less: FX

(8.6)

(7.6)

(2.1)

(18.3)

2024 Organic orders

1,480.2

1,286.2

773.3

(3.5)

3,536.2

2023 Orders

1,487.5

1,227.0

738.3

(3.3)

3,449.5

Less: Divestitures

68.7

7.3

76.0

2023 Organic orders

1,418.8

1,227.0

731.0

(3.3)

3,373.5

Organic Orders Growth - $

61.4

59.2

42.3

162.7

Organic Orders Growth - %

4.3%

4.8%

5.8%

4.8%

Reported Orders Growth - $

(15.9)

257.6

94.7

336.2

Reported Orders Growth - %

(1.1%)

21.0%

12.8%

9.7%

Note: Immaterial differences due to rounding.

ITT Inc. Non-GAAP Reconciliation Statements

(In millions; all amounts unaudited)

Reconciliations of Operating Income/Margin to Adjusted Operating Income/Margin

Full Year 2024

Full Year 2023

CCT

Corporate

ITT

CCT

Corporate

ITT

Reported Operating Income

314.6

276.3

146.1

(61.0)

676.0

230.8

243.6

107.5

(53.7)

528.2

(Gain) loss on sale of businesses

(47.8)

15.3

Restructuring costs

2.7

3.0

2.4

8.1

4.0

4.6

1.3

9.9

Impacts related to Russia-Ukraine war

(0.6)

1.3

1.2

2.5

Acquisition and divestiture related costs

4.2

2.8

7.0

2.4

Other special items [a]

0.1

(0.1)

(3.7)

Adjusted Operating Income

268.9

283.5

151.3

(61.0)

642.7

236.2

249.4

126.4

(57.4)

554.6

Change in Operating Income

36.3%

13.4%

35.9%

13.6%

28.0%

Change in Adjusted Operating Income

13.8%

13.7%

19.7%

6.3%

15.9%

Reported Operating Margin

21.7%

20.3%

17.7%

18.6%

15.8%

21.6%

15.4%

16.1%

Impact of special item adjustments

-310 bps

50 bps

60 bps

-90 bps

40 bps

50 bps

270 bps

80 bps

Adjusted Operating Margin

18.6%

20.8%

18.3%

17.7%

16.2%

22.1%

18.1%

16.9%

Change in Operating Margin

590 bps

-130 bps

230 bps

250 bps

Change in Adjusted Operating Margin

240 bps

-130 bps

20 bps

80 bps

Disclaimer

ITT Inc. published this content on March 18, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 18, 2025 at 16:40:07.727.