The Global Leader in Motion and Control Technologies Evercore ISI Industrial Conference New York, NY Lee C. Banks President & Chief Operating Officer March 3, 2015
Parker at a Glance The Global Leader in Motion and Control Technologies (NYSE:PH) Centrally Led, Decentralized Company Broad Market Exposure 13 Billion in Sales 57,000 Employees 3
Why Invest in Parker Winning Culture & Values Strong Competitive Advantages Clear Strategy and Goals Consistent Execution and Performance Opportunities for Growth 4
Parkers Culture & Values The Foundation of Our Success Our success is founded on fair dealing, hard work, coordination of effort and quality of products. - Arthur L. Parker Founder Winning Culture Passionate People Valued…
Why Invest in Parker Winning Culture & Values Strong Competitive Advantages Clear Strategy and Goals Consistent Execution and Performance Opportunities for Growth 6
1 Position in Motion & Control Industry Ample Opportunity for Growth in a 120 Billion Global Market Top All Other Competitors 7
The Broadest Technology Platform Yields Higher Market Share and Margins Motion Systems Hydraulics Pneumatics Electromechanical Flow & Process Control Fluid & Gas Handling Process Control Climate Control Filtration &…
A Unique Competitive Advantage How We Win Premier Customer Service Global Distribution, Service & Support Patent Protection & Proprietary Systems Operational Excellence 9
Solving the Worlds Greatest Engineering Challenges Our focus on solving some of the worlds greatest engineering challenges sparks our passion for innovation and secures future growth. Food Water Energy Transportation Defense…
Balanced Globally Benefit from Growth Anywhere in the World Reporting Segments Global Technology Platforms Aerospace Aerospace Systems Systems Motion 17% 17% Systems Diversified 30% Industrial North America Filtration & 43%…
Powerful Aftermarket Exposure Half of Industrial Sales from High Margin Channel Parker Distributors Close to the Customer Independent Partners 50% 50% Technical Expertise OEM Aftermarket Value Added Services ParkerStores…
Why Invest in Parker Winning Culture & Values Strong Competitive Advantages Clear Strategy and Goals Consistent Execution and Performance Opportunities for Growth 13
Clear Vision and Goals Vision Vision The 1 Motion & Control Company 1 Premier Customer Service Goals Financial Performance Profitable Growth 14
The Win Strategy 57,000 Employees All on the Same Page 15
Strategic Margin Drivers Our Goal is to Consistently Improve Margins 50 bps 50 bps 50 bps Innovation Europe System Solutions Higher Margin Revenue Aerospace Optimize Footprint Increased Content 25B Wins DAT Model Normalized…
Raising the Floor and Ceiling on Margins Our Long Term Actions Are Producing Record Margins 18.0% 9.00 15.7% 16.0% 14.8% 15.2% 14.3% 8.00 13.8% 14.1% 13.8% 12.5% 13.4% Segment Operating Margin % 14.0% 7.00 11.3% 11.4%…
Why Invest in Parker Winning Culture & Values Strong Competitive Advantages Clear Strategy and Goals Consistent Execution and Performance Opportunities for Growth 18
Driving Free Cash Flow Free Cash Flow Net Income in m illions 1,400 1,200 1,000 800 600 400 200 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Free Cash Flow Net Income * Free Cash Flow =…
Consistent Cash Generation 13 Years of 10% as a Percentage of Sales 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 * Cash Flow from Operations % = (Cash…
58 Fiscal Years of Increasing Dividends Among the Top 5 Longest Records in the S&P 500 FY15 2.52 Run Rate 2.50 152% Increase Last Five 2.00 Years 1.50 1.00 0.50 0.00 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12…
Why Invest in Parker Winning Culture & Values Strong Competitive Advantages Clear Strategy and Goals Consistent Execution and Performance Opportunities for Growth 22
Parkers Growth Strategy Driven by Global Reach & Technology Synergies Emerging Markets Expanded Distribution Systems Solutions Innovation Value Added Acquisitions 23
Continued Emerging Market Expansion Proven Method of Expansion in Fast Growing Markets Establish Sales Build Position and Engineering and Presence Market Share Sales Support Follow the Customer Grow Distribution Serve Local…
Expanding Distribution Network Innovative Service Points with Outlets in 83 Countries 2,300 8,000 700 Technology Center 90 1,100 Tags Deployed in 50 Countries 25
Distribution Value Streams Service is a Key Differentiator Motion & Control Breadman Tech Services Training Systems Kitting & Sub-assemblies Vendor Managed Strategic Hose Assembly Power Units Inventory Account Manager 26
Increasing Systems Sales Our Changing Mix of Revenues Drive Higher Margins Systems Sales 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Past Today Future 27
Total Systems Solutions Capabilities Material Handling Example: Reach Stacker Hydraulics Systems 28
Total Systems Solutions Capabilities Material Handling Example: Reach Stacker Electronic Control Systems 29
Total Systems Solutions Capabilities Material Handling Example: Reach Stacker Engine Cooling Systems 30
Driving Systems Solutions Transportation Example Bus & Coach Pneumatics Systems 31
Driving Systems Solutions Transportation Example Bus & Coach Power Conversion Systems 32
Driving Systems Solutions Transportation Example Bus & Coach Engine Cooling Systems 33
Driving Systems Solutions Transportation Example Bus & Coach Electronic Control Systems 34
Aerospace Systems Solutions Parkers Expertise from Nose to Tail Hydraulics Systems Ground service equipment Reservoirs Accumulators Filters Valves Heat exchangers Pumps Control electronics & software 35
Aerospace Systems Solutions Parkers Expertise from Nose to Tail Engine Systems Fuel spray nozzles Thrust reverser actuators Manifolds & pigtails Engine build unit Heat management Oil pumps Oil reservoirs Pneumatics 36
Aerospace Systems Solutions Parkers Expertise from Nose to Tail Flight Control Systems Trim actuation Cockpit controls Primary/secondary flight control actuators Servovalves Control electronics & software Surface-position…
Aerospace Systems Solutions Parkers Expertise from Nose to Tail Fuel & Interting Systems Gauging management Pumps Valves Control electronics & software Inerting 38
A Rigorous Approach to Innovation Protected by our growing patent portfolio New to the Market, New to the World 39
IndegoTM Exoskeleton Human Motion & Control 40
Dissolvable Sealing System For Hydraulic Fracturing Parkers Dissolvable Sealing System makes wells with long horizontal segments possible. Frac balls Natural Gas McPherson, Kansas, U.S.A. are used as hydraulic seals to isolate the…
Value Added Acquisition Strategy Proven Record of Acquiring, Integrating and Improving Objectives Technology & Product Expansion FY01- FY15 Access to New Markets 102 Acquisitions Geographic Expansion Aftermarket Exposure +5…
Why Invest in Parker Winning Culture & Values Strong Competitive Advantages Clear Strategy and Goals Consistent Execution and Performance Opportunities for Growth 43
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