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JPMorgan Small/Mid Cap Conference Boston, MA – November 13 th , 2006

JPMorgan Small/Mid Cap Conference Boston, MA – November 13 th , 2006. FORWARD-LOOKING STATEMENTS.

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JPMorgan Small/Mid Cap Conference Boston, MA – November 13 th , 2006

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  1. JPMorgan Small/Mid Cap Conference Boston, MA – November 13th, 2006

  2. FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Lennox International’s publicly available filings with the Securities and Exchange Commission. LII disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A reconciliation of information presented to U.S. Generally Accepted Accounting Principles (GAAP) is posted on the company’s website at www.lennoxinternational.com.

  3. Investment Highlights • Leading climate control solutions provider with 111-year history of product innovation operating in over 100 countries • Positive operating earnings growth trend with expected FY 06 adjusted EPS up 15%+ • A strong balance sheet with Debt : Capitalization of 13% provides a solid foundation for growth • Mitigating $60 mil in estimated commodities headwinds in 2006 • Successful transition to 13 SEER resulting in product mix benefits • Exposure to residential new construction limited to an estimated 20% of total sales • 4.7 million shares repurchased in first 9 months of 2006 • Dividend increased 10% in December 2005 • CEO succession plan for smooth transition

  4. Focused on Four Related BusinessesSTRONG BRANDS SOLD THROUGH MULTI-CHANNEL DISTRIBUTION Revenue Segment Profit ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration HVAC Equipment Sales, Installation, Maintenance, and Service Cold Storage Applications, Primarily for Food Preservation Central Air Conditioning, Furnaces, Heat Pumps, IAQ Equipment, Fireplaces Packaged Rooftop Units, Split Systems Notes: Data is TTM to 09/30/06; segment profit is before unallocated corporate expense; residential is net of eliminations

  5. Geography Americas Europe Asia Pacific End Market Replacement New Construction Customer Residential Commercial Business Mix 5% Source: Company estimates

  6. Manufacturing Footprint27 PLANTS IN 11 COUNTRIES                            Residential Heating & Cooling Commercial Heating & Cooling Refrigeration Joint Ventures    

  7. HVACR Market Fundamentals • Maturing markets with mid-single digit growth • Increasing shift in end markets from new constructionto replacement • Economic conditions, new construction, and weather drive demand • Regulatory environment impacts product offering • Strong competitive environment with some pricing power • Value in brands and established distribution relationships

  8. LII’s Historical GrowthSALES IN $ MILLIONS “Clearing the decks” Service Experts International A new era of growth Armstrong Refrigeration Note - 2004 sales from continuing operations

  9. Growth & Profit Improvement Initiatives • Residential Heating & Cooling • Continue to invest in product leadership • Increase sales in under-penetrated sunbelt markets • Commercial Heating & Cooling • Solidify new construction position • Penetrate replacement market opportunities • Service Experts • Protection plans to strengthen relationship with homeowners • Customer contact center to improve conversion rates • Field automation to improve efficiency • Refrigeration • Extend successful domestic business model into developing markets • Leverage internal and external intellectual property to drive innovation • Explore acquisitions to enhance capabilities and extend product reach • Acquisitions provide upside • Strategic acquisitions • Strong balance sheet • Disciplined acquisition

  10. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Replacements Drive Residential GrowthNORTH AMERICA RESIDENTIAL UNIT SHIPMENTS VS HOUSING STARTS Source: ARI, GAMA, HRAI, NAHB, CMHC

  11. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Multi-Channel Distribution OEM Distributor Dealer Home Owner BY REVENUE BY UNIT 2-Step 1-Step 2-Step 1-Step Delivering 2.8M units* Generating $1.5 billion* * 2005 company data

  12. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Product Innovation XC21 … The world’s first central air conditioner rated at 20+ SEER HSX15 … The quietest central air conditioning system G61V … The quietest gas furnace SignatureStat … Humidity and temperature control in one device PureAir … Cleans the air in your home better than any other single system Humiditrol … Whole home dehumidification system Approximately 30% of 2005 manufacturing equipment revenue came from products introduced in the past 3 years

  13. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration LII Market ShareGROWTH OPPORTUNITY IN LARGE AND GROWING SUNBELT MARKETS Sunbelt MarketFocus At or above average market share Lower than average market share

  14. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Sunbelt Opportunity 2005 U.S. Industry Shipments • Top 5 states represent 40% of all shipments • Sunbelt states represent 60% of all shipments • Growth in sunbelt outpacing others Source: ARI, GAMA

  15. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration The State of the RNC Industry Units New Construction Market Forecast Remains Above Robust Years Sources: NAHB, single and multi-family

  16. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Strong Position with 17 of Top 20 BuildersLENNOX SHARE % : █ 1-33% █ 34-66% █67-100% Source: 2005 GIANTS Listing, Builder Magazine

  17. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration 36% CAGR Commercial End Market MixINCREASING MORE PROFITABLE REPLACEMENT SALES LennoxReplacement Sales Growth Total Market New Construction Replacement Source: Industry data and company estimates

  18. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Commercial Regional Distribution CentersINCREASE PENETRATION IN REPLACEMENT MARKET 24 - 48 Hour Response

  19. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Retail Education Commercial Warehouses Parking Garage/Auto Svc Office and Bank Other Commercial Market SegmentationNEW CONSTRUCTION (Square Footage) Source: 2Q06 Dodge Analytics & company estimates

  20. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration A Strong Base in RetailNEW CONSTRUCTION (Square Footage) Retail Education Commercial Warehouses Parking Garage/Auto Svc Office and Bank Other Strengthen Position Source: 2Q06 Dodge Analytics & company estimates

  21. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration New Segment OpportunitiesNEW CONSTRUCTION (Square Footage) Retail Education Commercial Warehouses Parking Garage/Auto Svc Office and Bank Other New Focus/New Products Source: 2Q06 Dodge Analytics & company estimates

  22. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Continuous Improvements at Service Experts • Over 78% of sales focused on more profitable and stable service/replacement opportunities • Common IT system, financial controls,and regional accounting centers deployed • Inventory Management & Replenishment programreducing working capital requirements to <8% of sales • 49 graduates of GM Fast Track development program adding bench strength • Home Health Report Card - IAQ revenue growing over 40% in 2006 • Continued roll-out of common branding & Standards of Excellence • Profitable IBS commercial business model growing over 20% CAGR since 2000 • Over 85% of service technicians are NATE certified

  23. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Protection Plan ProgramsONLY 1 IN 20 HOMEOWNERS HAS A SERVICE AGREEMENT Demand Service OPPORTUNITY Renewals Protection Plans Replacement Sales Accessories/IAQ Sales Tune-Ups TRUST Closing Rate More Than Double for Protection Plan Customers

  24. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Customer Contact Center Current situation: • First contact is with a local Customer Service Representative • High CSR turnover (45%) • Little or no marketing intelligence collected on customers • Inability to consistently implement sales and marketing initiatives Future situation:Consolidate calls into two outsourced locations to exclusively support Service Experts • Inbound calls • Receive, handle or route all customer/prospect calls • Warm transfer to local center • Outbound calls • Customer satisfaction survey • Maintenance appointment setting • Telemarketing Net Result is Low Call Conversion Rates (52%)

  25. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Improve Technician Efficiency • Project “FAST” (Field Automation for Service Technicians) • Deploy mobile wireless solution to improve the efficiency (cost reduction) and effectiveness (revenue increase) of field technicians • Strengthen Service Experts control environment • Key Functionality • Early phases • Electronic service work orders • Driving directions (with GPS) • Interactive time stamps and enhanced paging • Up-sell prompts • Credit card, check, cash transactions with signature capture • Future phases • Full integration with business system • Immediate revenue recognition • Inventory management system with bar-coding • Equipment diagnostics

  26. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Demand Enablers Customer Contact Center Driving Demand Field Application for Service Technicians Exploiting Demand Efficiently ConversionRate Improvement 10% 20% 30% Service Revenue Opportunity $18m $36m $54m Additional Calls Per Tech 2/week 3/week 4/week Service Revenue Opportunity $24m $36m $48m Creating a World Class Service Organization

  27. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Worldwide Product Segments$17.5 BILLION TOTAL MARKET ($ BILLIONS) $2.2 Commercial Systems $3.1 Transport Refrigeration $2.9 Refrigerated Cases/Display $1.0 Non-Food Ultra Low Temp $1.2 Walk-in Coolers $2.3 Industrial/Ammonia $1.9 Vending Ice Machines $2.1 Self Contained/Reach-In $0.8 Specialty Chillers Sources: Fredonia, Census Bureau, Frost and Sullivan, company estimates

  28. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration 2004 2005 2006 2007 2008 Organic RoadmapSTRATEGIC DRIVERS Plan development and execution Product Development Strategy 3 year roadmap Stage Gate® Open innovation Brand strategy >8% revenue growth/year Product Leadership Plan development and execution Customer Interface Strategy Service alignment Customer segmentation Unparalleled customer service Customer Intimacy Plan development and execution Manufacturing Excellence Strategy Low-cost product platforms Open innovation >15% cost reduction Operational Excellence

  29. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration 16% CAGR REVENUE EBIT 10%+ Developing MarketsSTRATEGIC DRIVERS • Represent approximately 20-25% of global refrigeration market today • Developing refrigeration infrastructure • Development of retail food channels • Average per capita spend ~10% of developed markets • Emerging economies and infrastructure offer attractive market growth rates • China ~12-14% • India ~12-14% • Southeast Asia ~ 9-11% • South America ~6-9% Heatcraft Model in Place in Brazil Source: McKinsey report, internal estimates

  30. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Potential Adjacent Markets • Common customer base and channels • Leverage technology and manufacturing processes • Supporting services and technology • Expands our influence to key end use sectors • Expands available market Food Retail Food Production Food Service

  31. ResidentialHeating & Cooling CommercialHeating & Cooling Service Experts Refrigeration Worldwide Product Segments$17.5 BILLION TOTAL MARKET ($ BILLIONS) $9.5 Expanded MarketOpportunity $2.2 Commercial Systems $3.1 Transport Refrigeration $2.9 Refrigerated Cases/Display $1.0 Non-Food Ultra Low Temp $1.2 Walk-in Coolers $2.3 Industrial/Ammonia $1.9 Vending Ice Machines $2.1 Self Contained/Reach-In $0.8 Specialty Chillers Sources Fredonia, Census Bureau, Frost and Sullivan, company estimates

  32. Financial Overview

  33. 5 Years of Sales & Profit Growth$ MILLIONS EXCEPT PER SHARE DATA Adjusted Income From Continuing Operations* Sales Adjusted EPS* * Exclusive of restructuring, non-recurring items, non-operating gains/losses and goodwill impairment charges

  34. Solid First 9 Months Performance$ MILLIONS EXCEPT PER SHARE AND RATIO DATA 20062005% Chg Sales $ 2,808.7 $ 2,495.6 +13% Net Income 120.6 108.9 Discontinued Operations #… ---- 1.3 (Gains), losses & other expenses # * 3.1 (15.9) Restructuring charge #… 8.5 1.6 Tax items…… (8.8) ---- Cumulative effect of accounting change # …---- (0.2) Adjusted Income from Continuing Operations $123.4 $95.7 +29% Diluted EPS, as adjusted 1.65 1.37 +20% Total Debt at 09/30 $120.0 $236.1 -49% Debt : Cap at 09/30 13% 27% * Net of realized gains on settled futures contracts# Net of income tax

  35. A Stronger Balance Sheet Reduced Total Debt by $570 Million in Past 5 Years * As of September 30, 2006

  36. Financial Objectives FULL-YEAR 2006 GUIDANCE (provided 10/26/06) • GAAP EPS of $2.00 to $2.10; adjusted EPS exceeding this range • Revenue growth of approximately 10% • Capital expenditures of approximately $70 million LONG-TERM • Annual revenue growth of 6 to 8% plus acquisition activity • 10% segment profit margin…a minimum of 50 bps improvement per year • ROIC = 5% greater than cost of capital • Debt : Capitalization below 40%

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