Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — Q3 2021 Earnings Presentation
29 slides from Roper Technologies's earnings presentation, Oct 22, 2021
Slide 1: Q3 2021 Financial Results
A DIVERSIFIED TECHNOLOGY COMPANY Q3 2021 FINANCIAL RESULTS OCTOBER 22, 2021 SIMPLE IDEAS. POWERFUL RESULTS.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The information provided in this presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans,
Slide 3: Reg. G Disclosure
REG. G DISCLOSURE Today’s Conference Call Will Discuss Results Primarily on an Adjusted (Non-GAAP) Basis. During and Subsequent to Q3, Roper Signed Definitive Agreements to Divest its TransCore, Zetec, and CIVCO Radiotherapy Businesses. Results for these Businesses are Reported as Discontinued Opera
Slide 4: Roper Conference Call
ROPER CONFERENCE CALL • Q3 Enterprise Highlights & Financial Results • Segment Detail & Outlook • Q4 & FY 2021 Enterprise Guidance • Q&A PAGE 4
Slide 5: Q3 Summary
Q3 SUMMARY • Another Quarter of Excellent Performance • Revenue, EBITDA, and DEPS Grew 20%+ • +12% Organic Revenue Growth • Continued Strong Software Recurring Revenue Growth • Strong Customer Demand; Product Businesses Executing Well Despite Challenging Supply Chain Environment • Continued Rapid De
Slide 6: Enhancing Portfolio Quality
ENHANCING PORTFOLIO QUALITY • Divesting TransCore, Zetec, and CIVCO Radiotherapy for a Combined $3.15B – ~$160M EBITDA in 2021 – ~20x 2021 EBITDA • Higher Quality Portfolio Following Transactions • Accelerates and Amplifies Roper’s Ability to Deploy Capital; $5B+ of M&A Firepower Including Deal Proc
Slide 7: Q3 Results (Bridge to Continuing Operations)
Q3 RESULTS (BRIDGE TO CONTINUING OPERATIONS) Q3’21 Discontinued Q3’21 Including Discontinued Operations Continuing Operations Operations Revenue $1,621 $(159) $1,463 EBITDA $602 $(44) $558 DEPS $3.91 $(0.31) $3.60 DEPS Guidance $3.80 - $3.84 Free Cash Flow $431 In $ millions, except DEPS. PAGE 7 Res
Slide 8: Q3 Income Statement Metrics
Q3 INCOME STATEMENT METRICS (CONTINUING OPERATIONS) Q3’20 Q3’21 Revenue $1,201 $1,463 +22%; Organic +12% Gross Profit $813 $996 +23% Gross Margin 67.7% 68.1% EBITDA $462 $558 +21% EBITDA Margin 38.5% 38.2% Interest Expense $55 $58 Tax Rate 21.8% 21.1% Net Earnings $308 $384 +24% DEPS $2.91 $3.60 +24
Slide 9: Deleveraging Update
DELEVERAGING UPDATE (INCLUDING DISCONTINUED OPERATIONS) EBITDA* (TTM) FREE CASH FLOW* (TTM) 85% of +$313 +$274 EBITDA $1,981 $2,293 $1,668 $1,941 12/31/20 9/30/21 12/31/20 9/30/21 NET DEBT* NET DEBT-TO-EBITDA* (TTM) $(1,276) $9,258 $7,983 4.7x 3.5x 12/31/20 9/30/21 12/31/20 9/30/21 Reduced Leverage
Slide 10: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL (1) AS % OF Q3 ANNUALIZED REVENUE 2021 2019 (AS 2020 (AS (CONTINUING REPORTED) REPORTED) OPS.) • Divestitures Meaningfully Improve Net Working Capital Position (3.1)% (6.3)% • NWC Lower by $200M+ • Significant Decrease in Unbilled (11.9)% Receivables Negative
Slide 11: Segment Performance
SEGMENT PERFORMANCE
Slide 12: Application Software
APPLICATION SOFTWARE Q3 HIGHLIGHTS REVENUE EBITDA • Double-Digit Organic Revenue Growth +34% +33% vs PY vs PY _____ – Recurring Revenue +DD (~75% of Segment) +10% • Continued Broad-Based Growth Organic – Deltek Strength – GovCon Wins; Enterprise SaaS Momentum; PS Strength $405 $451 $603 $168 $201 $2
Slide 13: Network Software & Systems
NETWORK SOFTWARE & SYSTEMS (CONTINUING OPERATIONS) Q3 HIGHLIGHTS REVENUE EBITDA • Segment Now >90% Software +19% +21% vs PY vs PY _____ • Continued Strong Software Recurring Revenue Growth & Customer Retention Rates +17% Organic • Record Carrier Additions for DAT; Increased Revenue Per Customer; Fav
Slide 14: Measurement & Analytical Solutions
MEASUREMENT & ANALYTICAL SOLUTIONS (CONTINUING OPERATIONS) Q3 HIGHLIGHTS REVENUE EBITDA • Organic Revenue Grew 20%+ Excl. Verathon +10% vs PY (1)% _____ vs PY • Backlog Up 50%+ +9% • Strong Customer Demand; Margins In Line with Organic Expectations; Businesses Executed Well Despite Supply Chain Chal
Slide 15: Process Technologies
PROCESS TECHNOLOGIES (CONTINUING OPERATIONS) Q3 HIGHLIGHTS REVENUE EBITDA • Strong Demand for Our Solutions; Orders and Backlog Up ~50% +17% vs PY • Accelerated Upstream O&G Growth _____ +28% vs PY +16% • Continued Cornell Share Gains; IoT Pumping Organic Solutions Ramping • Businesses Managing Thro
Slide 16: 2021 Guidance
2021 GUIDANCE
Slide 17: Guidance Update
GUIDANCE UPDATE (CONTINUING OPERATIONS) Adjusted DEPS Low End High End New FY’21 Guidance (Continuing Operations) $14.08 $14.12 FY Discontinued Operations $1.18 FY’21 DEPS Including Discontinued Operations $15.26 $15.30 Previous FY’21 Guidance Including Discontinued Operations $15.00 $15.20 Establis
Slide 18: Summary
SUMMARY • Continued Strong Execution; Improved 2021 Outlook – 20%+ Revenue, EBITDA, and DEPS Growth – +12% Organic Revenue Growth – Continued Strong Software Recurring Revenue Growth – Customer Demand Strong; Product Businesses Navigating Challenging Supply Chain – Reduced Debt by ~$370M in Q3; Decr
Slide 19: Appendix
APPENDIX
Slide 20: Segment Results - Continuing Operations
SEGMENT RESULTS - CONTINUING OPERATIONS Q1’20 Q2’20 Q3’20 Q4’20 FY’20 Q1’21 Q2’21 Q3’21 Application Software Revenue $405 $398 $451 $554 $1,808 $578 $592 $603 Operating Profit $98 $113 $128 $136 $475 $153 $153 $163 EBITDA $156 $172 $201 $242 $772 $259 $258 $268 Network Software & Systems Revenue $29
Slide 21: Q3 Income Statement Metrics - Including Discontinued Operations
Q3 INCOME STATEMENT METRICS - INCLUDING DISCONTINUED OPERATIONS Q3’21 Application Software $603 Network Software & Systems $475 Measurement & Analytical Solutions $404 Process Technologies $138 Revenue $1,621 Application Software $163 Network Software & Systems $172 Measurement & Analytical Solution
Slide 22: Reconciliations I
RECONCILIATIONS I (CONTINUING OPERATIONS) Adjusted Revenue, Gross Profit and EBITDA Reconciliation for Continuing Operations ($M) Q3 2020 Q3 2021 V% Adjusted Revenue Reconciliation GAAP Revenue $ 1,198 $ 1,463 22% Purchase accounting adjustment to acquired deferred revenue 3 - Adjusted Revenue $ 1,2
Slide 23: Reconciliations II
RECONCILIATIONS II (CONTINUING OPERATIONS) Adjusted Revenue Growth Reconciliation Network Measurement Q3 2021 Application Software & & Analytical Process Software Systems Solutions Technologies Roper Organic 10% 17% 9% 16% 12% Acquisitions/Divestitures 23% 1% - - 9% Foreign Exchange 1% 1% 1% 1% 1% T
Slide 24: Reconciliations III
RECONCILIATIONS III (CONTINUING OPERATIONS) Adjusted DEPS Reconciliation B Q3 2020 Q3 2021 V% GAAP DEPS from Continuing Operations $ 1.95 $ 2.43 25% Purchase accounting adjustment to acquired deferred A revenue and commission expense 0.02 (0.01) Transaction-related expenses for completed acquisition
Slide 25: Reconciliations IV
RECONCILIATIONS IV (CONTINUING OPERATIONS) Application Software 2019 2020 2021 Q3 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 GAAP Revenue $ 405 $ 405 $ 398 $ 448 $ 549 $ 1,800 $ 577 $ 592 $ 603 Purchase accounting adjustment to acquired deferred revenue - - - 3 5 8 1 - - Ad
Slide 26: Reconciliations V
RECONCILIATIONS V (CONTINUING OPERATIONS) Measurement & Analytical Solutions 2019 2020 2021 Q3 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Q3 2021 GAAP Revenue $ 385 $ 354 $ 355 $ 357 $ 360 $ 1,426 $ 370 $ 385 $ 392 Purchase accounting adjustment to acquired deferred revenue - - - -
Slide 27: Reconciliations VI
RECONCILIATIONS VI (INCLUDING DISCONTINUED OPERATIONS) Adjusted Revenue, and EBITDA Reconciliation ($M) Q3 2020 Q3 2021 V% FY 2020 TTM 2021 Adjusted Revenue Reconciliation GAAP Revenue $ 1,366 $ 1,621 19% $ 5,527 $ 6,243 Purchase accounting adjustment to acquired deferred revenue 3 - 12 6 Adjusted R
Slide 28: Footnotes
FOOTNOTES A. 2021 actual results and forecast of estimated acquisition-related fair value adjustments to deferred revenue and commission expense related to the acquisition of Vertafore as shown below ($M except per share data). Q3 2020A Q3 2021A Q4 2021E FY 2021E Pretax $ 3 $ (1) $ (1) $ (5) After-t
Slide 29: A Diversified Technology Company
A DIVERSIFIED TECHNOLOGY COMPANY