Regal Rexnord Corporation · NYSE:RRX

Regal Rexnord — Regal Beloit — Investor Day (March 2017)

124 slides from Regal Rexnord's investor day presentation, Mar 10, 2017

1. Slide 1: Investor Day 2017 General Session

   ©2017 Regal Beloit Corporation Rob Cherry Vice President – Investor Relations Regal Beloit Corporation Investor Day 2017 General Session March 10, 2017

2. Slide 2: Safe Harbor Statement

   March 10, 2017 ©2017 Regal Beloit Corporation 2 Safe Harbor Statement This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our management’s judgment regarding future events. In many cases, you

3. Slide 3: Non-GAAP Financial Measures

   March 10, 2017 ©2017 Regal Beloit Corporation 3 Non-GAAP Financial Measures We prepare financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). We also periodically disclose certain financial measures in our quarterly earnings releases, on inves

4. Slide 4: Agenda

   March 10, 2017 ©2017 Regal Beloit Corporation 4 Agenda 8:30-8:35 Welcome & Introductions – Rob Cherry, VP - IR 8:35-10:00 General Session – Tansa – Mark Gliebe, Chairman & CEO – Chuck Hinrichs, VP & CFO – Jon Schlemmer, COO 10:00-10:30 Q&A – Tansa 10:30-10:45 Break – Balcony 10:45-12:15 Segment Brea

5. Slide 5: Today's Presenters – General Session

   March 10, 2017 ©2017 Regal Beloit Corporation 5 Today’s Presenters – General Session Mark Gliebe Chairman & CEO Chuck Hinrichs VP & CFO Jon Schlemmer COO Rob Cherry VP Investor Relations Rob Chesser VP Manufacturing John Avampato VP & CIO

6. Slide 6: Today's Presenters – Commercial & Industrial

   March 10, 2017 ©2017 Regal Beloit Corporation 6 Today’s Presenters – Commercial & Industrial Mike Wickiser Senior VP Commercial Motors Mike Logsdon VP Technology Eric McGinnis VP Industrial Motors & Power Generation

7. Slide 7: Today's Presenters – Climate Solutions

   March 10, 2017 ©2017 Regal Beloit Corporation 7 Today’s Presenters – Climate Solutions John Kunze VP Climate Solutions Paul Selking HVAC Business Leader

8. Slide 8: Today's Presenters – Power Transmission Solutions

   March 10, 2017 ©2017 Regal Beloit Corporation 8 Today’s Presenters – Power Transmission Solutions Jerry Morton VP PTS Dave Brick VP PTS Technology

9. Slide 9: Other Participants – Finance

   March 10, 2017 ©2017 Regal Beloit Corporation 9 Other Participants – Finance Rob Rehard VP FP&A Dan Erdman VP Treasurer

10. Slide 10: Enterprise Strategy

    ©2017 Regal Beloit Corporation Enterprise Strategy Mark Gliebe Chairman & CEO Regal Beloit Corporation Investor Day 2017 March 10, 2017

11. Slide 11: Agenda

    March 10, 2017 ©2017 Regal Beloit Corporation 11 Agenda 8:35-9:05 Enterprise Strategy – Mark Gliebe, Chairman & CEO 9:05-9:20 Financial Overview – Chuck Hinrichs, VP & CFO 9:20-10:00 Organic Growth & Simplification – Jon Schlemmer, COO – John Avampato, CIO – Rob Chesser, VP Manufacturing 10:00-10:30

12. Slide 12: Enterprise Strategy: 2017-2019

    March 10, 2017 ©2017 Regal Beloit Corporation 12 Enterprise Strategy: 2017-2019 FOUNDATIONAL PERFORMANCE CORE CAPABILITIES Top Quartile Cash Generation Improving Margins Customer Favored Unique Culture Innovative Strong Operators Drives Long Term Growth and Improved Returns • Focus on Core KEY ELEME

13. Slide 13: Enterprise Strategy – Updated Performance Targets

    March 10, 2017 ©2017 Regal Beloit Corporation 13 Enterprise Strategy – Updated Performance Targets Adj. Operating Margins* 200 – 250 BPS ROIC* 300 – 400 BPS Organic Sales Growth* 2% – 4% CAGR By 2019 Enterprise Strategy Drives Sustainable Improvements in Financial Performance Free Cash Flow to Net I

14. Slide 14: Enterprise Strategy: 2017-2019

    March 10, 2017 ©2017 Regal Beloit Corporation 14 Enterprise Strategy: 2017-2019 FOUNDATIONAL PERFORMANCE CORE CAPABILITIES Top Quartile Cash Generation Improving Margins Customer Favored Unique Culture Innovative Strong Operators Drives Long Term Growth and Improved Returns • Focus on Core KEY ELEME

15. Slide 15: Regal Core Capabilities

    March 10, 2017 ©2017 Regal Beloit Corporation 15 Regal Core Capabilities Innovative Strong Operators CORE CAPABILITIES Unique Culture Innovative Strong Operators

16. Slide 16: Regal Core Capabilities – Business System

    March 10, 2017 ©2017 Regal Beloit Corporation 16 Regal Core Capabilities Business System Unique Culture Innovative CORE CAPABILITIES Unique Culture Innovative Strong Operators

17. Slide 17: Business System

    March 10, 2017 ©2017 Regal Beloit Corporation 17 Business System Business System When there is a Distinct Advantage to Standardize and Deploy common elements across Regal, we will do so. It is the compilation of these Cultural Behaviors & Business Processes that make up the Regal Business System. “T

18. Slide 18: Business System

    March 10, 2017 ©2017 Regal Beloit Corporation 18 Business System Business System When there is a Distinct Advantage to Standardize and Deploy common elements across Regal, we will do so. It is the compilation of these Cultural Behaviors & Business Processes that make up the Regal Business System. “T

19. Slide 19: Regal Core Capabilities – Innovative

    March 10, 2017 ©2017 Regal Beloit Corporation 19 Regal Core Capabilities 4 5 6 Customer Survey Innovation Score Customers Recognizing Innovation Unique Culture Strong Operators CORE CAPABILITIES Unique Culture Innovative Strong Operators

20. Slide 20: Innovation – DEC Star

    March 10, 2017 ©2017 Regal Beloit Corporation 20 Innovation – DEC Star® Innovative  First to Market  New Technology in the Motor, Drive, Blower Construction and Blower Wheel  17 Patents Issued and Pending Delivers Benefits to Customers  Substantial Improvement in Energy Efficiency  Less Noise 

21. Slide 21: Innovation – UlteMAX

    March 10, 2017 ©2017 Regal Beloit Corporation 21 Innovation - UlteMAX™ Innovative  First to Market  Revolutionary Form Factor  New Technology in the Motor, Drive  8 Patents Issued and Pending Delivers Benefits to Customers  Substantial Improvement in Energy Efficiency  50% - 75% Less Weight an

22. Slide 22: Positive Handprint

    March 10, 2017 ©2017 Regal Beloit Corporation 22 Positive Handprint Creating a Better Tomorrow

23. Slide 23: Enterprise Strategy: 2017-2019

    March 10, 2017 ©2017 Regal Beloit Corporation 23 Enterprise Strategy: 2017-2019 FOUNDATIONAL PERFORMANCE CORE CAPABILITIES Top Quartile Cash Generation Improving Margins Customer Favored Unique Culture Innovative Strong Operators Drives Long Term Growth and Improved Returns • Focus on Core KEY ELEME

24. Slide 24: Regal's Foundational Performance – Free Cash Flow

    March 10, 2017 ©2017 Regal Beloit Corporation 24 0% 25% 50% 75% 100% 125% 150% 175% 200% $- $100 $200 $300 $400 $500 2012 2013 2014 2015 2016 Free Cash Flow* % of Adj. Net Income* Improving Margins Customer Favored Regal’s Foundational Performance * Non-GAAP Financial Measurement, See Appendix for R

25. Slide 25: Regal's Foundational Performance – Margins

    March 10, 2017 ©2017 Regal Beloit Corporation 25 2014 2016 Regal’s Foundational Performance Increasing Margins Through Difficult Markets Customer Favored FOUNDATIONAL PERFORMANCE Top Quartile Cash Generation Improving Margins Customer Favored Adj. EBIT* Margin Adj. EBITDA* Margin * Non-GAAP Financia

26. Slide 26: Regal's Foundational Performance – Customer Survey Results

    March 10, 2017 ©2017 Regal Beloit Corporation 26 Regal’s Foundational Performance Quality Responsive Innovation Value 2012 2016 2016 Customer Survey Results  Best Net Promoter Score Ever  Best Response Rate Ever  3rd Consecutive Year of Improvement 12.9% 5.7% 6.1% 5.3% Continuously Improving Our

27. Slide 27: Performing for Our Most Demanding Customers

    March 10, 2017 ©2017 Regal Beloit Corporation 27 Regal’s Foundational Performance Performing for Our Most Demanding Customers

28. Slide 28: Enterprise Strategy: 2017-2019

    March 10, 2017 ©2017 Regal Beloit Corporation 28 Enterprise Strategy: 2017-2019 FOUNDATIONAL PERFORMANCE CORE CAPABILITIES Top Quartile Cash Generation Improving Margins Customer Favored Unique Culture Innovative Strong Operators Drives Long Term Growth and Improved Returns • Focus on Core KEY ELEME

29. Slide 29: Focus on the Core

    March 10, 2017 ©2017 Regal Beloit Corporation 29 Focus on the Core Focus Regal’s talent, capital and energy on core businesses so that we can accelerate our growth and position ourselves for long term success.

30. Slide 30: Focus on the Core

    March 10, 2017 ©2017 Regal Beloit Corporation 30 Focus on the Core  Focus On Core Businesses Where We Can Differentiate with Technology  Increase the Focus on the Distribution Channel to Drive Growth  Selectively Prune Businesses Where We Do Not Have a Clear Advantage or Scale  Management Incent

31. Slide 31: Innovate for Growth

    March 10, 2017 ©2017 Regal Beloit Corporation 31 Innovate for Growth Innovation that delivers differentiated value to customers drives sustained organic growth and margin improvement.

32. Slide 32: Innovation

    March 10, 2017 ©2017 Regal Beloit Corporation 32 Innovation Energy Efficiency Internet of Things Disruptive Technology HP Range Year Markets < 1.0 2011 Furnaces Boilers Appliances 0.5 - 1.0 2015 Furnaces Air Handlers 3.0 – 15.0 2017 Ind. Fans Pumps  Efficient motors use electronics  Every motor ca

33. Slide 33: Continue Simplification

    March 10, 2017 ©2017 Regal Beloit Corporation 33 Continue Simplification Complexity is a barrier to growth, speed and profitability. Continue to simplify our structure and footprint to improve our customer responsiveness and increase our margins.

34. Slide 34: Simplification Initiative

    March 10, 2017 ©2017 Regal Beloit Corporation 34 Simplification Initiative Restructuring Expenses* Delivering $8.9 $6.8 $9.0 2015 2016 2017E ERPs Manufacturing Footprint Design Platforms Suppliers Warehouses Still More Opportunity ~2 Year or Less Payback ~35 BPS Annual Adjusted Operating Margin Im

35. Slide 35: Leveraging Simplification

    March 10, 2017 ©2017 Regal Beloit Corporation 35 Leveraging Simplification  Energy Efficiency  Disruptive Technology  Internet of Things Enables Enables Enables Rooftop Consolidation Automation ERP Consolidation Digital Customer Experience Platform Consolidation Innovation 1,845K sq ft consolidat

36. Slide 36: Enterprise Strategy: 2017-2019

    March 10, 2017 ©2017 Regal Beloit Corporation 36 Enterprise Strategy: 2017-2019 FOUNDATIONAL PERFORMANCE CORE CAPABILITIES Top Quartile Cash Generation Improving Margins Customer Favored Unique Culture Innovative Strong Operators Drives Long Term Growth and Improved Returns • Focus on Core KEY ELEME

37. Slide 37: Financial Overview

    ©2017 Regal Beloit Corporation Chuck Hinrichs Vice President and Chief Financial Officer Regal Beloit Corporation Investor Day 2017 March 10, 2017 Financial Overview

38. Slide 38: Agenda

    March 10, 2017 ©2017 Regal Beloit Corporation 38 Agenda  Sales and Earnings Review  Strong Free Cash Flow  Cash Repatriation  Uses of Cash  Debt and Leverage Ratio  Capital Allocation Priorities  Update on 2017 Guidance

39. Slide 39: Financial History

    March 10, 2017 ©2017 Regal Beloit Corporation 39 39 Financial History Expecting Organic Sales Growth and Earnings Growth in 2017 * Non-GAAP Financial Measurement, See Appendix for Reconciliation $3,096 $3,257 $3,510 $3,225 2013 2014 2015 2016 $198 $195 $240 $200 2013 2014 2015 2016 Sales (millions)

40. Slide 40: Consistently Generating Cash

    March 10, 2017 ©2017 Regal Beloit Corporation 40 0% 25% 50% 75% 100% 125% 150% 175% 200% $- $100 $200 $300 $400 $500 2012 2013 2014 2015 2016 Free Cash Flow* % of Adj. Net Income* Expecting Free Cash Flow % of Net Income of 100% - 125% in 2017-2019 * Non-GAAP Financial Measurement, See Appendix for

41. Slide 41: Cash Repatriation

    March 10, 2017 ©2017 Regal Beloit Corporation 41 Significant Increase in Available Cash to Reduce Debt and Repurchase Shares Cash Repatriation  Regal had $285 Million of Cash at Year End 2016 − $280 Million of Cash Outside of U.S.  In 2017, Regal will Repatriate ~ $150 Million of Cash to U.S. − No

42. Slide 42: Returning Cash to Shareholders

    March 10, 2017 ©2017 Regal Beloit Corporation 42 $0.58 $0.62 $0.64 $0.66 $0.70 $0.74 $0.78 $0.84 $0.90 $0.94 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Consistent Increase in Cash Dividends to Shareholders Dividends Per Share Paid Returning Cash to Shareholders

43. Slide 43: Debt and Leverage Ratio

    March 10, 2017 ©2017 Regal Beloit Corporation 43 0.0 1.0 2.0 3.0 4.0 $0 $600 $1,200 $1,800 $2,400 2014 2015 2016 2017E Total Debt Total Debt/EBITDA Strong Balance Sheet to Deploy Capital * Non-GAAP Financial Measurement, See Appendix for Reconciliation Debt and Leverage Ratio Total Debt (millions) T

44. Slide 44: Capital Allocation Priorities

    March 10, 2017 ©2017 Regal Beloit Corporation 44 Capital Allocation Priorities Acquisitions Targeted Transactions to Strengthen the Core and Drive Shareholder Value Share Repurchase Opportunistically Repurchase Shares while Maintaining Financial Flexibility Balance Sheet Targets Disciplined Approach

45. Slide 45: Affirming 2017 Guidance of Sales and Earnings Growth

    March 10, 2017 ©2017 Regal Beloit Corporation 45 Affirming 2017 Guidance of Sales and Earnings Growth * Non-GAAP Financial Measurement, See Appendix for Reconciliation Affirming 2017 Guidance  2017 Organic Sales Growth  Improved Adjusted Operating Margin  FY 2017 GAAP EPS Guidance of $4.35 to $4.

46. Slide 46: Organic Growth & Simplification

    ©2017 Regal Beloit Corporation Jon Schlemmer Chief Operating Officer John Avampato Vice President and Chief Information Officer Regal Beloit Corporation Investor Day 2017 March 10, 2017 Organic Growth & Simplification Rob Chesser Vice President Manufacturing

47. Slide 47: Agenda

    March 10, 2017 ©2017 Regal Beloit Corporation 47  Organic Growth – Performance Excellence – Innovation – Commercial Excellence – Digital Customer Experience  Simplification – Progress to Date – Next Steps  Summary and Key Takeaways Agenda

48. Slide 48: Organic Growth

    March 10, 2017 ©2017 Regal Beloit Corporation 48 Organic Growth 64% OEM  Performance Excellence  Innovation 36% Distribution  Commercial Excellence  Digital Customer Experience $3.2B Sales

49. Slide 49: Performance Excellence

    March 10, 2017 ©2017 Regal Beloit Corporation 49 Performance Excellence The Underlying Framework that Drives Our Operations to Continuously Improve

50. Slide 50: Performance Excellence Creates a Competitive Advantage

    March 10, 2017 ©2017 Regal Beloit Corporation 50 Performance Excellence Performance Excellence Creates a Competitive Advantage Performance 1 Star Establish Engagement Trained & Engaged Firm Foundation Meets Base Criteria 2 Star Broad Engagement 3 Star Culture 4 Star Value Stream Focus 5 Star World C

51. Slide 51: Growth through Performance Excellence

    March 10, 2017 ©2017 Regal Beloit Corporation 51 Growth through Performance Excellence Teams Competing to Achieve Customer Performance Metrics

52. Slide 52: Performance Excellence – Keys to Success

    March 10, 2017 ©2017 Regal Beloit Corporation 52 Performance Excellence – Keys to Success Engaged High Energy Teams 5S Visual Factory Capable Processes

53. Slide 53: Employee Engagement Video

    March 10, 2017 ©2017 Regal Beloit Corporation 53 Employee Engagement Video

54. Slide 54: Customer Feedback

    March 10, 2017 ©2017 Regal Beloit Corporation 54 Customer Feedback Johnson Controls Independent Distributors Network Continuous Improvement Customers Recognizing the Improvement 2016 Customer Survey Customer Awards  Nearly 4,000 Responses  Achieved Highest Net Promoter Score Ingersoll Rand Quality

55. Slide 55: Performance Excellence Journey

    March 10, 2017 ©2017 Regal Beloit Corporation 55 Performance Excellence Journey Performance Excellence Will Create a Competitive Advantage 1 Star 25% 50% 2 Star 5% 30% 3 Star 15% 4 Star 5% 5 Star Today 2020 Vision

56. Slide 56: Organic Growth – Innovation

    ©2017 Regal Beloit Corporation Organic Growth – Innovation

57. Slide 57: Efficiency Requirements Increasing

    March 10, 2017 ©2017 Regal Beloit Corporation 57 IE3 Efficiency Industrial Motors Fan Energy Rating (FER) Walk in Coolers & Freezers Comm. Ref. Equipment Multi-Year Trend Favors High Efficiency Suppliers Efficiency Requirements Increasing Commercial HVAC 2017 2018 2019 2020

58. Slide 58: Full Range of FER Solutions

    March 10, 2017 ©2017 Regal Beloit Corporation 58 Full Range of FER Solutions Best FER Solution Set Customer Benefits  Full Range of Solutions  Highest Motor Efficiency with Proven Reliability  Premium Solution for Most Difficult Applications Regal Benefits  Full Customer Engagement  Est $40-$60

59. Slide 59: UlteMAX Delivers Differentiated Solution in C&I

    March 10, 2017 ©2017 Regal Beloit Corporation 59 UlteMAX™ UlteMAX™ Delivers Differentiated Solution in C&I Customer Benefits  Compact Form Factor  50% – 75% Lower Weight  Higher Efficiency UlteMAX™ Motor & Control Standard Industrial Motor Regal Benefits  Significant Customer Interest  Sales Be

60. Slide 60: Axial Technology Creating New Opportunities

    March 10, 2017 ©2017 Regal Beloit Corporation 60 Axial Technology Creating New Opportunities Growth Opportunities in Both Existing and New Markets for Regal UlteMAX™ Motor & Control DEC Star® HVAC Solution Axial Draft Inducer Axial Gas Pre-Mix 2011 2013 2015 2017

61. Slide 61: Well Positioned for Internet of Things

    March 10, 2017 ©2017 Regal Beloit Corporation 61 Well Positioned for Internet of Things Industry Leading Position of Small Motors with Integrated Electronics Swimming Pools HVAC Water Heaters Commercial HVAC Commercial Refrigeration Manufacturing Residential Commercial Industrial

62. Slide 62: Innovation Summary

    March 10, 2017 ©2017 Regal Beloit Corporation 62 Innovation Summary  Energy Efficiency Regulations Favor High Efficiency Suppliers  Axial Differentiating Regal with Disruptive Technology  Regal’s High Efficiency Products Well Positioned for the Internet of Things

63. Slide 63: Organic Growth – Commercial Excellence

    ©2017 Regal Beloit Corporation Organic Growth – Commercial Excellence

64. Slide 64: Investing in Commercial Excellence

    March 10, 2017 ©2017 Regal Beloit Corporation 64 Significant Focus on Growth in the Distribution Segment Investing in Commercial Excellence  Aftermarket Solutions  Product Promotions  Contractor Training New Products Sales Coverage & Talent Tools & Training  Increasing Coverage  Adding Sales Ta

65. Slide 65: Organic Growth – Digital Customer Experience

    ©2017 Regal Beloit Corporation Organic Growth – Digital Customer Experience

66. Slide 66: Simplification of Our IT Systems

    March 10, 2017 ©2017 Regal Beloit Corporation 66 25% 35% 60% 80% 90% 2009 2012 2015 2017 2019 Simplification of Our IT Systems % Sales on Standard ERP IT Platform Has Been Simplified…Shift to Growth! ERP Consolidation Benefits Customer  One PO, One Shipment  Product Configurator  Higher Stock Ava

67. Slide 67: Digital is Transforming the Buying Process

    March 10, 2017 ©2017 Regal Beloit Corporation 67 Digital is Transforming the Buying Process  Human interactions shift to online searches and digital transactions  B2B buyers demand the same online experience they see in the B2C world  Rich content gives buyers the answers they need  Our top indu

68. Slide 68: Regal Digital Customer Experience

    March 10, 2017 ©2017 Regal Beloit Corporation 68 Regal Digital Customer Experience Digital Product Information Electronic Business Transactions Website Refresh Cu s tom e r Exp e ri e n c e Rich Content Research and “Where to Buy” Make It Easy For The Customer

69. Slide 69: Digital Product Information

    March 10, 2017 ©2017 Regal Beloit Corporation 69  Digitizing Product Catalog for all Brands Across Regal  Digital Asset Management - Images, Graphics, Videos  On Demand Syndication to Our Customers Digital Product Information Delivering Rich Product Content to Our Customers High-Resolution Produc

70. Slide 70: Website Refresh

    March 10, 2017 ©2017 Regal Beloit Corporation 70 Website Refresh DIGITAL CONTENT Features & Specifications: Mounting: Two-Bolt Base Bore Diameter: 1 inch Bore Type: Round Duty Type: Light Duty Housing Material: Cast Iron Locking Device: Eccentric Collar Seal Type: Contact/Lip Overall Dimension: 4x2.

71. Slide 71: Electronic Business Transactions

    March 10, 2017 ©2017 Regal Beloit Corporation 71 Electronic Business Transactions $490 $550 $1,000 $0 $200 $400 $600 $800 $1,000 2015 2016 2019E (millions) Make It Easy For The Customer

72. Slide 72: Organic Growth Strategies and Actions

    March 10, 2017 ©2017 Regal Beloit Corporation 72 Organic Growth 64% OEM  Performance Excellence  Innovation 36% Distribution  Commercial Excellence  Digital Customer Experience $3.2B Sales Strategies and Actions to Drive 2%-4% Organic Growth CAGR

73. Slide 73: Simplification Update and Next Steps

    ©2017 Regal Beloit Corporation Simplification Update and Next Steps

74. Slide 74: Simplification Initiative

    March 10, 2017 ©2017 Regal Beloit Corporation 74 Simplification Initiative ERPs Manufacturing Footprint Design Platforms Suppliers Completed thru 2016 Reducing Our Costs and Making it Easy for the Customer Planned for 2017-2019 75% of Sales on One ERP 90% of Sales on One ERP 1,845,000 Sq-Ft Reduced

75. Slide 75: Platform Simplification Enables Innovation

    March 10, 2017 ©2017 Regal Beloit Corporation 75 Platform Simplification Enables Innovation Freeing Up Engineering Capacity to Accelerate Innovation Worm Gears Industrial Motors 3.3” HVACR 48 Frame HVAC 56 Frame C&I 2017  Fewer Platforms Reduce Engineering Support  Freeing Up Engineering Capacity

76. Slide 76: Automation – Material Movement

    March 10, 2017 ©2017 Regal Beloit Corporation 76 Automation – Material Movement Simple Automation Increases Safety and Efficiency

77. Slide 77: Automation – Component Assembly

    March 10, 2017 ©2017 Regal Beloit Corporation 77 Automation – Component Assembly Complex Automation Enabled by Simplification Efforts

78. Slide 78: Simplification to Automation

    March 10, 2017 ©2017 Regal Beloit Corporation 78 Simplification to Automation 2014 - 2016 2017 - 2019 Future Simplification Automation 90% 70% 50% 50% 30% 10% Simplification and Automation Continue to Deliver Margin Improvement Annual Margin Improvement ~35 bps 30-40 bps 30-40 bps

79. Slide 79: Summary and Key Takeaways

    March 10, 2017 ©2017 Regal Beloit Corporation 79 Summary and Key Takeaways Strategy and Actions in Place to Drive Growth and Margin Improvement 2016 2019E Adj. Operating Margins* 200 – 250 BPS Organic Sales Growth* 2% – 4% CAGR 9.7% 11.7% - 12.2% $3.2B 2016 Sales 36% Distribution 64% OEM Organic Gro

80. Slide 80: Q & A

    ©2017 Regal Beloit Corporation Q & A We create a better tomorrow by efficiently converting power into motion.

81. Slide 81: Agenda

    March 10, 2017 ©2017 Regal Beloit Corporation 81 Agenda 8:35-9:05 Enterprise Strategy – Mark Gliebe, Chairman & CEO 9:05-9:20 Financial Overview – Chuck Hinrichs, VP & CFO 9:20-10:00 Organic Growth & Simplification – Jon Schlemmer, COO – John Avampato, CIO – Rob Chesser, VP Manufacturing 10:00-10:30

82. Slide 82: Non-GAAP Reconciliations – Organic Growth and 2017 Guidance

    March 10, 2017 ©2017 Regal Beloit Corporation 82 Appendix Non-GAAP Reconciliations ORGANIC GROWTH (Dollars in Millions) Fiscal 2016 Net Sales 3,224.5$ Net Sales from Businesses Acquired (35.9) Net Sales from Businesses Divested 11.6 Impact from Foreign Currency Exchange Rates 31.2 Adjusted Net Sales

83. Slide 83: Non-GAAP Reconciliations – Adjusted Operating Income

    March 10, 2017 ©2017 Regal Beloit Corporation 83 Appendix Non-GAAP Reconciliations ADJUSTED OPERATING INCOME (Dollars In Millions) Fiscal 2016 GAAP Income from Operations 320.6$ Goodwill Impairment - Venezuelan Asset Write Down - Gain on Sale of Assets (1.7) Purchase Accounting and Transaction Costs

84. Slide 84: Non-GAAP Reconciliations – EBIT and EBITDA

    March 10, 2017 ©2017 Regal Beloit Corporation 84 Appendix Non-GAAP Reconciliations EBIT AND EBITDA RECONCILIATION (Dollars In Millions) Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017E Income From Operations 121.5$ 252.8$ 320.6$ 322.0$ Plus: Goodwill Impairment 119.5 79.9 - - Plus: Asset Impairment

85. Slide 85: Non-GAAP Reconciliations – ROIC

    March 10, 2017 ©2017 Regal Beloit Corporation 85 Appendix Non-GAAP Reconciliations RETURN ON INVESTED CAPITAL (ROIC) RECONCILIATION (Data in Millions) Fiscal 2015 Fiscal 2016 Cash (253)$ (285)$ Current Maturities of Long Term Debt 6 101 Long Term Debt 1,716 1,311 Total Net Debt 1,469$ 1,127$ Total R

86. Slide 86: Non-GAAP Reconciliations – Free Cash Flow and Adjusted Net Income

    March 10, 2017 ©2017 Regal Beloit Corporation 86 Appendix Non-GAAP Reconciliations (Dollars in Millions) FREE CASH FLOW Dec 29, 2012 Dec 28, 2013 Jan 3, 2015 Jan 2, 2016 Dec 31, 2016 Net Cash Provided by Operating Activities 351.7$ 305.0$ 298.2$ 381.1$ 439.6$ Additions to Property Plant and Equipmen

87. Slide 87: Non-GAAP Reconciliations – Adjusted Net Income

    March 10, 2017 ©2017 Regal Beloit Corporation 87 Appendix Non-GAAP Reconciliations Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Net Income Attributable to Regal Beloit Corporation 120.0$ 31.0$ 143.3$ 203.4$ Goodwill Impairment 117.2 58.1 Asset Impairment and Other, Net 74.6 30.2 Venezuelan Asset

88. Slide 88: Segment Breakout Sessions

    ©2017 Regal Beloit Corporation Segment Breakout Sessions March 10, 2017 Regal Beloit Corporation Investor Day 2017

89. Slide 89: Commercial & Industrial Systems

    ©2017 Regal Beloit Corporation Mike Wickiser Senior Vice President Commercial Motors Eric McGinnis Vice President Industrial Motors and Power Generation Regal Beloit Corporation Investor Day 2017 March 10, 2017 Commercial & Industrial Systems Mike Logsdon Vice President Technology

90. Slide 90: Agenda

    March 10, 2017 ©2017 Regal Beloit Corporation 3 Agenda  C&I Systems Overview  Growth Progress – 2016 & 2017  Core Products and Energy Legislation Update  New Products to Drive Growth  Questions

91. Slide 91: Commercial & Industrial Systems Overview

    March 10, 2017 ©2017 Regal Beloit Corporation 4 Commercial & Industrial Systems Overview 2016 Sales $1,531M Revolutionary New Products Increased Focus on Distribution Targeting Growth in IHP Primary Brands Sales by Product Sales by Geography Sales by End Market Production by Region Improving Industr

92. Slide 92: C&I Systems Products

    March 10, 2017 ©2017 Regal Beloit Corporation 5 Motors and Controls Drive & Control Systems Power Generation C&I Systems Products

93. Slide 93: 2016 End Markets and 2017 Outlook

    March 10, 2017 ©2017 Regal Beloit Corporation 6 NA/China Industrial Oil and Gas Price / MPF Transport Refrig. Commercial HVAC Residential Pool Data Centers 2016 End Markets 2017 Outlook NA/China Industrial Oil and Gas Price / MPF Transport Refrig. Commercial HVAC Residential Pool Data Centers Growth

94. Slide 94: Energy Efficiency Trends Drive Growth

    March 10, 2017 ©2017 Regal Beloit Corporation 7 Energy Efficiency Energy Efficiency Trends Drive Growth TRENDS REGULATIONS  Higher Efficiencies  Variable Speed  System Integration  Commercial HVAC – 2018  Resi Pool Pumps – 2019  C&I Pumps – 2021 Sales Impact $20M

95. Slide 95: Business Rightsized – Markets Improving

    March 10, 2017 ©2017 Regal Beloit Corporation 8 Business Rightsized – Markets Improving Drives and Controls Motor Starter and Low Voltage Drives Oil Well Pumping  80% of Rightsizing Complete in 2016 – Evaluating Further Restructuring  Diversified Product Capabilities to Serve Other Markets  Impro

96. Slide 96: C&I Global Industrial Motor Growth

    March 10, 2017 ©2017 Regal Beloit Corporation 9 C&I Global Industrial Motor Growth Growing the Core With Simplified Design and Competitive Footprint Regal Wuxi, China  World Class Manufacturing Facilities  New Global Integral Motor Design Platform  Single Global Industrial Management Team  Addin

97. Slide 97: Technology as Growth Driver

    March 10, 2017 ©2017 Regal Beloit Corporation 10 Technology as Growth Driver Regal Continues to Lead This Transformation SyMAX-i® SyMAX® SyMAX® Fixed Speed Induction PM Motors with Integrated Control Permanent Magnet (PM) Motors

98. Slide 98: Presenting UlteMAX Axial Form Factor

    March 10, 2017 ©2017 Regal Beloit Corporation 11 Presenting UlteMAX™ Axial Form Factor Changing the Game in Air Moving - $70M Sales Over 7 Years 10hp Induction Motor & Separate Control Plus Supporting Structure (>250 lbs) 10hp Regal UlteMAXTM Axial Motor and Integrated Control (<50 lbs) 5” Thick 10h

99. Slide 99: C&I Systems Key Takeaways

    March 10, 2017 ©2017 Regal Beloit Corporation 12 C&I Systems Key Takeaways  End Markets Improving  Energy Efficiency Trends are a Tailwind  Industrial Motors Global Platform Complete  Emerging Custom Drives & Controls Segment  Exciting New Products

100. Slide 100: Climate Solutions

     ©2017 Regal Beloit Corporation John Kunze Vice President Climate Solutions Paul Selking Business Leader HVAC Regal Beloit Corporation Investor Day 2017 March 10, 2017 Climate Solutions

101. Slide 101: Agenda

     March 10, 2017 ©2017 Regal Beloit Corporation 14 Agenda  Climate Solutions Overview  HVAC Market Outlook  Energy Legislation Update  New Products to Drive Growth  Questions

102. Slide 102: Climate Solutions Overview

     March 10, 2017 ©2017 Regal Beloit Corporation 15 Climate Solutions Overview 2016 Sales $960M Technology & Market Leader Fractional HP Motors Blower Systems Other USA Mexico Asia Europe USA & Canada Mexico Europe ROW Middle East Resi & Light Commcl HVAC Distributi on Water Heating Comm Ref General In

103. Slide 103: Key Products and Applications

     March 10, 2017 ©2017 Regal Beloit Corporation 16 Key Products and Applications Applications Products

104. Slide 104: North America Resi. HVAC Demand Outlook

     March 10, 2017 ©2017 Regal Beloit Corporation 17 North America Resi. HVAC Demand Outlook Source: AHRI; JP Morgan HVAC Industry Report (2016) North American Residential HVAC Growth Continues • Strong base demand from new housing • Pent up demand continuing to provide growth • Replacing peak year of 2

105. Slide 105: Resi. HVAC Sector Transitioning to Higher SEER

     March 10, 2017 ©2017 Regal Beloit Corporation 18 Resi. HVAC Sector Transitioning to Higher SEER Source: AHRI; JP Morgan HVAC Industry Report (2016), Management estimate More efficient Less efficient Product Mix Shift Toward Higher Efficiency Presents Opportunity for Regal

106. Slide 106: Furnace Fan Regulation Impact

     March 10, 2017 ©2017 Regal Beloit Corporation 19 Industry Units by Motor Type (million units) 2016 2020 High Eff Standard 2.9 3.1 Sources: AHRI & Management estimates  Fan Energy Rating (FER)  New National Furnace Standard  Electrical Efficiency Requirement  High Efficiency Motor Mandate  7/1/1

107. Slide 107: Four Paths To Meet FER Regulation

     March 10, 2017 ©2017 Regal Beloit Corporation 20 Four Paths To Meet FER Regulation Blower Housing Blower Motor Gas Modulation Heat Exchanger 70% 82% 93% 100% % of Volume

108. Slide 108: New Products Driving Growth

     March 10, 2017 ©2017 Regal Beloit Corporation 21 New Products Driving Growth Regal Axial Technology Provides Differentiation Draft Inducer Pre-Mix DEC Star®

109. Slide 109: AHR Expo 2017 – Customer Highlights

     March 10, 2017 ©2017 Regal Beloit Corporation 22 AHR Expo 2017 – Customer Highlights

110. Slide 110: ECM Proliferation Now Needs Service

     March 10, 2017 ©2017 Regal Beloit Corporation 23 ECM Proliferation Now Needs Service Installed Base Contractor Tools Product Solutions Millions of units 2000 2016 30 20 10

111. Slide 111: Climate Solutions Key Takeaways

     March 10, 2017 ©2017 Regal Beloit Corporation 24 Climate Solutions Key Takeaways  Leader in NA HVAC, Water Heating & Commercial Refrigeration  Positive Market Growth Drivers  Energy Efficiency Provides Tailwinds  Innovative New Products Taking Hold

112. Slide 112: Power Transmission Solutions

     ©2017 Regal Beloit Corporation Jerry Morton Vice President Power Transmission Solutions Dave Brick Vice President PTS Technology Regal Beloit Corporation Investor Day 2017 March 10, 2017 Power Transmission Solutions

113. Slide 113: Agenda

     March 10, 2017 ©2017 Regal Beloit Corporation 26 Agenda  Power Transmission Solutions Overview  Integration and Synergy Update  Growth Drivers  New Products  Questions

114. Slide 114: Power Transmission Solutions Overview

     March 10, 2017 ©2017 Regal Beloit Corporation 27 Power Transmission Solutions Overview 2016 Sales $734M Global Footprint Primary Brands Premier Power Transmission Brands Balanced Customer Base OEM - Distribution - End Users Sales by Product Sales by End Market Sales by Geography Production by Region

115. Slide 115: Product Brands

     March 10, 2017 ©2017 Regal Beloit Corporation 28 Product Brands Est. Installed Base ($M) Key Products $1,740 Mounted Bearing Cam Follower $1,250 Worm Gearing Shaft Reducer $1,000 Disc Couplings Gear Coupling $525 Chain Guide Conveyor Chain $450 V-Belt Drive TorqGard™ PTS Established Brand Portfolio

116. Slide 116: PTS Integration Complete

     March 10, 2017 ©2017 Regal Beloit Corporation 29  Integration of Regal's Largest and Most Complex Acquisition Now Complete  Delivered $20 Million of Synergies through Year Two  Forecasting $30 Million in Total Synergies By End of Year Three – Ahead of Original Four Year Plan Executed Double Integ

117. Slide 117: PTS Growth Drivers

     March 10, 2017 ©2017 Regal Beloit Corporation 30 PTS Growth Drivers Customer Care Performance Excellence Commercial Excellence New Products Prospects Inquiries Proposals New Sales

118. Slide 118: Performance Excellence Impact

     March 10, 2017 ©2017 Regal Beloit Corporation 31 Performance Excellence Impact Performance Excellence Driving Key Customer Metrics Past Due Backlog  Daily Focus to Executive Level of Past Due by SKU  Implemented Pull Systems % Available in Stock  Strategically Invested in the Right Inventory  Cu

119. Slide 119: Customer Care Improvement

     March 10, 2017 ©2017 Regal Beloit Corporation 32  Acting on Customer Feedback – Nineteen Total Associates Added to U.S. Based Teams – Actions Completed in 2016  Customer Care Actions Helped Drive an Improved Net Promoter Score Delighting Our Customers Drives Growth Baggage Handling Application New

120. Slide 120: Commercial Excellence

     March 10, 2017 ©2017 Regal Beloit Corporation 33 Commercial Excellence Extending Performance Excellence to the Commercial Function  Commercial Coverage – Identified Sales Coverage Gap and Opportunities to Further Penetrate and Grow – Adding/Reallocating 30% More Resources to Field Sales Force – Com

121. Slide 121: PTS Technology Update

     ©2017 Regal Beloit Corporation PTS Technology Update

122. Slide 122: New Product Success

     March 10, 2017 ©2017 Regal Beloit Corporation 35 New Product Success Innovation and Synergy Delivering Growth and Margin Acquired  New Product for Utility Scale Solar Improves the Efficiency of the Panels as They Track the Sun  PTS Acquisition Enabled the Scale and Speed ‒ Delivered ~$30M in Sales

123. Slide 123: New Products for Growth Industries

     March 10, 2017 ©2017 Regal Beloit Corporation 36 New Products for Growth Industries Material Handling  Integrated Gearmotors – High Efficiency and Power Density  Mounted Bearing – TIME SAVINGTM Technology  Modular Transfer System - MODSORTTM – Improves Warehouse & Distribution Operations Focused

124. Slide 124: Key Takeaways

     March 10, 2017 ©2017 Regal Beloit Corporation 37  Key End Markets Are Turning  Integration Complete – Synergies Ahead of Schedule  Renewed Focus on the Customer  Commercial Excellence on Track  Technology and New Product Teams Are Driving Growth Key Takeaways

Regal Beloit — Investor Day (March 2017) on 6ix