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Jefferies 2017Industrials Conference
Chris Stephens, Senior Vice President, Finance & CFO
New York CityAugust 8, 2017
THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS
• Forward-looking statements are made based upon management's good faith expectations and beliefs concerning future developments and their potential effect upon the Company.
• These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements, including the risks and uncertainties set forth under our full disclosure located at the end of this presentation and included in our SEC filings.
• The Company assumes no obligation to update our forward-looking statements.
• References to adjusted financial results are non-GAAP measures. You will find a reconciliation table as an appendix to our “Investor Overview” presentation in the investor relations section of our corporate website at www.BGInc.com.
Safe Harbor Statement
-2-
Americas56%
2016 Revenue Breakdown
Aero %AEROSPACEINDUSTRIAL
$407M$824M
33%67%
TOTAL REVENUE
$1,231M
AEROSPACE INDUSTRIAL
END MARKETS GEOGRAPHY(Destination Sales)
OEM
71%
AFTERMARKET29%
46%
NITROGEN GAS PRODUCTS
14%
ENGINEERED COMPONENTS
40%
MOLDINGSOLUTIONS
AEROSPACE OEM23%
AEROSPACE AFTERMARKET
10%
AUTOPRODUCTION
19%
AUTOMOLDING
SOLUTIONS
15%
GENERAL INDUSTRIAL
14%
TOOL & DIE10%
MEDICAL, PERSONAL CARE & PACKAGING
9%EUROPE
32%ASIA17%
AMERICAS51%
GLOBAL, DIVERSIFIED END MARKETS -3-
Strategic Themes
• Build On Intellectual Property (IP) as Core Differentiator
• Seek Portfolio Enhancements to Drive Shareholder Value
• Choose End-Markets with Long Term Sustainable, Profitable Growth
• Target Cyclical Moderation –Multiple Platforms / Market Channels
• Expand Global Footprint / Access
• Enhance Barnes Enterprise System
• Invigorate Employee Development, Empowerment and Engagement
DRIVE SUSTAINABLE PROFITABLE GROWTH
-4-
A LONG HISTORY ... SIGNIFICANT RECENT TRANSFORMATION
Wallace Barnes founds company in Bristol, CT making springs for hoop skirts and clocks
Associated Spring Formed
Associated Spring stock is offered OTC
Associated Spring is listed on
NYSE
Name changes to Barnes Group Inc.
Barnes Aerospace
formed
Sales pass $500M
Barnes Aerospace expands in Singapore
Acquires NGP Acquires Seeger-Orbis
Sales pass $1B
AcquiresHänggi
BGI celebrates its 150th
Anniversary
AcquiresSynventive
AcquiresMänner
DistributionDivestiture
Acquires Thermoplay and Priamus
Acquires FOBOHA
A Global Industrial and Aerospace Manufacturer and
Services Provider, Serving a Wide Range of End
Markets and Customers
Two Global Business Segments: Industrial & Aerospace
HQ in Bristol, CT with Global Operations in 90+ Locations;
~5,200 Employees
83 Consecutive Years of Paying a Dividend
Barnes Group Overview
-5-
Acquires Gammaflux
$105$300
$160
$110
$38
$9
$75
Portfolio Transformation
2010 Sales Mix (1) M&A Transactions 2016 Sales Mix
32% 36%
32%
INDUSTRIALAEROSPACE
DISTRIBUTION
Divestitures
EuropeN. America
Year Sales
Acquisitions Year Sales
20112013
2012
2013
2015
2015
2016
($ in millions, ~ annual sales at time of transaction)
Sales (1)
Op. Inc. $ (1)
Op. Margin (1)
Share Price (2)
Market Cap(2)
$1,133M
$86.5
7.6%
$20.67
$1.1B
Sales
Adj. Op. Inc. $
Adj. Op. Margin
Share Price (2)
Market Cap(2)
$1,231M
$197.3
16.0%
$47.42
$2.6B
+9%
+128%
+840 bps
+129%
+136%
67%33%AEROSPACE INDUSTRIAL
(1) 2010 Sales, Operating Income and Operating Margin are “as reported” in the Company’s 2010 10-K. 2010 Sales Mix re-calculated to reflect three segments – Aerospace, Industrial & Distribution vs the original two reported segments of Precision Components & Logistics and Manufacturing Services. (2) Share Price and Market Cap as of December 31, 2010 and 2016, respectively.
PORTFOLIO TRANSFORMATION WELL UNDERWAY
-6-
Note: 2001 to 2005 Average Operating Margin adjusted for the impact of accounting changes to be comparable to 2016. 2016 Adjusted Operating Margin, see GAAP reconciliation table at the end of this presentation.
Driving Operating Margin Expansion
• Differentiated Products and Processes
• Organic Growth Investment
• Strategic Acquisitions
• Leverage Commercial Aerospace
• Extend Global Reach
• BES Next Generation
• Talent Management
5%
16.0%
High-Teens
AVG. 2001 - 2005 2016 EXPECTATION
HOLDING COMPANY APPROACH
ALIGNEDPORTFOLIO
EXECUTING OUR STRATEGY TO DELIVER IMPROVED MARGIN PERFORMANCE
FOCUS AREAS
-7-
INDUSTRIALSEGMENT
AEROSPACESEGMENT
OTHER
Actual% of 2016
Sales
2017 Total Sales Growth
Outlook* End Market Highlights / Comments
Molding Solutions 31%
9%Nitrogen Gas Products
Original Equipment Manufacturing (OEM)
Maintenance, Repair,and Overhaul (MRO)
Spare Parts (RSP Programs)
23%
Up Mid 20s
6%
4%
M&A
F/X
Favorable Hot Runner Demand, Focus on MRO Growth & Global Expansion, FOBOHA & Gammaflux Contribution
Tool & Die Markets Remain Strong
New Engine Programs Ramping as OEM Sales Growth Returns, Solid Backlog
Aircraft Utilization Remains High
Favorable CFM56 Demographic Trends Continue
FOBOHA & Gammaflux Acquisition Sales ~+5%
F/X Sales Impact ~0%
2017 TOTAL SALES EXPECTATION UP 14% TO 15%; UP 9% TO 10% ORGANICALLY* LDD – Low double digits %, LSD - Low single digits %
Our 2017 full-year outlook is only as of our July 28, 2017 earnings call, and it is not being updated or affirmed at this time.
UpLDD
Industrial Segment 67%Up LowTeens
Aerospace Segment 33%
-8-
27%Engineered ComponentsGlobal Auto Production Good - but North America declining; General Industrial Markets Improving
Up MidTeens
UpLSD
Up LDD
Up High Teens
Up MidTeens
=
2017 Segment Market Outlook(Updated 7/28/2017)
Why Invest In Barnes Group?
WELL POSITIONED BUSINESSES
STRONG FINANCIAL PERFORMANCE
STRATEGY EXECUTION DELIVERING RESULTS
• Global Industrial Products and Services; Auto Production at High Levels
• Commercial Aero; OEM Production at High Levels, Aftermarket Improving
• Demonstrated Margin Expansion; Further Expansion Planned
• Benefiting from Barnes Enterprise System
• Strong Cash Generator; Solid Balance Sheet
• Expanding Differentiated Systems, Products, and Processes
• Disciplined Acquisitions and Strategic Investments
• Focused on Sustainable, Long-Term Profitable Growth -9-