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Credit Suisse Global Industrials Conference – Flowserve Corp.

Flowserve Corp. · Dec 3, 2014 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 1
    FLOWSERVE CORPORATION (NYSE: FLS) Credit Suisse Global Industrials Conference December 3, 2014
  2. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 2
    Flowserve Overview Leading manufacturer and aftermarket service provider of comprehensive flow control systems History dates back to 1790 with more than 50 well-respected brands such as Worthington, IDP, Valtek, Limitorque, Durco and…
  3. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 3
    Investment Highlights Focused flow control provider engaged primarily in energy infrastructure markets Diversified business model provides stability and foundation for earnings growth Broad portfolio of distinguished brand names, with…
  4. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 4
    Diversified Business Model Segment Breakdown 2013 Sales - 5.0B Diverse mix of products, end markets and geographies provided earnings stability through the cycle and decreases risk profile Operating Segments Engineered Product…
  5. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 5
    Broad Flow Control Platform 2.6 EPD 40% 1.2 IPD 40% 2.0 FCD 40% 2.5 1.0 1.6 30% 30% 30% 2.4 0.8 (billions) (billions) (billions) 1.2 2.3 20% 0.6 20% 20% 0.8 2.2 0.4 10% 10% 10% 2.1 0.2 0.4 2.0 0% 0.0 0% 0.0 0% 2008…
  6. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 6
    Earnings Stability Through the Cycle 3.85 3.65 3.41 2.84 2.57 2.53 2.55 EPS guidance of 2.29 EPS 3.65 - 3.85 15.3% 14.4% 14.4% 14.2% Operating Margin 1.49 13.7% 13.8% 10.9% 0.67 7.8% 2006 2007 2008 2009…
  7. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 7
    Flowserves Served Market Flowserve offers the market a broad range of flow control products Served markets represent 75% of total available market Pump, valve & seal spend increasingly taking place in developing regions Developing…
  8. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 8
    Key Drivers of Growth Long-term tailwinds for our growth: Energy and emerging Energy demand growth market growth Global economic and population growth Resurgence of large project activity x Operational excellence - propensity…
  9. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 9
    Resurgence of Large OE Activity Expected JV with Technip Awarded Sasols Louisiana ethane cracker E&C awards for large infrastructure projects key leading indicator Page 10
  10. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 10
    Targeting Acquisitions to Leverage Competitive Advantages Acquisition strategy seeks to pursue growth in: Markets/units that have earned the right to grow High profitability and strong growth 2014 Acquisition Cash Paid - 373M…
  11. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 11
    SIHI Overview Global pumping solution provider with innovative and customized solutions for demanding applications in the process industry Headquarters: Itzehoe, Germany Key products: Vacuum pumps, fluid pumps, ISO, ring section,…
  12. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 12
    SIHI Exemplifies M&A Strategy Achieving Key Rationale for Acquisition of SIHI Strategic Objectives Invest in markets/units that Significant progress in IPD operating platform excellence Demonstrated success in integrating past…
  13. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 13
    One Flowserve Customer-Centric Culture On-Time Delivery, Product Quality, Reliability, Local Service Technology Customer Intimacy Leadership Operational Excellence Strategic Localization Understanding of the Local engineering…
  14. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 14
    Global Provider of OEM & Aftermarket Services Lead Secondary Quick Response Product Operation Product Operation Centers Product line custodian and Implements the manufacturing Local service and repair recognized as the world wide and…
  15. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 15
    Proximity to Customers Provides Aftermarket Opportunities End-user customers typically experience approximately nine times the initial purchase and installation costs over the equipments operating life 2.0m Removal End user…
  16. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 16
    Process Improvement Continuum Process Focus Product Manufacturing Focus Bundling Capacity Supply Chain Balance Alliances Best Practice Consortium Front End Identification Agreements Proposals and sharing with other Product…
  17. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 17
    Strong Annual Financial Performance Sales Operating Results Page 18
  18. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 18
    EPS Seasonally Second-Half Weighted (Quarterly EPS - diluted) Full Year EPS Full Year EPS Full Year EPS Full Year EPS 3Q YTD 2014 EPS 1.25 2.29 2.55 2.84 3.41 2.60 1.00 0.75 0.50 0.25 0.00 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11…
  19. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 19
    Consistent Returns to Shareholders Total diluted share count has been reduced by nearly 16% since 2005 Cumulative annual declared dividends increased 220% to the anticipated 0.64 per share in 2014 from 0.20 per share in 2007 175…
  20. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 20
    Long-Term Capital Deployment Plan Capital deployment priorities will continue to focus on accretive investments to maximize the operating platform and total shareholder return From 2009-2013, Flowserve generated 1.4 billion in free…
  21. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 21
    Financial Commitments Made and Delivered Commitment Result Status Revenue Growth Rate 2013 guidance growth rate of 4% - 6%, Delivered an increase of 4.3% or 5% on constant currency basis in 2013 Long-term revenue CAGR of 8-10% On…
  22. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 22
    2014 Outlook 2014 EPS 1 3.65 3.85 Revenue Growth (Constant Currency)2 Essentially Flat Tax Rate 30% Capital Expenditures 150 160 M Pension Contributions 30 35 M Scheduled Debt Reduction 40 M Longer Term Guidance: Operating…
  23. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 23
    Flowserve Investor Relations Contacts: Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jrouecheflowserve.com mmullinflowserve.com
  24. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 24
    A PPENDIX
  25. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 25
    Substantial OE Opportunities from New Infrastructure Refinery - 300,000 bpd Nuclear Power - 1700 MW 60m - 100m 60m - 80m Coal Power Station - 600MW Solar Power Station - 250 MW Combined Cycle Power - 650 MW 30m - 40m 20m - 25m…
  26. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 26
    Q3 2013 Consolidated Bookings & Sales BOOKINGS SALES Original Equipment Aftermarket Q3 2014 59% 41% 1.27B 59% 41% 1.20B Q3 2013 61% 39% 1.23B 62% 38% 1.23B Bookings Bookings in Q3 2014 increased 3.7%, or 5.0% on a constant…
  27. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 27
    Q3 2014 Bookings & Industry Outlook Oil & Gas Chemical Power Water General Industries 46% 19% 11% 4% 20% 1.27B Q3 2014 45% 20% 13% 3% 19% 42% 11% 4% Q3 2013 39% 20% 21% 17% 4% 20%22% 1.23B OIL & GAS Oil & gas investment…
  28. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 28
    Q3 2014 Sales & Regional Outlook North America Europe Asia-Pacific Middle East & Africa Latin America Q3 2014 36% 20% 20% 12% 12% 1.20B Q3 2013 34% 21% 20% 13% 12% 1.23B NORTH AMERICA Continued opportunities in North American…
  29. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 29
    Q3 2014 - Consolidated Financial Results 3rd Quarter Year to Date Constant Constant ( millions) 2014 2013 Delta () Delta (%) FX (%)* 2014 2013 Delta () Delta (%) FX (%)* Bookings 1,274.8 1,229.8 45.0 3.7% 5.0% 3,851.4 3,635.4 216.0…
  30. Credit Suisse Global Industrials Conference – Flowserve Corp. – slide 30
    Q3 2014 Cash Flows Q3 Q2 Q1 YTD ( millions) 2014 2014 2014 2014 2013 Net Income 130 125 109 364 346 Depreciation and amortization 27 29 27 83 79 Change in working capital (6) (90) (207) (303) (286) Other (14) 10 (14) (18) (30)…

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