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Barclays Energy Power Conference – Flowserve Corp.

Flowserve Corp. · Sep 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. Barclays Energy Power Conference – Flowserve Corp. – slide 1
    FLOWSERVE CORPORATION (NYSE: FLS) Barclays Energy-Power Conference September 3, 2014
  2. Barclays Energy Power 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. Barclays Energy Power 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. Barclays Energy Power 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. Barclays Energy Power 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. Barclays Energy Power Conference – Flowserve Corp. – slide 6
    Earnings Stability Through the Cycle 4.00 3.65 3.41 2.84 2.57 2.53 2.55 EPS guidance of 2.29 EPS 3.65 - 4.00 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. Barclays Energy Power 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. Barclays Energy Power 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. Barclays Energy Power Conference – Flowserve Corp. – slide 9
    Resurgence of Large OE Activity Expected E&C awards for large infrastructure projects key leading indicator Page 10
  10. Barclays Energy Power Conference – Flowserve Corp. – slide 10
    Project Drivers are Beyond just Profit-Only Long Shareholder Value Standing Profit Internal Rate of Return Capital Investments Driver Demographics Population Growth Rural to Urban Move Industrialization Middle Class Rise Growth…
  11. Barclays Energy Power Conference – Flowserve Corp. – slide 11
    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…
  12. Barclays Energy Power Conference – Flowserve Corp. – slide 12
    Business Opportunity Framework Leverage broad portfolio of flow control Mark 200 Control WIK Decoking Valve Jet Pump products Design and manufacture highly engineered products that must work when put into critical services…
  13. Barclays Energy Power Conference – Flowserve Corp. – slide 13
    Targeting Acquisitions to Leverage Competitive Advantages Acquisition strategy seeks to pursue growth in: Markets/units that have earned the right to grow 2013 Acquisition Cash Paid - 78.7M High profitability and strong growth…
  14. Barclays Energy Power Conference – Flowserve Corp. – slide 14
    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…
  15. Barclays Energy Power Conference – Flowserve Corp. – slide 15
    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…
  16. Barclays Energy Power Conference – Flowserve Corp. – slide 16
    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…
  17. Barclays Energy Power Conference – Flowserve Corp. – slide 17
    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…
  18. Barclays Energy Power Conference – Flowserve Corp. – slide 18
    Strong Annual Financial Performance Sales Operating Results Page 19
  19. Barclays Energy Power Conference – Flowserve Corp. – slide 19
    EPS Seasonally Second-Half Weighted (Quarterly EPS - diluted) Full Year EPS Full Year EPS Full Year EPS Full Year EPS 1H 2014 EPS 1.25 2.29 2.55 2.84 3.41 1.67 1.00 0.75 0.50 0.25 0.00 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11…
  20. Barclays Energy Power Conference – Flowserve Corp. – slide 20
    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…
  21. Barclays Energy Power Conference – Flowserve Corp. – slide 21
    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…
  22. Barclays Energy Power Conference – Flowserve Corp. – slide 22
    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…
  23. Barclays Energy Power Conference – Flowserve Corp. – slide 23
    2014 Outlook 2014 EPS 1 3.65 4.00 Revenue Growth (Constant Currency)2 3 6% Tax Rate 30% Capital Expenditures 130 140 M Pension Contributions 30 35 M Scheduled Debt Reduction 40 M Longer Term Guidance: Operating Margin…
  24. Barclays Energy Power Conference – Flowserve Corp. – slide 24
    Flowserve Investor Relations Contacts: Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jrouecheflowserve.com mmullinflowserve.com
  25. Barclays Energy Power Conference – Flowserve Corp. – slide 25
    A PPENDIX
  26. Barclays Energy Power Conference – Flowserve Corp. – slide 26
    Q2 2014 Consolidated Bookings & Sales BOOKINGS SALES Original Equipment Aftermarket Q2 2014 62% 38% 1.38B 59% 41% 1.22B Q2 2013 59% 41% 1.23B 60% 40% 1.24B Bookings Bookings in Q2 2014 increased 12.6%, or 12.8% on a constant…
  27. Barclays Energy Power Conference – Flowserve Corp. – slide 27
    Q2 2014 Bookings & Industry Outlook Oil & Gas Chemical Power Water General Industries Q2 2014 46% 19% 11% 4% 20% 1.38B Q2 2013 42% 21% 11% 4% 22% 1.23B OIL & GAS Market conditions support price levels that encourage…
  28. Barclays Energy Power Conference – Flowserve Corp. – slide 28
    Q2 2014 Sales & Regional Outlook North America Europe Asia-Pacific Middle East & Africa Latin America Q2 2014 37% 18% 20% 14% 11% 1.22B Q2 2013 35% 21% 20% 14% 10% 1.24B NORTH AMERICA Continued focus on North American…
  29. Barclays Energy Power Conference – Flowserve Corp. – slide 29
    Q2 2014 Consolidated Financial Results 2nd Quarter Year to Date Constant Constant ( millions) 2014 2013 Delta () Delta (% ) 2014 2013 Delta () Delta (% ) FX (% )* FX (% )* Bookings 1,384.2 1,229.0 155.2 12.6% 12.8% 2,577.7 2,409.3…
  30. Barclays Energy Power Conference – Flowserve Corp. – slide 30
    Q2 2014 Cash Flows Q2 Q1 YTD ( millions) 2014 2014 2014 2013 Net Income 125 109 234 220 Depreciation and amortization 29 27 56 52 Change in working capital (90) (207) (297) (289) Other 10 (14) (4) (16) Total Operating Activities…

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