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Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp.

Flowserve Corp. · Feb 26, 2015 · 32 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. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 1
    FLOWSERVE CORPORATION (NYSE: FLS) Gabelli Pump, Valve & Water Systems Symposium February 26, 2015
  2. Gabelli Pump Valve & Water Systems Symposium – 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. Gabelli Pump Valve & Water Systems Symposium – 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. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 4
    Business Outlook Disciplined focus on profitable growth Diverse, attractive end markets Opportunities to accelerate our resilient aftermarket franchise growth Leverage significant competitive advantages including flexible operating…
  5. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 5
    Diversified Business Model Segment Breakdown 2014 Sales - 4.9B Diverse mix of products, end markets and geographies provided earnings stability through the cycle and decreases risk profile Operating Segments Engineered Product…
  6. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 6
    Resiliency of Business Traditional Recent years mix of sales mix of sales New capacity greenfield / brownfield expansion Has trended lower: Typically large, longer lead-time OE projects 20% OE large only 10-15% E&C driven, highly…
  7. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 7
    Projected Impact of Oil Price Declines Market Typical share Expected Impact to Recent observations / expectations of FLS FLS bookings Project OE Run-rate AM OE Downstream Negative Integrated (Intl) oil companies to be impacted;…
  8. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 8
    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…
  9. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 9
    Earnings Stability Through the Cycle 4.00 3.76 3.60 3.41 2.84 *Adjusted EPS guidance 2.57 2.53 2.55 2.29 EPS of 3.60- 4.00 16.2% 15.3% 14.4% 14.4% 14.2% Operating Margin 1.49 13.7% 13.8% 10.9% 0.67 7.8%…
  10. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 10
    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…
  11. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 11
    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…
  12. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 12
    Large OE Activity Announcements JV with Technip Awarded Sasols Louisiana ethane cracker E&C awards for large infrastructure projects key leading indicator Page 13
  13. Gabelli Pump Valve & Water Systems Symposium – 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. Gabelli Pump Valve & Water Systems Symposium – 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. Gabelli Pump Valve & Water Systems Symposium – 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. Gabelli Pump Valve & Water Systems Symposium – 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. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 17
    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…
  18. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 18
    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,…
  19. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 19
    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…
  20. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 20
    Strong Annual Financial Performance Sales 6,000 5,000 4,000 3,000 2,000 1,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Aftermarket (M) Original Equipment (M) Operating Results 800 50.0% 700 40.0% 600 500…
  21. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 21
    Consistent Returns to Shareholders Total diluted share count has been reduced by approximately 20% since 2005 Cumulative annual declared dividends increased 360% to the anticipated 0.72 per share in 2015 from 0.20 per share in 2007…
  22. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 22
    EPS Seasonally Second-Half Weighted (Quarterly EPS - diluted) Full Year EPS Full Year EPS Full Year EPS Full Year EPS Full Year EPS 1.25 2.29 2.55 2.84 3.41 3.76 1.00 0.75 0.50 0.25 0.00 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11…
  23. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 23
    Q4 2014 Financial Highlights Fourth quarter EPS* of 1.16, up 14.9%, compared to 1.01 prior year EPS Strong bookings of 1.32 billion, up 5.6% versus prior year, or 11.2% on a constant currency basis Original equipment bookings of 768…
  24. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 24
    2015 Outlook 2015 Adjusted EPS 1 3.60 4.00 Revenue Growth 2 Down 1% to Up 3% Net Interest Expense 3 64 66 M Tax Rate 30% 31% Capital Expenditures 150 160 M Pension Contributions 30 35 M Scheduled Debt Reduction 45 M Longer Term…
  25. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 25
    Flowserve Investor Relations Contacts: Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jrouecheflowserve.com mmullinflowserve.com
  26. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 26
    A PPENDIX
  27. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 27
    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…
  28. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 28
    Full Year & Q4 2014 Consolidated Bookings & Sales Bookings Sales Bookings Bookings in Q4 2014 increased 5.6%, or 11.2% on a constant currency basis, driven by strength in all industries with the exception of water Original…
  29. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 29
    2014 Bookings & Industry Outlook 46% 19% 11% 4% 20% 42% 21% 11% 4% 22% OIL & GAS Oil & gas investment remained strong in 2014 despite geopolitical conflicts in key energy producing regions and downturn in oil prices…
  30. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 30
    2014 Sales & Regional Outlook NORTH AMERICA Strong growth during 2014 but some uncertainty ahead due to oil price environment Good momentum in U.S. petrochemicals due to cost advantages, derivatives build out and general economic…
  31. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 31
    Q4 & Full Year 2014 Consolidated Financial Results 4th Quarter Full Year Constant Constant ( millions) 2014 2013 Delta () Delta (%) FX (%)* 2014 2013 Delta () Delta (%) FX (%)* Bookings 1,322.3 1,252.6 69.7 5.6% 11.2% 5,161.0…
  32. Gabelli Pump Valve & Water Systems Symposium – Flowserve Corp. – slide 32
    Quarterly & Full Year 2014 Cash Flows Q4 Q3 Q2 Q1 YTD ( millions) 2014 2014 2014 2014 2014 2013 Net Income 161 130 125 109 525 488 Depreciation and amortization 27 27 29 27 110 106 Change in working capital 207 (6) (90) (207) (96)…

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