Slide 1: SPX Corporation Investor Presentation
SPX Corporation Investor Presentation March 2022 SPX Corporation 2019 Investor Event - New York
Slide 2: SPX Corporation Overview
SPX SPX Corporation Overview
Slide 3: Company Overview
Company Overview 2021 Revenue by Region Headquartered in Charlotte, NC 82% 89% 9% 6% Focused, market-leading platforms: HVAC Detection & Measurement 9% ~$1.4b Revenue in 2022E ~3,100 employees NYSE Ticker: SPXC SPX is a Leading Supplier of HVAC and Detection & Measurement Products and
Slide 4: Attractiveness of SPX for Long-Term Holders
Attractiveness of SPX for Long-Term Holders Attractive Core Well positioned key platforms in growth markets Favorable long-term secular trends and business mix; Growth growth initiatives in early innings Cash Flow Strong free cash flow conversion of adjusted net income* Business System Consistent re
Slide 5: Strong Product Offerings and Attractive Market Dynamics
Strong Product Offerings and Attractive Market Dynamics 2021 2021 REVENUE FROM REPLACEMENT SALES† ADJUSTED REVENUE EBITDA MARGIN* Cooling towers ~70% Engineered air quality Refrigeration Process cooling $752m mid-teens 2021 REVENUE FROM #1 OR #2 MARKET POSITION† Boilers Electrical heatin
Slide 6: Value Creation Framework
Value Creation Framework Organic Growth SPX Business System • New products • Policy deployment • Channel expansion • Operational excellence • Adjacent markets • Due diligence/integration Inorganic Growth Culture & Values • Strategic platform focus • Integrity • Significant capital to deploy • Result
Slide 7: 2022+ Initiatives
2022+ Initiatives Revenue & Margin Enhancement - Tools & Drivers Product Technology M&A Channel Continuous Innovation Improvement Geography Lean Software Service Robotics Digital Sourcing AI Loyalty March 2022 7
Slide 8: Building the Products & People that Build the World
Building the Products & People that Build the World …In What We Make… Our products enable E Drive energy efficient HVAC solutions Keep water and gas lines safe and clean Recycle heat exchange media Issue annual sustainability report Lower Clean Connectivity Clean Safety Emissions Water Energ
Slide 9: Well-Positioned for Infrastructure Spending
Well-Positioned for Infrastructure Spending Water & Wastewater General Construction (heavy civil, housing) Public Transit Renewables (wind) Telecom (5G), Airports, Ports Institutional (K-12, gov’t, healthcare) Infrastructure-centric R&D March 2022 9
Slide 10: SPX 2025
SPX4 SPX 2025
Slide 11: SPX Strategic Portfolio Transformation Continues
SPX Strategic Portfolio Transformation Continues 2020A (Pre-Sale) 2021A 2025 Targets Adj. Revenue $1.56B $1.22B ~$2.0B Gross margin % 31.0% ~+450bps 35.4% ~+500bps ~40% Adj. Segment Income % 15.3% ~+110bps 16.4% ~+400bps ~20% Adj. Operating Income % 10.9% 11.1% ~+500bps ~16% Long-term Growth % ~1-4%
Slide 12: Focused, Market-Leading Growth Platforms
Focused, Market-Leading Growth Platforms Detection & Measurement (~$467M)(1) HVAC (~$752M)(1) ~$1.22 Billion(1) Location & Inspection Cooling Premium engineered niches Technology / innovation focus Aids to Navigation ~90% Market Leadership (#1 or #2) Heating High replacement revenue (~70%)
Slide 13: SPX Long-Term Targets – Revenue
SPX Long-Term Targets – Revenue SPX TODAY SPX TARGET 2100.0 ~$2.0 Billion 2000.0 1900.0 1800.0 '16-'21 CAGR 1700.0 1600.0 1500.0 ~$1.4 Billion 1400.0 1300.0 ~$1.2 Billion Process Cooling 1200.0 ~$1.1 Billion Process Cooling 1100.0 Process Cooling 1000.0 7.0% 900.0 HVAC 800.0 HVAC HVAC (~$760m) 700.0
Slide 14: Segment Overview
Segment Overview HVAC Detection & Measurement
Slide 15: HVAC
SPX4 HVAC
Slide 16: HVAC Segment Overview
HVAC Segment Overview 2020 2021 2022E 2021 Revenue by Product Adjusted segment income* % ($ millions) $752 ~$873 $741 Heating Cooling Products $752m Products 42% 58% 14% 14% 14.0-14.5% 2021 Revenue by Geography 2020 2021 2022E 3% Gross Margin% 31% 32% - Segment EBITDA* $114 $116 - 10% 87% . *Non-GAA
Slide 17: HVAC Cooling Overview
HVAC Cooling Overview 2021 Revenue by Product Cooling products used in non-residential, commercial Parts & Service construction, engineered air quality, process cooling and 30% Package Cooling refrigeration applications $434m Towers & Refrigeration Well-recognized product brands: Marley, Recold,
Slide 18: Cooling Product Examples
Cooling Product Examples Marley MD Everest Tower Marley MH Element Fluid Cooler Engineered Air Quality High-Value Components Suitable for larger applications Industrial and process cooling Customized fans and blowers Gearboxes, motors, drives 85% more cooling capacity than High performan
Slide 19: HVAC Heating Overview
HVAC Heating Overview 2021 Revenue by Product North American businesses with strong brands Electric Heating Products Large installed base / established spec position 25% Boiler Systems $318m 75% Products used in residential and non-residential markets and sold primarily through distributors 20
Slide 20: Heating Product Examples
Heating Product Examples Residential Boilers Commercial Boilers Electrical Heating Products High efficiency natural gas High efficiency natural gas Standard cast iron Standard cast iron Digital Unique hybrid design wall heaters Gas combi boilers Wash-down, corrosion resistant heaters Tre
Slide 21: Detection & Measurement
SPX4 Detection & Measurement
Slide 22: Detection & Measurement Segment Overview
Detection & Measurement Segment Overview 2021 Revenue by Product 2020 2021 2022E Adjusted segment income* % ($ millions) ~$503 $467 Aids to Navigation Location & (“AtoN”), CommTech, $387 $467m Inspection and Transportation Equipment 45% 55% 21% 20% 19.0-21.0% 2021 Revenue by Geography 18% 2020 2021
Slide 23: Location & Inspection Overview
Location & Inspection Overview 2021 Revenue by Product A leading global supplier of location & inspection equipment for underground infrastructure Location Inspection 50% $257m 50% Global distribution / established channels Integrated hardware and software solutions 2021 Revenue by Geography
Slide 24: Location & Inspection – Key Products
Location & Inspection – Key Products Location Equipment Inspection Equipment Full Lifecycle Infrastructure Solutions Provider for Location & Inspection Markets March 2022 24
Slide 25: AtoN, CommTech, and Transportation
AtoN, CommTech, and Transportation 2021 Revenue by Product CommTech CommTech : A leading global supplier of spectrum monitoring, 22%* communication intelligence and geolocation technologies Transportation Aids to Navigation: Global Leader in terrestrial obstruction lighting, 25% $211m marine aid
Slide 26: Aids to Navigation – Key End Markets
Aids to Navigation – Key End Markets Terrestrial Obstruction Marine Obstruction Airfield Ground Lighting Lighting Lighting Global Leader with Full Product Range March 2022 26
Slide 27: CommTech – Key Capabilities & Solutions
CommTech – Key Capabilities & Solutions Spectrum Monitoring Communications (SMS) Intelligence NEW PIC Spectrum monitoring leader with expanding COMINT presence March 2022 27
Slide 28: Transportation – Next Generation Fare Collection
Transportation – Next Generation Fare Collection Mobile Legacy Farebox Fast Fare Farebox Fast Fare-e Ticketing Point-of-Sale e-Fare Cloud-Based Infrastructure Software Service and as a Service Support Fare Collection Suite of Products Integrated with Back-End Support; We Believe This is the New Indu
Slide 29: Financial Performance & Capital Allocation
Financial Performance & Capital Allocation
Slide 30: Capital Allocation Discipline
Capital Allocation Discipline Methodology Expected Outcome 1) Utilize strategic planning process to evaluate Quantify projected future cash flows and future revenue and earnings growth estimate total company valuation 2) Maintain target capital structure Net Debt to EBITDA(1) target range: 1.5x
Slide 31: Financial Position - Capital Structure & Liquidity Update
Financial Position - Capital Structure & Liquidity Update 1.5-2.5x ($millions) Q3 2021 Q4 2021 Impact of Cincinnati Fan Short-term debt $2 $2 1.6x 1.6x Current maturities of long-term debt 12 13 Long-term debt 234 231 -0.9x Total Debt $248 $246 -1.9x Less: Cash on hand (560) (396) Net Debt $(312) $(
Slide 32: SPX Acquisition Approach
SPX Acquisition Approach Qualitative Quantitative Focused on building existing platforms Revenue transaction size $20-$200 million Existing markets or close adjacencies (primary focus); opportunistically consider larger targets Engineered products Cash ROIC ≥ double digits 3-5 yrs Attrac
Slide 33: Building Strategic Platforms
Building Strategic Platforms
Slide 34: SPX Business Value Model
SPX Business Value Model Disciplined Business System Strategic Acquisition Approach Superior Performance Strategic Organic Sales Growth (Innovation, Product Mgmt.) Organic / Inorganic SPX has acquired Revenue Growth Continuous Improvement ~$360M of revenue (Lean, 80/20) in ~4 years Margin Expansion
Slide 35: Building Strategic Platforms – Location & Inspection
Building Strategic Platforms – Location & Inspection Location Equipment Inspection Equipment $~100m $~10m $~10m* $~100m $~40m* Location & Specialized GPR Location Water & Waste Gas Utility Inspection Ferrous Locators Equipment Water Pipeline Pipeline Transformed ~$100m Equipment Inspection Inspectio
Slide 36: Building Strategic Platforms – Aids to Navigation
Building Strategic Platforms – Aids to Navigation $~40-60m $~25-30m* $~30-40m* Terrestrial Marine Obstruction Airfield Ground and Transformed ~$40-60m Obstruction Lighting Lighting Marine Obstruction Lighting Obstruction Lighting Business into ~$130m Global Leader in Aids to Navigation Solutions Glo
Slide 37: Building Strategic Platforms – CommTech
Building Strategic Platforms – CommTech Acquired Feb 2019 ~$40-60m Legacy Business ~$14m* ~$40-50m* ~25-30m* Spectrum Monitoring Tactical Data Links and and COMINT Solutions RF Countermeasures Broad Provider of Spectrum Monitoring and COMINT Solutions Significant Runway to Grow Presence in COMINT *
Slide 38: Building Strategic Platforms – HVAC Cooling
Building Strategic Platforms – HVAC Cooling $~430m $~15m* $~60-70m* Leading Position in Industrial Custom fans, blowers, Strengthened Industrial Packaged Cooling and Refrigeration Products and critical exhaust Field Erected Towers systems Refrigeration Solutions and Accelerated Growth Strategy in En
Slide 39: Building Strategic Platforms – HVAC Heating
Building Strategic Platforms – HVAC Heating Acquired Feb 2019 ~$180-200m ~$40m* ~25-30m* Leading Position in High-efficiency Residential Boilers Commercial Boilers Accelerated Growth Strategy in Commercial High Efficiency Boilers Opportunity for Core Consolidation / Product Add-Ons * Approximate ann
Slide 40: Executive Summary
SPX4 Executive Summary
Slide 41: Executive Summary
Executive Summary Balanced business portfolio with attractive and diverse end market drivers Strong balance sheet, significant capital availability, and cash generation Effective business system and continued focus on growth accelerators, including inorganic opportunities Significant Value Cre
Slide 42: Appendix
SPX4 Appendix
Slide 43: 2022 Guidance
2022 Guidance Revenue Segment Income Margin $855-$890m 14.0-14.5% HVAC ($752m in 2021) (14.3% in 2021) Detection & $485-$520m 19.0%-21.0% Measurement ($467m in 2021) (19.9% in 2021) $1.34-$1.41B 16%-17% Total SPX Adjusted ($1.22B in 2021) (16.4% in 2021) Adjusted Operating Income in a Ra
Slide 44: Modeling Considerations – Full Year 2022
Modeling Considerations – Full Year 2022 Metric Considerations Corporate expense $47-49m Long-term incentive comp $13-15m Restructuring costs $1m Interest cost $7-9m Other income/(expense), and Non-service pension $4-6m benefit/(expense) Tax rate 20-22% Capex $15-20m Cash cost of pension + OPEB $12-
Slide 45: 2022 Adjusted EPS Guidance - Key Drivers
2022 Adjusted EPS Guidance - Key Drivers • Favorable economic policy/infrastructure stimulus $2.80 • Moderating supply chain challenges and input costs • Accelerated project-related sales $2.65 Base Case • Worsening supply chain challenges and input costs • Delayed project-related sales $2.50 • Unfa
Slide 46: SPX in a Paris Agreement World - HVAC
SPX in a Paris Agreement World - HVAC HVAC Cooling HVAC Heating Most efficient way of cooling Highest efficiency hydronics Lower GHG intensiveness Broadest electrical heating suite Lower lifecycle H2O use March 2022 46
Slide 47: SPX in a Paris Agreement World – Detection & Measurement
SPX in a Paris Agreement World – Detection & Measurement Location & Inspection Aids-to-Navigation Safer infrastructure Safer air travel / shipping Cleaner water Minimize power need (LEDs) Minimize GHG leaks Solar PV integration March 2022 47
Slide 48: SPX in a Paris Agreement World – Detection & Measurement
SPX in a Paris Agreement World – Detection & Measurement CommTech Transportation Enabling next gen comms Mobility for the underserved Safety from new threats Low carbon travel Lower power use Efficient system management March 2022 48
Slide 49: Adjusted Segment Income Phasing
Adjusted Segment Income Phasing 35% 34% 22% 23% 24% 20% 21% 21% Q1 Q2 Q3 Q4 2020 2021 March 2022 49
Slide 50: 2020 Adjusted SPX Results by Quarter
2020 Adjusted SPX Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2020 Segment Income 36.4 36.1 40.8 58.5 171.8 Exclude: One time acquisition related costs 0.1 - - 1.2 1.3 Exclude: Intangible amortization 2.6 2.4 3.3 5.7 14.0 Adjusted Segment Income 39.1 38.5 44.1 65.4 187.1 Operating Income from Contin
Slide 51: 2021 Adjusted SPX Results by Quarter
2021 Adjusted SPX Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2021 Segment Income 42.3 37.3 32.9 61.4 173.9 Exclude: One time acquisition related costs 0.6 0.9 3.3 0.3 5.1 Exclude: Intangible amortization 4.0 6.5 5.5 5.6 21.6 Adjusted Segment Income 46.9 44.7 41.7 67.3 200.6 Operating Income from Co
Slide 52: HVAC Segment Results – 2020, 2021
HVAC Segment Results – 2020, 2021 ($ millions) Q1 Q2 Q3 Q4 2020 Revenue $162.8 $165.2 $182.6 $230.2 $740.8 GAAP Segment Income 18.2 20.1 26.6 37.8 102.7 Exclude: One time acquisition related costs 0.1 - - 0.5 0.6 Exclude: Intangible amortization 0.8 0.7 0.7 0.7 2.9 Adjusted Segment Income $19.1 $20.
Slide 53: D&M Segment Results – 2020, 2021
D&M Segment Results – 2020, 2021 ($ millions) Q1 Q2 Q3 Q4 2020 Revenue $91.9 $92.1 $85.2 $118.1 $387.3 GAAP Segment Income 18.2 16.0 14.2 20.7 69.1 Exclude: One time acquisition related costs - - - 0.7 0.7 Exclude: Intangible amortization 1.8 1.7 2.6 5.0 11.1 Adjusted Segment Income $20.0 $17.7 $16.
Slide 54: Q4 2021 U.S. GAAP to Adjusted EPS Reconciliation
Q4 2021 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) Segment income (1) $ 61.4 $ 5.9 $ 67.3 Corporate expense (2) (20.6) 5.2 (15.4) Long-term incentive compensation expense (3.4) - (3.4) Impairment of intangible assets (3) (5.7) 5.7 - (4) Special charges, net (0.3)
Slide 55: Q4 2020 U.S. GAAP to Adjusted EPS Reconciliation
Q4 2020 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) (1) Segment income $ 58.5 $ 6.9 $ 65.4 Corporate expense (2) (14.7) 1.3 (13.4) Long-term incentive compensation expense (3.6) - (3.6) Impairment of intangible assets (3) (0.7) 0.7 - Special charges, net (1.0) - (
Slide 56: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation ($ millions) Three months ended Twelve months ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Operating income $ 13.9 $ 29.1 $ 73.7 $ 96.9 Include - TSA Income (1) 0.9 - 0.9 - Exclude: Acquisition related and other c
Slide 57: Q4 2021 Non-GAAP Reconciliation - Organic Revenue
Q4 2021 Non-GAAP Reconciliation - Organic Revenue Three months ended December 31, 2021 Detection & HVAC Measurement Net Revenue Growth (Decline) (8.0)% 17.0 % Exclude: Foreign Currency 0.1 % -% Exclude: Acquisitions 0.9 % 12.8 % Organic Revenue Growth (Decline) (9.0)% 4.2 % March 2022 57
Slide 58: U.S. GAAP Adjusted Segment Income Reconciliation
U.S. GAAP Adjusted Segment Income Reconciliation ($ millions) CONSOLIDATED SPX: Three months ended Twelve months ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Total segment income $ 61.4 $ 58.5 $ 173.9 $ 171.8 Exclude: Acquisition related costs (1) (0.3) (1.2) (5.1) (
Slide 59: U.S. GAAP Adjusted Segment Income Reconciliations
U.S. GAAP Adjusted Segment Income Reconciliations ($ millions) HVAC REPORTABLE SEGMENT: Three months ended Twelve months ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 HVAC segment income $ 33.0 $ 37.8 $ 104.2 $ 102.7 Exclude: Acquisition related costs (1) (0.1) (0.5)