Slide 1: Third Quarter 2022 Earnings Conference Call
THIRD QUARTER 2022 EARNINGS CONFERENCE CALL November 1, 2022 Q3 2022 EARNINGS CONFERENCE CALL 1
Slide 2: Forward Looking Statements and Non-GAAP Measures
FORWARD LOOKING STATEMENTS AND NON-GAAP MEASURES Safe Harbor Statement: This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions
Slide 3: Q3 2022 Highlights
Q3 2022 HIGHLIGHTS • Strong bookings of $1.22 billion represent YoY growth of 34.2%, or 40.8% constant currency - Included Middle East oil and gas award of $220 million, driving over 60% original equipment growth - Aftermarket bookings of $544 million represented a 16.2% constant currency increase o
Slide 4: Q3 2022 Overview
Q3 2022 OVERVIEW Strong Bookings Momentum Backlog Supports Expected Growth Bookings • Year-over-year bookings growth Sales • Revenue increased 0.8% versus $ millions driven by strong project activity $ millions prior year, or 7.2% on a constant $1,223 and continued MRO spending currency basis $1,086
Slide 5: Q3 Bookings Mix
Q3 BOOKINGS MIX Original Equipment End-Market Mix End-Market Outlook Water General Industries Power Chemical Oil & Gas Oil & Gas $680 $ millions $912M $1.22B • Continued strength in MRO and Aftermarket bookings $518 and activity $417 • Strong project activity primarily in the Middle East 56% • Energ
Slide 6: Q3 Sales Mix
Q3 SALES MIX Original Equipment Region Mix $ millions $866M $873M $425 $411 $412 49% 47% 47% 38% 42% 2021 Q3 2022 Q2 2022 Q3 North America Europe Asia Pacific 20% Middle East & Africa Aftermarket 19% Latin America $ millions $471 $461 $441 23% 20% 53% 53% 51% 11% 13% 8% 6% 2021 Q3 2022 Q2 2022 Q3 20
Slide 7: Q3 Segment Highlights FPD FCD
Q3 SEGMENT HIGHLIGHTS FPD FCD YoY Bookings Growth 40.1% 18.3% Adjusted Gross Margin* 28.6% 27.7% Adjusted SG&A as % of Sales* 23.5% 17.2% Adjusted Operating Margin* 6.0% 10.5% Book-to-Bill 1.56x 1.06x * See appendix for reconciliation to corresponding GAAP-based measure Q3 2022 EARNINGS CONFERENCE C
Slide 8: 2022 Fourth Quarter Adjusted EPS Guidance Bridge
2022 FOURTH QUARTER ADJUSTED EPS GUIDANCE BRIDGE Key Fourth Quarter Assumptions (1) Previously announced items not expected to Further opportunities to exceed $0.40 (4) recur in Q4 include impact of ERP conversion of $0.09, corporate expenses of $0.10 and technology acquisition of $0.03 $0.12 $0.40
Slide 9: Flowserve 3D Growth Strategy in Action
FLOWSERVE 3D GROWTH STRATEGY IN ACTION DECARBONIZATION – DECARBONIZATION – CREATING SUSTAINABLE ENABLING CARBON CAPTURE, SOLUTIONS THROUGH THE POWER UTILIZATION & STORAGE IN THE U.S. OF WATER STORAGE Flowserve will supply Vertical Turbine Flowserve will supply pumps and valves for Pumps to the West
Slide 10: Q3 Technology Developments
Q3 TECHNOLOGY DEVELOPMENTS DIVERSIFY – FLEX Energy DECARBONIZE – Acquired Chart Recovery Device Ind’s Hydrogen Pump Technology • Best-in-class hydraulic • Acquired in-process R&D for efficiency – Recovers more than hydrogen dispensing pump 98% of the hydraulic energy of technology the brine stream •
Slide 11: Key Takeaways and Initial 2023 Outlook
KEY TAKEAWAYS AND INITIAL 2023 OUTLOOK • Strong Q3 bookings augmented by 3D strategy bringing backlog to $2.6 billion • Q3 was challenged by a number of issues that have mostly been resolved - ERP conversion disruption in highly profitable business that is now operating at normal levels - Unusually
Slide 12: Questions & Answers
Questions & Answers Q3 2022 EARNINGS CONFERENCE CALL 1 2
Slide 13: Appendix
APPENDIX Q3 2022 EARNINGS CONFERENCE CALL 1 3
Slide 14: Q3 2022 Consolidated Financial Results
Q3 2022 CONSOLIDATED FINANCIAL RESULTS 3rd Quarter 3rd Quarter Adjusted 2022 2022 2021 ($ m illions) 2022 2021 Delta ($) Delta (%) Constant Adjusted Adjusted Adjusted Delta ($) Delta (%) Constant FX(%)* Items Results Results FX(%)* Bookings $ 1,223.3 $ 911.6 $ 311.7 34.2% 40.8% $ - $ 1,223.3 $ 911.6
Slide 15: Year-to-Date 2022 Consolidated Financial Results
YEAR-TO-DATE 2022 CONSOLIDATED FINANCIAL RESULTS Year-to-Date Year-to-Date Adjusted Constant 2022 2022 2021 Constant ($ m illions) 2022 2021 Delta ($) Delta (%) Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* FX(%)* Items Results Results Bookings $ 3,346.7 $ 2,805.7 $ 541.0 19.3% 24.0% $ - $ 3
Slide 16: Flowserve Pump Division Q3 2022 Segment Results
FLOWSERVE PUMP DIVISION Q3 2022 SEGMENT RESULTS 3rd Quarter Year-to-Date Constant Constant ($ m illions) 2022 2021 Delta ($) Delta (%) FX(%)* 2022 2021 Delta ($) Delta (%) FX(%)* Bookings $ 925.8 $ 660.9 $ 264.9 40.1% 46.8% $ 2,433.6 $ 1,982.5 $ 451.1 22.8% 27.7% Sales $ 592.6 $ 601.8 $ (9.2) -1.5%
Slide 17: Flowserve Pump Division Q3 2022 Bookings and Sales
FLOWSERVE PUMP DIVISION Q3 2022 BOOKINGS AND SALES 3rd Quarter Year-to-Date Constant Constant ($ m illions) 2022 2021 Delta (%) 2022 2021 Delta (%) FX(%)* FX(%)* 460 228 102% 109% 1,041 708 47% 52% OE Bookings Mix 50% 35% 1500 bps 43% 36% 700 bps ** 8% 14% 9% 14% 466 433 1,392 1,274 AM 50% 65% (1500
Slide 18: Flow Control Division Q3 2022 Segment Results
FLOW CONTROL DIVISION Q3 2022 SEGMENT RESULTS 3rd Quarter Year-to-Date Constant Constant ($ m illions) 2022 2021 Delta ($) Delta (%) FX(%)* 2022 2021 Delta ($) Delta (%) FX(%)* Bookings $ 300.0 $ 253.6 $ 46.4 18.3% 24.7% $ 923.2 $ 834.0 $ 89.2 10.7% 15.0% Sales $ 282.6 $ 266.1 $ 16.5 6.2% 12.5% $ 79
Slide 19: Flow Control Division Q3 2022 Bookings and Sales
FLOW CONTROL DIVISION Q3 2022 BOOKINGS AND SALES 3rd Quarter Year-to-Date Constant Constant ($ m illions) 2022 2021 Delta (%) 2022 2021 Delta (%) FX(%)* FX(%)* 222 190 17% 24% 699 626 12% 16% OE Bookings Mix 74% 75% (100) bps 76% 75% 100 bps ** 24% 28% 8% 11% 79 64 224 208 AM 26% 25% (100) bps 24% 2
Slide 20: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 214.697.8568 jroueche@flowserve.com mmullin@flowserve.com Q3 2022 EARNINGS CONFERENCE CALL 2 0