Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Shareholder Meeting (May 2012)
29 slides from Franklin Electric's shareholder meeting presentation, May 4, 2012
Slide 1: Annual Shareowners' Meeting May 4, 2012
Annual Shareowners’ Meeting May 4, 2012
Slide 2: 2011 Financial Highlights
2011 Financial Highlights Sales $821 M + 15% EPS $2.65 + 61% ROIC1 21.5% + 52% Net Debt/Capital 2% – 1 Operating income/net debt + equity 2
Slide 3: 2011 Global Business Segment Performance
2011 Global Business Segment Performance % of Sales Water Systems 80% Fueling Systems 20% Fueling Systems Sales $167 M + 28% Operating Income1 $32 M + 53% 1 Operating income after non-GAAP adjustments described on pages 16-17 of the company’s 2011 10-K Water Systems Sales $654 M + 12.1% Operating In
Slide 4: Increased Dividend for the 19th Consecutive Year
Increased Dividend for the 19th Consecutive Year 4 $0 1993 $0.20 $0.40 $0.40 $0.50 $0.60 $0.10 1994 1995 1996 1997 1998 1999 2000 2002 2009 2003 2004 2005 2006 2007 2008 2010 2001 2011
Slide 5: Increased Dividend for the 19th Consecutive Year, 20th
Increased Dividend for the 19th Consecutive Year 20th 5 $0 1993 $0.20 $0.40 $0.40 $0.50 $0.60 $0.10 1994 1995 1996 1997 1998 1999 2000 2002 2009 2003 2004 2005 2006 2007 2008 2010 2001 2011 2012
Slide 6: 1st Quarter 2012 Financial Highlights
1st Quarter 2012 Financial Highlights Sales $202 M + 9% EPS $0.96 + 113% Adjusted EPS1 $ .60 + 30% 6 1 For reconciliation, see the company’s 10-Q
Slide 7: Strategic Imperatives
Strategic Imperatives • Continuously improve quality and cost 7 • Grow through product line extensions and geographic expansion
Slide 8: North American Water Systems Manufacturing Restructuring Program (2005-2011)
North American Water Systems Manufacturing Restructuring Program (2005-2011) • 8 factories consolidated to 2 factories • 1.3 M ft2 consolidated to 0.66 M ft2 Western Pump Monarch Pump Linares Little Giant Pump Siloam Springs Jonesboro JBD Pump 8 Wilburton
Slide 9: North American Water Systems Manufacturing Restructuring Program 2005-2011
North American Water Systems Manufacturing 9 Restructuring Program 2005-2011 Cumulative Capital Investment $45 M Approx. Annual Direct Labor and Fixed Cost Reduction $30 M
Slide 10: North American Pump & Motor Manufacturing Facilities
North American Pump & Motor Manufacturing Facilities 10 Two World Class Manufacturing Facilities Wilburton, Oklahoma High Horsepower Motors & Pumps Linares, Mexico Low Horsepower Motors & Pumps • “15 Best Plants in North America” – Industry Week Magazine • “Best Plant in Mexico” – Great Places to Wo
Slide 11: Upgraded and Expanded Facilities During 2011
Upgraded and Expanded Facilities During 2011 11 Johannesburg, South Africa Izmir, Turkey Portland, Oregon (Pioneer Pump) Joinville, Brazil
Slide 12: Upgraded and Expanded Facilities During 2011
Upgraded and Expanded Facilities During 2011 12 Johannesburg, South Africa Izmir, Turkey Portland, Oregon (Pioneer Pump) Joinville, Brazil
Slide 13: New Corporate Headquarters
New Corporate Headquarters 13
Slide 14: Water Systems Product Line Extensions
Water Systems Product Line Extensions 14 Motors, Controls and Drives 1990s Motors, Pumps, Drives and Controls 2004 Franklin Submersible Motor 1950s Adjacent Pumping Systems 2006 Pre-Packaged Pumping Systems Global Addressable Market: ≈ $1.2 B ≈ $1.7 B ≈ $2.7 B ≈ $5.5 B ≈ $7.5 B
Slide 15: Oil and Gas Well Deliquification System
Oil and Gas Well Deliquification System 15 Annual Pumping Equipment Purchases ≈ $0.5 B / year (US, Canada, Australia) Natural gas to pipeline. Typical Water Well Depth (40 to 600 feet) Typical Oil/Gas Well Depth (2000 to 6000 feet) Natural gas released from seam. Coal or shale seam.
Slide 16: Other Packaged Systems Development Initiatives 2011
Other Packaged Systems Development Initiatives 2011 16 Solar Groundwater Pumping Systems Water Pressure Boosting/Control Systems
Slide 17: Pioneer Pump Acquisition – March 2012
Pioneer Pump Acquisition – March 2012 17 Mobile Pumping Systems - 2011 Sales - $70 M • Oil and gas fracking liquids • Dewatering mines and construction sites • Wastewater by-pass • Flood control
Slide 18: Water Systems Geographic Expansion
Water Systems Geographic Expansion 18 US/Canada Western Europe Latin America Eastern Europe2 Mideast/Africa Asia Pacific Total km3/year 700 400 350 200 400 2,100 4,150 Water Withdrawals by Region1 1 Source UNESCO and management estimates 2 Russia, Ukraine, Belarus 74% in Developing Regions
Slide 19: Water Systems Geographic Expansion
Water Systems Geographic Expansion 19 US/Canada Western Europe Latin America Eastern Europe2 Mideast/Africa Asia Pacific Total km3/year 700 400 350 200 400 2,100 4,150 % Withdrawals for Agriculture Use 40% 20% 90% 70% 80% 90% Growth Trend Flat Flat Growing Growing Growing Growing Water Withdrawals b
Slide 20: Water Systems Sales to Developing Regions
Water Systems Sales to Developing Regions 20 $48M 2003 2010 $0 $50 $75 $100 $125 $150 $175 $200 $225 2004 2005 2006 2007 2008 2009 $55M $77M $94M $135M $204M $188M $228M 12% Share of Addressable Market % of Total Franklin Water Sales 16% 40% $25 2011E $270M $250 $275
Slide 21: Fueling Systems Geographic Expansion
Fueling Systems Geographic Expansion 21 Growing motor vehicle sales Installation of new technologies International Expansion:
Slide 22: Fueling Systems Annual Sales of Cars and Light Trucks
Fueling Systems Annual Sales of Cars and Light Trucks 22 Up 5.5x North America 2000 Est. 2011 20 M 15.2 M 3 M 16.6 M China, India & Latin America 1 Source Scotiabank Group Global Auto Report
Slide 23: Fueling Systems Installation of New Technologies
Fueling Systems Installation of New Technologies 23 United States Rest of World Number of Stations 175,000 500,000 Stations with pressure pumping technology 97% 23% Stations with vapor recovery systems 80% 17% Stations with fuel management systems 75% 36% * Franklin management estimates Internationa
Slide 24: Fueling Systems International Sales Growth
Fueling Systems International Sales Growth 24 2011 $0 $20 $40 $100 2005 $60 $80 $17 M $71 M % of Franklin Fueling Sales: 22% 42%
Slide 25: The Problem: lack of access to clean, safe drinking water
25 The Problem: 5000 children per day die in Africa from lack of access to clean, safe drinking water
Slide 26: Our Mission: Bring clean, safe groundwater to underprivileged villages
26 Our Mission: Bring clean, safe groundwater to underprivileged villages in the developing world
Slide 27: Our Approach: Partner with governments
27 Our Approach: Partner with governments so we provide the water system infrastructure and the government provides ongoing maintenance
Slide 28: Village water projects in Africa
28 Hlabisa, Kwa-Zulu Natal – 1,500 People Emfilweni – 2,500 People Southern Sudan – 4,000 People Zimbabwe – 3,000 People Kenya Nakura – 10,000 People Botswana – 3,000 People
Slide 29: Annual Shareowners' Meeting May 4, 2012
Annual Shareowners’ Meeting May 4, 2012