Spx Technologies, Inc. · NYSE:SPXC
Spx Technologies — Bank of America Merrill Lynch 2011 Industrials Conference
39 slides from Spx Technologies's conference presentation, Dec 7, 2011
Slide 1: Bank of America Merrill Lynch 2011 Industrials Conference
Bank of America Merrill Lynch 2011 Industrials Conference December 7, 2011 1 December 2011 1
Slide 2: Forward-looking statements
Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations, financial projections and acquisitions are forward-looking statements and are thus prospective. These forward-looking statements are subjec
Slide 3: SPX Overview
SPX Overview INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL December 2011 3
Slide 4: SPX Transformation
SPX Transformation 1912-1996 2005-Today 1997-2004 U.S. Automotive Global, Multi-Industry Supplier Supplier Diversified Industrial Manufacturer Of Engineered Solutions CLYDEUNION Diversification, Acquisition >100 Acquisitions; Legacy divestitures APV Acquisition Focus on Executing United Dominion Lon
Slide 5: SPX Geographic Profile
SPX Geographic Profile Emerging Market Revenue % 2010 Revenue % by Geography of Total Reported Revenue 48% 24% 28% 25% 22% 23% 17% 15% 14% 18% 2005 2006 2007 2008 2009 2010 2011E* 2% 8% *Through the first nine months of 2011 Globalization has Improved Growth Prospects; Emerging Markets have Provided
Slide 6: SPX Overview
SPX Overview SPX is a leading global supplier of engineered solutions including: power & energy infrastructure food & beverage process equipment diagnostic tools used in vehicle service U.S. based Fortune 500 company Global capabilities with ~16,000 employees worldwide Power & Food & Vehicle Energy
Slide 7: SPX Revenue Breakdown
SPX Revenue Breakdown Revenue by End Market Revenue by Segment Thermal Equipment & Flow Services Infrastructure Food & 30% 53% HVAC/ Technology Other Beverage 16% 37% 17% Power & Energy 36% Test & Vehicle Measurement 20% Service 16% Other Industrial Markets Products & Services 15% 13% Note: End mark
Slide 8: Flow Technology
Flow Technology 2011E Revenue by End Market Food & Beverage 48% Industrial Q3 ending backlog increased 17% year- Processes over-year 29% Power & Energy Order volumes for short cycle 23% components remained steady Revenue & Segment Income Margins sequentially; no indication of weakness +21% to across
Slide 9: Test & Measurement
Test & Measurement 2011E Revenue by End Market Vehicle Service 85% Short cycle orders remained steady Telecom Positive outlook for new vehicle 8% introductions over the next few years Transportation 7% Increased standards for vehicle efficiency Revenue & Segment Income Margins and environmental impa
Slide 10: Thermal Equipment & Services
Thermal Equipment & Services 2011E Revenue by End Market Power HVAC Generation 28% 67% Orders flat year-over-year Industrial 5% We remain disciplined on project selection Revenue & Segment Income Margins +2% to Quoting activity increased in emerging +3% regions, however, highly competitive $1,596 $1
Slide 11: Industrial Products & Services
Industrial Products & Services 2011E Revenue by Product Power Transformers Hydraulic 33% Technologies 21% Other Q3 ending backlog increased 37% year- 7% over-year Communication Crystal Growers Technologies 9% Aerospace 18% Power transformer trends: Components 12% Replacement demand remains robust Gr
Slide 12: Historical Financial Results for Power Transformer Business
Historical Financial Results for Power Transformer Business ($ millions) Quarterly Backlog Value* Full Year Revenue Full Year Operating Margin % $481 $393 $376 $348 $283 $250 ~$240 $209 $224 $194 30% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E *2011 backlog figures do not include orders ma
Slide 13: Power Transformer Facility Expansion
Power Transformer Facility Expansion Power Transformer Facility Expansion Nearly Complete; Received Orders for 13 Large Power Units and Expect to Begin Production in December December 2011 13
Slide 14: SPX Flow Technology
FOOD & BEVERAGE POWER & ENERGY INDUSTRIAL PROCESSES SPX Flow Technology GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS December 2011 14 December 2011 14
Slide 15: Flow Technology's Strategic Development
Flow Technology’s Strategic Development consolidate & integrate 2003 2004 2005 2006 2007 2008 2009 2010 2003 - 2004: brand focused operating structure 2005 - 2007: consolidated product offerings 2011 2008 - 2009: integrated APV acquisition invest & grow: 2010: reorganized to regional management stru
Slide 16: Flow Technology's Strategic Development
Flow Technology’s Strategic Development strengthened base; expanded global market relevance; localized resources 2003 2004 2005 2006 2007 2008 2009 2010 Revenue in $ billions ~$2.6 $2.0 ~$2.0 2011 $1.6 $1.7 $1.1 invest & grow: $0.7 $0.8 end market strategy emerging market capabilities 2005 2006 2007
Slide 17: Key Flow Technology Acquisitions
Key Flow Technology Acquisitions Food & Beverage Power & Energy Industrial Markets Note: CLYDEUNION acquisition targeted to close in Q4 2011 Since 2005, 85% of Acquisition Capital Has Been Focused on Strategically Expanding Flow Technology Segment December 2011 17
Slide 18: Flow Technology Overview
Flow Technology Overview 2010 Revenue % by Geography SPX Flow Technology is a leading global supplier of custom engineered process solutions 32% 30% Key markets served: food & beverage power & energy industrial processes 25% Global capabilities with ~6,000 employees worldwide 6% 2011E revenue: ~$2b
Slide 19: Flow Technology End Market Structure
Flow Technology End Market Structure Food & Beverage Power & Energy Industrial Processes Design, manufacture and Design and manufacture highly Currently supply highly service highly engineered food engineered components and engineered components into processing components, modular systems used in th
Slide 20: Flow Technology Customer Examples
Flow Technology Customer Examples Food & Beverage Power & Energy Industrial Processes Well Recognized, Diverse, and Global Customer Base; Continue to Focus on Expanding Customer Relevance December 2011 20
Slide 21: Flow Technology Revenue Analysis
Flow Technology Revenue Analysis Revenue By Product Type Components Systems ~70% original equipment ~80% fully integrated Components ~30% aftermarket & services ~20% modular skids ~75% lead times: < 3 months lead times: 6 to 18 months sales channels: direct, reps, sales channel: primarily direct dis
Slide 22: Flow Technology Food & Beverage Systems
Flow Technology Food & Beverage Systems ($ millions) Annual Systems Revenue 2011E Systems Revenue by Type +70% to +80% Dairy & Dairy Food Liquid Powder 32% 20% $293 $270 Dairy $232 Turnkey Food 14% 3% Pharma Fats & Oils 4% Cheese Beverage 13% 4% 10% 2008 2009 2010 2011E 14% 14% 18% ~25% % of Total F
Slide 23: Recent Large Food & Beverage System Awards
Recent Large Food & Beverage System Awards Margarine Whey & Butter Powder Milk Evaporation Milk Powder Butter Food Ingredients Yogurt Yogurt Caustic 6 Plants Evaporator Whey Powder Dairy Water Yogurt Yellow Fats Infant Formula Soft Drinks Milk EP Cheese Soft Drinks Orders for Large Scale Food & Beve
Slide 24: Flow Technology Backlog Analysis
Flow Technology Backlog Analysis ($ millions) Quarter End Backlog Backlog Aging Components Systems 2011E Sales 48% $318 $308 $295 $250 $283 $554 $589 $592 $522 $506 2012E Sales 52% Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Note: As of 11/2/2011 17% Year-Over-Year Increase in Flow Technology Backlog to
Slide 25: Flow Technology Segment Income and Margin Development
Flow Technology Segment Income and Margin Development Annual Segment Income and Margin +20% to +25% $243 16.4% $216 15.6% $211 14.4% 13.0% to $175 12.9% 13.0% 13.2% 12.2% $128 $106 acquisition acquisition dilution: 550 pts dilution: 50 pts 2005 2006 2007 2008 2009 2010 2011E Note: 2011E as of 11/2/2
Slide 26: Flow Technology End Market Development
Flow Technology End Market Development ($ billions) Revenue by End Market 2005 2011E Pro Forma 2011E Pro Forma Revenue by End Market ~$1b ~$1b Food & ~$0.6 Beverage 37% Power & $0.3 Energy $0.2 38% $0.2 Food & Power & Industrial Beverage Energy Markets Industrial Processes 25% Note: 2011E as of 11/2
Slide 27: SPX Executive Summary
SPX Executive Summary ($ billions; except per share data) Revenue $5.8 Experiencing strong growth in early cycle Adjusted EPS* businesses; recovery in late cycle power ~$5.5 businesses has been mixed $4.8 $4.9 $4.5 $6.53 Positive long-term growth expectations $3.9 $4.85 $4.35 to across key end marke
Slide 28: Questions?
questions? December 2011 28 December 2011 28
Slide 29: Appendix
appendix December 2011 29 December 2011 29
Slide 30: SPX Revenue by Segment
SPX Revenue by Segment 2005 Reported 2011E Pro Forma Revenue by Segment Revenue by Segment Thermal Equipment & Thermal Services Equipment & 28% Flow Services Technology 27% Flow 43% Industrial Technology $4.3b $6.1b Products & 20% Services 27% Test & Measurement 17% Test & Measurement Industrial 25%
Slide 31: Flow Technology Food & Beverage Business
Flow Technology Food & Beverage Business Primary Applications 2010 Revenue by End Market liquid dairy products Dairy powder dairy products Products 52% beverages ~$740m processed foods Food & Beverages 42% pharmaceuticals Pharma & Personal personal care products Care 7% A Global Market Leader in Dai
Slide 32: Flow Technology Industrial Business
Flow Technology Industrial Business 2010 Revenue by End Market Primary Applications Mining & Marine & mining of minerals Minerals Shipbuilding 28% 28% marine & shipbuilding ~$630m chemical processing Other 10% Rubber & waste water treatment Plastics 14% Waste Water Treatment pulp & paper Paints & In
Slide 33: Flow Technology Power & Energy Business
Flow Technology Power & Energy Business 2010 Revenue by End Market Primary Applications Oil & Gas Oil & Gas transportation 61% & distribution Chemical Injection for Coal Fired petroleum processing ~$293m Power 15% Nuclear and conventional power generation Nuclear Power Other Natural Gas 8% 10% Power
Slide 34: CLYDEUNION Pumps Acquisition
CLYDEUNION Pumps Acquisition Revenue % by Geography CLYDEUNION Pumps is a leading global supplier of Pump Technologies into oil & gas, power generation and industrial markets 22% 20% Based in the U.K. Global capabilities with ~2,000 employees: 8 manufacturing plants 25% 25 service centers Revenue br
Slide 35: CLYDEUNION End Markets
CLYDEUNION End Markets Revenue by End Market Applications Upstream oil & gas Oil & Gas 52% Downstream oil & gas Nuclear power generation Conventional power generation Industrial Power Water desalination Markets Generation 9% 39% Mining & minerals Offshore and marine CLYDEUNION Designs, Manufactures
Slide 36: CLYDEUNION Oil & Gas Pumps
CLYDEUNION Oil & Gas Pumps Upstream Oil CLYDEUNION provides a comprehensive range of Exploration & production highly engineered centrifugal and reciprocating Transportation & storage pumps that are critical to oil extraction from increasingly Downhole & subsea marginal or difficult fields Downstream
Slide 37: CLYDEUNION Power Generation Pumps
CLYDEUNION Power Generation Pumps Nuclear Power CLYDEUNION is a leading global supplier of diverse pump technologies that are used in the nuclear power generation process feed water pump residual heat safety injection/ recovery pump containment pump Conventional Power CLYDEUNION is a leading provide
Slide 38: Pro Forma Calculations
Pro Forma Calculations 2011E ($ billions) Revenue SPX Flow Technology $2.0 CLYDEUNION Pumps $0.6 Pro Forma SPX Flow Technology - CLYDEUNION Pumps $2.6 2011E Revenue SPX Corporation $5.5 CLYDEUNION Pumps $0.6 Pro Forma SPX Corporation - CLYDEUNION Pumps $6.1 Note: 2011E as of 11/2/2011 Note: CLYDEUNI
Slide 39: Full Year Adjusted EPS
Full Year Adjusted EPS 2011E 2006 2007 2008 2009 2010 Mid-Point GAAP EPS from continuing operations $ 3.74 $ 5.33 $ 4.68 $ 0.95 $ 3.86 $ 4.14 refinancing charges - - - - 0.33 - asset impairments - 0.05 2.21 3.40 - 0.29 tax benefits (0.85) (0.59) (0.47) (0.43) (0.57) (0.41) legal matters 0.27 0.06 0.
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