Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Investor Presentation (April 2021)
23 slides from Franklin Electric's investor presentation, April 2021
Slide 1: Investor Presentation 2Q-2021
Investor Presentation 2Q-2021 Gregg Sengstack, Chairperson and CEO John J. Haines, VP – Chief Financial Officer April 2021
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT: "Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company’s financial results, costs, expenses or expense reductions, profit margins, invento
Slide 3: Strategic Focus
STRATEGIC FOCUS: To grow as a global provider of water and fuel systems, through geographic expansion and product line extensions, leveraging our global platform and competency in system design. 3
Slide 4: Investment Highlights
Investment Highlights Leading market position in groundwater pumping systems Track record of consistent organic growth across segments Advantageous global footprint to extend leadership and capture revenue in developing markets Proven cash flow generation with FCF growth CAGR of 23% since 2016 (5 yr
Slide 5: Franklin Electric Segment Overview (Revenue YTD 2020)
Franklin Electric Segment Overview (Revenue YTD 2020) WATER SYSTEMS DISTRIBUTION FUELING SYSTEMS $735M (56%) $328M (25%) $245M (19%) 12% 64% 8% 2% 14% 5
Slide 6: Performance by Segment
Performance by Segment 1 WATER SYSTEMS DISTRIBUTION FUELING SYSTEMS Q1 2021 YoY Q1 2021 YoY Q1 2021 YoY Net Sales: $198M up 20% Net Sales: $96M up 58% Net Sales: $57M up 3% (18% organic growth) (31% organic growth) (1% organic growth) FY 2020 YoY FY 2020 YoY FY 2020 YoY Net Sales: $735M down 6% Net
Slide 7: Water Systems Evolution
Water Systems Evolution 2000 2020 MOTORS & CONTROLS PUMPING SYSTEMS Franklin has evolved its portfolio and established itself as a leading supplier of groundwater pumping systems, and forward integrating in the U.S. 7
Slide 8: Headwater Distribution Companies
Headwater Distribution Companies • Extend our position in groundwater • Move closer to contractor • Optimize supply chain • Opportunities to move into adjacencies: • Filtration • Treatment • Irrigation • Commercial • Gicon Pump & Equipment acquired December 2020 8
Slide 9: Fueling Evolution
Fueling Evolution 2000 2020 PUMPS & CONTROLS TOTAL SYSTEMS Proven growth from listening to and serving our customers 9
Slide 10: Foundation for Growth
Foundation for Growth Corporate Customer Centricity Innovation Stewardship 10
Slide 11: Customer Centricity
Customer Centricity Continue driving productivity & building a competitive advantage by closely connecting the value chain to the customer. Functional focus areas 1. Order Management, Distribution & Logistics – Customer centric fulfillment to achieve service level agreement (SLA) 2. Central Planning
Slide 12: Innovations in Water Systems
Innovations in Water Systems High-Efficiency High-Efficiency Permanent Variable Frequency Drives Inline Delta Pressure Submersible Pumps Magnet Motors with Bluetooth-Enabled Mobile Apps Booster Patent-pending design 4 & 6 inch encapsulated Residential/Commercial HVAC, High-Rise Buildings & Light con
Slide 13: Innovations in Fueling Systems
Innovations in Fueling Systems EVO 200/400 FFS PRO Verify Corrosion Control Fuel Management Installation Assurance In-Tank & In-Sump Highly accurate Automated Cloud service that provides Mitigates corrosion and Tank Gauges for small to remote installation quality protects sites from its mid-size fue
Slide 14: Corporate Stewardship
Corporate Stewardship Corporate strategy aligned with ESG principles; Focus on increasing transparency • Engagement across all levels • Hold employees and suppliers to Commitment to • Prioritize employee health and Operational high standards Safety wellness Integrity • Continue to improve supply cha
Slide 15: Strategic Priorities
Strategic Priorities • Customer-focused innovation Continue to drive organic • Enhance position in industrial channel 1 growth • 10 year Developing Region Growth CAGR of 8% • Drive synergies through the entire U.S. Groundwater Pro channel • Extend leadership position via quality, Maintain competitiv
Slide 16: Capital Allocation Performance & Priorities
Capital Allocation Performance & Priorities 2006 – 2020 FCF Deployment Priorities for Cash Deployment Share CAPEX Opportunistic approach to acquisitions Repurchases 15% 27% 1 with >$640M in deal capacity (a) Reinvestment in business to drive 2 organic growth Dividends 23% 3 Dividends paid CAGR of 8%
Slide 17: Acquisitions are a critical engine for growth
Acquisitions are a critical engine for growth Key Priorities Outcomes Criteria More FELE- • Demonstrated ability to Product Line grow and drive incremental branded products Extensions operating margins in distribution • Focus on risk adjusted IRR and EPS accretion New platforms • Historic cash flow
Slide 18: Financial Performance Summary
Financial Performance Summary 18
Slide 19: Financial Performance Summary
Financial Performance Summary Consolidated Sales $1,400 $1,298 $1,315 $1,247 $1,200 $1,125 $1,000 $800 $950 7% 23% $600 NET REVENUE FREE CASH FLOW1 $400 CAGR CAGR $200 FY2016-2020 FY2016-2020 $- 2016 2017 2018 2019 2020 EPS (before restructuring) $2.26 7% $2.50 $2.00 $1.64 $1.92 $2.07 $2.18 16.2% EP
Slide 20: Cash Generation & Returns
Cash Generation & Returns Net Income ($M) Free Cash Flow ($M)1 $120 $200 $189 $106 $101 $180 $100 $95 $156 $160 $79 $78 $140 $80 $120 $107 $60 $100 $82 $80 $40 $60 $34 $20 $40 $20 $- $- 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Free Cash Flow Conversion ROIC2 200% 187% 18.0% 16.2% 180% 163%
Slide 21: Organic Sales Growth
40.0% Organic Sales Growth 1 Water Systems Fueling Systems Distribution 31.5% 30.0% 20.0% 18.3% 15.0% 12.5% 10.0% 8.2% 8.1% 3.1% 3.5% 2.5% 0.1% 1.3% 0.0% -0.1% -2.5% -10.0% -16.7% -20.0% 2017 2018 2019 2020 2021 YTD 1 Distribution first measured in 2018. Excludes acquisitions for one year and impact
Slide 22: Investment Highlights
Investment Highlights Leading market position in groundwater pumping systems Track record of consistent organic growth across segments Advantageous global footprint to extend leadership and capture revenue in developing markets Proven cash flow generation with FCF growth CAGR of 23% since 2016 (5 yr
Slide 23: For More Information
For More Information: John J. Haines, VP – CFO, Franklin Electric Co. Inc. jhaines@fele.com. 260-827-5442 23
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