Slide 1: 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 and financial projections, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amend
Slide 2: SPX Corporation: Company Overview
SPX Corporation: Company Overview September 2016
Slide 3: Company Overview: The New SPX Corporation
Company Overview The “New” SPX Corporation Headquartered in Charlotte, NC A leading supplier of: HVAC products, Detection & Measurement technologies, and Power equipment 71% 16% 10% ~$1.7b of revenue in 2015 ~6,000 employees 0% 3% NYSE Ticker: SPXC SPX Corporation is a Leading Supplier of HVAC, Dete
Slide 4: Key Product Offerings and Financial Profile by Segment
Key Product Offerings and Financial Profile by Segment Fluid coolers Electrical heating products Communication technologies (1) Base Power results are non-GAAP financial measures that exclude results of the South African projects. Segment Income is Predominantly Generated by the HVAC and Detection &
Slide 5: Value Creation in Core Businesses
Value Creation in Core Businesses Grow HVAC platform: New product development Channel development Geographic expansion Leverage synergies Grow Detection & Measurement platform: Continue to upgrade installed base New product launches in 2016 Expand vertically and geographically Extend product offerin
Slide 6: Progress On Value Creation Strategies
Progress On Value Creation Strategies Transformer business tracking ahead of schedule to achieve long-term margin target of 10% Launch of new evaporative condenser product (industrial refrigeration) New Genfare Link fare collection system live in key reference market Engaged BNP Paribas to pursue sa
Slide 7: Segment Overview
Segment Overview September 2016
Slide 8: HVAC Segment Overview
HVAC Segment Overview 2015 Revenue $529 Heating 54% Cooling 46% EMEA and APAC market environments Timing of start of Q4’15 winter heating season Growth from 2015/2016 new product launches Commercial construction sensitivity Favorable mix effect on 2015 margins APAC 8% EMEA 5% Replacement 67% New Bui
Slide 9: Heating Products Overview
Heating Products Overview North American businesses with strong brands Products used in residential and non-residential markets and sold primarily through distributors End customers concentrated in the Northeast and Midwest $286m Demand for boiler systems is seasonal: Concentrated in the second half
Slide 10: Heating Product Examples
Heating Product Examples High efficiency Broad Product Offering of Heating Solutions for Residential and Light Commercial Applications September 2016 11 Commercial Boilers Standard cast iron Natural gas and oil Residential Boilers Standard cast iron High efficiency Natural gas and oil Electrical Hea
Slide 11: Cooling Products Overview
Cooling Products Overview Service 84% 72% 2015 Revenue by Geography 10% 18% Strong Product Brands and Leading Market Positions Across Cooling Product Portfolio September 2016 12 2015 Revenue Breakdown Package Cooling Towers $243m Parts and 16% Cooling products used in non-residential, commercial con
Slide 12: Cooling Product Examples
Cooling Product Examples Over 90 Years of Experience Engineering and Manufacturing Cooling Towers; Marley Sets a High Standard for Efficiency and Quality September 2016 13
Slide 13: Detection & Measurement Segment Overview
Detection & Measurement Segment Overview Fare Collection Technologies 17% Locators & Inspection Equipment 45% 2015 Revenue $232 Communication Technologies 38% U.S. federal transportation funding Industrial and commercial construction Global government spending Growth from 2015/2016 new product launc
Slide 14: Locators & Inspection Equipment
Locators & Inspection Equipment 10% 70% 20% Leading Global Supplier of Underground Pipe and Conduit Detection Equipment September 2016 15 2015 Revenue by Product Locators Inspection $104m Dry Air 2015 Revenue by Geography 38% 44%18% Based in the U.K., a leading global supplier of underground pipe an
Slide 15: Communication Technologies
Communication Technologies COMINT Obstruction 45% 68% Leading Brands and Technologies September 2016 16 2015 Revenue by Geography 22% 10% 2015 Revenue by Product SMS & 55% Lighting $89m Products A leading global supplier of spectrum monitoring (SMS) and communications intelligence (COMINT) systems A
Slide 16: Communication Technologies: Spectrum Monitoring and COMINT
Communication Technologies From Borders to Battlefields and From Urban Landscapes to Wide Open Spaces, Our Products Empower Customers to Monitor, Analyze and Manage the RF Spectrum September 2016 17 Spectrum Monitoring (SMS) Communications Intelligence (COMINT)
Slide 17: Communication Technologies: Obstruction Lighting
Communication Technologies We Provide High-Quality LED and Xenon Lighting Systems for a Variety of Tower Applications September 2016 18 Flash Lighting Systems Flash Lighting Systems
Slide 18: Fare Collection Technologies
Fare Collection Technologies A leading North American supplier in fare collection: Historical market position concentrated on fare box installations Rapidly evolving technology in the market has driven a transformation in our business: Evolved from “fare box supplier” to “fare collection system prov
Slide 19: Next Generation Fare Collection System
Next Generation Fare Collection System Fast Fare Suite of Products Integrated With Back-End Support; We Believe This is The New Industry Standard September 2016 20 Cloud-Based Software Support Fast Fare Box E-ticketing Legacy Farebox Fast Fare-eTM Point-of-Sale e-FareTM
Slide 20: Base Power Overview
Base Power Overview Power Generation 60% Transformers 40% 2015 Revenue $931 Transformer pricing and lead times Impact of transformers’ operational initiatives Restructuring savings in power generation Additional cost reduction opportunities Global power demand Margin growth in Transformers business;
Slide 21: Power Transformers
Power Transformers SPX is a leading supplier of power transformers into North America with strong brand equity Locations: Waukesha, WI and Goldsboro, NC Demand largely driven by replacement of aging installed base: Average age of installed base is ~40 years Recent end market trends: Replacement dema
Slide 22: Power Generation Equipment
Power Generation Equipment Hybrid Cooling (ClearSky) Leading supplier of cooling systems, large scale heat exchangers and pollution control systems Highly engineered products Equipment and technological solutions for several types of power generation plants Large installed base with recurring servic
Slide 23: Power Generation Equipment
Power Generation Equipment SPX Hybrid Cooling (ClearSky) * Leading supplier of cooling systems, large scale heat exchangers and pollution control systems * Highly engineered products * Equipment and technological solutions for several types of power generation plants * Large installed base with recu
Slide 24: South African Projects Overview
South African Projects Overview Medupi & Kusile Power Stations Medupi and Kusile are the two mega-projects: Twelve 800 mega-watt coal-fired plants (six at each project site) Eskom is a state-owned South African utility Alstom and Mitsubishi Hitachi are the primary contractors Boiler Island Turbine I
Slide 25: Q2 Results & 2016 Guidance
Q2 Results & 2016 Guidance September 2016
Slide 26: Core Q2 2016 Results
Core Q2 2016 Results Year-over-Year Analysis ($ millions) Q2 Year-to-Date ~2/3rds of revenue decline driven by the Dry Cooling business (sold in Q1 2016) Revenue Adjusted Operating Income Margin* $433 $795 Organic revenue* decline primarily driven by recent completion of a large, unique power projec
Slide 27: HVAC Q2 2016 Results
HVAC Q2 2016 Results Year-over-Year Analysis ($ millions) Revenue Segment Income Margin Q2 Revenue: +3.0% year-over-year improvement: +4.5% organic growth* due to the strength of cooling products sales in commercial markets (1.5%) currency impact $122 $118 14.0% 11.0% Q2 Segment Income and Margin: $
Slide 28: Detection & Measurement Q2 2016 Results
Detection & Measurement Q2 2016 Results Year-over-Year Analysis ($ millions) Q2 Revenue: Revenue Segment Income Margin +3.3% year-over-year growth: +5.0% organic growth*, largely due to higher sales of fare collection products (1.7%) currency impact $60 $58 20.1% Q2 Segment Income and Margin: 17.5%
Slide 29: Base Power Q2 2016 Results
Base Power Q2 2016 Results Year-over-Year Analysis ($ millions) Revenue Segment Income Margin Q2 Revenue: (17.6%) year-over-year decline: (10.2%) decline from sale of Dry Cooling business (6.5%) organic decline* primarily driven primarily by the completion of a large, unique power project that contr
Slide 30: Market Commentary
Market Commentary Cooling: Continued strength from commercial markets Heating: Slow 1H 2016 due to the mild 2015/2016 winter HVAC Segment Steady lead times and pricing Taking orders into 2017 Transformer Business Markets for Strategic Platforms Remain Stable; Repositioning Business Away from Challen
Slide 31: 2016 Core Guidance Update
2016 Core Guidance Update (Changes in Bold) commercial efforts in fare collection Transformer business generation operating environment strategic platforms Note: Core results are non-GAAP financial measures that exclude the results of the South African projects. Non-service pension items, the gain o
Slide 32: 2016 Modeling Considerations
2016 Modeling Considerations September 2016 33 Metric Commentary/Assumptions Corporate costs ~$40M Long-term incentive comp $13-15M Restructuring costs ~$6M Interest cost $13-14M Tax rate 35-40%, jurisdictionally sensitive Capex $18-20M Cash cost of pension + OPEB ~$16M ongoing cash cost D&A ~$30M,
Slide 33: Financial Position & Capital Allocation
Financial Position & Capital Allocation September 2016
Slide 34: Financial Position: Capital Structure Update
Financial Position Capital Structure Update Leverage Ratios 2.8x Short-term debt Current maturities of long-term debt Long-term debt Gross Debt $22 18 334 2.7x 2.5x 1.5-2.5x 2.3x $374 Less: Cash on hand Net Debt ($102) Q1'16 Q2'16 LT Target $272 Bank Net Leverage† Gross Leverage** †Calculated as def
Slide 35: Financial Position: Term Debt Repayment Schedule
Financial Position Capital Structure Update ($ millions) Term Debt Repayment Schedule Term Debt Cash Other ST Debt 300 250 200 150 100 50 0 $24 $24 $289 $350 $350 $101 $102 $9 $18 $18 $18 Q 4 ' 1 5 Q 2 ' 1 6 2016 20172018 2019 2020 No Significant Debt Repayment Requirement Until 2020 September 2016
Slide 36: Capital Allocation Discipline
Capital Allocation Discipline Organic business development (1) Net Debt and EBITDA as defined in SPX Corporation’s credit facility Evaluating Highest, Risk-Adjusted Return Opportunities September 2016 37 Methodology Expected Outcome 1)Utilize strategic planning process to evaluate future revenue and
Slide 37: Capital Allocation Strategy
Capital Allocation Capital Allocation Strategy Incremental Liquidity of $200m by YE 2018 • • • Growth Investments in Core Businesses Return of Capital to Shareholders Reduction in Debt and Equivalents Expect At Least $200m of Cumulative Incremental Liquidity by Year-End 2018 September 2016 38
Slide 38: Capital Allocation Strategy
Capital Allocation Capital Allocation Strategy Incremental Liquidity of $200m by YE 2018 * Growth Investments in Core Businesses * Return of Capital to Shareholders * Reduction in Debt and Equivalents Expect At Least $200m of Cumulative Incremental Liqt lity by Year-End 2018
Slide 39: SPX
SPX