Slide 1: Q4 2023 Earnings Conference Call
Q4 2023 EARNINGS CONFERENCE CALL February 21, 2024
Slide 2: Forward Looking Statement and Non-GAAP Measures
FORWARD LOOKING STATEMENT 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 o
Slide 3: Q4 2023 Highlights
Q4 2023 HIGHLIGHTS Total Bookings 3D Bookings Revenue Growth $1.04B 30% 12.1% Bookings largely maintained 3D Strategy produced nearly Substantial revenue growth our near-record backlog one-third of total bookings driven by strong conversion Adjusted Operating Adjusted EPS* Operating Cash Margins* Fl
Slide 4: Q4 2023 Overview
Q4 2023 OVERVIEW BOOKINGS SALES OPERATING CASH FLOW ADJUSTED EPS* $ millions $ millions $ millions $1,165 $1,107 $1,095 $0.68 $1,067 $1,044 $1,039 $195 $0.63 $0.50 $69 $81 2022 Q4 2023 Q3 2023 Q4 2022 Q4 2023 Q3 2023 Q4 2022 Q4 2023 Q3 2023 Q4 2022 Q4 2023 Q3 2023 Q4 8th consecutive quarter of more
Slide 5: Q4 2023 Bookings Mix
Q4 2023 BOOKINGS MIX OIL & GAS: 38% • New energy and decarbonization activity remains active • Middle East downstream project activity accelerating ORIGINAL EQUIPMENT • Oil & Gas project funnel up 25% year-over-year $ millions • Stable facility utilization rates driving aftermarket and MRO growth $5
Slide 6: Geographic Mix
Geographic Mix Q4 2023 SALES MIX Revenue Growth ORIGINAL EQUIPMENT $ millions 17% $576 43% Europe $529 $500 49% Q4: 13% 48% 48% FY: 16% North America 16% Q4: 14% 48% 49% 48% FY: 19% Asia Pacific 17% Q4: -2% FY: 6% 2022 Q4 2023 Q3 2023 Q4 Middle East 7% & Africa Q4: 27% AFTERMARKET FY: 45% $ millions
Slide 7: Q4 2023 Segment Highlights
Q4 2023 SEGMENT HIGHLIGHTS FPD FCD As Reported Year-Over-Year As Reported Year-Over-Year Bookings $722.2 -8.1% $326.9 +0.6% Revenue $832.8 12.6% $336.0 11.3% Adjusted Gross Margin* 28.9% -100 bps 32.2% +310 bps Adjusted Operating Margin* 11.8% -130 bps 16.6% +380 bps Book-to-Bill 0.87x 0.97x Strong
Slide 8: 2024 Guidance Assumptions
2024 GUIDANCE ASSUMPTIONS • Revenue growth supported by near-record Guidance Metric 2024 Guidance backlog of $2.7 billion - Expect significant improvement in backlog Revenue Growth Up 4.0% - 6.0% conversion of more than 500 bps Reported EPS [1] $2.25 - $2.45 • Guidance consistent with preliminary ou
Slide 9: Purposeful Capital Allocation
PURPOSEFUL CAPITAL ALLOCATION Guiding Principles • Capital allocation based COMMITMENTS on highest long-term return STRATEGIC Quarterly dividends Growth / margin expansion • Free cash flow conversion Safety and maintenance CAPEX CAPEX between 80% – 100% Share repurchases to offset New product develo
Slide 10: Disciplined M&A Criteria
DISCIPLINED M&A CRITERIA Strategic Filters Focused on Delivering Value Enhance 3D Leverage Confidence Strategy Scale in Integration IRR > Cost of Capital | Margin Accretive | Cash EPS Accretive FLOWSERVE 10 Q4 2023 Earnings Conference Call
Slide 11: Flowserve Growth Strategy in Action
FLOWSERVE GROWTH STRATEGY IN ACTION DIVERSIFY – Vacuum Pumps Enabling DECARBONIZE – Powering E- DIGITIZE – Expanding our Presence in Diverse Applications Commerce with Green Hydrogen Petrochemicals • Multiple SIHI vacuum pumps supplied • Worcester ball valves will support the • Three European petroc
Slide 12: Substantial Progress Towards 2027 Targets
SUBSTANTIAL PROGRESS TOWARDS 2027 TARGETS • 3D Strategy, aftermarket $5.0B growth, and new product development • Operational excellence, 14 - 16% portfolio optimization & product management and operating leverage >$4.00 • Multiple levers to enable success going forward FLOWSERVE * Adjusted operating
Slide 13: Appendix
Appendix
Slide 14: Q4 2023 Consolidated Financial Results
Q4 2023 CONSOLIDATED FINANCIAL RESULTS Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other General & Income Provision For Administrative Operating (Expense), (Benefi
Slide 15: Full Year 2023 Consolidated Financial Results
FULL YEAR 2023 CONSOLIDATED FINANCIAL RESULTS Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other Net Earnings General & Income Provision For Attributable to Net Adm
Slide 16: Q4 2022 Consolidated Financial Results
Q4 2022 CONSOLIDATED FINANCIAL RESULTS Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other General & Income Provision For Administrative Operating (Expense), (Benefi
Slide 17: Full Year 2022 Consolidated Financial Results
FULL YEAR 2022 CONSOLIDATED FINANCIAL RESULTS Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other General & Income Provision For Administrative Operating (Expense),
Slide 18: Q4 2023 and Q4 2022 Segment Financial Results
Q4 2023 AND Q4 2022 SEGMENT FINANCIAL RESULTS Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands) Flowserve Pumps Division Selling, Selling, General & General & Gross Administrative Operating Gross Administra
Slide 19: Full Year 2023 and 2022 Segment Financial Results
FULL YEAR 2023 AND 2022 SEGMENT FINANCIAL RESULTS Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands) Flowserve Pumps Division Selling, Selling, General & General & Gross Administrative Operating Gross Admini
Slide 20: 2023 and 2022 Segment Bookings and Sales Mix
2023 AND 2022 SEGMENT BOOKINGS AND SALES MIX Flowserve Pumps Division ($ millions) Q4 2023 Q4 2022 Delta (%) Constant FY 2023 FY 2022 Delta (%) Constant FX (%)* FX (%)* 241 316 -24% -25% 974 1,353 -28% -29% OE 33% 40% (700) bps 33% 42% (900) bps Bookings Mix ** 481 470 2% 1% 1,967 1,862 6% 5% AM 67%
Slide 21: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Tarek Zeni 972.443.6560 469.420.4045 jroueche@flowserve.com tzeni@flowserve.com Q3 2023 Earnings Conference Call 21