Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — KeyBanc Industrial Conference 2012
24 slides from Franklin Electric's conference presentation, May 2012
Slide 1: KeyBanc Industrial Conference
KeyBanc Industrial Conference May 2012
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: Topics
Topics Financial Summary --- Water Systems Growth --- Fueling Systems Growth 3
Slide 4: 2011 Financial Highlights
2011 Financial Highlights 2011 % +(-) Prior Sales $821 M + 15% Adjusted EPS1 $2.70 + 41% ROIC2 21.5% + 52% Net Debt/Capital 2% – 1 See company’s 10-K for reconciliation of adjusted EPS to GAAP EPS 2Operating income/net debt + equity 4
Slide 5: 1st Quarter 2012 Financial Highlights
1st Quarter 2012 Financial Highlights Q1 2012 % +(-) Prior Sales $202 M + 9% EPS $0.96 + 113% Adjusted EPS1 $0.60 + 30% 1 For reconciliation of adjusted EPS to GAAP EPS see company’s 10Q. 5
Slide 6: 2nd Quarter 2012 Guidance
2nd Quarter 2012 Guidance % +(-) Prior Water Systems Sales + 10% – 13% Fueling Systems Sales + 9% – 11% EPS + 10% – 13% Note: 2nd quarter 2011 EPS was a record at the time for any quarter in the company’s history. 6
Slide 7: 2011 Global Business Segment Performance
2011 Global Business Segment Performance % of Franklin Sales Fueling Systems 20% Water Systems 80% Water Systems LTM 3/31/12 % +(-) Prior Fueling Systems LTM 3/31/12 % +(-) Prior Sales $672 M + 13% Sales $166 M + 16% Operating Income1 $112 M + 22% Operating Income1 $32 M + 35% 1 Operating income aft
Slide 8: Water Systems – Sales by End User Application
Water Systems – Sales by End User Application % of Franklin Water Sales Irrigation & Industrial Water Pumping Residential & Light Commercial 40% Water Pumping 60% • Unplanned and non-discretionary replacement purchases represent 80%1 of sales • Availability takes precedence over pricing 1 Franklin m
Slide 9: Water Systems – Global Addressable Market: $5.0 B
Water Systems #1 Worldwide Supplier to Distribution Channels for Groundwater Pumping Equipment % of Franklin Water Sales “Adjacent” Pumps 35% Groundwater Pumps & Motors 65% Global Addressable Market: $5.0 B 9
Slide 10: Water Systems – Growth Strategy
Water Systems – Growth Strategy Further extend product lines to sell through Franklin global distribution network --- Expand distribution network in developing regions 10
Slide 11: Water Systems – Growth: Extend Product Lines
Water Systems – Growth: Extend Product Lines Fill Out Product Catalogs to Displace Competitor Offerings in our Distribution Network # of Franklin Water Systems SKUs 43,000 • Manufactured in 30,000 existing facilities • Sold by existing sales force • Bolt-on acquisitions and internal development 8,00
Slide 12: Water Systems – Growth: Packaged Systems
Water Systems – Growth: Packaged Systems Oil and Gas Well Deliquification System Gas Line Water Line Typical Water Well Depth (40 to 600 feet) Typical Oil/Gas Well Depth (2000 to 6000 feet) Addressable Market (US, Canada, Australia): $0.5 B 12
Slide 13: Water Systems – Growth: Packaged Systems
Water Systems – Growth: Packaged Systems Other Packaged Systems Development Initiatives 2011 Solar Groundwater Pumping Systems Water Pressure Boosting/Control Systems 13
Slide 14: Pioneer Pump Acquisition – March 2012
Pioneer Pump Acquisition – March 2012 Mobile Pumping Systems - 2011 Sales - $70 M • Oil and gas fracking liquids • Dewatering mines and construction sites • Wastewater by-pass • Flood control 14
Slide 15: Water Systems – Growth in Developing Regions
Water Systems – Growth in Developing Regions 12% Share of Addressable Market $275 $270 M $250 $228 M $225 $120 M Organic $204 M $200 $188 M $175 $150 $135 M $125 Acquisitions $94 M $95 M $100 $77 M $75 $55 M $50 $55 M Base $25 $0 2004 2005 2006 2007 2008 2009 2010 2011 % of Total Franklin 16% Water
Slide 16: Water Systems – Segment Sales
Water Systems – Segment Sales $654 M $334 M 2004 2011 Water Systems Segment % Operating Income 16.4% 16.3%1 1 Adjusted operating income – see company’s 10-K for reconciliation to GAAP. 16
Slide 17: Fueling Systems – Product Line Extensions
Fueling Systems – Product Line Extensions Franklin Submersible FE Petro FE Petro Turbine Adjacent Products International Motor Turbine Pump and Drive 2000s Expansion 1960s 1980s 1990s Global Addressable Market: $1.0 B 17
Slide 18: Fueling Systems – Annual Sales of Cars and Light Trucks
Fueling Systems – Annual Sales of Cars and Light Trucks 2000 2011 North America 20 M 15.2 M China, India & 3M 16.5 M Up 5.5x Latin America 1 Source Scotiabank Group Global Auto Report 18
Slide 19: Fueling Systems – Installation of New Technologies
Fueling Systems – Installation of New Technologies International Markets Growth 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% (on board) Stations with fuel management systems 75% 36% * Fra
Slide 20: Fueling Systems – International Expansion
Fueling Systems – International Expansion Adapting US Technologies to Needs of International Markets • Inventory management • Leak detection • Inventory measurement • Fraud prevention • Low-cost 20
Slide 21: Fueling Systems – International Expansion
Fueling Systems – International Expansion Adapting US Technologies to Needs of International Markets Piping & APT (UL Approved) UPP (EN Approved) Containment Dispensing Systems Healy/Franklin System Omni Series 21
Slide 22: Fueling Systems – Segment Sales
Fueling Systems – Segment Sales $167 M $71 M $71 M $17 M International Sales 2004 2011 % International 24% 42% % Operating Income Margin 14.1% 19.2%1 1 Adjusted operating income – see company’s 10-K for reconciliation to GAAP. 22
Slide 23: Summary
Summary Focused operating company --- Strong brand franchise and worldwide product leadership --- Ample headroom for organic growth in growing global markets --- Attractive bolt-on acquisition opportunities 23
Slide 24: KeyBanc Industrial Conference
KeyBanc Industrial Conference May 2012
Franklin Electric — KeyBanc Industrial Conference 2012 on 6ix