Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Investor Presentation (November 2020)
23 slides from Franklin Electric's investor presentation, Nov 9, 2020
Slide 1: Investor Presentation 4Q-2020
@ Franklin Electric INGFUEL MOVING FORWARD. Investor Presentation 4Q-2020 Gregg Sengstack, Chairman and CEO John J. Haines, VP — Chief Financial Officer November 2020
Slide 2: Safe Harbor Statement
@ Franklin Electric 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, pro
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. ® Franklin Electric
Slide 4: Investment Highlights
Investment Highlights arket position in ndwater pumping systems Track record of across segments Proven cash flow generation with since 2015 Strong balance sheet with and opportunity for investment History of returning capital to shareholders; since 1993 Corporate ; Focus on increasing transparency 4
Slide 5: Franklin Electric Segment Overview (Revenue YTD 2020)
@ Franklin Electric Franklin Electric Segment Overview (Revenue YTD 2020) GROU c le REYWATER Ly Pe DISTRIBUTION $250M (26%) | \ . WATER WELL BB ep FUELING SYSTEMS $180M (18%)
Slide 6: Performance by Segment
< A > Franklin Electric 4 Performance by Segment: WATER SYSTEMS Q3 2020 YoY Net Sales: $203M up 2% (6% organic growth) 2020 YTD YoY Net Sales: $545M down 8.1% (-4% organic growth) MARKET OPPORTUNITY >$6.0B 1Market opportunity based on management estimates as of Q42020 DISTRIBUTION Q3 2020 YoY Net Sa
Slide 7: Water Systems Evolution
e a 59 Franklin Electric i Water Systems Evolution 2000 2020 MOTORS & CONTROLS PUMPING SYSTEMS & fill Pile Franklin has evolved its portfolio and established itself as a leading supplier of groundwater pumping systems, and forward integrating in the U.S.
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 Headwater Locations * Irrigation * Commercial
Slide 9: Fueling Evolution
59 Franklin Electric Fueling Evolution 2000 2020 PUMPS & CONTROLS TOTAL SYSTEMS Proven growth from listening to and serving our customers
Slide 10: Foundation for Growth
Foundation for Growth cag 10
Slide 11: Building a competitive advantage through the value chain
59 Franklin Electric 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 Plannin
Slide 12: Innovations in Water Systems
High-Efficiency Submersible Pumps Patent-pending design configurations exceed U.S. Dept of Energy regulations Innovations in Water Systems High-Efficiency Permanent Magnet Motors 4 & 6 inch encapsulated submersible motors with lower operating costs. Variable Frequency Drives with Bluetooth-Enabled M
Slide 13: Innovations in Fueling Systems
59 Franklin Electric 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
Slide 14: ESG commitments
< A } Franklin Electric 4 Commitment to Safety Promote a culture of continuous health and safety training Continuous Improvement Measure ESG impact against publicly-disclosed targets & maintain commitment to industry- leading practices Engagement across all levels Prioritize employee health and well
Slide 15: Strategic Priorities
Strategic Priorities Customer-focused innovation (fo) tinue to drive organic Enhance position in industrial channel 10 year Developing Region Growth CAGR of 9% growth Drive synergies through the entire U.S. Groundwater Pro channel . . ous Extend leadership position via quality, Maintain competitive
Slide 16: Capital Allocation Performance & Priorities
Capital Allocation Performance & Priorities 2005 — 2019 FCF Deployment Share Repurchases 14% CAPEX Dividends 16% 40% Priorities for Cash Deployment Opportunistic approach to acquisitions with >S500M in deal capacity Reinvestment in business to drive organic growth Opportunistic share repurchases 16
Slide 17: Acquisitions are a critical engine for growth
Acquisitions are a critical engine for growth Key Priorities Outcomes Criteria ¢ Demonstrated ability to grow and drive incremental operating margins More FELE- branded products in distribution Product Line Extensions ¢ Focus on risk adjusted IRR and EPS accretion New platforms * Historic cash flow
Slide 18: Financial Performance Summary
GFUEL: MOVING FORWARD. Financial Performance Summary @ Franklin Electric 18
Slide 19: Financial Performance Summary
Financial Performance Summary Consolidated Sales $1,400 $1,298 $1,315 $1,200 $1,125 $1,000 $925 $950 $926 $800 $600 JET REVENL FREE CASH FLOW? _ AGR CAGR va ’2015-2019 FY2015-2019 2015 2016 2017 2018 2019 YTD 2020 EPS (before restructuring) 8% $2.50 $2.26 $2.00 $1.92 $2.07 14.9% ales) $154 $1.64 $1.
Slide 20: Cash Generation & Returns
Cash Generation & Returns Net Income eM) Free Cash Flow (SM)* $120 $180 $160 $156 $100 540 i $118 $80 $120 $107 $100 $82 60 3 $80 p78. $40 $60 $40 $34 $20 $20 i & $ 2016 2017 2018 2019 YTD 2020 2015 2016 2017 2018 2019 YTD 2020 Free Cash Flow Conversion ROIC? 80% 163% 160% ai 15.1% 149% 160% 15.0% 1
Slide 21: Organic Sales Growth
< Q > Franklin Electric 4 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% 20.0% 2.1% 72% 2015 5.1% 5.2% 2016 Organic Sales Growth? @Water Fueling @ Distribution 15.0% 8.2% 8.1% 2017 2018 {Distribution first measured in 2018. Excludes acquisitions for one year and impact of Foreign Currency translati
Slide 22: Investment Highlights
Investment Highlights arket position in ndwater pumping systems Track record of across segments Proven cash flow generation with since 2015 Strong balance sheet with and opportunity for investment History of returning capital to shareholders; since 1993 Corporate ; Focus on increasing transparency 2
Slide 23: For more information
INGFUEL MOVING FORWARD. For more information: John J. Haines, VP- CFO Franklin Electric Co. Inc. jhaines@fele.com @ Franklin Electric 260-827-5442 23
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