Slide 1: Forward-looking statements and non-GAAP disclaimer
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 and are thus prospective. These forward-looking statements are subject to risks, u
Slide 2: SPX Corporation: Company Overview
SPX Corporation: Company Overview May2016 SPX
Slide 3: Key Product Offerings and Financial Profile by Segment
Key Product Offerings and Financial Profile by Segment Fluid coolers Electrical heating products Communication technologies (1) Excludes South African projects Segment Income is Predominantly Generated by the HVAC and Detection & Measurement Segments May 2016 5 Power transformers Cooling towers Heat
Slide 4: 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 5: Value Creation Key Accomplishments
Value Creation Key Accomplishments Making Progress On Value Creation Strategies May 2016 7 Engaged BNP Paribas to pursue sale of European-based portion of our power generation business Completed sale of Global Dry Cooling business in Q1 2016 Transformers’ margin improvements ahead of schedule South
Slide 6: Segment Overview
Segment Overview May2016 SPX
Slide 7: HVAC Segment Overview
HVAC Segment Overview 2015 Revenue $529 Heating 54% Cooling 46% APAC 8% EMEA 5% Replacement 67% New Build 33% Revenue Profile Geography NA 87% Note: Revenue Profile breakdown is based on Management’s best estimates of end-market uses 9 May 2016 2016 Outlook Considerations EMEA and APAC market enviro
Slide 8: Heating Products Overview
Heating Products Overview Systems 66% Electrical Products Strong Product Brands and Leading Market Positions in North America May 2016 10 North American businesses with strong brands Products used in residential and non-residential markets and sold primarily through distributors End customers concen
Slide 9: Heating Product Examples
Heating Product Examples Broad Product Offering of Heating Solutions for Residential and Light Commercial Applications May 2016 11 Residential Boilers Commercial Boilers Standard cast iron Standard cast iron High efficiency High efficiency Natural gas and oil Natural gas and oil Electrical Heating P
Slide 10: Cooling Products Overview
Cooling Products Overview Service 84% 72% Strong Product Brands and Leading Market Positions Across Cooling Product Portfolio May 2016 12 2015 Revenue by Geography 10% 18% Cooling products used in non-residential, commercial construction, process cooling and refrigeration applications Well-recognize
Slide 11: Cooling Product Examples
Cooling Product Examples SPX Over 90 Years of Experience Engineering andManufacturing Cooling Towers; Marley Sets a High Standard for Efficiency and Quality May 2016
Slide 12: Detection & Measurement Segment Overview
Detection & Measurement Segment Overview Fare Collection Technologies 17% Locators & Inspection Equipment 45% 2015 Revenue $232 Communication Technologies 38% APAC 11% New Build 25% Replacement 75% Revenue Profile EMEA 26% Geography High degree of replacement sales; strong NA 63% Note: Revenue Profi
Slide 13: Locators & Inspection Equipment
Locators & Inspection Equipment conduit locators and inspection equipment $104m Leading Global Supplier of Underground Pipe and Conduit Detection Equipment May 2016 15 Based in the U.K., a leading global supplier of underground pipe and Continuous new product enhancements and loyal customer base ~6%
Slide 14: Communication Technologies
Communication Technologies communications intelligence (COMINT) systems 55% Lighting 68% Leading Brands and Technologies May 2016 16 A leading global supplier of spectrum monitoring (SMS) and A leading North American supplier of obstruction lighting products Key demand drivers: Global growth of wire
Slide 15: 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 17 May 2016 Spectrum Monitoring (SMS) Communications Intelligence (COMINT)
Slide 16: Communication Technologies: LED and Xenon Lighting Systems
Communication Technologies We Provide High-Quality LED and Xenon Lighting Systems for a Variety of Tower Applications May 2016 18 Flash Lighting Systems Flash Lighting Systems
Slide 17: Fare Collection Technologies
Fare Collection Technologies A Leading North American Supplier of Fare Collection Technologies May 2016 19 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
Slide 18: 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 May 2016 20 Cloud-Based Software Support Fast Fare Box E-ticketing Legacy Farebox Fast Fare-eTM Point-of-Sale e-FareTM
Slide 19: Base Power Overview
Base Power Overview Power Generation 60% Transformers 40% 2015 Revenue $931 APAC 11% New Build 38% Replacement 62% EMEA 23% Revenue Profile Geography NA 66% Note: Revenue Profile breakdown is based on Management’s best estimates of end-market uses Note: Base Power results exclude the results of the
Slide 20: Power Transformers
Power Transformers Our Focus is on Creating Higher Margins through Operational Efficiencies and Commercial Initiatives May 2016 22 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 replacemen
Slide 21: Power Generation Equipment
Power Generation Equipment We Provide Highly Engineered Products that Serve Several Types of Power Generation Plants May 2016 23 Hybrid Cooling (ClearSky) Leading supplier of cooling systems, large scale heat exchangers and pollution control systems Highly engineered products Equipment and technolog
Slide 22: Power Generation Equipment
Power Generation Equipment 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 service opportunities Focused on
Slide 23: South African Projects Overview
South African Projects Overview Medupi & Kusile Power Stations Boiler Island Turbine Island These Two Power Stations Expected to Add ~10 GW of Power Capacity When Completed May 2016 25 Medupi and Kusile are the two mega-projects: Twelve 800 mega-watt coal-fired plants (six at each project site) Esko
Slide 24: Q1 Results and 2016 Guidance
& Ql Results 2016 Guidance May2016 SPX
Slide 25: Core Q1 2016 Results Year-over-Year Analysis
Core Q1 2016 Results Year-over-Year Analysis margin expansion for both Heating and Adjusted Operating Income Margin* -0.4% incentive compensation expenses Core Segment Income Up +30% Over the Prior Year; Adjusted EPS* of $0.09 May 2016 27 ($ millions) Solid organic growth in HVAC segment andRevenue
Slide 26: HVAC Q1 2016 Results
HVAC Q1 2016 Results Year-over-Year Analysis $112 higher sales of cooling products $108 Segment Income and Margin Growth in Both Heating and Cooling May 2016 28 ($ millions) Q1 Revenue: Revenue +3.6% year-over-year improvement:Segment Income Margin +4.3% organic growth primarily driven by (0.7%) cur
Slide 27: Detection & Measurement Q1 2016 Results
Detection & Measurement Q1 2016 Results Year-over-Year Analysis $55 from multiple product lines within the $52 Q1 Segment Income and Margin: 17.1% Approximately 8% Organic Revenue Growth and 280 Points of Margin Improvement May 2016 29 ($ millions) Q1 Revenue: Revenue +6.7% year-over-year growth:Seg
Slide 28: Base Power Q1 2016 Results
Base Power Q1 2016 Results Year-over-Year Analysis Q1 Loss and Margin: -1.5% Growth and Strong Execution in Transformers Business, Offset by Challenging Environment in Power Generation Business May 2016 30 ($ millions) Q1 Revenue: Revenue Performance approximately flat:Segment Income Margin +0.6% or
Slide 29: Market Commentary
Market Commentary Heating: Muted by warm winter; operational efficiencies driving segment income growth Well Positioned in Mixed Market Environment May 2016 31 Segment/Business Commentary HVAC Cooling: Solid on strength of commercial market Detection & Measurement Demand for run-rate products remain
Slide 30: 2016 Guidance – Core
2016 Guidance – Core 3Q’15 affects comparisons) commercial efforts in fare collection segments Note: Core results exclude the results of the South African projects. Core Operating Income Range of $80 million to $100 million; Core EPS Range of $0.95-1.25 May 2016 32 Revenue Segment Income Margin HVAC
Slide 31: 2016 Modeling Considerations
2016 Modeling Considerations Note: Core results exclude the results of the South African projects. May 2016 33 Metric Commentary/Assumptions Corporate costs ~$40M Non-cash stock comp $13-15M Restructuring costs ~$5M Interest cost $13-14M Tax rate 35-40%, jurisdictionally sensitive Capex $18-20M Cash
Slide 32: Financial Position & Capital Allocation
Financial Position & Capital Allocation May2016 SPX
Slide 33: Financial Position Capital Structure Update
Financial Position Capital Structure Update Net Leverage Within Target Range May 2016 35 Leverage Ratios Short-term debt & other$382.8x2.8x Current maturities of long-term debt14 Long-term debt3382.5x2.5x1.5-2.5x Gross Debt$390 Less: Cash on hand(98)Q4'15Q1'16LT Target Net Debt$292 Bank Net Leverage
Slide 34: Capital Structure Update: Term Debt Repayment Schedule
Financial Position Capital Structure Update Term Debt Cash Other ST Debt 0 Q 4 ' 1 5 Q 1 ' 1 6 No Significant Debt Repayment Requirement Until 2020 May 2016 36 ($ millions) Term Debt Repayment Schedule $24 $40 300 250 200 $350 $350 150$289 100 $101 $98 50 $9$18$18$18 20162017201820192020
Slide 35: 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 May 2016 37 Methodology Expected Outcome 1)Utilize strategic planning process to evaluate future revenue and earni
Slide 36: 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 May 2016 38
Slide 37: Capital Allocation Strategy
Capital Allocation sex 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
Slide 38: SPX
SPX