Spx Technologies, Inc. · NYSE:SPXC

Spx Technologies — UBS Global Industrials and Transportation Virtual Conference (June 2020)

35 slides from Spx Technologies's conference presentation, June 2020

  1. Slide 1: SPX Corporation Investor Presentation

    SPX Corporation Investor Presentation June 2020 SPX Corporation 2019 Investor Event - New York

  2. Slide 2: 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, products introductions, and financial projections, are forward-looking statements within the meaning of Section 27A of the Securities Act

  3. Slide 3: SPX Corporation Overview

    SPX4 SPX Corporation Overview

  4. Slide 4: Company Overview

    Company Overview  Headquartered in Charlotte, NC 2019 Adjusted Revenue* by Region  A leading supplier of: 89% 89% 6% 6%  HVAC products  Detection & Measurement technologies, and  Engineered Solutions 5%  ~$1.5b Adjusted Revenue* in 2019  ~4,500 employees  NYSE Ticker: SPXC SPX is a Leading S

  5. Slide 5: Attractiveness of SPX for Long-Term Holders

    Attractiveness of SPX for Long-Term Holders Attractive Core Well positioned key platforms in growth markets Growth Favorable long-term secular trends and business mix; growth initiatives in early innings Cash Flow 100-110% conversion of adjusted net income* Business System Consistent repeatable proc

  6. Slide 6: Strong Product Offerings and Attractive Market Dynamics

    Strong Product Offerings and Attractive Market Dynamics 2019 ADJUSTED 2019 REVENUE FROM REPLACEMENT SALES† REVENUE EBITDA MARGIN*  Cooling towers  Refrigeration $593m 17% 70%  Boilers  Electrical heating 2019 REVENUE FROM #1 OR #2 MARKET POSITION†  Location & inspection  Fare collection $385m

  7. Slide 7: Transformation of SPX – 2015 Through 2019

    Transformation of SPX – 2015 Through 2019 Adjusted Operating Income Margin Revenue ~$1.5B 12% 10% 8% 11.3% 11.5% 6% 10.1% 8.8% 4% 7.0% 2% 3.7% 0% 2015* 2015* 2016* 2016* (as 2017*2017* 2018* 2018* 2019* 2019* 2020E (as reported (as reported (as reported reported Guidance 2/25/16) 2/23/17) 2/25/16) 2

  8. Slide 8: Value Creation Framework

    Value Creation Framework Organic Growth SPX Business System • New products • Policy deployment • Channel expansion • Operational excellence • Adjacent markets • Due diligence/integration Inorganic Growth Culture & Values • Focus in HVAC and D&M • Employee development • Significant capital to deploy

  9. Slide 9: End Market Exposures (2019)

    End Market Exposures* (2019) Total 2019 Revenue of $1.5 Billion 52% Wastewater / Water, 6% 29% Utility, Light Mfg. / Other, 5% 33% Healthcare, 3% Hospitality, 3% Data Center / Lab, 3% 11% Institutional, 9% Gov't Regulated, 8% Office / Retail, 7% 13% End Markets Resi Non-resi Gov't, Regulated and Uti

  10. Slide 10: Near-Term Demand Sensitivity

    Near-Term Demand Sensitivity % of 2019 Segment EBITDA Considerations Inspection; CARES Act; Less Sensitive Transformers; ~33% Gov’t Spending; Transportation; Backlog SMS/CommInt Regulatory drivers; Aids-to-Navigation; Project timing (access); Process Cooling; ~42% SME Liquidity; Residential Heating*

  11. Slide 11: Segment Overview

    SPX4 Segment Overview

  12. Slide 12: HVAC Segment Overview

    HVAC Segment Overview Revenue 2019 Revenue by Product Adjusted segment income* % $582 $593 Heating 2019 Cooling Products $510 $511 Revenue Products 52% $593m 48% 16.3% 15.7% 15.5% 14.5% 2019 Revenue by Geography ($ millions) 4% 2016† 2017† 2018† 2019 Segment GM% 34% 32% 32% 33% Segment EBITDA* $86 $

  13. Slide 13: HVAC Product Examples

    HVAC Product Examples Cooling Products Heating Products Marley NC Cooling Tower Recold Fluid Cooler Residential Boilers Commercial Boilers Marley MD Everest Cooling Tower Evaporative Condenser Electrical Heating Products June 2020 13

  14. Slide 14: Detection & Measurement Segment Overview

    Detection & Measurement Segment Overview Adjusted revenue* 2019 Revenue by Product Adjusted segment income* % Fare Collection Technologies 15% $385 2019 Location & Revenue Inspection $321 $385m Equipment $260 Communication 50% $226 Technologies 25.3% 23.7% 24.4% 35% 20.0% 2019 Revenue by Geography (

  15. Slide 15: Detection & Measurement Product Examples

    Detection & Measurement Product Examples Cable & Pipe Locators Communication Technologies Inspection Equipment Cable Avoidance Signal Monitoring Obstruction Lighting Marine Lighting Transportation Fast Fare Farebox Fast Fare E June 2020 15

  16. Slide 16: Engineered Solutions Segment Overview

    Engineered Solutions Segment Overview Engineered Solutions revenue 2019 Revenue by Product Segment income % Process Cooling (Project Selectivity $653 and Exit of Heat 26% 2019 Transfer/South $561 African Ops.) Revenue Transformers $537 $549 $549m 74% 7.9% 6.5% 7.8% 4.9% 2019 Revenue by Geography 1%

  17. Slide 17: Engineered Solutions Product Examples

    Engineered Solutions Product Examples Transformer Solutions Process Cooling Components Medium Power Transformer High Voltage Transformer Gear Reducer Heat Transfer Media Installation & Service Air Flow Components June 2020 17

  18. Slide 18: Financial Performance & Capital Allocation

    Financial Performance & Capital Allocation

  19. Slide 19: Capital Structure

    Capital Structure Leverage Ratios* ($millions) 2.3x Q1 2019 Q1 2020 2.1x 1.5-2.5x Short-term debt $75.0 $260.3 1.9x Current maturities of long-term debt 14.2 2.6 1.6x Long-term debt 332.3 248.6 Total Debt $421.5 $511.5 Less: Cash on hand (39.0) (163.1) Net Debt $382.5 $348.4 Q1 2019 Q1 2020 LT Targe

  20. Slide 20: Financial Position - Liquidity Update

    Financial Position - Liquidity Update Refinanced Credit Facility in Q4’19: ($ in millions)  $450 million revolver, with ~$200 million remaining Term Loan Repayment Schedule capacity at Q1’20 $219 ‒ Drew down $100 million pre-emptively during Q1  $250 million term loan - 2024 final maturity and mod

  21. Slide 21: Detection & Measurement Inorganic Investments

    Detection & Measurement Inorganic Investments Global Leader in Inspection Equipment Radiodetection CUES Market Leading Inspection Equipment Inspection Equipment Strengthens Global Leadership in Engineered Specialty Lighting Flash Technology Obstruction Sabik Market Leading Lighting Equipment Marine

  22. Slide 22: HVAC Inorganic Investments

    HVAC Inorganic Investments Strengthens Industrial Refrigeration Solutions Accelerates Growth Strategy in Commercial High Efficiency Boilers June 2020 22

  23. Slide 23: Executive Summary

    Executive Summary  Balanced business portfolio with attractive and diverse end market drivers  Well-positioned to manage through current environment – Strong balance sheet and liquidity, and effective business system  Poised to resume long-term growth journey, including inorganic opportunities Si

  24. Slide 24: Questions

    SPX4 Questions

  25. Slide 25: Appendix

    SPX4 Appendix

  26. Slide 26: Appendix: Modeling Considerations

    Appendix: Modeling Considerations Metric Considerations Incremental/ Decremental Margins Corporate Expense Reduced incentive comp Long-term incentive comp ~$14-15m HVAC Low-30s% Restructuring costs Cost reduction actions Detection & Measurement ~50% Interest cost Drew $100m on revolver in Q1’20 Engi

  27. Slide 27: 2016-2019 Adjusted Profit Measures

    2016-2019 Adjusted Profit Measures ADJUSTED SEGMENT INCOME ($M) ADJUSTED EPS ADJUSTED EBITDA ($M) 250 $198 20% 4 200 ~$231 $171 $207 $2.76 $139 13% 15% 200 $182 3 $2.27 150 $126 12% $157 10% $1.74 9% 10% 2 $1.47 100 100 1 50 5% 0 0 0 0% 2016* 2017* 2018* 2019* 2016* 2017* 2018* 2019* 2016* 2017* 201

  28. Slide 28: FY 2016 Engineered Solutions Adjusted Revenue Reconciliation

    FY 2016 Engineered Solutions Adjusted Revenue, Adjusted Gross Profit and Adjusted Segment Income to U.S. GAAP Reconciliation ($ millions) FY 2016 Engineered Solutions and "All Other"* revenue $ 736.4 Exclude: South African projects 83.3 Engineered Solutions adjusted revenue $ 653.1 Engineered Soluti

  29. Slide 29: Adjusted Segment EBITDA to U.S. GAAP Reconciliation

    FY 2019, FY 2018, FY 2017 and FY 2016 Adjusted Segment EBITDA to U.S. GAAP Reconciliation ($ millions) HVAC Segment FY 2019 FY 2018 FY 2017 FY 2016 Segment income $ 95.4 $ 90.0 $ 74.1 $ 80.2 Exclude: Depreciation & amortization (6.9) (5.4) (5.5) (5.3) HVAC Segment EBITDA $ 102.3 $ 95.4 $ 79.6 $ 85.5

  30. Slide 30: FY 2019 Adjusted EPS to U.S. GAAP Reconciliation

    FY 2019 Adjusted Earnings Per Share to U.S. GAAP Reconciliation GAAP Adjustments Adjusted Segment income (1) $ 174.0 $ 57.0 $ 231.0 Corporate expense (2) (46.7) 2.6 (44.1) ($ millions) Long-term incentive compensation expense (13.6) - (13.6) (3) Special charges, net (4.0) 3.0 (1.0) (4) Other operati

  31. Slide 31: FY 2018 Adjusted EPS to U.S. GAAP Reconciliation

    FY 2018 Adjusted Earnings Per Share to U.S. GAAP Reconciliation GAAP Adjustments Adjusted ($ millions) (1) Segment income $ 178.5 $ 28.1 $ 206.6 (2) Corporate expense (48.5) 4.9 (43.6) Long-term incentive compensation expense (15.5) - (15.5) (3) Special charges, net (6.3) 5.0 (1.3) Loss on sale of d

  32. Slide 32: FY 2017 Adjusted EPS to U.S. GAAP Reconciliation

    FY 2017 Adjusted Earnings Per Share to U.S. GAAP Reconciliation GAAP Adjustments Adjusted (1) Segment income $ 124.9 $ 57.4 $ 182.3 ($ millions) Corporate expense (46.2) (0.9) (47.1) Long-term incentive compensation expense (15.8) — (15.8) Pension service cost (0.3) — (0.3) Special charges, net (2)

  33. Slide 33: FY 2016 Adjusted EPS to U.S. GAAP Reconciliation

    FY 2016 Adjusted Earnings Per Share to U.S. GAAP Reconciliation GAAP Adjustme nts Adjuste d Segment income (1) $ 142.8 $ 14.5 $ 157.3 Corporate expense (41.7) — (41.7) ($ millions) Pension and postretirement income (expense) (2) (15.4) 16.0 0.6 Long-term incentive compensation expense (13.7) — (13.7

  34. Slide 34: FY 2019 and FY 2018 Adjusted Revenue and Segment Income Reconciliation

    FY 2019 and FY 2018 Adjusted Revenue and Adjusted Segment Income to U.S. GAAP Reconciliation CONSOLIDATED SPX: Twelve months ended December 31, 2019 December 31, 2018 ($ millions) Consolidated revenue $ 1,525.4 $ 1,538.6 Exclude: "All Other" operating segments(1) (1.6) 98.6 Acquisition accounting ad

  35. Slide 35: Adjusted Revenue and Consolidated EBITDA Reconciliation

    FY 2019, FY 2018, FY2017, and FY 2016 Adjusted Revenue and Consolidated EBITDA to U.S. GAAP Reconciliation ($ millions) ` FY 2019 FY 2018 FY 2017 FY 2016 GAAP Revenue $ 1,525.4 $ 1,538.6 $ 1,425.8 $ 1,472.3 Exclude: "All Other" operating segment (1) (1.6) 98.6 93.8 - Exclude: South African projects

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