Slide 1: Second Quarter 2021 Earnings Conference Call
SECOND QUARTER 2021 EARNINGS CONFERENCE CALL August 6, 2021 Q2 2021 EARNINGS CONFERENCE CALL 1
Slide 2: Forward Looking Statements and Non-GAAP Measures
FORWARD LOOKING STATEMENTS 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
Slide 3: Q2 2021 Highlights
Q2 2021 HIGHLIGHTS • Strong 17.9% year-over-year bookings growth driven by aftermarket and MRO • Aftermarket bookings of $525 million – highest level since 2018 Q4 • Backlog up $66 million sequentially on 1.06x book-to-bill • Increased our full-year 2021 bookings growth outlook to above 10% from pri
Slide 4: Q2 2021 Overview
Q2 2021 OVERVIEW Bookings • Strong year-over-year bookings Sales • Increased 2021 revenue $ millions growth of 17.9% on strong oil $ millions guidance to down 2% - 4% from and gas and chemical markets $985 prior guide of down 3% - 5% on $945 $953 - Original equipment year-over- $925 $924 improved ma
Slide 5: Q2 Bookings Mix
Q2 BOOKINGS MIX Original Equipment End-Market Mix End-Market Outlook Water General Industries Power Chemical Oil & Gas $ millions Oil & Gas $808M $953M $488 • Vaccine progress driving increased mobility and $428 end market recovery $366 52% • Aftermarket growth on increased utilization and 31% impro
Slide 6: Q2 Sales Mix
Q2 SALES MIX Original Equipment Region Mix $ millions $925M $898M $463 $434 $407 50% 47% 48% 41% 38% 2020 Q2 2021 Q1 2021 Q2 North America Europe Asia Pacific 21% Middle East & Africa Aftermarket 20% Latin America $ millions $462 $450 $464 21% 23% 53% 52% 50% 13% 11% 5% 7% 2020 Q2 2021 Q1 2021 Q2 20
Slide 7: Second Quarter Segment Highlights
SECOND QUARTER SEGMENT HIGHLIGHTS FPD FCD YoY Bookings Growth 24.7% 5.3% Adjusted Gross Margin* 32.4% 30.3% Adjusted SG&A as % of Sales* 21.5% 17.1% Adjusted Operating Margin* 11.4% 13.3% Book-to-Bill 1.08x 1.03x * See appendix for reconciliation to corresponding GAAP-based measure – Prior period co
Slide 8: 2021 Guidance Assumptions
2021 GUIDANCE ASSUMPTIONS Guidance 2021 Revised 2021 Prior Assumptions Guidance Guidance Revenue Guidance Down 2.0% - 4.0% Down 3.0% - 5.0% [1] Reported EPS Guidance $1.15 - $1.40 $1.15 - $1.40 [2] Adjusted EPS Guidance $1.45 - $1.65 $1.40 - $1.60 EUR Rate 1.20 1.20 Adjusted Tax Rate 21% - 23% 22% -
Slide 9: ESG Progress
ESG PROGRESS • Set ambitious target to reduce carbon emission intensity by 40% by the year 2030 – over 5% reduction from 2019 to 2020 • Releasing Annual Sustainability Report for 2020 in Q3 2021 incorporating both SASB and TCFD reporting • Partnered with local organizations to help communities impac
Slide 10: Our Energy Transition Objectives and Offerings
OUR ENERGY TRANSITION OBJECTIVES AND OFFERINGS ENERGY EFFICIENCY - Flowserve has the flow control offering to support energy transition RENEWABLE ENERGY - Estimated $60 trillion* investment in the next 10 years, with nearly half that amount focused on energy efficiency EMISSIONS CO2 REDUCTION - Flow
Slide 11: Flowserve Energy Transition in Action
FLOWSERVE ENERGY TRANSITION IN ACTION Bio-Diesel Refinery Conversion Biodegradable Plastics Project Flowserve SIHI Dry Vacuum Pump Technology • Collaboration with large U.S. customer to • Supplying 150 SIHI Dry vacuum pumps for convert petroleum refinery to a bio-diesel critical process application
Slide 12: 2021 Outlook and Strategic Focus
2021 OUTLOOK AND STRATEGIC FOCUS • Steady progress toward carbon intensity reduction target of 40% by 2030, including 5% reduction in 2020 versus prior year ESG • Opportunity for significant positive environmental contributions through energy transition technology and solutions • Positioned to drive
Slide 13: Questions & Answers
Questions & Answers Q2 2021 EARNINGS CONFERENCE CALL 1 3
Slide 14: Appendix
APPENDIX Q2 2021 EARNINGS CONFERENCE CALL 1 4
Slide 15: Q2 2021 Consolidated Financial Results
Q2 2021 CONSOLIDATED FINANCIAL RESULTS 2nd Quarter 2nd Quarter Adjusted 2021 2021 2020 Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* Items Results Results Bookings $ 952.8 $ 808.3 $ 144.5 17.9% 13.0% $ - $ 952.8 $ 808.3 $ 14
Slide 16: Year-to-Date 2021 Consolidated Financial Results
YEAR-TO-DATE 2021 CONSOLIDATED FINANCIAL RESULTS Full Year Year-to-Date Adjusted 2021 2021 2020 Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* Items Results Results Bookings $ 1,896.8 $ 1,783.6 $ 113.2 6.3% 2.7% $ - $ 1,896.8
Slide 17: Flowserve Pump Division Q2 2021 Segment Results
FLOWSERVE PUMP DIVISION Q2 2021 SEGMENT RESULTS 2nd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* 2021 2020 Delta ($) Delta (%) FX(%)* Bookings $ 668.8 $ 536.5 $ 132.3 24.7% 19.3% $ 1,322.2 $ 1,220.1 $ 102.1 8.4% 4.6% Sales $ 617.5 $ 674.1 $ (56.6) -8.4% -1
Slide 18: Flowserve Pump Division Q2 2021 Bookings and Sales
FLOWSERVE PUMP DIVISION Q2 2021 BOOKINGS AND SALES 2nd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta (%) 2021 2020 Delta (%) FX(%)* FX(%)* 217 162 34% 27% 481 419 15% 10% OE 32% 30% 200 bps 36% 34% 200 bps Bookings Mix ** 452 375 21% 16% 841 801 5% 1% AM 68% 70% (200) bps 64% 6
Slide 19: Flow Control Division Q2 2021 Segment Results
FLOW CONTROL DIVISION Q2 2021 SEGMENT RESULTS 2nd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* 2021 2020 Delta ($) Delta (%) FX(%)* Bookings $ 289.1 $ 274.6 $ 14.5 5.3% 1.5% $ 582.6 $ 570.8 $ 11.8 2.1% -1.3% Sales $ 281.2 $ 252.3 $ 28.9 11.5% 6.6% $ 537.0
Slide 20: Flow Control Division Q2 2021 Bookings and Sales
FLOW CONTROL DIVISION Q2 2021 BOOKINGS AND SALES 2nd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta (%) 2021 2020 Delta (%) FX(%)* FX(%)* 213 205 4% 0% 438 423 4% 0% OE 74% 75% (100) bps 75% 74% 100 bps Bookings Mix ** 76 69 9% 6% 145 148 -2% -5% AM 26% 25% 100 bps 25% 26% (100)
Slide 21: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com Q2 2021 EARNINGS CONFERENCE CALL 2 1