Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — KeyBanc Conference June 2016
32 slides from Franklin Electric's conference presentation, Jun 1, 2016
Slide 1: KeyBanc Conference June 2016
KeyBanc Conference June 2016
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, inventor
Slide 3: Moving Water. Moving Fuel. Moving Forward.
Moving Water. Moving Fuel. Moving Forward. Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and automotive fuels. Recognized as a technical leader in its products and services, Franklin serves customers around the world in resid
Slide 4: 2015 Financial Performance
2015 Financial Performance 4 Revenue EPS(3) $‐ $200 $400 $600 $800 $1,000 $1,200 2014 FX Oil (1) Organic Growth (2) 2015 $‐ $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 2014 FX Oil (1) Organic Growth (2) 2015 $1,048 ($89) ($59) $25 $925 $1.76 ($0.20) ($0.16) $0.07 $1.47 (1) Management
Slide 5: Q1 2016 - Consolidated
Q1 2016 ‐ Consolidated Franklin Electric Co. Inc. 5 Q1 2016 Q1 2015 % +(‐) Prior Year Sales $218 $226 (3%) Operating Income(1) $22.2 $16.7 + 33% EPS(1) $0.29 $0.32(2) (9%) (1) After non‐GAAP adjustments – see 10‐K for reconciliation to GAAP EPS (2) Adjusted earnings per share includes approximately
Slide 6: Strategy
Strategy 6
Slide 7: Strategic Focus
Strategic Focus 7 Residential, Agricultural, Commercial Water Systems $6.0 B Global Market Potential(1) Complete Fueling Systems $1.2 B Global Market Potential(1) (1) Current Franklin management estimates Strong Brand Franchise #1 or #2 in Addressable Markets Growing Global Footprint Fragmented Cust
Slide 8: To grow as a global provider of water and fuel systems
8 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.
Slide 9: Annual Organic Sales Growth
Annual Organic Sales Growth 5.8% 4.9% 6.8% 7.8% ‐7.2% 1.2% 8.5% 7.1% 5.9% 11.7% 2.1% 7.8% 6.3% 5.4% 6.6% 8.6% ‐5.2% 2.6% 2011 2012 2013 2014 2015 1Q 2016 Water Fueling Consolidated 9* Organic growth calculation excludes impact of foreign currency and revenue from acquisitions for the first 12 months
Slide 10: Projected World Population Today
Projected World Population 10 Today Source: www.prb.org
Slide 11: Sales in Developing Regions
Sales in Developing Regions 11 $75 $92 $149 $218 $202 $242 $288 $316 $336 $372 $355 $‐ $50 $100 $150 $200 $250 $300 $350 $400 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ($ in millions)
Slide 12: Water Systems
Water Systems 12
Slide 13: Sales Growth Rates in US$ and Local Currency
MENA (IMPO) US $ Local 6.1% 18.8% Sales Growth Rates in US $ and Local Currency 13 2010‐2015 CAGR LATIN AMERICA US $ Local 5.8% 19.1% SOUTHERN AFRICA US $ Local (7.6%) 2.2% APAC US $ Local 8.1% 21.4%
Slide 14: Geographic Expansion: Brazil
Geographic Expansion: Brazil 14 ‘Top Ten’ global GDP 12% of world’s freshwater 2nd largest underground aquifer 400 million hectare of fertile land Sources: SABESP / agricultra.gov.br / cia.gov
Slide 15: Geographic Expansion: Brazil
• 2008 – Acquired Motobombas Schneider – Leading producer of surface pumps • Residential, Agriculture, Commercial • 5,000 active customers • 2009 – Imported Franklin Brand – Addressed premium market – Established Field Service • 2014 – Acquired Bombas Leao – Leading Brazilian submersible pump brand
Slide 16: Leverage Product Platforms Across Developing Regions
Leverage Product Platforms Across Developing Regions 16
Slide 17: Solar Pumping Systems
Solar Pumping Systems 17 $4,300 $2,700 SubDrive Solar Fhoton System Franklin SubDrive Solar 2012 Fhoton Solar Pumping System 2016 System Cost (Including pump, motor, controller, PV panels, racking) 37%
Slide 18: Product Line Extensions - New Products
Product Line Extensions‐New Products 18 (1) Sales of products launched last three years 2015 Increased investment in research & development Record number of new products launched Record revenue from new products(1) Focus on high efficiency product and system solutions
Slide 19: Product Line Extensions - Drives and Controls
COMMERCIALRESIDENTIAL AGRICULTURAL FUELING Product Line Extensions‐Drives and Controls 19
Slide 20: Drives & Controls
Drives & Controls 20 Residential Applications Municipal/Agricultural Applications Benefits to user: • Constant pressure • Better system protection Benefits to user: • Better system protection • Greater efficiency • Lower total cost of ownership $200 $100 $500 $2,200 $1,600 $4,200 ▶ Leverage our appl
Slide 21: High Efficiency Water Systems
High Efficiency Water Systems 21 89.6% 92.6% 92.8% Present Motor Efficiency Customer Feedback Improvement in Efficiency Recovered Investment Time 20 points 6 months New 6” Motor – Unique High Efficiency Design ▶ Expanding to new configurations & ratings
Slide 22: Fueling Systems
Fueling Systems 22
Slide 23: Fueling Systems
Fueling Systems 23 $131 $217 2010 2015 Sales 11% CAGR Operating Income $22 $52 2010 2015 19% CAGR Revenue Growth by Region 2010‐2015 CAGR ▲ 16% ▲ 9% DevelopedDeveloping ($ in millions)
Slide 24: Fueling Systems
Fueling Systems North American Market Rest of World Markets 24
Slide 25: Fueling Systems - Shell New Global Agreement
Fueling Systems 25 Shell New Global 5 Year Agreement • Now includes complete end‐to‐end underground fuel system • Expanded to address dealer network of 28,000 branded sites • Introduces new services which enhance safety and reduce total cost of ownership
Slide 26: Fueling Systems
Fueling Systems 26 • Industry's most powerful complete site quoting tool • Built by Franklin design optimization engineers • Powered by years of petroleum equipment design expertise
Slide 27: Fueling Systems
Fueling Systems 27 • Premier training, certification, and resource tool for installation and maintenance professionals • Systematic approach to training with a holistic view of the complete system
Slide 28: Capital Allocation
Capital Allocation 28
Slide 29: Capital Allocation
Capital Allocation 29 Return to Shareholders $263 CAPEX/R&D $402 Acquisitions $449 Total $1,114 Last 10 Years Debt to EBITDA 1.7 Debt to Total Capital 28% 2015 YE ($ in millions)
Slide 30: Consecutive Annual Dividend Payment Increases
24 Consecutive Annual Dividend Payment Increases 30 $‐ $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 31: Acquisition Timeline
Acquisition Timeline 31 20162005 2006 2007 2008 2009 2010 2011 2012 2013 20142004 JBD F U E L I N G F U E L I N G W A T E R 2015
Slide 32: KeyBanc Conference June 2016
KeyBanc Conference June 2016