Flowserve Corporation · NYSE:FLS
Flowserve — Gabelli Pump, Valve & Water Systems Symposium 2020
18 slides from Flowserve's conference presentation, Feb 27, 2020
Slide 1: Gabelli Pump, Valve & Water Systems Symposium
Gabelli Pump, Valve & Water Systems Symposium NYC February 27, 2020
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: Investment Highlights
Investment Highlights Distinguished history of flow control expertise with a heritage of more than 225 Overview Company years Diversified business model – geographies, end markets and products Three consecutive years of bookings growth Markets End Significant installed base provides recurring afterm
Slide 4: Flowserve at a Glance
Flowserve at a Glance Geographic diversification Increasingly engaged including significant high associates focused on growth emerging market ~17,000 meeting and exceeding exposure Employees customer expectations Over 50 Over 50 Countries Leading Product Brands Capturing highly profitable Respected
Slide 5: Diversified Business Model
Diversified Business Model ~60% of Business Outside North America Balanced Platform 6% 11% 31% 41% 2019 2019 Sales North America Sales 21% Europe Asia Pacific 69% Flowserve Pump Division Middle East & Africa 21% Latin America Flow Control Division Attractive End Markets Powerful Aftermarket Franchis
Slide 6: A Comprehensive, Pure-Play Flow Control Company
A Comprehensive, Pure-Play Flow Control Company Highlights AFTERMARKET • Only company with significant global presence in pumps, valves and seals PUMPS • Unmatched aftermarket capabilities to serve customers across industries and geographies SEALS ‒ Enterprise Frame Agreements ‒ LifeCycle Advantage
Slide 7: Historical Performance
Historical Performance Industry Timeline EPS * Operating Margin * $3.72 2010-2014: Post Financial Crisis $3.40 ▪ Recovery period post-financial crisis $3.09 ▪ Reasonable capital investment and solid maintenance spend $2.84 ▪ Excess capacity in the Flow Control industry limited pricing power $2.55 $2
Slide 8: The Transformation Journey
The Transformation Journey 2017 2018 2019 2020 2021 2022 STABILIZE TRANSFORM – FLOWSERVE 2.0 PLAN GROWTH AFTERMARKET COMMERCIAL COST STRUCTURE OPERATIONS WORKING CAPITAL MEASURE OPTIMIZE 8
Slide 9: Creating Long-Term Sustainable Shareholder Value
Creating Long-Term Sustainable Shareholder Value* Operating System Revenue Growth Free Cash Flow • Constructing Flowserve 2.0 operating model +2% 100%+ above industry grow th rate of Net Incom e • Developing a flexible cost structure for any Operating Margin ROIC environment 15-17% 15-20% • Creating
Slide 10: Progress Towards Long-Term Targets
Progress Towards Long-Term Targets [1] 2017 2018 2019 2022 Targets Organic Year-over-Year Revenue Growth [2] (9.1%) 5.0% 6.2% Adjusted Operating Margin [3] 8.8% 9.8% 11.3% Adjusted Free Cash Flow Conversion [4] 140.0% 46.0% 85.0% [5] ROIC 7.6% 10.7% 12.9% Strong progress towards our 2022 financial t
Slide 11: Appendix
Appendix
Slide 12: Full Year 2019 Consolidated Financial Results
Full Year 2019 Consolidated Financial Results - Diluted EPS calculated using fully diluted shares of 131.7 and 131.3 million shares for YTD 2019 and YTD 2018, respectively ** YTD 2019 and 2018 include losses of $14.5 million and $18.7 million arising from transactions in currencies * Constant FX rep
Slide 13: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Organic Revenue Growth $ millions 2017 2018 2019 Reported Revenue $ 3,660.8 $ 3,832.7 $ 3,944.8 Foreign exchange impact 34.0 31.0 (94.0) Divestiture impact (41.2) (31.0) Organic Revenue $ 3,626.8 $ 3,842.9 $ 4,069.8 Prior Year Reported Revenue $ 3,990.
Slide 14: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) 14
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) 15
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Twelve Months Ended December 31, 2015 Twelve Months Ended December 31, 2016 (Amounts in millions, except per share data) As Reported (a) Adjustments As Adjusted As Reported (a) Adjustments As Adjusted Sales $ 4,557.8 $ - $ 4,557.8 $ 3,990.5 $ - $ 3,990
Slide 17: 2020 Outlook
2020 Outlook [1] Guidance Assumptions 2020 Guidance Revenue Guidance 3.0% - 5.0% Reported EPS Guidance $2.05 - $2.20 Adjusted EPS Guidance [2] $2.30 - $2.45 EUR Rate 1.12 Adjusted Tax Rate 24% - 26% Capital Expenditures $90 - $100 million [1] 2020 Reported and Adjusted EPS guidance as of February 18
Slide 18: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com
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