Spx Technologies, Inc. · NYSE:SPXC
Spx Technologies — Deutsche Bank Industrials & Basic Materials Conference 2011
37 slides from Spx Technologies's conference presentation, Jun 15, 2011
Slide 1: Deutsche Bank Industrials & Basic Materials Conference
Deutsche Bank Industrials & Basic Materials Conference INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 15, 2011 1
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 and financial projections, are forward-looking statements and are thus prospective. These forward-looking statements are subject to risks, u
Slide 3: Introductory Comments
Introductory Comments INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 2011 3
Slide 4: SPX Transformation
SPX Transformation 1912-1996 2005-Today 1997-2004 U.S. Automotive Global, Multi-Industry Supplier Supplier Diversified Idustrial Manufacturer Of Engineered Solutions Focus on Executing Long-Term Strategy, Cyclical Recovery Focus on 3 Strategic Markets Diversification, Focus on >100 Acquisitions Stru
Slide 5: Key End Market Drivers
Key End Market Drivers Power & Energy Food & Beverage Vechicle Service Electricity Demand Customer Globalization, New Vehicle Platforms Emerging Markets Retrofit and Refurbishement Increasing Electronic of Aged Infrastructure Sustainability & Complexity of Vehicles Environmental Considerations Emerg
Slide 6: Strategic Overview
Strategic Overview Growth Initiatives Internal Focus Develop Continue LEAN Innovative Solutions Journey Expand Customer Migrate to Relevance Shared Services Broaden Geographic Promote Presence Brand Localize Content One with Global Expertise Global Operating System Power & Food & Vehicle Energy Beve
Slide 7: Revenue by Region
Revenue by Region Emerging Market Revenue % 2010 Revenue % by Geography of Total Reported Revenue $1.2b 48% 24% 25% 22% 23% $0.6b 17% 15% 14% 18% 2% 2005 2006 2007 2008 2009 2010 8% Globalization has Improved Growth Prospects; Emerging Markets have Provided Growth Opportunities June 2011 7
Slide 8: Financial Performance
Financial Performance ($ billions; except per share data) peak revenue & EPS achieved in 2008 Revenue EPS* $5.8 Actions Since Late 2008 ~$5.5 $4.8 $4.9 Structural improvements: $4.5 $6.53 >$100m of restructuring actions $3.9 Reduced tax rate 300 points $3.5 $4.85 $4.25 to Reduced debt & interest exp
Slide 9: Medium Term Growth Drivers
Medium Term Growth Drivers INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 2011 9
Slide 10: Medium Term Growth Drivers
Medium Term Growth Drivers Cyclical recovery, particularly in power-related businesses Expansion in large power transformers Expansion in food & beverage systems Robust OEM new vehicle launch forecast Margin expansion across all four segments Strategic acquisitions Innovation focus We Believe SPX is
Slide 11: Cyclical Analysis of Primary End Markets
Cyclical Analysis of Primary End Markets Recovery Stage Later Vehicle Service Diagnostic Tools Food & Beverage & Equipment Components Recovery Stage Middle HVAC & Other Infrastructure Food & Beverage Power Systems Recovery Stage Generation Power T&D Early Oil & Gas Late Cycle Mid Cycle Early Cycle N
Slide 12: U.S. Power Transformer Market
U.S. Power Transformer Market Base Giga-Voltage Ampere (GVA) per Year Additions 200 180 Electricity demand: 160 Load growth on the grid Transformer GVA Installed 140 120 100 Increased industrial utilization 80 60 New housing starts 40 20 0 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986
Slide 13: Historical Financial Results for SPX Transformer Business
Historical Financial Results for SPX Transformer Business ($ millions) Quarterly Backlog Value Full Year Revenue Full Year Operating Margin % $481 $393 $376 $348 $283 $250 ~$250 $209 $224 $194 30% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E Note: 2011E as of 5/4/2011 Cyclical Recovery Unde
Slide 14: Large Power Expansion
Large Power Expansion 140k square foot (~50%) expansion of power transformer facility in Waukesha, WI Estimated total investment: ~$70m Government subsidies: $25m Estimated net investment: ~$45m Construction underway: On schedule to being shipping units in 2012 Awarded 8 large transformer orders to
Slide 15: Power Plant Offerings
Power Plant Offerings Power Generation Plant Goal Natural Gas Nuclear Coal-Fired Solar Geothermal Wet & Dry Stationary Heat Rotating Heat Polution Control Process Large Power Cooling Systems Exchangers Exchangers Systems Solutions Transformers Thermal Equipment & Flow Technology Industrial Products
Slide 16: Power Projects >$15m in Backlog
Power Projects >$15m in Backlog natural gas solar coal geothermal Evaporative nuclear oil Cold End Cooling Retrofit Cooling Solution 6 Heat Exchanger or Pollution Control Retrofits 3 Dry Cooling 4 Dry Cooling Projects Projects 3 Evaporative Cooling Retrofits Heat Nuclear Exchangers Nuclear Squib Val
Slide 17: Power Generation Infrastructure Investment Needs
Power Generation Infrastructure Investment Needs ($ billions) China $2,222 Western Europe $1,774 North America $1,624 Other Asia Pacific $1,278 India $967 Eastern Europe $665 Latin America $403 Power Infrastructure Investment 2010-2035 Power Infrastructure Investment 2010-2020 Middle East $358 Afric
Slide 18: Power Plant Age and New Capacity Projections
Power Plant Age and New Capacity Projections Projected Power Generation Additions (GW) Power Plant Age in 2008 2010 - 2020 2020 - 2030 2010 - 2020 2020 - 2030 322 520 498 729 Developed Markets Emerging Markets 38% 39% 62% 61% 2010 - 2020 2020 - 2030 1st Half of Life 190 282 2nd Half of Life 2010 - 2
Slide 19: Efficiency and Emissions
Efficiency and Emissions The Efficiency-Emissions Connection Emissions Source: IEA “Focus on Clean Coal” 2006 A 1% Increase in Efficiency is Equal to a 2% to 3% Reduction in Emissions June 2011 19
Slide 20: Cooling System Efficiency
Cooling System Efficiency As cooling tower efficiency increases, water consumption decreases 75% efficiency 100% efficiency Source: IEA “Focus on Clean Coal” 2006 Retrofitting Aged Cooling Systems can Result in Efficiency Gains and Reduced Water Consumption June 2011 20
Slide 21: Food & Beverage Business
Food & Beverage Business INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 2011 21
Slide 22: Global Food & Beverage Market
Global Food & Beverage Market Food & Beverage Market: Global Retail Industry Revenues 2010 – 2014E CAGR 2009 decline $16,000 due to global +6% recession $14,000 +4% $12,000 $10,000 +6% $8,000 +3% $6,000 +7% $4,000 $2,000 $0 Asia Pacific Europe Middle East & Africa North America Latin America Source:
Slide 23: Food & Beverage Expansion
Food & Beverage Expansion 2001-2007 2008-Today U.S. Based Supplier of Global Supplier Food & Beverage Components Of Full-Line, Automated Solutions >$800m in Revenue >50% International Expanded Systems Capabilties Globalization & Systems Acquired Waukesha Cherry-Burrell and Bran & Luebbe businesses i
Slide 24: Key Food Categories
Key Food Categories Milk products Yogurt Customer Examples Cream Baby formula Dairy Cheese Whey & milk powder Butter Dairy ingredients Soft drinks Soya drinks Beverages Fruit juices Beer Flavored water Wine Coffee & tea Spirits Baby food Processed egg Yeast Desserts & confectionery Food Ready meals
Slide 25: Food & Beverage Systems
Food & Beverage Systems Recent Large Project Awards 2011E Systems Revenue Margarine Milk & Butter Powders Dairy (liquid) Milk Whey 52% Powders Powders Butter Food Plant Dairy Ingredients Yogurt (powder) Whey Plants 18% Powders Dairy Brewery & Products Other Yellow Fats Factory 6% Beverages Fats & Oi
Slide 26: Dairy Products Factory Project
Dairy Products Factory Project Example of Daily Production in a Dairy Products Factory Goal 240 Tons 50 Tons per day per day 120 Tons 8 Tons 15 Tons 1,000,000 per day per day per day liters per day Milk Juice Yogurt Cheese Butter Whey Powder Acquisitions Have Expanded SPX’s Capabilities as a Supplie
Slide 27: Key Market Drivers
Key Market Drivers Increasing Globalization Emerging Middle Class Emerging Markets Food Safety Regulations Social Responsibility Increasing Standards Product Energy Efficiency Safety Sustainability High Integrity in Process Waste Prevention Product Innovation Health & Wellness Sports Nutrition Globa
Slide 28: Forecasted Growth Rates of UHT Milk
Forecasted Growth Rates of Ultra High Temperature (UHT) Milk 2010 to 2015 CAGR 5.5% to 11% 3.5% to 5.4% 2.1% to 3.4% 0.0% to 2.0% -0.1% to -5.0% data not available Source: Euromonitor International; Retail Value, US$, Fixed 2010 Ex. Rates Sales of Long-Life UHT Milk Expected to Grow Fastest in Emerg
Slide 29: Executive Summary
Executive Summary INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 2011 29
Slide 30: Executive Summary
Executive Summary ($ billions; except per share data) peak revenue & EPS achieved in 2008 Medium Term Growth Drivers Revenue $5.8 Cyclical recovery, particularly in power- EPS* related businesses ~$5.5 $4.8 $4.9 Expansion in large power transformers $4.5 $6.53 Expansion in food & beverage systems $3
Slide 31: Questions
Questions INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 2011 31
Slide 32: Coal-Fired Power Generation
Coal-Fired Power Generation Items shaded in green highlight SPX products SPX Supplies Critical Heat Exchange Technology to the Steam Turbine Island of a Coal-Fired Power Plant June 2011 32
Slide 33: Nuclear Power Generation
Nuclear Power Generation Items shaded in green highlight SPX products SPX Supplies Critical Heat Exchange Technology to the Steam Turbine Island of a Nuclear Power Plant June 2011 33
Slide 34: Combined Cycle Power Generation
Combined Cycle Power Generation Items shaded in green highlight SPX products SPX Supplies Critical Heat Exchange Technology to the Steam Turbine Island of a Combined Cycle Power Plant June 2011 34
Slide 35: Solar Power Generation
Solar Power Generation Items shaded in green highlight SPX products SPX Supplies Critical Heat Exchange Technology to the Steam Turbine Island of a Nuclear Power Plant June 2011 35
Slide 36: Non-GAAP Reconciliations
Non-GAPP Reconciliations INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL June 2011 36
Slide 37: 2006 to 2010 Adjusted EPS
2006 to 2010 Adjusted EPS 2006 2007 2008 2009 2010 GAAP EPS from continuing operations $ 3.74 $ 5.33 $ 4.68 $ 0.95 $ 3.86 refinancing charges - - - - 0.33 asset impairments - 0.05 2.21 3.40 - tax benefits (0.85) (0.59) (0.47) (0.43) (0.57) legal matters 0.27 0.06 0.11 - - other (0.08) - - - - Adjust
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