Slide 1: SPX August 2018
SPX August 2018
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 within the meaning of Section 21E of the Securities Exchange Act of 1934, as am
Slide 3: SPX Corporation Overview
SPX Corporation Overview August 2018
Slide 4: Company Overview
Company Overview SPX Corporation 2017 Core Revenue* by Region Headquartered in Charlotte, NC A leading supplier of: 87% 8% HVAC products, Detection & Measurement technologies, and Engineered Solutions 5% ~$1.4b Core Revenue* in 2017 ~5,000 employees NYSE Ticker: SPXC *Non-GAAP financ
Slide 5: Executive Highlights
Executive Highlights Well-positioned to invest for sustainable double digit earnings growth Solid FCF* conversion 100% to 110% of Core net income >$400M remaining available capital to deploy through 2020 Solid platform to expand (products, markets, channels) Completed two proprietary acqui
Slide 6: Strong Brands and Attractive Market Dynamics
Strong Brands and Attractive Market Dynamics 2017 Core Revenue* ~$1.4B ~93% of Revenue from 69% of Revenue from #1 or #2 Market Position Replacement Sales 88% 69% (1) Management Estimates Management Estimates *Non-GAAP financial measure. Note: Core results are non-GAAP financial measures that exclud
Slide 7: Key Product Offerings and Financial Profile by Segment
Key Product Offerings and Financial Profile by Segment Package cooling units 2017: Fluid coolers $511m revenue Residential and Non-Residential Boilers Segment income margin 15% Electrical heating products Locators 2017: Fare collection systems $260m revenue Communication technolo
Slide 8: Updated Value Creation Roadmap
Updated Value Creation Roadmap Organic Growth SPX Business System New products Policy deployment New channels Operational excellence Adjacent markets Due diligence/integration Inorganic Growth Culture & Values Focus in HVAC and D&M Leadership development Significant capital to depl
Slide 9: SPX Margin Transformation
SPX Margin Transformation Adjusted Operating Income Margin $1.75B 12% Revenues ~$1.40B 10% 11.0% 8% 10.0% 6% 8.6% 4% 7.0% 5.1% 2% 3.7% 0% 2015* 2016 2016* 2017* 2018** 2020** (as Guidance (as (as Guidance Targets reported reported reported 2/25/16) 2/23/17) 2/21/18) Adjusted EPS* N/A $1.10 $1.47 $1.
Slide 10: Segment Overview
Segment Overview August 2018
Slide 11: HVAC Segment Overview
HVAC Segment Overview 2017 Revenue by Product Cooling Products Heating Revenue $511m 49% Products Segment income % Organic CAGR 51% 2.0-4.0% 7.0-8.0% $510 $511 2017 Revenue by Geography 100 bps 15.7% 15.0-16.0% 14.5% increase 5% 8% ($ millions) 2016 2017 2018E 2020E 87% Segment GM% 34% 32% + ~100 bp
Slide 12: 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 August 2018 12
Slide 13: Detection & Measurement Segment Overview
Detection & Measurement Segment Overview 2017 Revenue by Product Organic CAGR Revenue 2.0-6.0% Segment income % $325-335 $260 $226 23.0 -25.0% 2017 Revenue by Geography ~24.4% 22.5-23.5% 23% 20.0% 2016 2017 2018E 2020E 8% ($ millions) 69% Segment GM% 46% 46% Moderate Decline Segment EBITDA * $49 $67
Slide 14: Detection & Measurement Product Examples
Detection & Measurement Product Examples Fare Collection Products Cable & Pipe Locator Products Fast Fare Farebox Fast Fare E Video Inspection Cable Avoidance Communication Technologies Products SMS & Communications Intelligence Flash Lighting Systems Drone Detection Systems August 2018 14
Slide 15: Engineered Solutions (Adjusted) Segment Overview
Engineered Solutions (Adjusted*) Segment Overview 2017 Adjusted Revenue by Product Engineered Solutions (Adjusted) Revenue* Transformers Adjusted income %* 58% $653 (Project Process $625m Selectivity and Cooling $625 Exit of Heat Organic CAGR 42% Transfer) 2.0-3.0% $550-560 ~8.0% 9.0-10.0% 7.2% 2017
Slide 16: Engineered Solutions Product Examples
Engineered Solutions Product Examples Transformer Solutions Process Cooling Components Medium Power Transformer High Voltage Transformer Gear Reducer Heat Transfer Media Installation & Service Air Flow Components August 2018 16
Slide 17: Financial Position & Capital Allocation
Financial Position & Capital Allocation August 2018
Slide 18: Cash Flow & Liquidity
Cash Flow & Liquidity ($ in millions) ($ in millions) Targeting 110% Core Free Cash Flow* Conversion Term Debt Repayment Schedule Projecting >$400 million remaining of capacity for capital allocation through 2020 Growth investments in Core businesses $298 Active M&A pipeline Return of capi
Slide 19: Capital Structure
Capital Structure Leverage Ratios* ($millions) Q1 2018 Q2 2018 2.7x Short-term debt $6.8 $124.1 2.3x 2.2x Current maturities of long-term debt 4.9 9.2 1.5-2.5x Long-term debt 344.9 340.6 1.5x Total Debt $356.6 $473.9 Less: Cash on hand (103.7) (66.7) Net Debt $252.9 $407.2 Q1 2018 Q2 2018 LT Target
Slide 20: SPX Acquisition Approach
SPX Acquisition Approach Qualitative Quantitative Focused on building existing platforms Revenue transaction size $20-$100 million Existing markets or close adjacencies (primary focus); opportunistically consider larger targets Engineered products Cash ROIC ≥ double digits 3-5 yrs Attrac
Slide 21: Schonstedt Overview
Schonstedt Overview Company Profile 2017 Sales: $9M Purchase multiple*: <7x post-synergies XTpc Pipe and Cable Locator Description: Manufacturer of magnetic locator products used for locating underground utilities and other buried objects. Acquisition Rationale: • Strengthens Detection & Measurement
Slide 22: CUES Overview
CUES Overview Company Profile CUES Digital Universal Camera 2017 Sales: ~$86M Purchase multiple*: <10x post-synergies Description: Leading manufacturer of inspection and rehabilitation equipment. Acquisition Rationale: Mobile Inspection Units CUES SPiDER Scanner • Strengthens Detection & Measurement
Slide 23: 2016-2018 SPX Adjusted EBITDA Performance
2016-2018 SPX Adjusted EBITDA Performance Adjusted EBITDA Adjusted EBITDA Margin % ~10% ($ MMs) Mid Higher 14% + ~40 bps $175 $160s 12% 12% $150 10% $143 10% 9% $125 $100 8% $126 $75 6% $50 4% $25 2% $0 0% 2016A* 2017A* 2018E** 2018 Exit 2016A* 2017A* 2018E** 2018 Exit Rate with Rate with Schonstedt
Slide 24: 2020 Financial Targets
2020 Financial Targets Focus on Cash Returns from Capital Deployment Adjusted Earnings Per Share Prior 2020 Adjusted EPS** guidance of $2.65 - $2.90 $2.90-$3.10 included M&A-related amortization $2.65-$2.90 A look at cash returns from capital deployment $1.78 provides a better view of value crea
Slide 25: Appendix
Appendix August 2018
Slide 26: Full-Year Gross Margins to U.S. GAAP Reconciliation
Full-Year Gross Margins to U.S. GAAP Reconciliation Engineered Solutions segment FYE 2017 FYE 2016 Engineered Solutions gross profit 47.7 97.7 as a percent of revenues 7% 13% (1) Exclude: South African projects (59.1) (5.8) Engineered Solutions (Adjusted) Gross profit 106.8 103.5 as a percent of Adj
Slide 27: Full-Year EBITDA to U.S. GAAP Reconciliation
Full-Year EBITDA to U.S. GAAP Reconciliation FYE 2017 FYE 2016 HVAC Segment Segment income $ 74.1 $ 80.2 Adjustments: Depreciation & amortization 5.5 5.3 HVAC Segment EBITDA $ 79.6 $ 85.5 Detection & Measurement segment Segment income $ 63.4 $ 45.3 Adjustments: Depreciation & amortization 4.0 3.4 De
Slide 28: Full-Year Adjusted EBITDA to U.S. GAAP Reconciliation
Full-Year Adjusted EBITDA to U.S. GAAP Reconciliation ($ millions) FY 2017 FY 2016 Consolidated revenue $ 1,425.8 $ 1,472.3 Exclude: South African projects (1) 29.1 83.3 Adjusted revenues $ 1,396.7 $ 1,389.0 Adjusted operating income (1) (2) $ 119.1 $ 96.2 Adjustments: Depreciation & amortization 25
Slide 29: Engineered Solutions (Adjusted) Segment Income Reconciliation
Engineered Solutions (Adjusted*) Segment Income to U.S. GAAP Reconciliation ENGINEERED SOLUTIONS SEGMENT: (as reported in $ millions) FY 2017 FY 2016 Engineered Solutions revenue $ 654.5 $ 736.4 Exclude: South African projects 29.1 83.3 Engineered Solutions (Adjusted) revenue $ 625.4 $ 653.1 Enginee
Slide 30: Full-Year 2017 U.S. GAAP to Adjusted Operating Income
Full-Year 2017 U.S. GAAP to Adjusted Operating Income ($ millions) GAAP Adjustme nts Adjuste d (1) Segment income $ 124.9 $ 57.8 $ 182.7 Corporate expense (46.2) — (46.2) Pension and postretirement (expense) (0.3) — (0.3) Long-term incentive compensation expense (15.8) — (15.8) (2) Special charges,
Slide 31: Full-Year 2016 U.S. GAAP to Adjusted Operating Income
Full-Year 2016 U.S. GAAP to Adjusted Operating Income ($ millions) GAAP Adjustme nts Adjuste d (1) Segment income $ 142.8 $ 14.5 $ 157.3 Corporate expense (41.7) — (41.7) Pension and postretirement (expense) (0.4) — (0.4) Long-term incentive compensation expense (13.7) — (13.7) Special charges, net