Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Baird Industrial Conference 2014
38 slides from Franklin Electric's conference presentation, Nov 10, 2014
Slide 1: Baird Industrial Conference November 11, 2014
Baird Industrial Conference November 11, 2014
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: Topics
Topics Financial Overview --- Strategy Overview Water Systems Fueling Systems Acquisitions 3
Slide 4: 2010-2014 Sales History
2010-2014 Sales History $0 $200 $300 $400 $500 $600 $700 $100 $1,000 $891 M 2012 $900 $800 2010 $714 M 2011 $821 M 4 $965 M 2013 $1,024 M 2014 LTM
Slide 5: 2010-2014 Operating Income History
2010-2014 Operating Income(1) History 1 After non-GAAP adjustments – See 10Q For reconciliation $0 $50 $75 $100 $25 $125 $114.9 M 2012 2010 $72.4 M 2011 $95.7 M 5 $127.4 M 2013 $128.9 M 2014 LTM
Slide 6: Strong Balance Sheet
Strong Balance Sheet 6 At year-end Q3 2011 2012 2013 2014 Net Debt/Capital 2% 9% 7% 17% Cash & Marketable Securities $153 M $103 M $135 M $77 M Gross Debt/EBITDA 1.3 1.1 1.2 1.4
Slide 7: 22 Consecutive Annual Dividend Payment Increases
$0 1993 $0.10 $0.15 $0.20 $0.25 $0.30 $0.05 1994 1995 1996 1997 1998 1999 2000 2002 2009 2003 2004 2005 2006 2007 2008 2010 2001 2011 2012 2013 $0.35 2014 7 22 Consecutive Annual Dividend Payment Increases
Slide 8: 2014 Sales & Earnings Growth
9 mos. YTD 2014 % +(-) Prior Year Sales $794 + 8% EPS(1) $1.45 + 1% ROIC(2) 17.3% - 2.2% (1) After non-GAAP adjustments – see 10-K for reconciliation to GAAP EPS (2) ROIC LTM operating income after non-GAAP adjustments ÷ (net debt + equity) 8 2014 Sales & Earnings Growth
Slide 9: Water Systems Sales Mix 2012-2014 YTD
Sales Mix Water Systems 2012-2014 YTD Water Systems Sales Mix (Total Water Sales) 2012 2013 YTD 2014 2013-14 +(-) Groundwater 68.1% 66.1% 59.9% (6.2%) Surface, non-dewatering 26.7% 26.6% 28.2% 1.6% De-watering (Pioneer) 5.2% 7.3% 11.9% 4.6% Total Water 100.0% 100.0% 100.0% 9
Slide 10: Pioneer Margins
10 Pioneer Margins
Slide 11: Drought Map – 2013-14 Comparison
Drought Map – 2013-14 Comparison 11
Slide 12: Distributor Reset
Distributor Reset o © o : © © ° © © © 6° 7) © bY of
Slide 13: Distributor Reset
Ce ee Distributor Reset
Slide 14: Strategy
Strategy 14
Slide 15: 2014 Q3 YTD Net Sales Business Segments
Water Systems 79% Fueling Systems 21% 15 2014 Q3 YTD Net Sales Business Segments
Slide 16: 2014 Q3 YTD Water Systems Sales
Groundwater Pumping Systems 60% Surface Pumps 40% 16 2014 Q3 YTD Water Systems Sales
Slide 17: Global Aquifer Map
The World’s aquifers contain 50 times as much fresh water as all the World’s lakes, ponds, rivers, and streams combined. 17 Global Aquifer Map Source: UNESCO; United States Geological Survey
Slide 18: 2014 Q3 YTD Water Systems Sales by Region
United States 47% Developed Non-US 14% Developing Regions 39% 2010-13 Developed World CAGR 9.3% 2010-13 Developing World CAGR 13.6% 18 2014 Q3 YTD Water Systems Sales
Slide 19: Global Expansion – Platform Acquisitions: Focus on India
$21.3 $35.9 $17.7 Year Prior to Acquisition (at 2014 FX) $38.1 $76.7 $44.7 2014 19 Global Expansion – Platform Acquisitions FOCUS ON INDIA
Slide 20: Global Expansion – Distribution
20 Global Expansion – Distribution Bombas Leão Pluga
Slide 21: 2014 Q3 YTD Water Systems Sales
Irrigation & Industrial Groundwater Pumping Systems 27% Residential Groundwater Pumping Systems 33% Residential Surface Pumps 15% Irrigation & Industrial Surface Pumps 25% 21 2014 Q3 YTD Water Systems Sales
Slide 22: 2014 Q3 YTD Water Systems Sales
Irrigation & Industrial Groundwater Pumping Systems 27% Residential Groundwater Pumping Systems 33% Residential Surface Pumps 15% Irrigation & Industrial Surface Pumps 25% #2 Global Supplier to residential water pumping systems distribution channel #1 Global supplier to agricultural irrigation pumpi
Slide 23: Product Development Process
CONCEPT MODELING SIMULATION 200 250 300 350 0 500 1000 H ea d (Ft ) Flow (GPM RESULTS TESTING PROTOTYPE OPTIMIZE GEOMETRY 23 Product Development Process
Slide 24: Water Systems – New Products
24 Water Systems – New Products
Slide 25: Water Systems – Drives & Controls
• Leading supplier of drives and controls for low horsepower groundwater pumping applications • Cerus acquisition (FCS) – technology leader in higher horsepower fluid transfer applications • Sell FCS drives and controls with Franklin high horsepower pumps and motors • Doubles revenue per installatio
Slide 26: Water Systems – High Efficiency
Present Motor Eff. New 6” Motor – Unique High Efficiency Design 26 Water Systems – High Efficiency
Slide 27: Water Systems – Solar
27 Water Systems – Solar
Slide 28: Oil and Gas Deliquification
Oil and Gas Deliquification 28
Slide 29: 29
29
Slide 30: Fueling Systems Global Supplier Positions
Fuel Management Systems #2 Global Supplier Vapor Recovery Systems #1 Global Supplier Piping & Containment Systems #1 Global Supplier Pumping Systems #1 Global Supplier Fueling Systems 30
Slide 31: Fueling Systems – Growth Through Acquisitions
Fueling Systems – Growth Through Acquisitions 2010 Acquisitions 55% Organic 45% GROWTH 2002 2000 2004 2006 2012 31
Slide 32: 2014 Q3 YTD Fueling Systems Sales
United States 49% Developed Non-US 20% Developing Regions 31% 2010-13 Developed World CAGR 12.3% 2010-13 Developing World CAGR 22.0% 32 2014 Q3 YTD Fueling Systems Sales
Slide 33: New Passenger Vehicle Sales
New Passenger Vehicle Sales 33 * Source: Scotiabank Group Global Auto Report 2000 2013 2000 2013 North America China, India, & South America + 7.6 X 20 M 18.3 M 3 M 22.9 M
Slide 34: Fueling Systems – Global Growth
Fueling Systems – Global Growth(1) US/Canada Rest of World Number of Stations 175,000 565,000 Stations with pressure pumping technology 97% 30% Stations with vapor recovery systems(2) 95% 20% Stations with fuel management systems 75% 38% Stations with flexible piping 45% 35% 1 Franklin management es
Slide 35: Fueling Systems – New Products
Fueling Systems – New Products 35
Slide 36: Fueling Systems – New Product Development
Fueling Systems – New Product Development Addressing the Needs of both Developed and Developing Markets 36
Slide 37: Acquisitions
Acquisitions • Fragmented Global Markets – Bolt-on Acquisition Opportunities • Franklin Acquisition Profile (Past 10 Years) – Acquisitions per Year ~ 2 – Purchase Price – $1-125 M (Avg. $30 M) – Average EBITDA Multiple ~ 7.5 X 37
Slide 38: Baird Industrial Conference November 11, 2014
Baird Industrial Conference November 11, 2014