Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — KeyBanc Industrial Conference May 2012
24 slides from Franklin Electric's conference presentation, May 30, 2012
Slide 1: KeyBanc Industrial Conference May 2012
KeyBanc Industrial Conference May 2012
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, invento
Slide 3: Topics
Topics Financial Summary --- Water Systems Growth --- Fueling Systems Growth 3
Slide 4: 2011 Financial Highlights
2011 Financial Highlights 2011 % +(-) Prior Sales $821 M + 15% Adjusted EPS1 $2.70 + 41% ROIC2 21.5% + 52% Net Debt/Capital 2% – 1 See company’s 10-K for reconciliation of adjusted EPS to GAAP EPS 2Operating income/net debt + equity 4
Slide 5: 1st Quarter 2012 Financial Highlights
1st Quarter 2012 Financial Highlights 5 Q1 2012 % +(-) Prior Sales $202 M + 9% EPS $0.96 + 113% Adjusted EPS1 $0.60 + 30% 1 For reconciliation of adjusted EPS to GAAP EPS see company’s 10Q.
Slide 6: 2nd Quarter 2012 Guidance
2nd Quarter 2012 Guidance 6 % +(-) Prior Water Systems Sales + 10% – 13% Fueling Systems Sales + 9% – 11% EPS + 10% – 13% Note: 2nd quarter 2011 EPS was a record at the time for any quarter in the company’s history.
Slide 7: 2011 Global Business Segment Performance
2011 Global Business Segment Performance % of Franklin Sales Water Systems 80% Fueling Systems 20% Fueling Systems LTM 3/31/12 % +(-) Prior Sales $166 M + 16% Operating Income1 $32 M + 35% 1 Operating income after non-GAAP adjustments described on pages 16-17 of the company’s 2011 10-K Water Systems
Slide 8: Water Systems – Sales by End User Application
Water Systems – Sales by End User Application 8 Irrigation & Industrial Water Pumping 40% Residential & Light Commercial Water Pumping 60% • Unplanned and non-discretionary replacement purchases represent 80%1 of sales • Availability takes precedence over pricing % of Franklin Water Sales 1 Franklin
Slide 9: Water Systems: #1 Worldwide Supplier to Distribution Channels
Water Systems 9 #1 Worldwide Supplier to Distribution Channels for Groundwater Pumping Equipment “Adjacent” Pumps 35% Groundwater Pumps & Motors 65% % of Franklin Water Sales Global Addressable Market: $5.0 B
Slide 10: Water Systems – Growth Strategy
Water Systems – Growth Strategy 10 Further extend product lines to sell through Franklin global distribution network --- Expand distribution network in developing regions
Slide 11: Water Systems – Growth: Extend Product Lines
Water Systems – Growth: Extend Product Lines 11 Fill Out Product Catalogs to Displace Competitor Offerings in our Distribution Network # of Franklin Water Systems SKUs 2015 Projected 2004 8,000 43,000 2011 30,000 • Manufactured in existing facilities • Sold by existing sales force • Bolt-on acquisit
Slide 12: Water Systems – Growth: Packaged Systems
Water Systems – Growth: Packaged Systems 12 Typical Oil/Gas Well Depth (2000 to 6000 feet) Oil and Gas Well Deliquification System Addressable Market (US, Canada, Australia): $0.5 B Typical Water Well Depth (40 to 600 feet) Gas Line Water Line
Slide 13: Water Systems – Growth: Packaged Systems
Water Systems – Growth: Packaged Systems 13 Solar Groundwater Pumping Systems Water Pressure Boosting/Control Systems Other Packaged Systems Development Initiatives 2011
Slide 14: Pioneer Pump Acquisition – March 2012
Pioneer Pump Acquisition – March 2012 14 Mobile Pumping Systems - 2011 Sales - $70 M • Oil and gas fracking liquids • Dewatering mines and construction sites • Wastewater by-pass • Flood control
Slide 15: Water Systems – Growth in Developing Regions
Water Systems – Growth in Developing Regions 15 2010 $0 $50 $75 $100 $125 $150 $175 $200 $225 2004 2005 2006 2007 2008 2009 $55 M $77 M $94 M $135 M $204 M $188 M $228 M 12% Share of Addressable Market % of Total Franklin Water Sales 16% 40% $25 2011 $270 M $250 $275 $ 5 5 M B as e $ 9 5 M Ac q u is
Slide 16: Water Systems – Segment Sales
Water Systems – Segment Sales 16 2011 2004 $334 M $654 M Water Systems Segment % Operating Income 16.4% 16.3%1 1 Adjusted operating income – see company’s 10-K for reconciliation to GAAP.
Slide 17: Fueling Systems – Product Line Extensions
Fueling Systems – Product Line Extensions 17 FE Petro Turbine and Drive 1990s FE Petro Turbine Pump 1980s Franklin Submersible Motor 1960s Adjacent Products 2000s International Expansion Global Addressable Market: $1.0 B
Slide 18: Fueling Systems – Annual Sales of Cars and Light Trucks
Fueling Systems – Annual Sales of Cars and Light Trucks 18 Up 5.5x North America 2000 2011 20 M 15.2 M 3 M 16.5 M China, India & Latin America 1 Source Scotiabank Group Global Auto Report
Slide 19: Fueling Systems – Installation of New Technologies
Fueling Systems – Installation of New Technologies 19 United States Rest of World Number of Stations 175,000 500,000 Stations with pressure pumping technology 97% 23% Stations with vapor recovery systems 80% 17% Stations with fuel management systems 75% 36% * Franklin management estimates Internatio
Slide 20: Fueling Systems – International Expansion
Fueling Systems – International Expansion 20 • Inventory management • Leak detection • Inventory measurement • Fraud prevention • Low-cost Adapting US Technologies to Needs of International Markets
Slide 21: Fueling Systems – International Expansion
Fueling Systems – International Expansion 21 Piping & Containment APT (UL Approved) UPP (EN Approved) Dispensing Systems Healy/Franklin System Omni Series Adapting US Technologies to Needs of International Markets
Slide 22: Fueling Systems – Segment Sales
Fueling Systems – Segment Sales 22 2011 2004 $71 M $167 M $17 M $71 M % International 24% 42% % Operating Income Margin 14.1% 19.2%1 International Sales 1 Adjusted operating income – see company’s 10-K for reconciliation to GAAP.
Slide 23: Summary
Summary 23 Focused operating company --- Strong brand franchise and worldwide product leadership --- Ample headroom for organic growth in growing global markets --- Attractive bolt-on acquisition opportunities
Slide 24: KeyBanc Industrial Conference May 2012
KeyBanc Industrial Conference May 2012
Franklin Electric — KeyBanc Industrial Conference May 2012 on 6ix