Slide 1: Second Quarter 2018 Earnings Conference Call
Second Quarter 2018 Earnings Conference Call August 8, 2018 Quarterly Presentation 2017 1
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: Q2 2018 Overview
Q2 2018 Overview • Q2 2018 Reported and Adjusted earnings per share of $0.10 and $0.41 - Adjusted EPS* excludes approximately $47 million consisting primarily of realignment, asset write-down related to planned divestiture of non-strategic IPD product lines and below-the-line foreign exchange expens
Slide 4: Q2 Bookings & Sales Mix
Q2 Bookings & Sales Mix Bookings Sales End-Markets $1.04B $971M $973M $877M • Oil & Gas • Oil & Gas pre-FEED and FEED pipeline continues to grow • Downstream spend improved on increased refinery maintenance and efficiency upgrades 36% 35% Oil & Gas 41% 41% North America • North America LNG activity
Slide 5: Q2 Original Equipment / Aftermarket Mix
Q2 Original Equipment / Aftermarket Mix Original Equipment Aftermarket Bookings Mix % Sales Mix % Bookings Mix % Sales Mix % $ millions $ millions $ millions $ millions $533 $514 $504 $488 $485 $482 $465 $457 $455 $443 $434 $447 49% 50% 51% 53% 52% 50% 47% 49% 50% 50% 51% 48% 2018 Q2 2018 Q1 2017 Q2
Slide 6: Q2 2018 Financial Scorecard
[1] Q2 2018 Financial Scorecard [2] Bookings Revenue Adjusted OI% Adjusted EPS Oper. Cash Flow PWC $ millions $ millions 9.3% $ millions As a % of TTM Revenue $64 $1,037 8.2% $43 $0.41 32.0% $971 $973 6.8% 30.1% 30.1% $929 $920 2018 Q1 $0.27 $877 2018 Q2 2017 Q2 $0.22 ($121) 2018 Q2 2018 Q1 2017 Q2
Slide 7: 2018 Guidance Assumptions
2018 Guidance Assumptions [1] Guidance Assumptions 2018 Guidance Revenue Guidance 3% - 6% Reported EPS Guidance $0.95 - $1.15 Adjusted EPS Guidance $1.50 - $1.70 EUR Rate 1.22 Adjusted Tax Rate 27% - 28% Capital Expenditures $80 - $90 million [1] 2018 Reported and Adjusted EPS guidance as of August
Slide 8: Flowserve 2.0 Transformation
Flowserve 2.0 Transformation Operations REDUCE COMPLEXITY Growth Commercial ACCELERATE GROWTH Organizational Health OPERATIONAL EXCELLENCE Cost Aftermarket Structure FLOWSERVE OPERATING Working MODEL Capital Flowserve Q2 2018 Earnings Conference Call 8
Slide 9: Questions & Answers
Questions & Answers Flowserve Q2 2018 Earnings Conference Call 9
Slide 10: Appendix
Appendix Flowserve Q2 2018 Earnings Conference Call 10
Slide 11: Q2 2018 Consolidated Financial Results
Q2 2018 Consolidated Financial Results 2nd Quarter 2nd Quarter Adjusted 2018 2018 2017 Constant Constant ($ millions) 2018 2017 Delta ($) Delta (%) FX(%)* Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* Items Results Results Bookings $ 1,037.3 $ 971.3 $ 66.0 6.8% 5.0% $ - $ 1,037.3 $ 971.3 $ 6
Slide 12: Year-to-Date 2018 Consolidated Financial Results
Year-to-Date 2018 Consolidated Financial Results Year-to-Date Year-to-Date Adjusted 2018 2018 2017 Constant Constant ($ millions) 2018 2017 Delta ($) Delta (%) FX(%)* Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* Items Results Results Bookings $ 1,965.8 $ 1,928.1 $ 37.7 2.0% -1.4% $ 1,965.8
Slide 13: Engineered Product Division Q2 2018 Segment Results
Engineered Product Division Q2 2018 Segment Results 2nd Quarter Year-to-Date Constant Constant ($ millions) 2018 2017 Delta ($) Delta (%) FX(%)* 2018 2017 Delta ($) Delta (%) FX(%)* Bookings $ 505.7 $ 465.1 $ 40.6 8.7% 7.9% $ 930.6 $ 925.1 $ 5.5 0.6% -2.0% Sales $ 480.7 $ 427.7 $ 53.0 12.4% 11.4% $
Slide 14: Engineered Product Division Q2 2018 Bookings and Sales
Engineered Product Division Q2 2018 Bookings and Sales 2nd Quarter Year-to-Date Constant Constant ($ millions) 2018 2017 Delta (%) 2018 2017 Delta (%) FX(%)* FX(%)* $ 154 $ 144 7% 7% $ 246 $ 288 -15% -17% OE 31% 31% 0 bps 26% 31% (500) bps Bookings Mix ** $ 351 $ 321 9% 8% $ 684 $ 637 7% 5% AM 69% 6
Slide 15: Industrial Product Division Q2 2018 Segment Results
Industrial Product Division Q2 2018 Segment Results 2nd Quarter Year-to-Date Constant Constant ($ millions) 2018 2017 Delta ($) Delta (%) FX(%)* 2018 2017 Delta ($) Delta (%) FX(%)* Bookings $ 235.0 $ 213.3 $ 21.7 10.2% 7.1% $ 433.4 $ 420.0 $ 13.4 3.2% -1.3% Sales $ 205.7 $ 191.8 $ 13.9 7.2% 4.2% $
Slide 16: Industrial Product Division Q2 2018 Bookings and Sales
Industrial Product Division Q2 2018 Bookings and Sales 2nd Quarter Year-to-Date Constant Constant ($ millions) 2018 2017 Delta (%) 2018 2017 Delta (%) FX(%)* FX(%)* $ 149 $ 135 10% 7% $ 269 $ 267 1% -3% OE 63% 63% 0 bps 62% 64% (200) bps Bookings Mix ** $ 86 $ 78 10% 7% $ 164 $ 153 7% 2% AM 37% 37%
Slide 17: Flow Control Division Q2 2018 Segment Results
Flow Control Division Q2 2018 Segment Results 2nd Quarter Year-to-Date Constant Constant ($ millions) 2018 2017 Delta ($) Delta (%) FX(%)* 2018 2017 Delta ($) Delta (%) FX(%)* Bookings $ 318.6 $ 316.2 $ 2.4 0.8% -1.4% $ 645.3 $ 625.6 $ 19.7 3.1% -0.4% Sales $ 306.5 $ 275.4 $ 31.1 11.3% 8.9% $ 583.7
Slide 18: Flow Control Division Q2 2018 Bookings and Sales
Flow Control Division Q2 2018 Bookings and Sales 2nd Quarter Year-to-Date Constant Constant ($ millions) 2018 2017 Delta (%) 2018 2017 Delta (%) FX(%)* FX(%)* $ 240 $ 245 -2% -3% $ 484 $ 479 1% -1% OE 75% 78% (300) bps 75% 77% (200) bps Bookings Mix ** $ 78 $ 71 10% 5% $ 162 $ 147 10% 1% AM 25% 22%
Slide 19: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com Flowserve Q2 2018 Earnings Conference Call 19