Slide 1: Fourth Quarter 2020 Earnings Conference Call
February 24, 2021 Fourth Quarter 2020 Earnings Conference Call 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: Q4 2020 Overview
Q4 2020 Overview • Delivered strong Q4 and full year free cash flow of $185 million and $253 million, respectively, and 111% free cash flow conversion of full year adjusted earnings • Strong liquidity position of $1.8 billion as December 31, 2020 - Includes $1.1 billion of cash and cash equivalents
Slide 4: Q4 Bookings & Sales Mix
Q4 Bookings & Sales Mix Bookings Sales End-Markets $825M $1.05B $985M $1.07B Oil & Gas • COVID driven mobility limitations continue to constrain global oil demand 35% 37% 41% 40% • Oil price and refinery utilization stable and improving North America modestly Oil & Gas • Global MRO spend expected to
Slide 5: Original Equipment / Aftermarket Mix
Original Equipment / Aftermarket Mix Original Equipment Aftermarket [1] Bookings Mix % Sales Mix % Bookings Mix % Sales Mix % [1] $ millions $ millions $ millions $ millions $535 $546 $507 $517 $522 $479 $478 $445 $405 $420 $425 $381 51% 51% 52% 51% 51% 53% 49% 49% 48% 49% 49% 47% 2020 Q4 2020 Q3 20
Slide 6: Q4 2020 Financial Scorecard
[1] Q4 2020 Financial Scorecard [1] [2] Bookings Revenue Adjusted OI% Adjusted EPS [1] Operating Cash Flow PWC $ millions $ millions $0.64 $ millions As a % of TTM Revenue $1,052 $1,068 $196 11.3% 11.6% $181 $985 10.9% 30.0% $924 $0.53 $0.50 28.5% $825 $806 26.9% $94 2020 Q4 2020 Q3 2019 Q4 2020 Q4
Slide 7: RedRaven Commercial Launch – Flowserve's IoT Platform
RedRaven Commercial Launch – Flowserve’s IoT Platform • Digitally connect with our customers • Realtime actionable operating data • Monitoring and prediction capabilities PREDICT. ACT. PROTECT. • Improves productivity and plant reliability Flowserve Q4 2020 Earnings Conference Call 7
Slide 8: 2021 Guidance Assumptions
2021 Guidance Assumptions [1] Guidance Assumptions 2021 Guidance Revenue Guidance Down 4.0% - 7.0% Reported EPS Guidance $1.15 - $1.40 Adjusted EPS Guidance [2] $1.30 - $1.55 EUR Rate 1.20 Adjusted Tax Rate 22% - 24% Capital Expenditures $70 - $80 million [1] 2021 Reported and Adjusted EPS guidance
Slide 9: Flowserve 2.0 Transformation Journey
Flowserve 2.0 Transformation Journey 2018-2020 2021 2022 Innovative Optimize & Grow Products & Services Customer Experience Fix the Core Flowserve 2.0 Operational Excellence + Process Discipline Flowserve Q4 2020 Earnings Conference Call 9
Slide 10: 2020 ESG Accomplishments
2020 ESG Accomplishments Environmental Social Governance • Committed to reduce carbon • Continued commitment to safety • Focused board refreshment – 4 emissions intensity by 40% by 2030 and integrity – Top decile safety new board members since 2018 • Implemented Sustainability performance • 40% Boar
Slide 11: Progress Towards Long-Term Targets
Progress Towards Long-Term Targets [*] 2018 2019 2020 Organic Year-over- Year Revenue Growth 5.1% 6.0% (4.9%) Adjusted Operating Margin 9.3% 10.8% 9.8% Adjusted Free Cash Flow Conversion 50% 90% 111% ROIC 10.2% 12.5% 11.4% While COVID has impacted timing, we remain confident that all targets are ach
Slide 12: Questions & Answers
Questions & Answers Flowserve Q4 2020 Earnings Conference Call 12
Slide 13: Appendix
Appendix Flowserve Q4 2020 Earnings Conference Call 13
Slide 14: Q4 2020 Consolidated Financial Results
Q4 2020 Consolidated Financial Results 4th Quarter 4th Quarter Adjusted 2020 2020 2019 Constant Constant ($ millions) 2020 2019 Delta ($) Delta (%) Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* FX(%)* Items Results Results Bookings $ 825.1 $ 1,052.1 $ (227.0) -21.6% -22.7% $ - $ 825.1 $ 1,05
Slide 15: Full Year 2020 Consolidated Financial Results
Full Year 2020 Consolidated Financial Results Full Year Full Year Adjusted 2020 2020 2019 Constant Constant ($ millions) 2020 2019 Delta ($) Delta (%) Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* FX(%)* Items Results Results Bookings $ 3,411.6 $ 4,238.3 $ (826.7) -19.5% -18.9% $ - $ 3,411.6
Slide 16: Flowserve Pump Division 2020 Segment Results
Flowserve Pump Division 2020 Segment Results 4th Quarter Full Year Constant Constant ($ millions) 2020 2019 Delta ($) Delta (%) FX(%)* 2020 2019 Delta ($) Delta (%) FX(%)* Bookings $ 566.5 $ 756.0 $ (189.5) -25.1% -26.0% $ 2,358.4 $ 3,007.9 $ (649.5) -21.6% -20.9% Sales $ 695.7 $ 739.5 $ (43.8) -5.9
Slide 17: Flowserve Pump Division 2020 Bookings and Sales
Flowserve Pump Division 2020 Bookings and Sales 4th Quarter Full Year Constant Constant ($ millions) 2020 2019 Delta (%) 2020 2019 Delta (%) FX(%)* FX(%)* 214 301 -29% -30% 835 1,261 -34% -34% OE 38% 40% (200) bps 35% 42% (700) bps Bookings Mix ** 352 455 -23% -23% 1,523 1,747 -13% -12% AM 62% 60% 2
Slide 18: Flow Control Division 2020 Segment Results
Flow Control Division 2020 Segment Results 4th Quarter Full Year Constant Constant ($ millions) 2020 2019 Delta ($) Delta (%) FX(%)* 2020 2019 Delta ($) Delta (%) FX(%)* Bookings $ 258.4 $ 298.6 $ (40.2) -13.5% -15.1% $ 1,065.8 $ 1,240.9 $ (175.1) -14.1% -13.8% Sales $ 290.7 $ 330.2 $ (39.5) -12.0%
Slide 19: Flow Control Division 2020 Bookings and Sales
Flow Control Division 2020 Bookings and Sales 4th Quarter Full Year Constant Constant ($ millions) 2020 2019 Delta (%) 2020 2019 Delta (%) FX(%)* FX(%)* 191 236 -19% -21% 792 955 -17% -17% OE 74% 79% (500) bps 74% 77% (300) bps Bookings Mix ** 67 63 6% 4% 274 286 -4% -4% AM 26% 21% 500 bps 26% 23% 3
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Twelve Months Ended December 31, 2018 (Amounts in millions, except per share data) As Reported (a) Adjustments As Adjusted Sales $ 3,835.7 $ - $ 3,835.7 Operating income 227.7 (127.5) (1) 355.2 Operating income as a percentage of sales 5.9% 9.3% Other (expense) in
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Organic Revenue Growth $ millions 2018 2019 2020 Reported Revenue $ 3,835.7 $ 3,939.7 $ 3,728.1 Foreign exchange impact 31.0 (94.0) (17.0) Divestiture impact (41.2) (31.0) - Organic Revenue $ 3,845.9 $ 4,064.7 $ 3,745.1 Prior Year Reported Revenue $ 3,660.8 $ 3,83
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Twelve Months Ended December 31, 2019 Twelve Months Ended December 31, 2020 (Amounts in millions, except ROIC) As Reported (a) ROIC Adjustments ROIC Adjusted As Reported (a) ROIC Adjustments ROIC Adjusted Operating income $ 386.6 $ (37.1) (1) $ 423.8 $ 250.3 $ (11
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Twelve Months Ended December 31, 2018 (Amounts in millions, except ROIC) As Reported (a) ROIC Adjustments ROIC Adjusted Operating income $ 227.7 $ (126.2) (1) $ 353.9 Provision for income taxes (46.6) 45.9 (2) (92.4) Net Operating Profit After Taxes $ 181.2 $ (80.
Slide 24: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com Flowserve Q4 2020 Earnings Conference Call 24