Franklin Electric Co., Inc. · NASDAQ:FELE

Franklin Electric — KeyBanc Investor Conference 2014

34 slides from Franklin Electric's conference presentation, May 28, 2014

  1. Slide 1: KeyBanc Investor Conference

    KeyBanc Investor Conference May 28, 2014

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement "Safe Harbor” Statement under the Private Securi>es Li>ga>on Reform Act of 1995. Any forward-­‐looking statements contained herein, including those rela>ng to market condi>ons or the Company’s financial results, costs, expenses or expense reduc>ons, profit margins, inventory leve

  3. Slide 3: 2009-2013 Sales History

    2009-­‐2013 Sales History $1,000 $965 M $891 M $900 $821 M $800 $714 M $700 ye ar $626 M per $600 . 4% $500 11 $400 $300 $200 $100 $0 2009 2010 2011 2012 2013 3

  4. Slide 4: 2009-2013 Operating Income

    2009-­‐2013 OperaHng Income $127.4 M (1) History $125 $114.9 M $100 $95.7 M $75 $72.4 M $49.9 M $50 $25 $0 2009 2010 2011 2012 2013 1 A_er non-­‐GAAP adjustments – See 10Q For reconcilia>on 4

  5. Slide 5: 2014 Q1 Sales & Earnings Growth

    2014 Q1 Sales & Earnings Growth % +(-­‐) 2014 Q1 Prior Year Sales $231 M + 4% EPS(1) $0.35 + 6% ROIC(2) 19.2% -­‐0.4% (1) A_er non-­‐GAAP adjustments – see 10-­‐K for reconcilia>on to GAAP EPS (2) ROIC LTM opera>ng income a_er non-­‐GAAP adjustments ÷ (net debt + equity) 5

  6. Slide 6: Consecutive Quarters of Adjusted EPS Growth

    18 17 ConsecuHve Quarters of Adjusted EPS(1) Growth $1.75 $1.50 Last 12 Months EPS $1.25 $1.00 $0.75 $0.50 $0.20 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 (1) A_er non-­‐GAAP adjustments – see 10-

  7. Slide 7: Strong Balance Sheet

    Strong Balance Sheet At Year-­‐end 2010 2011 2012 2013 Net Debt/Capital 2.1% 1.7% 9.2% 7.0% Cash & Marketable Securi>es $140M $153M $103M $135M Gross Debt/EBITDA 1.7 1.3 1.1 1.2 7

  8. Slide 8: Consecutive Annual Dividend Payment Increases

    22 21 ConsecuHve Annual Dividend Payment Increases $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 8

  9. Slide 9: Business Segments

    Business Segments 2013 Net Sales Fueling Systems 21% Water Systems 79% 9

  10. Slide 10: Global Aquifer Map

    Global Aquifer Map The World’s aquifers contain 50 Hmes as much fresh water as all the World’s lakes, ponds, rivers, and streams combined. 10

  11. Slide 11: 2013 Water Systems Sales

    2013 Water Systems Sales 2009-­‐13 2009-­‐13 Developing World Developed World Developing Regions United States CAGR CAGR 38% 46% 23.9% 13.4% Developed Non-­‐US 16% 11

  12. Slide 12: Global Expansion – Distribution

    Global Expansion – DistribuHon 12

  13. Slide 13: Global Expansion – Platform Acquisitions

    Global Expansion – Plahorm AcquisiHons Year Prior to AcquisiHon (at 2013 FX) 2013 $20.0 $37.2 $33.3 $23.6 $72.6 $41.2 13

  14. Slide 14: 2013 Water Systems Sales

    2013 Water Systems Sales Surface Pumps 39% Groundwater Pumping Systems 61% 14

  15. Slide 15: 2013 Water Systems Sales

    2013 Water Systems Sales Irriga>on & Industrial Surface Pumps Irriga>on & Industrial Groundwater 20% Pumping Systems 26% Residen>al Surface Pumps 19% Residen>al Groundwater Pumping Systems 35% 15

  16. Slide 16: 2013 Water Systems Sales

    2013 Water Systems Sales #2 Global Irriga>on & Supplier to Industrial Surface residenHal water pPumps umping systems Irriga>on &d IistribuHon ndustrial channel Groundwater 20% Pumping Systems #1 Global supplier to 26% agricultural irrigaHon p umping systems distribuHon channel Residen>al Surface Pum

  17. Slide 17: Product Development Process

    Product Development Process CONCEPT MODELING SIMULATION OPTIMIZE GEOMETRY 350 Head (Ft) 300 250 200 0 500 1000 Flow (GPM RESULTS TESTING PROTOTYPE 17

  18. Slide 18: 2013 Water Systems Sales

    2013 Water Systems Sales Irriga>on & Industrial Surface Irriga>on & Industrial Pumps Groundwater 20% Pumping Systems 26% Residen>al Surface Pumps 19% Residen>al Groundwater Pumping Systems 35% 18

  19. Slide 19: Water Systems – Drives & Controls

    Water Systems – Drives & Controls SUBMERSIBLE SURFACE PUMPS PUMPS VERTICAL WASTEWATER MULTISTAGE • Leading supplier of drives and controls for low horsepower groundwater pumping applica>ons • Cerus acquisi>on (FCS) – technology leader in higher horsepower fluid transfer applica>ons • Sell FCS drives

  20. Slide 20: Water Systems – High Efficiency

    Water Systems – High Efficiency New 6” Motor – Unique High Efficiency Design Present Motor Eff. 20

  21. Slide 21: Water Systems – Solar

    Water Systems – Solar 21

  22. Slide 22: Oil and Gas Dewatering

    Oil and Gas DeliquificaHon 22

  23. Slide 23: Drives – HVAC Market

    Drives – HVAC Market 23

  24. Slide 24: Pioneer Pump Rental in UK

    Pioneer Pump Rental in UK • Opened first branch – Q2, 2013 • Acquired small compe>tor – Q3, 2013 • Breakeven – Q1, 2014 24

  25. Slide 25: Fueling Systems

    Fueling Systems Vapor Recovery Systems Fuel Management Systems #1 Global Supplier #2 Global Supplier Pumping Systems Piping & Containment Systems #1 Global Supplier #1 Global Supplier 25

  26. Slide 26: 2013 Fueling Systems Sales

    2013 Fueling Systems Sales 2009-­‐13 2009-­‐13 Developing World Developing Regions United States Developed World CAGR 31% 52% CAGR 26.4% 8.6% Developed Non-­‐US 17% 26

  27. Slide 27: Fueling Systems – Inorganic Growth

    Fueling Systems – Inorganic Growth 2002 2006 2012 2004 2010 2000 GROWTH Organic Acquisi>ons 40% 60% 27

  28. Slide 28: Fueling Systems – Global Growth

    Fueling Systems – Global Growth New Passenger Vehicle Sales(1) 2000 2013 North America 20 M 15.2 M China, India & La>n America 3 M 17.4 M Up 5.8X 1 Source: Sco>abank Group Global Auto Report 28

  29. Slide 29: Fueling Systems – Global Growth

    Fueling Systems – Global Growth(1) United States Rest of World Number of Sta>ons 175,000 550,000 Sta>ons with pressure pumping technology 97% 23% Sta>ons with vapor recovery systems(2) 95% 17% Sta>ons with fuel management systems 75% 35% Sta>ons with flexible piping 45% 35% 1 Franklin management es>m

  30. Slide 30: Fueling Systems – New Products

    Fueling Systems – New Products 30

  31. Slide 31: Fueling Systems – New Product Development

    Fueling Systems – New Product Development Addressing the Needs of both Developed and Developing Markets • Inventory management • Leak detec>on • Inventory measurement • Fraud preven>on • Low-­‐cost 31

  32. Slide 32: Fueling Systems – New Product Development

    Fueling Systems – New Product Development Addressing the Needs of both Developed and Developing Markets 32

  33. Slide 33: Acquisitions

    AcquisiHons • Fragmented Global Markets – Bolt-­‐on Acquisi>on Opportuni>es • Franklin Acquisi>on Profile (Past 10 Years) – Acquisi>ons per Year – 1-­‐2 – Purchase Price – $1-­‐125 M (Ave. $50 M) – Average EBITDA Mul>ple – 7.5 X 33

  34. Slide 34: Moving Water. Moving Fuel. Moving Forward.

    MOVING WATER. MOVING FUEL @ Franklin Electric MOVING FORWARD.

Franklin Electric — KeyBanc Investor Conference 2014 on 6ix