Slide 1: SPX Technologies Investor Presentation June 2023
SPX Technologies Investor Presentation June 2023 SPX Corporation 2019 Investor Event - New York
Slide 2: SPX Technologies Overview
SPX4 TECHNOLOGIES SPX Technologies Overview
Slide 3: Company Overview
Company Overview 2022 Revenue by Region† Headquartered in Charlotte, NC ~85% 89% ~10% 6% Focused, market-leading platforms: HVAC Detection & Measurement ~5% $1.70B Revenue* ~3,300 employees NYSE Ticker: SPXC * Midpoint of 2023 guidance as presented June 5, 2023 †Based on management est
Slide 4: Attractiveness of SPX for Long-Term Holders
Attractiveness of SPX for Long-Term Holders Attractive Core Well positioned key platforms in growth markets Favorable long-term secular trends and business mix; Growth growth initiatives in early innings Cash Flow Solid free cash flow conversion Business System Consistent repeatable process to drive
Slide 5: Strong Product Offerings and Attractive Market Dynamics
Strong Product Offerings and Attractive Market Dynamics 2022 2022 REVENUE FROM REPLACEMENT SALES† ADJUSTED REVENUE EBITDA MARGIN* ~2/3 Cooling towers Refrigeration Engineered air movement $914m mid-teens 2022 REVENUE FROM #1 OR #2 MARKET POSITION† Process Cooling Boilers Electrical heati
Slide 6: Value Creation Framework
Value Creation Framework Organic Growth SPX Business System • New products • Digital initiatives • Channel expansion • Continuous Improvement • Adjacent markets • Due diligence/integration Inorganic Growth Culture & Values • Strategic platform focus • Integrity • Significant capital to deploy • Resu
Slide 7: 2023+ Initiatives
2023+ Initiatives Revenue & Margin Enhancement - Tools & Drivers Product Technology M&A Channel CI Innovation Lean Geography Software Service SEALITE Robotics ECS CINCINNATI FAN Digital ITL Sourcing AI Loyalty June 2023 7
Slide 8: Focus on Sustainability
Focus on Sustainability …In What We Make… Our products enable Lower Clean Connectivity Clean Safety Emissions Water Energy …And How We Make It… Core # 190 of 500 Diversity & Engagement Continuous Minimize Values Inclusion Improvement Waste June 2023 8
Slide 9: Focused, Market-Leading Growth Platforms
Focused, Market-Leading Growth Platforms Detection & Measurement (~$580M)(1) HVAC (~$1,120M)(1) Location & Inspection ~$1.70 Billion(1) Cooling Premium engineered niches Technology / innovation focus Aids to Navigation ~90% Market Leadership (#1 or #2) Heating High replacement revenue (~2/3)
Slide 10: Momentum in Digital
Momentum in Digital Driving Customer Value Through Focus on Technology June 2023 10
Slide 11: Well-Positioned for Infrastructure Spending
Well-Positioned for Infrastructure Spending Water & Wastewater General Construction (heavy civil, housing) Public Transit SEALITE Renewables (wind) ECS Telecom (5G), Airports, Ports Institutional (K-12, gov’t, healthcare) Infrastructure-centric R&D June 2023 11
Slide 12: SPX 2025
SPX4 TECHNOLOGIES SPX 2025
Slide 13: SPX Strategic Portfolio Transformation Continues
SPX Strategic Portfolio Transformation Continues 2021 2023 Current Guidance* 2025 Targets Revenue $1.22B $1.70B ~$2.0B Gross margin % 35.4% ~38% ~40% Segment Income %† 16.4% 19.3% ~20% Adj. Operating Income %† 11.1% 15.4% ~16% Long-term Growth % ~2-4% ~3-5% ~3-5% Adj. EPS $2.33 ~$3.98 ~+$5.00 *Midpo
Slide 14: SPX Long-Term Targets – Revenue
SPX Long-Term Targets – Revenue SPX TODAY SPX TARGET 2100.0 '16-'23 CAGR ~$2.0 Billion 2000.0 1900.0 1800.0 ~$1.70 Billion* 1700.0 Process Cooling 1600.0 ~$1.46 Billion 1500.0 1400.0 Process Cooling 1300.0 ~$1.22 Billion 1200.0 ~10% 1100.0 Process Cooling HVAC HVAC (~$1,005m)* 1000.0 HVAC 900.0 ($79
Slide 15: Segment Overview
Segment Overview HVAC Detection & Measurement
Slide 16: HVAC
SPX4 TECHNOLOGIES HVAC
Slide 17: HVAC Segment Overview
HVAC Segment Overview 2021 2022 2023E ** 2022 Revenue by Product Adjusted segment income % ($ millions) ~$1,120 Heating 2022 Cooling $914 Products Revenue Products $752 41% $914m 59% ~18.5% 14% 15% 2022 Revenue by Geography ~3% 2021 2022 2023E Gross Margin% 30% 30% - Adjusted EBITDA* $116 $145 - ~8%
Slide 18: HVAC Cooling Overview
HVAC Cooling Overview 2022 Revenue by Product Cooling products used in non-residential, commercial, Parts & Service industrial, process cooling and refrigeration applications 29% Package 2022 Cooling Revenue Towers & Well-recognized product brands: Marley and Recold $537m Refrigeration 71% Wel
Slide 19: Cooling Product Examples
Cooling Product Examples Marley NC Cooling Tower Marley MH Element Fluid Cooler Engineered Air Movement High-Value Components High efficiency Industrial and process cooling Custom Fans & Blowers Gearboxes, motors, drives Low drift rates High performance copper coils Two stage filtratio
Slide 20: HVAC Heating Overview
HVAC Heating Overview 2022 Revenue by Product North American businesses with strong brands Electric Heating 2022 Products Large installed base / established spec position 27% Boiler Systems Revenue 73% $377m Products used in residential and non-residential markets and sold primarily through di
Slide 21: Heating Product Examples
Heating Product Examples Residential Boilers Commercial Boilers Electrical Heating Products High efficiency natural gas High efficiency natural gas Wash-down, corrosion Digital Standard cast iron Standard cast iron resistant heaters wall heaters Unique hybrid design Gas combi boilers Tre
Slide 22: Detection & Measurement
SPX4 TECHNOLOGIES Detection & Measurement
Slide 23: Detection & Measurement Segment Overview
Detection & Measurement Segment Overview 2022 Revenue by Product 2021 2022 2023E** Adjusted segment income % ($ millions) Aids to Navigation Location & ~$580 (“AtoN”), CommTech, Inspection $547 2022 $467 and Transportation Revenue Equipment 52% $547m 48% 20% 21% ~21% 2022 Revenue by Geography ~19% 2
Slide 24: Location & Inspection Overview
Location & Inspection Overview 2022 Revenue by Product A leading global supplier of location & inspection equipment for underground infrastructure 2022 Location Revenue Inspection 50% 50% Global distribution / established channels $262m Integrated hardware and software solutions 2022 Revenue b
Slide 25: Location & Inspection – Key Products
Location & Inspection – Key Products Location Equipment Inspection Equipment Full Lifecycle Infrastructure Solutions Provider for Location & Inspection Markets June 2023 25
Slide 26: AtoN, CommTech, and Transportation
AtoN, CommTech, and Transportation 2022 Revenue by Product CommTech Aids to Navigation: Global Leader in terrestrial obstruction lighting, Transportation 20% 27%* marine aids-to-navigation, and airfield ground lighting solutions 2022 Revenue CommTech : A leading global supplier of spectrum monit
Slide 27: Aids to Navigation – Key End Markets
Aids to Navigation – Key End Markets Terrestrial Obstruction Marine Obstruction Airfield Ground Lighting Lighting Lighting Global Leader with Full Product Range June 2023 27
Slide 28: CommTech – Key Capabilities & Solutions
CommTech – Key Capabilities & Solutions Spectrum Monitoring Communications (SMS) Intelligence NEW PIC Spectrum monitoring leader with expanding COMINT presence June 2023 28
Slide 29: Transportation – Next Generation Fare Collection
Transportation – Next Generation Fare Collection Mobile Legacy Farebox Fast Fare Farebox Fast Fare-e Ticketing Point-of-Sale e-Fare Cloud-Based Infrastructure Software Service and as a Service Support Fare Collection Suite of Products Integrated with Back-End Support; We Believe This is the New Indu
Slide 30: Financial Performance & Capital Allocation
Financial Performance & Capital Allocation
Slide 31: Capital Allocation Discipline
Capital Allocation Discipline Methodology Expected Outcome 1) Utilize strategic planning process to evaluate Quantify projected future cash flows and future revenue and earnings growth estimate total company valuation 2) Maintain target capital structure Net Debt to EBITDA(1) target range: 1.5x
Slide 32: Financial Position - Capital Structure & Liquidity Update
Financial Position - Capital Structure & Liquidity Update ($millions) Q4 2022 Q1 2023 1.5-2.5x Short-term debt $2 $69 Pro Forma w/ TAMCO Current maturities of long-term debt 2 3 Long-term debt 243 242 Total Debt $247 $314 1.1x 1.2x 0.8x Less: Cash on hand (157) (213) 0.4x 0.4x Net Debt (Cash) $90 $1
Slide 33: Financial Position – Outlook
Financial Position – Outlook Bank Net Leverage* 3 1.5x-2.5x 2.5 2 Proforma 1.5 TAMCO 1 0.8x ~2.0x ~1.5x 0.5 0.4x 0 Q1 2023 Q2 2023E** Q4 2023E** LT Target Anticipate Low-End of Target Leverage Range by Year-End * Calculated as provided in SPX Technologies’ credit facility agreement. ** Based on mana
Slide 34: SPX Acquisition Approach
SPX Acquisition Approach Qualitative Quantitative Focused on building existing platforms Revenue transaction size $20-$200 million Existing markets or close adjacencies (primary focus); opportunistically consider larger targets Engineered products Cash ROIC ≥ double digits 3-5 yrs Attrac
Slide 35: Building Strategic Platforms
Building Strategic Platforms
Slide 36: SPX Business Value Model
SPX Business Value Model Disciplined Business System Strategic Acquisition Approach Superior Performance Strategic Organic Sales Growth SPX has acquired ~$535M of Organic / Inorganic (Innovation, Product Mgmt.) revenue in ~4 years Revenue Growth Continuous Improvement SEALITE (Lean, 80/20) ITL ECS M
Slide 37: Building Strategic Platforms – Location & Inspection
Building Strategic Platforms – Location & Inspection Location Equipment Inspection Equipment Location & Specialized GPR Location Water & Waste Gas Utility Inspection Ferrous Locators Equipment Water Pipeline Pipeline Equipment Inspection Inspection & Equipment Remediation Transformed ~$100m locator
Slide 38: Building Strategic Platforms – Aids to Navigation
Building Strategic Platforms – Aids to Navigation SEALITE ITL Terrestrial Marine Obstruction Airfield Ground and Bolt-on Terrestrial Obstruction Lighting Lighting Marine Obstruction Obstruction Lighting Lighting Transformed ~$40-50m obstruction lighting business into ~$150m global leader in aids to
Slide 39: Building Strategic Platforms – CommTech
Building Strategic Platforms – CommTech ECS Legacy Business Acquired Feb 2019 Spectrum Monitoring Tactical Data Links and ~25-30m* ~$40-50m* and COMINT Solutions RF Countermeasures Broad provider of spectrum monitoring and COMINT solutions Product/Technology Synergies Driving Substantial Growth June
Slide 40: Building Strategic Platforms - Cooling
Building Strategic Platforms - Cooling Open and Close Loop Cooling Engineered Air Movement Leading Position in Industrial Custom fans, High Performance Packaged Cooling Refrigeration blowers, and Industrial and Towers Products critical exhaust Commercial Air >$660m Revenue* systems Control Solutions
Slide 41: Building Strategic Platforms – HVAC Heating
Building Strategic Platforms – HVAC Heating Hydronic Heating Electrical Heating Leading Position High-efficiency Leader in High-quality in Residential Commercial Supplemental High-efficiency Electric Heating Boilers Boilers Electric Heat for Commercial for Industrial and >$500M high-value Commercial
Slide 42: Executive Summary
SPX4 TECHNOLOGIES Executive Summary
Slide 43: Executive Summary
Executive Summary Balanced business portfolio with attractive and diverse end market drivers Effective business system and continued focus on growth accelerators, including inorganic opportunities Strong cash generation and solid balance sheet support growth investments Significant Value Creat
Slide 44: Appendix
SPX4 TECHNOLOGIES Appendix
Slide 45: 2023 Guidance
2023 Guidance Revenue Segment Income Margin $1,110-$1,130m 18.00%-19.00% HVAC Prior $1,035-$1,055m Prior 17.25%-18.25% Detection & $570-$590m 20.50%-21.50% Measurement Unchanged Unchanged $1.68-1.72b 18.75%-19.75% Total SPX Prior $1.61-1.65b Prior 18.50%-19.50% Adj. Operating Income* of
Slide 46: Modeling Considerations – Full Year 2023
Modeling Considerations – Full Year 2023 Metric Considerations Corporate expense $48-52m Long-term incentive comp $13-14m Restructuring costs $1-2m Interest cost $25-26m Other income/(expense), and Non-service pension benefit/(expense) $4-6m Tax rate 23.5-24.5% Capex ~$25m Cash cost of pension + OPE
Slide 47: 2023 Adjusted EPS Guidance - Key Drivers
2023 Adjusted EPS Guidance - Key Drivers • Favorable economic policy/infrastructure stimulus $4.05 • Accelerated project-related sales • Moderating supply chain challenges and input costs $3.98 Base Case • Worsening supply chain challenges and input costs • Delayed project-related sales $3.90 • Unfa
Slide 48: End Market Exposure
End Market Exposure ~$1.46 Billion* (~2/3 Replacement Revenue) Gov’t, Regulated Non-Resi Industrial Residential & Utility 28% 17% 13% 42% Water/Wastewater, 8% Light Mfg. / Other, 4% Utility, 13% Hospitality, 2% Data Center / Lab, 3% Healthcare, 3% Gov't Regulated, Institutional, 12% 21% Office / Ret
Slide 49: Divestiture of Asbestos Assets & Liabilities
Divestiture of Asbestos Assets & Liabilities Divested on November 1, 2022 Improve growth focus Strengthened and simplified enterprise $139m contribution Reduce Reduce cash Administrative Annual EPS accretion of $0.08-$0.10 outflow burden ― 100% cash conversion Eliminated cash settlements
Slide 50: Segment Income Phasing and Reconciliations
Segment Income Phasing and Reconciliations 36% 34% 25% 23% 22% 23% 21% 16% Q1 Q2 Q3 Q4 2021 2022 June 2023 50
Slide 51: GAAP Reconciliation Results by Quarter
GAAP Reconciliation Results by Quarter ($ millions) 2021 2022 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Segment income $ 47.0 $ 44.7 $ 41.6 $ 67.3 $ 200.6 $ 39.6 $ 56.1 $ 63.4 $ 90.5 $ 249.6 Corporate expense (14.4) (13.6) (11.9) (20.6) (60.5) (16.6) (16.4) (17.2) (18.4) (68.6) Acquisition related and other cos
Slide 52: Segment Results – 2021-2022
Segment Results – 2021-2022 ($ millions) HVAC D&M 2021 2022 2021 2022 Revenue 752.1 913.8 467.4 547.1 Segment income 107.7 135.5 92.9 114.1 % of revenue 14.3% 14.8% 19.9% 20.9% Depreciation 8.1 9.0 9.8 6.5 Adjusted EBITDA 115.8 144.5 102.7 120.6 % of revenue 15.4% 15.8% 22.0% 22.0% June 2023 52
Slide 53: 2020 Historical Reconciliation
2020 Historical Reconciliation* Adjustments as Non-GAAP Adjusted asas As reported reported reported 12/31/2020 12/31/2020 12/31/2020 Revenue(1) 1,559.5 (4.0) 1,555.5 (2) Segment Income 203.7 34.6 238.3 Corporate expense(3) (44.8) 1.7 (43.1) Long-term incentive compensation (14.0) - (14.0) (4) Impair
Slide 54: 2022 U.S. GAAP to Adjusted EPS Reconciliation
2022 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) Segment income $ 249.6 $ — $ 249.6 (1) Corporate expense (68.6) 18.2 (50.4) Acquisition related costs (2) (1.9) 1.9 — Long-term incentive compensation expense (3) (10.9) (0.8) (11.7) Amortization of intangible asset
Slide 55: 2021 U.S. GAAP to Adjusted EPS Reconciliation
2021 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) Segment income $ 200.6 $ — $ 200.6 Corporate expense (1) (60.5) 8.6 (51.9) Acquisition related and other costs (2) (5.1) 5.1 — Long-term incentive compensation expense (12.8) — (12.8) Amortization of intangible asse
Slide 56: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation ($ millions) Three months ended Twelve months ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Operating income (loss) $ (24.9) $ 13.9 $ 51.0 $ 73.7 Include - TSA Income (1) 0.5 0.9 2.9 0.9 Exclude: Acquisition relate
Slide 57: GAAP Reconciliation Results by Quarter
GAAP Reconciliation Results by Quarter ($ millions) 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Segment income $ 39.6 $ 56.1 $ 63.4 $ 90.5 $ 249.6 $ 74.4 Corporate expense (16.6) (16.4) (17.2) (18.4) (68.6) (14.6) Acquisition related and other costs (0.1) (0.9) (0.1) (0.8) (1.9) (0.6) Long-term incentive compensati
Slide 58: Adjusted SPX 2021 Results by Quarter
Adjusted SPX 2021 Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2021 HVAC segment income $ 23.0 $ 26.6 $ 23.6 $ 34.5 $ 107.7 Detection & Measurement segment income 24.0 18.1 18.0 32.8 92.9 Consolidated segment income $ 47.0 $ 44.7 $ 41.6 $ 67.3 $ 200.6 Operating income from continuing operations $ 25.
Slide 59: Q1 2023 Adjusted EBITDA Reconciliation
Q1 2023 Adjusted EBITDA* Reconciliation ($ millions) Last 12 Months Net Income** $ 31.6 Income tax provision 16.0 Interest expense 9.3 Income before interest and taxes 56.9 Depreciation and amortization 43.1 EBITDA 100.0 Adjustments: Loss on disposition of assets outside the ordinary course of busin
Slide 60: Q4 2022 Debt Reconciliation
Q4 2022 Debt Reconciliation ($ millions) Q4 2022 Short-term debt $ 1.8 Current maturities of long-term debt 2.0 Long-term debt 243.0 Gross debt 246.8 Plus: adjustment associated with credit agreement⁽ⁱ⁾ (1.1) Adjusted gross debt 245.7 Less: cash and equivalents (156.6) Adjusted net debt $ 89.1 ⁽ⁱ⁾In
Slide 61: Q1 2023 Debt Reconciliation
Q1 2023 Debt Reconciliation ($ millions) Q1 2023 Short-term debt $ 68.9 Current maturities of long-term debt 3.5 Long-term debt 241.5 Gross debt 313.9 (1) plus: adjustment associated with credit agreement (1.2) Adjusted gross debt 312.7 less: cash and equivalents (212.2) Adjusted net debt $ 100.5 (1
Slide 62: 2022 Adjusted EBITDA Reconciliation
2022 Adjusted EBITDA* Reconciliation ($ millions) FY 2022 Net Income $ 0.2 Income tax provision 7.3 Interest expense 9.3 Income before interest and taxes 16.8 Depreciation and amortization 46.4 EBITDA 63.2 Adjustments: Losses on disposition of assets outside the ordinary course of business 19.6 Impa
Slide 63: 2022 Adjusted Free Cash Flow Reconciliation
2022 Adjusted Free Cash Flow Reconciliation ($ millions) FY 2022 Operating cash flow used in continuing operations $ (115.2) Capital expenditures (15.9) Free cash flow used in continuing operations (131.1) Adjustments* 228.1 Adjusted free cash flow from continuing operations $ 97.0 * Adjustments ali