Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Shareholder Meeting (May 2016)
31 slides from Franklin Electric's shareholder meeting presentation, May 6, 2016
Slide 1: Shareholders Meeting May 6, 2016
Shareholders Meeting May 6, 2016
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, inventor
Slide 3: 2015 Financial Performance
Total Company 2015 % +(-) Prior Year Sales $925 M (12%) Operating Income(1) $96 M (23%) EPS(1) $1.47 (16%) Water Systems 2015 % +(-) Prior Year $708 M (14%) $90 M (27%) Fueling Systems 2015 % +(-) Prior Year $217 M (3%) $52 M – 3 (1) After non-GAAP adjustments – see 10-K for reconciliation to GAAP E
Slide 4: 2015 Financial Performance: Revenue and EPS bridge
} Franklin Electric (Sin millions) 2015 Financial Performance Revenue EPS(?) $1,200 $2.00 $1,048 $1.80 $1.76 $1,000 |_| $25 $925 Pr || $0.07 | — $1.47 ($89) ($0.20) = $800 ($59) aad ($0.16) $1.20 $600 $1.00 $0.80 $400 soso $200 90.40 $0.20 $ AS 2014 FX oil (1) Organic 2015 2014 FX Oil (1) Organic 20
Slide 5: 2015 Financial Performance
2015 Financial Performance 5 Sales Operating Income(1) Free Cash Flow H1 2015 $473 $41 ($3) % +(-) Prior Year (8%) (40%) H2 2015 $452 $54 $72 % +(-) Prior Year (15%) (3%) (1) After non-GAAP adjustments – see 10-K for reconciliation to GAAP EPS ▶ Made necessary mid-year corrections ▶ Free cash flow i
Slide 6: Consecutive Annual Dividend Payment Increases
24 Consecutive Annual Dividend Payment Increases 6 $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 7: Q1 2016 - Consolidated
Q1 2016 - Consolidated Franklin Electric Co. Inc. 7 Q1 2016 Q1 2015 % +(-) Prior Year Sales $218 $226 (3%) Operating Income(1) $22.2 $16.7 + 33% EPS(1) $0.29 $0.32(2) (9%) (1) After non-GAAP adjustments – see 10-K for reconciliation to GAAP EPS (2) Adjusted earnings per share includes approximately
Slide 8: Strategy
Strategy 8
Slide 9: Strategic Focus
Strategic Focus 9 Residential, Agricultural, Commercial Water Systems $6.0 B Global Market Potential(1) Complete Fueling Systems $1.2 B Global Market Potential(1) (1) Current Franklin management estimates Strong Brand Franchise #1 or #2 in Addressable Markets Growing Global Footprint Fragmented Cust
Slide 10: To grow as a global provider of water and fuel systems
10 To grow as a global provider of water and fuel systems, through geographic expansion and product line extensions, leveraging our global platform and competency in system design.
Slide 11: Projected World Population
Projected World Population 11 Today Source: www.prb.org
Slide 12: Sales in Developing Regions
Sales in Developing Regions 12 $75 $92 $149 $218 $202 $242 $288 $316 $336 $372 $355 $- $50 $100 $150 $200 $250 $300 $350 $400 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ($ in millions)
Slide 13: Sales Growth Rates in US $ and Local Currency
MENA (IMPO) US $ Local 6.1% 18.8% Sales Growth Rates in US $ and Local Currency 13 LATIN AMERICA US $ Local 5.8% SOUTHERN AFRICA US $ Local (7.6%) APAC US $ Local 8.1% 2010-2015 CAGR 19.1% 2.2% 21.4%
Slide 14: Geographic Expansion: Brazil
Geographic Expansion: Brazil 14 ‘Top Ten’ global GDP 12% of world’s freshwater 2nd largest underground aquifer 400 million hectare of fertile land Sources: SABESP / agricultra.gov.br / cia.gov
Slide 15: Geographic Expansion: Brazil
• 2008 – Acquired Motobombas Schneider – Leading producer of surface pumps • Residential, Agriculture, Commercial • 5,000 active customers • 2009 – Imported Franklin Brand – Addressed premium market – Established Field Service • 2014 – Acquired Bombas Leao – Leading Brazilian submersible pump brand
Slide 16: Leverage Product Platforms Across Developing Regions
Leverage Product Platforms Across Developing Regions 16
Slide 17: Solar Pumping Systems
Solar Pumping Systems 17 $4,300 $2,700 SubDrive Solar Fhoton System Franklin SubDrive Solar 2012 Fhoton Solar Pumping System 2016 System Cost (Including pump, motor, controller, PV panels, racking) 37%
Slide 18: Product Line Extensions - New Products
Product Line Extensions-New Products 18 (1) Sales of products launched last three years 2015 Increased investment in research & development Record number of new products launched Record revenue from new products(1) Focus on high efficiency product and system solutions
Slide 19: Product Line Extensions - Drives and Controls
COMMERCIALRESIDENTIAL AGRICULTURAL FUELING Product Line Extensions-Drives and Controls 19
Slide 20: Drives & Controls
Drives & Controls 20 Residential Applications Municipal/Agricultural Applications Benefits to user: • Constant pressure • Better system protection Benefits to user: • Better system protection • Greater efficiency • Lower total cost of ownership $200 $100 $500 $2,200 $1,600 $4,200 ▶ Leverage our appl
Slide 21: High Efficiency Water Systems
High Efficiency Water Systems 21 89.6% 92.6% 92.8% Present Motor Efficiency Customer Feedback Improvement in Efficiency Recovered Investment Time 20 points 6 months New 6” Motor – Unique High Efficiency Design Expanding to new configurations & ratings
Slide 22: Fueling Systems
Fueling Systems 22
Slide 23: Fueling Systems
Fueling Systems 23 $131 $217 2010 2015 Sales 11% Operating Income $22 $52 2010 2015 19% Revenue Growth by Region 2010-2015 CAGR ▲ 16% ▲ 9% DevelopedDeveloping ($ in millions)
Slide 24: Fueling Systems
Fueling Systems North American Market Rest of World Markets 24 Shell New Global 5 Year Agreement • Now includes complete end-to-end underground fuel system • Expanded to address dealer network of 28,000 branded sites • Introduces new services which enhance safety and reduce total cost of ownership
Slide 25: Fueling Systems
Fueling Systems 25 • Industry's most powerful complete site quoting tool • Built by Franklin design optimization engineers • Powered by years of petroleum equipment design expertise
Slide 26: Fueling Systems
Fueling Systems 26 • Premier training, certification, and resource tool for installation and maintenance professionals • Systematic approach to training with a holistic view of the complete system
Slide 27: Capital Allocation
Capital Allocation 27
Slide 28: Capital Allocation
Capital Allocation 28 Return to Shareholders $263 CAPEX/R&D $402 Acquisitions $449 Total $1,114 Last 10 Years Debt to EBITDA 1.7 Debt to Total Capital 28% 2015 YE ($ in millions)
Slide 29: Acquisition Timeline
Acquisition Timeline 29 20162005 2006 2007 2008 2009 2010 2011 2012 2013 20142004 JBD FUE LI N G FUE LI N G W A TE R 2015
Slide 30: 2015 Activities: Franklin Wells for the World
30 2015 Activities Five Installations – 4 Solar Powered • Botswana • Zimbabwe • Sudan • South Africa • India Provided water for 18,000 people. Since inception, Franklin Wells for the World has provided 100,000 people with drinking water.
Slide 31: Shareholders Meeting May 6, 2016
Shareholders Meeting May 6, 2016