Slide 1: Third Quarter 2023 Earnings Conference Call
THIRD QUARTER 2023 EARNINGS CONFERENCE CALL October 26, 2023 Q3 2023 Earnings Conference Call 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: Q3 2023 Highlights
Q3 2023 Highlights Substantial revenue growth of 25.4% drove Adjusted EPS* of $0.50 Bookings of $1.07 billion largely maintained our near-record $2.77 billion backlog Included solid aftermarket bookings of $582 million, up 7.1% vs. prior year Adjusted gross margins* increased 230 bps to 29.7% versus
Slide 4: Q3 2023 Overview
Q3 2023 Overview BOOKINGS SALES $ millions $ millions $1,223 $1,111 MRO and Aftermarket bookings $1,080 $1,095 Revenue increased 25.4% versus $1,067 continued at near record levels prior year – highest revenue level $873 since 2015 - AM bookings remained strong at $582 million - Expect full-year 202
Slide 5: Q3 2023 Bookings Mix
Q3 2023 Bookings Mix OIL & GAS – 40% • Elevated commodity prices driving enhanced activity globally ORIGINAL EQUIPMENT • Further project activity expected in the Middle East and Asia $ millions • Higher utilization rates continue to drive aftermarket and MRO activity $680 • Decarbonization spending
Slide 6: Q3 2023 Sales Mix
Q3 2023 Sales Mix ORIGINAL EQUIPMENT Europe - 18% $ millions 18% Revenue Growth $518 $529 $412 47% 48% 48% 2022 Q3 2023 Q2 2023 Q3 North America - 41% 24% Revenue Growth Asia Pacific - 18% 14% Revenue Growth AFTERMARKET $ millions Latin America - 7% Middle East $563 $566 & Africa - 16% 43% Revenue G
Slide 7: Q3 2023 Segment Highlights
Q3 2023 Segment Highlights FPD FCD As Reported Year-over-Year As Reported Year-over-Year Bookings $734.7 -20.6% $330.5 10.2% Adjusted Gross Margin* 29.6% +100 bps 29.8% +210 bps Adjusted SG&A as % of Sales* 17.8% -570 bps 15.1% -210 bps Adjusted Operating Margin* 12.3% +630 bps 14.7% +420 bps Book-t
Slide 8: 2023 Guidance
[1] 2023 Guidance Revised 2023 Prior 2023 Guidance Metric Guidance Guidance Revenue Growth Up 18.0% - 19.0% Up 16.0% - 18.0% [2] Reported EPS $1.40 - $1.50 $1.40 - $1.65 [3] Adjusted EPS $1.95 - $2.05 $1.85 - $2.00 Adjusted Tax Rate ~20% ~20% Capital Expenditures $75 - $85 million $75 - $85 million
Slide 9: 2027 Financial Targets
2027 Financial Targets $5B+ 14 – 16% >$4.00 Organic Revenue Adjusted Operating Margin* Adjusted EPS* 5% CAGR (2023-2027) Operational excellence, portfolio Significant growth expected in 2024 3D strategy, aftermarket growth, optimization & product management Multiple levers to enable success and new
Slide 10: Flowserve 3D Growth Strategy in Action
Flowserve 3D Growth Strategy in Action DIVERSIFY DECARBONIZE DIGITIZE Diversify – Vacuum Technology Decarbonize – CO2 Capture in Digitize – Enabling Reliable Delivery of Enabling Semiconductor Manufacturing Ammonia Production Safer Food & Beverages Multiple SIHI Dry vacuum pumps supplied for A portf
Slide 11: Key Takeaways and Outlook
Key Takeaways and Outlook New operating model driving improved and consistent operating performance provides confidence to raise full year guidance for the third consecutive quarter 3D strategy positions Flowserve exceptionally well to capitalize on supportive end markets, including strength in our
Slide 12: Earnings Conference Call
Q3 2023 Earnings Conference Call 12
Slide 13: Appendix
Appendix Q3 2023 Earnings Conference Call 13
Slide 14: Q3 2023 Consolidated Financial Results
Q3 2023 Consolidated Financial Results Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other Earnings General & Income Attributable to Net Administrative Operating (Ex
Slide 15: YTD 2023 Consolidated Financial Results
YTD 2023 Consolidated Financial Results Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other Earnings General & Income Attributable to Net Gross Administrative Operat
Slide 16: Q3 2022 Consolidated Financial Results
Q3 2022 Consolidated Financial Results Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other General & Income Administrative Operating (Expense), Income Net Earnings E
Slide 17: YTD 2022 Consolidated Financial Results
YTD 2022 Consolidated Financial Results Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Selling, Other General & Income Gross Administrative Operating (Expense), Income Net Ear
Slide 18: Q3 2023 Segment Results
Q3 2023 Segment Results Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands) Flowserve Pump Division Selling, Selling, General & General & Gross Administrative Operating Gross Administrative Operating Three Mo
Slide 19: YTD 2023 Segment Results
YTD 2023 Segment Results Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands) Flowserve Pump Division Selling, Selling, General & General & Gross Administrative Operating Gross Administrative Operating Nine Mo
Slide 20: Q3 2023 Bookings and Sales Mix
Q3 2023 Bookings and Sales Mix Flowserve Pump Division Constant Constant ($ m illions) Q3 2023 Q3 2022 Delta (%) YTD 2023 YTD 2022 Delta (%) FX(%)* FX(%)* 234 460 -49% -50% 736 1,041 -29% -30% OE Bookings Mix 32% 50% (1800) bps 33% 43% (1000) bps ** 501 466 7% 5% 1,486 1,392 7% 7% AM 68% 50% 1800 bp
Slide 21: 2027 Financial Target Assumptions
2027 Financial Target Assumptions Key assumptions include: no significant macroeconomic, pandemic, geopolitical or terrorist-related disruptions that could have a material impact on our business and industry; ongoing modestly positive global GDP growth; inflation and interest rates at current levels
Slide 22: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 214.697.8568 jroueche@flowserve.com mmullin@flowserve.com Q3 2023 Earnings Conference Call 22