Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Rotary Club of Indianapolis, October 2008
28 slides from Franklin Electric's conference presentation, Oct 28, 2008
Slide 1: Rotary Club of Indianapolis
Rotary Club of Indianapolis October 2008 1
Slide 2: Franklin Electric
@ Franklin Electric
Slide 3: Franklin Electric
@ Franklin Electric
Slide 4: Franklin Electric
@ Franklin Electric
Slide 5: Electric
Franklin Electric
Slide 6: Franklin Electric
@ Franklin Electric
Slide 7: Electric
Franklin Electric
Slide 8: Electric
Franklin Electric ‘ i
Slide 9: Manufacturing Locations
Manufacturing Locations Approx. $800 Million Sales & 3600 Employees Wittlich Madison Brno Siloam Springs Bluffton Saco Berzo Demo Oklahoma City Grant County Wilburton Little Rock Suzhou Linares Joinville Botswana Johannesburg Headquarters Manufacturing Facilities 9
Slide 10: Franklin Electric
Franklin Electric Selected by Forbes Magazine for 6 years as one of the “200 Best Run Small Companies in America” 10
Slide 11: Financial Summary
Financial Summary FELE NASDAQ 2008 9 mos YTD Sales $593.5 + 32% (record) Operating Income $69.1 + 78% (record) EPS $1.75 + 77% Increased for 15th Dividend (annualized) $0.50/share Consecutive Year 11
Slide 12: Strategic Focus
Strategic Focus Residential, Agricultural & Commercial Water Systems Fueling Systems $5.6 Bil Global Market Potential $1.0 Bil Global Market Potential Steadily Growing Global Demand Customers Value Reliability Franklin Brand Equity 12
Slide 13: Growth History
Growth History Product Line Extensions and Geographic Expansion Water Systems Franklin Motors, Controls Motors, Pumps, Drives Adjacent Pumping Global Submersible Motor and Drives and Controls Systems Sales 1950s 1990s 2004 2006 Opportunity Fueling Systems Franklin FE Petro FE Petro Turbine Adjacent
Slide 14: Product/Market Sales Mix
Product/Market Sales Mix 2008 Annualized Sales + $780 mil 14
Slide 15: Water Systems
Water Systems Product Categories Residential Agricultural Commercial Private Water Well Irrigation Systems Dewatering Community Water Well Livestock Watering Systems Pressure Boosting Dewatering/Sump Pumps Desalination Sewage & Effluent Pumps HVAC Condensate Pumps Pond & Fountain Pumps Pressure Boos
Slide 16: Water Systems
Water Systems YTD Financial Summary 9 mos YTD Sales $449 mil + 27% Operating Income $59.8 mil + 29% 16
Slide 17: Global Market Position
Franklin Global Market Position #1 in Groundwater Pumping Systems % of $2 bil Global Addressable Market* Franklin Electric 18-19% Competitor A 11-13% Competitor B 10-11% Competitor C 9-11% Competitor D 3-4% All Others 42-49% Total 100% * Source – Franklin Management Estimates 17
Slide 18: Residential, Agricultural & Commercial
Residential, Agricultural & Commercial #3 in RAC Pumping Systems % of $5.6 bil Global Addressable Market* Competitor A 13-16% Competitor B 11-12% Franklin Electric 10-11% 5-6% in 2004 Competitor C 6-8% Competitor D 2-3% All Others 50-58% Total 100% * Source – Franklin Management Estimates 18
Slide 19: International Water Systems
International Water Systems 35% of Total Franklin Sales YTD 2008 Sales Growth US/Canada Water Systems + 13% International Water Systems + 48% 19
Slide 20: International Water Systems
International Water Systems Addressable Market and Growth Trend Total Addressable Growth Market Profile US/Canada Water Systems $1.2 bil International Water Systems $2.0 bil (Mature Regions*) International Water Systems $2.4 bil (Developing Regions**) * Mature Markets – Western Europe, Australia/NZ,
Slide 21: International Water Systems
International Water Systems Sales in Developing Regions* * Latin America/Brazil, Asia/Pacific, Middle East, Africa, Eastern Europe 21
Slide 22: Global Water Systems Manufacturing Facilities
Global Water Systems Manufacturing Facilities Wittlich Siloam Springs Brno Berzo Demo Oklahoma City Grant County Wilburton Little Rock Suzhou/China Sourcing Linares Joinville Botswana Johannesburg 2003 2008 % Water Systems Manufacturing Headcount in Low Cost Regions 10% 50-55% 22
Slide 23: Fueling Systems
Franklin Fueling Systems 24% of Total Franklin Sales 23
Slide 24: Fueling Systems
Franklin Fueling Systems YTD Financial Summary 9 mos YTD Sales $145 mil + 54% Operating Income $39.2 mil + 148% 24
Slide 25: Fueling Systems
Franklin Fueling Systems Key Growth Driver: Franklin Fuel Management Systems (Modules) Environmental Issues: • Vapor Control and Monitoring • Leak Detection • Product Adulteration Detection • Inventory Monitoring and Management • Variable Speed Pumping 25
Slide 26: California Vapor Control Mandate
Franklin Fueling Systems California Vapor Control Mandate • 12,000 Filling Stations in California • Equipment Cost = $27,000/station • $300 mil Market Opportunity 2008-2009 • Franklin is One of Only Two Authorized Suppliers • 40% of Conversion Complete – Franklin Share 80% • International Vapor Cont
Slide 27: Franklin Electric 2008 Outlook
Franklin Electric 2008 Outlook • Total Sales Growth – 25% to 30% • Organic Sales Growth in Excess of 12% • Fixed Spending Leverage in Excess of 220 BPS • Back Half Rate of Profit Improvement may be Slower than First Half 27
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