Flowserve Corporation · NYSE:FLS
Flowserve — Gabelli Pump, Valve & Water Symposium 2019
18 slides from Flowserve's conference presentation, Feb 28, 2019
Slide 1: Gabelli Pump, Valve & Water Symposium
Gabelli Pump, Valve & Water Symposium New York City February 28, 2019
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: Investment Highlights
Investment Highlights Distinguished history of flow control expertise with a heritage of more than 225 years Overview Company Diversified business model – geographies, end markets and products Recovering end markets, evidenced by year-over-year increased bookings Markets End Significant installed ba
Slide 4: Diversified Business Model
Diversified Business Model ~60% of Business Outside North America Balanced Platform 6% 11% 22% 20% 2018 49% 2018 20% Sales Europe Sales North America Industrial Pumps Asia Pacific 31% Middle East & Africa Valves and Actuation 41% Latin America Engineered Pumps & Seals Attractive End Markets Powerful
Slide 5: Factors Driving Forecasted Growth
Factors Driving Forecasted Growth Macroeconomic Industry-Specific Other Factors • GDP • Commodity Prices • Regulation • Population Growth • Chemical Demand • Environmental • Industrial Production • Aging Infrastructure • Domestic Investment • Energy Demand • Emerging Market Infrastructure • New Reso
Slide 6: Strong Relationships with Key Customers
Strong Relationships with Key Customers GENERAL INDUSTRY POWER GENERATION WATER CHEMICAL OIL & GAS Diverse customer base anchored by the premier names in each of the markets we serve 2019 Gabelli Pump, Valve & Water Symposium 6
Slide 7: A Comprehensive, Pure-Play Flow Control Company
A Comprehensive, Pure-Play Flow Control Company Highlights AFTERMARKET • Only company with significant global presence in pumps, valves and seals PUMPS • Unmatched aftermarket capabilities to serve customers across industries and geographies SEALS ‒ Enterprise Frame Agreements ‒ LifeCycle Advantage
Slide 8: The Power of a Pure-Play
The Power of a Pure-Play Isolation Control Atmospheric Isomerization Valve Valve Distillation Hydrotreater Vacuum Distillation Catalytic Hydrocracker Reformer EXAMPLE: Vapor Recovery Delayed Alkylation System Coking Typical 400K Barrel/day Refinery Liquid Ring Pump Compressor and and Seals Seals 201
Slide 9: Historical Performance
Historical Performance Industry Timeline $3.72 EPS * Operating Margin * $3.40 2010-2014: Post Financial Crisis $3.09 ▪ Recovery period post-financial crisis $2.84 ▪ Reasonable capital investment and solid maintenance spend $2.55 ▪ Excess capacity in the Flow Control industry limited pricing power $2
Slide 10: Flowserve 2.0: Transforming the Organization
Flowserve 2.0: Transforming the Organization Legacy Flowserve Flowserve 2.0 The operating model worked well during the last period of expansion: • Flexible organization for any market environment • Decentralized operations • Empowered local organizations • Globalized operations • Responsive to a wid
Slide 11: Creating Long-Term Sustainable Shareholder Value
Creating Long-Term Sustainable Shareholder Value* Operating System Revenue Growth Free Cash Flow • Constructing Flowserve 2.0 operating model +2% 100%+ above industry grow th rate of Net Incom e • Developing a flexible cost structure for any Operating Margin ROIC environment 15-17% 15-20% • Creating
Slide 12: 2019 Outlook
2019 Outlook [1] Guidance Assumptions 2019 Guidance Revenue Guidance 4% - 6% Reported EPS Guidance $1.60 - $1.80 Adjusted EPS Guidance $1.95 - $2.15 EUR Rate 1.16 Adjusted Tax Rate 26% - 28% Capital Expenditures $90 - $100 million Expecting year-over-year Adjusted EPS growth of 17% at the mid-point
Slide 13: Investment Highlights
Investment Highlights Distinguished history of flow control expertise with a heritage of more than 225 years Overview Company Diversified business model – geographies, end markets and products Recovering end markets, evidenced by year-over-year increased bookings Markets End Significant installed ba
Slide 14: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com 2019 Gabelli Pump, Valve & Water Symposium
Slide 15: Appendix
Appendix 2019 Gabelli Pump, Valve & Water Symposium
Slide 16: 2019 Outlook
2019 Outlook [1] Guidance Assumptions 2019 Guidance [2] Revenue Guidance 4% - 6% Reported EPS Guidance $1.60 - $1.80 [3] Adjusted EPS Guidance $1.95 - $2.15 EUR Rate 1.16 Adjusted Tax Rate 26% - 28% Capital Expenditures $90 - $100 million [1] 2019 Reported and Adjusted EPS guidance as of February 21
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Twelve Months Ended December 31, 2017 TrailingTwelve Months Ended December 31, 2018 (Amounts in millions, except per share data) As Reported (a) Adjustments As Adjusted As Reported (a) Adjustments As Adjusted Sales $ 3,660.8 $ - $ 3,660.8 $ 3,823.7 $ -
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Unaudited) Twelve Months Ended December 31, 2015 Twelve Months Ended December 31, 2016 (Amounts in millions, except per share data) As Reported (a) Adjustments As Adjusted As Reported (a) Adjustments As Adjusted Sales $ 4,557.8 $ - $ 4,557.8 $ 3,990.5 $ - $ 3,990
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