Slide 1: First Quarter 2022 Earnings Conference Call
FIRST QUARTER 2022 EARNINGS CONFERENCE CALL May 3, 2022 Q1 2022 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: Q1 2022 Highlights
Q1 2022 HIGHLIGHTS • Strong year-over-year and sequential bookings growth of 14.9% and 12.1%, respectively - Included four project awards totaling $150 million in oil and gas and power markets - Aftermarket bookings of $542 million – highest level since 2014 • Backlog up 11.3% sequentially to $2.23
Slide 4: Actions to Drive Improved Backlog Conversion and Increase Margins
ACTIONS TO DRIVE IMPROVED BACKLOG CONVERSION AND INCREASE MARGINS Short Term - 2nd price increase of 2022 now in effect - Quotation validity length reduced - Significant resources dedicated and deployed to expedite suppliers - Augmented recruiting efforts for manufacturing positions - Mobilized team
Slide 5: Q1 2022 Overview
Q1 2022 OVERVIEW Bookings • Strong year-over-year bookings Sales • Revenue decreased 4.2% $ millions growth driven by continued $ millions versus prior year, or 2.0% on a $1,086 aftermarket spending and the constant currency basis return of project investment $919 $969 $898 - Backlog conversion down
Slide 6: Q1 Bookings Mix
Q1 BOOKINGS MIX Original Equipment End-Market Mix End-Market Outlook Oil & Gas Water General Industries Power Chemical Oil & Gas • High utilization rates and improved access to customer facilities $ millions $544 $945M $1.09B driving continued momentum in aftermarket and MRO $488 $469 • LNG project
Slide 7: Q1 Sales Mix
Q1 SALES MIX Original Equipment Region Mix $ millions $857M $821M $438 $407 $383 47% 48% 47% 37% 42% 2021 Q1 2021 Q4 2022 Q1 North America Europe Asia Pacific 21% Middle East & Africa Aftermarket 19% Latin America $ millions $450 $482 $438 24% 21% 53% 52% 53% 13% 11% 5% 7% 2021 Q1 2021 Q4 2022 Q1 20
Slide 8: Q1 Segment Highlights
Q1 SEGMENT HIGHLIGHTS FPD FCD YoY Bookings Growth 21.7% 0.1% Adjusted Gross Margin* 28.8% 24.4% Adjusted SG&A as % of Sales* 22.7% 17.4% Adjusted Operating Margin* 6.8% 7.0% Book-to-Bill 1.38x 1.19x * See appendix for reconciliation to corresponding GAAP-based measure Q1 2022 EARNINGS CONFERENCE CAL
Slide 9: Adjusted Operating Margin Bridge
ADJUSTED OPERATING MARGIN BRIDGE 10.3% 6.8% • Q1 sales decline drove under-absorption • Frictional costs included higher than expected logistics costs on expedited air freight and increased energy costs, * increased labor costs to mitigate employee absenteeism, and supply chain challenges • Based on
Slide 10: 2022 Guidance Assumptions
2022 GUIDANCE ASSUMPTIONS Factors Driving Revised Guidance Metric Revised 2022 Guidance Prior 2022 Guidance Guidance • Strengthening U.S Dollar Revenue Growth Up 5.0% - 7.0% Up 7.0% - 9.0% • Supply chain, logistics and labor Reported EPS [1] $1.25 - $1.45 $1.65 - $1.85 availability issues and mitiga
Slide 11: Diversify, Decarbonize, Digitize Growth Strategy
DIVERSIFY, DECARBONIZE, DIGITIZE GROWTH STRATEGY GROWTH DRIVERS DIVERSIFY DECARBONIZE DIGITIZE Diversify end markets Support our customers Leverage technology and data and create a more today and through the to improve internal operations, balanced portfolio energy transition customer experience, an
Slide 12: Flowserve 3D Growth Strategy in Action
FLOWSERVE 3D GROWTH STRATEGY IN ACTION DIVERSIFY – Accelerating DECARBONIZE – Converting DIGITIZE – RedRaven Technology Specialty Chemical Production Plastics to Sustainable Chemicals Supporting Offshore Platforms • Flowserve supplying a variety of • Flowserve supplying pumps for • Flowserve is inst
Slide 13: Questions & Answers
Questions & Answers Q1 2022 EARNINGS CONFERENCE CALL 1 3
Slide 14: Appendix
APPENDIX Q1 2022 EARNINGS CONFERENCE CALL 1 4
Slide 15: Q1 2022 Consolidated Financial Results
Q1 2022 CONSOLIDATED FINANCIAL RESULTS 1st Quarter 1st Quarter Adjusted 2022 2022 2021 ($ m illions) 2022 2021 Delta ($) Delta (%) Constant Adjusted Adjusted Adjusted Delta ($) Delta (%) Constant FX(%)* Items Results Results FX(%)* Bookings $ 1,086.1 $ 945.0 $ 141.1 14.9% 17.6% $ - $ 1,086.1 $ 945.0
Slide 16: Flowserve Pump Division Q1 2022 Segment Results
FLOWSERVE PUMP DIVISION Q1 2022 SEGMENT RESULTS 1st Quarter Constant ($ m illions) 2022 2021 Delta ($) Delta (%) FX(%)* Bookings $ 795.6 $ 653.8 $ 141.8 21.7% 24.6% Sales $ 575.6 $ 602.6 $ (27.0) -4.5% -2.1% Gross Profit $ 156.9 $ 182.9 $ (26.0) -14.2% Gross Margin (%) 27.3% 30.4% (310) bps SG&A $ 1
Slide 17: Flowserve Pump Division Q1 2022 Bookings and Sales
FLOWSERVE PUMP DIVISION Q1 2022 BOOKINGS AND SALES 1st Quarter Constant ($ m illions) 2022 2021 Delta (%) FX(%)* 324 264 23% 25% OE Bookings Mix 41% 40% 100 bps ** 21% 22% 472 390 AM 59% 60% (100) bps 201 215 -7% -5% OE 35% 36% (100) bps Sales Mix ** 375 388 -4% -1% AM 65% 64% 100 bps * Constant FX
Slide 18: Flow Control Division Q1 2022 Segment Results
FLOW CONTROL DIVISION Q1 2022 SEGMENT RESULTS 1st Quarter Constant ($ m illions) 2022 2021 Delta ($) Delta (%) FX(%)* Bookings $ 294.3 $ 294.0 $ 0.3 0.1% 2.3% Sales $ 247.9 $ 255.8 $ (7.9) -3.1% -1.2% Gross Profit $ 59.5 $ 74.6 $ (15.1) -20.2% Gross Margin (%) 24.0% 29.2% (520) bps SG&A $ 44.3 $ 49.
Slide 19: Flow Control Division Q1 2022 Bookings and Sales
FLOW CONTROL DIVISION Q1 2022 BOOKINGS AND SALES 1st Quarter Constant ($ m illions) 2022 2021 Delta (%) FX(%)* 221 225 -2% -1% OE Bookings Mix 75% 77% (200) bps ** 6% 6% 73 69 AM 25% 23% 200 bps 184 193 -5% -3% OE 74% 76% (200) bps Sales Mix ** 64 63 3% 5% AM 26% 24% 200 bps * Constant FX represents
Slide 20: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com Q1 2022 EARNINGS CONFERENCE CALL 2 0