Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Shareholder Meeting (May 2018)
25 slides from Franklin Electric's shareholder meeting presentation, May 4, 2018
Slide 1: 2018 Shareholders Meeting
2018 Shareholders Meeting Gregg Sengstack, Chairman and CEO | May 4, 2018
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, invento
Slide 3: Earnings Per Share
Earnings Per Share $2.00 $1.86 Impact of $1.86 $0.21 New Tax Law $1.68 $1.65 $1.65 $1.50 $1.50 $1.41 $1.00 REASONS FOR DECLINE: • Strong $ $0.50 • Decline in oil price • Distribution reset • Weather $0.00 2013 2014 2015 2016 2017 *One time impact of U.S. tax law was $0.21/share. Future benefit appro
Slide 4: First Quarter 2018 Results
First Quarter 2018 Results (Amounts in millions except share data) Sales Operating Income E.P.S. $350 $30 $0.50 $0.45 $295.6 $300 $25 $22.7 $0.40 $250 $0.33 $220.3 $20 $18.5 $0.30 $200 $15 $150 $0.20 $10 $100 $0.10 $50 $5 $0 $0 $‐ Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 23% increase in opera
Slide 5: Cash Flow
Cash Flow Net Income Free Cash Flow $100 $82.3 $78.7 $78.2 $72.9 $73.6 $75 $50 $33.5 $25 $0 2015 2016 2017 Company‐wide focus on generating free cash flow > net income Free Cash Flow = Operating Cash Flow minus Net Capital Expenditures 5
Slide 6: Consecutive Annual Dividend Payment Increases
25 24 Consecutive Annual Dividend Payment Increases $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $‐ 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 6
Slide 7: Acquisition Timeline
Acquisition Timeline FUELING NEW DISTRIBUTION SEGMENT WATER 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 At year‐end 2017, we had $385 million additional debt capacity 7
Slide 8: Sales by Segment
Sales by Segment 21% Fueling Systems 22% 57% Distribution Water Systems (US Groundwater) (based on 2017 Proforma Revenue) 8
Slide 9: Geographic Sales Mix
Geographic Sales Mix Water & Fueling Segments 39% 47% Emerging Markets United States 14% International Developed (based on 2017 sales) 9
Slide 10: Strategic Focus
Strategic Focus Residential, Agricultural, Commercial Water Systems Complete Fueling Systems $6.0 B Global Market Potential(1) $1.0 B Global Market Potential(1) Strong Brand Franchise Mission Critical Products and Systems #1 or #2 in Addressable Markets Applications with High Cost of Downtime Growin
Slide 11: Strategic Focus: global provider of water and fuel systems
STRATEGIC FOCUS: 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. 11
Slide 12: Geographic Expansion
Geographic Expansion 12
Slide 13: Global Footprint
Global Footprint Locations with 50+ employees New sites, Last 5 years 13
Slide 14: Geographic Expansion
Geographic Expansion 2017 Water and Fueling Segment Sales US/CANADA Sales $515 M EMEA Sales $203 M ASIA LATIN AMERICA Sales $143 M Sales $128 M 14
Slide 15: Sales in Emerging Markets
Sales in Emerging Markets Constant Currency $500 $500 $481 $450 $459 $400 $413 $350 $356 $335 ($ in millions) $300 $286 $250 $246 $200 $226 $218 $150 $149 $100 $50 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 15
Slide 16: Fueling Systems: China
Fueling Systems: China Government Mandated Multi‐Year Infrastructure Upgrade $40 Fueling Systems Sales in China $30 $25 ($ in millions) $20 $13 $10 $7 $0 2015 2016 2017 2018 2019 Oil companies upgrading pumping and leak detection systems as well 16
Slide 17: Headwater Companies
HEADWATER. COMPANIES
Slide 18: Headwater Companies strategy and adjacencies
• Extend our position in groundwater • Move closer to contractor • Optimize supply chain • Opportunities to move into adjacencies: – Filtration – Treatment – Irrigation 2M Company, Inc. – Commercial Drillers Service, Inc. Headwater Wholesale Western Hydro Valley Farms Supply 18
Slide 19: Product Line Extensions
Product Line Extensions 19
Slide 20: Product Line Extensions
Product Line Extensions Water Systems Fueling Systems 20
Slide 21: Electronics Evolution
Electronics Evolution Constant Pressure Constant Pressure Constant Pressure Constant Pressure Packaged Systems: Improved Quality Improved Quality Improved Quality High‐Efficiency More Models More Models More Models Better Performance Environment Extension More Applications More Applications Increase
Slide 22: Fueling – Total System Solutions
Fueling – Total System Solutions FUEL MANAGEMENT SYSTEMS SUBMERSIBLE PUMPING SYSTEMS PIPE & CONTAINMENT SYSTEMS DISPENSING SYSTEMS SERVICE STATION HARDWARE 22
Slide 23: Historic Organic Growth Affirms Our Strategy
Historic Organic Growth Affirms Our Strategy 15.0% Water Fueling Consolidated 11.7% 11.0% 10.4% 10.0% 8.6% 8.2% 8.5% 7.8% 6.8% 6.6% 5.9% 5.1% 5.2% 5.1% 5.0% 3.8% 2.5% 2.1% 0.0% ‐5.0% ‐5.2% ‐7.2% ‐10.0% 2013 2014 2015 2016 2017 Q1 2018 23
Slide 24: 2018 Shareholders Meeting
2018 Shareholders Meeting Gregg Sengstack, Chairman and CEO | May 4, 2018
Slide 25: 2017 Efforts: solar pumping installations
2017 Efforts: – 5 installations spanning 3 different countries • South Africa • Zimbabwe • Uganda – Benefiting the lives of nearly 18,000 people – Leveraged our solar pumping technology 25