Slide 1: Fourth Quarter 2022 Earnings Conference Call
FOURTH QUARTER 2022 EARNINGS CONFERENCE CALL February 22, 2023 Q4 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: Q4 2022 Highlights
Q4 2022 HIGHLIGHTS • Strong bookings of $1.11 billion represent YoY growth of 14.2%, or 19.4% constant currency - Constant currency OE and AM growth of 24.0% and 15.1%, respectively, driven by core market growth and 3D strategy • Q4 Adjusted EPS* of $0.63 reflects improved operations and leveraging
Slide 4: Q4 2022 Overview
Q4 2022 OVERVIEW Continued Strong Bookings Momentum Revenue Growth on Improved Execution Bookings • Year-over-year bookings growth Sales • Revenue increased 13.0% $ millions driven by strong project activity $ millions versus prior year, or 18.6% on a $1,039 $1,223 and continued MRO spending constan
Slide 5: Q4 Bookings Mix
Q4 BOOKINGS MIX Original Equipment End-Market Mix End-Market Outlook Water General Industries Power Chemical Oil & Gas Oil & Gas $680 • Global capex forecast projects ongoing growth through 2023 $ millions $969M $1.11B $556 • Middle East has largest investment program both upstream $469 and downstre
Slide 6: Q4 Sales Mix
Q4 SALES MIX Original Equipment Region Mix $ millions $919M $1.04B $500 $438 $412 48% 47% 48% 39% 42% 2021 Q4 2022 Q3 2022 Q4 North America Europe Asia Pacific 19% Middle East & Africa Aftermarket 17% Latin America $ millions $539 $482 $461 22% 18% 52% 53% 52% 15% 13% 7% 8% 2021 Q4 2022 Q3 2022 Q4 2
Slide 7: Q4 Segment Highlights
Q4 SEGMENT HIGHLIGHTS FPD FCD YoY Bookings Growth 13.4% 16.5% Adjusted Gross Margin* 29.9% 29.1% Adjusted SG&A as % of Sales* 17.3% 16.3% Adjusted Operating Margin* 13.1% 12.8% Book-to-Bill 1.06x 1.08x * See appendix for reconciliation to corresponding GAAP-based measure Q4 2022 EARNINGS CONFERENCE
Slide 8: 2023 Guidance Assumptions
2023 GUIDANCE ASSUMPTIONS 2023 Guidance Comments [1] Guidance Metric 2023 Guidance ‒ Revenue growth supported by $2.7 billion backlog and in anticipation that Revenue Growth Up 9.0% - 11.0% markets remain supportive [2] • Expect to ship roughly 80% of beginning Reported EPS $1.40 - $1.65 backlog in
Slide 9: Flowserve 3D Growth Strategy in Action
FLOWSERVE 3D GROWTH STRATEGY IN ACTION DIVERSIFY – Providing Critical DECARBONIZE – Flare Gas DIGITIZE – Providing Clean, Products for Nuclear Power Plant Recovery to Reduce CO2 Reliable Water with RedRaven • Flowserve supplying nuclear • Flowserve is sole supplier for • Flowserve is partnering with
Slide 10: Velan Acquisition Enhances 3D Growth Strategy
VELAN ACQUISITION ENHANCES 3D GROWTH STRATEGY Transaction Summary ‒ Flowserve to acquire Velan Inc. for approximately $215 million including net debt of approximately $5 million • TTM revenue of approximately $380 million and EBITDA of approximately $21 million Nuclear Cryogenic Severe Service • Adj
Slide 11: Key Takeaways and 2023 Outlook
KEY TAKEAWAYS AND 2023 OUTLOOK • $2.7 billion backlog and Velan acquisition supportive of multi-year revenue and Strong Growth earnings growth Outlook • End markets anticipated to remain supportive and 3D growth strategy well aligned to energy transition and decarbonization spending • Operating perf
Slide 12: Questions & Answers
Questions & Answers Q4 2022 EARNINGS CONFERENCE CALL 1 2
Slide 13: Appendix
APPENDIX Q4 2022 EARNINGS CONFERENCE CALL 1 3
Slide 14: Q4 2022 Consolidated Financial Results
Q4 2022 CONSOLIDATED FINANCIAL RESULTS 4th Quarter 4th Quarter Adjusted 2022 2022 2021 ($ m illions) 2022 2021 Delta ($) Delta (%) Constant Adjusted Adjusted Adjusted Delta ($) Delta (%) Constant FX(%)* Items Results Results FX(%)* Bookings $ 1,106.7 $ 969.1 $ 137.6 14.2% 19.4% $ - $ 1,106.7 $ 969.1
Slide 15: Full Year 2022 Consolidated Financial Results
FULL YEAR 2022 CONSOLIDATED FINANCIAL RESULTS Year-to-Date Year-to-Date Adjusted 2022 2022 2021 Constant Constant ($ m illions) 2022 2021 Delta ($) Delta (%) Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* FX(%)* Items Results Results Bookings $ 4,447.5 $ 3,774.4 $ 673.1 17.8% 22.7% $ - $ 4,44
Slide 16: Flowserve Pump Division Q4 & Full Year 2022 Segment Results
FLOWSERVE PUMP DIVISION Q4 & FULL YEAR 2022 SEGMENT RESULTS 4th Quarter Year-to-Date Constant Constant ($ millions) 2022 2021 Delta ($) Delta (%) FX(%)* 2022 2021 Delta ($) Delta (%) FX(%)* Bookings $ 786.2 $ 693.5 $ 92.7 13.4% 18.7% $ 3,214.7 $ 2,675.7 $ 539.0 20.1% 25.2% Sales $ 739.4 $ 648.9 $ 90
Slide 17: Flowserve Pump Division Q4 & Full Year 2022 Bookings and Sales
FLOWSERVE PUMP DIVISION Q4 & FULL YEAR 2022 BOOKINGS AND SALES 4th Quarter Year-to-Date Constant Constant ($ m illions) 2022 2021 Delta (%) 2022 2021 Delta (%) FX(%)* FX(%)* 316 256 23% 29% 1,353 964 40% 46% OE Bookings Mix 40% 37% 300 bps 42% 36% 600 bps ** 7% 13% 9% 14% 470 437 1,862 1,712 AM 60%
Slide 18: Flow Control Division Q4 & Full Year 2022 Segment Results
FLOW CONTROL DIVISION Q4 & FULL YEAR 2022 SEGMENT RESULTS 4th Quarter Year-to-Date Constant Constant ($ millions) 2022 2021 Delta ($) Delta (%) FX(%)* 2022 2021 Delta ($) Delta (%) FX(%)* Bookings $ 324.9 $ 278.8 $ 46.1 16.5% 21.4% $ 1,247.2 $ 1,112.8 $ 134.4 12.1% 16.5% Sales $ 301.8 $ 272.8 $ 29.0
Slide 19: Flow Control Division Q4 & Full Year 2022 Bookings and Sales
FLOW CONTROL DIVISION Q4 & FULL YEAR 2022 BOOKINGS AND SALES 4th Quarter Year-to-Date Constant Constant ($ millions) 2022 2021 Delta (%) 2022 2021 Delta (%) FX(%)* FX(%)* 242 214 13% 18% 940 840 12% 17% OE 74% 77% (300) bps 75% 76% (100) bps Bookings Mix ** 83 64 29% 33% 307 272 13% 16% AM 26% 23% 3
Slide 20: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 214.697.8568 jroueche@flowserve.com mmullin@flowserve.com Q4 2022 EARNINGS CONFERENCE CALL 2 0