Slide 1: Third Quarter 2021 Earnings Conference Call
THIRD QUARTER 2021 EARNINGS CONFERENCE CALL October 28, 2021 Q3 2021 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: Q3 2021 Highlights
Q3 2021 HIGHLIGHTS • Solid 13.1% YoY bookings growth included Cryogenic Ball Valve for LNG improvement in all core energy and water markets Applications • Aftermarket bookings of $495 million – remain at pre-COVID levels • Backlog up $115 million versus 2020 year-end on 1.07x YTD book-to-bill • Full
Slide 4: Q3 2021 Overview
Q3 2021 OVERVIEW Bookings • Solid year-over-year bookings Sales • Revenue decreased 6.3% $ millions growth of 13.1% with increases $ millions versus prior year across all core end-markets $985 - 3rd consecutive positive book- $945 $953 $912 - Original equipment year-over- $924 $898 to-bill year grow
Slide 5: Q3 Bookings Mix
Q3 BOOKINGS MIX Original Equipment End-Market Mix End-Market Outlook Water General Industries Power Chemical Oil & Gas $ millions Oil & Gas $806M $912M • Commodity pricing growth continued through the quarter – above pre-pandemic levels for most of 2021 $428 $417 $381 • Downstream and mid-stream uti
Slide 6: Q3 Sales Mix
Q3 SALES MIX Original Equipment Region Mix $ millions $924M $866M $479 $434 $425 52% 48% 49% 37% 38% 2020 Q3 2021 Q2 2021 Q3 North America Europe Asia Pacific 22% 20% Middle East & Africa Aftermarket Latin America $ millions $445 $464 $441 23% 23% 52% 51% 48% 12% 11% 6% 8% 2020 Q3 2021 Q2 2021 Q3 20
Slide 7: Q3 Segment Highlights
Q3 SEGMENT HIGHLIGHTS FPD FCD YoY Bookings Growth 15.1% 6.7% Adjusted Gross Margin* 30.8% 29.0% Adjusted SG&A as % of Sales* 21.4% 18.5% Adjusted Operating Margin* 10.2% 10.5% Book-to-Bill 1.10x 0.95x * See appendix for reconciliation to corresponding GAAP-based measure – Prior period comparisons ar
Slide 8: 2021 Guidance Assumptions
2021 GUIDANCE ASSUMPTIONS Guidance 2021 Revised 2021 Prior Assumptions Guidance Guidance Revenue Guidance Down 3.5% - 4.5% Down 2.0% - 4.0% [1] Reported EPS Guidance $1.05 - $1.10 $1.15 - $1.40 [2] Adjusted EPS Guidance $1.40 - $1.45 $1.45 - $1.65 Q4 EUR Rate 1.16 1.20 Adjusted Tax Rate ~20% 21% - 2
Slide 9: Flowserve Energy Transition in Action
FLOWSERVE ENERGY TRANSITION IN ACTION Bio-Diesel Capacity Expansion Sustainable Aviation Fuel Solar Panel Film Technology • Providing pumps and seals to • Providing pumps and seals to • Flowserve developed vacuum more than double the processing one of Europe’s largest biofuels pump technology to sup
Slide 10: ESG Progress
ESG PROGRESS • Clearly defined Purpose and meaningful core Values drive strong ESG program with Board and executive leadership • Recently released Annual ESG Report for 2020 incorporating both SASB and TCFD reporting • Significant progress on reducing our emissions and on track to meet our 2030 carb
Slide 11: 2021 Outlook and Strategic Focus
2021 OUTLOOK AND STRATEGIC FOCUS • Published ESG report in Q3 highlighting progress towards our 2030 carbon emission reduction target and commitment to strengthen our culture through ESG diversity, equity and inclusion program • Opportunity for significant positive environmental contributions throug
Slide 12: Questions & Answers
Questions & Answers Q3 2021 EARNINGS CONFERENCE CALL 1 2
Slide 13: Appendix
APPENDIX Q3 2021 EARNINGS CONFERENCE CALL 1 3
Slide 14: Q3 2021 Consolidated Financial Results
Q3 2021 CONSOLIDATED FINANCIAL RESULTS 3rd Quarter 3rd Quarter Adjusted 2021 2021 2020 ($ millions) 2021 2020 Delta ($) Delta (%) Constant Adjusted Adjusted Adjusted Delta ($) Delta (%) Constant FX(%)* Items Results Results FX(%)* Bookings $ 911.6 $ 806.1 $ 105.5 13.1% 11.8% $ - $ 911.6 $ 806.1 $ 10
Slide 15: Year-to-Date 2021 Consolidated Financial Results
YEAR-TO-DATE 2021 CONSOLIDATED FINANCIAL RESULTS Year-to-Date Year-to-Date Adjusted 2021 2021 2020 Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* Adjusted Adjusted Adjusted Delta ($) Delta (%) FX(%)* Items Results Results Bookings $ 2,805.7 $ 2,587.3 $ 218.4 8.4% 5.5% $ - $ 2,80
Slide 16: Flowserve Pump Division Q3 2021 Segment Results
FLOWSERVE PUMP DIVISION Q3 2021 SEGMENT RESULTS 3rd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* 2021 2020 Delta ($) Delta (%) FX(%)* Bookings $ 660.9 $ 574.1 $ 86.8 15.1% 13.9% $ 1,982.5 $ 1,792.3 $ 190.2 10.6% 7.6% Sales $ 601.8 $ 670.2 $ (68.4) -10.2% -
Slide 17: Flowserve Pump Division Q3 2021 Bookings and Sales
FLOWSERVE PUMP DIVISION Q3 2021 BOOKINGS AND SALES 3rd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta (%) 2021 2020 Delta (%) FX(%)* FX(%)* 228 204 12% 10% 708 622 14% 11% OE 35% 36% (100) bps 36% 35% 100 bps Bookings Mix ** 433 370 17% 16% 1,274 1,170 9% 6% AM 65% 64% 100 bps 6
Slide 18: Flow Control Division Q3 2021 Segment Results
FLOW CONTROL DIVISION Q3 2021 SEGMENT RESULTS 3rd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta ($) Delta (%) FX(%)* 2021 2020 Delta ($) Delta (%) FX(%)* Bookings $ 253.6 $ 237.6 $ 16.0 6.7% 5.4% $ 834.0 $ 807.8 $ 26.2 3.2% 0.5% Sales $ 266.1 $ 255.2 $ 10.9 4.3% 3.2% $ 803.1 $
Slide 19: Flow Control Division Q3 2021 Bookings and Sales
FLOW CONTROL DIVISION Q3 2021 BOOKINGS AND SALES 3rd Quarter Year-to-Date Constant Constant ($ millions) 2021 2020 Delta (%) 2021 2020 Delta (%) FX(%)* FX(%)* 190 179 6% 5% 626 601 4% 1% OE 75% 75% - bps 75% 74% 100 bps Bookings Mix ** 64 59 8% 8% 208 207 1% -1% AM 25% 25% - bps 25% 26% (100) bps 20
Slide 20: Investor Relations Contacts
Investor Relations Contacts Jay Roueche Mike Mullin 972.443.6560 972.443.6636 jroueche@flowserve.com mmullin@flowserve.com Q3 2021 EARNINGS CONFERENCE CALL 2 0