investor handout · 2021. 1. 26. · investor handout first quarter 2018 8 2017 achieved to date...

Investor HandoutFirst Quarter 2018

Company Overview

1997-2004 2005-2007 2008-2014 2015

Sele

ct K

ey

Acq

uis

itio

ns

Select Key Divestitures

Legacy Automotive

Market Diversification

Strategic Market Focus

Flow Market Development

Flow Spin-Off

‒ Sealed Power ‒ Best Power

+ General Signal + United Dominion

‒ EST‒ Kendro‒ Bomag

‒ Service Solutions‒ EGS JV Interest‒ Precision Components

+ APV+ Anhydro+ Gerstenberg + ClydeUnion

+ Johnson Pump

‒ Contech‒ LDS‒ Vance

TRANSFORMATION

TRANSFORMATION ROADMAPJourney to a High Performing Operating Enterprise

ENTERPRISE STRATEGY

Product Strategy

Organic Growth Investments

CREATE VALUE AS A HIGH PERFORMING OPERATING ENTERPRISE

Winning culture

Team focused

Customer centric

Proven system

Accountability

Sustainable, high performanceContinuous Improvement Focus

Operating Structure / Financial Stability

2015-2017: realignment program, transition to operating structure; debt refinancing and net debt reduction

4

General Industrial, 25%

Oil and Gas, 19%

Food and Beverage, 20%

Dairy, 16%

Compressed Air, 8%

Power Generation, 7%

Chemical Processing, 5%

$1,952m


5

Company Overview

2017 Revenue by End Market

FOOD & BEVERAGE

37%

INDUSTRIAL35%

POWER & ENERGY

28%

$1,952M

2017 Revenue by Segment

High quality products; Well-recognized, trusted brands

Deep application expertise in rotating, actuating and hydraulic equipment

Process expertise to optimize configuration in critical and high standard applications

Global manufacturing footprint

Large install base drives attractive aftermarket business

Strengths

Key Brands

Revenue Profile and Financial Performance Investor HandoutFirst Quarter 2018

38% 30%

23%

7%2%

$2,805 $2,770

$2,389

$1,996 $1,952~$2,050

2013 2014 2015 2016 2017 2018E

Revenue

11.8%

13.9%12.3%

10.0% 10.1%~12.1%

Segment Income

2017 Revenue by Geography Historical Financial Performance

7

Q1 Q2 Q3 Q4FY

2017Commentary

Order Growth (y-y) +2% +4% +12% +25% +10% Driven by all three segments

Backlog Growth (YTD) +16% +19% +23% +27% +27% Organic order growth and currency benefit

Adjusted Free Cash Flow $28m $51m $52m $92m $223m Project milestones and completions

Accounts receivable reduction

Proceeds from Asset sales $20m $11m $6m - $37m Sale of legacy assets and closed facilities

Net Debt(1) Reduction 5% 7% 7% 10% 29% $213m of gross debt reduction

Voluntary prepayment of $100m on term loan in Q4

Net Leverage(1) 3.9x 3.8x 3.4x 3.0x 3.0x Significantly improved financial position

Realignment Savings $17m $11m $14m $8m $50m Achieved full year savings target

2017 HIGHLIGHTS10% order growth, net leverage to 3.0x, achieved realignment savings

(1) Net debt and leverage calculations use debt and EBITDA as defined by the company’s credit facilities

Note: See appendix for reconciliation of non-GAAP measures



8

2017Achieved to Date

Program Target

Cost Savings(1) $50 $120 ~$140

Special Charges $16 $138 $138

Headcount Reduction 425 ~5%

1,700~20%

~20%

Footprint Optimization:

Opened 300k square foot manufacturing site in Bydgoszcz, Poland

8 plant consolidations:

• 6 in Europe

• 1 in North America

• 1 in Asia Pacific

1 shared service center consolidation

Opened 2 new service centers (Corpus Christi and Saudi Arabia)

Workforce Actions:

Streamlining functional support

Increasing capabilities in high-value countries

Strategic hires in key commercial and operational roles

($ millions)

(1) Net of merit increases

2015-2017 REALIGNMENT PROGRAMfinal actions substantially complete

Cost savings target of ~$140m:

$120m realized in 2017

$20m incremental savings to be annualized in 2018E

~66% structural / ~33% related to volume declines


9

Global Footprint

End of 2014

End of 2016

End of 2017

Employees ~8,400 ~7,100 ~7,000

Manufacturing Sites

38 34 31

Optimizing our global footprint to improve competitive advantage


10

Bydgoszcz, Poland Facility300k square foot state-of-the-art manufacturing facility

Net investment of $60m to $65m included in realignment program:

~$20m net capital investments [capex]

$40m to $45m of restructuring [special charges]

~$25m of tax incentives mostly recognized in 2016

Plant consolidations completed:

Kolding, Denmark: 84k square feet

Heat exchangers

Unna, Germany: 60k square feet

Valves and homogenizers

Orebro, Sweden: 130k square feet

Marine and Agricultural pumps

Other locations under review

Investor Handout

First Quarter 2018

11

Highest Quarterly

orders since xx

$453$535 $504 $484 $494

$28$72

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Orders > $15m

Run-Rate Orders

$453

$535$504 $512

$565

Y-Y Organic Change (8%) 4% 5% 10% 20%

Q4 Year-Over-Year Analysis

Q4 2017 orders up 25%, or $112m:

Organic increase of 20%, or $92m

Currency benefit was ~5%

Q4 Sequential Analysis

Q4 2017 orders up 10%, or $53m:

Currency benefit was < 1%

($ millions)

QUARTERLY ORDERSconsolidated

4 consecutive

quarters of

organic growth

Highest level of

orders since

Q1 2015

Investor Handout

First Quarter 2018

12

Highest Quarterly

orders since xx

$160 $184 $165 $161 $163

$28$72

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Orders > $15m

Run-Rate Orders

$160$184

$165$189

$235

Y-Y Organic Change (4%) (12%) (7%) 14% 24%


Q4 2017 orders up 47%, or $75m:




Q4 2017 orders up 25%, or $46m:


($ millions)

FOOD & BEVERAGEquarterly orders

Highest Quarterly

orders since xx8% Full Year

Organic

Growth

Investor Handout

First Quarter 2018

13

Highest Quarterly

orders since xx

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Orders > $15m

Run-Rate Orders

$122

$168

$145 $140$150


Q4 2017 orders up 23%, or $28m:




Q4 2017 orders up 7%, or $10m:

Currency impact was < 1%

($ millions)

POWER & ENERGYquarterly orders


Highest Quarterly


Organic

Growth

Investor Handout

First Quarter 2018

14

Highest Quarterly

orders since xx


Q4 2017 orders up 5%, or $9m:


Currency benefit was 3%


Q4 2017 orders down (2%), or ($4m):


($ millions)

INDUSTRIALquarterly orders

Highest Quarterly


Organic

Growth

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Orders > $15m

Run-Rate Orders

$171$183 $193 $184 $180


Investor Handout

First Quarter 2018

15

100 bps of margins

expansion year

over year

Q4 2017 Results & 2018 Guidance

February 6, 2018

BACKLOGhigher beginning backlog across all 3 segments

Highest Quarterly

orders since xx

Backlog

Increased

27%, or $214m

in 2017

$ Millions

Year-Over-Year Analysis

Backlog up 27%, or $214m:

Organic growth of 19%, or $150m

Currency benefit of 8%, or $64m

Sequential Analysis

Backlog up 4%, or $37m:

Organic growth of 3%, or $31m

Currency benefit of 1%, or $6m

$324 $411 $409

$296

$335 $372

$165

$215 $217

Q4 2016 Q3 2017 Q4 2017

Backlog Analysis

Industrial

Food & beverage

Power & Energy

$784

$961 $998

Investor Handout

First Quarter 2018

16

Highest Quarterly

orders since xx

2018 GUIDANCE OVERVIEWas compared to 2017 adjusted actuals

Highest Quarterly

orders since xx

Revenue +5%

EPS +88%

EBITDA +25%

2017 Adjusted Actuals

2018 Mid-point

Commentary

Revenue $1,952 $2,050 5% growth: 3% organic: 2% currency

Operating Income $138 $191 +$53 or 38% growth

Operating Income % 7.1% 9.3% 220 points of expansion

EPS $1.27 $2.39 88% increase

EBITDA $200 $250 25% increase, or $50

Free Cash Flow (1) $223 $115 ~110% conversion of 2018E net income

(1) 2018 guidance includes $13m cash payments related to company’s realignment program


($ millions; except per share data)

Food & Beverage

Investor Handout

First Quarter 2018

18

Highest Quarterly

orders since xx

Food & Beverage Overview

Highest Quarterly

orders since xx

Aftermarket32%

Original Equipment

68%

$716m

Food & Beverage57%

Dairy41%

Personal Care2%

$716m

Systems, 39%

Components, 29%

Aftermarket, 32%

$716m

28% 35%

30%

3%4%

2017 Revenue by OE / AM


2017 Revenue by Product

2017 Revenue by Geography


19

Food & Beverage OfferingsFull line of components, turn-key systems, and related aftermarket products

Pumps Valves Heat Exchangers

DispersionSeparation & Clarification Mixing

MECHANICAL COMPONENTS PROCESS TECHNOLOGY


20

Customers and ApplicationsGlobal customer base across a number of applications

Infant Formula

Milk & Whey Powders

Dairy Ingredients

Recombined Milk Products

Butter & Spreads

Yoghurt & Fermented Products

Fresh & UHT Milk

Pressed Cheese

Vegetable Fats

Margarines

Baby Food

Ingredients & Flavorings

Yeast extract

Condiments

Bakery & Confectionery

Proteins

Tea & Coffee Drinks

Instant Coffee

Nutritional & Soy Drinks

Soft Drinks

Fruit Juices

Flavored Water

Beer

Wine

Spirits

Silica & Industrial powders

Extraction, Recovery of Organic Substances

Cosmetics

Healthcare

Detergents

Solvent Recovery

Biofuel, Concentration of Glycerol, Methanol

DAIRY FOODS BEVERAGES PERSONAL CARE/OTHER

CUSTOMER EXAMPLES

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=DiC_urgTEs0aRM&tbnid=Z_o2Q-p2-9pBFM:&ved=0CAgQjRwwAA&url=http://cms.iuf.org/?q=node/780&ei=ovcQUZeAKJLkqAHT6oGYCQ&psig=AFQjCNGkr9MFBbN82RPR0Cf2sTXPRbfZhg&ust=1360152866689844

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=DiC_urgTEs0aRM&tbnid=Z_o2Q-p2-9pBFM:&ved=0CAgQjRwwAA&url=http://cms.iuf.org/?q=node/780&ei=ovcQUZeAKJLkqAHT6oGYCQ&psig=AFQjCNGkr9MFBbN82RPR0Cf2sTXPRbfZhg&ust=1360152866689844

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=lElgNvuMyznFyM&tbnid=ESGY8GbTQ0qtSM:&ved=0CAgQjRwwAA&url=http://www.cardofcom.net/1037-net/prmcontact/en-v-v-v.htm&ei=3_cQUdukPMyLqQG_lICoCg&psig=AFQjCNHwG6lb0Y_57zQJqhgZKJrK2wZWXA&ust=1360152928031031

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=lElgNvuMyznFyM&tbnid=ESGY8GbTQ0qtSM:&ved=0CAgQjRwwAA&url=http://www.cardofcom.net/1037-net/prmcontact/en-v-v-v.htm&ei=3_cQUdukPMyLqQG_lICoCg&psig=AFQjCNHwG6lb0Y_57zQJqhgZKJrK2wZWXA&ust=1360152928031031

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=xVK20e1rXjHB2M&tbnid=iTm6LPuqBljP5M:&ved=0CAgQjRwwAA&url=http://www.norskdesign.no/graphic-design/tine-visual-identity-article2355-423.html&ei=bvgQUbSBAcunqQGx_ICoDQ&psig=AFQjCNEFIr45QkiBEiu7nl00sh7SeV-uog&ust=1360153070048464

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=xVK20e1rXjHB2M&tbnid=iTm6LPuqBljP5M:&ved=0CAgQjRwwAA&url=http://www.norskdesign.no/graphic-design/tine-visual-identity-article2355-423.html&ei=bvgQUbSBAcunqQGx_ICoDQ&psig=AFQjCNEFIr45QkiBEiu7nl00sh7SeV-uog&ust=1360153070048464


21

Process TechnologiesSystem sales are structurally lower margin due to 3rd party content;However, growing installed base fosters component and aftermarket service business

3rd Party Pass-Through

Content45% to 65%

SPX FLOW Engineering20% to 30%

Mechanical Components15% to 25%

GENERAL COST BREAKDOWN INTEGRATED DAIRY EXAMPLE


22

Innovation Centers Comprehensive R&D facilities are critical to our success

Innovation =Insight + Execution

with the purpose of creating something new to provide value to customers and generate value for SPX FLOW

shareholders


23

Innovation Examples Innovation and product development have strengthened our offerings

New Dryer air distributer enhances plant performance and customer attraction in Dry Dairy & Food

Integrated (Wet&Dry) Dairy drives productivity, product safety and Components / Aftermarket content

SPX technology and filling partners for Yoghurt and UHT milk is a strong liquid dairy driver

Microparticulation of Whey helps our customers create low fat and healthy drinks and food products

Homogenizer pressure and capacity improvements to strengthen SPX’s competitive position

The Mixer portfolio strengthens our market position in Infant formula, Beverage and Food applications

Unique Thermal Infusion System increases quality in high growth Infant Formula and specialty drinks

Investor Handout

First Quarter 2018

24

Highest Quarterly

orders since xx

Aftermarket Opportunity

Highest Quarterly

orders since xx Gain self-sufficiency in routine maintenance areas Outsource for specialized tasks, when stretched too thin or when significant

modifications required

Reduce Downtime & Business Risk

Outsource Non-core Functions

Reduce Overhead & Working Capital

Account for Skilled Workforce Shortage

Where Do Our Customers Need Our Help?

Maintain 24/7 operating environment

While also ensuring equipment and process quality / integrity

Reduce internal costs in less frequently needed product and service areas

Improve utilization rates and productivity of existing assets and processes

Labor costs rising as the skilled labor pool remains limited

Leverage our

technology by

providing great

customer

service


25

First 10 Years of Typical F&B SystemAftermarket opportunity is ~20% - 30% of the System’s value

Investor Handout

First Quarter 2018

26

Highest Quarterly

orders since xx

New Product Launch

Highest Quarterly

orders since xx

Twin screw pump

Background:

• Food producers may use positive displacement pumps for product and centrifugal pumps for clean in place

• Twin screw can process product and CIP

• 2017 North American launch

Market:

• Anticipated high growth in overall twin screw market

• Competitive market environment

• SPX FLOW Advantages:

• Well recognized, strong brand name (WCB)

• Established distribution channel

• Only U.S. manufacturer of the twin screw pump

Industrial

Investor Handout

First Quarter 2018

28

Highest Quarterly

orders since xx

Industrial Overview

Highest Quarterly

orders since xx

Aftermarket33%

Original Equipment

67%

$692m

49% 24%

23%

4%<1%





General Industrial

50%

Air Treatment20%

Marine / Water11%

Chemical Processing

10%Mining

6%Transportation

3%

$692m

Mixers25%

Dehydration Products

22%Hydraulic

Tools18%

Pumps15%

Heat Exchangers

12%Other

8%

$692m


29

Industrial Products

DEHYDRATION / AIR TREATMENT MIXERS

HYDRAULIC TECHNOLOGIES PUMPS HEAT EXCHANGERS


30

Customer and Market Examples

Investor Handout

First Quarter 2018

31

Highest Quarterly

orders since xx

New Product Launch

Highest Quarterly

orders since xx

Industry leading energy savings

Simple, efficient design

Patent Pending 3-1 PCM Heat Exchanger

Low cost manufacturing in Busan, Korea

Korea launched phase 1 in 2016

US / EMEA launch 2017

FLEX Dryer

A better

product at a

better price to

capture the

energy

savings

market

Power & Energy

Investor Handout

First Quarter 2018

33

Highest Quarterly

orders since xx

Power & Energy Overview

Highest Quarterly

orders since xx

Aftermarket48%

Original Equipment

52%

$543m

41% 29%

12%

18%<1%





Midstream Oil, 28%

Upstream Oil, 17%

Downstream Oil, 14%Gas, 2%

Conventional Power, 5%

Nuclear, 13%

General Industrial, 20%

$543m

Pumps, 21%

Valves, 19%

Filters / Closures / Other, 12%

Aftermarket, 48%

$543m


34

Power & Energy Product OverviewA variety of high performance pump technologies


35

Power & Energy Products and End Users


36

Power & Energy Aftermarket~50% of 2017 Revenues

Apply global aftermarket growth plan across all relevant brands

Expand service center network to leverage existing footprint and increase presence in key markets

Portfolio-based target markets:

Pipeline

Offshore Platform

Middle East development

Develop master service agreements with customers

Expand aftermarket engineering competency as a value proposition for service agreements

Opened 2 new service centers in H1 2017 (U.S. & Iraq)

AFTERMARKET STRATEGY


37

Typical Power & Energy Pump LifecycleAftermarket opportunity is 2x to 5x the OE sale over 25 years

2018 Guidance and Financial Position

39

2018 SEGMENT TARGETS

Revenue Segment Income %

2017 2018 Growth Target (1) 20172018

Target RangeMargin

Expansion

Food & Beverage $716 low/mid-single digits 10.5% 11.2% to 12.2%+70 to +170

points

Power & Energy $543 low/mid-single digits 6.5% 8.7% to 9.7%+220 to +320

points

Industrial $692 mid/high-single digits 12.4% 14.4% to 15.4%+200 to +300

points

SPX FLOW $1,951total growth: 4% to 6%

organic growth: 2% to 4% 10.1% 11.6% to 12.6%

+150 to +250 points

(1) Currency is expected to be an ~2% benefit to revenue year-over-year for each segment and in total

$ millions

targeting revenue growth and margin expansion in each segment


Q1 2018 Guidance Ranges

Revenue $470 to $490

Segment Income $48 to $55

Operating Income $31 to $38

Earnings Per Share $0.30 to $0.42

EBITDA $46 to $53

40

Q1 2017 Adjusted Basis

Q1 2018 Mid-Point Guidance

Variance

Revenue $433 $480 +11%

Segment Income $35 $51 +46%

Corporate Expense ($16) ~($14) (10%)

Special Charges $0 ~($2)

Pension Expense ($0.4) ($0.4)

Operating Income $19 $35 +84%

Interest Expense ($16) ($14) (15%)

Other Income / Expense ($2) <($1)

Earnings Per Share ($0.01) $0.36 na

EBITDA $33 $50 +58%

($ millions, except earnings per share)

Q1 2018 FINANCIAL GUIDANCE

Key Q1 2018 Guidance Assumptions

Tax Rate 25% to 26%

Diluted Shares Outstanding 42.6m

Depreciation & Amortization ~$15

Capex ~$5



2018 Guidance Ranges

Revenue $2,025 to $2,075

Segment Income % 11.6% to 12.6%

Operating Income $181 to $201

Earnings Per Share $2.21 to $2.56

EBITDA $240 to $260

Free Cash Flow $105 to $125

41

2017 Adjusted Basis

2018 Mid-Point Guidance

Variance

Revenue $1,952 $2,050 +5%

Segment Income % 10.1% 12.1% +200 points

Corporate Expense ($57) ($51) (10%)

Special Charges $0 ($5)

Pension Expense ($2) ($2)

Operating Income $138 $191 +38%

Interest Expense ($63) ($51) (19%)

Other Income / Expense $1 ($1)

Net Income $54 $103 +91%

Earnings Per Share $1.27 $2.39 +88%

EBITDA $200 $250 +25%

2018 FINANCIAL GUIDANCE

Key 2018 Guidance Assumptions

Tax Rate 25% to 26%

Diluted Shares Outstanding 42.8m

Depreciation & Amortization ~$62

Capex ~$30


($ millions, except earnings per share)


42

CASH FLOWnotable items in 2017 and 2018E

2017 Adjusted Free Cash Flow $223m

Notable Items

+ Reduction of accounts receivable $49m

+ Down payments on large projects $20m

Incentive compensation $0m

‒ Capex ($19m)

‒ Restructuring cash payments ($37m)

2018 Free Cash Flow Guidance $115m

Notable Items

+ Reduction of working capital ~$10m

‒ Large project cash outflows ($21m)

‒ Incentive compensation ($32m)

‒ Capex ($30m)

‒ Restructuring cash payments ($15m)


43

Capital Structure 12/31/2016 12/31/2017

Short-term debt $28 $24

Current maturities of LT debt $20 $21

Long-term debt $1,061 $851

Gross debt $1,109 $896

Less: Cash on hand ($215) ($264)

Net debt $894 $632

Net leverage (1) 4.0x 3.0x

Gross leverage (1) 4.8x 4.0x

($ millions)

2017 adjusted free cash flow: $223m

2017 proceeds from sale of assets: $37m

Gross debt reduced by $213m in 2017:

→ In January 2018, we made an additional $30m voluntary prepayment on term loan A

Annual interest expense reduced by ~$12m, or $0.20 per share

Key Cash Investments/Uses 2017 FY 2018E

Realignment program $37m $10m to $15m

Capital Expenditures $19m ~$30m

Gross Debt Reduction $213m TBD

(1)Leverage calculation uses debt and EBITDA as defined by the company’s credit facilities

FINANCIAL POSITIONnet leverage at 3.0x at the end of 2017


Investor Handout

First Quarter 2018

44

100 bps of margins

expansion year

over year

($ millions)

DEBT AND MATURITY SCHEDULEstaggered capital structure

Highest Quarterly

orders since xxNo significant

maturities until

2020

Senior credit facilities:

$240 Term Loan A

$450 Revolver

$500 non-cash performance bond

Maturity in Q3 2020

$300m bonds at 5.625%:

Maturity in 2024

$300m bonds at 5.875%:

Maturity in 2026

Securitization facility: ~$35m

$0

$50

$100

$150

$200

$250

$300

$350

2018 2019 2020 2021 2022 2023 2024 2025 2026

$20 $20

$200

$300 $300

Term Loan A @ ~4% 5.625% Senior Notes 5.875% Senior Notes

$30m prepayment in January

2018

$230

Q4 2017 Results & 2018 Guidance February 6, 2018

45

Certain statements contained in this presentation that are not historical facts, including any statements as to future marketconditions, results of operations and financial projections, are forward-looking statements and are thus prospective. These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future express or implied results.

Although SPX FLOW believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. In addition, estimates of future operating results are based on the company’s continuing operations, which are subject to change.

Particular risks facing SPX FLOW include risks relating to economic, business and other risks stemming from changes in the economy, our international operations, legal and regulatory risks, cost of raw materials, pricing pressures, and integration of acquisitions. More information regarding such risks can be found in SPX FLOW’s SEC filings.

Statements in this presentation are only as February 6, 2018, and SPX FLOW does not intend to update any statements made in this presentation except as required by regulatory authorities.

This presentation includes non-GAAP financial measures. A copy of this presentation, including a reconciliation of the non-GAAP financial measures with the most comparable measures calculated and presented in accordance with GAAP, is available on our website at www.SPXFLOW.com.

Appendix

Investor Handout

First Quarter 2018

47

100 bps of margins

expansion year

over year

Q4 2017 Results & 2018 Guidance

February 6, 2018

U.S. TAX CUTS AND JOBS ACTimpact of U.S. tax reform

Highest Quarterly

orders since xx

($21m) net tax

benefit recorded

in Q4 2017

~$20m in cash

taxes to be paid

over 8 years

Q4 2017 Income Statement

Cash Tax Impact

Deemed Repatriation Tax $50 ~$20

Previously Accrued Repatriation Tax at higher rates

($53) -

Deferred Tax Liabilities ($18) -

Net Tax (Benefit) / Impact ($21) ~$20

($ millions)

Investor Handout

First Quarter 2018

48

Highest Quarterly

orders since xx

Organic Revenue Reconciliation

Highest Quarterly

orders since xx

Total Revenue Foreign Organic Revenue

Change Currency Change

Food & Beverage 8.0 % 4.7 % 3.3 %

Power & Energy 16.5 % 5.6 % 10.9 %

Industrial (1.2) % 3.9 % (5.1) %

SPX FLOW 6.8 % 4.6 % 2.2 %

Total Revenue Foreign Organic Revenue

Change Currency Change

Food & Beverage (1.7) % 1.1 % (2.8) %

Power & Energy (3.5) % 0.0 % (3.5) %

Industrial (1.8) % 1.0 % (2.8) %

SPX FLOW (2.2) % 0.7 % (3.0) %

Three months ended December 31, 2017

Twelve months ended December 31, 2017

Investor Handout

First Quarter 2018

49

Highest Quarterly

orders since xx

Consolidated LTM Bank EBITDA

Highest Quarterly

orders since xx

LTM

Net Income 46$

Income tax provision 11$

Interest Expense, net 63$

Income before interest and taxes 120$

Depreciation and amortization expense, including intangibles 61$

Basic EBITDA 181$

Adjustments:

Non-cash compensation expense 22$

(Gains)/Loses on dispositions of assets (3)$

Pension adjustments (4)$

Extradiordinary non - cash charges 4$

Extradiordinary non - recurring cash charges 15$

Interest income 5$

Other 1$

Bank Consolidation EBITDA 220$

($ millions)

Note: EBITDA as defined by the company’s credit facilities

Investor Handout

First Quarter 2018

50

Highest Quarterly

orders since xx

Adjusted Debt Reconciliation

Highest Quarterly

orders since xx

($ millions)

12/31/2017

Short-term debt 24

Current maturities of long-term debt 21

Long-term debt 851

Gross Debt 896

less: Purchase card program and extended A/P programs (22)

Adjusted Gross Debt 874

Less: Cash in excess of $50 214

Adjusted Net Debt 660

Note: Adjusted debt as defined by the company’s credit facilities

Investor Handout

First Quarter 2018

51

Highest Quarterly

orders since xx

2017 Free Cash Flow Reconciliation

Highest Quarterly

orders since xx

($ millions)

Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017

Net cash from operations $23 $49 $45 $88 $205

Capital expenditures ($5) ($7) ($2) ($6) ($19)

Free Cash Flow $18 $42 $43 $82 $186

Adjustments

Realignment cash outflows $9 $9 $9.3 $9 $37

Adjusted Free Cash Flow $28 $51 $52 $92 $223

Investor Handout

First Quarter 2018

52

Highest Quarterly

orders since xx

2018 Free Cash Flow Reconciliation

Highest Quarterly

orders since xx

($ millions

Net cash from operations* $135 $155

Capital expenditures ($30) ($30)

Free Cash Flow $105 to $125

Shares Outstanding 42.8 42.8

Free Cash Flow Per Share $2.45 $2.92

2018 Guidance

* Includes $15m of cash payments related to company’s realignment program..

Investor Handout

First Quarter 2018

53

Highest Quarterly

orders since xx

Full Year 2018 Guidance Mid-Point Model

Highest Quarterly

orders since xx

($ millions, except per share data)

2017 2018E

Revenue $1,952 $2,050

Segment income % 10.1% 12.1%

Corporate expense ($57) ($51)

Pension and post retirement expense ($2) ($2)

Special charges ($19) ($5)

Operating Income $119 $191

Operating Income % 6.1% 9.3%

Interest expense, net ($63) ($51)

Other income or (expense) $1 ($1)

Income before taxes $58 $139

Income tax provision ($11) ($35)

Income from continuing operations $47 $103

Minority interest, net of taxes ($1) ($1)

Net income from continuing operations $46 $102

Mid-Point EPS Guidance $1.10 $2.39

Shares Outstanding 42.2 42.8

54

Full Year 2018 GuidanceQuarterly Phasing

22%

26% 25%27%

23%25% 25%

26%

0%

5%

10%

15%

20%

25%

30%

Q1 Q2 Q3 Q4

Revenue Phasing

2017 2018E

14%

26%

29%

32%

18%

23%

28%

31%

0%

5%

10%

15%

20%

25%

30%

35%

Q1 Q2 Q3 Q4

Operating Income Phasing

2017 2018E


Investor Handout

First Quarter 2018

55

Highest Quarterly

orders since xx

2018 Mid-Point EBITDA Reconciliation

Highest Quarterly

orders since xx

($ millions) 2018E

Net Income $102

Income Tax Expense $35

Interest Expense $51

Depreciation & Amortization $62

Basic EBITDA $250

Non-cash Compensation Expense $18

Non-service Pension Costs $1

Interest Income $5

Special Charges $5

Other $0

Bank Consolidated EBITDA $279

56

2013 to 2018E Revenue and Segment Income

2013 2014 2015 2016 2017 2018 Guidance*

Food & Beverage

Revenue $962 $965 $870 $728 $716 +Low/mid single digits

Segment Income $83 $95 $104 $75 $75

Segment Income % 8.6% 9.9% 12.0% 10.3% 10.5% 11.2% to 12.2%

Power & Energy

Revenue $1,000 $969 $750 $563 $543 +Low/mid single digits

Segment Income $120 $159 $84 $25 $36


Industrial

Revenue $844 $836 $768 $705 $692 +mid/high single digits

Segment Income $129 $131 $105 $99 $86


SPX FLOW Consolidated

Revenue $2,805 $2,770 $2,389 $1,996 $1,952 4% to 6%

Segment Income $331 $386 $293 $199 $196


FX Translation y/y n/m n/m ($211) ($52) $15 ~$36*

* @ 12/31/17 FX Rates


investor handout · 2021. 1. 26. · investor handout first quarter 2018 8 2017 achieved to date...

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