Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Shareholder Meeting (May 2017)
28 slides from Franklin Electric's shareholder meeting presentation, May 5, 2017
Slide 1: Shareholders Presentation May 2017
Shareholders Presentation May 2017
Slide 2: Safe Harbor Statement
2 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, inven
Slide 3: Earnings Per Share
Earnings Per Share $1.73 $1.68 $1.41 $1.50 $1.65 $0.00 $0.50 $1.00 $1.50 $2.00 2012 2013 2014 2015 2016 REASONS FOR DECLINE: • Strong $ • Decline in oil price • Distribution reset • Weather 3 GAAP fully diluted
Slide 4: First Quarter 2017 Results
First Quarter 2017 Results Amounts in millions except share data 1Q 2017 1Q 2016 % +(-) Prior Year Sales $220.3 $218.4 1% Operating Income $18.5 $21.1 (12%) EPS $0.33 $0.28 18% 4
Slide 5: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) 21.5% 19.9% 14.5% 12.6% 15.7% 0% 25% 2012 2013 2014 2015 2016 5 ROIC = Operating Income Divided by Average Year-end Net Debt Plus Equity
Slide 6: Cash Flow
Cash Flow $82.9 $82.0 $69.8 $72.9 $78.7 $33.2 $30.9 $13.4 $73.6 $82.3 $0 $25 $50 $75 $100 2012 2013 2014 2015 2016 Net Income Free Cash Flow 6 Free Cash Flow = Operating Cash Flow minus Net Capital Expenditures
Slide 7: Consecutive Annual Dividend Payment Increases
23 Consecutive Annual Dividend Payment Increases 7 $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 24
Slide 8: New Distribution Segment
NEW DISTRIBUTION SEGMENT 8 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FUEL IN G 2015 2017 2016 W A TE R Acquisitions 2004
Slide 9: Leverage (Net Debt/EBITDA)
Leverage (Net Debt/EBITDA) 9 0.59 0.73 0.87 1.18 0.78 1.42 0 1 2 3 4 5 2012 2013 2014 2015 2016 2017 Q2 Forecast EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization Borrowing Limit = 3.5 Additional Borrowing Capacity $300 Million+ Includes Headwater Acquisitions
Slide 10: Strategic Focus
Strategic Focus 10 Residential, Agricultural, Commercial Water Systems $6.0 B Global Market Potential(1) Complete Fueling Systems $1.2 B Global Market Potential(1) (1) Current Franklin management estimates Strong Brand Franchise #1 or #2 in Addressable Markets Growing Global Footprint Fragmented Cus
Slide 11: Strategic Focus
11 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.
Slide 12: Geographic Expansion
Geographic Expansion 12
Slide 13: Global Footprint
13 Global Footprint Locations with 50+ employees New sites, Last 5 years
Slide 14: Geographic Expansion: 2016 Sales by Region
14 US/CANADA Sales $495 LATIN AMERICA Sales $138 EMENA Sales $150 INDIA Sales $22 ASIA/PACIFIC Sales $112 SOUTHERN AFRICA Sales $33 Geographic Expansion 2016 Sales in millions
Slide 15: Sales in Developing Regions
Sales in Developing Regions $92 $149 $218 $202 $242 $288 $316 $336 $372 $363 $366 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ($ in milli o n s) 15 Actual
Slide 16: Sales in Developing Regions (Constant Currency)
Sales in Developing Regions $92 $149 $226 $218 $246 $286 $335 $356 $413 $459 $481 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ($ in milli o n s) 16 Constant Currency
Slide 17: Product Line Extensions
Product Line Extensions 17
Slide 18: Acquired brands and product lines
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Slide 19: Water System Design
Water System Design 19 ELECTRONICS DEVELOPMENT PUMPS DEVELOPMENT MOTORS DEVELOPMENT
Slide 20: Drives & Controls
Drives & Controls 20 Residential Applications Municipal/Agricultural Applications Benefits to user: • Constant pressure • Better system protection Benefits to user: • Better system protection • Greater efficiency • Lower total cost of ownership $200 $100 $500 $2,200 $1,600 $4,200
Slide 21: Drives & Controls
Drives & Controls 21 Residential Applications Municipal/Agricultural Applications Benefits to user: • Constant pressure • Better system protection Benefits to user: • Better system protection • Greater efficiency • Lower total cost of ownership $200 $100 $500 $2,200 $1,600 $4,200 ▶ Leverage our appl
Slide 22: Fueling System Design
22 Fueling System Design FUEL MANAGEMENT SYSTEMS DISPENSING SYSTEMS PIPE & CONTAINMENT SUBMERSIBLE PUMPING SYSTEMS SERVICE STATION HARDWARE
Slide 23: Annual Organic Growth Summary 2012 to 1Q 2017
(a) Sales growth excluding the impact of acquisitions for the first twelve months of ownership and the impact of Foreign Exchange. 4.9% 6.8% 7.8% -7.2% 5.1% -1.4% 7.1% 5.9% 11.7% 2.1% 5.2% 8.7% 5.4% 6.6% 8.6% -5.2% 5.1% 0.9% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% Water Fueling Consolidated Annual Organi
Slide 24: Headwater Companies
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Slide 25: Why Headwater?
Why Headwater? Headwater is a direct result of a shared vision to safeguard the long-term success of groundwater distribution channels. Functioning as a holding company and investment vehicle, The Headwater Companies will support the continued growth and success of the entire groundwater industry. 2
Slide 26: Headwater Companies and strategy
2M Company, Inc. Drillers Service, Inc. 2MDSI/Headwater Wholesale Western Hydro • Extend our position in groundwater • Move closer to contractor • Opportunities to move into adjacencies: – Filtration – Treatment – Irrigation – Commercial 26
Slide 27: Shareholders Presentation May 2017
Shareholders Presentation May 2017
Slide 28: 2016 Efforts: Solar pumping community installations
2016 Efforts: – 5 installations spanning 5 different countries – Impacting nearly 18,000 people – Leveraged our solar pumping technology – Communities are already experiencing increased school enrollment – Also offered civil work, post-installation service, and assistance with feeding programs 28