Franklin Electric Co., Inc. · NASDAQ:FELE
Franklin Electric — Q3 2022 Earnings Presentation
18 slides from Franklin Electric's earnings presentation, October 2022
Slide 1: Investor Presentation 4Q-2022
Investor Presentation 4Q-2022 Gregg Sengstack, Chairperson and CEO Jeff Taylor, VP – Chief Financial Officer October 2022
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: Strategic Focus
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. 3
Slide 4: Investment Highlights
Investment Highlights 1 Leading market position in groundwater pumping systems Track record of consistent organic growth across segments Advantageous global footprint to extend leadership and capture revenue in developing markets Proven cash flow generation with FCF growth CAGR of 32% since 2017 (5
Slide 5: Franklin Electric Segment Overview (Revenue FY 2021)
Franklin Electric Segment Overview (Revenue FY 2021) WATER SYSTEMS DISTRIBUTION FUELING SYSTEMS $963.6M (55%) $497.6M (28%) $289.1M (17%) 7% 55% 8% 11% 19% 5
Slide 6: Performance by Segment
Performance by Segment1 WATER SYSTEMS DISTRIBUTION FUELING SYSTEMS NET SALES GROWTH NET SALES GROWTH NET SALES GROWTH Q3 2022 YoY Q3 2022 YoY Q3 2022 YoY $293.1M up 12% $193.2 up 38% $90.2M up 11% (19% organic growth) (22% organic growth) (13% organic growth) YTD9 2022 YoY YTD9 2022 YoY YTD9 2022 Yo
Slide 7: Global Presence & Opportunity
Global Presence & Opportunity On a daily basis, the world uses… ~3 Trillion gallons of fresh water ~1 Billion gallons of fuel To meet this demand, Franklin Electric produces 20,000 pumps, motors, drives, and controls daily 6,200+ employees Global footprint 20+ countries 6 continents Franklin Electri
Slide 8: Water Systems
Water Systems WATER SYSTEMS Water treatment brands acquired Residential, agricultural, municipal and industrial applications Water Treatment • High fragmentation of water treatment providers in North America driving organic and inorganic growth Headwater Distribution • Five acquisitions since 3Q’201
Slide 9: Fueling Systems
Fueling Systems FUELING SYSTEMS Advantageous Position in Transitioning Market Leader in fuel pumping, containment, and monitoring and control systems Fuel Systems • Advances in petroleum piping and containment systems, electronic leak detection and overfill protection enable providers to safely keep
Slide 10: Corporate Stewardship
Corporate Stewardship Our Vision Our Goal To be an indispensable partner to our customers To accomplish these objectives in ways that deliver value to our customers and shareholders Commitment to Safety Operational Integrity Promote a culture of continuous health and safety training Ensuring proper
Slide 11: Strategic Priorities
Strategic Priorities • Customer-focused innovation Continue to drive organic • Enhance position in industrial channel • 10 year Developing Region Growth CAGR of 8% growth • Drive synergies through the entire U.S. Groundwater Pro channel Maintain competitive • Extend leadership position via quality,
Slide 12: Capital Allocation Performance & Priorities
Capital Allocation Performance & Priorities Priorities for Cash Deployment Share Opportunistic approach to acquisitions Repurchases 14% CAPEX 1 with >$700M in deal capacity (a) 27% Reinvestment in business to drive Dividends 17% 2007 – 2021 2 organic growth FCF Deployment 3 Dividends paid CAGR of 8%
Slide 13: Acquisitions are a critical engine for growth
Acquisitions are a critical engine for growth Key Priorities Outcomes More FELE-branded products in Product Line Extensions distribution Geographic Expansion New platforms and bolt-ons to extend reach Criteria Demonstrated ability to grow and drive incremental operating margins Focus on risk adj
Slide 14: Financial Performance Summary
Financial Performance Summary 14
Slide 15: Financial Performance Summary
Financial Performance Summary Consolidated Sales $1,125 $1,298 $1,315 $1,247 $1,662 10% 32% NET REVENUE FREE CASH FLOW1 CAGR CAGR FY2017-2021 FY2017-2021 2017 2018 2019 2020 2021 EPS (Before Restructuring) 14% $3.26 13.8% EPS $2.26 $2.07 $2.18 ROIC2 (BEFORE RESTRUCT.) $1.92 2021 CAGR FY2017-2021 201
Slide 16: Cash Generation & Returns
Cash Generation & Returns Net Income ($M) Free Cash Flow ($M)1 $155 $189 $156 $106 $101 $107 $95 $101 $78 $34 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Free Cash Flow Conversion ROIC2 187% 13.8% 163% 12.2% 12.0% 12.6% 9.3% 101% 65% 43% 2017 2018 2019 2020 2021 3 2017 2018 2019 2020 2021 1 FC
Slide 17: Organic Sales Growth
Organic Sales Growth 1 Water Fueling Distribution 40.0% 35.4% 30.0% 23.9% 21.8% 20.3% 20.0% 18.6% 17.1% 15.0% 12.5% 10.0% 8.1% 3.1% 3.5% 0.1% 0.0% -0.1% -2.5% -10.0% -20.0% -16.7% 2018 2019 2020 2021 YTD 2022 1 Distribution first measured in 2018. Excludes acquisitions for one year and impact of For
Slide 18: For More Information
For More Information: Jeff Taylor, VP – CFO, Franklin Electric Co. Inc. [email protected]. 260-827-5520 18