Post on 19-Jan-2015
description
Ross Skelton: VP Global Sales and Marketing, SPX Flow Technology
September 25, 2008
SPX Flow Technology:
Global Food, Beverage & Dairy Equipment Market
PAGE 2
Forward-Looking Statements
Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, 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 results expressed or implied by such forward-looking statements.
Particular risks facing SPX include economic, business and other risks stemming from our international operations, legal and regulatory risks, cost of raw materials, pricing pressures, pension funding requirements, integration of acquisitions and changes in the economy. More information regarding such risks can be found in SPX’s SEC filings.
Although SPX 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.
Statements in this presentation are only as of the time made, and SPX does not intend to update any statements made in this presentation except as required by regulatory authorities.
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SPX is Focused on Three Global End Markets
SPX Well Positioned in Global Infrastructure, Process Equipment and Tools & Diagnostics Markets
Global
Infra
struc
ture Process Equipment
Tools & Diagnostics
PAGE 4
SPX Flow Technology Overview
Flow Technology is SPX’s Largest Segment and Provides Engineered Process Solutions Globally
35% 28%
19%18%
2007 Pro Forma Revenue by Segment
Note: Data from continuing operations, 2008E as of 7/30/2008
Industrial Products &
Services
Test & Measurement
Flow Technology
Thermal Equipment &
Services
35% 27%
21%17%
2007 Pro Forma Revenue: $2b
Strong brands with market leading positions
Global sales infrastructure and distribution
Engineered products and turnkey solutions
Operational expertise
Key Flow TechnologyCharacteristics
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SPX Flow Technology Integration History
Product Line Integration has Broadened Customer Offerings
2002
2003
2004
2005/2006
2007
2008Sanitary Pumps
Metering Pumps & Mixers
Industrial Valves
Dryers & Filters
Johnson Pump
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SPX Flow Technology Key Brands
Strong, Global Brand Equity in Niche End Markets
Food, Beverage, Dairy,Pharma & Personal Care Power, Oil & Gas
General Industrial Air Dehydration & Filtration
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SPX Flow Technology Revenue Breakdown
ROW8%
North America
33%
Asia-Pacific21%
Europe38%
Balanced Global Presence;41% of Revenue Supports the Global Sanitary Market
Note: Data from continuing operations, 2007 pro forma for APV acquisition
2007 Pro Forma $2b Flow Revenue by Geography
2007 Pro Forma $2bFlow Revenue by End Market
Chemical10%
Compressed Air5%
Sanitary41% Power &
Energy25%
General Industrial
19%
Includes Food, Beverage, Dairy, Pharmaceutical and Personal Care Markets
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Global Sanitary Market
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Key Sanitary Market Drivers
Food
Beverage
Dairy
Brewing
Pharmaceutical
Personal Care
SPX Has Technologies that Serve the Food, Beverage, Dairy, Pharmaceutical and Personal Care Manufacturers
Increases in hygienic standards and regulatory controls
Economic expansion in developing regions
Process and business optimization
Energy efficiency and waste reduction
Production of value added or higher quality produce
Demand for new plants
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Food Processing Market Characteristics
$38.6
$40.7
$43.0
$45.4
2008E 2009E 2010E 2011E
Food Processing Machinery and Equipment Global Forecast
($ billions)
Source: Food Processing Machinery & Equipment
Global Food Processing Market Projected to Grow Significantly From 2008E to 2011E
Regulated market
Stable
Consistent growth
Developing market opportunities
Attractive End MarketCharacteristics
6% CAGR
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Developing Economies A Key Growth Driver
Investment in Food Processing Machinery Expected to be Higher in Developing Countries
2001 to 2010E Investmentfor Food Processing Machinery and
Equipment by Region
Source: Food Processing Machinery and Equipment Report, Global Industry Analysts
’01 – ’06CAGR
5.8%
3.3%
0.1%
4.0%
Region
Asia-Pac
Europe
US
Latin America
’07 – ’10ECAGR7.1%
3.3%
3.6%
5.6%
EMEA30%
Asia-Pacific35%
North America18% Latin America
10%ROW7%
2007 Global FPME Spend by Region
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APV Acquisition
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APV Overview
The Acquisition of APV Increased SPX’s Sanitary Revenue Base to More Than $1B
2007 APV Revenue by End Market
Sanitary (Dairy, Food,
Beverage)73%
General Industrial
16%
Power and Energy11%
2007 revenue: $876m
Acquired on December 31, 2007
APV is a global manufacturer of process equipment and engineered solutions
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APV Strategic Rationale
The APV Acquisition Significantly Increased SPX’s Presence in the Global Sanitary Market
Expanded global presence and added critical mass
Increased exposure to attractive sanitary market
Highly complementary products
Strong, global APV brand name
Expanded presence in low cost countries (China / Eastern Europe)
Expect significant revenue and cost synergies
EMEA56%
Asia-Pacific24%
Americas20%
2007 APV Revenue by Geography
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Complimentary Areas of Excellence
Leverage “Best Practices” Within Each Organization
Lean manufacturing
Engineered components competency
North American distribution efficiencies
Operational expertise
Strong brands with market leading positions
Research and development
Engineering solutions
Complete system solutions
Global sales infrastructure and distribution
Global market reputation / brand equity
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SPX Flow Technology Global Presence Before APV
Global Expansion of Manufacturing, Sales and Distribution Presence Underway Prior to APV Acquisition…
Strong Presence
Growing Presence
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Strong Presence
Growing Presence
Key APV Additions
APV Increased SPX’s Flow Technology Presence in Key Developing Economies
…Addition of APV’s Global Platform is Expected to Accelerate SPX Flow Technology’s Global Expansion
APV has increased SPX’s presence in developing growth markets:
– China
– Eastern Europe
– South America
– Middle East
– Russia
– South Africa
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Middle East Example
– Previous SPX Flow Technology presence:
– 1 sales office in Dubai
– 4 sales professionals
APV additions:– Permanent offices in Riyadh, Dubai
– Work camps in Al Kharj, Haradh and Jeddah, Saudi Arabia
– 1 financial entity in Dubai serving 18 countries
– ~100 professionals of 14 different nationalities
– Sales, service, engineering, fabrication, automation, skidded systems assembly
APV’s Presence in the Middle East Provides an Opportunity to Transition from an Import Model to an In-Country Model
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SPX Sanitary Business
PAGE 20
Typical SPX Sanitary Customers
Power
SPX Serves a Global Customer Base IncludingMany of the Leading Food and Beverage Manufacturers
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SPX Flow Technology Sanitary Offerings
SPX Offers Customers Engineered Components, Skidded Systems and Turnkey Systems
2007 Pro FormaRevenue by Type
Note: Data from continuing operations, pro forma for APV acquisition
Engineered Components
70%
Process Systems
30%
~70% engineered components for niche end markets:
– Built to order
~30% turnkey and skidded process systems:
– Engineered, designed and installed
Market channels:– Sales reps
– Direct
– Distributers
– OEM’s
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Flow Technology Sanitary Components
Custom Engineered Product Offerings
Positive Displacement Pumps Centrifugal Pumps Homogenizers
Pump viscous products such as tomato paste, peanut butter
Pump thin fluids for beverage or clean in place systems
Emulsify liquids, uniformly disperse solid particles throughout a liquid and high pressure pumping applications
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Flow Technology Sanitary Products
MixersValves
Process Regulating Butterfly
Heat Exchangers
Temperature control for mechanically separated meats, margarines, icings, fondants
Process flow diversion and shut off
Dispersion and solid suspension
Custom Engineered Product Offerings
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Typical Beverage Process Flow Diagram
Mixers
Pumps
Valves
SPX Manufactures Engineered Components That Can be Used Throughout a Typical Beverage Process
PAGE 25
Typical Dairy Process Flow Diagram
Mixers
Pumps
Heat Exchangers
Valves
Homogenizer
SPX Manufactures Engineered Components That Can be Used Throughout a Typical Dairy Process
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SPX Flow Technology Sanitary Systems
Skidded and Turnkey Systems Range from $1m to $30m and Provide Significant Aftermarket Opportunities
2007 System Revenue by Application
Note: Data from continuing operations, pro forma for APV acquisition
Other Dairy17%
Other2%
Milk17%
Foods17%
Beverage18%
Yogurt12%
Butter3%
Cheese14%
Offerings include both turnkey and skidded systems
~30% of 2007 sanitary revenue from systems;
65% of systems were for dairy applications
~20% of systems revenue generated in developing countries
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Core Technologies
Cheese & Butter Processes Utlra High Temperature Processes
Ultrafiltration & Microfiltration Mixing & Blending
Strong Experience With Proven Core Technologies
PAGE 28
System Examples
Dairy Markets in Developing Countries have been a Growth Driver
Ultra High Temperature Infusion: China
Ultrafiltration Unit: Ukraine
Engineered for the concentration of whole milk to be used in the production of feta cheese
Engineered for the sterilization of drinking milk, milk shakes, chocolate milk, cream and ice cream
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New Innovations
LeanCreame FlexMix Processing
Technology Without Whey Separation White Water Recovery
Continue to Focus on System Innovation;New Technologies Designed to Add Value for our Customers
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Summary
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Summary
The global food, beverage and dairy market is a steady, single digit growth market with higher growth rates expected in developing countries:
– Attractive growth market for SPX
The APV acquisition has increased SPX’s sanitary market presence and accelerated globalization:
– ~$1b global sanitary business
SPX Flow Technology offers a global customer base engineered components, skidded systems and turnkey solutions
SPX Flow Technology is Well Positioned to Serve the Global Food, Beverage and Dairy Markets
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