SPX Flow Technology: Global Food, Beverage & Dairy Equipment Market. Ross Skelton: VP Global Sales and Marketing, SPX Flow Technology

Transcription

1 SPX Flow Technology: Global Food, Beverage & Dairy Equipment Market Ross Skelton: VP Global Sales and Marketing, SPX Flow Technology September 25, 2008

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 forwardlooking 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. PAGE 2

3 SPX is Focused on Three Global End Markets Global Infrastructure Process Equipment Tools & Diagnostics PAGE 3 SPX Well Positioned in Global Infrastructure, Process Equipment and Tools & Diagnostics Markets

4 SPX Flow Technology Overview 2007 Pro Forma Revenue by Segment Flow Technology 35% 28% 35% 27% 18% 17% Thermal Equipment & Services 19% 21% Key Flow Technology Characteristics 2007 Pro Forma Revenue: $2b Strong brands with market leading positions Global sales infrastructure and distribution Engineered products and turnkey solutions Industrial Products & Services Test & Measurement Operational expertise Note: Data from continuing operations, 2008E as of 7/30/2008 PAGE 4 Flow Technology is SPX s Largest Segment and Provides Engineered Process Solutions Globally

5 SPX Flow Technology Integration History Industrial Valves Johnson Pump Sanitary Pumps /2006 Dryers & Filters Metering Pumps & Mixers PAGE 5 Product Line Integration has Broadened Customer Offerings

6 SPX Flow Technology Key Brands Food, Beverage, Dairy, Pharma & Personal Care Power, Oil & Gas General Industrial Air Dehydration & Filtration PAGE 6 Strong, Global Brand Equity in Niche End Markets

7 SPX Flow Technology Revenue Breakdown 2007 Pro Forma $2b Flow Revenue by End Market 2007 Pro Forma $2b Flow Revenue by Geography Includes Food, Beverage, Dairy, Pharmaceutical and Personal Care Markets Sanitary 41% Power & Energy 25% North America 33% Europe 38% Compressed Air 5% Chemical 10% General Industrial 19% ROW 8% Asia-Pacific 21% Note: Data from continuing operations, 2007 pro forma for APV acquisition PAGE 7 Balanced Global Presence; 41% of Revenue Supports the Global Sanitary Market

8 PAGE 8 Global Sanitary Market

9 Dairy Food Key Sanitary Market Drivers Increases in hygienic standards and regulatory controls Beverage Pharmaceutical Economic expansion in developing regions Process and business optimization Brewing Personal Care Energy efficiency and waste reduction Production of value added or higher quality produce Demand for new plants PAGE 9 SPX Has Technologies that Serve the Food, Beverage, Dairy, Pharmaceutical and Personal Care Manufacturers

10 Food Processing Market Characteristics Food Processing Machinery and Equipment Global Forecast Attractive End Market Characteristics ($ billions) 6% CAGR $43.0 $45.4 Regulated market $38.6 $40.7 Stable Consistent growth Developing market opportunities 2008E 2009E 2010E 2011E Source: Food Processing Machinery & Equipment PAGE 10 Global Food Processing Market Projected to Grow Significantly From 2008E to 2011E

11 Developing Economies A Key Growth Driver 2001 to 2010E Investment for Food Processing Machinery and Equipment by Region 2007 Global FPME Spend by Region CAGR 07 10E CAGR Region EMEA 30% 5.8% 7.1% Asia-Pac Asia-Pacific 35% 3.3% 3.3% Europe 0.1% 3.6% US 4.0% 5.6% Latin America North America 18% Latin America ROW 10% 7% Source: Food Processing Machinery and Equipment Report, Global Industry Analysts PAGE 11 Investment in Food Processing Machinery Expected to be Higher in Developing Countries

12 PAGE 12 APV Acquisition

13 APV Overview Power and Energy 11% General Industrial 16% 2007 APV Revenue by End Market Sanitary (Dairy, Food, Beverage) 73% 2007 revenue: $876m Acquired on December 31, 2007 APV is a global manufacturer of process equipment and engineered solutions PAGE 13 The Acquisition of APV Increased SPX s Sanitary Revenue Base to More Than $1B

14 APV Strategic Rationale Expanded global presence and added critical mass 2007 APV Revenue by Geography Increased exposure to attractive sanitary market Highly complementary products Strong, global APV brand name EMEA 56% Americas 20% Expanded presence in low cost countries (China / Eastern Europe) Asia-Pacific 24% Expect significant revenue and cost synergies PAGE 14 The APV Acquisition Significantly Increased SPX s Presence in the Global Sanitary Market

15 Complimentary Areas of Excellence 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 PAGE 15 Leverage Best Practices Within Each Organization

16 SPX Flow Technology Global Presence Before APV Strong Presence Growing Presence PAGE 16 Global Expansion of Manufacturing, Sales and Distribution Presence Underway Prior to APV Acquisition

17 APV Increased SPX s Flow Technology Presence in Key Developing Economies Strong Presence Growing Presence Key APV Additions APV has increased SPX s presence in developing growth markets: China Eastern Europe South America Middle East Russia South Africa PAGE 17 Addition of APV s Global Platform is Expected to Accelerate SPX Flow Technology s Global Expansion

18 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 PAGE 18 APV s Presence in the Middle East Provides an Opportunity to Transition from an Import Model to an In-Country Model

19 PAGE 19 SPX Sanitary Business

20 Typical SPX Sanitary Customers Power PAGE 20 SPX Serves a Global Customer Base Including Many of the Leading Food and Beverage Manufacturers

21 SPX Flow Technology Sanitary Offerings 2007 Pro Forma Revenue by Type Engineered Components 70% ~70% engineered components for niche end markets: Built to order ~30% turnkey and skidded process systems: Engineered, designed and installed Process Systems 30% Note: Data from continuing operations, pro forma for APV acquisition Market channels: Sales reps Direct Distributers OEM s PAGE 21 SPX Offers Customers Engineered Components, Skidded Systems and Turnkey Systems

22 Flow Technology Sanitary Components 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 PAGE 22 Custom Engineered Product Offerings

23 Flow Technology Sanitary Products Heat Exchangers Valves Mixers Process Regulating Butterfly Temperature control for mechanically separated meats, margarines, icings, fondants Process flow diversion and shut off Dispersion and solid suspension PAGE 23 Custom Engineered Product Offerings

24 Typical Beverage Process Flow Diagram Mixers Pumps Valves PAGE 24 SPX Manufactures Engineered Components That Can be Used Throughout a Typical Beverage Process

25 Typical Dairy Process Flow Diagram Mixers Pumps Heat Exchangers PAGE 25 Valves Homogenizer SPX Manufactures Engineered Components That Can be Used Throughout a Typical Dairy Process

26 SPX Flow Technology Sanitary Systems 2007 System Revenue by Application Offerings include both turnkey and skidded systems Other Dairy 17% Other 2% Beverage 18% Foods 17% ~30% of 2007 sanitary revenue from systems; 65% of systems were for dairy applications Butter 3% Milk 17% ~20% of systems revenue generated in developing countries Yogurt 12% Cheese 14% Note: Data from continuing operations, pro forma for APV acquisition PAGE 26 Skidded and Turnkey Systems Range from $1m to $30m and Provide Significant Aftermarket Opportunities

27 Core Technologies Cheese & Butter Processes Utlra High Temperature Processes Ultrafiltration & Microfiltration Mixing & Blending PAGE 27 Strong Experience With Proven Core Technologies

28 System Examples Ultra High Temperature Infusion: China Engineered for the sterilization of drinking milk, milk shakes, chocolate milk, cream and ice cream Ultrafiltration Unit: Ukraine Engineered for the concentration of whole milk to be used in the production of feta cheese PAGE 28 Dairy Markets in Developing Countries have been a Growth Driver

29 New Innovations LeanCreame FlexMix Processing Technology Without Whey Separation White Water Recovery PAGE 29 Continue to Focus on System Innovation; New Technologies Designed to Add Value for our Customers

30 PAGE 30 Summary

31 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 PAGE 31 SPX Flow Technology is Well Positioned to Serve the Global Food, Beverage and Dairy Markets

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