Slides
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Q2 2025 Earnings Presentation 29 July 2025
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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, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, weather conditions, new housing starts, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s Securities and Exchange Commission filings, included in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2024, Exhibit 99.1 attached thereto and in Item 1A of Part II of the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements. 22
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Key Messages • Strong Q2 results in all three segments with both price and volume • Record Sales, Operating Income and Earnings per Share • Healthy Q3 order trends and backlog. A positive 2025 outlook • Strategy execution led to solid growth in a softer markets • Well-positioned in the face of tariffs and global uncertainty 3
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Our People, Promise, and Commitment To our employees: Being a great place to work and attracting the best talent To our customers: Leading with service and being an indispensable partner For our products: Innovating with quality products in the markets we serve 4 2025 America’s Greenest Companies Newsweek 2025 Most Trustworthy Companies in America Newsweek 2024 America’s Climate Leaders USA Today 2024 America’s Most Responsible Companies Newsweek Jennifer Wolfenbarger Chief Financial Officer Wolfenbarger has served in divisional CFO roles at some of the country’s most recognizable and growth-minded manufacturing companies, including Caterpillar, Stryker and most recently Owens Corning. In her role at Owens Corning, Wolfenbarger oversaw strategic planning, investor relations, compliance and financial reporting for the company’s $4 billion global insulation business. Daniela Williams Chief Human Resources Officer Williams joins Franklin Electric with a track record of leading talent strategy and organizational transformation across global manufacturing, automotive, and technology companies, including Visteon, Aptiv, and DURA Automotive. In her previous role at Visteon, a $3.8 billion automotive supplier, she served as Global Vice President of People and Culture, where she led workforce planning, executive succession, and enterprise redesign globally.
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Q2 2025 Overview • Financial Performance: − Sales of $587.4M, up 8% YoY − Gross Margin of 36.1%, down slightly − Operating income of $88.1M, up 11% YoY , with operating margin of 15.0% − GAAP EPS of $1.31, up 4% YoY • Solid performance despite macroeconomic challenges • Higher sales in Water Systems, from the benefit of acquisitions, favorable pricing, and higher volumes • Strong operating performance in Energy Systems • Higher sales in the Distribution segment due to higher volumes 5 SALES OPERATING INCOME EPS $543 M $587M Q2 2024 Q2 2025 +8% YoY $1.26 $1.31 Q2 2024 Q2 2025 $79M $88M Q2 2024 Q2 2025 +11% YoY +4% YoY
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Q2 2025 Performance 6 $79M $12M ($3M) ($0M) $88M Q2 2024 Gross Profit SG&A Restructuring Q2 2025 SALES OPERATING INCOME Sales of $587.4M increased 8% YoY • Favorable pricing in Water Systems and Energy Systems • Higher volumes in all three Segments • Acquisitions added 3% of growth Operating Income of $88.1M increased 11% YoY • Gross profit up on higher sales • Higher SG&A expenses primarily due to acquisition- related costs $543M $30M $15M ($1M) $587M Q2 2024 Volume/Price Acquisitions FX, net Q2 2025 14.6% 15.0%3%5% (0%) (4%)15% (0%) 8% YoY 11% YoY
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Q2 2025 Segment Details WATER SYSTEMSENERGY SYSTEMSDISTRIBUTION Sales Op. Income Op. Margin Comments $340.8M (up 8%) $61.8M (down 1%) 18.1% (down 160 bps) • Record revenue with Water Treatment up MSD, Dewatering sales up >20% • Gross margin down mainly due to one-time purchase accounting from recent acquisitions and sales mix • SG&A up due to acquisition-related expenses & intangible amortization $77.5M (up 6%) $29.1M (up 12%) 37.5% (up 190 bps) • Sales growth in Q2 due to favorable pricing and volumes • Operating margin increased due to favorable geographic mix of sales and cost management $200.0M (up 5%) $16.1M (up 64%) 8.1% (up 300 bps) • Record revenue with growth of 5% • Cost structure actions implemented in 2024 driving improvement in operating performance 7
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8 Balance Sheet and Cash Flow¹ 1 Non-GAAP financial metrics referenced in this slide include net debt/cash, free cash flow, and net debt to EBITDA. A reconciliation to comparable U.S. GAAP measures can be found herein. $105M Cash Balance $180M Net Debt 0.6x Net Debt to EBITDA 1.4M Shares repurchased in Q2 totaling $120.3M $26M $40M Q2 2024 Q2 2025 Free Cash Flow $36M $52M Q2 2024 Q2 2025 Cash Flow From Operations
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2025 Outlook 9 • Maintaining our EPS guidance • Solid underlying demand in core markets, healthy demand trend, solid backlog • Maintaining strong margins • Tariff management and mitigation protecting margins • Maintaining strong balance sheet and deploying capital with best ROIC mindset • Confident in our long-term strategy • Not in outlook: termination of defined benefit pension plan HIGHLIGHTS SALES $2.09 to $2.15 Billion (up LSD to MSD) EPS $3.95 to $4.25 (up MSD to HSD/LDD) LSD = low-single digits, MSD = mid-single digits, HSD = high-single digits, LDD = low-double digits
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OUR VALUE CREATION FRAMEWORK (2027) OUR BUSINESS SEGMENTS GROWTH ACCELERATION RESILIENT MARGINS INVESTMENTS & CAPITAL TALENT CENTRIC • Serve global water needs where most critical • Use our leading channel and customer partnerships to drive share and growth • Focus on faster-growing commercial, industrial, and energy verticals with new solutions • Be the easiest to do business with via digital customer innovations • Expand Franklin Operating System (FOS) and our productivity and efficiency • Use data-driven solutions to deliver leading products pricing, and supply chain – end-to-end • Optimize our product development and portfolio • Strategic M&A driven by secular trends • Capital deployments to deliver automation, capacity, and optimal footprint • Share repurchase and dividend commitment • Build on our “Great Places to Work” recognition by focusing on collaboration, service, innovation, and respect • Live Safety as a bedrock • Leading attractor and developer of talent OUR VALUE CREATION FRAMEWORK Water Systems Distribution Energy Systems $2.021B REVENUE $243.6M OPERATING INCOME 13% 55%32% 29% 63% 8% 2024 63% 10
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Market intimacy, Leading Innovation 11 AN ALL-IN-ONE FUEL MONITORING SYSTEM SOLUTION AT THE PRICE OF JUST A CONSOLE • A sizable portion of the market relies on outdated technology for fuel monitoring • Industry offerings are overbuilt without providing a holistic solution • Customers lack an economical pathway to the latest technology • EVO ONE is an all-in-one, right sized fuel management solution(including console, sensors, probes, and hardware) that lets station owners upgrade or equip a typical site for a similar price as a standalone Automatic Tank Gauge console replacement Market Need Franklin Electric Solution ONE KIT. ONE SYSTEM. ONE SOLUTION. Full featured | Affordable | Easy Upgrade User-Friendly | Simplified Compliance | Remote Access
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Closing Thoughts 12 • Strong Q2, all businesses performing well • We have opportunities to further our transformation • Solid backlog and book to bill • Maintaining our EPS guidance, we expect a strong year • Mitigation strategies in place to offset tariff impacts • Continued confidence in our long-term strategy • Our focus is growth, innovation, and building a great team
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13 Non-GAAP Reconciliations
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Non-GAAP Reconciliations To supplement Franklin Electric’s consolidated financial statements presented on a U.S. GAAP basis, the company discloses certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States. Non-GAAP financial measures may enhance an understanding of the company’s operations and may facilitate an analysis of those operations, particularly in evaluating performance from one period to another. Management believes that non-GAAP financial measures, when used in conjunction with the results presented in accordance with U.S. GAAP and the company’s reconciliations to corresponding U.S. GAAP financial measures (which are included in the tables accompanying this presentation), may enhance an investor’s overall understanding of the company’s past financial performance and prospects for the future. Accordingly, management uses these non-GAAP measures internally in financial planning and to monitor business performance. This information should be considered in addition to, and not as substitutes for, information prepared in accordance with U.S. GAAP. Franklin Electric strongly encourages investors to review its consolidated financial statements and publicly- filed reports in their entirety and cautions investors that the non-GAAP measures used by the company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Non-GAAP financial measures used in this presentation include net debt/cash, net debt to EBITDA and free cash flow and conversion. 14
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Reconciliation of Non-GAAP Financial Measure Total Debt to Net Debt (Cash) and Net Debt to EBITDA $ in Millions 15
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Reconciliation of Non-GAAP Financial Measure Operating Cash Flow to Free Cash Flow $ in Millions 16
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Thank You! Jennifer Wolfenbarger CFO InvestorRelations@FELE.com 260-827-5520