Slides
Page 1
Q3 2025 Earnings Presentation 28 October 2025
Page 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, 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
Page 3
Key Messages • Strong Q3 results in all three segments with both price and volume • Sales growth across end markets • Healthy Q3 order trends and backlog. A positive 2025 outlook • Disciplined strategy execution led to solid growth in a softer markets • Investing for growth while maintaining strong cost discipline • Well-positioned in the face of tariffs and global uncertainty 3
Page 4
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
Page 5
Q3 2025 Overview ¹ • Financial Performance: − Sales of $581.7M, up 9% YoY − Gross Margin of 35.9%, up slightly − Operating income of $85.1M, up 16% YoY , with operating margin of 14.6% − GAAP EPS of $0.37, Adjusted EPS of $1.30, up 11% YoY • Solid performance despite macroeconomic challenges • Higher sales in Water Systems, from the benefit of acquisitions, favorable pricing, and higher volumes • Higher Sales in Energy Systems due to higher volumes • Higher sales in the Distribution segment due to higher volumes 5 SALES OPERATING INCOME EPS $531M $582M Q3 2024 Q3 2025 +9% YoY $1.17 $1.30 Q3 204 Q3 2025 $74M $85M Q3 2024 Q3 2025 +16% YoY +11% YoY 1 Non-GAAP financial metrics referenced in this slide include Adjusted EPS, net debt/cash, free cash flow, and net debt to EBITDA. A reconciliation to comparable U.S. GAAP measures can be found herein.
Page 6
$1.30 $1.17 Adjusted Q3 EPS Q3 2024 EPS Q3 2025 Adjusted EPS ¹ $0.37 $0.93 Q3 2025 Reported EPS Pension Settlement Loss 6 +11% 8% YoY 11% YoY 1 Non-GAAP financial metrics referenced in this slide include Adjusted EPS, net debt/cash, free cash flow, and net debt to EBITDA. A reconciliation to comparable U.S. GAAP measures can be found herein.
Page 7
Q3 2025 Performance 7 $74M $19M ($8M) $0M $85M Q3 2024 Gross Profit SG&A Restructuring Q3 2025 SALES OPERATING INCOME Sales of $581.7M increased 9% YoY • Favorable pricing in all three Segments • Higher volumes in all three Segments • Acquisitions added 3% of growth Operating Income of $85.1M increased 16% YoY • Gross profit up on higher sales • Higher SG&A expenses primarily due to acquisition- related costs $531M $33M $16M $1M $582M Q3 2024 Volume/Price Acquisitions FX, net Q3 2025 13.8% 14.6%3%6% (0%) (6%)10% (0%) 9% YoY 16% YoY
Page 8
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 8 8
Page 9
9 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. $103M Cash Balance $101M Net Debt 0.4x Net Debt to EBITDA 0.0M No Shares repurchased in Q3 $123M $107M Q3 2024 Q3 2025 $151M $135M Q3 2024 Q3 2025 Cash Flow From OperationsFree Cash Flow
Page 10
2025 Outlook 10 • Maintaining the midpoint of our EPS guidance, narrowing our range • 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 EPS outlook: termination of defined benefit pension plan HIGHLIGHTS SALES $2.09 to $2.15 Billion (up LSD to MSD) EPS $4.00 to $4.20 (up MSD to HSD/LDD) LSD = low-single digits, MSD = mid-single digits, HSD = high-single digits, LDD = low-double digits
Page 11
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% 11
Page 12
Water Pressure Boosting New Released Line Refining Channel Approach Inline SpecPAK Zero Footprint Minimal Noise VR SpecPAK Wide Range Compact Footprint VersaBoost Pro High Performance Minimal Noise One Franklin Solution Boosting | Water Treatment | Condensate Wastewater | Cooling Tower VFDs Prioritizing End Users 1) Understand Needs & Pain Points 2) Generate Pull-through Demand Pulling Sales through Specifiers, Contractors, Distribution Partners End Users Want: Single Source for Water Mgmt. End Users i.e. Hospitality, Senior Living, Multi-Family Market Pain Points Sprawling municipal infrastructure is degrading water pressure in new & existing buildings Mechanical room space is at a premium Property owners need to minimize equipment noise Multi-Family, Hospitality, & Senior Living need easy-to-use, economical pressure boosting Standard Easy-to-Use Interface 12
Page 13
Izmir Factory Expansion Investment: • $10M Investment to support Water & Energy businesses regional growth • New factory will support Water, refurbished legacy factory to support Energy Capacity: • ~130k sqft new manufacturing space • Serve our growing business in East Europe and the Middle East Go-live dates: • Q1 ‘26 for new Water plant • Q1 ‘27 for new Energy plant
Page 14
Closing Thoughts 14 • Strong Q3, all businesses performing well both volume and Price • We have opportunities to further our transformation • Solid backlog and book to bill • Maintaining our EPS guidance, tightening range, 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
Page 15
15 Non-GAAP Reconciliations
Page 16
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. 16
Page 17
Reconciliation of Adjusted EPS Non-GAAP Financial Measure 17 2025 2024 Change Diluted Earnings per Share "EPS" (as reported - US GAAP) 0.37$ 1.17 $ -68% Pension Settlement Loss 0.93$ - $ Adjusted Diluted EPS (non-GAAP) 1.30$ 1.17 $ 11% For the Third Quarter
Page 18
Reconciliation of Non-GAAP Financial Measure Total Debt to Net Debt (Cash) and Net Debt to EBITDA $ in Millions 18 As of September 30, 2025 Total debt 204$ Less: cash and cash equivalents (103)$ Net (cash) debt 101$ Nine months ended September 30, 2025 Year ended December 31, 2024 Nine months ended September 30, 2024 Twelve months ended September 30, 2025 Net income 109$ 182$ 147$ 143$ Depreciation and amortization 46$ 56$ 42$ 60$ Income tax expense 37$ 50$ 44$ 43$ Interest expense 8$ 6 $ 5 $ 9 $ EBITDA 200$ 294$ 238$ 255$ Net debt to EBITDA as of Sept 30, 2025 0.4
Page 19
Reconciliation of Non-GAAP Financial Measure Operating Cash Flow to Free Cash Flow $ in Millions 19 Q1 Q2 Q3 YTD Q1 Q2 Q3 YTD Cash flows from operating activities (19.5)$ 51.5$ 102.7$ 134.7$ (1.4)$ 36.4$ 116.1$ 151.1$ Cash flows from investing activities (116.1)$ (11.2)$ (9.8)$ (137.1)$ (10.2)$ (10.0)$ (9.1)$ (29.3)$ Cash flows from financing activities (2.6)$ (19.5)$ (90.1)$ (112.2)$ (6.3)$ (32.4)$ (61.3)$ (100.0)$ Cash flows from operating activities (19.5)$ 51.5$ 102.7$ 134.7$ (1.4)$ 36.4$ 116.1$ 151.1$ Capital expenditures (6.8)$ (11.6)$ (11.4)$ (29.8)$ (9.2)$ (10.2)$ (9.5)$ (28.9)$ Proceeds from sale of property, plant and equipment 0.4$ 0.3$ 1.9$ 2.6$ 0.1$ 0.3$ 0.3$ 0.7$ Free cash flow (25.9)$ 40.2$ 93.2$ 107.5$ (10.5)$ 26.5$ 106.9$ 122.9$ 2025 2024
Page 20
Thank You! Jennifer Wolfenbarger CFO InvestorRelations@FELE.com 260-827-5520 20