Q EARNINGS RESULTS & 2019 GUIDANCE. February 5, 2019

Transcription

1 Q EARNINGS RESULTS & 2019 GUIDANCE February 5, 2019

2 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 expressed or implied results. Although SPX FLOW 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. In addition, estimates of future operating results are based on the company s continuing operations, which are subject to change. Particular risks facing SPX FLOW include risks relating to economic, business and other risks stemming from changes in the economy, our international operations, legal and regulatory risks, cost of raw materials, and pricing pressures. More information regarding such risks can be found in SPX FLOW s SEC filings. Statements in this presentation are only as of the time made, and SPX FLOW does not intend to update any statements made in this presentation except as required by regulatory authorities. This presentation includes non-gaap financial measures. A copy of this presentation, including a reconciliation of the non- GAAP financial measures from their most comparable measures calculated and presented in accordance with GAAP, is available on our website at 2

3 OPENING REMARKS Marc Michael, President and CEO

4 Q OVERVIEW growth, margin expansion, debt reduction ($ millions) Organic Change $529 REVENUE SEGMENT INCOME +5% +9% $64 $538 $59 5% organic revenue growth 11.8% Segment income margins up 70 points to 11.8% 11.1% Adjusted EBITDA of $65m, up 8% year-over-year Q Q Q Q Orders: Stable sequential orders with 1% organic growth SEQUENTIAL ORDERS YEAR-OVER-YEAR ORDERS 8% organic decline year-over-year: Attributable to $72m of large dry dairy system orders in Q that did not repeat $500 +1% $501 $565 $72 (8%) $501 $16 6% organic growth in Industrial orders $60m voluntary prepayment on term loan $493 $485 Q Q Q Q Note: Leverage as defined by the company s credit facility See appendix for reconciliations of non-gaap metrics 4

5 2018 FULL YEAR OVERVIEW progress on journey to high-performance 5% organic revenue growth ($ millions) Organic Change $1,952 REVENUE +5% $2,090 ADJUSTED EBITDA $ % $200 Adjusted operating margins of 9%, up 180 points 10.2% 11.4% Adjusted EBITDA of $239m, up 19% Favorable margin shift in organic order development: Mid single-digit growth in AGGRESSIVELY invest products + Low single-digit growth in OPPORTUNISTICALLY invest products Double-digit decline in ENHANCE performance products Continued to strengthen balance sheet: + $127m of debt repayment, a 14% reduction to gross debt + Gross leverage down to 2.8x + Net leverage down to 2.2x Aggressive Opportunistic YTD ORDERS $2,116 $2,085 (2%) 42% 45% 24% 25% 4.0x LEVERAGE gross / net 3.0x 2.8x 2.2x Enhance 34% 30% Q Q Note: Leverage as defined by the company s credit facility See appendix for reconciliations of non-gaap metrics 5

6 ORDER and BACKLOG DEVELOPMENT shift in backlog to higher margin products and a lower level of projects Established Product Investment Roles Executed High Value Order Growth year-over-year organic change Improved Backlog Composition Q FY Low-Single Digits +Mid-Single Digits $998m $952m 19% 23% Aggressive year-over-year backlog change by category +13% Q Down Low Single Digits 20% 22% Opportunistic +5% FY Low-Single Digits 60% 55% Enhance (13%) Q FY 2018 Down Double Digits Down Double Digits 2018 Opening Backlog 2019 Opening Backlog 6

7 2019 GUIDANCE journey to a high-performance culture continues Guidance Highlights Assumes low growth global economic environment No large project orders assumed in guidance Targeting 1% to 3% organic revenue growth (excluding F&B systems) Revenue Organic change Segment Margin % $1, % +5% $2, % +1% to (1%) $2,025 to $2,075 12% to 13% ($ millions) ~100 points of segment income margin expansion Favorable shift in margins as year progresses Price/cost neutral Savings from restructuring actions ~7% EBITDA growth $200 Adjusted EBITDA +19% E $239 ~+7% $250 to $260 ~110% free cash flow conversion to net income E 7

8 EXECUTIVE TEAM experienced and diverse management team positioned to deliver value and high performance culture JAIME EASLEY VP and CFO DWIGHT GIBSON President, Food & Beverage JOSÉ LARIOS President, Industrial and P&E TY JEFFERS VP, GMO and Supply Chain MARC MICHAEL President and CEO KEVIN EAMIGH CIO & VP, Global Business Services STEVE TSORIS VP, Secretary & General Counsel BELINDA HYDE VP, Chief HR Officer RYAN TAYLOR Chief Strategy Officer Denotes 2018 Promotion/Addition 8

9 FINANCIAL REVIEW Jaime Easley, VP and CFO

10 Q EARNINGS PER SHARE bridge from mid-point guidance Q EPS Guidance $0.60 Guidance range: $0.54 to $0.67 per share Segment Income $0.03 Driven by strong execution in power & energy segment Adjusted EPS of $0.66 Other Items $0.03 Primarily due to a pension mark-to-market adjustment Q Adjusted EPS $0.66 Up 27% as compared to Q adjusted EPS of $0.52 Taxes ($0.88) Primarily related to U.S. tax reform measurement period adjustments Asset Impairments ($0.34) $14.6m related primarily to certain assets in Food & Beverage segment Restructuring Expense ($0.08) $3.5m related to strategy to reduce exposure to large dry dairy projects Q GAAP EPS ($0.64) 10

11 FOOD & BEVERAGE q results ($ millions) Q Q Δ ORGANIC Δ Orders $175 $235 (26%) (22%) Revenue $195 $197 (1%) 6% Segment Income $22 $22 0% - Margin 11.5% 11.3% 20 bps - Revenue down (1%): (4%) ASC 606 impact (3%) currency headwind + 6% organic growth: + Execution of large system projects in backlog + Growth in aftermarket sales Segment income flat, margins up 20 points: + Modestly favorable revenue mix Organic Orders Declined (22%): Lower level of large, dry dairy system orders: Q orders included 2 dry dairy orders totaling $72m + Mid-single digit growth in component and aftermarket orders Note: See appendix for reconciliation of non-gaap measures 11

12 POWER & ENERGY q results ($ millions) Q Q Δ ORGANIC Δ Orders $142 $150 (6%) (3%) Revenue $147 $151 (3%) (6%) Segment Income $15 $14 $1 - Margin 10.1% 9.4% 70 bps - Revenue down (6%) + 6% ASC 606 benefit (3%) currency headwind (6%) organic decline: + Mid-single digit aftermarket growth Lower level pump and valve shipments Segment Income up 4% and margins expanded 70 points: + Increase in aftermarket revenue drove modestly favorable margin mix Organic Order Decline of (3%): North American oil pipeline valves Note: See appendix for reconciliation of non-gaap measures 12

13 INDUSTRIAL q results ($ millions) Q Q Δ ORGANIC Δ Orders $185 $180 3% 6% Revenue $196 $181 9% 13% Segment Income $26 $22 19% - Margin 13.4% 12.3% 110 bps - Revenue Increased 9%: (3%) currency headwind (2%) ASC 606 impact + 13% organic growth: + Broad-based across all product lines + High single-digit growth in mixers shipments Segment income up 19% and margins expanded 110 points: + Leverage on organic revenue growth Organic Order Growth of 6%: + Broad-based across each product line + Double-digit growth in hydraulic tools Note: See appendix for reconciliation of non-gaap measures 13

14 2019 SEGMENT TARGETS targeting ~100 points of segment income margin expansion $ millions Revenue Segment Income % Target Range Target Range Margin Expansion Total Organic Food & Beverage $744 (5%) to (3%) (3%) to (1%) 11.8% 12.5% to 13.5% +70 to +120 points Power & Energy $590 (1%) to +1% 1% to 3% 8.9% 8.5% to 9.5% (40) to +60 points Industrial $756 (2%) to flat flat to +2% 13.4% 14.0% to 15.0% +60 to +160 points SPX FLOW $2,090 total growth: (3%) to (1%) organic growth: (1%) to 1% currency headwind: ~(2%) 11.5% 12% to 13% +50 to +150 points Note: Currency is ~(2%) headwind year-over-year in each segment 14

15 2019 ADJUSTED GUIDANCE ($ millions, except earnings per share) 2019 Guidance Ranges Revenue $ 2,025 to $2,075 Segment Income $245 to $265 Operating Income* $192 to $212 Earnings Per Share* $2.40 to $2.75 EBITDA* $245 to $265 Free Cash Flow $105 to $125 Key 2019 Guidance Assumptions Tax Rate 28% to 30% Diluted Shares Outstanding ~43m Depreciation & Amortization ~$58 Capex ~$ Adjusted 2019 Adjusted Guidance Variance Revenue $2,090 $2,050 (3%) to (1%) Segment Income $241 $255 +6% Corporate Expense ($48) ($45) Restructuring Expense* ($5) ($5) Pension Expense ($2) ($2) Operating Income* $186 $202 +9% Interest Expense ($47) ($42) (11%) Other Income / (Expense) ($6) ($3) Net Income* $99 $110 Earnings Per Share* $2.32 $ % EBITDA* $239 $255 +7% * Denotes adjusted measure Note: Targeting $15 to $20 million of total restructuring expense in 2019, including $10 to $15 million related to discrete strategic actions; See appendix for reconciliation of non-gaap measures 15

16 Q ADJUSTED GUIDANCE ($ millions, except earnings per share) Q Guidance Ranges Revenue $475 to $495 Segment Income $45 to $52 Operating Income* $31 to $38 Earnings Per Share* $0.31 to $0.43 EBITDA* $44 to $51 Key Q Guidance Assumptions Tax Rate 28% to 30% Diluted Shares Outstanding ~43m Depreciation & Amortization ~$14 Capex ~$8 Q Q Adjusted Guidance Variance Revenue $490 $485 (3%) to +1% Segment Income $51 $48 Corporate Expense ($14) ($12) Restructuring Expense* ($3) ($2) Pension Expense ($0.4) ($0.4) Operating Income* $33 $34 +3% Interest Expense ($13) ($11) Other Income / (Expense) ($5) ($1) Earnings Per Share* $0.36 $0.37 EBITDA* $44 $47 +7% *Denotes adjusted measure Note: Targeting ~$9 million of total restructuring expense in Q1 2019, including ~$7 million related to discrete strategic actions; See appendix for reconciliation of non-gaap measures 16

17 FINANCIAL POSITION net leverage at 2.2x; net debt reduced 12% during 2018 ($ millions) Capital Structure 12/31/ /31/2018 Short-term debt $24 $26 Current maturities of LT debt $21 $21 Long-term debt $851 $ Free Cash Flow: $80m Timing of working capital, primarily large projects and inventory, to support growth and delivery to customers 2018 Gross Debt Reduced by $127m or 14%: $110m of voluntary prepayments on term loan A during 2018 Gross debt $896 $769 Less: Cash on hand ($264) ($213) Key Cash Investments Q FY 2018 FY 2019E Net debt $632 $556 Restructuring payments $1 $13 $15 - $20 Net leverage (1) 3.0x 2.2x Capital Expenditures $8 $26 ~$30 Gross leverage (1) 4.0x 2.8x Gross Debt Reduction $69 $127 $50 - $75 (1) Leverage calculation uses debt and EBITDA as defined by the company s credit facilities 17

18 DEBT OVERVIEW intend to refinance senior credit facilities in 2019 ($ millions) Senior credit facilities: $140 Term Loan A $450 Revolver $500 non-cash performance bond Maturity in Q $300m bonds at 5.625%: Maturity in 2024 $300m bonds at 5.875%: Maturity in 2026 Securitization facility: ~$35 $350 $300 $250 $200 $150 $100 $50 $0 Maturity Schedule $300 $300 $120 $ Term Loan ~4.25% 5.625% Senior Notes 5.875% Senior Notes 18

19 EXECUTIVE SUMMARY Marc Michael, President and CEO

20 VALUE CREATION journey to a high-performance culture SPX FLOW Value Creation Realigned overhead cost structure Consolidated manfuacturing footprint Implemented product line strategy CULTURE WINNING CULTURE PEOPLE Elevate talent and capabilities PRODUCTS Execute highvalue growth strategy Strengthened balance sheet + Operational excellence + Hoshin planning + LEAN + Root cause analysis + SIOP + Capacity for additional capital allocation CUSTOMER-CENTRIC TEAM-FOCUSED PROVEN SYSTEM ACCOUNTABILITY SUSTAINABLE PERFORM Revenue Growth R.O.I.C PROCESS Continuous Improvement + Increased strategic focus 20

21 CONTINUOUS IMPROVEMENT FOOD & BEVERAGE VALUE CREATION focused action plans to create customer and shareholder value Aggressively invest to grow process solutions components and aftermarket value streams: Aggressively invest to grow mixers, hydraulics, dehydration and pumps Optimize distribution and service contracts New product development and value engineering Project selectivity with focus on liquid processing solutions Pathway to Excellence Hoshin planning Global Process Excellence (GPEX) Sales, Inventory and Operations Planning (S.I.O.P.) LEAN ~12% OPERATING MARGIN Geographic expansion (localize) Market / channel development New product development Aggressively invest to grow aftermarket and service capabilities Opportunistically invest to grow valves Selectivity in OE pump projects: Focus on growth in midstream, nuclear and industrial applications Value engineering and repeatable designs INDUSTRIAL POWER & ENERGY 21

22 VALUE CREATION financial objectives connected to high-performance journey HIGH VALUE GROWTH MARKET +Plus Growth in Aggressively Invest Product Lines ANNUAL FREE CASH FLOW ~120% GROWTH MARGIN EXPANSION CONVERSION OF NET INCOME SEGMENT MARGINS OPERATING MARGIN ACCELERATED CASH GENERATION FOOD & BEVERAGE: MID TEENS INDUSTRIAL: HIGH TEENS ~12% ROIC POWER & ENERGY: LOW DOUBLE DIGITS 22

23 QUESTIONS

24 APPENDIX

25 CONSOLIDATED REVENUE BREAKOUT 3 segments with sales across food, industrial and energy markets; balanced geographic profile; ~40% of sales are aftermarket segment INDUSTRIAL 36% market Oil and Gas 20% FOOD & BEVERAGE 36% $2.1b Food and Beverage 20% $2.1b Dairy 16% Compressed Air 7% POWER & ENERGY 28% General Industrial 23% Power Generation 6% Marine & Shipbuilding 5% Chemical Processing 4% type region 38% 29% Original Equipment 61% $2.1b 25% Aftermarket 39% 2% 6% 25

26 FOOD & BEVERAGE OVERVIEW a leading provider of food and beverage process technology and service 2018 Revenue by Product Components, 28% 2018 Revenue by Market Dairy 45% Systems, 38% $744m Aftermarket, 34% Food & Beverage 53% $744m Personal Care and Other 10% 2018 Revenue by Region 27% 34% Revenue Segment Income Margin $728 $716 $744 ~(4%) 33% 10.3% 10.5% 11.8% ~100 bps 4% 2% E 26

27 FOOD & BEVERAGE quarterly orders ($ millions) $235 $72 $171 $199 $158 $175 Orders > $15m Run-Rate Orders $163 $171 $199 $158 $175 Y-Y Organic Change Sequential Organic Change Q Q Q Q Q % (14%) 19% (14%) (22%) 24% (30%) 19% (20%) 12% 27

28 INDUSTRIAL OVERVIEW a leading provider of industrial process and flow control technologies 2018 Revenue by Product Other 8% Heat Exchangers 12% Pumps 15% Mixers 26% $756m Dehydration Products 22% Hydraulic Tools 17% 62% OE 38% AM 2018 Revenue by Market Air Treatment 16% General Industrial 34% Marine / Water 14% Food & Beverage, 11% $756m Chemicals, 9% Mining 6% Oil & Gas, 5% HVAC 5% 2018 Revenue by Region 48% 23% Revenue Segment Income Margin $705 $692 $756 ~(1%) 25% 14.0% 12.4% 13.4% ~100 bps <1% 4% E 28

29 INDUSTRIAL quarterly orders ($ millions) $180 $193 $206 $196 $185 Orders > $15m Run-Rate Orders Y-Y Organic Change Sequential Organic Change Q Q Q Q Q % 1% 6% 9% 6% (2%) 1% 9% (4%) (5%) 29

30 POWER & ENERGY diversified portfolio with high aftermarket concentration 2018 Revenue by Product Pumps 19% 2018 Revenue by Market Midstream Oil, 22% Aftermarket 49% $590m Valves 23% Filters / Closures / Other 9% Aftermarket, 49% $590m Upstream Oil, 5% Downstream Oil, 6% Conventional Power, 2% Nuclear, 6% General Industrial, 11% 2018 Revenue by Region 40% 30% Revenue Segment Income Margin $563 $543 $590 ~flat 15% 4.5% 6.5% 8.9% ~flat <1% 15% E 30

31 POWER & ENERGY quarterly orders Orders for Oil Pipeline Valves in North American ($ millions) $150 $144 $170 $21 $146 $140 $15 $16 Safety Pump Orders > $15m Run-Rate Orders $150 $144 $149 $131 $126 Y-Y Organic Change Sequential Organic Change Q Q Q Q Q % (20%) 15% 5% (3%) 7% (20%) 21% (14%) (2%) 31

32 CONSOLIDATED ORDERS quarterly trends ($ millions) Year-Over-Year Analysis Year-over-Year Decline Related to a Lower Level of Large Projects for Food and Beverage Orders > $15m Run-Rate Orders $565 $72 $509 $575 $21 $500 $15 $501 $16 Q orders down (11%), or ($64m): Currency impact was (3%), or ($16m) Organic decline of (8%), or ($48m): + Industrial: +6% Power and Energy: (3%) Food and Beverage: (22%) Modest Organic Growth Sequentially From Q $494 $509 $554 $485 $485 Sequential Analysis Q orders flat: Currency impact was (1%) Year-over-Year Organic Change Sequential Organic Change Q Q Q Q Q % (11%) 12% (1%) (8%) 10% (12%) 16% (12%) 1% Organic growth of 1%, or $7m: + Food and Beverage: 12% Power and Energy: (2%) Industrial: (5%) 32

33 BACKLOG ($ millions) Backlog Analysis Year-Over-Year Analysis Backlog Stable Organically Yearover-Year $998 $1,016 $952 $217 $241 $372 $343 $223 $317 Industrial Food & Beverage Backlog down (5%), or ($45m): Organic decline of (1%), or ($6m) Currency impact was (4%), or ($38m) Sequential Analysis $409 $432 $412 Power & Energy Backlog down (6%), or ($63m): Organic decline of (4%), or ($45m) Q Q Q Currency impact was (2%), or ($18m) 33

34 ORGANIC REVENUE non-gaap reconciliation Three months ended December 31, 2018 Net Revenue Foreign Adoption of New Organic Revenue Growth (Decline) Currency Revenue Standard* Growth (Decline) Food & Beverage (1.1) % (3.0) % (4.3) % 6.2 % Power & Energy (2.7) % (2.5) % 6.1 % (6.3) % Industrial 8.5 % (3.1) % (1.7) % 13.3 % SPX FLOW 1.7 % (2.9) % (0.5) % 5.0 % Twelve months ended December 31, 2018 Net Revenue Foreign Adoption of New Organic Revenue Growth Currency Revenue Standard* Growth Food & Beverage 3.9 % 0.9 % 1.4 % 1.6 % Power & Energy 8.7 % 1.0 % 2.8 % 4.9 % Industrial 9.2 % 0.3 % 0.4 % 8.5 % SPX FLOW 7.1 % 0.7 % 1.4 % 5.0 % * Transitioned to ASC 606 accounting for revenue recognition in Q See form 10-K filed February 5, 2019 for more information. 34

35 EBITDA non-gaap reconciliation ($ millions) Q Q FY 2017 FY 2018 Net Income (Loss) $31 ($27) $46 $44 Income Tax Expense (Benefit) ($1) $49 $11 $71 Interest Expense $15 $11 $63 $47 Depreciation & Amortization $15 $14 $61 $59 Basic EBITDA $60 $47 $181 $221 Asset Impairments* $1 $14 $5 $14 Restructuring Charges* $1 $4 $14 $4 Adjusted EBITDA $62 $65 $200 $239 * Only impairment and restructuring charges in 2018 specifically related to reduction in the dry dairy market 35

36 LTM CONSOLIDATED BANK EBITDA non-gaap reconciliation ($ millions) LTM Net Income $ 44 Income tax provision 71 Interest Expense, net 47 Income before interest and taxes $ 162 Depreciation and amortization expense, including intangibles 59 Basic EBITDA $ 221 Adjustments: Non-cash compensation expense 18 Impairment and other organizational costs 10 (Gains)/Losses on dispositions of assets 0 Pension adjustments (2) Extraordinary non - recurring non - cash charges 5 Extraordinary non - recurring cash charges 8 Interest income 7 Other 1 Bank Consolidated EBITDA $ 268 Note: EBITDA as defined by the company s credit facilities 36

37 ADJUSTED DEBT non-gaap reconciliation ($ millions) 12/31/2018 Short-term debt 26 Current maturities of long-term debt 21 Long-term debt 723 Gross Debt 769 less: Purchase card program and extended A/P programs (23) Adjusted Gross Debt 746 Less: Cash in excess of $ Adjusted Net Debt 583 Note: Adjusted debt as defined by the company s credit facilities 37

38 2018 FREE CASH FLOW non-gaap reconciliation ($ millions) Q Q Q Q FY 2018 Net cash from operations $16 $3 $29 $58 $106 Capital expenditures ($5) ($7) ($5) ($8) ($26) Free Cash Flow $10 ($4) $25 $49 $80 38

39 2019E Adjusted EPS non-gaap reconciliation Q FY 2018 Q1 2019E FY 2019E Reported EPS ($0.64) $1.03 $0.25 $2.37 Certain restructuring charges $0.08 $0.08 $0.12 $0.20 Certain asset impairments $0.34 $ Certain tax charges (benefits) $0.88 $ Adjusted EPS $0.66 $2.32 $0.37 $

40 2019 GUIDANCE full year mid-point models ($ millions, except per share data) UNADJUSTED EARNINGS MODEL E Revenue $2,090 $2,050 Segment income % 11.5% 12.4% Corporate expense ($48) ($45) Pension and post retirement expense ($2) ($2) Asset impairments ($15) $0 Special charges ($8) ($18) Operating Income $168 $189 Operating Income % 8.1% 9.2% Interest expense, net ($47) ($42) Other income or (expense) ($6) ($3) Income before taxes $116 $144 Income tax provision ($71) ($42) Income from continuing operations $45 $103 Minority interest, net of taxes ($1) ($1) Net income from continuing operations $44 $102 Mid-Point EPS Guidance $1.03 $2.37 Shares Outstanding ($ millions, except per share data) ADJUSTED EARNINGS MODEL E Revenue $2,090 $2,050 Segment income % 11.5% 12.4% Corporate expense ($48) ($45) Pension and post retirement expense ($2) ($2) Restructuring charges ($5) ($5) Operating Income $187 $202 Operating Income % 8.9% 9.9% Interest expense, net ($47) ($42) Other income or (expense) ($6) ($3) Income before taxes $134 $157 Income tax provision ($34) ($45) Income from continuing operations $100 $112 Minority interest, net of taxes ($1) ($1) Net income from continuing operations $99 $110 Mid-Point EPS Guidance $2.32 $2.57 Shares Outstanding

41 2019E Adjusted Operating Income non-gaap reconciliation ($ millions) Q1 2019E 2019E Operating income $27 $189 Certain restructuring charges $7 $13 Adjusted Operating income $34 $202 41

42 2019E EBITDA MID-POINT non-gaap reconciliation ($ millions) 2019E Net Income $102 Income Tax Expense $42 Interest Expense $42 Depreciation & Amortization $58 Basic EBITDA $243 Certain Restructuring Charges $13 Adjusted EBITDA $255 Non-cash Compensation Expense $16 Non-service Pension Costs $1 Interest Income $8 Other Restructuring Charges $5 Other $1 Bank Consolidated EBITDA $287 42

43 2019E FREE CASH FLOW non-gaap reconciliation ($ millions) 2019 Guidance Net cash from operations $135 to $155 Capital expenditures ($30) to ($30) Free Cash Flow $105 to $125 Includes $15 to $20 million of restructuring payments 43

44 SEGMENT FINANCIAL PERFORMANCE 2016 to 2019E ($ millions) Guidance Revenue $728 $716 $744 (5%) to (3%) Food & Beverage Segment Income $75 $75 $88 Segment Income % 10.3% 10.5% 11.8% 12.5% to 13.5% Revenue $563 $543 $590 (1%) to +1% Power & Energy Segment Income $25 $36 $53 Segment Income % 4.5% 6.5% 8.9% 8.5% to 9.5% Revenue $705 $692 $756 (2%) to flat Industrial Segment Income $99 $86 $101 Segment Income % 14.0% 12.4% 13.4% 14.0% to 15.0% SPX FLOW Consolidated Revenue $1,996 $1,952 $2,090 (3%) to (1%) Segment Income $199 $196 $241 Segment Income % 10.0% 10.1% 11.5% +~100 points Year-Over-Year Foreign Currency Translation on Revenue ($52) $15 $14 ~($43) Note: 2019 guidance assumes foreign currency rates as of December 31,