Summary of Flowserve and Chart Industries Conference Call Industry and Companies Involved - **Companies**: Flowserve Corporation and Chart Industries - **Industry**: Industrial Process Technologies Core Points and Arguments 1. **Merger Announcement**: The merger between Chart and Flowserve is described as transformational, creating a leader in industrial process technologies with a comprehensive portfolio of flow and thermal management solutions [4][5][6] 2. **Ownership Structure**: The merger is structured as an all-stock merger of equals, with Chart shareholders owning approximately 53.5% and Flowserve shareholders owning approximately 46.5% of the combined company [7][8] 3. **Cost Synergies**: The merger is expected to drive approximately $300 million in annual cost synergies, primarily from materials and procurement savings, roofline consolidation, and organization efficiencies [7][21] 4. **Revenue Synergies**: An additional 2% growth in revenue is anticipated from commercial revenue synergies over time [21][52] 5. **Financial Profile**: The combined company is projected to have combined revenue of $800 million and $1.8 billion in cash flow over the twelve months ended March 31, 2025 [9][25] 6. **Market Opportunities**: The merger positions the companies to capitalize on macro trends such as energy intensity, energy security, and decarbonization, with a focus on high-growth end markets [10][11] 7. **Aftermarket Business**: The combined aftermarket business is expected to generate significant recurring revenue, with a global installed base of nearly 5.5 million assets, creating a $4 billion aftermarket franchise [19][61] 8. **Digital Integration**: The merger will enhance digital capabilities, allowing for better monitoring and predictive maintenance of assets, which is expected to drive further growth in the aftermarket segment [62][63] 9. **Geographic Expansion**: The merger will allow both companies to leverage each other's geographic strengths, particularly in regions where one company has a stronger presence [48][49] 10. **Cultural Integration**: Both companies emphasize a shared commitment to safety, innovation, and community, which will be integral to the combined company's culture [27][28] Important but Overlooked Content 1. **Regulatory Considerations**: The merger is expected to face minimal regulatory concerns, with no significant overlap in product offerings that could raise antitrust issues [95] 2. **LNG Market Role**: LNG is projected to account for 9% of the combined company's revenues, highlighting its importance in the overall strategy [116] 3. **Leverage and Financial Strategy**: The combined company aims for a conservative leverage ratio of 2 times net debt to adjusted EBITDA at close, with plans for future shareholder returns through dividends and share buybacks [25][121] 4. **Integration Management**: An integration management office will be established to ensure effective synergy realization post-merger [85] This summary encapsulates the key points discussed during the conference call, providing a comprehensive overview of the merger's implications for both companies and the industry at large.

I N V E S T O R P R E S E N T A T I O N J u n e 4 , 2 0 2 5 Chart Industries and Flowserve Corporation to Combine in Merger of Equals Chart Industries + Flowserve 1 Important Disclosures Important Information about the Transaction and Where to Find It This communication may be deemed to be solicitation material in respect of the proposed merger transaction between Chart Industries, Inc. ("Chart") and Flowserve Corporation ("Flowserve"). In connection therewith, the parties intend to file relevant materials ...

Group 1 - FLS has acquired Scott Specialized Rubber & Engineering (SSRE), enhancing its service growth strategy and supporting its CORE'26 initiative [1][2] - The acquisition allows FLS to establish local production of rubber and composite mill liners, improving service speed and reliability for mining customers in Africa [2] - The transaction terms remain undisclosed, but it does not affect FLSmidth's financial guidance for 2025 [3] Group 2 - FLS is a leading original equipment manufacturer (OEM) in the global mining industry, providing engineering, equipment, and service solutions [4] - The company offers a full range of mill liner options, including composite, steel, and rubber solutions, aimed at enhancing productivity and efficiency [5] - FLSmidth is committed to sustainability, with a goal of achieving zero emissions in mining and cement by 2030, under its MissionZero initiative [6]

Company Overview - Flowserve shares have increased by approximately 11.7% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the key drivers behind this performance [1] Earnings Estimates - Estimates for Flowserve have trended downward in the past month, with a consensus estimate shift of -7.15% [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [4] VGM Scores - Flowserve has a Growth Score of B, but a low Momentum Score of F, while its Value Score is also B, placing it in the top 40% for this investment strategy [3] - The aggregate VGM Score for Flowserve is C, which is relevant for investors not focused on a single strategy [3] Industry Comparison - Flowserve is part of the Zacks Manufacturing - General Industrial industry, where Dover Corporation, a peer, has gained 5.2% over the past month [5] - Dover reported revenues of $1.87 billion for the last quarter, reflecting a year-over-year decline of -10.9%, with an EPS of $2.05 compared to $1.95 a year ago [5] - For the current quarter, Dover is expected to post earnings of $2.38 per share, indicating a slight increase of +0.9% from the previous year [6]

Core Viewpoint - Flowserve Corporation is experiencing growth due to strong performance across its segments and strategic acquisitions, enhancing its appeal to shareholders [1][2]. Business Strength - The aftermarket business is showing solid momentum, with a 21.2% year-over-year increase in bookings for the Flowserve Pumps Division in Q1, supported by a book-to-bill ratio above 1.0x [3]. - Increased bookings in general industries, energy, and power end markets are contributing positively to the Flow Control Division's performance [3]. End Market Strength - Flowserve's booking levels are driven by strength in various end markets and its 3D strategy, with improved customer orders from large project wins in the energy sector [4]. - The chemical end market is also strong, supported by an unconventional gas project and a petrochemical project in the Middle East, with expectations for significant capacity additions [4]. - Growth in the power generation market is linked to increased data center capacity and rising activity in Artificial Intelligence [4]. Expansion Efforts - Flowserve is focused on expanding its market presence through acquisitions, such as the October 2024 acquisition of MOGAS Industries, which enhanced its valve and automation product portfolio [5]. - The MOGAS acquisition contributed positively to sales growth by 3.3% in Q1 2025 [5]. - In July 2024, Flowserve acquired intellectual property related to cryogenic LNG submerged pump technology from NexGen Cryogenic Solutions, expanding its LNG product portfolio [6]. Rewards to Shareholders - Flowserve rewards shareholders through dividends and share buybacks, distributing $27.6 million in dividends and repurchasing shares worth $21.1 million in Q1 2025 [7]. - The company's shares have gained 1.7% over the past year, outperforming the industry's growth of 0.2% [7].

Core Insights - The article discusses the expertise of Vladimir Dimitrov, CFA, who has a background in brand and intangible assets valuation, particularly in the technology, telecom, and banking sectors [1] Group 1: Analyst Background - Vladimir Dimitrov has experience as a strategy consultant and has worked with major global brands [1] - He graduated from the London School of Economics and focuses on identifying reasonably priced businesses with sustainable long-term competitive advantages [1]

Group 1 - FLSmidth appointed Julian Soles as President of Mining Products Business Line starting from May 1, 2025, and Toni Laaksonen as President of Mining Service Business Line starting from June 1, 2025 [1] - The company is a full flowsheet technology and service supplier to the global mining and cement industries [2] - FLSmidth aims to achieve zero emissions in mining and cement by 2030 as part of its sustainability ambition, MissionZero [2]

Core Insights - FLSmidth's Q1 2025 results exceeded expectations, leading to an upgraded financial guidance due to strong commercial performance and effective backlog management [2][15] Financial Performance - Group revenue decreased by 2% year-over-year to DKK 4,729 million, with service revenue increasing by 11% while products revenue decreased by 26% [12][23] - Mining revenue increased by 4% compared to Q1 2024, with service revenue rising by 14% driven by consumables and effective backlog management [10][23] - Cement revenue decreased by 15% compared to Q1 2024, with products revenue down by 37% due to portfolio pruning and divestments [11][23] - Adjusted EBITA margin for the group improved to 13.9% from 9.2% in Q1 2024, reflecting operational efficiency [12][23] Order Intake - Group order intake decreased by 12% compared to Q1 2024, with service order intake down by 4% and products order intake down by 27% [9][23] - Mining order intake decreased by 10%, while cement order intake fell by 18% [5][8][23] Business Segments - Mining Service revenue grew by 14%, with an Adjusted EBITA margin of 15.1% [6][10] - Cement business continues to face challenges, with an Adjusted EBITA margin of 9.5% and ongoing negotiations for potential divestment [6][14] Strategic Initiatives - The company is in exclusive negotiations for the potential sale of its Cement business to Pacific Avenue Capital Partners [2][14] - Continued focus on sustainability targets and operational efficiency is evident, with a commitment to reducing emissions by 2030 [24]

Core Insights - FLSmidth has raised its financial guidance for the full year 2025 due to strong performance in the Mining business in Q1 2025 [1] - The Adjusted EBITA margin for the Mining business is now expected to be between 14.0% and 14.5%, an increase from the previous range of 13.5% to 14.0% [1][4] - The overall Adjusted EBITA margin for the Group is now projected to be between 13.0% and 13.5%, up from 12.5% to 13.0% [2][4] Financial Guidance - The financial guidance for 2025 reflects ongoing business simplification, transformation efforts, and improvements in the Mining business, along with strategic initiatives in the Cement business [3] - Revenue expectations for the Mining segment are approximately DKK 15.0 billion, while Cement revenue is expected to be around DKK 4.0 billion, leading to a consolidated Group revenue of about DKK 19.0 billion [4] - The Adjusted EBITA margin for the Cement business is expected to remain between 9.0% and 9.5%, unchanged from previous guidance [4] Market Outlook - The Mining Service business is expected to see stable and active market demand, while the Mining Products business is anticipated to remain soft compared to 2024 [5] - The short-term outlook for the cement industry is affected by macroeconomic uncertainty, and revenue guidance reflects the divestment of the MAAG business completed in 2024 [6] Cost Considerations - The guidance for the Adjusted EBITA margin excludes transformation and separation costs of approximately DKK 200 million for the Mining business and around DKK 50 million for the Cement business for the full year 2025 [5][7]

Core Insights - A progressive Indian miner and steelmaker has chosen FLS to supply a comprehensive flotation technology package for a new iron ore beneficiation plant, which is expected to be one of the largest and most efficient globally [1] - The plant will utilize domestic low-grade iron ore, which will be upgraded to a high-purity final product using FLS flotation systems [1] Group 1: Technology and Performance - FLS conducted extensive laboratory and on-site pilot testing to develop a beneficiation flowsheet that ensures high metallurgical performance and operational flexibility [2] - The selected technology includes FLS nextSTEP™ flotation cells, equipped with mechanical and process condition monitoring, along with KREBS millMAX pumps for froth and slurry transport [2] Group 2: Customer Relationship and Orders - This order marks the third consecutive purchase from the customer within six months, with the iron ore being processed from 18 vertical tower mills ordered from FLS for Q1 2025 [3] - The customer also ordered two high-pressure grinding rolls (HPGRs) from FLS in Q4 2024, along with additional KREBS pumps and hydrocyclones for the grinding circuits [3] Group 3: Installation Timeline and Impact - All FLS technologies are expected to be installed and commissioned during 2026/2027 [4] - The CEO of FLS emphasized the significance of this order as a testament to strong customer relations and confidence in FLS's market-leading technologies, which will lead to reductions in energy, water, and grinding media consumption [5] Group 4: Order Details - The order was booked in Q2 2025, although the value of the order has not been disclosed [6]