Flowserve(US:FLS)2026-02-17 14:52Flowserve Corporation 2026 Conference Summary Company Overview - Company: Flowserve Corporation (NYSE: FLS) - Industry: Flow control products and services, including pumps and valves Key Points and Arguments Financial Performance and Targets - Flowserve achieved a 500 basis points margin improvement over the last three years, exceeding the 2027 target framework set previously [4] - New long-range targets for 2030 include: - Organic sales growth of mid-single digits - Margin expansion of approximately 100 basis points per year, aiming for 20% operating income by 2030 - Adjusted EPS growth in double digits [5] Operational Excellence - The company has focused on operational excellence since 2018, enhancing productivity and reducing disruptive events that affect margins [11] - Significant training and competency improvements in manufacturing operations have been implemented [12] Portfolio Excellence - The 80/20 Program was fully integrated across all product business units by 2025, focusing on high-potential products and customers [13] - The program aims to streamline operations and improve profitability while maintaining growth potential [31] Commercial Excellence - Flowserve is retraining its sales force to enhance commercial excellence, focusing on account segmentation and effective use of CRM systems [16][19] - Changes in incentive plans are designed to align sales efforts with strategic growth areas [20] Footprint Optimization - The company is actively consolidating manufacturing facilities, with plans for at least two consolidations each year [28] - This strategy aims to drive efficiencies and leverage existing capacity without significant new investments [30] Market Dynamics and Growth Areas - The company anticipates a second half revenue acceleration in 2026, driven by improved market conditions and project timing [40] - The aftermarket business is expected to grow at mid- to high-single digits, supported by a large installed base of pumps and valves [41][63] Nuclear and Power Markets - Flowserve has a strong position in the nuclear market, with equipment on 75% of all reactors globally [96] - The company expects continued growth in nuclear bookings, particularly from life extensions and power re-rates [97] - Traditional power markets are also showing growth, with opportunities in coal and natural gas sectors [81] 3D Strategy: Diversify, Decarbonize, Digitize - The company has shifted its focus from upstream oil and gas to downstream and refining, reducing energy exposure from 40% to just over 30% [84] - Flowserve is actively pursuing decarbonization projects and has seen success in carbon capture initiatives [88] - The RedRaven IoT technology is now profitable and expected to drive future growth through predictive maintenance and monitoring [120] Acquisition of Trillium - The acquisition of Trillium's valve division is expected to enhance Flowserve's nuclear offerings, increasing content per reactor by 15%-20% [103] - This acquisition is anticipated to provide growth opportunities not only in nuclear but also in traditional power markets [111] Additional Important Insights - The company has reduced its supplier count by 50%, improving supply chain efficiency and cost management [53] - Flowserve's focus on selective bidding for projects has led to improved margins, particularly in engineered pumps [56] - The company is optimistic about future growth in general industries, including water and mining applications [118] This summary encapsulates the key insights and strategic directions discussed during the Flowserve Corporation 2026 conference, highlighting the company's focus on operational and commercial excellence, market opportunities, and growth strategies.