2013 q3 pentair presentation

58
PENTAIR 21 OUR FUTURE: POSITIONING FOR DIFFERENTIATED GROWTH In Strong Position with Mega Trends Maximize Growth with Platform / Vertical Prioritization Driving in New Geographies and Growth Capabilities Driving Core Important … But Must Pursue Differentiation 2013 Houston Investor & Analyst Event

Transcript of 2013 q3 pentair presentation

Page 1: 2013 q3  pentair presentation

PENTAIR 21

OUR FUTURE: POSITIONING FOR DIFFERENTIATED GROWTH

• In Strong Position with Mega Trends

• Maximize Growth with Platform / Vertical Prioritization

• Driving in New Geographies and Growth Capabilities

Driving Core Important … But Must Pursue Differentiation

2013 Houston Investor & Analyst Event

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PENTAIR 22

CURRENT TRENDS

US: Steady Recovery (Bright Spot)

+ Housing Back Strong

+ Petrochemical Opportunity

– Fiscal Uncertainty

Developed Regions Fast Growth Regions

Europe: Could Be Good Growth

+ Stabilizing Now

+ Could Surprise to Upside

– Difficult Decisions Ahead

FGR: Mixed but Slowed in ’12 & ’13

+ China 5-yr Plan Attractive

+/– China Slow but Still Important

– India, Brazil Bouncing Around

Resource Rich: Infrastructure Build

+ Significant Energy Investment

+ Adding Lots of Jobs

– Mining Slow … For Now

In Position to Take Advantage of Trends

U.S. Housing Remains Strong and Europe Improving

Continuing to Add Talent to Key Growth Regions

PIMS Executes on Our Strategies Aggressively

Generally Good-To-Improving Environment

2013 Houston Investor & Analyst Event

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PENTAIR

3 Reporting Segments

ORGANIZING FOR SUCCESS – CURRENT ALIGNMENT

Platforms are Where We Serve Customers … GBU’s + ELT Aligned to Improve

Growth and Productivity Trajectory26

Water & Fluid SolutionsValves &

ControlsTechnical Solutions

Executive Leadership Team (ELT)

Aquatic

Systems

Equipment

Protection

Thermal

Management

7 Global Business Units

Filtration &

Process

Flow

TechnologiesWES

Valves &

Controls

24 Operating Platforms

Standard Pumps

Engineered Pumps

Fluid Motion

Advanced Filtration Electrical/Cooling

Aquaculture

Ag Spray

Pool

Oil & Gas Separation

F & B Processing

Water Purification

Bldg. Infra. Solutions

Actuation & Controls

Adv. Ind. Solutions

Food Service

Quarter Turn

ElectronicsPressure Relief

Gate, Globe, & Check

Water Services

Mega-Projects

Water Transmission

Water Dynamics

Clean Air Systems

CEO + COO + CFO + Growth + HR + Legal/Compliance

2013 Houston Investor & Analyst Event

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PENTAIR 28

MAINTAINING LEADERSHIP IN ENERGY

Pentair’s Capabilities and Solutions

WAYS TOWIN

1

2

4

3

5

Product Innovation for Critical

Applications – Sub-sea, Cryogenic

Expanded Solutions & Service

Offerings – HRT, HIPPS, Rentals

Fast Growth Region Expansion –

Mid-East, China, Russia / CIS, Africa

Global Strategy Serving Local Needs

PIMS … Best in Class Quality,

Delivery, and Standardization

2013F: ~$2.1B

~75% Direct Sales

~25% Indirect Sales

~225 Sales Engineers

~600 Distributors

Actuation & Control

Electrical/Cooling

Oil & Gas Separation

Adv. Ind. Solutions

Quarter Turn

Pressure Relief

Gate, Globe, & Check

Mega-Projects

Water Transmission

2013 Houston Investor & Analyst Event

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PENTAIR 29

EXPANDING OFFERINGS IN INDUSTRIAL

Led by North American Industrial Recovery

2013F: ~$1.9B

~55% Direct Sales

~45% Indirect Sales

~300 Sales Engineers

~2000 Distributors

WAYS TOWIN

1

2

4

3

5

Expanded Service Offerings –

Cooling Audits, Plant Services

Fast Growth Region Expansion –

Russia, Middle-East, China

Maximize NA Distribution Channels

Product Innovation for Severe

Service Applications

PIMS … Best in Class Quality,

Delivery, and Standardization

Water Services

Clean Air Systems

Adv. Ind. Solutions

Pressure Relief

Actuation & Control

Quarter Turn

Gate, Globe, & Check

Electrical/Cooling

Advanced Filtration

2013 Houston Investor & Analyst Event

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PENTAIR 33

OUR CURRENT LANDSCAPE – FAST GROWTH REGIONS

We Have Real & Global Capabilities

China

Africa

India

Middle East

Eastern Europe

Latin America

$360M

3,340

6South East Asia

$350M

1,150

2

$200M

65

-$390M

2,860

6

$200M

400

2

$100M

1,340

4$100M

60

1Total FGRs - Additional Info:

Sales & Mktg Headcount

R&D Headcount

# of Distributors & Agents

950

350

1,100

Legend:

2013F Ship-to-Sales

Headcount

Manufacturing Sites

2013 Houston Investor & Analyst Event

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PENTAIR 35

FOCUS AREAS – ADDITIONAL PRIORITIES

…Without Forgetting the Other Nice Opportunities

ChinaMiddleEast

Brazil /LAM

IndiaSEAEasternEurope

Africa

RESI &

COMMERCIAL

INFRA-

STRUCTURE

ENERGY

INDUSTRIAL

FOOD &

BEVERAGE

= Priority / Focus Area

= Opportunity / Core

2013 Houston Investor & Analyst Event

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PENTAIR

VALVES & CONTROLSPENTAIR INVESTOR & ANALYST EVENT

David Dunbar

President, Pentair Valves & Controls

November 13, 2013

722013 Houston Investor & Analyst Event

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PENTAIR

KEY MESSAGES

73

Valves & Controls Positioned to Deliver Superior Value

• Pentair Valves & Controls is a Leading Solution Provider in a Growing,

High Demand, Fragmented Segment

• We Believe We are Well Positioned to Win Through:

— Breadth of Offering

— Superior Application Expertise

— Strong Global Presence

— Project and Aftermarket Opportunities

• We Expect to Deliver Shareholder Value Through:

— Organic Revenue Growth

— Operation Improvements (PIMS)

— Simplification and Standardization (Lean Enterprise)

2013 Houston Investor & Analyst Event

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PENTAIR 74

WE CONTROL FLOW

We are a World Leader in Valves and Controls74

ACTUATOR: The Muscles

A Mechanical Device Used

to Open and Close a Valve

CONTROLS: The Brains

Instruments Used to Monitor,

Control, or Diagnose a Valve and

Actuator Package

VALVE: The Bones

A Mechanical Device that

Controls the Flow of a

Liquid, Gas, or Vapor in a

Piping System

2013 Houston Investor & Analyst Event

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PENTAIR

VALVES—CRITICAL TO GLOBAL INFRASTRUCTURE

Our Products Enable Safer, More Efficient, and More Sustainable Operations

From Oil & Gas

Upstream Applications

in FPSO Vessels that are

6X Larger than an

Aircraft Carrier…

… to Relief Valves Being

the Last Line of Defense

Preventing Catastrophic

Equipment Failure in

Nuclear Power Plants

… and Control Valves in

Supercritical Steam Power

Plants to Meet the Ever

Increasing Electricity Demand

in the Emerging World

… to High Integrity

Isolation Valves at an

Alumina Refinery with

Highly Caustic, High

Temperature Fluids

Isolation Valves for

Liquid Natural Gas

Terminals Operating at

Extremely Low

Temperatures of -320 F

Zero Leakage Valves Preventing

Escape of Hazardous Gases Like

Phosgene in Petrochem Plants

75

Valves are Highly Critical Components for Energy and Industrial Infrastructure

752013 Houston Investor & Analyst Event

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PENTAIR

• $2.4 Billion in Global Sales*

• 140 Years of Experience

• 10,000 Employees

• 50+ Sales Offices

• 42 Manufacturing Sites

• 80 Service Centers

• 900 Patent Filings in Last 20 Years

• 900+ Technical Sales Staff

• 1,000+ Application and Customer Service Specialists

• Our Products

– Sizes Range from 1 Inch to 7 Feet in Diameter

–Weights from Ounces to Over 30 Tons

–Operate from -370 F to Over 1,100 F

– Are Installed on Every Continent on the Planet

Fasani Gate Valve• 23 Feet High & e31 Tons

• Flare Line Isolation at

Petrochemical Plant

VALVES & CONTROLS FAST FACTS

V&C Offers Significant Experience in a Broad Array of Solutions76

FCT Ball Valve

• Subsea Pipeline Operation

• 1,000 Feet Water Depth

2013 Houston Investor & Analyst Event * 2013 estimated sales.

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PENTAIR

SEGMENT CHARACTERISTICS

Diversified Industry and Geographical Presence77

Oil & Gas

Mining

Power

Chemical

Other

Process

Middle East

ROW

Dev. Asia

Latin

America

N. America

China

India

Europe

Next 10

Competitors

Other

Competitors

Other

Local &

Regional

Competitors

PVC

2013 Houston Investor & Analyst Event

• Target Complex, Difficult

Applications

• Customers are Super-Majors

/ Majors

• Requires High Technology &

Expertise

• Developed Regions Have

Large Installed Base and

Aftermarket Activity

• Emerging Markets Building

New Infrastructure to Support

Growth

• PVC is a Leader

• ~15 True Global Players

• Thousands of Small Local

Competitors; Limited Reach

and Range

Valve ManufacturersIndustry Geography100% = ~$38B 100% = ~$38B 100% = ~$38B

Page 14: 2013 q3  pentair presentation

PENTAIR

KEY TRENDS

Overall Trends Favorable for Strong Growth

CUSTOMER TRENDSINDUSTRY TRENDSDEMAND TRENDS

+ Increasingly Harsh

Operating Environments

+ Increasing Global

Coordination of Large

Complex Projects

+ Growing Focus on Safety

+ Tightening of

Environmental

Regulations

Increasing EPC

Competition

+ Oil & Gas Growth at

Record Levels

+ Growth in NA

Petrochemical

+ Power Industry Seeing

Coal to Gas Transition

+ Power Growth in Middle

East / Asia

Mining Investment

Slowing in the

Short Term

+ Increasing Population

and Growing Middle

Class Resulting in

Greater Demand for

Energy and Power

Total Primary Energy Demand

Source: World Energy Outlook 2012

Presentation by Dr. Fatih Birol, IEA Chief

Economist.

Mtoe

Source: Citi, JPMorgan, Jefferies, UBS, Morgan

Stanley, Deutsche Bank, Bloomberg, BMI

782013 Houston Investor & Analyst Event

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PENTAIR

2325

3032

3634

30

3638 38

4042

44

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

4042

44

GROWTH DYNAMICS ARE EXPECTED TO BE SOLID

Forecasting Moderate Growth Through Next 3 Years

• Global Opportunity for

Valves has Grown ~5%

CAGR Since 2004

• Recent Peak to Trough

Decline of 15%

• We Expect 4-6% Sales

Growth Through 2016

– Continued Demand for

Critical Infrastructure in

Developing Markets

– Marginal Strengthening

in Developed Economies

– Increased Project

Investments after Minor

Slowdown in 2013

CAGR

5%

CAGR

Global V&C Total Addressable Market (TAM)$ Billions

Source: EIF 2012, PNR Estimates

2013 Houston Investor & Analyst Event 79

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PENTAIR

CONSISTENT THROUGH THE CYCLE GROWTH

A Result of Product and Industry Breadth80

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Pentair V&C Sales

6.3% CAGR

Through the Cycle

2013 Houston Investor & Analyst Event

$M

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PENTAIR

0

20

40

60

80

100%

Pentair

Others

Pentair

Others

Pentair

Others

Pentair

Others

Pentair

Others

VALVES USE ACROSS INDUSTRIES

Pentair is a Leader in Targeted Industry Segments

Source: EIF 2012, PNR Estimates

81

• Total Segment Opportunity: $38B

• Pentair Share: ~6%

• Fragmentation in Current Segments Points to Continued Growth

Opportunities Through Share Gain and Acquisitions

2013 Houston Investor & Analyst Event

(IncludesWater, Food & Beverage, Pulp & Paper,

HVAC, Marine, etc.)Oil & Gas Mining Power Chemical

Page 18: 2013 q3  pentair presentation

PENTAIR 2013 Houston Investor & Analyst Event

VALVES PROCUREMENT IN PROJECT CYCLE

Valves Procured Late in Large Capital Projects

Long Cycle

•Compressors

•Automation

System

•Pumps

•Heat Exchangers

“Mid Cycle”

•Control Valves

•Automated

Valves

•Special

Instruments

Short Cycle

•Manual Valves

•Safety Valves

•Standard

Instruments

FEEDDetailed

Design

Construction

and

Installation

PRE-FEED

Equipment

Ordering

Project

ApprovalStart-Up

Project Approval to Start-up Time in Months

• Combined Cycle Power Plant: ~18-24

• Ethylene Plant: ~36-48

• Offshore Platform: ~48-60

• FPSO: ~48-60

~12-36 Months from

Project Approval to

Valves Orders

Operation

82

Page 19: 2013 q3  pentair presentation

PENTAIR

CUSTOMER REQUIREMENTS

Customers Value Better Products83

32%

13%

13%

9%

9%

8%

7%

5%

Valve Performance

Lead Time

On-Time Delivery

Ease of Maintenance

Sales Support

Technical Support

Brand

After-Market Service

Customer Key Buying

Criteria*Valve Performance Defined:

• Cycle Life

• Leakage (Both Inside and

Outside the Pipe)

Better Performance Provides:

• Process Reliability / Uptime

• Process Safety / Lower Risk

• Improved Environmental

Performance

• Lower Capital Costs

• Lower Operating Costs

*Non-price attributes

Source: PV&Cmarket research

2013 Houston Investor & Analyst Event

Page 20: 2013 q3  pentair presentation

PENTAIR

KEY MESSAGES

84

Valves & Controls Positioned to Deliver Superior Value

• Pentair Valves & Controls is a Leading Solution Provider in a Growing,

High Demand, Fragmented Segment

• We Believe We are Well Positioned to Win Through:

— Breadth of Offering

— Superior Application Expertise

— Strong Global Presence

— Project and Aftermarket Opportunities

• We Expect to Deliver Shareholder Value Through:

— Organic Revenue Growth

— Operation Improvements (PIMS)

— Simplification and Standardization (Lean Enterprise)

2013 Houston Investor & Analyst Event

Page 21: 2013 q3  pentair presentation

PENTAIR

VALVES & CONTROLS OFFERINGS

85

Leading Global Valves & Controls Supplier … $2.4B

Actuation

& ControlsQuarter

Turn

Valves

Pressure

Management

Valves

GGC &

Control

Valves

SALES BY PRODUCT PLATFORM

100% = ~$2.4B*

SALES BY VERTICAL

100% = ~$2.4B*

Energy

Industrial

Other

Developed

Fast

Growth

U.S. &

Canada

Western

Europe

SALES BY GEOGRAPHY

100% = ~$2.4B*

SALES BY CHANNEL

100% = ~$2.4B*

Projects

Installed

2013 Houston Investor & Analyst Event * 2013 estimated sales.

Page 22: 2013 q3  pentair presentation

PENTAIR

QUARTER TURN VALVES

~$1B Estimated Quarter Turn Valves Revenue in 201386

SALES BY VERTICAL

EnergyIndustrial

SALES BY REGIONSALES BY CHANNEL

MAJOR BRANDS

SAMPLE CUSTOMERSKEY GROWTH DRIVERS / VERTICALSPRODUCT

• Keystone

• KTM

• Vanessa

Installed

Projects

U.S. &

Canada

Fast

Growth

Other

Developed

Western

Europe

Butterfly

Valve Ball

Valve

• Offshore O&G Platforms

• FPSO (Floating

Production, Storage,

and Offloading)

• Chemical &

Petrochemical

• LNG Terminals

• Food & Beverage

• Cryogenic Isolation

• Corrosive Chemical

Isolation

2013 Houston Investor & Analyst Event

Triple Offset

Valve

100% = ~$1.0B* 100% = ~$1.0B* 100% = ~$1.0B*

* 2013 estimated sales.

Page 23: 2013 q3  pentair presentation

PENTAIR

PRESSURE MANAGEMENT VALVES

87

SALES BY VERTICAL

Energy

Industrial

SALES BY REGIONSALES BY CHANNEL

MAJOR BRANDS

SAMPLE CUSTOMERSKEY GROWTH DRIVERS / VERTICALSPRODUCT

• Anderson Greenwood

• Crosby

• Sempell

Aftermarket Project

Direct Spring

Relief Valve

Pilot

Operated

Relief

Valve

~$600M Estimated Pressure Management Valves Revenue in 2013

• Steam Power Plants

• Nuclear Power Plants

• Oil and Gas Exploration

and Refining

• Petrochemical Tank

Farms

• LNG Terminals

• Power Plant Steam

Boiler Protection

• Refinery Tank Protection

U.S. &

CanadaFast

Growth

Other

Developed

Western

Europe

Installed

Projects

2013 Houston Investor & Analyst Event

100% = ~$0.6B* 100% = ~$0.6B* 100% = ~$0.6B*

* 2013 estimated sales.

Page 24: 2013 q3  pentair presentation

PENTAIR

GATE, GLOBE, CHECK & CONTROL VALVES

88

SALES BY VERTICAL

Energy

Industrial

SALES BY REGIONSALES BY CHANNEL

MAJOR BRANDS

SAMPLE CUSTOMERSKEY GROWTH DRIVERS / VERTICALSPRODUCT

• Clarkson

• Fasani

• Sempell

Installed

Projects

U.S. &

Canada

Fast

Growth

Other

Developed

Western

Europe

Knife Gate

Valve

Globe Valve

~$400M Estimated Gate, Globe, & Check Valves Revenue in 2013

• Steam Control for

Power Plants

• Mining Tailings Isolation

• Steam Power Plants

• Nuclear Power Plants

• Copper and Gold

Mining

• Alumina Refining

• Oil and Gas Exploration

and Refining

2013 Houston Investor & Analyst Event

100% = ~$0.4B*100% = ~$0.4B*100% = ~$0.4B*

* 2013 estimated sales.

Page 25: 2013 q3  pentair presentation

PENTAIR

ACTUATION & CONTROLS

89

SALES BY VERTICAL

Energy Industrial

SALES BY REGIONSALES BY CHANNEL

MAJOR BRANDS

SAMPLE CUSTOMERSKEY GROWTH DRIVERS / VERTICALSPRODUCT

• Biffi

• Morin

• Westlock

Installed

Projects

U.S.

Fast

Growth

Other

Developed

W. Europe

Valve Actuator

Valve

Positioner

~$400M Estimated Actuation & Controls Revenue in 2013

• ~30% Captive V&C

• ~70% Other Valve

Companies

• O&G Pipelines

• O&G Upstream

• FPSO (Floating

Production, Storage,

and Offloading)

• Chemical &

Petrochemical

• LNG Terminals

U.S. &

Canada

Fast

Growth

Other

Developed

Western

Europe

Energy

Industrial

2013 Houston Investor & Analyst Event

100% = ~$0.4B* 100% = ~$0.4B* 100% = ~$0.4B*

* 2013 estimated sales.

Page 26: 2013 q3  pentair presentation

PENTAIR

0

20

40

60

80

100%

Pentair

Target Market

Non-Target

Pentair

Target

Market

Non-Target

Pentair

Target Market

Non-Target

Target

Market

Pentair

Target

Market

Pentair

Target Market

Non-Target

Pentair

Non-

Target

WINNING THROUGH PRODUCT BREADTH

Pentair Valves & Controls is a Leader in all Segments90

#2#1 #1

• Most Product Segments Also Very Fragmented

• PVC Targets the Highly Engineered and Technical Segments of Each Product Space ($23B)

2013 Houston Investor & Analyst Event

(Includes valve parts (seals, etc.), solenoid valves,

fittings, etc.; Excludes control, pressure reducing,

plug, and manual diaphragm valves)

QT PMV GGC A&C OtherService

$9B $4B $12B $2B $9B$2B

Non-Target

Market

Non-Target Market Non-Target

Market

Non-Target Market

Quarter Turn Pressure

Management

Gate, Globe, Check A&CService Other(Includes Valve Parts,

Solenoid Valves, Fittings, etc.)Source: EIF 2012, PNR Estimates

Page 27: 2013 q3  pentair presentation

PENTAIR

WINNING THROUGH APPLICATION EXPERTISE

Leading Brands are Trusted for Critical Applications91

• 75 Years of

Experience

• The World’s First

Supplier of Full

Bore, Split Body

Type Ball Valves

• Developed the

Resilient Seated

Butterfly Valve

in 1951

• Provides Market

Leading Cycle Life

• Started in 1874

• Trusted to Protect

Nuclear Submarines

and Commercial

Nuclear Plants in the

US and Across the

World

• A Leading Supplier of

Relief Valves with a Track

Record of Product

Innovations and

Technical Breakthroughs

to Solve the Toughest

Application Challenges

ANDERSONGREENWOOD

CROSBYKEYSTONE

KTM

2013 Houston Investor & Analyst Event

Page 28: 2013 q3  pentair presentation

PENTAIR

WINNING THROUGH APPLICATION EXPERTISE

Leading Brands are Trusted for Critical Applications92

• Developed the Metal

Seat Valve with “Zero

Leakage”

• Used in Highly

Challenging Isolation

Applications

• Pioneer of the Dual

Elastomer Sleeve

Slurry Valve

• One of the Highest Quality

and Most Technologically

Advanced Slurry Valves on

the Market

• 140 Years of Experience

• Deep Expertise in Power

Plant Valve Applications

for Both Nuclear and

Conventional Fuels

• A Leading Actuator

Manufacturer for Over

50 Years

• Wide Range of Standard

and Custom Designed

Automation Solutions

SEMPELL

BIFFICLARKSON

VANESSA

2013 Houston Investor & Analyst Event

Page 29: 2013 q3  pentair presentation

PENTAIR

WINNING WITH GLOBAL PRESENCE

We Can Make Commitments at a Global Level and Execute Consistently Locally

Service Center

Mobile Service Center

Major Manufacturing Location

Major Sales Office

50+ Sales Offices

80 Service Centers

42 Manufacturing Plants

1900

780

1100

2800

1050

650

675350

932013 Houston Investor & Analyst Event

# Employees

Page 30: 2013 q3  pentair presentation

PENTAIR

WINNING WITH GLOBAL PRESENCE

Pentair Provides Global Scale to Serve Our Customers’ Needs

Downstream

Activity

UNITED STATES

Upstream

Activity

Jetty

Pipeline

Downstream

Activty

AUSTRALIA

LNG Storage Tanks

FRANCE

Chevron Wheatstone Project Scope…

• LNG Plant in Western Australia

• $29B Project

• 25M Tonnes / Year LNG Production

• 650M / Day Cubic Feet Domestic Gas

942013 Houston Investor & Analyst Event

PVC Involvement

Project Management

Sales Offices

Plants

Service

Pentair Valves & Controls Supplied:

Anderson Greenwood & Crosby Relief Valves

Biffi Actuators

Vanessa Triple Offset Valves

Richards Ball Valves

EPC 1

LNG Tank Supplier

EPC 1

EPC 2

Jetty

Consortium

Pipeline

Supplier

Page 31: 2013 q3  pentair presentation

PENTAIR

WINNING WITH GLOBAL PRESENCE

95

Latin America

•Hiter Acquisition in Brazil

•Localized Assembly and

Test for Actuators, Pressure

Relief, Butterfly, Knife Gate,

and Control Valves

China

•Localized Assembly and

Test for Actuators,

Butterfly, Ball, Pressure

Relief, and Knife Gate

Valves

India

• Localized Assembly and

Test for Actuators,

Butterfly, and Slurry

Valves

Middle East

•KEF Acquisition in UAE

•Localized Assembly

and Test for Gate,

Globe, Check, and Ball

Valves

• Local Design & Development to Meet Regional Needs

• Local Assembly & Test to Reduce Lead Times

Using Our Global Footprint to Better Serve Our Customers2013 Houston Investor & Analyst Event

Page 32: 2013 q3  pentair presentation

PENTAIR

WINNING WITH PROJECT AND AFTERMARKET

Valve Growth Driven by Infrastructure Expansion and Operation96

Refinery (300,000 Barrels Per Day)

• ~$200M in Valves for Greenfield Site

• ~$7M in Annual Aftermarket Opportunity

LNG Liquefaction Plant (8 MTPA)

• ~$150M in Valves for Greenfield Site

• ~$12M in Annual Aftermarket Opportunity

Alumina Refinery

(5 MTPA)

• ~$50M in Valves for

Greenfield Site

• ~$5M in Annual

Aftermarket

Opportunity

Power Plant (600MW Coal Fired)

• ~$6M in Valves for

Greenfield Site

• ~$1M in Annual

Aftermarket

Opportunity

2013 Houston Investor & Analyst Event

Page 33: 2013 q3  pentair presentation

PENTAIR

KEY MESSAGES

97

Valves & Controls Positioned to Deliver Superior Value

• Pentair Valves & Controls is a Leading Solution Provider in a Growing,

High Demand, Fragmented Segment

• We Believe We are Well Positioned to Win Through:

— Breadth of Offering

— Superior Application Expertise

— Strong Global Presence

— Project and Aftermarket Opportunities

• We Expect to Deliver Shareholder Value Through:

— Organic Revenue Growth

— Operation Improvements (PIMS)

— Simplification and Standardization (Lean Enterprise)

2013 Houston Investor & Analyst Event

Page 34: 2013 q3  pentair presentation

PENTAIR

2011 2012 2013F 2015T

2011 2012 2013F 2015T

PNR V&C EXPECTATIONS

Higher Quality of Revenue and Stronger Operating Performance

Top 2014 / 2015 Priorities

1. Drive Organic Revenue Growth

Through New Product

Developments

2. Capture Growth Through

Improved Customer Service

and Operations Improvements

3. Simplify Our Business

2013 Houston Investor & Analyst Event

Sales ($B)

Operating Income ($M)

2.4

>4%

2.42.3

2.7

232 244295

400+

ROS 10.2% 10.3% 12.5% >15%

98

Page 35: 2013 q3  pentair presentation

PENTAIR

RENEWED PRODUCT INNOVATION

PIMS Tools Driving Standardized Approach to Product Development99

New Product Sales Have Grown from

$0 in 2010 to an Estimated $40M+ in

2013 with a Strong Funnel for 2014+

1990's 2000's 2010's

Patent Filings

Patent Filings are Back to 1990s

Levels Showing Reinvestment in

Product Technology

~60 / Year

~28 / Year

~60 / YearDiscover

23 Projects

~ $50M+

Develop

Deploy

25 Projects

~ $80M+

17 Projects

~ $50M+

New Product Development Funnel3 Year Run Rate Revenue Estimate

2013 Houston Investor & Analyst Event

Page 36: 2013 q3  pentair presentation

PENTAIR

RENEWED PRODUCT INNOVATION

Pentair Valves are Innovative100

Keystone GR Series Butterfly Valves are More Durable

• Independent Lab Testing Verifies Cycle Life of 2.5X Our

Nearest Competitor

• Sizes Ranging from 2” – 72” and 1,000+ Trim Configurations

Vonk Choke Valves Last Longer

• Unique Rotating Disc Technology Provides 3X Longer Cycle Life than

Competing Products

• Customer Field Testing in Shale Gas Applications have Shown 4X Longer

Cycle Life Leading to Lower Maintenance Costs

Clarkson Knife Gate Valve Solves Customer Problem

• Canadian Oil Sands Customer was Replacing Knife Gate Valves Every 6 Weeks

• Pentair Used Computational Fluid Dynamics to Determine Root Cause of

Wear and Designed a New Valve

• Redesigned Valve now Lasts 2 years—17X Longer than Competing Valve

2013 Houston Investor & Analyst Event

Page 37: 2013 q3  pentair presentation

PENTAIR

RENEWED PRODUCT INNOVATION

Pentair Valves are Innovative101

Narvik CircTemp Desuperheater PerformMore Effectively

• Optimized for Supercritical Boilers Operating at 1,100 F and to Withstand

2,000 Cycles Annually

• Independent Lab Testing Verifies a 50% Reduction in Evaporation Rates

Leading to Shorter Pipe Distances, Saving Installation, and Operating Costs

Keystone CompoSeal Butterfly Valves are More Environmentally Friendly

• Patented Composite Two Piece Housing can Operate at 10 Bar and 250 F,

Giving a Light Weight Alternative to Metal Body Valves

• 70% Lower Carbon Foot Print Compared to an Ordinary Butterfly Valve

with Fully Recyclable Material

Vanessa Triple Offset Valves Give Best Isolation

• First Triple Offset Valve with True Zero Leakage Performance

• The Preferred Triple Offset Valve in Cryogenic Applications

• Over $500 Million in Project Wins in Last 5 Years

2013 Houston Investor & Analyst Event

Page 38: 2013 q3  pentair presentation

PENTAIR

RENEWED PRODUCT INNOVATION

Pentair Valves are Innovative102

Wellbond High Pressure Globe Valve is Easily Repaired

• Design-for-Maintenance Approach Offers Fastest and Lowest Cost In-

Line Repair vs. Competitors

• Typical Plant with 100 Valves may see up to $1M in Life Cycle Savings

Clarkson Slurry Knife Gate Valves provide more process uptime

• Patented Sleeve Design Resists Jamming and Provides Bubble Tight

Shut Off for Slurry Flows

• Field Replaceable Sleeves Reduce Repair Time and Increase

Operating Up-Time

Biffi OLGAS Hydraulic Actuator Provides Record Operating Time

• Designed for Operation in High-Integrity Pressure Protection

Systems (HIPPS) to Prevent Over-Pressurization

• Unique Design Allows for Record Closing TimeWhile Preventing

Impact Damage to the Valve

2013 Houston Investor & Analyst Event

Page 39: 2013 q3  pentair presentation

PENTAIR

ORGANIC GROWTH—LEAN

Lean Efforts Driving ~12% Increase in Aftermarket Sales

Aftermarket Focus

• Focused Resources, Programs, and Incentives to Drive MRO Product Sales

• Lean Transformation to Simplify RFQ Process and Improve Organization Capability to

Handle Increased Volume

• Target Inventory Program to Support Off-the-Shelf

• Rapid Growth Process (RGP) to Test Sites with Opportunities

1032013 Houston Investor & Analyst Event

Q1 Q2 Q3 Q4 Q1 Q2 Q3

+12%

0

0.1

0.2

0.3

0.4

Jan Feb Mar Apr May Jun Jul Aug Sep

Global MRO Sales

2012 2013

Pasadena Inside Sales ProductivityQuotes/Person/Hour

Lean Kaizen Event

Page 40: 2013 q3  pentair presentation

PENTAIR

SERVICE FACTS

104

• 80 Locations

• 600 Technicians

• Over 5,000 Customers

• Over 55,000 Square Meters of Shop Space

• 200,000 Order Transactions

• 80 Locations

• 600 Technicians

• Over 5,000 Customers

• Over 55,000 Square Meters of Shop Space

• 200,000 Order Transactions

A Leading Global Valves Services Network2013 Houston Investor & Analyst Event

Page 41: 2013 q3  pentair presentation

PENTAIR

GROWTH THROUGH SERVICE CENTER EXPANSION

October 2013

Macae, Brazil

New February 2011:

Port Arthur, TX

NewMarch 2012:

Coatzacoalcos, Mexico

New August 2013:

Tampico, Mexico

Extension 2012

Baton Rouge, LA

Extension 2012

Pasadena, TXLatin America

April 2013

Buenos Aires

Argentina

Vizag

Dec 2013

Hazira

Dec 2013

Asia

Rayong, Thailand

March 2011

Songkla, Thailand

October 2010

Pacific

September 2011

Karratha, AUS

Extension 2012

Gladstone, AUS … and Others in

Europe, US,

Canada

Following Our Customers to Support Them Locally1052013 Houston Investor & Analyst Event

Page 42: 2013 q3  pentair presentation

PENTAIR

GROWTH THROUGH AN EXPANDED OFFERING

106

Automation

Valves Asset Management

Turnaround Planning

Turnaround Execution

Project Commissioning

Diagnostics

Spare Parts Supply

On Site Repair

In Shop Repair

• Many Service Centers Have Developed Local

Innovative Services Offerings

• Service Centers were Brought Under Single Global

Management in 2013 to Drive Standardization

and Best Practices Across the Network

Innovating to Improve Customers Total Cost of Ownership

Basic

Services

Higher Value

Services

2013 Houston Investor & Analyst Event

Page 43: 2013 q3  pentair presentation

PENTAIR

Key Account Program Creates Organic Growth107

• Domain Expertise within Supply Base to

Solve Difficult Application Requirements

• Supplier Rationalization to Simplify

Supply Chain Operations

• Standardization to Improve Operations

and Reduce Maintenance Costs

• Peace of Mind that Products Will

Perform Efficiently, Reliably, and Safely

V&C Customer Buying Trends

ORGANIC GROWTH—GLOBAL KEY ACCOUNTS

Value of V&C Key Account Management

• Leading Engineering Capabilities

Enables Breakthrough Solutions

• Single Point of Contact Aligns with

Customer Supply Chain Strategy

• Portfolio ofWorld Class Products

Covers Wide Range of Needs

• Global Service Footprint Supports

Customer Facilities

2011 2012 2013F

24%

CAGR

15% of PV&C Revenue with Strong Growth

Oil & Gas Petrochem Mining Process Power

Global Key Accounts Across Multiple Industries

BP

Chevron

ConocoPhillips

ExxonMobil

Shell

Total

BASF

Bayer

Dow

Sabic

BHP

Freeport-

McMoRan

Newmont

RioTinto

Air Products

Praxair

Siemens

Veolia

Alstom

2013 Houston Investor & Analyst Event

Page 44: 2013 q3  pentair presentation

PENTAIR

IMPROVE CUSTOMER EXPERIENCE

PIMS Toolkit Supports Growth for V&C108

0.31

-0.23

-0.39

0.08

0.30

0.22

0.31

0.05

Valve Performance

Lead Time

On-Time Delivery

Ease of Maintenance

Sales Support

Technical Support

Brand

After-Market Service

V&C Performance vs.

CompetitorsPIMS as Growth Tool

Source: PV&Cmarket research

• Customers Prefer Our

Products, Support, and

Services

• Key Priority is Improving

Customer Experience Via:

Lean Factory

Improvements

Global Sourcing

Office Based Lean

2013 Houston Investor & Analyst Event

Page 45: 2013 q3  pentair presentation

PENTAIR 109

FAST LEAN EXECUTION

Valves & Controls Adopted LEAN Successfully within 12 Months

Expansion

of “4 Wall”

Lean to

Enterprise

Services

and Sales

Offices

LEAN

BeginsLegacy

OpEx

Lean

Assessment

12 LEAN

Focus Sites

42 Sites

Lean Plans

CCF / MMF

/ PFEP

Events

Mar 12 Jun 12 Sep 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14

LEAN in

Our DNA!

PNR / TYC

Announcement

1st PIMS

Meetings

PNR / Flow

Control

Merger

*Lean Transformation Plan

12 Focus Sites Cover

$1B Sales

2013 Houston Investor & Analyst Event

Page 46: 2013 q3  pentair presentation

PENTAIR

IMPROVE CUSTOMER EXPERIENCE—LEAN FACTORY

Improved Lead Times—Sample Results to Date:

• High Performance Butterfly Valve Lead Times Reduced from 20 Weeks to 6 Weeks

(Breda, Netherlands)

• Safety Relief Valves Lead Time Reduced from 12 Weeks to 6 Weeks (JOS) and from 12

Weeks to 7 Weeks for OMNIs and 80s (Stafford, TX)

15+ Product Lines Have Seen Lead Time Reductions in Last 9 months110

Example: Breda, Netherlands After: Productivity Increased by 200%,

WIP Reduced by 99%, and Space by 75%

2013 Houston Investor & Analyst Event

Page 47: 2013 q3  pentair presentation

PENTAIR

IMPROVE CUSTOMER EXPERIENCE—LEAN FACTORY

Improved Quality—Sample Results to Date:

• Reduced Rejects on RPI Actuator Line by 47%

• 38% Reduction in Slurry Knife Gate Valve Defects

• Defects on Safety Relief Valve Line Reduced by 62%

Improved Quality Leading to Shorter Lead Times and Lower Costs111

Example: Armentieres, France After: Building All Small Valves in “One

Piece Flow” Reduced Rejects Significantly

Improved First

Pass Yields and

Less Rework

2013 Houston Investor & Analyst Event

Page 48: 2013 q3  pentair presentation

PENTAIR

IMPROVE CUSTOMER EXPERIENCE—LEAN FACTORY

Increase Available Space—Results to Date:

• Overall 10%+ Reduction in Space in Our Major Focus Sites Freeing Up Over

250,000 Square Feet of Available Factory Space

Utilizing Space to Expand Localization Efforts — Further Reducing Lead Times to Customers

112

Example: Qingpu, China

Example: Black Mountain, NC

2013 Houston Investor & Analyst Event

Page 49: 2013 q3  pentair presentation

PENTAIR

IMPROVE CUSTOMER EXPERIENCE—OFFICE LEAN

• V&C Multi-Million $ Projects are Complex

– Custom Engineered Products

– Multiple Plants

– Multiple Constituents: Suppliers, Inspection

Agencies, Freight Companies, End Users, and

EPC Firms

– Detailed Testing and Certification

Paperwork Required

• Applying Lean Principles to Managing Projects:

– Variable Staffing to Match Project Phase

– Co-Located Office Teams for Hyper

Communication

– Standard Work for Project Control

– Daily Gemba Walks to Identify Issues and

Resolve Quickly

– Daily Objectives to Drive Results

Customers Praise the Dedicated Focus113

Daily Gemba Walk for Project Team

Early Results Show Improved Delivery,

Improved Quality, Reduced Costs, and

Happier Customers

2013 Houston Investor & Analyst Event

Page 50: 2013 q3  pentair presentation

PENTAIR

SIMPLIFICATION—LEAN ENTERPRISE

Key Metrics 2010 2013F 2017T

Plants 48 ~40 < 40

ERP 39 29 TBD

% Production in Destination

Region

61% 66% > 75%

Product Groups 30+ 12 5

MILESTONES

• 2010-2011: Dissolved Regional

Organizations and Created Global Vertical

Industry Focus

• 2012: Creation of Global Functional Group

Increased Speed and Efficiency of Decision

Making and Execution

• 2013: Consolidating Product Management

Under 4 Core Global Product Platforms

• 2014: Begin Rollout of Global ERP Template

and System Consolidation

Aggressively Reducing Complexity114

We are Building a Lean Business Model to:

• Improve the Customer Experience

• Use Our Global Portfolio

• Create an Efficient High Performance

Global Organization

2013 Houston Investor & Analyst Event

Page 51: 2013 q3  pentair presentation

PENTAIR

KEY MESSAGES

115

Valves & Controls Positioned to Deliver Superior Value

• Pentair Valves & Controls is a Leading Solution Provider in a Growing,

High Demand, Fragmented Segment

• We Believe We are Well Positioned to Win Through:

— Breadth of Offering

— Superior Application Expertise

— Strong Global Presence

— Project and Aftermarket Opportunities

• Expect to Deliver Shareholder Value Through:

— Organic Revenue Growth

— Operation Improvements (PIMS)

— Simplification and Standardization (Lean Enterprise)

2013 Houston Investor & Analyst Event

Page 52: 2013 q3  pentair presentation

PENTAIR 2013 Houston Investor & Analyst Event

APPENDIX: VALVES 101

116

Page 53: 2013 q3  pentair presentation

PENTAIR

VALVES 101—WHAT IS A VALVE

Valve: A Valve is a Mechanical Device Whose Function is

to Control the Flow of Fluids in a Piping System

– Control Applied to These Fluids can Take Multiple

Forms

• Starting and Stopping Flow (Isolation or On/Off)

• Limiting or Managing Fluid Pressure

• Preventing Reverse Flow (Backflow)

• Changing Flow Direction

• Regulating Flow Volume (Throttling)

– Fluids can be Liquids, Gases, and Vapors, and can

also be Liquids Carrying Suspended Solid Particles

(Slurries)

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

A “Globe” Valve, Used to

Start and Stop Flow

A “Pressure Relief” Valve,

Used to Regulate Pressure

2013 Houston Investor & Analyst Event 117

Page 54: 2013 q3  pentair presentation

PENTAIR

VALVES 101—QUARTER TURN VALVESQuarter-Turn Valves: Category of Valves (Such as Ball or Butterfly) Which Require 90

Degree Turn of the Stem to Move from the Fully Open to the Fully Closed Position.

Typically Used for Isolation and Throttling Applications.

Ball Valve

A Quarter-Turn Valve with a Ball

Shaped Closing Element held Between

Two Seats. Ball Valves are Widely Used

as On/Off Valves, but Some Special

Designs are Available for Throttling

Applications.

Butterfly Valve

A Quarter-Turn Valve Which has a Circular Disk as its

Closing Element. The Standard Design has the Valve

Stem Running Through the Disk, Giving a

Symmetrical Appearance. Later Designs Off-Set the

Stem, so that the Disk ‘Cams’ into the Valve Seat.

2013 Houston Investor & Analyst Event

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

118

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PENTAIR

VALVES 101—GATE AND GLOBE VALVESGate Valve

A Multi-Turn Valve Used for Isolation Applications

Which has a Gate as its Closing Element. The Gate

Moves Linearly, Perpendicular to the Direction of Flow.

Gate Valves Provide Robust Sealing and are used

Extensively in the Petrochemicals Industries. This Class

of Valves also Includes Knife Gate Valves, which have

much Thinner Gates with a Knife-like Edge, Making

them Suited to use with Floating Solids.

Globe Valve

A Multi-Turn Valve with a Closing Element

that Moves Perpendicularly to the Valve

Body Seat and Generally Seals in a Plane

Parallel to the Direction of Flow. This Type

of Valve is Suited both to Throttling and

General Flow Control.

2013 Houston Investor & Analyst Event

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

119

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PENTAIR

VALVES 101—CHECK AND CONTROL VALVESCheck Valve

A Valve that is Designed to Allow the Fluid

to Flow in a Given Direction but Closes to

Prevent Backflow. Check Valves (also

called Non-Return Valves) are Usually Self-

Acting.

Control Valve

A Valve which Regulates the Flow or Pressure of a

Fluid. Control Valves Normally Respond to Signals

Generated by Independent Devices such as Flow

Meters, Temperature Gauges, etc. Control Valves

are Normally Fitted with Actuators and

Positioners.

2013 Houston Investor & Analyst Event

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

120

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PENTAIR

VALVES 101—PRESSURE MANAGEMENT VALVESPressure Management Valves: Category of Valves used to Reduce Excess Pressure in

Pressurized Systems, for Example a Steam Boiler. Pressure Management Valves

Automatically Open to Relieve Overpressure which Prevents Potentially Violent

Equipment Failure.

Direct Spring Relief Valves

Typically use a Spring to Hold the disc

or Piston on the Seat.

Pilot Operated Relief Valves

The Difference Between PORV and Spring Loaded

PRV is that Pilot Valves use System Pressure to Seal

the Valve.

2013 Houston Investor & Analyst Event

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

121

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PENTAIR

VALVES 101—ACTUATORS AND CONTROLS

Actuator

Actuators are Mechanical Devices

that use Hydraulic, Pneumatic, or

Electric Power to Provide the

Muscle (Torque or Thrust) Needed

to Move a Valve to Open, Closed,

or Stop Positions.

Actuators & Controls: Valves can be Operated with a Variety of Mechanisms from Simple

Lever Handles and Hand-Wheels to Very Complex Valve Automation Systems.

Gears

Gears are Mechanical Devices

Used with Valves and / or

Actuators to Provide the Muscle

(Torque or Thrust) Needed to

Move a Valve to Open, Closed, or

Stop Positions.

Controls

Controls are the Brains which

Command the Actuators’ Power.

They are Instruments and / or

Systems Necessary to Provide Local

or Remote Monitoring, Control,

and Diagnostics of Valves.

2013 Houston Investor & Analyst Event

Source: The Valve Primer, Brent T. Stojkov, Industrial Press Inc.

122