AEP Capital Markets Day 12 June 2014 Advanced Sealing Technologies Leonard Casey, Divisional Managing Director Fenner PLC Board Away Day 2014 1
Introduction to Advanced Sealing Technologies Advanced Sealing Technologies manufactures performance seals and polymer components Extensive product portfolio of seals for oil & gas, fluid power and petrochemical applications Currently qualified to supply major service and OEM companies in our industries Comprised of two global companies and two US-based companies, representing 50% of AEP by revenue Fenner PLC AEP Capital Markets Day June 2014 2
Leonard Casey Work experience May 2013 Present Divisional Managing Director, Advanced Sealing Technologies Division 2006 2013: Fenner Advanced Sealing Technologies - Houston 2002 2006: Weatherford International 1984 2002: Halliburton Education Bachelor's Degree, Electrical Engineering, University of New Orleans Fenner PLC AEP Capital Markets Day June 2014 3
Overview of Advanced Sealing Technologies Custom Seals for Upstream Oil and Gas Applications Custom Pump, Valve, and Compressor Components for Midstream and Downstream Applications Catalogue Seals for Fluid Power Applications in Construction and Mining Precision Machined Custom Components Fenner PLC AEP Capital Markets Day June 2014 4
Advanced Sealing Technologies revenue breakout 7% 3% 20% 50% 20% Hallite EGC AEP other CDI AIP Fenner PLC AEP Capital Markets Day June 2014 5
Principal market Upstream Oil & Gas Principal products Custom Seals Primary applications High-Pressure Pumps 7% 13% Locations Americas Asia Europe 40% 40% Hallite CDI Energy Products EGC Critical Components AIP Precision Machining Bottom image courtesy of National Oilwell Varco Fenner PLC AEP Capital Markets Day June 2014 6
Principal markets Midstream/ Downstream Oil & Gas Principal products Wear Products Seals Connectors Primary applications Locations Pumps Valves Compressors Americas Asia Europe USA 13% 7% 40% Hallite CDI Energy Products EGC Critical Components AIP Precision Machining 40% Top image courtesy of FMC Technologies Fenner PLC AEP Capital Markets Day June 2014 7
Principal markets Construction & Mineral Extraction Equipment Principal products Seals Primary applications Locations Hydraulic cylinders for fluid power Americas Asia Europe Americas Asia Europe 13% 40% 7% 40% Hallite CDI Energy Products EGC Critical Components AIP Precision Machining Fenner PLC AEP Capital Markets Day June 2014 8
Principal markets Energy Industrial Medical equipment Principal products Precision machined products Primary Core competencies applications Locations Rapid concept-toprototyping Tight tolerances Complex geometries Americas Asia Europe USA 13% 7% 40% Hallite CDI Energy Products EGC Critical Components AIP Precision Machining 40% Fenner PLC AEP Capital Markets Day June 2014 9
Advanced Sealing Technologies divisional market focus Energy Value Chain Our product applications overlap multiple market segments Key customers operate in connected market segments Fenner PLC AEP Capital Markets Day June 2014 10
Case Study: CDI Energy Products a story of growth and globalisation Fenner PLC AEP Capital Markets Day June 2014 11
Founded in 1974 Distributor of O-rings Located in Houston
CDI Seals is purchased by Wellington Holdings. CDI Seals starts to supply customers in Europe.
Fenner purchases Wellington Holdings.
Fenner acquires EGC Plastics for advanced polymer processing and oil and gas sales presence. CDI and EGC co-locate into state-of the-art, 210,000 sq. ft. manufacturing facility in Houston, Texas.
Created dedicated CDI management team to focus and align to upstream oil and gas markets Developed a strategy to grow through acquisitions and organic investments with the goal of developing a regional delivery model
Acquired long time distributor Multiseals to strengthen presence in Southeast Asia
Norwegian Seals acquired to complement existing European capabilities and strengthen our subsea market presence
CDI has established global coverage
CDI s Tuff Breed Well Service packing developed in Houston through organic investment Enabled substantial growth in the U.S. for hydraulic fracturing applications As pressure pumping gains momentum internationally, CDI s global footprint will enable growth in other regions
revenue development 60m 50m 40m 30m 20m 10m 2005 Fenner acquired CDI via Wellington Since 2005, CDI revenue has grown at 21% p.a. CAGR 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Fenner PLC AEP Capital Markets Day June 2014 21
Current business Well established in upstream energy market with top OEM customers Regional manufacturing and service capabilities Highly focused growth strategy Growth potential Upstream is fastest growing market with largest potential - Asia, South America and North America Leverage global footprint to exploit upstream energy markets Development of new materials and products Strategic Business Development Planning additional investments Fenner PLC AEP Capital Markets Day June 2014 22
Advanced Sealing Technologies - future vision Increased focus on energy value stream market segments More focused on in-depth application knowledge than competitors Very exciting future enabled by material portfolio, diverse manufacturing processes and unique market knowledge Fenner PLC AEP Capital Markets Day June 2014 23