Flowserve (FLS) Baird 2026 Global Industrial Conference summary

Q3 performance and 2030 targets

• Q3 bookings were ~$1.3B, with record backlog and aftermarket; margin expansion continued.

• Long-term targets remain mid-single-digit revenue growth and 20% operating income by 2030, plus double-digit EPS growth.

• Q3 operating margin was ~16%; the plan calls for roughly 100 bps of annual margin improvement through 2030.

Margin improvement levers

• The operating system, launched in 2023, drives operational, portfolio, commercial, people and innovation excellence; operational excellence and 80/20 portfolio actions are key margin drivers.

• Manufacturing productivity work targets lower variances and cost per standard hour; 80/20 focuses resources on higher-value products and customers.

• Aftermarket revenue has grown mid- to high-single digits for three years, outpacing OE; higher aftermarket margins support expansion.

• Pricing initiatives and more substantial facility consolidations are expected to add margin; consolidation removes overhead and increases scale at key sites.

• Trillium Valves, acquired in Q2, currently has margins slightly below the blended level; synergies and 80/20 are expected to lift margins above it.

Revenue growth and end markets

• The 2030 revenue framework is 4%-6%; 80/20 portfolio exits weigh on revenue in 2026, with a smaller headwind in Q4 and further easing in 2027.

• Record backlog and growth in power, energy security and general industries support the outlook; aftermarket growth also benefits from improved installed-base capture.

• The project funnel rose sequentially, led by power, with energy security and general-industry opportunities supporting visibility into 2027 and beyond.

• Refining operators have delayed spending and turnarounds amid high utilization; maintenance spending is expected to begin recovering in 2027.