Flowserve (FLS) Bank of America’s 33th Annual Industrials, Transportation and Airlines Key Leaders Conference summary

Market environment and business performance

• Remains constructive on the industrial environment, with strong interest and tailwinds in the power sector, especially nuclear and aftermarket services.

• Achieved eight consecutive quarters with over $600 million in aftermarket bookings, focusing on customer service and growth.

• MRO business started slow in early 2026 but rebounded in March and April, supporting mid-single digit bookings growth guidance for 2026.

• Middle East disruptions impacted Q1 revenue, with expectations for continued effects into Q2 and potential recovery or rebuild opportunities in the second half.

• Nuclear segment saw $110 million in Q1 orders, with backlog growth driven by life extension and aftermarket work.

Operational initiatives and strategic focus

• 80/20 SKU reduction strategy began in industrial pumps, achieving a 40% SKU reduction and supporting portfolio decisions and divestitures.

• Valves business started 80/20 later, with benefits expected to accelerate in 2026; discontinued low-margin fabricated business from MOGAS.

• 80/20 framework aims to free resources for best products and customers, with commercial teams embracing the approach for growth.

• Margin expansion targets are supported by operational simplification and commercial excellence, with growth as a potential accelerator.

Market trends and outlook

• Chemical sector stabilized in 2025, with Q1 2026 bookings growth led by North American aftermarket; Europe stable at lower levels, Asia monitored for feedstock risks.

• Opportunity funnel for the next 12 months shows sequential growth, excluding Middle East rebuild activity; power and nuclear remain strong.

• General industries, including food & beverage, pharma, water, mining, and electrification, identified as key growth vectors for the next 3–5 years.