®

John JackoVice President

Marketing & Communications

Accelerating the Vision, Together

®

John JackoVice President

Marketing & Communications

Accelerating the Vision, Together

®

Title HereText here Bullet here

®

Title HereText here Bullet here

®

®

Title HereText here Bullet here

®

®

Agenda Company Overview Making The Customer Our Focus Marketing – Why, What Is It? Functional Organization Branding Strategy

Take away copy point here

®

Sales by Region

Sales by Market

Sales by Business Segment

2003e Sales$2,500M

Seals14%

Valves37%

Pump49%

AP9%

EMA34%

LA8%

NA49%

Flowserve - 2003

® Five Key Strategic Objectives

Organic Growth

Globalization

AcquisitionIntegration

Process Excellence

Productivity

CustomerSatisfaction

Productivity and Growth

Core Competency

Customer Fulfillment

Installed Base

Change Management

Organizational Capability

® Flowserve Management System (FMS)

Improve organizational alignment and readiness to implement strategy Asia Pacific (China, Japan, India, Australia) evaluation & expansion Accelerate strategic sourcing and supplier consolidation efforts

Fully embrace FMS & CIP…into Operational Excellence Sarbanes - Oxley compliance Data standardization implementation Fix focus operations - Vernon, ISG, Hamburg..return to profitability

Pursue strategic "tuck in" acquisitions / non-core divestitures Develop integration core competency

Develop new product and service pipeline Drive rotating equipment sales force alignment Define and begin implementation of FCD end user model

Bui

ld F

low

serv

e br

and

and

cultu

re

Geo

grap

hic

expa

nsio

n of

end

mar

kets

and

sou

rcin

g

Top

Tie

r fin

anci

als:

15%

Op.

Pro

fit %

Sal

es /

15%

RO

NA

Acq

uisi

tion

grow

th o

f $3

.0 B

Org

an

ic g

row

th o

f $5

00

M v

ia e

nd

use

r/lif

e c

ycle

mg

mt f

ocu

s

Gro

w o

rgan

ic s

ales

to

$2.5

0 B

$300

M s

trat

egic

gro

wth

pro

gram

s id

entif

ied

for

'05-

'07

Com

plet

e st

rate

gic

tran

sact

ions

of

$100

M

Ach

ieve

$22

0 M

Ope

ratin

g P

rofit

/ 8

.8%

OP

Mar

gin

Impr

ove

inve

ntor

y tu

rns

by 1

Impr

ove

DS

O's

10%

100%

com

plia

nce

on p

olic

ies

and

proc

edur

es

Red

uce

mat

eria

l cos

ts b

y 4%

/

incr

ease

LC

S%

to

15%

Cre

ate

key

coun

trie

s' m

anag

emen

t st

ruct

ure

Imp

lem

en

t fu

nct

'l o

rga

niz

atio

n a

nd

targ

ete

d tr

ain

ing

pro

gra

ms

FS

D

FC

D

FP

D

Pla

nnin

g

Acc

ount

ing

/ T

reas

ury

/ T

ax

HR

Lega

l

IT Mar

ketin

g &

Com

mun

icat

ions

Sup

ply

chai

n /

CIP

Globalization Organic growth @ 2X market rate Leading industry consolidator Primary Responsibility

Low cost / process excellence mindset Secondary Responsibility Organizational capability via 6 C's

Resources

2004 Contributions to Objectives

(HOW)

Long-Term Objectives

2004-2008 Breakthrough

Objectives (WHAT)

2004Targets

(HOW MUCH)