Question · Q3 2025
Damian Karras asked about the projected profitability of nuclear awards, considering historical industry competitiveness during mega growth cycles that led to slim OE margins. He also inquired about the asbestos transaction's impact on Flowserve's cost of financing and the company's plans for its newfound balance sheet flexibility.
Answer
Scott Rowe, Flowserve's President and CEO, explained the multi-year lifecycle of new nuclear reactors, emphasizing high barriers to entry due to extensive engineering and quality requirements, which makes it difficult for new suppliers. He stressed the importance of performance, delivery, and capacity. Amy Schwetz, Flowserve's CFO, added that the asbestos divestment is credit enhancing but not significantly impactful on financing costs. She highlighted increased capital allocation opportunities, including opportunistic share repurchases and M&A for growth, guided by strict value creation criteria.