Slide 1: Q3 2017 Earnings Release
Q3 2017 EARNINGS RELEASE October 24, 2017 Q3 2017 Earnings Release
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS CAUTION CONCERNING FORWARD-LOOKING STATEMENTS THIS PRESENTATION CONTAINS STATEMENTS THAT WE BELIEVE TO BE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT ARE F
Slide 3: Key Definitions
KEY DEFINITIONS • Except as Otherwise Noted All References to 2017 and 2016 Represent Our Results from Continuing Operations for the Period Indicated, Presented on an Adjusted Basis • "Core Sales" Refers to GAAP Revenue from Continuing Operations Excluding (1) the Impact of Currency Translation and
Slide 4: Executive Summary
EXECUTIVE SUMMARY • Adjusted Core Sales Grew 1% Solid Performance • Return on Sales Expanded 100 bps to 18.9% Across the Board • Adjusted EPS Grew 22% • Electrical Form 10 Expected to be Filed in Coming Week Separation Remains • First and Second Level Management Identified on Track • On Track for Sp
Slide 5: Q3'17 Pentair Performance
Q3'17 PENTAIR PERFORMANCE SALES FINANCIAL HIGHLIGHTS (YoY) $15M $3M $16M $1.23B $1.21B Adjusted Core Sales Up 1% (YTD Up 1%) ($17M) • Water Up 1% (YTD Up 1%) 2016 Large Jobs 1% ($31M) YoY • Electrical Up 2% (YTD Up 2%) 1 pt 0 pts (1 pt) 1 pt 1(1ptpt) Segment Income Up 7% Acq./ Q3'16 Volume Price FX
Slide 6: Q3'17 Water Segment Performance
Q3'17 WATER SEGMENT PERFORMANCE SALES CORE SALES AND HIGHLIGHTS (YoY) $4M $3M $4M $8M $687M Filtration & Process Down 4% (YTD Down 3%) $668M 2016 Large Jobs ($5M) 3% • Foodservice and Residential Strength YoY • Weak Beverage Activity 1 pt 0 pts 1 pt 1 pt 3(1pts pt) Acq./ Flow Technologies Down 2% (Y
Slide 7: Q3'17 Electrical Segment Performance
Q3'17 ELECTRICAL SEGMENT PERFORMANCE SALES CORE SALES AND HIGHLIGHTS (YoY) $543M $11M $0M $8M $541M Enclosures Up 2% (YTD Up 1%) ($21M) 2016 Large Jobs (1%) • Industrial Continued to Strengthen ($26M) YoY • Telecom Stabilizing with Improved Orders 2 pts 0 pts (4 pts) 1 pt (1 pt) Acq./ Thermal Manage
Slide 8: Separation Update
SEPARATION UPDATE May 9, 2017 Announced Plan to Separate Water and Electrical October 2017 Expect to File Form 10 for nVent January 30, 2018 Report Q4’17 Results and Initial 2018 Outlook February 13, 2018 Pentair and nVent Investor Meetings April 24, 2018 Report Q1’18 Earnings Results Q2 2018 Expect
Slide 9: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW CASH FLOW DEBT SUMMARY Q3 YTD ($M) 2017 2017 $1.5B* Maturity Net Income - Continuing Ops $ 127 $ 276 Amortization 25 73 Subtotal $ 152 $ 349 $1.4B 91% Fixed 2018 – 2025 Depreciation 22 64 Capital Expenditures (13) (50) Asset Sales 3 7 Working Capital (34) (74) $0.1B 9% Va
Slide 10: Q4'17 Pentair Outlook
Q4'17 PENTAIR OUTLOOK Q4'17 Q4'16 Q4’17 FINANCIAL OUTLOOK (YoY) Sales ~$1.24B $1.19B Adjusted Core Sales Up ~2% Op. Income ~$202M $162M • Water Up ~2% Seg. Income ~$227M $204M • Electrical Up ~2% ROS ~18% 17.2% Segment Income Up ~11% EPS (Rpt.) ~$0.82 $0.60 ROS ~18% … Up ~80 bps EPS (Adj.) ~$0.93 $0
Slide 11: Full Year 2017 Pentair Outlook
FULL YEAR 2017 PENTAIR OUTLOOK FY'17 FY'16 FY'17 FINANCIAL OUTLOOK (YoY) Sales ~$4.9B $4.9B Adjusted Core Sales Up ~2% Op. Income ~$745M $701M • Water Up ~1% Seg. Income ~$898M $840M • Electrical Up ~2% ROS ~18% 17.2% Segment Income Up ~7% EPS (Rpt.) ~$2.41 $2.47 ROS ~18% … Up ~100 bps EPS (Adj.) ~$
Slide 12: Appendix
APPENDIX GAAP to Non-GAAP Measurements & Reconciliations Q3 2017 Earnings Release 12
Slide 13: Reported to Adjusted 2017 Reconciliation
REPORTED TO ADJUSTED 2017 RECONCILIATION Pentair plc and Subsidiaries Reconciliation of the GAAP year ended December 31, 2017 to the non-GAAP excluding the effect of 2017 adjustments (Unaudited) Actual Forecast First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter
Slide 14: Q3 2017 Core Sales Growth Reconciliation
Q3 2017 CORE SALES GROWTH RECONCILIATION Pentair plc and Subsidiaries Reconciliation of Net Sales Growth to Core Net Sales Growth by Strategic Business Group for the quarter ended September, 2017 (Unaudited) Q3 Net Sales Growth Core ex. Acq./ Large Jobs Large Jobs Core Currency Div Total Water 1.0%
Slide 15: YTD 2017 Core Sales Growth Reconciliation
YTD 2017 CORE SALES GROWTH RECONCILIATION Pentair plc and Subsidiaries Reconciliation of Net Sales Growth to Core Net Sales Growth by Strategic Business Group for the nine months ended September 30, 2017 (Unaudited) Nine Months Ended Net Sales Growth Core ex. Acq./ Large Jobs Large Jobs Core Currenc
Slide 16: Other Reconciliations
OTHER RECONCILIATIONS Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Dollars in millions 2016 2016 2017 2017 2017 Return on Invested Capital (ROIC) Segment Income $ 216.2 $ 204.4 $ 183.5 $ 255.2 $ 231.9 Reported Effective Tax Rate 21.5% 12.5% 22.1% 21.0% 27.3% Adjusted Effec
Slide 17: Reported to Adjusted 2016 Reconciliation
REPORTED TO ADJUSTED 2016 RECONCILIATION Pentair plc and Subsidiaries Reconciliation of the GAAP year ended December 31, 2016 to the non-GAAP excluding the effect of 2016 adjustments (Unaudited) Actual First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter
Slide 18: Shipping Days
SHIPPING DAYS YEAR Q1 Q2 Q3 Q4 FY 2014 62 63 63 63 251 2015 61 63 63 64 251 2016 63 64 64 60 251 2017 64 63 63 60 250 2018 63 64 63 61 251 Q3 2017 Earnings Release 18