Slide 1: Q1 2018 Earnings Release
Q1 2018 EARNINGS RELEASE April 19, 2018 Q1 2018 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 2018 and 2017 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 • Delivered 4% Core Sales Growth with Both Segments Contributing Above Commitments Q1’18 • Strong Segment Income and Adjusted EPS Growth • Starting 2018 and Building Momentum into the Planned Separation • Form 10 Declared Effective and nVent has Begun to Trade on a “When Issued” Ba
Slide 5: Q1'18 Pentair Performance
Q1'18 PENTAIR PERFORMANCE SALES FINANCIAL HIGHLIGHTS (YoY) $42M $1.27B Core Sales Up 4% $37M $8M $1.18B ($1M) 7% • Water Up 4% YoY • Electrical Up 3% 3 pts 1 pt 0 pts 3 pts 7(1pts pt) Segment Income Up 13% Acq./ Q1'17 Volume Price FX Q1’18 Divestitures ROS 16.6% … Up 90 bps SEGMENT INCOME *Non-Cash
Slide 6: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW CASH FLOW ($M) DEBT SUMMARY Q1 Q1 2018 2017 Net Income - Continuing Ops $ 104 $ 81 $2.7B* Maturity Amortization 25 24 Subtotal $ 129 $ 105 Depreciation 21 21 Capital Expenditures (17) (24) Asset Sales 2 -- Working Capital (247) (195) Other Accruals/Other (70) (40) Free Ca
Slide 7: New Pentair Q1'18 Results and Outlook
NEW PENTAIR Q1’18 RESULTS AND OUTLOOK
Slide 8: New Pentair Executive Summary
New Pentair Executive Summary • Core Sales Grew 4% Q1’18 • All Three Businesses Contributed to Improved Growth • ROS Expanded 180 bps to 16.0% • Expect Core Sales to Grow 3-4% • Expect ROS to Expand ~50 bps to ~18% Outlook 2018 • Adjusted EPS Guidance of $2.25 - $2.30 … Anticipate Another Strong Fre
Slide 9: Q1'18 New Pentair Performance
Q1'18 New Pentair Performance Sales Financial Highlights (YoY) $21M $732M $5M Core Sales Up 4% $24M ($1M) 7% • Aquatic Systems Up 8% YoY $683M • Filtration Solutions Up 4% 3 pts 1 pt 0 pts 3 pts 7(1pts pt) Acq./ • Flow Technologies Up 2% Q1'17 Volume Price FX Q1’18 Divestitures Segment Income *Non-C
Slide 10: Q1'18 New Pentair Business Performance
Q1'18 New Pentair Business Performance Aquatic Systems Filtration Solutions Flow Technologies Sales Sales Sales $252M $240M $240M $231M $230M $223M +8% +9% +5% Q1'17 Q1'18 Q1'17 Q1'18 Q1'17 Q1'18 Segment Income Segment Income Segment Income $60M $34M $39M $56M $24M $33M +8% +40% +17% ROS 24.9% ROS 2
Slide 11: 2018 New Pentair Outlook
2018 New Pentair Outlook 2018 Sales Outlook 2018 Segment Income Outlook ~$87M ~$24M ~$53M ~$2.96B *Non-Cash Intangible Amortization $2.85B ~$72M ~$6M (~$49M) ~$18M ~$535M $497M $36M * ~4% $37M * (~$58M) ~8% YoY YoY ROS ROS ~3 pts ~1 pt (~2 pts) ~2 pts ~4(1pts pt) 17.5% ~2.1% (~0.1%) (~2.0%) ~0.5% ~1
Slide 12: Q2'18 New Pentair Outlook
Q2'18 New Pentair Outlook Q2'18 Q2'17 Q2’18 Financial Outlook (YoY) Sales ~$790M $754M Core Sales Up ~3-4% • Aquatic Systems Up ~7-8% Op. Income ~$106M $136M • Filtration Solutions Up ~1-2% Seg. Income ~$159M $152M • Flow Technologies Up ~2-3% ROS ~20% 20.1% EPS (Rpt.) $0.44-$0.46 N/A Segment Income
Slide 13: Full Year 2018 New Pentair Outlook
Full Year 2018 New Pentair Outlook FY'18 FY'17 FY'18 Financial Outlook (YoY) Sales ~$2.96B $2.85B Core Sales Up 3-4% • Aquatic Systems Up 5-6% Op. Income ~$422M $415M • Filtration Solutions Up 2-4% Seg. Income ~$535M $497M • Flow Technologies Up 1-2% ROS ~18% 17.5% Segment Income Up ~8% EPS (Rpt.) $
Slide 14: The New Pentair Strategy Summary
The New Pentair Strategy Summary Our Vision: To be the Leading A Pure Play Residential & Commercial Water Value Creation Through: Water Company Treatment Company Sales by Segment ~$3B of Revenue* Revenue Growth Flow ~18% ROS* Filtration Technologies Solutions Targeting Free Cash Flow = • Base
Slide 15: New Pentair Focused Strategies
New Pentair Focused Strategies Accelerate Residential & Expand in China & Advance Pool Growth Commercial Filtration Southeast Asia Residential Water Expanding Develop Innovative Products Build Out Portfolio and Aftermarket Products Better Connect to Consumers Ample Opportunities in Commercial Foodse
Slide 16: New Pentair Summary
New Pentair Summary We are a Pure Play Water Company with a Portfolio of Industry-Leading Brands and Strong Secular Trends We are Driven by the Pentair Integrated Management System and have a Proven and Capable Management Team We have a Large and Installed Base to Serve We have a Strong Capital Stru
Slide 17: Appendix
APPENDIX GAAP to Non-GAAP Measurements & Reconciliations Q1 2018 Earnings Release | ©2018 Pentair | Confidential property of Pentair. Do not reproduce without express permission of Pentair. | 17
Slide 18: Reported To Adjusted 2018 Reconciliation
Reported To Adjusted 2018 Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP year ended December 31, 2018 to the non-GAAP excluding the effect of 2018 adjustments (Unaudited) Actual Actual Forecast Pentair Water Water First First Second Full In millions, except per-share data Qua
Slide 19: 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) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year To
Slide 20: Core Sales Growth Reconciliation
Core Sales Growth Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Sales Growth to Core Net Sales Growth by Strategic Business Group (SBG) For the Quarter Ending March 31, 2018 Actual Q1 Net Sales Growth Acq. / Core Currency Div. Total Water 4.2% 3.1% (0.1)% 7.2% Aquatic Systems 7.5
Slide 21: Reported To Adjusted Reconciliation - Water
Reported To Adjusted Reconciliation - Water Pentair plc and Subsidiaries Reconciliation of the GAAP years ended December 31, 2017 and 2016 to the non-GAAP excluding the effect of 2017 and 2016 adjustments (Unaudited) Water - 2017 First Second Third Fourth Full In millions, except per-share data Quar
Slide 22: Water Sales and Segment Income by Quarter - 2017
Water Sales and Segment Income by Quarter - 2017 Pentair plc and Subsidiaries Supplemental Financial Information by SBG (Unaudited) 2017 First Second Third Fourth In millions Quarter Quarter Quarter Quarter Full Year Net sales Aquatic Systems $ 222.5 $ 253.7 $ 211.7 $ 251.6 $ 939.5 Filtration Soluti
Slide 23: Water Sales and Segment Income by Quarter - 2016
Water Sales and Segment Income by Quarter - 2016 Pentair plc and Subsidiaries Supplemental Financial Information by SBG (Unaudited) 2016 First Second Third Fourth In millions Quarter Quarter Quarter Quarter Full Year Net sales Aquatic Systems $ 197.6 $ 249.0 $ 192.8 $ 238.4 $ 877.8 Filtration Soluti
Slide 24: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP operating activities cash flow to the non-GAAP free cash flow (Unaudited) Three months ended March 31, March 31, In millions 2018 2017 Net cash provided by (used for) operating activities of continuing operations $