Slide 1: Q1 2024 Earnings Release
- Picture to be updated Q1 2024 EARNINGS RELEASE APRIL 23, 2024
Slide 2: Forward-Looking Statements
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 forward-looking statements. Without limitation
Slide 3: Key Definitions
Key Definitions • Except as otherwise noted, our results represent continuing operations for the period indicated, presented on an adjusted basis • Core sales refers to GAAP net sales from continuing operations excluding: (1) the impact of currency translation and (2) the impact of net sales from ac
Slide 4: Executive Summary
Executive Summary Sales Segment Income ROS Adjusted EPS Q1'24 Performance: 21.4% $217M $0.94 − Sales down 1% $1,029M $1,017M $211M 20.5% $0.91 90 bps 3% − Segment Income up 3% 3% YoY YoY (1%) YoY − ROS expanded 90 bps YoY − Adjusted EPS increased 3% Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24
Slide 5: Q1 Segment Pulse
Q1 Segment Pulse Pool Poised for Q2 Growth; Continued Resilience in Commercial and Industrial Verticals Flow • Commercial and Industrial verticals performed well in Q1 • Residential and Agriculture verticals impacted by higher interest rates Water Solutions • Foodservice and Hospitality verticals pe
Slide 6: Sustainability Strategic Targets and 2023 Progress
Sustainability Strategic Targets and 2023 Progress1 Carbon Footprint Water Product Design Responsible Diversity and Reduction Reduction for Sustainability Supply Chain Inclusion TARGETS Reduce our Scope 1 and 2 30% reduction in overall Further assess, design, and In partnership with our Achieve an i
Slide 7: CEO Summary
CEO Summary Delivered Better-than-Expected Q1 Results Investor Day Key Themes Remain on Track 80/20 Training & Workshops Underway with What We Believe are Promising Early Read- outs 2024 Outlook: Reiterating Full Year and Introducing Strong Q2 Guidance 7 Q1 2024 Earnings Release. @2024 Pentair. All
Slide 8: Q1'24 Pentair Performance
Q1'24 Pentair Performance Sales Segment Income $25M Flat $1.03B $29M Flat $1.02B $211M $4M $217M ($1M) ($23M) ($40M) (1%) 3% YoY YoY ROS ROS (4 pts) 3 pts 0 pts 0 pts (1pt) 20.5% 2.8% 0.0% (2.3%) 0.4% 21.4% (1 pt) Growth/ Q1'23 Volume Price Acq./Div. FX Q1'24 Q1'23 FX Inflation Prod. Q1'24 Price/Acq
Slide 9: Q1'24 Flow Performance
Move Water Q1'24 Flow Performance Sales Segment Income $392M $11M Flat $10M $77M $8M Flat $1M $384M $65M ($17M) (2%) ($9M) YoY 19% YoY ROS ROS (4 pts) 2 pts 0 pts 0 pts (2 pts) 16.6% 3.2% 0.0% (2.3%) 2.6% 20.1% (1 pt) Growth/ Q1'23 Volume Price Acq./Div. FX Q1'24 Q1'23 FX Inflation Prod. Q1'24 Price
Slide 10: Q1'24 Water Solutions Performance
Improve Water Q1'24 Water Solutions Performance Sales Segment Income $272M $4M Flat $273M $9M $4M $56M ($2M) ($1M) $52M ($2M) ($7M) Flat YoY 6% YoY ROS ROS (1 pt) 2 pts 0 pts (1 pt) 0 pts 19.3% 2.6% (0.5%) (2.6%) 1.6% 20.4% (1 pt) Growth/ Q1'23 Volume Price Acq./Div. FX Q1'24 Q1'23 FX Inflation Prod
Slide 11: Q1'24 Pool Performance
Enjoy Water Q1'24 Pool Performance Sales Segment Income $9M Flat $364M $16M Flat Flat $359M $116M $111M ($6M) ($21M) ($8M) (1%) (5%) YoY YoY ROS ROS (5 pts) 4 pts 0 pts 0 pts (1 pts) 31.9% 2.7% 0.0% (1.7%) (2.1%) 30.8% (1 pt) Growth/ Q1'23 Volume Price Acq./Div. FX Q1'24 Q1'23 FX Inflation Prod. Q1'
Slide 12: Transformation Initiatives
Transformation Initiatives Target ROS of 24% in 2026 with potential upside as discussed at Investor Day 2022 2026T Sales Pricing Excellence Sales Material Material Strategic Sourcing Costs Costs Operations Excellence OCOGS OCOGS Other Organizational Effectiveness Expenses Other Expenses FY’26 Target
Slide 13: Transformation Runway
Transformation Runway Driving Margin Expansion Around 4 Key Themes 2023 2024 2025 2026 2027 and BEYOND Wave 3 Wave 3 Pricing Wave 2 Wave 2 Wave 2 Excellence Wave 1 Wave 1 Wave 1 Wave 1 Ongoing savings Wave 3 Wave 3 as previous waves Strategic are re-visited Wave 2 Wave 2 Wave 2 Sourcing Wave 1 Wave
Slide 14: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Debt Summary Cash Flow ($M) $2,084M* Maturity Q1 2023 Q1 2024 Net Income – Continuing Ops $129 $133 Amortization 14 13 $1,101M** 53% Fixed 2025 – 2032 Subtotal $143 $146 Depreciation 15 15 Capital Expenditures (17) (19) $983M 47% Variable 2023 – 2027 Asset Sales - - Worki
Slide 15: Q2 and Full Year 2024 Pentair Outlook & Expectations
Q2 and Full Year 2024 Pentair Outlook & Expectations • Balanced water portfolio and focused growth strategy • Recovery of Pool drives top-line Q2’24 FY’24 growth • Total Sales up ~1 to 2% versus a • Total Sales up ~2% to 3% Sales Sales • Reiterating FY’24 adjusted EPS record prior year (Flow up ~LSD
Slide 16: CEO Closing Comments
CEO Closing Comments 1 Solid execution across our balanced water portfolio drove significant margin expansion for the 8th consecutive quarter 2 Reiterating 2024 guidance reflecting confidence in our strategy as we expect to achieve new performance records 3 Transformation initiatives expected to con
Slide 17: We Believe Pentair Is a Compelling Investment Opportunity
We Believe Pentair Is a Compelling Investment Opportunity An industry leader with a balanced, innovative water portfolio Transformation initiatives to drive operational efficiencies and margin expansion ESG focus on People, Planet and Governance to provide smart, sustainable water solutions Favorabl
Slide 18: Pentair
> PENTAIR
Slide 19: Appendix: GAAP to Non-GAAP Measurements & Reconciliations
Appendix GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 20: Reported To Adjusted 2024 Reconciliation
Reported To Adjusted 2024 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending December 31, 2024 Excluding the Effect of 2024 Adjustments (Unaudited) Actual Forecast First Second Full In millions, except per-share data Quarter Quarter
Slide 21: Reported To Adjusted 2023 Reconciliation
Reported To Adjusted 2023 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2023 Excluding the Effect of 2023 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quar
Slide 22: Reported To Adjusted 2022 Reconciliation
Reported To Adjusted 2022 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2022 Excluding the Effect of 2022 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quar
Slide 23: Reported To Adjusted 2021 Reconciliation
Reported To Adjusted 2021 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2021 Excluding the Effect of 2021 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quar
Slide 24: Core Sales Growth Reconciliation
Core Sales Growth Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment For the Quarter Ended March 31, 2024 (Unaudited) Q1 Net Sales Growth Core Currency Total Total Pentair (1.1)% —% (1.1)% Flow (2.1) % 0.2 % (1.9) % Water Solutions 0.8
Slide 25: 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 Three months ended ended March 31, March 31, In millions 2024 2023 Net cash used for operating activities of continuing operati
Slide 26: ROIC Reconciliation
ROIC Reconciliation Pentair plc and Subsidiaries Return on Invested Capital (ROIC) (Unaudited) First Second Third Fourth First Quarter Quarter Quarter Quarter Quarter Dollars in millions 2023 2023 2023 2023 2024 Segment income $ 211.0 $ 234.2 $ 212.1 $ 197.8 $ 217.3 Reported effective tax rate 14.6
Slide 27: Last Twelve Months EBITDA Reconciliation
Last Twelve Months EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Income from Continuing Operations to EBITDA (Unaudited) Second Third Fourth First Last Quarter Quarter Quarter Quarter Twelve In millions 2023 2023 2023 2024 Months Net income from continuing operations $ 154
Slide 28: 2024 EBITDA Reconciliation
2024 EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Income from Continuing Operations to EBITDA for the Year Ending December 31, 2024 (Unaudited) Full Year at Midpoint of In millions Outlook Net income from continuing operations approx $ 635 Adjustments: Intangible amortiza