Watts Water Technologies, Inc. · NYSE:WTS
Watts Water Technologies — Q1 2025 Earnings Presentation
20 slides from Watts Water Technologies's earnings presentation, May 8, 2025
Slide 1: Watts Water Technologies Q1 2025 Earnings Conference Call
WATTS WATER TECHNOLOGIES Q1 2025 EARNINGS CONFERENCE CALL May 8, 2025 © 2025 Watts Water Technologies, Inc.
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, effective tax rate, capital
Slide 3: Q1 Overview and 2025 Outlook
Q1 Overview and 2025 Outlook Q1 2025 Performance Operational Updates 2025 Outlook Results surpassed expectations Proactively working to mitigate impact of tariffs Maintaining FY 2025 outlook with price, supply chain strategy and Organic sales* declined 2% due to fewer accelerated onshoring ▲ Q1 perf
Slide 4: Strategic Approach to Mitigate Tariff Impacts
Strategic Approach to Mitigate Tariff Impacts Estimated 2025 Tariff Cost Impact* Actions • Price: implemented increases China Mexico Canada Rest of World Other • Supply chain: pivoting vendors and leveraging dual source supply base Aluminum & Steel • Operations: leveraging vertically integrated U.S.
Slide 5: Q1 2025 Financial Summary
Q1 2025 Financial Summary Sales ($M) Adj. EBITDA and Adj. Adj. EPS ($)* FCF ($M)* $571 Operating Margin (%)* $46 $558 $2.37 $2.33 $37 21.4% -2% Adj. +80 bps 20.6% Reported & EBITDA Organic* +2% +25% Adj. OM 18.2% +80 bps 19.0% 2024 2025 2024 2025 2024 2025 2024 2025 • Fewer shipping days, ~-3% • Adj
Slide 6: Q2 and Full Year 2025 Outlook
Indicates change vs. previous outlook Q2 and Full Year 2025 Outlook* Previous FY Outlook Updated FY Outlook Q2 Outlook Reported -2% to +3% Reported +1% to +4% Sales Growth Reported & Organic -3% to +2% Organic -3% to +2% Organic Flat to +3% Segment Organic Growth Segment Organic Growth Segment Organ
Slide 7: Summary
Summary Better-than-expected Q1 results driven by Americas and APMEA volume and cost control Proactively working to mitigate tariff-related impacts; leveraging our U.S. footprint and global supply chain Maintaining full year 2025 outlook despite challenging macros and continued uncertainty Continuin
Slide 8: Appendix
Appendix 8 © 2025 Watts Water Technologies, Inc.
Slide 9: Other 2025 Outlook Inputs
Indicates change vs. previous outlook Other 2025 Outlook* Inputs Previous Other FY Inputs Updated Other FY Inputs Other Q2 Inputs Corporate Costs ~$55M to $57M ~$55M to $57M ~$15M Net Interest Expense ~$2M - $3M ~$2M - $3M ~$1M Stock-Based Compensation ~$20M ~$20M ~$6M Adj Effective Tax Rate ~25% ~2
Slide 10: Watts Water Snapshot (NYSE: WTS)
Watts Water Snapshot (NYSE: WTS) 2024 Key Statistics With 5 Year Performance vs. 2019 $8.86 17.7% $1.72 $2.3B 112% 19.8% 106% Adj. EPS Adj. Operating Margin Dividends Net Sales 5-yr Avg Free Cash ROIC (GAAP) 5-yr Avg Reinvestment +17% CAGR +480 bps Expansion +13% CAGR 7% CAGR Flow Conversion +640 bp
Slide 11: Key Themes
Key Themes Recognized Aligned to Focus on Accretive Capital Resilient Leader Long-term Secular Innovation and Deployment and Business Model Trends and Profitable Growth Strong Balance Tested Across Diverse Markets Sheet Economic Cycles Global reach Solutions aligned Continuing Targeting >100% Large
Slide 12: Consolidated Statements of Operations
Consolidated Statements of Operations First Quarter 2025 2024 B/(W) % Net sales $558.0 $570.9 ($12.9) (2%) Cost of goods sold 285.5 303.4 17.9 6% Gross profit 272.5 267.5 5.0 2% 48.8% 46.9% +190 bps Selling, general & administrative expenses 167.5 169.6 2.1 1% 30.0% 29.7% -30 bps Restructuring 17.3
Slide 13: Reconciliation of Net Sales to Organic Net Sales
Reconciliation of Net Sales to Organic Net Sales First Quarter Americas Europe APMEA Total Net sales 2025 $418.1 $108.4 $31.5 $558.0 Net sales 2024 $418.8 $123.3 $28.8 $570.9 Dollar change ($0.7) ($14.9) $2.7 ($12.9) Net sales % (decrease) increase -% (12%) 9% (2%) Foreign exchange impact - 3% 4% 1%
Slide 14: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures First Quarter 2025 2024 Net Sales $558.0 $570.9 Operating income $87.7 $96.7 Operating margin % 15.7% 16.9% Adjustments for special items: Restructuring $17.3 $1.2 Acquisition-related costs 1.1 7.0 Gain on sale of assets - (1.1) Adjusted operating income $
Slide 15: Segment Earnings and Margin Summary
Segment Earnings and Margin Summary First Quarter 2025 First Quarter 2024 Americas Europe APMEA Corp. OI Americas Europe APMEA Corp. OI Segment earnings / Corp expenses / Adj. OI $97.8 15.1 5.5 (12.3) $106.1 $92.7 19.4 5.2 (13.5) $103.8 Segment margin / Adjusted operating margin % 23.4% 13.9% 17.5%
Slide 16: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow First Quarter 2025 2024 Net cash provided by operating activities $55.2 $45.6 Less: additions to property, plant, and equipment (9.6) (10.1) Plus: proceeds from the sale of property, plant, and equipment - 1.1 Free cash fl
Slide 17: Reconciliation of Long-term Debt to Net Debt to Capitalization Ratio
Reconciliation of Long-term Debt (Including Current Portion) to Net Debt to Capitalization Ratio March 30, 2025 December 31, 2024 Current portion of long-term debt $- $- Plus: Long-term debt, net of current portion 197.2 197.0 Less: Cash and cash equivalents (336.8) (386.9) Net debt ($139.6) ($189.9
Slide 18: Calculations of EBITDA & Gross and Net Leverage
Calculations of EBITDA & Gross and Net Leverage First Quarter Ended First Quarter Ended Trailing Twelve Months March 30, 2025 March 31, 2024 Through March 30, 2025 Sales $558.0 $570.9 $2,239.3 Net income – as reported $74.0 $72.6 $292.6 Plus: Interest expense, net 0.4 2.1 4.1 Plus: Income taxes 12.9
Slide 19: Reconciliation of Adjusted Non-GAAP Effective Tax Rate
Reconciliation of “Adjusted” Non-GAAP Effective Tax Rate First Quarter 2025 2024 Income before income taxes $86.9 $95.2 Provision for income taxes $12.9 $22.6 Effective tax rate 14.8% 23.7% Income before income taxes $86.9 $95.2 Total adjustments for special items 18.4 7.1 Adjusted Income before inc
Slide 20: Reconciliation between GAAP and Non-GAAP Measures Included in 2025 Outlook
Reconciliation between GAAP and Non-GAAP Measures Included in 2025 Outlook* Second Quarter Full Year 2025 2025 Net Sales Net sales growth +1% to +4% -2% to +3% Forecasted impact of acquisition / FX -1% -1% Organic net sales growth Flat to +3% -3% to +2% Operating Margin Operating margin range 18.9%
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