Slide 1: Q1 2019 Earnings Release
Q1 2019 EARNINGS RELEASE APRIL 17, 2019
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 2019 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 First Quarter of 2019 Impacted by Cold, Wet Weather Cautious Outlook as Inventory is Worked Down in Key Distribution Channels Recent Acquisitions on Track and Performing Well Continue to Believe in Long-Term Strategy We Believe Our Long-Term Strategy Remains On Track Q1 2019 Earnin
Slide 5: Q1'19 Pentair Performance
Q1'19 Pentair Performance Sales Financial Highlights (YoY) $733M Core Sales Down 4% $14M $4M • Aquatic Systems Down 6% $689M ($45M) ($17M) -6% • Filtration Solutions Down 6% YoY • Flow Technologies Flat (7 pts) 2 pts 1 pt (2 pts) (6 pts) Acq./ (1 pt) Segment Income Down 16% Q1'18 Volume Price FX Q1’
Slide 6: Q1'19 Pentair Segment Performance
Q1'19 Pentair Segment Performance Aquatic Systems Filtration Solutions Flow Technologies Sales Sales Sales $240M $252M $240M $221M $239M $229M -6% -6% Flat Core Core Core Q1'18 Q1'19 Q1'18 Q1'19 Q1'18 Q1'19 Segment Income Segment Income Segment Income $60M $39M $52M $34M $34M $30M -13% Flat -22% ROS
Slide 7: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow CASH FLOW ($M) DEBT ROLL-FORWARD ($M) Q1 Q1 Q1 Q1 2019 2018 Use of Cash: 2019 2018 Net Income - Continuing Ops $ 52 $ 58 Beginning Debt $ 788 $ 1,441 Amortization 8 9 Used (Generated) Cash 273 182 Subtotal $ 60 $ 67 Share Repurchase - 150 Depreciation 12 13 Dividends 31 6
Slide 8: Q2'19 Pentair Outlook
Q2'19 Pentair Outlook • Total PNR Up ~1 to 2% (Core Sales ~Flat to Up ~1%) ‒ Aquatic Systems Core Sales ~Flat to Down ~1% Sales ‒ Filtration Solutions Core Sales ~Flat to Down ~2% ‒ Flow Technologies Core Sales Up ~2 to 4% ‒ FX Down ~2%; Acq./Div. Up ~3% • Segment Income Down ~5 to 7% Income and EPS
Slide 9: Full Year 2019 Pentair Outlook
Full Year 2019 Pentair Outlook • Total PNR Up ~1-2% (Core Sales ~Flat to Up ~1%) ‒ Aquatic Systems Core Sales ~Flat to Down ~2% Sales ‒ Filtration Solutions Core Sales ~Flat to Down ~1% ‒ Flow Technologies Core Sales Up ~2 to 4% ‒ FX Down ~2%; Acq./Div. Up ~3% • Segment Income ~Flat to Up ~2% Income
Slide 10: 2019 Full Year Guidance Update
2019 Full Year Guidance Update 2018 1/29/19 4/17/19 Actual Guidance Guidance Sales Up 4% Up ~5 to 6% Up ~1 to 2% Core Sales Growth Total PNR Up 5% Up ~4 to 5% ~Flat to Up ~1% Aquatic Systems Up 11% Up ~5 to 7% ~Flat to Down ~2% Filtration Solutions Up 1% Up ~1 to 4% ~Flat to Down ~1% Flow Technologi
Slide 11: Segment Positioning
Segment Positioning Aquatic Systems Filtration Solutions Flow Technologies • A Leading Franchise • Strengthened Residential & • Residential Small Pumps Commercial Business with Two Impacted by Channel Inventory • 2019 Impacted by Weather and Recent Acquisitions Inventory … We Believe Long • Right Si
Slide 12: Long-Term Value Creation Goals
Long-Term Value Creation Goals +LSD - MSD Core Sales Growth Targeting +MSD - HSD Segment Income Growth Top Quartile EPS Growth FCF = Adj. NI Strong Free Cash Flow Incremental Disciplined Capital Allocation (Includes $150M of Annual Buyback; 43 Consecutive Years of Dividend Increase) LSD – Low Single
Slide 13: Pentair Summary
Pentair Summary We Continue to Invest in Our Prioritized Growth Initiatives Accelerating PIMS and Sourcing – Building on Productivity Culture Optimizing Cost Structure and Operational Footprint We Have a Strong Capital Structure, Solid FCF Generation, and Will Be Disciplined with Our Capital Strengt
Slide 14: Appendix: GAAP to Non-GAAP Measurements & Reconciliations
APPENDIX GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 15: Reported To Adjusted 2019 Reconciliation
Reported To Adjusted 2019 Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP year ended December 31, 2019 to the non-GAAP excluding the effect of 2019 adjustments (Unaudited) Actual Forecast First Second Full In millions, except per-share data Quarter Quarter Year Net sales $ 688
Slide 16: 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) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year Ne
Slide 17: 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 Ending March 31, 2019 (Unaudited) Actual Q1 Net Sales Growth Acq. / Core Currency Div. Total Total Pentair (4.2)% (2.4)% 0.6% (6.0)% Aquatic Systems (6
Slide 18: Other Reconciliations
Other Reconciliations First Second Third Fourth First Quarter Quarter Quarter Quarter Quarter Dollars in millions 2018 2018 2018 2018 2019 Return on Invested Capital (ROIC) Segment Income $ 117.0 $ 164.1 $ 121.8 $ 133.9 $ 98.7 Reported Effective Tax Rate 20.5% 21.1% 10.4% 11.0% 17.1% Adjusted Effect