Slide 1: Q4 2022 Earnings Release
Q4 2022 Earnings Release January 31, 2023
Slide 2: Caution Concerning 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 forward-looking statements.
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 revenue from continuing operations excluding: (1) the impact of currency translation and (2) the impact of revenue from acqu
Slide 4: Executive Summary
Executive Summary ✓ Strong financial results for FY’22 FY’21 Results FY’22 Results ─ Sales growth of 9% Sales $3.76B $4.12B ─ Segment income up 12% Segment Income $686M $768M ─ ROS expanded 40 basis points ─ Adjusted EPS increased 8% Adjusted EPS $3.40 $3.68 ✓ Delivered impressive sales, segment inc
Slide 5: 5 Year Pentair Performance
5 Year Pentair Performance Driving Strong Performance $4.12B 8% CAGR • Revenue Growth CAGR of 8% Revenue $2.85B • Adjusted EPS CAGR of 14% • Cumulative Free Cash Flow of >$2B Segment Income $497M $768M • ROIC at 12/31/2022 of ~16% ROS 2017 17.5% 2022 18.6% 14% Adjusted EPS $1.94 $3.68 CAGR Full Year
Slide 6: Pentair at a Glance
Pentair at a Glance We Help the World Sustainably Move, Improve, and Enjoy Water, Life’s Most Essential Resource Employees Sales (2022) Focus on Profitability (2022) ~11K $4.1B 18.6% ROS Strong Cash Flow Large Installed Base Dividend Aristocrat and Solid Returns 47 YEARS ~ Annual Dividend 75%+ Repla
Slide 7: Our Impact: Making Better Essential for People and the Planet
Our Impact: Making Better Essential for People and the Planet Continued momentum in making a positive impact for people on the planet Recognized for leadership on sustainability and impact: 2022 Highlights: 71% of Pentair solutions support 15.9 million tons of CO2 Pentair water filtration helped wat
Slide 8: Strategic Framework
Strategic Framework OUR PURPOSE: To create a better world for people and the planet through smart, sustainable water solutions. OUR MISSION: We help the world sustainably move, improve, and enjoy water, life’s most essential resource. Industrial & Flow Technologies Water Solutions Pool Flow Business
Slide 9: Q4'22 Pentair Performance
Q4’22 Pentair Performance Sales Segment Income $69M $111M $989M $1.00B $133M ($2M) ($24M) ($46M) $183M 1% $167M $21M* YoY $7M * ($47M) 10% ($164M) YoY ROS ROS (16 pts) 13 pts 7 pts (3 pts) 1 pt 16.9% 10.6% 0.2% (4.7%) (4.8%) 18.2% (1 pt) Growth/ Q4’21 Volume Price Acq./ Div. FX Q4’22 Q4’21 FX Inflat
Slide 10: FY'22 Pentair Performance
FY’22 Pentair Performance Sales Segment Income $207M $484M $4.12B $499M ($10M) ($84M) $3.76B 9% $768M YoY $686M ($328M) ($64M) $53M* $26M * 12% ($265M) YoY ROS ROS (7 pts) 13 pts 5 pts (2 pts) 9 pts 18.2% 10.7% 0.1% (8.7%) (1.7%) 18.6% (1 pt) Growth/ FY’21 Volume Price Acq./ Div. FX FY’22 FY’21 FX I
Slide 11: Q4'22 Consumer Solutions Performance
Q4’22 Consumer Solutions Performance Sales Segment Income $69M $630M $74M $627M ($2M) $92M ($8M) ($22M) $145M (1%) $136M $20M * YoY $4M * ($36M) 7% YoY ($161M) ROS ROS (26 pts) 15 pts 12 pts (2 pts) (1 pt) 21.6% 10.8% 0.0% (3.5%) (5.8%) 23.1% (1 pt) Growth/ Q4’21 Volume Price Acq./ Div. FX Q4’22 Q4’
Slide 12: FY'22 Consumer Solutions Performance
FY’22 Consumer Solutions Performance Sales Segment Income $207M $2.62B $325M $351M ($26M) ($5M) $2.34B 12% $611M $554M ($216M) ($47M) $46M * YoY $14M * ($254M) 10% YoY ROS ROS (11 pts) 15 pts 9 pts (1 pt) 12 pts 23.7% 10.8% 0.0% (9.2%) (2.0%) 23.3% (1 pt) Growth/ FY’21 Volume Price Acq./ Div. FX FY’
Slide 13: Q4'22 Industrial & Flow Technologies Performance
Q4’22 Industrial & Flow Technologies Performance Sales Segment Income $42M $41M $376M ($2M) $358M ($6M) ($16M) $65M ($1M) 5% $54M ($23M) ($6M) $1M * $3M * YoY 21% YoY ROS ROS 0 pts 11 pts (2 pts) (4 pts) 5 pts 15.0% 10.6% 0.0% (6.4%) (1.8%) 17.4% (1 pt) Growth/ Q4’21 Volume Price Acq./ Div. FX Q4’22
Slide 14: FY'22 Industrial & Flow Technologies Performance
FY’22 Industrial & Flow Technologies Performance Sales Segment Income $148M Flat $158M $1.50B $1.42B ($9M) ($58M) ($10M) 6% $242M $213M ($106M) ($14M) $6M * YoY $13M * 14% YoY ROS ROS 0 pts 10 pts 0 pts (4 pts) 6 pts 15.0% 9.6% (0.1%) (7.4%) (1.0%) 16.1% (1 pt) Growth/ FY’21 Volume Price Acq./ Div.
Slide 15: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Debt Summary Cash Flow ($M) FY 2021 FY 2022 $2,317M* Maturity Net Income - Continuing Ops $556 $483 Amortization 26 53 $797M 34% Fixed 2025 – 2032 Subtotal $582 $536 Depreciation 51 54 Capital Expenditures (60) (85) Asset Sales 4 4 $1,520M 66% Variable 2023 – 2027 Working
Slide 16: Segment Structure Beginning 2023
Segment Structure Beginning 2023 Realigned segment financials presented in the Supplemental Data section of this presentation Move Improve Enjoy Water Water Water Industrial & Flow Water Solutions Pool Technologies Sales Sales Sales $1.5B* $1.2B*^ $1.6B* ROS ROS ROS 16.1%* 16.9%*^ 28.3%* Long-Term L
Slide 17: Transformation Expectations
Transformation Expectations 2022 Driving Margin Expansion 2025T Around 4 Key Themes Pricing Excellence Material Costs Material Strategic Sourcing Costs OCOGS Operations Excellence OCOGS Other Other Organizational Expenses Expenses Effectiveness ROS Target ROS 18.6% ~23% 17 Q4 2022 Earnings Release.
Slide 18: Q1 and Full Year 2023 Pentair Outlook
Q1 and Full Year 2023 Pentair Outlook • Confident in our long-term value creation • Continued execution and Q1’23 FY’23 implementation of our multi-year Transformation Sales • Total Sales ~flat to up 1% • Total Sales down ~3% to up 1% initiatives • Progress made on channel Income • Segment Income up
Slide 19: FY'23 Guidance at Midpoint
FY’23 Guidance at Midpoint* Sales Segment Income $4.1B ~5% ~Flat ~$4.1B ~5% ~$825M (~1%) $768M YoY (~10%) ~8% YoY ROS ROS 18.6% ~20.2% (1 pt) Growth/ FY’22 Volume Price Acq./ Div. FX FY’23 FY’22 FX Inflation Prod. FY’23 Price/Acq. Total Pentair down ~1% Segment Income up ~8%; ROS ~20.2% • Pool: Down
Slide 20: Q4 2022 Earnings Release. ©2023 Pentair. All Rights Reserved.
20 Q4 2022 Earnings Release. ©2023 Pentair. All Rights Reserved.
Slide 21: Appendix
Appendix GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 22: Reported To Adjusted 2022 Reconciliation
Reported To Adjusted 2022 Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP Year Ended December 31, 2022 to the Non-GAAP Excluding the Effect of 2022 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year Ne
Slide 23: Reported To Adjusted 2021 Reconciliation
Reported To Adjusted 2021 Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP Year Ended December 31, 2021 to the Non-GAAP Excluding the Effect of 2021 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year Ne
Slide 24: 5 Year CAGR Reconciliation
5 Year CAGR Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP Year Ended December 31, 2022 and December 31, 2017 to the Non-GAAP Excluding the Effect of 2022 and 2017 Adjustments (Unaudited) In millions, except per-share data FY 2022 FY 2017 5 Year CAGR Net sales $ 4,121.8 $ 2,8
Slide 25: 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 and Year Ended December 31, 2022 (Unaudited) Q4 Net Sales Growth Full Year Net Sales Growth Core Currency Acq. / Div. Total Core Currency Acq. / Div. T
Slide 26: ROIC Reconciliation
ROIC Reconciliation Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Quarter Dollars in millions 2021 2022 2022 2022 2022 Return on invested capital (ROIC) Segment income $ 166.9 $ 172.1 $ 205.9 $ 206.9 $ 182.8 Reported effective tax rate 2.0 % 15.4 % 15.7 % 9.6 % 5.0 % Adjusted effe
Slide 27: 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) Years ended December 31 5 Year In millions 2022 2021 2020 2019 2018 Cumulative Net cash provided by operating activities of continuing opera
Slide 28: Last Twelve Months Adjusted EBITDA Reconciliation
Last Twelve Months Adjusted EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Income from Continuing Operations to Adjusted EBITDA for the Year Ended December 31, 2022 (Unaudited) In millions FY 2022 Net income from continuing operations $ 483.2 Adjustments: Restructuring and
Slide 29: Reported To Adjusted 2023 Reconciliation
Reported To Adjusted 2023 Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP Year Ending December 31, 2023 to the Non-GAAP Excluding the Effect of 2023 Adjustments (Unaudited) Forecast First Full In millions, except per-share data Quarter Year Net sales approx Flat - Up 1% approx
Slide 30: Supplemental Data
-Supplemen tal I Data
Slide 31: Aligning Organization for Accelerated Success
Aligning Organization for Accelerated Success Committed to driving value for all of our stakeholders Industrial & Flow Consumer Solutions Technologies Industrial & Flow Pool Water Solutions Technologies Aligning our Reporting Segments to Serve our Customers and Drive Superior Value to Shareholders 3
Slide 32: Supplemental Financial Data – New Segmentation
Supplemental Financial Data – New Segmentation Pentair plc and Subsidiaries Supplemental Financial Information by Reportable Segment - New Segmentation (Unaudited) 2022 First Second Third Fourth Full In millions Quarter Quarter Quarter Quarter Year Net sales Pool $ 435.4 $ 464.0 $ 390.0 $ 343.3 $ 1,
Slide 33: Supplemental Financial Data – New Segmentation
Supplemental Financial Data – New Segmentation Pentair plc and Subsidiaries Supplemental Financial Information by Reportable Segment - New Segmentation (Unaudited) 2021 First Second Third Fourth Full In millions Quarter Quarter Quarter Quarter Year Net sales Pool $ 354.8 $ 389.6 $ 407.8 $ 419.8 $ 1,
Slide 34: Supplemental Financial Data – New Segmentation
Supplemental Financial Data – New Segmentation Pentair plc and Subsidiaries Supplemental Financial Information by Reportable Segment - New Segmentation (Unaudited) 2020 First Second Third Fourth Full In millions Quarter Quarter Quarter Quarter Year Net sales Pool $ 240.2 $ 262.0 $ 309.5 $ 311.8 $ 1,
Slide 35: Supplemental Financial Data – New Segmentation
Supplemental Financial Data – New Segmentation Pentair plc and Subsidiaries Supplemental Financial Information by Reportable Segment - New Segmentation (Unaudited) 2019 First Second Third Fourth Full In millions Quarter Quarter Quarter Quarter Year Net sales Pool $ 220.4 $ 270.6 $ 218.7 $ 275.6 $ 98