Pentair Plc. · NYSE:PNR
Pentair — Q2 2019 Earnings Presentation
17 slides from Pentair's earnings presentation, Jul 23, 2019
Slide 1: Q2 2019 Earnings Release
Q2 2019 EARNINGS RELEASE JULY 23, 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 Delivered Second Quarter Results as Weather Issues Lingered Recent Acquisitions on Track and Performing Well Second Half Expected to Benefit from Price, Moderating Inflation Comps, and Improved Tax Rate Positioning to Return to “Normalized” Performance in 2020 We Believe Our Long-T
Slide 5: Q2'19 Pentair Performance
Q2'19 Pentair Performance Sales Financial Highlights (YoY) $21M Core Sales Up 1% $25M $800M $781M ($13M) • Aquatic Systems Down 2% ($14M) 2% YoY • Filtration Solutions Up 1% • Flow Technologies Up 5% (2 pts) 3 pts 3 pts (2 pts) 2 pts Acq./ (1 pt) Segment Income Down 6% Q2'18 Volume Price FX Q2’19 Di
Slide 6: Q2'19 Pentair Segment Performance
Q2'19 Pentair Segment Performance Aquatic Systems Filtration Solutions Flow Technologies Sales Sales Sales $276M $286M $271M $242M $243M $262M 1% -2% Core 5% Core Core Q2'18 Q2'19 Q2'18 Q2'19 Q2'18 Q2'19 Segment Income Segment Income Segment Income $52M $80M $50M $77M $44M $42M -4% -4% -6% ROS 28.8%
Slide 7: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow CASH FLOW ($M) DEBT ROLL-FORWARD ($M) Q2 YTD Q2 YTD 2019 2019 Use of Cash: 2019 2019 Net Income - Continuing Ops $ 115 $ 168 Beginning Debt $ 1,371 $ 788 Amortization 8 16 Used (Generated) Cash (340) (67) Subtotal $ 123 $ 184 Share Repurchase 150 150 Depreciation 12 24 Di
Slide 8: Q3'19 Pentair Outlook
Q3'19 Pentair Outlook • Total PNR ~Flat to up 2% (Core Sales Down ~1 to 3%) ‒ Aquatic Systems Core Sales Down ~8 to 10% Sales ‒ Filtration Solutions Core Sales Up ~1 to 3% ‒ Flow Technologies Core Sales ~Flat to Up 2% ‒ FX ~Flat; Acq./Div. Up ~3% • Segment Income ~Flat to Up 2% Income and EPS • Adju
Slide 9: Full Year 2019 Pentair Outlook
Full Year 2019 Pentair Outlook • Total PNR ~Flat to Up 1% (Core Sales ~Flat to Down 1%) ‒ Aquatic Systems Core Sales Down ~4 to 6% Sales ‒ Filtration Solutions Core Sales ~Flat to Up 1% ‒ Flow Technologies Core Sales Up ~1 to 3% ‒ FX Down ~1%; Acq./Div. Up ~2% • Segment Income Down ~2% Income and EP
Slide 10: Focused Strategies
Focused Strategies • Increase New Pool Average Content (~75,000 New Pools) Through: ‒ Consumer Awareness ‒ Automation and Connected Pools Advance Pool ‒ New Product Introductions Growth • Increase Content and Penetration in Installed Pools (~5M) Through: ‒ Automation and Connected Pools ‒ Energy Eff
Slide 11: Pentair Summary
Pentair Summary We Believe We Will Exit 2019 Repositioned for More Normalized Performance Accelerating PIMS and Sourcing – Building on Productivity Culture Funding Key Strategies Around Advancing Pool Growth and Accelerating Residential & Commercial Water Treatment We Have a Strong Capital Structure
Slide 12: Appendix: GAAP to Non-GAAP Measurements & Reconciliations
APPENDIX GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 13: 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 Third Full In millions, except per-share data Quarter Quarter Quarter Year N
Slide 14: 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 15: 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 June 30, 2019 (Unaudited) Actual Q2 Net Sales Growth Acq. / Core Currency Div. Total Total Pentair 1.3% (1.6)% 2.7% 2.4% Aquatic Systems (1.5)%
Slide 16: ROIC Reconciliation
ROIC Reconciliation Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Dollars in millions 2018 2018 2018 2019 2019 Return on Invested Capital (ROIC) Segment Income $ 164.1 $ 121.8 $ 133.9 $ 98.7 $ 154.1 Reported Effective Tax Rate 21.1% 10.4% 11.0% 17.1% 16.1% Adjusted Effecti
Slide 17: 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 Six months Six months ended ended ended ended March 31, June 30, June 30, June 30, In millions 2019 2019 2019 2018