Pentair Plc. · NYSE:PNR
Pentair — Q3 2024 Earnings Presentation
29 slides from Pentair's earnings presentation, Oct 22, 2024
Slide 1: Q3 2024 Earnings Release
- Picture to be updated Q3 2024 EARNINGS RELEASE OCTOBER 22, 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 Balanced water portfolio, Transformation and strong execution continued to drive strong results Adjusted Operating Sales ROS Adjusted EPS Income Q3'24 Performance: $239M $1.09 $1,009M $993M 24.1% − Sales down 2% $212M $0.94 − Adjusted Operating Income up 13% 13% 21.0% 310 bps 16%
Slide 5: Q3 and Full Year 2024 Segment Pulse
Q3 and Full Year 2024 Segment Pulse Pool sales continued to grow; Flow, Water Solutions impacted by Residential / Industrial headwinds Flow • Commercial sales grew year-over-year for the 9th consecutive quarter driven by focused growth initiatives • Residential / Industrial continued to be impacted
Slide 6: Transformation and 80/20 Update
Transformation and 80/20 Update Pentair Business System 80/20 ACCELERATING TRANSFORMATION • Focus on accelerating pricing actions and improving operating performance by reducing complexity • Training completed across the portfolio • Implementing action plans to address Quad 4 exits & core growth Sou
Slide 7: Key Takeaways
Key Takeaways 1 Transformation continued to drive strong margins and earnings growth 2 80/20 expected to be an accelerator to more focused, profitable growth 3 Increased adjusted EPS FY’24 guidance to ~$4.27, up ~14% driven by solid execution 4 Record* year-to-date Free Cash Flow of $629 million 5 W
Slide 8: Q3'24 Pentair Performance
Q3'24 Pentair Performance Sales Adjusted Operating Income $1,009M $22M $2M $993M Flat $29M $239M $18M ($2M) $212M ($38M) (2%) ($20M) 13% YoY YoY ROS ROS (3 pts) 2 pts 0 pts (1 pt) (2 pts) 21.0% 2.2% 0.0% (2.0%) 2.9% 24.1% (1 pt) Growth/ Q3'23 Volume Price Acq./Div. FX Q3'24 Q3'23 FX Inflation Prod.
Slide 9: Q3'24 Flow Performance
Move Water Q3'24 Flow Performance Sales Segment Income $400M $8M Flat $5M $83M $7M Flat $1M $372M $78M ($36M) ($8M) (7%) 7% YoY YoY ROS ROS (9 pts) 2 pts 0 pts 0 pts (7 pts) 19.4% 3.5% 0.0% (2.0%) 1.3% 22.2% (1 pt) Growth/ Q3'23 Volume Price Acq./Div. FX Q3'24 Q3'23 FX Inflation Prod. Q3'24 Price/Ac
Slide 10: Q3'24 Water Solutions Performance
Improve Water Q3'24 Water Solutions Performance Sales Segment Income $299M $3M Flat $1M $290M $69M $2M $3M $64M ($13M) ($3M) ($7M) (3%) (6%) YoY YoY ROS ROS (4 pts) 1 pt 0 pts 0 pts (3 pts) 23.0% 0.0% 0.5% (2.2%) 0.9% 22.2% (1 pt) Growth/ Q3'23 Volume Price Acq./Div. FX Q3'24 Q3'23 FX Inflation Prod
Slide 11: Q3'24 Pool Performance
Enjoy Water Q3'24 Pool Performance Sales Segment Income $12M Flat $331M $12M $11M Flat $16M $113M $309M ($2M) $91M ($5M) 7% 24% YoY YoY ROS ROS 4 pts 4 pts (1 pt) 0 pts 7 pts 29.3% 1.0% 0.0% (1.5%) 5.2% 34.0% (1 pt) Growth/ Q3'23 Volume Price Acq./Div. FX Q3'24 Q3'23 FX Inflation Prod. Q3'24 Price/A
Slide 12: Transformation Initiatives
Transformation Initiatives Target ROS of 24% in 2026 with potential upside as discussed at Investor Day 2022 2026T Sales Pricing Excellence Sales Material Material Strategic Sourcing Costs Costs Operations Excellence OCOGS OCOGS Other Organizational Effectiveness Expenses Other Expenses FY'23 ROS FY
Slide 13: 80/20 Expected to Accelerate Transformation
80/20 Expected to Accelerate Transformation Accelerating Value Creation by 80/20 ANALYSIS Focusing on the Right Quadrant-based strategy to assess Customers and Products customers and products by revenue Products Commit to Customer segmentation over Product segmentation 80% 20% Customers 80% Keep! Mi
Slide 14: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Debt Summary Cash Flow ($M) $1,628M* Maturity Q3 2024 Q3 2023 YTD 2024 YTD 2023 Net Income – Continuing Ops $140 $132 $459 $415 Amortization 13 14 40 42 $1,103M** 68% Fixed 2025 – 2032 Subtotal $153 $146 $499 $457 Depreciation 15 15 45 44 Capital Expenditures (15) (19) (5
Slide 15: Q4 and Full Year 2024 Pentair Outlook & Expectations
Q4 and Full Year 2024 Pentair Outlook & Expectations • Balanced water portfolio and focused, profitable growth strategy Q4'24 FY'24 • Transformation continues to drive • Total Sales of $965M to $975M • Total Sales of $4,075M to $4,085M (~flat to down 1%) margin expansion Sales Sales (down ~1% to 2%)
Slide 16: CEO Closing Comments
CEO Closing Comments 1 Solid execution across our balanced water portfolio drove significant margin expansion for the 10th consecutive quarter Increased full year 2024 adjusted EPS guidance reflecting 2 confidence in our Strategy, Transformation and 80/20 3 Transformation and 80/20 expected to conti
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
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 Third Fourth Full In millions, except per-share data Qua
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: Segment Information
Segment Information Pentair plc and Subsidiaries Supplemental Financial Information by Reportable Segment (Unaudited) 2024 2023 First Second Third Nine First Second Third Nine In millions Quarter Quarter Quarter Months Quarter Quarter Quarter Months Net sales Flow $ 384.3 $ 396.8 $ 372.2 $ 1,153.3 $
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 Ended September 30, 2024 (Unaudited) Q3 Net Sales Growth Core Currency Acq. / Div. Total Total Pentair (1.5)% 0.2 % (0.2)% (1.5)% Flow (7.3) % 0.3 % —
Slide 26: 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 Three months Nine months ended ended ended ended March 31, June 30, September 30, September 30, In millions 2024 2
Slide 27: ROIC Reconciliation
ROIC Reconciliation Pentair plc and Subsidiaries Return on Invested Capital (ROIC) (Unaudited) Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Dollars in millions 2023 2023 2024 2024 2024 Adjusted operating income $ 212.1 $ 197.8 $ 217.3 $ 271.4 $ 239.2 Reported effective tax
Slide 28: Last Twelve Months EBITDA Reconciliation
Last Twelve Months EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Income from Continuing Operations to EBITDA (Unaudited) Fourth First Second Third Last Quarter Quarter Quarter Quarter Twelve In millions 2023 2024 2024 2024 Months Net income from continuing operations $ 208
Slide 29: 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) In millions Full Year Outlook Net income from continuing operations approx $ 617 Adjustments: Intangible amortization approx 55