Slide 1: Q3 2019 Earnings Release
Q3 2019 EARNINGS RELEASE OCTOBER 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 Third Quarter Segment Income Growth and ROS Expansion Maintaining EPS Guidance as Top Line Showing Signs of Stabilization Continuing to Invest in Strategic Growth Priorities We Believe We Are Positioned for Return to Core Sales and Income Growth in 2020 We Believe Our Lon
Slide 5: Q3'19 Pentair Performance
Q3'19 Pentair Performance Sales Financial Highlights (YoY) $24M $714M Core Sales Down 2% $711M $22M ($8M) • Aquatic Systems Down 5% ($35M) Flat • Filtration Solutions Up 4% YoY • Flow Technologies Down 5% (5 pts) 3 pts 3 pts (1 pt) Flat Acq./ (1 pt) Segment Income Up 1% Q3'18 Volume Price FX Q3’19 D
Slide 6: Q3'19 Pentair Segment Performance
Q3'19 Pentair Segment Performance Aquatic Systems Filtration Solutions Flow Technologies Sales Sales Sales $233M $274M $238M $219M 4% $221M $240M Core -5% -5% Core Core Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Segment Income Segment Income Segment Income $60M $45M $55M $38M $37M $38M 17% -9% 4% ROS 25.7%
Slide 7: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow CASH FLOW ($M) DEBT ROLL-FORWARD ($M) Q3 YTD Q3 YTD 2019 2019 Use of Cash: 2019 2019 Net Income - Continuing Ops $ 91 $ 259 Beginning Debt $ 1,215 $ 788 Amortization 8 24 Used (Generated) Cash (153) (221) Subtotal $ 99 $ 283 Share Repurchase - 150 Depreciation 12 36 Divid
Slide 8: Q4'19 Pentair Outlook
Q4'19 Pentair Outlook • Total PNR Up ~2% (Core Sales ~Flat) ‒ Aquatic Systems Core Sales Down ~1 to 3% Sales ‒ Filtration Solutions Core Sales ~Flat ‒ Flow Technologies Core Sales ~Flat ‒ FX Down ~1%; Acq./Div. Up ~3% • Segment Income Up ~6 to 8% Income and EPS • Adjusted EPS ~$0.64 to $0.66 • Corp.
Slide 9: Full Year 2019 Pentair Outlook
Full Year 2019 Pentair Outlook • Total PNR ~Flat (Core Sales Down ~1%) ‒ Aquatic Systems Core Sales Down ~4 to 5% Sales ‒ Filtration Solutions Core Sales ~Flat ‒ Flow Technologies Core Sales ~Flat ‒ FX Down ~1%; Acq./Div. Up ~2% • Segment Income Down ~3% Income and EPS • Adjusted EPS ~$2.35 • Corp.
Slide 10: Executing a Consistent Strategy
Executing a Consistent Strategy Global Water Awareness Increasing • Global Water Quality Concern is a Global Issue • Aging U.S. Infrastructure Requires Consumers to Increasingly Solve Their Own Needs • Pentair is One of the Few Total Solution Providers for Residential Customers Serving Large and Sta
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 Fourth Full In millions, except per-share data Quarter Quarter Quarter
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 September 30, 2019 (Unaudited) Actual Q3 Net Sales Growth Acq. / Core Currency Div. Total Total Pentair (1.9)% (1.1)% 3.3% 0.3% Aquatic Systems
Slide 16: ROIC Reconciliation
ROIC Reconciliation Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Dollars in millions 2018 2018 2019 2019 2019 Return on Invested Capital (ROIC) Segment Income $ 121.8 $ 133.9 $ 98.7 $ 154.1 $ 122.8 Reported Effective Tax Rate 10.4% 11.0% 17.1% 16.1% 9.8% Adjusted Effective
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 Three months Nine months Nine months ended ended ended ended ended March 31, June 30, September 30, September 30,