Slide 1: Q4 2017 Earnings Release
Q4 2017 EARNINGS RELEASE January 30, 2018 Q4 2017 Earnings Release
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 2017 and 2016 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 • Adjusted Core Sales Grew 4% Q4’17 • Return on Sales Expanded 80 bps to 18.0% • Adjusted EPS Grew 19% • Adjusted Core Sales Grew 2% Full Year 2017 • Return on Sales Expanded 100 bps to 18.2% • Adjusted EPS Grew 16% … Another Strong Free Cash Flow Year • Solid Core Sales Growth Exp
Slide 5: Full Year 2017 Pentair Performance
FULL YEAR 2017 PENTAIR PERFORMANCE SALES FINANCIAL HIGHLIGHTS (YoY) $77M $22M $28M $4.94B $4.89B Adjusted Core Sales Up 2% ($80M) 2016 Large Jobs 1% • Water Up 2% ($124M) YoY • Electrical Up 3% 1 pt 1 pt (2 pts) 1 pt 1 1(1pt ptpt) Segment Income Up 7% Acq./ 2016 Volume Price FX 2017 Large Jobs ROS 1
Slide 6: Q4'17 Pentair Performance
Q4’17 PENTAIR PERFORMANCE SALES FINANCIAL HIGHLIGHTS (YoY) $26M $1.26B $45M $1M $0M Adjusted Core Sales Up 4% 2016 Large Jobs $1.19B ($10M) • Water Up 3% 6% YoY • Electrical Up 5% 4 pts 0 pts 0 pts 2 pts 6(1pts pt) Segment Income Up 11% Acq./ Q4'16 Volume Price FX Q4’17 Large Jobs ROS 18.0% … Up 80
Slide 7: Q4'17 Water Segment Performance
Q4'17 WATER SEGMENT PERFORMANCE SALES CORE SALES AND HIGHLIGHTS (YoY) $13M $720M $18M $2M $5M Filtration Solutions Down 2% (FY Down 3%) $682M 2016 Large Jobs ($2M) 6% • Residential & Commercial Strength YoY • Beverage Weakness Continued 3 pts 0 pts 1 pt 2 pts 6(1pts pt) Acq./ Flow Technologies Up 4%
Slide 8: Q4'17 Electrical Segment Performance
Q4'17 ELECTRICAL SEGMENT PERFORMANCE SALES CORE SALES AND HIGHLIGHTS (YoY) $27M $13M $542M Enclosures Up 8% (FY Up 2%) $508M ($1M) ($5M) 2016 Large Jobs 7% • Industrial Strength ($8M) YoY • Broad-Based Geographical Strength 5 pts 0 pts (1 pts) 3 pts 7 pts (1 pt) Acq./ Thermal Management Down 3% (FY
Slide 9: Separation Update
SEPARATION UPDATE Form 10 Filed and Review Process Ongoing New Leadership Teams in Place for Water and Electrical Enterprise Separation Activities On or Ahead of Schedule Expecting Capital Structures to be Determined by End of Q1 February 13 Investor Meetings for Water and Electrical Targeting Separ
Slide 10: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW CASH FLOW DEBT SUMMARY Q4 YTD ($M) 2017 2017 $1.4B* Maturity Net Income - Continuing Ops $ 204 $ 480 Amortization 25 98 Subtotal $ 229 $ 578 ~$1.3B 96% Fixed 2018 – 2025 Depreciation 21 85 Capital Expenditures (20) (71) Asset Sales 1 8 Working Capital 48 (26) ~$0.1B 4% Va
Slide 11: 2018 Outlook
2018 OUTLOOK WATER ELECTRICAL PENTAIR Core Sales Up ~2-4% Up ~2-4% Up ~2-4% Sales ~$2.95B ~$2.15B ~$5.10B ROS Up ~40bps ~Flat Up ~20bps Corporate Expense ~$55M ~$45M ~$100M Interest Expense ~$20M ~$30M ~$50M Tax Rate ~18% ~18% ~18% Adjusted EPS ~$2.20-$2.30 ~$1.70-$1.80 ~$4.00 Shares ~183M ~183M ~18
Slide 12: Seasonality Present in Both Businesses
SEASONALITY* PRESENT IN BOTH BUSINESSES WATER SALES (% of FY) WATER SEGMENT INCOME (% of FY) 27% 30% 24% 24% 25% 25% 24% 21% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ELECTRICAL SALES (% of FY) ELECTRICAL SEGMENT INCOME (% of FY) 25% 26% 25% 27% 24% 25% 24% 24% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *Historical 2 year average Expec
Slide 13: Q1'18 Pentair Outlook
Q1'18 PENTAIR OUTLOOK Q1'18 Q1'17 Q1’18 FINANCIAL OUTLOOK (YoY) Sales ~$1.26B $1.18B Core Sales Up ~3% Op. Income ~$171M $138M • Water Up ~3% Seg. Income ~$195M $184M • Electrical Up ~3% ROS ~15.5% 15.5% Segment Income Up ~6% EPS (Rpt.) ~$0.70-$0.72 $0.44 EPS (Adj.) ~$0.81-$0.83 $0.65 ROS ~15.5% … F
Slide 14: Appendix
APPENDIX GAAP to Non-GAAP Measurements & Reconciliations Q4 2017 Earnings Release 14
Slide 15: Reported to Adjusted 2017 Reconciliation
REPORTED TO ADJUSTED 2017 RECONCILIATION Pentair plc and Subsidiaries Reconciliation of the GAAP year ended December 31, 2017 to the non-GAAP excluding the effect of 2017 adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year To
Slide 16: Q4 2017 Core Sales Growth Reconciliation
Q4 2017 CORE SALES GROWTH RECONCILIATION Q4 2017 Earnings Release 16
Slide 17: Full Year 2017 Core Sales Growth Reconciliation
FULL YEAR 2017 CORE SALES GROWTH RECONCILIATION Q4 2017 Earnings Release 17
Slide 18: Other Reconciliations
OTHER RECONCILIATIONS Q4 2017 Earnings Release 18
Slide 19: Reported to Adjusted 2016 Reconciliation
REPORTED TO ADJUSTED 2016 RECONCILIATION Pentair plc and Subsidiaries Reconciliation of the GAAP year ended December 31, 2016 to the non-GAAP excluding the effect of 2016 adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year To
Slide 20: 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) Forecast Water Electrical Pentair Full Full First Full In millions, except per-share data Year Year Quart