Watts Water Technologies, Inc. · NYSE:WTS
Watts Water Technologies — Q2 2026 Earnings Presentation
21 slides from Watts Water Technologies's earnings presentation, Aug 6, 2026
Slide 1: Q2 2026 Earnings Conference Call
Q2 2026 Earnings Conference Call August 6, 2026
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, effective tax rate, capital
Slide 3: Q2 Overview and 2026 Outlook
Q2 Overview and 2026 Outlook Q2 2026 Performance Business Updates 2026 Outlook Record Q2 exceeded expectations Acquisition integrations and synergy Increasing FY sales and margin outlook realization on track through utilization of Organic sales* increased 12% driven by One Watts Performance System ▲
Slide 4: Data Center Growth Initiative
Data Center Growth Initiative ~$2B ~15%-20%+ CAGR ~$25K to ~$100K Range depends on: liquid vs air cooling, amount of content in each project Served Addressable Estimated Market Market Growth* Potential Content / MW • Q2 2026 data center sales more than tripled year-over-year; year- to-date data cent
Slide 5: Q2 2026 Financial Summary
Q2 2026 Financial Summary Adj. EBITDA and Adj. Sales ($M) Operating Margin (%)* Adj. EPS ($)* FCF ($M)* $763 $3.66 $105 $644 +19% Adj. EBITDA 23.8% $3.09 $98 Reported 23.1% +12% -70 bps Organic* +18% -7% Adj. OM 21.6% 21.0% -60 bps 2025 2026 2025 2026 2025 2026 2025 2026 Segment sales • Adj. EBITDA:
Slide 6: Q3 and Full Year 2026 Outlook
Q3 and Full Year 2026 Outlook* Previous FY Outlook Updated FY Outlook Q3 Outlook Sales Growth Reported +8% to +12% Reported +14% to +17% Reported +11% to +14% Organic +2% to +6%** Organic +8% to +11%** Organic +5% to +8%** Americas: +3% to +7% Americas: +9% to +12% Americas: +7% to +10% Segment Euro
Slide 7: Key Takeaways
Key Takeaways Strong Q2 performance exceeded expectations across all regions Driving growth through strategic initiatives and strong data center demand, offsetting continued weakness in residential and non-institutional commercial new construction markets Raising full year 2026 sales and margin outl
Slide 8: Appendix
Watts Water Technologies, Inc. Appendix
Slide 9: Other 2026 Outlook Inputs
Other 2026 Outlook* Inputs Previous Other FY Inputs Updated Other FY Inputs Other Q3 Inputs Corporate Costs ~$60M $64M to $66M ~$17M Net Interest ~$3M to $4M ~$1M to $2M Flat to $1M Expense Stock-based ~$22M ~$27M ~$7M Compensation Adj. Effective Tax ~25% ~25% ~25% Rate Share Count ~33.5M ~33.5M ~33
Slide 10: Driving Value Creation Through Sustainability Strategy
Driving Value Creation Through Sustainability Strategy • 2025 Sustainability Report released mid-June • Continued commitment to high-performance solutions that solve our customers’ challenges, while promoting safety, sustainability and efficiency • Advanced progress on second generation of environme
Slide 11: Watts Water Snapshot (NYSE: WTS)
Watts Water Snapshot (NYSE: WTS) 2025 Key Statistics With 5 Year Performance vs. 2020 $10.58 19.6% $1.99 $2.4B 100% 20.5% 103% Adj. EPS Adj. Operating Margin Dividends Net Sales 5-yr Avg Free Cash ROIC (GAAP) 5-yr Avg +22% CAGR +670 bps Expansion +17% CAGR 10% CAGR Flow Conversion +880 bps Expansion
Slide 12: Key Themes
Key Themes Recognized Aligned to Focus on Accretive Capital Resilient Leader Long-term Secular Innovation and Deployment and Business Model Trends and Profitable Growth Strong Balance Tested Across Global reach Diverse Markets Sheet Economic Cycles with leading Continuing market positions Solutions
Slide 13: Consolidated Statements of Operations
Consolidated Statements of Operations Second Quarter 2026 2025 B/(W) % Net sales $763.2 $643.7 $119.5 19% Cost of goods sold 389.1 317.8 (71.3) (22%) Gross profit 374.1 325.9 48.2 15% 49.0% 50.6% -160 bps Selling, general & administrative expenses 214.5 187.2 (27.3) (15%) 28.1% 29.1% -100 bps Restru
Slide 14: Reconciliation of Net Sales to Organic Net Sales
Reconciliation of Net Sales to Organic Net Sales Second Quarter Americas Europe APMEA Total Net sales 2026 $585.0 $124.6 $53.6 $763.2 Net sales 2025 $498.5 $111.0 $34.2 $643.7 Dollar change $86.5 $13.6 $19.4 $119.5 Net sales % increase 17% 12% 57% 19% Foreign exchange impact - (3%) (9%) (1%) Acquisi
Slide 15: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Second Quarter Six Months 2026 2025 2026 2025 Net Sales $763.2 $643.7 $1,440.4 $1,201.7 Operating income $154.0 $135.3 $287.0 $223.0 Operating margin % 20.2% 21.0% 19.9% 18.6% Adjustments for special items: Restructuring $5.6 $3.4 $5.8 $20.7 Acquisition-re
Slide 16: Segment Earnings and Margin Summary
Segment Earnings and Margin Summary Second Quarter 2026 Second Quarter 2025 Americas Europe APMEA Corp. Consolidated Americas Europe APMEA Corp. Consolidated Segment earnings / Corp expenses / Adj. OI $150.1 16.6 10.6 (17.3) $160.0 $135.8 13.0 6.5 (16.2) $139.1 Segment margin / Adjusted operating ma
Slide 17: Reconciliation of Net Cash Provided to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Six Months 2026 2025 Net cash provided by operating activities $120.8 $124.9 Less: additions to property, plant, and equipment (22.6) (19.8) Free cash flow $98.2 $105.1 Net income $217.9 $174.9 Cash conversion rate of free
Slide 18: Reconciliation of Long-term Debt to Net Debt Ratio
Reconciliation of Long-term Debt (Including Current Portion) to Net Debt to Capitalization Ratio June 28, 2026 December 31, 2025 Current portion of long-term debt $- $- Plus: Long-term debt, net of current portion 108.0 197.7 Less: Cash and cash equivalents (347.9) (405.5) Net debt ($239.9) ($207.8)
Slide 19: Calculations of EBITDA & Gross and Net Leverage
Calculations of EBITDA & Gross and Net Leverage Second Quarter Ended Second Quarter Ended Trailing Twelve Months June 28, 2026 June 29, 2025 Through June 28, 2026 Sales $763.2 $643.7 $2,677.3 Net income – as reported $118.3 $100.9 $383.8 Plus: Interest expense, net 0.5 0.4 1.6 Plus: Income taxes 35.
Slide 20: Reconciliation of Adjusted Non-GAAP Effective Tax Rate
Reconciliation of “Adjusted” Non-GAAP Effective Tax Rate Second Quarter Six Months 2026 2025 2026 2025 Income before income taxes $153.7 $134.7 $285.1 $221.6 Provision for income taxes $35.4 $33.8 $67.2 $46.7 Effective tax rate 23.0% 25.2% 23.6% 21.1% Income before income taxes $153.7 $134.7 $285.1
Slide 21: Reconciliation between GAAP and Non-GAAP Measures Included in 2026 Outlook
Reconciliation between GAAP and Non-GAAP Measures Included in 2026 Outlook* Third Quarter Full Year 2026 2026 Net Sales Net sales growth +11% to +14% +14% to +17% Forecasted impact of acquisition / FX (6%) (6%) Organic net sales growth +5% to +8% +8% to +11% Operating Margin Operating margin range 1
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