Slide 1: Watts Water Technologies Q2 2025 Earnings Conference Call
WATTS WATER TECHNOLOGIES Q2 2025 EARNINGS CONFERENCE CALL August 7, 2025 © 2025 Watts Water Technologies, Inc.
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 2025 Outlook
Q2 Overview and 2025 Outlook Q2 2025 Performance Operational Updates 2025 Outlook Record sales, operating income and EPS Continuing to manage tariffs impacts Increasing FY sales and margin outlook with price and supply chain strategies Organic sales* increased 6%; benefits ▲ H1 performance from favo
Slide 4: Driving Value Creation Through Sustainability Strategy
Driving Value Creation Through Sustainability Strategy Access Our Full 2024 Sustainability Report Here SUSTAINABILITY PILLARS AND 2024 PROGRESS EXAMPLES SOLVING CUSTOMERS’ CHALLENGES ACROSS OUR “TRIPLE PLAY” >80 M Liters of water reduced since 2014 CHALLENGE SOLUTION Footprint ~950 MT Absolute CO2 r
Slide 5: Q2 2025 Financial Summary
Q2 2025 Financial Summary Sales ($M) Adj. EBITDA and Adj. Adj. EPS ($)* FCF ($M)* $644 Operating Margin (%)* $3.09 $120 $105 $597 23.8% $2.46 +8% Adj. +280 bps Reported 21.0% EBITDA +6% 21.6% +26% -12% Organic* +280 bps Adj. OM 18.8% 2024 2025 2024 2025 2024 2025 2024 2025 • Segment sales • Adj. EBI
Slide 6: Q3 and Full Year 2025 Outlook
Q3 and Full Year 2025 Outlook* Previous FY Outlook Updated FY Outlook Q3 Outlook Reported -2% to +3% Reported +2% to +5% Reported +4% to +7% Sales Growth Organic -3% to +2% Organic Flat to +3% Organic +2% to +5% Segment Organic Growth Segment Organic Growth Segment Organic Growth Americas: -2% to +3
Slide 7: Summary
Summary Better-than-expected Q2 results driven by strong Americas growth, price/cost and volume leverage Navigating tariff-related challenges by leveraging price, expansive U.S. footprint & and global supply chain Raising full year 2025 sales and margin outlook due to strong H1 Strong balance sheet
Slide 8: Appendix
Appendix 8 © 2025 Watts Water Technologies, Inc.
Slide 9: Other 2025 Outlook Inputs
Other 2025 Outlook* Inputs Previous Other FY Inputs Updated Other FY Inputs Other Q3 Inputs Corporate Costs ~$55M to $57M ~$58M ~$15M Net Interest Expense ~$2M - $3M ~$2M - $3M ~$1M Stock-Based Compensation ~$20M ~$20M ~$6M Adj Effective Tax Rate ~25% ~25% ~25% Share Count ~33.5M ~33.5M ~33.5M Capex
Slide 10: Watts Water Snapshot (NYSE: WTS)
Watts Water Snapshot (NYSE: WTS) 2024 Key Statistics With 5 Year Performance vs. 2019 $8.86 17.7% $1.72 $2.3B 112% 19.8% 106% Adj. EPS Adj. Operating Margin Dividends Net Sales 5-yr Avg Free Cash ROIC (GAAP) 5-yr Avg Reinvestment +17% CAGR +480 bps Expansion +13% CAGR 7% CAGR Flow Conversion +640 bp
Slide 11: 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 Diverse Markets Sheet Economic Cycles Global reach Solutions aligned Continuing Targeting >100% Large
Slide 12: Consolidated Statements of Operations
Consolidated Statements of Operations Second Quarter 2025 2024 B/(W) % Net sales $643.7 $597.3 $46.4 8% Cost of goods sold 317.8 312.5 (5.3) (2%) Gross profit 325.9 284.8 41.1 14% 50.6% 47.7% +290 bps Selling, general & administrative expenses 187.2 173.1 (14.1) (8%) 29.1% 29.0% -10 bps Restructurin
Slide 13: Reconciliation of Net Sales to Organic Net Sales
Reconciliation of Net Sales to Organic Net Sales Second Quarter Americas Europe APMEA Total Net sales 2025 $498.5 $111.0 $34.2 $643.7 Net sales 2024 $448.1 $114.1 $35.1 $597.3 Dollar change $50.4 ($3.1) ($0.9) $46.4 Net sales % increase (decrease) 11% (3%) (3%) 8% Foreign exchange impact - (5%) 2% (
Slide 14: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Second Quarter Six Months 2025 2024 2025 2024 Net Sales $643.7 $597.3 $1,201.7 $1,168.2 Operating income $135.3 $111.5 $223.0 $208.2 Operating margin % 21.0% 18.7% 18.6% 17.8% Adjustments for special items: Restructuring $3.4 $0.2 $20.7 $1.4 Acquisition-re
Slide 15: Segment Earnings and Margin Summary
Segment Earnings and Margin Summary Second Quarter 2025 Second Quarter 2024 Americas Europe APMEA Corp. OI Americas Europe APMEA Corp. OI Segment earnings / Corp expenses / Adj. OI $135.8 13.0 6.5 (16.2) $139.1 $108.8 11.4 6.6 (14.7) $112.1 Segment margin / Adjusted operating margin % 27.2% 11.7% 18
Slide 16: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Six Months 2025 2024 Net cash provided by operating activities $124.9 $130.9 Less: additions to property, plant, and equipment (19.8) (16.9) Plus: proceeds from the sale of property, plant, and equipment - 5.7 Free cash fl
Slide 17: Reconciliation of Long-term Debt to Net Debt to Capitalization Ratio
Reconciliation of Long-term Debt (Including Current Portion) to Net Debt to Capitalization Ratio June 29, 2025 December 31, 2024 Current portion of long-term debt $- $- Plus: Long-term debt, net of current portion 197.3 197.0 Less: Cash and cash equivalents (369.3) (386.9) Net debt ($172.0) ($189.9)
Slide 18: Calculations of EBITDA & Gross and Net Leverage
Calculations of EBITDA & Gross and Net Leverage Second Quarter Ended Second Quarter Ended Trailing Twelve Months June 29, 2025 June 30, 2024 Through June 29, 2025 Sales $643.7 $597.3 $2,285.7 Net income – as reported $100.9 $82.0 $311.5 Plus: Interest expense, net 0.4 2.2 2.3 Plus: Income taxes 33.8
Slide 19: Reconciliation of Adjusted Non-GAAP Effective Tax Rate
Reconciliation of “Adjusted” Non-GAAP Effective Tax Rate Second Quarter Six Months 2025 2024 2025 2024 Income before income taxes $134.7 $109.5 $221.6 $204.7 Provision for income taxes $33.8 $27.5 $46.7 $50.2 Effective tax rate 25.2% 25.1% 21.1% 24.5% Income before income taxes $134.7 $109.5 $221.6
Slide 20: Reconciliation between GAAP and Non-GAAP Measures Included in 2025 Outlook
Reconciliation between GAAP and Non-GAAP Measures Included in 2025 Outlook* Third Quarter Full Year 2025 2025 Net Sales Net sales growth +4% to +7% +2% to +5% Forecasted impact of acquisition / FX -2% -2% Organic net sales growth +2% to +5% Flat to +3% Operating Margin Operating margin range 16.9% t