Slide 1: Q3 2020 Earnings Release
Q3 2020 EARNINGS RELEASE October 20, 2020 ©2020 Pentair. All Rights Reserved. Confidential property of Pentair. Do not reproduce or distribute without express permission of Pentair. 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTION CONCERNING FORWARD - L OOKING STATEMENTS THIS PRESENTATION CONTAINS STATEMENTS THAT WE BELIEVE TO BE "FORWARD-LOOKINGSTATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORMACT OF 1995. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT ARE
Slide 3: Key Definitions
Key Definitions • Except as Otherwise Noted All References to 2020 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 Continue to be focused on the health and safety of our employees, our customers, our businesses, and our communities Especially grateful to our sales and manufacturing employees for their commitment to our customers and shareholders Delivered strong third quarter results • Sa
Slide 5: Q3'20 Pentair Performance
Q3’20 Pentair Performance Sales Financial Highlights (YoY) $73M $2M $4M $6M $799M Core Sales up 10% • Consumer Solutions up 23% $714M 12% YoY • Industrial & Flow Technologies down 4% 10 pts 0 pts 1 pt 1 pt 12 pts Segment Income up 14% (1 pt) Acq./ Q3’19 Volume Price FX Q3’20 Divestitures ROS 17.6% …
Slide 6: Q3'20 Consumer Solutions Performance
Q3’20 Consumer Solutions Performance Sales Financial Highlights (YoY) $4M $2M $471M Pool $87M $1M • Sales up 46% 25% $377M YoY • Strong linearity throughout the quarter following delayed start to season 23 pts 0 pts 1 pt 1 pt 25 pts • Demand remained strong (1 pt) Acq./ Q3’19 Volume Price FX Q3’20 D
Slide 7: Q3'20 Industrial & Flow Technologies Performance
Q3’20 Industrial & Flow Technologies Performance Sales Financial Highlights (YoY) Residential & Irrigation Flow $336M $5M $327M $1M Flat • Sales up 6% ($15M) -3% • Solid demand in break & fix business YoY (4 pts) 0 pts 0 pts 1 pt (3 pts) Commercial & Infrastructure Flow (1 (1 pt) pt) Acq./ Q3’19 Vol
Slide 8: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Debt Summary Debt Roll-Forward $805M* Maturity Q3 YTD Use of Cash: ($M) 2020 2020 $603M 75% Fixed 2021 – 2029 Beginning Debt $1,013 $1,029 Used (Generated) Cash (220) (456) Share Repurchase - 115 Dividends 31 95 $202M 25% Variable 2023 Acquisitions/Other (19) 22 Q3‘20 Ave
Slide 9: Full Year 2020 Pentair Outlook
Full Year 2020 Pentair Outlook Sales • Total Sales ~$2.95B EPS • Adjusted EPS ~$2.35 to $2.40 • Corp. Expense ~$60M to $65M Other • Net Interest/Other ~$28M Items • Adjusted Tax Rate of ~15% • Shares ~167M Balance • Expecting FCF Greater Than 100% of Net Income Sheet & • Capital Expenditures ~$65M C
Slide 10: Our Longer-Term Aspirations
Our Longer-Term Aspirations • Grow greater than GDP across the ENTIRE portfolio Grow Revenue • Improve our commercialization process and velocity Organically • Focus on Acceleration of Top Growth Actions • Focus on highest growth areas Add Tuck-in and Bolt-On • Build robust opportunity funnel Acquis
Slide 11: Living Our "Win Right" Values Through ESG
Living Our “Win Right” Values Through ESG • Greater than 60%* of solutions support water efficiency • ~75%* of solutions support energy efficiency Environmental • Supporting CO2 reductions and reuse *Based on Pentair’s top brands as a percentage of total revenue • Commitment to safety and a healthy
Slide 12: A Strong Foundation to Build Upon
A Strong Foundation to Build Upon We have a strong purpose, mission, and vision We believe we are in attractive spaces that are expanding We have the right enterprise strategy, businesses, talent, and culture We continue to prioritize providing superior customer experiences and delivering more predi
Slide 13: Q3 2020 Earnings Release | ©2020 Pentair
Q3 2020 Earnings Release | ©2020 Pentair
Slide 14: Appendix: GAAP to Non-GAAP Measurements & Reconciliations
APPENDIX GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 15: Reported To Adjusted 2020 Reconciliation
Reported To Adjusted 2020 Reconciliation Pentair plc and Subsidiaries Reconciliation of the GAAP year ending December 31, 2020 to the non-GAAP excluding the effect of 2020 adjustments (Unaudited) Actual Forecast First Second Third Full In millions, except per-share data Quarter Quarter Quarter Year
Slide 16: 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) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quarter Quarter Year Ne
Slide 17: 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, 2020 (Unaudited) Q3 Net Sales Growth Core Currency Acq. / Div. Total Total Pentair 10.4 % 1.0 % 0.5 % 11.9 % Consumer Solutions 23.
Slide 18: ROIC Reconciliation
ROIC Reconciliation Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter In millions 2019 2019 2020 2020 2020 Return on Invested Capital (ROIC) Segment Income $ 122.8 $ 140.7 $ 111.5 $ 124.7 $ 140.5 Reported Effective Tax Rate 9.8 % 2.8 % 21.5 % 28.8 % 11.5 % Adjusted Effective Ta
Slide 19: 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 2020 2
Slide 20: Last Twelve Months Adjusted EBITDA Reconciliation
Last Twelve Months Adjusted EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net income from continuing operations to Adjusted EBITDA (Unaudited) Fourth First Second Third Last Quarter Quarter Quarter Quarter Twelve In millions 2019 2020 2020 2020 Months Net income from continuin