Slide 1: Q2 2024 Earnings Release
- Picture to be updated Q2 2024 EARNINGS RELEASE JULY 23, 2024
Slide 2: Forward-Looking Statements
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 forward-looking statements. Without limitation
Slide 3: Key Definitions
Key Definitions • Except as otherwise noted, our results represent continuing operations for the period indicated, presented on an adjusted basis • Core sales refers to GAAP net sales from continuing operations excluding: (1) the impact of currency translation and (2) the impact of net sales from ac
Slide 4: Executive Summary
Executive Summary Balanced water portfolio drove record results* Adjusted Operating Sales ROS Adjusted EPS Income ✓ Q2'24 Performance: $1.22 $1,082M $1,099M $271M 24.7% − Sales up 2% $234M $1.03 21.6% 18% − Adjusted Operating Income up 16% 16% 310 bps YoY YoY 2% YoY − ROS expanded 310 bps YoY − Adju
Slide 5: Q2 and Full Year 2024 Segment Pulse
Q2 and Full Year 2024 Segment Pulse Pool Returned to Growth; Flow & Water Solutions Performed as Expected Flow • Commercial reached record sales in Q2; Focused growth efforts expected to drive continued stability and growth in 2H 2024 • Residential and Industrial projects impacted by higher interest
Slide 6: Transformation and 80/20 Update
Transformation and 80/20 Update Pentair Business System mple xity Reductio 80/20 ACCELERATING TRANSFORMATION Co n • Focus on accelerating pricing actions and improving operating 80/20 Approach performance by reducing complexity • 50% of revenue completed in 1H 2024 • Training sessions scheduled in 2
Slide 7: Q2 Key Takeaways
Q2 Key Takeaways Continued to drive strong operating income and margin expansion through 1 Transformation despite sales pressure from a sluggish global economy 2 Transformation initiatives well underway while 80/20 actions are in early stages Increased confidence in long-term performance to drive sh
Slide 8: Q2'24 Pentair Performance
Q2'24 Pentair Performance Sales Adjusted Operating Income $37M $271M $25M $1.08B $11M $11M $1.10B $234M ($1M) ($2M) ($4M) ($24M) 2% 16% YoY YoY ROS ROS 1 pt 1 pt 0 pts 0 pts 2 pts 21.6% 1.8% 0.0% (2.2%) 3.5% 24.7% (1 pt) Growth/ Q2'23 Volume Price Acq./Div. FX Q2'24 Q2'23 FX Inflation Prod. Q2'24 Pr
Slide 9: Q2'24 Flow Performance
Move Water Q2'24 Flow Performance Sales Segment Income $412M $5M Flat $397M $18M $84M ($2M) $75M Flat Flat ($18M) ($9M) (4%) 13% YoY YoY ROS ROS (4 pts) 1 pt 0 pts (1 pt) (4 pts) 18.2% 1.0% 0.0% (2.3%) 4.4% 21.3% (1 pt) Growth/ Q2'23 Volume Price Acq./Div. FX Q2'24 Q2'23 FX Inflation Prod. Q2'24 Pri
Slide 10: Q2'24 Water Solutions Performance
Improve Water Q2'24 Water Solutions Performance Sales Segment Income $336M $75M $4M Flat $311M $7M $73M ($27M) ($2M) ($1M) ($1M) ($7M) (8%) (3%) YoY YoY ROS ROS (8 pts) 1 pt 0 pts (1 pt) (8 pts) 22.2% 1.4% (0.1%) (2.0%) 2.0% 23.5% (1 pt) Growth/ Q2'23 Volume Price Acq./Div. FX Q2'24 Q2'23 FX Inflati
Slide 11: Q2'24 Pool Performance
Enjoy Water Q2'24 Pool Performance Sales Segment Income $57M $3M Flat $392M $11M $134M $25M Flat ($2M) $334M $105M ($7M) 17% 27% YoY YoY ROS ROS 17 pts 1 pt (1 pt) 0 pts 17 pts 31.4% 1.6% 0.0% (2.1%) 3.2% 34.1% (1 pt) Growth/ Q2'23 Volume Price Acq./Div. FX Q2'24 Q2'23 FX Inflation Prod. Q2'24 Price
Slide 12: Transformation Initiatives
Transformation Initiatives Target ROS of 24% in 2026 with potential upside as discussed at Investor Day 2022 2026T Sales Pricing Excellence Sales Material Material Strategic Sourcing Costs Costs Operations Excellence OCOGS OCOGS Other Organizational Effectiveness Expenses Other Expenses FY'23 ROS FY
Slide 13: 80/20 Expected to Accelerate Transformation
20 Approach 80/ 80/20 Expected to Accelerate Transformation Accelerating Value Creation by 80/20 ANALYSIS Focusing on the Right Quadrant-based strategy to assess Customers and Products customers and products by revenue Products Commit to Customer segmentation over Product segmentation 80% 20% Custom
Slide 14: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Debt Summary Cash Flow ($M) $1,756M* Maturity Q2 2024 Q2 2023 Net Income – Continuing Ops $186 $154 Amortization 13 14 $1,103M** 63% Fixed 2025 – 2032 Subtotal $199 $168 Depreciation 15 14 Capital Expenditures (17) (18) $653M 37% Variable 2023 – 2027 Asset Sales - 5 Worki
Slide 15: Q3 and Full Year 2024 Pentair Outlook & Expectations
Q3 and Full Year 2024 Pentair Outlook & Expectations • Balanced water portfolio and focused growth strategy Q3'24 FY'24 • Continued economic weakness drives • Total Sales down ~2% to 3% • Total Sales ~flat to down 1% (was up ~2% to 3%) 2H sales pressure Sales Sales (Flow down ~LSD, was up LSD; Water
Slide 16: CEO Closing Comments
CEO Closing Comments 1 Solid execution across our balanced water portfolio drove significant margin expansion for the 9th consecutive quarter Increased 2024 ROS and adjusted EPS guidance reflecting 2 confidence in our strategy 3 Transformation and 80/20 initiatives expected to continue to drive stro
Slide 17: We Believe Pentair Is a Compelling Investment Opportunity
We Believe Pentair Is a Compelling Investment Opportunity An industry leader with a balanced, innovative water portfolio Transformation initiatives to drive operational efficiencies and margin expansion ESG focus on People, Planet and Governance to provide smart, sustainable water solutions Favorabl
Slide 18: Pentair
> PENTAIR
Slide 19: Appendix
Appendix GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 20: Reported To Adjusted 2024 Reconciliation
Reported To Adjusted 2024 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending December 31, 2024 Excluding the Effect of 2024 Adjustments (Unaudited) Actual Forecast First Second Third Full In millions, except per-share data Quarter Qu
Slide 21: Reported To Adjusted 2023 Reconciliation
Reported To Adjusted 2023 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2023 Excluding the Effect of 2023 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quar
Slide 22: Reported To Adjusted 2022 Reconciliation
Reported To Adjusted 2022 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2022 Excluding the Effect of 2022 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quar
Slide 23: Reported To Adjusted 2021 Reconciliation
Reported To Adjusted 2021 Reconciliation Pentair plc and Subsidiaries Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2021 Excluding the Effect of 2021 Adjustments (Unaudited) First Second Third Fourth Full In millions, except per-share data Quarter Quarter Quar
Slide 24: Segment Information
Segment Information Pentair plc and Subsidiaries Supplemental Financial Information by Reportable Segment (Unaudited) 2024 2023 First Second Six First Second Six In millions Quarter Quarter Months Quarter Quarter Months Net sales Flow $ 384.3 $ 396.8 $ 781.1 $ 391.8 $ 411.6 $ 803.4 Water Solutions 2
Slide 25: 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 June 30, 2024 (Unaudited) Q2 Net Sales Growth Core Currency Acq. / Div. Total Total Pentair 2.2 % (0.4)% (0.2)% 1.6 % Flow (3.1) % (0.5) % — % (3
Slide 26: 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 Six months ended ended ended March 31, June 30, June 30, In millions 2024 2024 2024 Net cash (used for) provided b
Slide 27: ROIC Reconciliation
ROIC Reconciliation Pentair plc and Subsidiaries Return on Invested Capital (ROIC) (Unaudited) Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Dollars in millions 2023 2023 2023 2024 2024 Adjusted operating income $ 234.2 $ 212.1 $ 197.8 $ 217.3 $ 271.4 Reported effective ta
Slide 28: Last Twelve Months EBITDA Reconciliation
Last Twelve Months EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Income from Continuing Operations to EBITDA (Unaudited) Third Fourth First Second Last Quarter Quarter Quarter Quarter Twelve In millions 2023 2023 2024 2024 Months Net income from continuing operations $ 132
Slide 29: 2024 EBITDA Reconciliation
2024 EBITDA Reconciliation Pentair plc and Subsidiaries Reconciliation of Net Income from Continuing Operations to EBITDA for the Year Ending December 31, 2024 (Unaudited) Full Year at Midpoint of In millions Outlook Net income from continuing operations approx $ 641 Adjustments: Intangible amortiza