Slide 1: Q3 2022 Earnings Release
Q3 2022 Earnings Release October 25, 2022
Slide 2: Caution Concerning 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 forward-looking statements.
Slide 3: Key Definitions
Key Definitions • Except as otherwise noted all references to 2022 and 2021 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 ✓ Strong financial results for Q3 Q3’22 Results Q3’21 Results ─ Sales growth of 9% Sales $1.06B $969M ─ Segment Income up 15% Segment Income $207M $180M ─ ROS expanded 110 basis points ─ Adjusted EPS increased 11% Adjusted EPS $0.99 $0.89 ✓ Early integration of Manitowoc Ice meetin
Slide 5: Water. And that's where we come in.
Water. It flows through everything we do – from the water we drink in our homes, to the infrastructure that shapes our communities, to the industries that drive our economy, to the resources that sustain our planet. Water is a basic, universal human need. It is essential to our lives and our planet,
Slide 6: Our Purpose
Our Purpose To create a better world for people and the planet through smart, sustainable water solutions. 6 Q3 2022 Earnings Release. ©2022 Pentair. All Rights Reserved.
Slide 7: Pentair at a Glance
Pentair at a Glance We help the world sustainably move, improve, and enjoy water, life’s most essential resource Employees 2022F Sales Focus on Profitability ~ 11.3K ~$ 4.1B * ~ 18% * ROS Strong Cash Flow and Solid Returns Large installed Base Dividend Aristocrat ~ High Teens* ROIC ~ 75%+ 75K+ REPLA
Slide 8: Aligning Organization for Accelerated Success
Aligning Organization for Accelerated Success* Committed to driving value for all of our stakeholders Industrial & Flow Consumer Solutions (~$2.6B) Technologies (~$1.5B) Industrial & Flow Pool Water Solutions (~$1.6B) (~$1.2B^) Technologies (~$1.5B) Aligning our Reporting Segments to Serve our Custo
Slide 9: ENJOY Water: Pool Business
Pool Business B y t h e N u m b e r s Long-Term Industry Revenue Growth Rate ROS Opportunity ~$ 1.6B* MSD+ High 20’s* ~$ 10B ENJOY Water We innovate pool solutions to help people more sustainably enjoy water by using less energy and fewer chemicals. *Represents 2022 guidance 9 Q3 2022 Earnings Relea
Slide 10: IMPROVE Water: Water Solutions Business
Water Solutions Business B y t h e N u m b e r s Long-Term Industry Revenue Growth Rate ROS Opportunity ~$ 1.2B*^ MSD ~20%* ~$ 40B IMPROVE Water We provide great tasting, higher-quality water and ice while helping our customers use water more productively. *Represents 2022 guidance ^ Water Solutions
Slide 11: MOVE Water: Industrial & Flow Technologies Segment
Industrial & Flow Technologies (IFT) Segment B y t h e N u m b e r s Long-Term Industry Revenue Growth Rate ROS Opportunity ~$ 1.5B* LSD Mid Teens* ~$ 20B Flow Technologies: ~70% of IFT Industrial Solutions: ~30% of IFT MOVE Water While our foundation is water, we are fueled by the importance of our
Slide 12: Transformation to Enhance Value Creation
Transformation to Enhance Value Creation Execution Underway Centered Around Four Key Themes • Pricing Excellence • Strategic Sourcing • Operations Excellence • Organizational Effectiveness Enablers Transformation to • Focus & Prioritization unlock value and fund growth • Digital Enterprise (ERP & Da
Slide 13: Early Thoughts on 2023
Early Thoughts on 2023 Revenue Income We expect to grow Revenue in 2023 vs. We expect to grow Income in 2023 vs. 2022 2022 with Manitowoc Ice, carryover pricing, with Manitowoc Ice, carryover pricing, and the diversity of our portfolio offsetting reduced manufacturing inefficiencies, and residential
Slide 14: Q3'22 Pentair Performance
Q3’22 Pentair Performance Sales Segment Income $72M $135M $1.06B $143M ($27M) ($3M) $969M 9% $207M YoY $180M ($97M) $19M* $6M * ($8M) 15% ($102M) YoY ROS ROS (11 pts) 15 pts 7 pts (2 pts) 9 pts 18.5% 11.7% 0.2% (10.0%) (0.8%) 19.6% Acq./ (1 pt) Growth/ Q3’21 Volume Price FX Q3’22 Q3’21 FX Inflation
Slide 15: Q3'22 Consumer Solutions Performance
Q3’22 Consumer Solutions Performance Sales Segment Income $69M $665M $87M $614M $99M ($8M) ($2M) 8% $159M $144M YoY $3M * ($65M) ($5M) $17M * 10% ($109M) YoY ROS ROS (18 pts) 16 pts 11 pts (1 pt) 8 pts 23.5% 11.6% 0.1% (10.5%) (0.9%) 23.8% Acq./ (1 pt) Growth/ Q3’21 Volume Price FX Q3’22 Q3’21 FX In
Slide 16: Q3'22 Industrial & Flow Technologies Performance
Q3’22 Industrial & Flow Technologies Performance Sales Segment Income $44M $3M $50M $389M ($3M) $355M $6M ($19M) 10% $66M $1M * YoY $52M ($31M) ($2M) $3M * 25% YoY ROS ROS 2 pts 12 pts 1 pt (5 pts) 10 pts 14.8% 11.5% (0.1%) (8.8%) (0.5%) 16.9% Acq./ (1 pt) Growth/ Q3’21 Volume Price FX Q3’22 Q3’21 F
Slide 17: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Debt Summary Cash Flow ($M) Q3 2022 YTD 2022 $2,448M* Maturity Net Income - Continuing Ops $115 $387 Amortization 19 31 $796M 33% Fixed 2025 – 2032 Subtotal $134 $418 Depreciation 13 40 Capital Expenditures (23) (63) Asset Sales - 3 $1,652M 67% Variable 2024 – 2027 Workin
Slide 18: Q4 and Full Year 2022 Pentair Outlook
Q4 and Full Year 2022 Pentair Outlook • Expect acceleration of inventory correction in residential channels Q4’22 FY’22 • FX headwinds increasing Sales • Total Sales ~flat • Total Sales up ~9% • Momentum building on Transformation funnel Income • Segment Income up ~8% • Segment Income up ~12% • Incl
Slide 19: Strategic Framework
Strategic Framework OUR PURPOSE: To create a better world for people and the planet through smart, sustainable water solutions. OUR MISSION: We help the world sustainably move, improve, and enjoy water, life’s most essential resource. OUR VISION: To be the world’s most valued sustainable water solut
Slide 20: Appendix
Appendix GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 21: 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 Ending December 31, 2022 Excluding the Effect of 2022 Adjustments (Unaudited) Actual Forecast First Second Third Fourth Full In millions, except per-share data Qua
Slide 22: 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 23: 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, 2022 (Unaudited) Q3 Net Sales Growth Core Currency Acq. / Div. Total Total Pentair 4.2 % (2.7)% 7.4 % 8.9 % Consumer Solutions (1.5
Slide 24: ROIC Reconciliation
ROIC Reconciliation Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Dollars in millions 2021 2021 2022 2022 2022 Return on Invested Capital (ROIC) Segment income $ 179.7 $ 166.9 $ 172.1 $ 205.9 $ 206.9 Reported effective tax rate 13.3 % 2.0 % 15.4 % 15.7 % 9.6 % Adjusted effe
Slide 25: 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 2022 2
Slide 26: 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 2021 2022 2022 2022 Months Net income from continuin
Slide 27: Q3 2022 Earnings Release. ©2022 Pentair. All Rights Reserved.
27 Q3 2022 Earnings Release. ©2022 Pentair. All Rights Reserved.