Slide 1: Q2 2020 Earnings Release
Q2 2020 EARNINGS RELEASE July 23, 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-LOOKING 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 FOR
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 Focused on the health and safety of our employees, our customers, and our businesses Delivered second quarter performance benefiting from monthly improvement in our Residential facing businesses, particularly in Pool Generated strong cash flow and further strengthened our liq
Slide 5: Segment Focus
Segment Focus Consumer Solutions Industrial & Flow Technologies Pool content growth in new/remodeled Reinforce PIMS processes to sustain pools performance Pool aftermarket expansion and Resources and investments focused on automation growth improving manufacturing productivity Water Soluti
Slide 6: What We Do Really Matters!
What We Do Really Matters! Named ENERGY STAR® Our residential filtration solutions reduce the World leading CO2 recovery and purification Partner of the Year for six consecutive years need for 9.9 billion water bottles annually technologies capture value from waste while reducing emission footprint
Slide 7: Q2'20 Pentair Performance
Q2’20 Pentair Performance Sales Financial Highlights (YoY) $800M Core Sales Down 10% $8M Flat • Consumer Solutions Down 8% $713M ($88M) ($7M) -11% • Industrial & Flow Technologies Down 13% YoY (11 pts) 1 pt 0 pts (1 pt) (11 pts) Segment Income Down 19% (1 pt) Acq./ Q2’19 Volume Price FX Q2’20 Divest
Slide 8: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Cash Flow ($M) Debt Summary Q2 YTD ~$1.0B* 2020 2020 Maturity Net Income - Continuing Ops $ 74 $ 147 Amortization 7 15 $685M 67% Fixed 2020 – 2029 Subtotal $ 81 $ 162 Depreciation 11 23 Capital Expenditures (12) (31) Working Capital 258 21 Other Accruals/Other 79 61 $336M
Slide 9: Q2'20 Consumer Solutions Performance
Q2’20 Consumer Solutions Performance Sales Financial Highlights (YoY) $437M Pool $5M Flat $401M • Sales flat ($39M) ($2M) -8% • Strong demand in aftermarket and new YoY construction (9 pts) 1 pt 0 pts 0 pts (8 pts) Acq./ (1 pt) Water Solutions Q2’19 Volume Price FX Q2’20 Divestitures • Sales down mi
Slide 10: Q2'20 Industrial & Flow Technologies Performance
Q2’20 Industrial & Flow Technologies Performance Sales Financial Highlights (YoY) $362M Residential & Irrigation Flow $3M Flat $312M • Sales down low double digits ($48M) ($5M) -14% • Sell thru improved during the quarter while YoY distributors remained cautious on ordering (14 pts) 1 pt 0 pts (1 pt
Slide 11: Full Year 2020 Planning Assumptions
Full Year 2020 Planning Assumptions Pool is having, and we expect will continue to have, a stronger year due to easier year-over-year comparisons and the benefits of consumers sheltered in place Water Solutions is expected to see a slower recovery due to the impacts of COVID-19 on hospitality an
Slide 12: Full Year 2020 Pentair Outlook
Full Year 2020 Pentair Outlook Sales • Total Sales ~$2.8B EPS • Adjusted EPS ~$2.00 to $2.20 Other • Adjusted Tax Rate of ~16% Items • Shares ~167M Balance • Targeting FCF Greater Than 100% of Net Income Sheet & • Capital Expenditures ~$60M to $70M Cash Flow • D&A of ~$75M and ~$20M of Non-Cash Stoc
Slide 13: 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 14: Q2 2020 Earnings Release | ©2020 Pentair
Q2 2020 Earnings Release | ©2020 Pentair
Slide 15: Appendix: GAAP to Non-GAAP Measurements & Reconciliations
APPENDIX GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS
Slide 16: 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 Full In millions, except per-share data Quarter Quarter Year Net sales $ 71
Slide 17: 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 18: 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, 2020 (Unaudited) Q2 Net Sales Growth Core Currency Acq. / Div. Total Total Pentair (10.0)% (0.9)% 0.1% (10.8)% Consumer Solutions (7.8)%
Slide 19: ROIC Reconciliation
ROIC Reconciliation Second Third Fourth First Second Quarter Quarter Quarter Quarter Quarter Dollars in millions 2019 2019 2019 2020 2020 Return on Invested Capital (ROIC) Segment Income $ 154.1 $ 122.8 $ 140.7 $ 111.5 $ 124.7 Reported Effective Tax Rate 16.1% 9.8% 2.8% 21.5% 28.8% Adjusted Effectiv
Slide 20: 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 Three months Three months Six months ended ended ended ended ended ended March 31, June 30, June 30, Ma