Pentair Reports Strong Fourth Quarter and Full Year 2023 Results
- Operating income in the fourth quarter increased by 50%
- Full year 2023 sales were $4.1 billion
- 2024 GAAP EPS guidance of $3.82 to $3.92 and adjusted EPS guidance of $4.15 to $4.25
- Fourth quarter sales declined by 2%
- Full year 2023 sales were flat compared to the previous year
- Core sales declined 2% in the fourth quarter of 2023
Insights
The reported financials indicate substantial growth in operating income and return on sales (ROS), which are critical indicators of the company's operational efficiency and profitability. A 50% increase in operating income and a 590 basis point improvement in ROS in Q4, alongside a full year operating income growth of 24%, suggest a robust performance despite flat sales year-over-year. This could be attributed to cost management and operational improvements. However, the decline in core sales after adjusting for currency, acquisitions and divestitures may raise concerns about underlying demand and market penetration.
The introduction of the 2024 GAAP EPS guidance, with an anticipated 11-13% increase compared to 2023, reflects management's confidence in the company's ability to enhance margins and drive earnings growth. The negative impact of global tax standards changes should be monitored, as it could affect net income. The dividend increase for the 48th consecutive year positions the company as a dividend aristocrat, potentially attracting income-focused investors.
The segment performance provides a nuanced view of the company's diverse portfolio. The Flow segment showed resilience with a modest sales increase and steady segment income, indicating stable demand in industrial technologies. However, the Pool segment experienced a notable decline in sales, which could reflect market saturation or cyclicality in consumer spending on pool-related products. Meanwhile, the Water Solutions segment's strong margin expansion suggests effective cost control and potentially higher pricing power within this sector.
The reported increase in free cash flow is a positive sign for stakeholders, as it enhances the company's ability to invest in growth opportunities, pay down debt, or return capital to shareholders. The emphasis on Transformation initiatives and margin expansion are strategic moves that could further strengthen the company's competitive position in the long run.
The financial results must be contextualized within the broader economic environment. The company's ability to expand margins and generate free cash flow in a period of potential economic uncertainty is commendable. However, the decline in core sales growth could be indicative of macroeconomic headwinds, such as reduced industrial activity or consumer spending. It is essential to consider the potential impact of inflationary pressures on input costs and consumer prices, which could affect future profitability and demand.
The guidance for 2024 suggests cautious optimism, with modest sales growth expectations. This conservative outlook may be a strategic response to current economic forecasts, projecting a potential slowdown or continued volatility in global markets. Investors should consider the company's performance in relation to economic trends, such as currency fluctuations and global trade dynamics, which could influence future results.
-
Fourth quarter sales of
; full year 2023 sales of$985 million .$4.1 billion -
Operating income in the fourth quarter increased 50 percent to
reflecting ROS of 17.0 percent, an increase of 590 basis points when compared to fourth quarter 2022; on an adjusted basis, ROS expanded 190 basis points to 20.1 percent. Full year operating income increased 24 percent to$167 million reflecting ROS of 18.0 percent, an increase of 360 basis points from the prior year; on an adjusted basis, ROS expanded 220 basis points to 20.8 percent.$739 million -
Fourth quarter GAAP EPS of
and adjusted EPS of$1.25 ; full year 2023 GAAP EPS of$0.87 and adjusted EPS of$3.75 .$3.75 -
Full year net cash provided by operating activities of continuing operations was
, an increase of$621 million compared to the prior year and free cash flow provided by continuing operations for the full year was$257 million , an increase of$550 million compared to full year 2022.$267 million -
The Company introduces 2024 GAAP EPS guidance of
to$3.82 and adjusted EPS guidance of$3.92 to$4.15 .$4.25
Reconciliations of GAAP to Non-GAAP measures are in the attached financial tables.
Fourth quarter 2023 operating income was
“Our strong results in 2023 reflected the power of our balanced and resilient water portfolio, our focused growth strategy, and solid execution from our relentless team,” said John L. Stauch, Pentair’s President and Chief Executive Officer. “Each of our three segments drove record margins in 2023. Our Transformation initiatives remain on track and have yielded strong margin expansion to continue to deliver shareholder value. In 2023, we generated significant free cash flow and continued to pay down debt, ending the year with an even stronger balance sheet. And, we raised our dividend for the 48th consecutive year which further solidified our status as a dividend aristocrat.”
Full year 2023 sales were
Full year 2023 operating income was
Flow (previously named “Industrial and Flow Technologies”) sales were up 1 percent in the fourth quarter of 2023 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 1 percent in the fourth quarter. Segment income of
Flow sales were up 5 percent for the full year of 2023 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 5 percent in 2023. Segment income of
Water Solutions sales were down 5 percent in the fourth quarter of 2023 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 4 percent in the fourth quarter. Segment income of
Water Solutions sales were up 19 percent for the full year of 2023 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales grew 1 percent in 2023. Segment income of
Pool sales were down 2 percent in the fourth quarter of 2023 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 2 percent in the fourth quarter. Segment income of
Pool sales were down 18 percent for the full year of 2023 compared to sales for the same period last year. Excluding currency translation, acquisitions and divestitures, core sales declined 18 percent in 2023. Segment income of
Full year net cash provided by operating activities of continuing operations was
Pentair paid a regular cash dividend of
OUTLOOK
Mr. Stauch concluded, “As we look to 2024, we are committed to driving growth, profitability and returns by focusing on our mission to help the world sustainably move, improve, and enjoy water, life’s most essential resource. We are investing in key areas to drive long-term growth and optimizing our sourcing and operational footprint which we expect to continue to drive further margin expansion in 2024 as these Transformation initiatives scale.”
The Company is introducing 2024 GAAP EPS guidance of approximately
In addition, the Company introduces first quarter 2024 GAAP EPS of approximately
EARNINGS CONFERENCE CALL
Pentair President and Chief Executive Officer John L. Stauch and Chief Financial Officer Robert P. Fishman will discuss the Company’s fourth quarter and full year 2023 results on a conference call with investors at 9:00 a.m. Eastern today. A live audio webcast of the call, along with the related presentation, can be accessed in the Investor Relations section of the Company’s website, www.pentair.com, shortly before the call begins.
Reconciliations of non-GAAP financial measures are set forth in the attachments to this release and in the presentations, each of which can be found on Pentair’s website. The webcast and presentations will be archived at the Company’s website following the conclusion of the event.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This release 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, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” “could,” “positioned,” “strategy,” or “future” or words, phrases, or terms of similar substance or the negative thereof are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the overall global economic and business conditions impacting our business, including the strength of housing and related markets and conditions relating to international hostilities; supply, demand, logistics, competition and pricing pressures related to and in the markets we serve; the ability to achieve the benefits of our restructuring plans, cost reduction initiatives and Transformation Program; the impact of raw material, logistics and labor costs and other inflation; volatility in currency exchange rates and interest rates; failure of markets to accept new product introductions and enhancements; the ability to successfully identify, finance, complete and integrate acquisitions; risks associated with operating foreign businesses; the impact of seasonality of sales and weather conditions; our ability to comply with laws and regulations; the impact of changes in laws, regulations and administrative policy, including those that limit
ABOUT PENTAIR PLC
At Pentair, we help the world sustainably move, improve, and enjoy water, life’s most essential resource. From our residential and commercial water solutions, to industrial water management and everything in between, Pentair is focused on smart, sustainable water solutions that help our planet and people thrive.
Pentair had revenue in 2023 of approximately
Pentair plc and Subsidiaries |
|||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) |
|||||||||||||
|
|
|
|
|
|
||||||||
|
Three months ended |
|
Twelve months ended |
||||||||||
In millions, except per-share data |
December 31,
|
December 31,
|
|
December 31,
|
December 31,
|
||||||||
Net sales |
$ |
984.6 |
|
$ |
1,002.9 |
|
|
$ |
4,104.5 |
|
$ |
4,121.8 |
|
Cost of goods sold |
|
618.5 |
|
|
678.1 |
|
|
|
2,585.3 |
|
|
2,757.2 |
|
Gross profit |
|
366.1 |
|
|
324.8 |
|
|
|
1,519.2 |
|
|
1,364.6 |
|
% of net sales |
|
37.2 |
% |
|
32.4 |
% |
|
|
37.0 |
% |
|
33.1 |
% |
Selling, general and administrative |
|
175.6 |
|
|
190.1 |
|
|
|
680.2 |
|
|
677.1 |
|
% of net sales |
|
17.8 |
% |
|
19.0 |
% |
|
|
16.6 |
% |
|
16.4 |
% |
Research and development |
|
23.5 |
|
|
23.1 |
|
|
|
99.8 |
|
|
92.2 |
|
% of net sales |
|
2.4 |
% |
|
2.3 |
% |
|
|
2.4 |
% |
|
2.2 |
% |
Operating income |
|
167.0 |
|
|
111.6 |
|
|
|
739.2 |
|
|
595.3 |
|
% of net sales |
|
17.0 |
% |
|
11.1 |
% |
|
|
18.0 |
% |
|
14.4 |
% |
Other expense (income) |
|
|
|
|
|
||||||||
Gain on sale of businesses |
|
— |
|
|
— |
|
|
|
— |
|
|
(0.2 |
) |
Other expense (income) |
|
6.4 |
|
|
(17.4 |
) |
|
|
2.0 |
|
|
(16.9 |
) |
Net interest expense |
|
26.6 |
|
|
27.6 |
|
|
|
118.3 |
|
|
61.8 |
|
% of net sales |
|
2.7 |
% |
|
2.8 |
% |
|
|
2.9 |
% |
|
1.5 |
% |
Income from continuing operations before income taxes |
|
134.0 |
|
|
101.4 |
|
|
|
618.9 |
|
|
550.6 |
|
(Benefit) provision for income taxes |
|
(74.1 |
) |
|
5.1 |
|
|
|
(4.0 |
) |
|
67.4 |
|
Effective tax rate |
|
(55.3 |
)% |
|
5.0 |
% |
|
|
(0.6 |
)% |
|
12.2 |
% |
Net income from continuing operations |
|
208.1 |
|
|
96.3 |
|
|
|
622.9 |
|
|
483.2 |
|
Loss from discontinued operations, net of tax |
|
(0.1 |
) |
|
(1.3 |
) |
|
|
(0.2 |
) |
|
(2.3 |
) |
Net income |
$ |
208.0 |
|
$ |
95.0 |
|
|
$ |
622.7 |
|
$ |
480.9 |
|
Earnings (loss) per ordinary share |
|
|
|
|
|
||||||||
Basic |
|
|
|
|
|
||||||||
Continuing operations |
$ |
1.26 |
|
$ |
0.59 |
|
|
$ |
3.77 |
|
$ |
2.93 |
|
Discontinued operations |
|
— |
|
|
(0.01 |
) |
|
|
— |
|
|
(0.01 |
) |
Basic earnings per ordinary share |
$ |
1.26 |
|
$ |
0.58 |
|
|
$ |
3.77 |
|
$ |
2.92 |
|
Diluted |
|
|
|
|
|
||||||||
Continuing operations |
$ |
1.25 |
|
$ |
0.58 |
|
|
$ |
3.75 |
|
$ |
2.92 |
|
Discontinued operations |
|
— |
|
|
(0.01 |
) |
|
|
— |
|
|
(0.02 |
) |
Diluted earnings per ordinary share |
$ |
1.25 |
|
$ |
0.57 |
|
|
$ |
3.75 |
|
$ |
2.90 |
|
Weighted average ordinary shares outstanding |
|
|
|
|
|
||||||||
Basic |
|
165.3 |
|
|
164.5 |
|
|
|
165.1 |
|
|
164.8 |
|
Diluted |
|
166.7 |
|
|
165.2 |
|
|
|
166.3 |
|
|
165.6 |
|
Cash dividends paid per ordinary share |
$ |
0.22 |
|
$ |
0.21 |
|
|
$ |
0.88 |
|
$ |
0.84 |
|
Pentair plc and Subsidiaries |
||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||
|
|
|
||
|
December 31,
|
December 31,
|
||
In millions |
||||
Assets |
||||
Current assets |
|
|
||
Cash and cash equivalents |
$ |
170.3 |
$ |
108.9 |
Accounts receivable, net |
|
561.7 |
|
531.5 |
Inventories |
|
677.7 |
|
790.0 |
Other current assets |
|
159.3 |
|
128.1 |
Total current assets |
|
1,569.0 |
|
1,558.5 |
Property, plant and equipment, net |
|
362.0 |
|
344.5 |
Other assets |
|
|
||
Goodwill |
|
3,274.6 |
|
3,252.6 |
Intangibles, net |
|
1,042.4 |
|
1,094.6 |
Other non-current assets |
|
315.3 |
|
197.3 |
Total other assets |
|
4,632.3 |
|
4,544.5 |
Total assets |
$ |
6,563.3 |
$ |
6,447.5 |
Liabilities and Equity |
||||
Current liabilities |
|
|
||
Accounts payable |
$ |
278.9 |
$ |
355.0 |
Employee compensation and benefits |
|
125.4 |
|
106.0 |
Other current liabilities |
|
545.3 |
|
602.1 |
Total current liabilities |
|
949.6 |
|
1,063.1 |
Other liabilities |
|
|
||
Long-term debt |
|
1,988.3 |
|
2,317.3 |
Pension and other post-retirement compensation and benefits |
|
73.6 |
|
70.8 |
Deferred tax liabilities |
|
40.0 |
|
43.3 |
Other non-current liabilities |
|
294.7 |
|
244.9 |
Total liabilities |
|
3,346.2 |
|
3,739.4 |
Equity |
|
3,217.1 |
|
2,708.1 |
Total liabilities and equity |
$ |
6,563.3 |
$ |
6,447.5 |
Pentair plc and Subsidiaries |
||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||
|
||||||
|
Years ended December 31 |
|||||
In millions |
|
2023 |
|
|
2022 |
|
Operating activities |
|
|
||||
Net income |
$ |
622.7 |
|
$ |
480.9 |
|
Loss from discontinued operations, net of tax |
|
0.2 |
|
|
2.3 |
|
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities of continuing operations |
|
|
||||
Equity income of unconsolidated subsidiaries |
|
(2.8 |
) |
|
(1.8 |
) |
Depreciation |
|
59.5 |
|
|
54.1 |
|
Amortization |
|
55.3 |
|
|
52.5 |
|
Gain on sale of businesses |
|
— |
|
|
(0.2 |
) |
Deferred income taxes |
|
(92.5 |
) |
|
(44.8 |
) |
Share-based compensation |
|
29.1 |
|
|
24.9 |
|
Asset impairment and write-offs |
|
7.9 |
|
|
25.6 |
|
Amortization of bridge financing debt issuance costs |
|
— |
|
|
9.0 |
|
Pension and other post-retirement expense (benefit) |
|
12.1 |
|
|
(12.2 |
) |
Pension and other post-retirement contributions |
|
(8.7 |
) |
|
(8.8 |
) |
Gain on sale of assets |
|
(3.4 |
) |
|
(2.3 |
) |
Changes in assets and liabilities, net of effects of business acquisitions |
|
|
||||
Accounts receivable |
|
(24.4 |
) |
|
30.4 |
|
Inventories |
|
109.6 |
|
|
(187.0 |
) |
Other current assets |
|
(29.1 |
) |
|
(16.5 |
) |
Accounts payable |
|
(75.1 |
) |
|
(56.9 |
) |
Employee compensation and benefits |
|
17.2 |
|
|
(35.2 |
) |
Other current liabilities |
|
(59.5 |
) |
|
46.5 |
|
Other non-current assets and liabilities |
|
2.7 |
|
|
3.8 |
|
Net cash provided by operating activities of continuing operations |
|
620.8 |
|
|
364.3 |
|
Net cash used for operating activities of discontinued operations |
|
(1.6 |
) |
|
(1.0 |
) |
Net cash provided by operating activities |
|
619.2 |
|
|
363.3 |
|
Investing activities |
|
|
||||
Capital expenditures |
|
(76.0 |
) |
|
(85.2 |
) |
Proceeds from sale of property and equipment |
|
5.6 |
|
|
4.1 |
|
Acquisitions, net of cash acquired |
|
(0.6 |
) |
|
(1,580.9 |
) |
(Payments) receipts upon the settlement of net investment hedges |
|
(18.5 |
) |
|
78.9 |
|
Other |
|
4.1 |
|
|
0.3 |
|
Net cash used for investing activities |
|
(85.4 |
) |
|
(1,582.8 |
) |
Financing activities |
|
|
||||
Net (repayments) borrowings of revolving long-term debt |
|
(320.0 |
) |
|
124.5 |
|
Proceeds from long-term debt |
|
— |
|
|
1,391.3 |
|
Repayments of long-term debt |
|
(12.5 |
) |
|
(88.3 |
) |
Debt issuance costs |
|
— |
|
|
(15.8 |
) |
Shares issued to employees, net of shares withheld |
|
9.6 |
|
|
(2.7 |
) |
Repurchases of ordinary shares |
|
— |
|
|
(50.0 |
) |
Dividends paid |
|
(145.2 |
) |
|
(138.6 |
) |
Receipts upon the settlement of cross currency swaps |
|
— |
|
|
12.3 |
|
Net cash (used for) provided by financing activities |
|
(468.1 |
) |
|
1,232.7 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(4.3 |
) |
|
1.2 |
|
Change in cash and cash equivalents |
|
61.4 |
|
|
14.4 |
|
Cash and cash equivalents, beginning of year |
|
108.9 |
|
|
94.5 |
|
Cash and cash equivalents, end of year |
$ |
170.3 |
|
$ |
108.9 |
|
|
|
|
Pentair plc and Subsidiaries |
||||||
Reconciliation of the GAAP Operating Activities Cash Flow to the Non-GAAP Free Cash Flow (Unaudited) |
||||||
|
|
|
||||
|
Years ended December 31 |
|||||
In millions |
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities of continuing operations |
$ |
620.8 |
|
$ |
364.3 |
|
Capital expenditures |
|
(76.0 |
) |
|
(85.2 |
) |
Proceeds from sale of property and equipment |
|
5.6 |
|
|
4.1 |
|
Free cash flow from continuing operations |
$ |
550.4 |
|
$ |
283.2 |
|
Net cash used for operating activities of discontinued operations |
|
(1.6 |
) |
|
(1.0 |
) |
Free cash flow |
$ |
548.8 |
|
$ |
282.2 |
|
Pentair plc and Subsidiaries |
|||||||||||||||
Supplemental Financial Information by Reportable Segment (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
2023 |
||||||||||||||
In millions |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||||||
Net sales |
|
|
|
|
|
||||||||||
Flow |
$ |
391.8 |
|
$ |
411.6 |
|
$ |
400.2 |
|
$ |
378.5 |
|
$ |
1,582.1 |
|
Water Solutions |
|
272.0 |
|
|
336.2 |
|
|
299.4 |
|
|
269.6 |
|
|
1,177.2 |
|
Pool |
|
364.3 |
|
|
334.3 |
|
|
308.8 |
|
|
336.2 |
|
|
1,343.6 |
|
Other |
|
0.5 |
|
|
0.4 |
|
|
0.4 |
|
|
0.3 |
|
|
1.6 |
|
Consolidated |
$ |
1,028.6 |
|
$ |
1,082.5 |
|
$ |
1,008.8 |
|
$ |
984.6 |
|
$ |
4,104.5 |
|
Segment income (loss) |
|
|
|
|
|
||||||||||
Flow |
$ |
65.0 |
|
$ |
74.8 |
|
$ |
77.5 |
|
$ |
65.0 |
|
$ |
282.3 |
|
Water Solutions |
|
52.4 |
|
|
74.8 |
|
|
68.8 |
|
|
51.6 |
|
|
247.6 |
|
Pool |
|
116.2 |
|
|
105.1 |
|
|
90.6 |
|
|
105.1 |
|
|
417.0 |
|
Other |
|
(22.6 |
) |
|
(20.5 |
) |
|
(24.8 |
) |
|
(23.9 |
) |
|
(91.8 |
) |
Consolidated |
$ |
211.0 |
|
$ |
234.2 |
|
$ |
212.1 |
|
$ |
197.8 |
|
$ |
855.1 |
|
Return on sales |
|
|
|
|
|
||||||||||
Flow |
|
16.6 |
% |
|
18.2 |
% |
|
19.4 |
% |
|
17.2 |
% |
|
17.8 |
% |
Water Solutions |
|
19.3 |
% |
|
22.2 |
% |
|
23.0 |
% |
|
19.1 |
% |
|
21.0 |
% |
Pool |
|
31.9 |
% |
|
31.4 |
% |
|
29.3 |
% |
|
31.3 |
% |
|
31.0 |
% |
Consolidated |
|
20.5 |
% |
|
21.6 |
% |
|
21.0 |
% |
|
20.1 |
% |
|
20.8 |
% |
Pentair plc and Subsidiaries |
|||||||||||||||
Supplemental Financial Information by Reportable Segment (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
2022 |
||||||||||||||
In millions |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||||||
Net sales |
|
|
|
|
|
||||||||||
Flow |
$ |
358.1 |
|
$ |
377.4 |
|
$ |
389.5 |
|
$ |
375.8 |
|
$ |
1,500.8 |
|
Water Solutions |
|
205.8 |
|
|
222.2 |
|
|
275.3 |
|
|
283.5 |
|
|
986.8 |
|
Pool |
|
435.4 |
|
|
464.0 |
|
|
390.0 |
|
|
343.3 |
|
|
1,632.7 |
|
Other |
|
0.3 |
|
|
0.6 |
|
|
0.3 |
|
|
0.3 |
|
|
1.5 |
|
Consolidated |
$ |
999.6 |
|
$ |
1,064.2 |
|
$ |
1,055.1 |
|
$ |
1,002.9 |
|
$ |
4,121.8 |
|
Segment income (loss) |
|
|
|
|
|
||||||||||
Flow |
$ |
52.2 |
|
$ |
59.1 |
|
$ |
65.7 |
|
$ |
65.3 |
|
$ |
242.3 |
|
Water Solutions |
|
22.2 |
|
|
32.5 |
|
|
49.3 |
|
|
45.0 |
|
|
149.0 |
|
Pool |
|
116.3 |
|
|
136.7 |
|
|
109.3 |
|
|
99.8 |
|
|
462.1 |
|
Other |
|
(18.6 |
) |
|
(22.4 |
) |
|
(17.4 |
) |
|
(27.3 |
) |
|
(85.7 |
) |
Consolidated |
$ |
172.1 |
|
$ |
205.9 |
|
$ |
206.9 |
|
$ |
182.8 |
|
$ |
767.7 |
|
Return on sales |
|
|
|
|
|
||||||||||
Flow |
|
14.6 |
% |
|
15.7 |
% |
|
16.9 |
% |
|
17.4 |
% |
|
16.1 |
% |
Water Solutions |
|
10.8 |
% |
|
14.6 |
% |
|
17.9 |
% |
|
15.9 |
% |
|
15.1 |
% |
Pool |
|
26.7 |
% |
|
29.5 |
% |
|
28.0 |
% |
|
29.1 |
% |
|
28.3 |
% |
Consolidated |
|
17.2 |
% |
|
19.3 |
% |
|
19.6 |
% |
|
18.2 |
% |
|
18.6 |
% |
Pentair plc and Subsidiaries |
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2023 |
|||||||||||||||
Excluding the Effect of Adjustments (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
In millions, except per-share data |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||||||
Net sales |
$ |
1,028.6 |
|
$ |
1,082.5 |
|
$ |
1,008.8 |
|
$ |
984.6 |
|
$ |
4,104.5 |
|
Operating income |
|
183.6 |
|
|
208.5 |
|
|
180.1 |
|
|
167.0 |
|
|
739.2 |
|
Return on sales |
|
17.8 |
% |
|
19.3 |
% |
|
17.9 |
% |
|
17.0 |
% |
|
18.0 |
% |
Adjustments: |
|
|
|
|
|
||||||||||
Restructuring and other |
|
2.9 |
|
|
0.6 |
|
|
1.6 |
|
|
(1.7 |
) |
|
3.4 |
|
Transformation costs |
|
8.5 |
|
|
6.0 |
|
|
13.5 |
|
|
16.3 |
|
|
44.3 |
|
Intangible amortization |
|
13.8 |
|
|
13.9 |
|
|
13.8 |
|
|
13.8 |
|
|
55.3 |
|
Legal accrual adjustments and settlements |
|
(1.9 |
) |
|
4.1 |
|
|
— |
|
|
— |
|
|
2.2 |
|
Asset impairment and write-offs |
|
3.9 |
|
|
0.5 |
|
|
1.8 |
|
|
1.7 |
|
|
7.9 |
|
Equity income of unconsolidated subsidiaries |
|
0.2 |
|
|
0.6 |
|
|
1.3 |
|
|
0.7 |
|
|
2.8 |
|
Segment income |
|
211.0 |
|
|
234.2 |
|
|
212.1 |
|
|
197.8 |
|
|
855.1 |
|
Adjusted return on sales |
|
20.5 |
% |
|
21.6 |
% |
|
21.0 |
% |
|
20.1 |
% |
|
20.8 |
% |
Net income from continuing operations—as reported |
|
128.5 |
|
|
154.2 |
|
|
132.1 |
|
|
208.1 |
|
|
622.9 |
|
Pension and other post-retirement mark-to-market loss |
|
— |
|
|
— |
|
|
— |
|
|
6.1 |
|
|
6.1 |
|
Other income |
|
— |
|
|
(5.1 |
) |
|
— |
|
|
— |
|
|
(5.1 |
) |
Adjustments to operating income |
|
27.2 |
|
|
25.1 |
|
|
30.7 |
|
|
30.1 |
|
|
113.1 |
|
Income tax adjustments (1) |
|
(4.6 |
) |
|
(3.1 |
) |
|
(6.6 |
) |
|
(98.5 |
) |
|
(112.8 |
) |
Net income from continuing operations—as adjusted |
$ |
151.1 |
|
$ |
171.1 |
|
$ |
156.2 |
|
$ |
145.8 |
|
$ |
624.2 |
|
Continuing earnings per ordinary share—diluted |
|||||||||||||||
Diluted earnings per ordinary share—as reported |
$ |
0.78 |
|
$ |
0.93 |
|
$ |
0.79 |
|
$ |
1.25 |
|
$ |
3.75 |
|
Adjustments |
|
0.13 |
|
|
0.10 |
|
|
0.15 |
|
|
(0.38 |
) |
|
— |
|
Diluted earnings per ordinary share—as adjusted |
$ |
0.91 |
|
$ |
1.03 |
|
$ |
0.94 |
|
$ |
0.87 |
|
$ |
3.75 |
|
(1) |
Income tax adjustments in the fourth quarter include |
Pentair plc and Subsidiaries |
|||||
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ending December 31, 2024 |
|||||
Excluding the Effect of Adjustments (Unaudited) |
|||||
|
|
|
|
|
|
|
Forecast |
||||
In millions, except per-share data |
|
First Quarter |
Full Year |
||
Net sales |
|
approx |
Down |
approx |
Up |
Operating income |
|
approx |
Up |
approx |
Up |
Adjustments: |
|
|
|
|
|
Intangible amortization |
|
approx |
|
approx |
|
Equity income of unconsolidated subsidiaries |
|
approx |
1 |
approx |
4 |
Segment income |
|
approx |
Down |
approx |
Up |
|
|
|
|
|
|
Net income from continuing operations—as reported |
|
approx |
|
approx |
|
Adjustments to operating income |
|
approx |
14 |
approx |
55 |
Income tax adjustments |
|
approx |
(2) |
approx |
— |
Net income from continuing operations—as adjusted |
|
approx |
|
approx |
|
Continuing earnings per ordinary share—diluted |
|
|
|
|
|
Diluted earnings per ordinary share—as reported |
|
approx |
|
approx |
|
Adjustments |
|
approx |
0.07 |
approx |
0.33 |
Diluted earnings per ordinary share—as adjusted |
|
approx |
|
approx |
|
Pentair plc and Subsidiaries |
|||||||||||||||||
Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment |
|||||||||||||||||
For the Quarter and Year Ended December 31, 2023 (Unaudited) |
|||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
Q4 Net Sales Growth |
|
Full Year Net Sales Growth |
||||||||||||||
|
Core |
Currency |
Acq. / Div. |
Total |
|
Core |
Currency |
Acq. / Div. |
Total |
||||||||
Total Pentair |
(2.3 |
)% |
0.7 |
% |
(0.2 |
)% |
(1.8 |
)% |
|
(4.9 |
)% |
0.1 |
% |
4.4 |
% |
(0.4 |
)% |
Flow |
(0.9 |
)% |
1.6 |
% |
— |
% |
0.7 |
% |
|
5.1 |
% |
0.3 |
% |
— |
% |
5.4 |
% |
Water Solutions |
(4.5 |
)% |
0.4 |
% |
(0.8 |
)% |
(4.9 |
)% |
|
1.1 |
% |
(0.3 |
)% |
18.5 |
% |
19.3 |
% |
Pool |
(2.1 |
)% |
— |
% |
— |
% |
(2.1 |
)% |
|
(17.6 |
)% |
(0.1 |
)% |
— |
% |
(17.7 |
)% |
Pentair plc and Subsidiaries |
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures for the Year Ended December 31, 2022 |
|||||||||||||||
Excluding the Effect of Adjustments (Unaudited) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
In millions, except per-share data |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||||||
Net sales |
$ |
999.6 |
|
$ |
1,064.2 |
|
$ |
1,055.1 |
|
$ |
1,002.9 |
|
$ |
4,121.8 |
|
Operating income |
|
145.8 |
|
|
190.8 |
|
|
147.1 |
|
|
111.6 |
|
|
595.3 |
|
Return on sales |
|
14.6 |
% |
|
17.9 |
% |
|
13.9 |
% |
|
11.1 |
% |
|
14.4 |
% |
Adjustments: |
|
|
|
|
|
||||||||||
Restructuring and other |
|
2.1 |
|
|
1.1 |
|
|
12.5 |
|
|
16.7 |
|
|
32.4 |
|
Transformation costs |
|
5.5 |
|
|
5.2 |
|
|
10.1 |
|
|
6.4 |
|
|
27.2 |
|
Intangible amortization |
|
6.6 |
|
|
6.3 |
|
|
18.5 |
|
|
21.1 |
|
|
52.5 |
|
Legal accrual adjustments and settlements |
|
(0.7 |
) |
|
0.5 |
|
|
— |
|
|
0.4 |
|
|
0.2 |
|
Asset impairment and write-offs |
|
— |
|
|
— |
|
|
— |
|
|
25.6 |
|
|
25.6 |
|
Inventory step-up |
|
— |
|
|
— |
|
|
5.8 |
|
|
— |
|
|
5.8 |
|
Deal-related costs and expenses |
|
6.4 |
|
|
1.6 |
|
|
13.4 |
|
|
0.8 |
|
|
22.2 |
|
|
|
5.9 |
|
|
— |
|
|
(0.8 |
) |
|
(0.4 |
) |
|
4.7 |
|
Equity income of unconsolidated subsidiaries |
|
0.5 |
|
|
0.4 |
|
|
0.3 |
|
|
0.6 |
|
|
1.8 |
|
Segment income |
|
172.1 |
|
|
205.9 |
|
|
206.9 |
|
|
182.8 |
|
|
767.7 |
|
Adjusted return on sales |
|
17.2 |
% |
|
19.3 |
% |
|
19.6 |
% |
|
18.2 |
% |
|
18.6 |
% |
Net income from continuing operations—as reported |
|
118.5 |
|
|
153.0 |
|
|
115.4 |
|
|
96.3 |
|
|
483.2 |
|
Gain on sale of businesses |
|
— |
|
|
— |
|
|
(0.2 |
) |
|
— |
|
|
(0.2 |
) |
Pension and other post-retirement mark-to-market gain |
|
— |
|
|
— |
|
|
— |
|
|
(17.5 |
) |
|
(17.5 |
) |
Amortization of bridge financing fees |
|
2.6 |
|
|
5.1 |
|
|
1.3 |
|
|
— |
|
|
9.0 |
|
Adjustments to operating income |
|
25.8 |
|
|
14.7 |
|
|
59.5 |
|
|
70.6 |
|
|
170.6 |
|
Income tax adjustments |
|
(5.4 |
) |
|
(3.8 |
) |
|
(12.3 |
) |
|
(14.4 |
) |
|
(35.9 |
) |
Net income from continuing operations—as adjusted |
$ |
141.5 |
|
$ |
169.0 |
|
$ |
163.7 |
|
$ |
135.0 |
|
$ |
609.2 |
|
Continuing earnings per ordinary share—diluted |
|
|
|
|
|
||||||||||
Diluted earnings per ordinary share—as reported |
$ |
0.71 |
|
$ |
0.92 |
|
$ |
0.70 |
|
$ |
0.58 |
|
$ |
2.92 |
|
Adjustments |
|
0.14 |
|
|
0.10 |
|
|
0.29 |
|
|
0.24 |
|
|
0.76 |
|
Diluted earnings per ordinary share—as adjusted |
$ |
0.85 |
|
$ |
1.02 |
|
$ |
0.99 |
|
$ |
0.82 |
|
$ |
3.68 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240130856657/en/
PENTAIR CONTACTS:
Shelly Hubbard
Vice President, Investor Relations
Direct: 763-656-5575
Email: shelly.hubbard@pentair.com
Rebecca Osborn
Director, External Communications
Direct: 763-656-5589
Email: rebecca.osborn@pentair.com
Source: Pentair plc
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