Mueller Water Products (MWA) Gabelli Funds 35th Annual Pump, Valve & Water Symposium summary

Business overview and recent performance

• 92% of sales are in the U.S., with the remainder in Canada and Western Europe, focusing on water infrastructure products, especially fire hydrants and underground valves.

• Sales reached nearly $1.4 billion in the last 12 months, with EBITDA at $303 million and a significant margin improvement in 2024.

• Reported record Q1 FY25 results, with net sales up 18.7% year-over-year and strong adjusted EBITDA and net income per share, driven by resilient demand and operational execution.

• Operational excellence initiatives, including Lean Six Sigma and supply chain improvements, have driven margin expansion over the past 12-18 months.

• Digital transformation is underway, focusing on customer interaction and internal operational efficiency.

Strategic initiatives and growth drivers

• Margin improved by 590 basis points from 2023 to 2024, with guidance for another 90 basis points in 2025.

• Guidance for 2025 is 5% revenue growth at the midpoint and nearly 9% EBITDA growth, driven by price and volume.

• Infrastructure bill (IIJA) and Build America, Buy America requirements are expected to provide tailwinds, especially for brass and specialty valves.

• Announced closure of legacy brass foundry, transitioning to a new state-of-the-art facility, expected to improve gross margin by 80–100 bps annually starting in H2 2025.

• Investment in a new brass foundry increases capacity for lead service line replacement projects.

Market positioning and product innovation

• Leading brand in iron products, especially gate valves and hydrants, with a strong distribution network serving over 50,000 water utilities.

• Products are critical for water infrastructure, with a focus on service brass valves and couplings for lead service line replacements.

• Compliance with American-made content standards positions the company well for federally funded projects.

• Technology innovation is focused on leak detection and pressure management to reduce non-revenue water losses.

• Technology-enabled products, such as leak detection and water intelligence platforms, help utilities address non-revenue water and infrastructure challenges.