Mueller Water Products (MWA) Investor presentation summary

Business overview and strategic priorities

• Net sales reached $1,374M (LTM Q2FY25) with 22.3% adjusted EBITDA margin and $192.3M free cash flow.

• Focus on operational excellence, customer experience, innovation, and digital transformation to drive growth and margin improvement.

• Strategic investments in manufacturing, including a new brass foundry and facility consolidations, support capacity, sustainability, and domestic production.

• Balanced capital allocation prioritizes investments, targeted acquisitions, and shareholder returns through dividends and buybacks.

• Strong balance sheet with $121.3M net debt, 0.4x net debt/EBITDA, and no maturities before June 2029.

Market dynamics and industry trends

• Over 90% of sales are water-focused, with two-thirds tied to repair and replacement for utilities.

• U.S. water infrastructure faces aging assets, high break rates, and a significant funding gap despite federal support like the IIJA.

• Regulatory drivers include lead service line replacement mandates and increased digitalization of water management.

• Digital water spending in the U.S. and Canada is projected to grow at 8.4% CAGR through 2033.

Financial performance and outlook

• Q2 FY2025 net sales grew 3.1% y/y to $364.3M; adjusted EBITDA up 2.8% to $84.5M; adjusted net income per share up 13.3% to $0.34.

• Gross margin declined 180 bps y/y due to manufacturing inefficiencies from the brass foundry transition, but margin benefits are expected in the second half.

• Free cash flow YTD Q2 FY2025 was $47.3M, with capital expenditures of $21.1M.

• FY2025 guidance: net sales $1,390M–$1,400M (+5.7% to +6.5% y/y), adjusted EBITDA $310M–$315M (+8.9% to +10.6%), free cash flow >80% of adjusted net income.

• Record financial performance in FY2024, with 5-year CAGRs of 6.3% for net sales and 7.5% for adjusted EBITDA.