Pentair (PNR) Baird 55th Annual Global Industrial Conference summary

Leadership transition and company overview

• Incoming CFO Nick Brazis will take over from Bob Fishman on March 1, ensuring a smooth transition.

• The company operates in three segments: flow (pumps), commercial water (filtration, ice), and pool equipment.

• 75% of revenue is through distribution, with a similar share from break/fix services, providing resilience.

• Transformation efforts over the past 2.5 years have driven significant ROS expansion, improving by nearly 600 basis points.

• Technology sharing across segments fosters innovation and operational efficiency.

Transformation strategy and 80/20 implementation

• Four transformation pillars: standardizing processes, pricing, sourcing, and digitizing global support.

• Early focus on sourcing and pricing yielded the most immediate benefits.

• 80/20 analysis by product line and revenue stream guides portfolio exits and operational improvements.

• Transformation aims to balance organic volume growth with ongoing efficiency gains through 2026–2028.

• Internal adoption is solid, with tailored approaches for different business units to maximize impact.

Segment performance and growth opportunities

• Flow segment ($1B revenue) is stabilizing in residential and growing in commercial/infrastructure, with 12 consecutive quarters of growth.

• Hydra-Stop acquisition enhances municipal repair offerings and creates cross-selling opportunities.

• Standardization and 80/20 initiatives have reduced SKUs and improved pricing strategies in flow.

• Pool segment remains highly profitable (34% ROS), with innovation and automation as key growth drivers.

• Commercial water segment leverages cross-selling between Everpure filtration and Manitowoc Ice, focusing on distribution efficiency.