Pentair (PNR) Q4 2024 earnings summary

Executive summary

• Achieved record adjusted operating income, return on sales (ROS), and adjusted EPS for both Q4 and full-year 2024, despite a 1% sales decline year-over-year.

• Transformation initiatives and 80/20 program drove triple-digit margin expansion and operational efficiencies across all segments for the 11th consecutive quarter.

• All three segments—Flow, Water Solutions, and Pool—delivered significant margin expansion and record ROS.

• Record free cash flow of $693M and balanced capital allocation, including organic growth investments, dividends, share repurchases, and a tuck-in acquisition.

• Introduced 2025 adjusted EPS guidance of $4.65-$4.80, up 9% at the midpoint, and raised 2026 ROS target to 26%; dividend increased for 49th consecutive year.

Financial highlights

• Q4 adjusted operating income rose 17% to $231M; ROS expanded 370 bps to 23.8%; adjusted EPS up 24% to $1.08.

• Full-year 2024 sales were $4.1B (down 1%), adjusted operating income $959M (up 12%), ROS 23.5% (up 270 bps), and adjusted EPS $4.33 (up 15%).

• Record free cash flow of $693M, up 26% year-over-year; cash flow margin 17%.

• Net income from continuing operations for FY 2024: $626M; EBITDA for FY 2024: $1.02B.

• Net debt leverage ratio reduced to 1.5x; ROIC increased to 15.5%.

Outlook and guidance

• 2025 adjusted EPS guidance: $4.65-$4.80 (7%-11% growth); sales expected flat to up 2% with FX headwinds.

• 2025 ROS expected at 24.5%-25%, up 125 bps at midpoint; $80M in productivity savings targeted.

• Q1 2025 sales expected down 3%-4%; adjusted EPS $1.00-$1.02 (up 6%-9%).

• 2025 GAAP EPS guidance is $4.37–$4.52.

• Pool sales projected to grow 4%-5%, Flow up slightly, Water Solutions flat to down low single digits.