Watts Water Technologies (WTS) Investor presentation summary

Business profile and performance

• 2025 net sales were $2.4B, adjusted EPS was $10.58 and adjusted operating margin was 19.6%; five-year CAGRs were 10% for sales and 22% for adjusted EPS.

• Five-year average free cash flow conversion was 100%; 2025 ROIC was 20.5%, up 880 bps vs. 2020.

• Sales mix was 70% non-residential and 30% residential; 60% of sales came from repair and replacement, based on pro forma 2025 acquisition sales.

• Products span flow control and protection, water quality, drainage and water reuse, and heating, hot water and other HVAC solutions.

Markets and growth opportunities

• Estimated global available market opportunity is ~$23B across residential, commercial, institutional, healthcare, industrial, hospitality and data center markets.

• Data center served addressable market is estimated at ~$2B, with estimated market growth of 15% to 20%+ CAGR and potential content of ~$25K to $100K per MW.

• Data center demand is project-based and can create quarter-to-quarter variability; sales are concentrated in the Americas and APMEA, with emerging opportunity in Europe.

• Secular demand drivers include water safety and regulation, energy efficiency, and water conservation; competitive strengths include global manufacturing, broad products and an installed repair-and-replacement base.

Portfolio expansion and innovation

• Eight strategic acquisitions received ~$660M of investment since 2023; acquired businesses represent ~$450M in annualized sales and increase non-residential, institutional and light industrial exposure.

• Smart and connected strategy includes Nexa, combining hardware, software and systems expertise for real-time monitoring and notifications in commercial buildings.

• Digital investment includes R&D above 3% of sales in 2024 and ~100 digital engineers focused on smart and connected products and platforms.

• Data center expansion builds on core capabilities through investment in talent, product innovation and capacity, plus growing relationships with contractors, OEMs and hyperscalers.