Watts Water Technologies (WTS) Investor presentation summary

Strategic positioning and market leadership

• Global leader in water solutions for commercial, residential, and light industrial markets, with a broad product portfolio and strong repair/replacement footprint.

• Operations span 36 principal locations across five continents, supporting a diverse customer base and end markets.

• Addressable market estimated at ~$20B, with exposure to institutional, healthcare, hospitality, industrial, and residential sectors.

• Competitive advantages include vertical integration, code-driven products, and a 150-year history of customer relationships.

• Recognized for resilience and adaptability, maintaining strong performance through market challenges.

Financial performance and capital deployment

• Achieved $2.3B in net sales (7% CAGR over five years), with adjusted EPS growing at a 17% CAGR and operating margin expanding by 480 bps.

• Five-year average free cash flow conversion at 112%, with a reinvestment ratio of 106% and ROIC at 19.8%.

• Balanced capital deployment: $434M in M&A, $207M in share buybacks, and $147M in dividends from 2020–2024.

• Net debt to capitalization ratio at -12.5% with no debt due until 2029, providing significant financial flexibility.

• Dividend increased 19% in 2024, with a five-year CAGR of 13%.

Innovation, digital transformation, and sustainability

• Smart & Connected revenues now represent 25% of sales, driven by ongoing R&D investment and digital product launches like Nexa.

• Sustainability is core, with significant reductions in water, energy, and hazardous waste footprints since 2018.

• 74% of product revenues contribute to health and safety, 24% to energy efficiency, and 42% to water conservation.

• Recognized by Newsweek and USA Today for sustainability leadership and awarded a low-risk ESG rating by Sustainalytics.

• Continuous improvement through the One Watts Performance System enhances operational excellence and customer focus.