2017 NDRs - Investor Presentation - Updated March Investor Presentation

Transcription

1 Investor Presentation 3

2 Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements are related to forecasts of sales, market dynamics and 2017 outlook update, capital expenditures, costs and savings associated with realignment activities, lead free developments and management goals and objectives. Watts cautions investors that any such forward-looking statements made by Watts are not guarantees of future performance. All forward-looking statements are subject to known and unknown risks, uncertainties and contingencies, many that are beyond the control of Watts, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Factors that might affect forward-looking statements include overall economic and business conditions, competitive factors, changes in laws affecting Watts, future acquisitions of material assets or businesses by Watts, the demand for Watts products and services and other factors identified in Watts most recent Annual Report on Form 10-K and subsequent reports filed with the SEC. 2/28/ Watts Water Technologies, Inc. 2 4

3 Who We Are REVENUE SOURCES Geographic US 59% End Markets EMEA 32% Non-Residential 60% Residential 40% Repair/Retrofit 65% New Construction 35% Asia Pacific 4% Canada 5% Leader in Commercial / Residential Water Products $1.4B Global Company Domestic / international revenue split fairly balanced Strong presence in commercial / residential markets Exposure to replacement markets & new construction Leveraging Leading Brands and Key Market Drivers Safety & Regulation Energy Efficiency Water Conservation Multi-Year Transformation Underway Delivering enhanced margin expansion Strong Cash Generator Drives Capital Deployment Codes drive ~ 65% of worldwide sales Global Leader / Driving Margin Expansion 2/28/ Watts Water Technologies, Inc. 3 5

4 Commercial Applications 2017 NDRs - Investor Presentation - Updated March 2017 WASTEWATER (DRAINAGE) SYSTEM Roof Drains Floor Drains Trench Drains Fixture Carriers Hydrants Acid Waste Systems Double Containment Piping Systems Rainwater Harvesting Systems Interceptors Cleanouts ALTERNATIVE ENERGY Solar Control Packages HVAC SYSTEM Commercial Boilers Water Heaters Expansion Tanks Gauges & Thermometers Balancing Valves Safety Relief Valves Anti-Scale Systems Electronic Temperature Controls Tempering Valves Backflow Preventers Radiant Snow Melting Systems Hydro-control Panels Steam Traps Strainers Feed Water Regulators Manifolds IRRIGATION SYSTEM Backflow Preventers Backflow Enclosures Automatic Control Valves Shutoff Valves Butterfly Valves Relief Valves Water Pressure Reducing Valves FOOD SERVICE APPLICATIONS Movable Gas Connectors Water Filtration Systems Anti-Scale Systems Gas and Water Shutoff Valves Commercial Faucets Gas Regulators Thermostatic Mixing Valves Grease Interceptors Stainless Steel Piping and Drains FIRE PROTECTION SYSTEM Backflow Preventers Transition Risers Relief Valves Check Valves UL / FM Fire Service Strainers Automatic Control Valves Pre-Engineered Valve Stations Gate Valves POTABLE WATER SYSTEM Water Heaters Gas Connectors Reverse Osmosis Water Filtration System Water Softeners Backflow Preventers Water Pressure Reducing Valves One of the Broadest Product Offerings Anti-Scale Systems T&P Relief Valves Tempering Valves Monitoring and Turbidity Monitors Strainers Butterfly Valves Water Hammer Arrestors 2/28/ Watts Water Technologies, Inc. 4 6

5 Residential Applications 2017 NDRs - Investor Presentation - Updated March 2017 KITCHEN Undersink Guardian Thermostatic Mixing Valves Reverse Osmosis Water Filtration Systems Ice Maker Filtration Systems Electric Tile Warming ALTERNATIVE ENERGY Geothermal Control Packages BATHROOM Tempering Valves for Tubs, Showers and Sinks Electric Tile Warming Hot Water On Demand Recirculation Systems LAUNDRY ROOM Automatic Washing Machine Shutoff Valves Water Hammer Arrestors Anti-Scale Systems Gas Ball Valves Gas Connectors RADIANT HEAT PRODUCTS Radiant Underfloor Heating Systems Snowmelting Electronic Temperature Controls Quick Connect Fittings Hydrocontrol Panels PEX Tubing Manifolds WATER HEATER T&P Relief Valves Tempering Valves Pressure Reducing Valves Expansion Tanks Anti-Scale Systems Water Detector Shutoffs Backflow Preventers Ball Valves Drain Tubes Floor Drains Gas Connectors WATER QUALITY Anti-Scale Systems Water Softeners UV Disinfection Systems Whole House Filtration Systems Unmatched in the Industry BOILER Temperature & Pressure Gauges Tempering Valves Safety Relief Valves Fill Valves Backflow Preventers Boiler Drains Air Separators Flow Control Valves Float Vents 2/28/ Watts Water Technologies, Inc. 5 7

6 Investment Thesis Strengthening the Foundation Multi-year transformation underway Enhanced portfolio and more efficient organization; ongoing tailwind Aligned to Favorable Macros and Markets Leading market positions in residential and commercial water, addressing global secular macro themes Focus On Innovation and Profitable Growth Leveraging components to broaden application solutions offering Investment continues, fueling growth Accretive Capital Deployment Strong cash flow and efficient capital structure enables more deployment upside; disciplined acquirer Winning With Commercial, Operational and Innovation Excellence 2/28/ Watts Water Technologies, Inc. 6 8

7 Multi-Year Transition Underway 2017 & Beyond European Restructuring Realigned Cost Structure to Demand Footprint Optimization Sourcing Excellence Americas / Asia Transformation Exited Non-core Products Footprint Optimization Sourcing Excellence Continue to Drive Productivity; Reinvest for Growth One Watts Innovation / Application Solutions Multi-Year Restructuring Tailwind Helping to Offset Macro Challenges 2/28/ Watts Water Technologies, Inc. 7 9

8 Verticals End Markets Attractive End Markets 2017 NDRs - Investor Presentation - Updated March 2017 Specialty Products and Systems that Conserve and Safeguard the Flow of Fluid and Energy Residential Multi Family / Commercial Light / General Industrial Healthcare Hospitality Institutional / Educational Balanced Portfolio Providing Tailwind For Growth 2/28/ Watts Water Technologies, Inc. 8 10

9 Aligned to Favorable Macro Trends SAFETY & REGULATION ENERGY EFFICIENCY WATER CONSERVATION Code & specification driven Extensive certification process Emerging need globally Economic & environmental value proposition Application & engineering competencies critical Environmental & emotional drivers Code & specification driven Emerging global demand Addressing Global Secular Macro Themes 2/28/ Watts Water Technologies, Inc. 9 11

10 Self Help Story Drives Earnings Growth Operating Margin Opportunity Next 5 Years Significant Margin Improvement 2/28/ Watts Water Technologies, Inc

11 Disciplined Capital Deployment Strong Cash Generation >100% FCF Conversion Deployment Priorities Investing in high ROI CAPEX - Reinvestment ratio % Strategic M&A - Selective acquirer; disciplined valuation and screening process Pay a competitive dividend - Consistent double-digit increases Stable share buyback - Offset option dilution at minimum 2015E 2019T Strong Cash Generation Drives Deployment Upside 2/28/ Watts Water Technologies, Inc

12 Summary Who We Are $1.4B enhanced water portfolio Global leading brands in highly fragmented industry Broad solutions across balanced geographies & end markets Strong presence in repair/replace & new construction Strong financial position & cash flow generation Disciplined capital allocation Our Commitments Expand operating margins mid teens Earnings growth through commercial and operational excellence Re-investment in innovation to drive growth and margin upside >100% free cash flow generation Accelerate growth through disciplined acquisitions Return excess cash to shareholders Stronger Foundation Delivering Long-term Value Creation 2/28/ Watts Water Technologies, Inc