| --- | --- | |-------|-----------------------------------------------------------| | | | | | | | | Watts Water Technologies 1Q 2022 Earnings Conference Call | | | May 4, 2022 | May 3, 2022 © 2022 Watts Water Technologies, Inc. 1 Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, effective ...

Watts Water Technologies, Inc. (NYSE:WTS) Q1 2022 Earnings Conference Call May 4, 2022 9:00 AM ET Company Participants Diane McClintock - Senior Vice President FP&A and Investor Relations Robert Pagano - Chief Executive Officer and President Shashank Patel - Chief Financial Officer Conference Call Participants Jake Jarnigo - Baird Adam Farley - Stifel Joe Giordano - Cowan & Company Jeff Hammond - KeyBanc Capital Markets Operator Ladies and gentlemen, thank you standing by. My name is Brent, and I will be yo ...

Financial Performance - The company achieved record performance for 2021 despite the impact of the COVID-19 pandemic and supply chain disruptions[25]. - Approximately 61% of net sales in 2021 were to wholesale distributors for commercial and residential applications[27]. - Residential & commercial flow control products accounted for approximately 53% of total net sales in 2021[29]. - The top ten customers accounted for $371.5 million, or 20.5% of total net sales in 2021[32]. Capital Expenditures and Investments - Capital expenditures in 2021 were $26.7 million, a decrease from $43.8 million in 2020[35]. - The company launched 21 new smart and connected product offerings in 2021[48]. - The company continues to invest in its smart and connected product pipeline, enhancing energy savings and safety[46]. - The company has invested in manufacturing capabilities to maintain high levels of quality and efficiency[34]. - The company launched the Connected IntelliFlow® Washing Machine flood prevention system and ACV Assure™ Municipal Water Monitoring System solution[47]. Employee Engagement and Diversity - As of December 31, 2021, the company had 4,597 employees globally, with 2,063 in the Americas, 2,239 in Europe, and 295 in APMEA[50]. - In 2021, 82% of employees participated in the global employee engagement survey, providing valuable feedback for workplace improvement[56]. - The company has developed a comprehensive talent management strategy to attract, develop, and retain top talent in a competitive environment[50]. - The company has initiated a comprehensive approach to diversity, equity, and inclusion, including employee resource groups to support diverse employees[55]. Environmental Responsibility - The company funded the construction of six AquaTowers and AquaSan systems, providing clean drinking water for up to 10,800 people in Cambodia, India, Mexico, the Philippines, and Vietnam during 2021[62]. - The company was recognized as one of Newsweek's Most Responsible Companies, ranking 100th overall and 5th within its industry classification in 2021[65]. - The company is committed to reducing its global water consumption and greenhouse gas emissions through smart monitoring systems and energy reduction projects[61]. - The company’s General Counsel and Chief Sustainability Officer oversees sustainability matters, reporting directly to the CEO[59]. Risk Management - The company is experiencing high inflationary pressures in commodity markets, particularly with copper and stainless steel[36]. - The company maintains product liability and other insurance coverage, which may not be adequate to fully protect against substantial damage claims[67]. - The company has been named as a potentially responsible party for a limited number of identified contaminated sites, with environmental liabilities recorded based on probable costs[68]. Financial Instruments and Currency Risks - The company reported consolidated earnings subject to translation risks due to foreign currency exchange rate fluctuations, particularly with the euro, Canadian dollar, and Chinese yuan[252]. - The company utilizes derivative financial instruments primarily to mitigate exposure to adverse fluctuations in foreign exchange rates, interest rates, and raw material costs, adhering to a policy of using these instruments solely for hedging purposes[251]. - Approximately 80% to 85% of forecasted intercompany purchases between a Canadian subsidiary and U.S. operating subsidiaries are hedged using forward exchange contracts for the next twelve months[253]. - Up to 60% of forecasted intercompany sales transactions between a Chinese subsidiary and U.S. operating subsidiaries are hedged using forward exchange contracts for the next twelve months[253]. - The fair value of designated foreign hedge contracts outstanding as of December 31, 2021, was a liability balance of less than $0.1 million[253]. - An interest rate swap agreement was entered into on March 30, 2021, with a notional amount of $100.0 million, paying a fixed rate of 1.02975%[254]. - The interest rate swap matures on March 30, 2026[254]. Commodity Management - The company purchases significant amounts of bronze ingot, brass rod, cast iron, stainless steel, and plastic for manufacturing[255]. - The company manages commodity price risk by monitoring market prices and working with suppliers for cost stability[255]. - The company seeks alternative supply sources when necessary to mitigate commodity price risks[255]. - The company aims to pass on increases in commodity costs to customers to the maximum extent possible[255].

Watts Water Technologies, Inc. (NYSE:WTS) Q4 2021 Earnings Conference Call February 10, 2022 9:00 AM ET Company Participants Tim MacPhee - Treasurer and VP, IR Bob Pagano - CEO & President Shashank Patel - CFO Conference Call Participants Adam Farley - Stifel David Tarantino - KeyBanc Capital Markets Ryan Connors - Boenning and Scattergood Walter Liptak - Seaport Research Partners Miguel Jesus - Goldman Sachs Mike Halloran - Robert W. Baird Nathan Jones - Stifel Operator Good morning, and my name is Sava ...

Financial Performance - Full year 2021 sales reached $1809 million, with organic growth of 17%[28] - Adjusted operating margin for full year 2021 was 143%, an increase of 140 bps[28] - Adjusted EPS for full year 2021 increased by 42% to $552[28] - Q4 2021 sales were $4739 million, an increase of 18% organically[19] - Adjusted operating profit in Americas increased by 13% to approximately $52 million in Q4 2021[26] - Europe's adjusted operating profit increased by 25% to approximately $21 million in Q4 2021[26] - APMEA's adjusted operating profit increased by 9% to approximately $4 million in Q4 2021[26] Smart & Connected Products - In 2021, the company incrementally invested $9 million in the development and support of smart & connected products[13] - Smart & connected products accounted for 16% of consolidated sales in 2021[13] - The company is aiming for 25% revenue from smart & connected products by 2023[13] 2022 Outlook - The company anticipates organic growth of 3% to 8% for full year 2022[33] - The company expects an adjusted operating margin between 143% and 147% for full year 2022[33]

Watts Water Technologies, Inc. (NYSE:WTS) Q3 2021 Earnings Conference Call November 4, 2021 9:00 AM ET Company Participants Tim MacPhee - Treasurer and Vice President-Investor Relations Bob Pagano - Chief Executive Officer & President Shashank Patel - Chief Financial Officer Conference Call Participants Ryan Connors - Boenning and Scattergood Walt Liptak - Seaport Research Jake Jarnigo - Baird David Tarantino - KeyBanc. Operator Ladies and gentlemen, thank you for standing by, and welcome to the Watts Water ...

| --- | --- | |-------|-----------------------------------------------------------| | | | | | | | | Watts Water Technologies 3Q 2021 Earnings Conference Call | | | November 4, 2021 | November 3, 2021 © 2021 Watts Water Technologies, Inc. 1 Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, ...

Financial Data and Key Metrics Changes - Sales for Q2 2021 reached $467 million, an increase of 38% on a reported basis and 32% organically, driven by global economic recovery [23] - Adjusted operating profit increased by 85%, with adjusted operating margins expanding by 380 basis points to 14.9% [24] - Adjusted earnings per share doubled compared to the previous year, reflecting better operating results and favorable foreign exchange impacts [24] Business Line Data and Key Metrics Changes - The Americas experienced strong repair and replacement activity, with adjusted operating profit increasing by 54% and adjusted operating margin rising by 270 basis points to 17.7% [30] - Europe saw solid sales growth across all major regions, with adjusted operating margin increasing by 700 basis points to 17.1% [31] - APMEA's sales increased double-digits, with adjusted operating margin rising by 460 basis points to 17.9% [32] Market Data and Key Metrics Changes - The U.S. weather freeze in February provided a revenue tailwind in Q2, contributing to strong demand in the Americas [10] - European markets remained robust, particularly in France and Italy, driven by repair and replacement activity [14] - APMEA markets showed growth, particularly in China and New Zealand, with commercial valve demand in data centers driving sales [32] Company Strategy and Development Direction - The company is focused on long-term growth opportunities, particularly in smart and connected solutions and productivity-enhancing technologies [45] - Sustainability efforts are emphasized, with initiatives aimed at reducing energy, water, and waste usage, alongside a commitment to diversity, equity, and inclusion [19][22] - The company plans to continue investing in its manufacturing capabilities and smart product offerings to enhance customer value [45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market conditions, with expectations for continued growth in repair and replacement activities [15] - Concerns remain regarding non-residential new construction, supply chain issues, and inflationary pressures [15] - The full-year outlook has been raised due to stronger-than-expected Q2 results and positive expectations for Q3 [46] Other Important Information - Free cash flow for the year-to-date was $65 million, up 160% from the same period last year [26] - The company completed negotiations to exit its manufacturing facility in Mery, France, with expected savings to be realized by 2023 [11][25] - The company repurchased approximately 31,000 shares of common stock at an investment of $4 million [27] Q&A Session Summary Question: Comments on high demand from channel anxiety in European markets - Management noted that there is over-ordering in the channels, particularly in North America and Europe, driven by supply chain concerns [51][52] Question: Price and cost dynamics for the full year - Management indicated that net pricing was slightly positive in the first half and expects to stay ahead of inflation with upcoming price increases [55][57] Question: European margin improvements - Management attributed margin improvements to a combination of pent-up demand and structural enhancements, with a focus on fixed cost management [66][68] Question: Non-residential construction recovery - Management observed slow recovery in non-residential construction but noted positive indicators in education and healthcare sectors [71][72] Question: Market share and supply chain challenges - Management believes they are holding their own in market share despite supply chain challenges faced by competitors [117] Question: Business normalization costs - Management discussed the return of costs related to travel, marketing, and training, which were previously cut back due to the pandemic [118][119] Question: Innovation and connected strategy uptake - Management reported positive customer feedback on their smart and connected product offerings, which are gaining traction in the market [108][110]

| --- | --- | |-------|-----------------------------------------------------------| | | | | | | | | Watts Water Technologies 2Q 2021 Earnings Conference Call | | | August 5, 2021 | August 4, 2021 © 2021 Watts Water Technologies, Inc. 1 Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, capi ...

Watts Water Technologies, Inc. (NYSE:WTS) Q1 2021 Earnings Conference Call May 5, 2021 9:00 AM ET Company Participants Timothy MacPhee - IR Bob Pagano - CEO Shashank Patel - CFO Conference Call Participants Adam Farley - Stifel Jake Jarnigo - Baird Ryan Connors - Boenning and Scattergood Joe Giordano - Cowen and Company David Tarantino - KeyBanc Operator Good day, and thank you for standing by. Welcome to the Watts Water Technologies' First Quarter 2021 Earnings Conference Call. [Operator Instructions] I'd ...