Watts Water(US:WTS)2024-08-07 20:49Sales Performance - Reported sales of $597 million increased by 12% compared to Q2 2023, with organic sales remaining flat[1][4] - Sales in the Americas reached $448 million, a 22% increase on a reported basis and 5% organically, driven by price realization and core product growth[5] - European sales decreased by 16% to $114 million, with a 15% decline in organic sales due to lower volumes and unfavorable foreign exchange impacts[6] - APMEA region sales increased by 16% to $35 million, with an 18% organic growth, benefiting from project timing[7] - Total sales for the second quarter of 2024 reached $597.3 million, a 12.1% increase from $532.8 million in the second quarter of 2023[16] - The Americas segment reported sales of $448.1 million for the second quarter of 2024, up 22.0% from $366.9 million in the same quarter of 2023[16] - The APMEA segment's sales grew to $35.1 million in the second quarter of 2024, up from $30.3 million in the same quarter of 2023, indicating a growth of 15.9%[16] - Reported net sales for the six months ended June 30, 2024, reached $1,168.2 million, a 16.3% increase compared to $1,004.5 million for the same period in 2023[24] Earnings and Margins - Reported EPS of $2.44, an increase of 8%; adjusted EPS of $2.46, up 5%[1][4] - Operating margin reported at 18.7%, down 10 basis points; adjusted operating margin at 18.8%, down 70 basis points[1][4] - Adjusted operating income for Q2 2024 was $112.1 million, compared to $103.9 million in Q2 2023, reflecting an increase of 2.1%[20] - The adjusted operating margin for Q2 2024 was 18.8%, slightly down from 19.5% in Q2 2023[20] - Net income for Q2 2024 was reported at $82.0 million, up from $75.9 million in Q2 2023, marking a 1.6% increase[20] - Net income for the six months ended June 30, 2024, was $154.5 million, up from $140.6 million for the same period in 2023, representing an increase of about 9.0%[15] Cash Flow and Investments - Operating cash flow for the first six months of 2024 was $131 million, up from $101 million in the same period last year, resulting in free cash flow of $120 million[8] - The company reported a net cash provided by operating activities of $130.9 million for the six months ended June 30, 2024, compared to $100.5 million for the same period in 2023, an increase of 30.2%[15] - Free cash flow for the six months ended June 30, 2024, was $119.7 million, up from $88.9 million in the same period last year[25] - The cash conversion rate of free cash flow to net income improved to 77.5% for the six months ended June 30, 2024, compared to 63.2% in the prior year[25] - The company invested $96.3 million in business acquisitions during the first half of 2024, compared to $11.7 million in the same period of 2023[15] Financial Position - Total assets increased to $2,383.3 million as of June 30, 2024, compared to $2,309.4 million at December 31, 2023, reflecting a growth of approximately 3.2%[14] - Total stockholders' equity increased to $1,618.2 million as of June 30, 2024, from $1,513.3 million at December 31, 2023, reflecting a growth of 6.9%[14] - Cash and cash equivalents decreased to $279.4 million at the end of the period from $350.1 million at the beginning of the year, a decline of 20.2%[15] - Net debt as of June 30, 2024, was $(20.7) million, a decrease from $(51.8) million at the end of 2023[26] - The net debt to capitalization ratio improved to (1.3)% as of June 30, 2024, compared to (3.5)% at the end of 2023[26] Future Outlook - Full-year 2024 outlook maintains reported sales growth of 7% to 12% and organic sales range of -4% to 1%[10] - The company forecasts reported net sales growth of 7% to 12% for the full year 2024, with an anticipated impact from acquisitions and foreign exchange of (11)%[27] - Organic sales growth is projected to be between (4)% to 1% for the full year 2024[27] - The operating margin is expected to be in the range of 16.6% to 17.2% for the full year 2024, with an adjusted operating margin forecasted at 17.1% to 17.7%[27] - Future outlook remains positive with continued focus on organic growth and strategic acquisitions to enhance market position[20]