Watts Water(US:WTS)2025-05-07 20:40Financial Performance - Net sales for Q1 2025 were $558 million, a decrease of 2% compared to Q1 2024[5] - Adjusted operating income increased by 2% to $106.1 million, with an adjusted operating margin of 19.0%, up 80 basis points[4] - Diluted earnings per share (EPS) rose by 2% to $2.21, while adjusted diluted EPS also increased by 2% to $2.37[4] - Net sales for the first quarter of 2025 were $558.0 million, a decrease of 2.3% compared to $570.9 million in the first quarter of 2024[27] - Adjusted operating income for the first quarter of 2025 was $106.1 million, compared to $103.8 million in the same period last year, reflecting an increase of 2.2%[27] - The operating margin for the first quarter of 2025 was 15.7%, down from 16.9% in the first quarter of 2024[27] - Net income for the first quarter of 2025 was $74.0 million, slightly up from $72.6 million in the first quarter of 2024[22] - The diluted earnings per share for the first quarter of 2025 were $2.21, compared to $2.17 in the first quarter of 2024, reflecting a growth of 1.8%[27] Cash Flow and Assets - Operating cash flow for Q1 2025 was $55.2 million, resulting in free cash flow of $45.6 million, up from $36.6 million in the same period last year[10] - Cash and cash equivalents at the end of the first quarter of 2025 were $336.8 million, down from $386.9 million at the beginning of the year, a decrease of 12.8%[22] - Net cash provided by operating activities increased to $55.2 million in Q1 2025 from $45.6 million in Q1 2024[30] - Free cash flow rose to $45.6 million in Q1 2025, compared to $36.6 million in Q1 2024, reflecting a strong cash conversion rate of 61.6%[30] - Total assets increased to $2,500.7 million as of March 30, 2025, up from $2,397.0 million at December 31, 2024, representing a growth of 4.3%[20] Sales Performance by Region - Organic sales growth was down 2%, impacted by fewer shipping days and market weakness in Europe[5] - Sales in the Americas segment were $418 million, flat on a reported basis and down 1% organically[7] - European sales decreased by 12% to $108 million, with a 9% decline on an organic basis due to destocking[8] - APMEA sales increased by 9% to $32 million, with a 13% organic growth driven by markets in China, Australia, and the Middle East[9] - Organic sales decreased by 2.1% in the first quarter of 2025, with a notable decline of 12.1% in Europe[29] Future Outlook - The company is maintaining its full year 2025 organic sales outlook, expecting reported sales to range from -2% to +3%[12] - The company forecasts net sales growth of (2)% to 3% for the full year 2025, with organic sales growth projected at (3)% to 2%[33] - The operating margin is expected to be between 16.7% and 17.3% for 2025, with an adjusted operating margin forecasted at 17.7% to 18.3%[33] - The forecasted impact of acquisition and foreign exchange is expected to reduce net sales growth by (1)%[33] - Restructuring and other costs are anticipated to contribute 1.0% to the operating margin for 2025[33] Shareholder Returns - The company announced a 21% increase in quarterly dividend payments to $0.52 per share, effective June 2025[11] Debt and Equity - The net debt position improved to $(139.6) million as of March 30, 2025, compared to $(189.9) million as of December 31, 2024[32] - Total stockholders' equity increased to $1,772.2 million as of March 30, 2025, from $1,707.9 million as of December 31, 2024[32] - The net debt to capitalization ratio improved to (8.6)% in Q1 2025 from (12.5)% in Q4 2024[32]