Summary of Pentair (NYSE: PNR) FY Conference Call - September 11, 2025 Company Overview - Pentair is a pure-play water company focused on moving, improving, and enjoying water through three segments: flow, water solutions, and pool business [2][6] - The company has been on a transformation journey, successfully expanding return on sales and anticipating top-line growth as it approaches 2026 [2][4] Segment Performance Pool Business - Generated $1.5 billion in revenue, with 75% from the five Sunbelt states [4] - Revenue breakdown: 20% from new pool builds, 20% from remodels, and 60% from break/fix services [4][8] - Experienced five consecutive quarters of growth, but facing a decline in new pool builds due to rising interest rates, with only 57,000 new builds expected this year compared to 80,000 pre-COVID [7][8] Water Solutions Business - Comprises one-third residential (water softeners, filtration) and two-thirds commercial (filtration and ice equipment) [5] Flow Business - A $1.6 billion business, with growth driven by commercial and infrastructure sectors, particularly in fire suppression and water supply pumps [27] - Expected mid-single-digit growth, with potential expansion into data center cooling technologies [27][28] Financial Performance and Transformation - The company has driven $190 million in savings over the last two years through a transformation program focused on sourcing, operational efficiency, and cost reduction [9][10] - Targeting a return on sales (ROS) of 26% by next year, up from 17% in 2020 [23] - The 80/20 initiative aims to focus on top customers and products, resulting in a loss of 2-3% of revenue but enabling better service and growth opportunities [11][12] Pricing Strategy and Tariff Impact - The company has successfully offset tariff impacts through price increases, initially estimating a $140 million impact, later revised to $75 million [16][17] - Pricing strategy has shifted from cost-plus to value-based, allowing for more strategic price increases [39][40] Capital Allocation and M&A Strategy - Focused on debt reduction, increasing dividends (49 consecutive years), and share repurchases [32][34] - Actively looking for bolt-on acquisitions, particularly in the pool and commercial water spaces [34][37] - Emphasis on high-quality companies with strong growth profiles and return on sales [36][47] Market Outlook and Consumer Sentiment - Anticipates a recovery in residential construction as interest rates stabilize, with a lag of 6-9 months for consumer reinvestment in home improvements [50] - The company is positioned for growth as it has transformed during low revenue years, expecting to benefit from improved consumer confidence and reduced uncertainty [55] Key Takeaways - Pentair is well-positioned for growth with a focus on transformation, operational efficiency, and strategic pricing - The company is navigating challenges in the pool business due to interest rates but sees potential for recovery - Continued emphasis on M&A and capital allocation strategies to drive long-term growth and shareholder value

上半年实现净成本节省约2100万英镑，集团宣布，由于行政总裁Richard Oldfield主导的业务重组加快， 因此决定将2025年成本削减目标从4000万英镑上调至5000万英镑。转型计划具体措施包括优化科技与客 户部门营运模式，提升效率，加速基金精简计划，以及将营运及科技服务外包以改善经营杠杆。 格隆汇7月31日｜施罗德公布2025年半年报，总资产管理规模(AUM)达到7766亿英镑，相比2024年底为 7787亿英镑，总流入资金增长8%至682亿英镑。合资企业以外的净新业务(NNB)达45亿英镑，主要由财 富管理业务27亿英镑及施罗德资本23亿英镑的净流入推动。 ...

Financial Data and Key Metrics Changes - The company reported record results in Q2, with sales increasing by 2% to $1.1 billion, adjusted operating income rising by 9% to $297 million, and adjusted EPS increasing by 14% to $1.39 [7][15] - Return on sales (ROS) expanded by 170 basis points to 26.4%, driven primarily by transformation initiatives and pricing strategies [7][15] - Free cash flow reached a record $596 million, up 14% year over year, with a net debt leverage ratio decreasing from 1.6 times to 1.2 times [20][21] Business Line Data and Key Metrics Changes - **Flow Segment**: Sales were flat year over year, with residential sales down 1% due to higher interest rates impacting the residential market, while commercial sales rose by 1% [16][18] - **Water Solutions Segment**: Sales declined by 4% to $298 million, primarily due to lower volume, with commercial sales down 3% and residential sales down 6% [18][19] - **Pool Segment**: Sales increased by 9% to $427 million, driven by price increases, volume growth, and the acquisition of Gulfstream [19][20] Market Data and Key Metrics Changes - The company anticipates flow sales to grow in the low single digits, while water solutions are expected to decline in the mid single digits, and pool sales are projected to increase by approximately 6% to 7% for the full year [22][23] - The company noted a softer residential end market, which has allowed for a focus on improving overall business operations [11][12] Company Strategy and Development Direction - The company is focused on driving long-term shareholder value through transformation initiatives and strategic growth investments, including talent acquisition and product innovation [10][13] - The company has committed to achieving $80 million in transformation savings for 2025, with expectations for continued margin improvement beyond 2026 [12][13] - The company is adapting to a rapidly changing macroeconomic environment and is optimistic about future demand recovery as interest rates potentially decrease [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy despite a challenging environment, with expectations for sales growth of 1% to 2% and adjusted EPS guidance of $4.75 to $4.85 for the full year [8][22] - The management highlighted the importance of monitoring macroeconomic conditions and adjusting strategies accordingly, particularly in response to tariff impacts and inflation [24][25] Other Important Information - The company made an investment in a startup, Hope Hydration, which aims to provide free water through digitally connected refill stations, leveraging Pentair's technology [9] - The company strategically divested its small commercial services business to focus on higher-margin filtration and ice businesses [18][66] Q&A Session Summary Question: Insights on pool unit volumes and pricing sensitivity - Management noted that new pool builds are expected to be modestly down, with customers extending product life through repairs rather than new purchases, influenced by pricing increases [31][32] Question: Price versus cost outlook for the year - Management indicated that pricing strategies are designed to offset tariff impacts, with a net benefit from lower tariffs contributing to raised guidance [35][36] Question: Pool volume outlook and channel inventories - Management confirmed that while pool volume outlook remains modestly challenging, channel inventories are well managed and in line with historical levels [90] Question: Impact of tariffs on pricing and operational decisions - Management stated that the tariff situation has paused some decision-making but remains committed to localizing supply chains and optimizing operational efficiencies [85][86] Question: Future divestitures and cash flow performance - Management clarified that while there are no immediate divestitures planned, they are focused on product line exits that do not align with their strategic goals, and highlighted strong cash flow performance due to improved working capital management [100][101]

Core Viewpoint - UBS's report indicates that Starbucks's transformation plan and management execution, along with store operation reforms, have the potential to drive the company's fundamentals into a recovery phase, despite challenges from global economic slowdown and inflation impacting consumer spending on premium coffee [1][2] Group 1: Transformation and Management Execution - The new CEO and management team are believed to have the capability to successfully implement large-scale strategies, which will support gradual sales recovery [8] - The "Back to Starbucks" strategy includes comprehensive reforms in operations, marketing, products, and customer experience, aiming to enhance performance [8] - The introduction of the "Green Apron" service model is expected to improve productivity during peak hours, with around 2,000 stores already implementing this model [9] Group 2: Financial Projections and Valuation - UBS sets a 12-month target price of $95 for Starbucks, reflecting a cautious valuation of approximately 18 times the future 12-month EV/EBITDA, which is consistent with historical trading ranges [3] - The report anticipates a decline in same-store sales in North America for FY2025, with a projected decrease of about 2% [4] - Profit margins are expected to be under pressure due to rising labor and material costs, with operating margins projected to drop to approximately 10.8% in FY2025 [5] Group 3: Consumer Sentiment and Brand Loyalty - Despite recent declines in customer traffic, Starbucks maintains a strong base of loyal customers, with improved perceptions of value among high-income consumers [10] - UBS's consumer survey indicates a slight increase in the willingness of consumers to visit Starbucks in 2024-2025, suggesting a potential recovery in customer sentiment [8] Group 4: Long-term Growth Opportunities - Starbucks has significant expansion potential in international markets, particularly in China, which could contribute to long-term revenue growth [11] - The development of new sales channels, such as ready-to-drink coffee and grocery sales, along with a digital membership ecosystem, is expected to provide additional revenue streams [11]

Core Viewpoint - Nike reported its worst quarterly earnings in over three years, yet investor confidence in its transformation plan increased, leading to a stock price surge of over 10% in after-hours trading [1]. Financial Performance - In Q4, Nike's revenue was $11.1 billion, exceeding analyst expectations but marking the lowest level since Q3 2022. Net profit was $211 million, a staggering 86% drop year-over-year, reaching a new low since Q4 FY2020 [3]. - The disappointing performance reflects the significant impact of the company's transformation plan, with expectations that adverse factors will ease in the future [3]. Strategic Initiatives - CEO Elliott Hill emphasized the company's reform measures, focusing on product line development in key sports areas. He noted that concentrating on sports allows Nike to succeed, highlighting a high single-digit growth in the running product line, which had previously raised investor concerns due to competition from brands like Hoka and On [3]. - CFO Matthew Friend indicated that the company is addressing the negative effects of an overemphasis on direct sales and reliance on lifestyle products and fashion trends [3]. Supply Chain Adjustments - In response to the adverse effects of President Trump's fluctuating tariff policies, Nike is shifting its supply chain to other countries, estimating an increase in its own costs by approximately $1 billion due to new tariff rates [4].

Core Viewpoint - PayPal reported Q1 earnings that exceeded analyst expectations, but maintained its full-year profit forecast due to global macroeconomic uncertainties [1][2] Financial Performance - Q1 revenue was $7.79 billion, slightly below the average analyst expectation of $7.85 billion [1] - Adjusted earnings per share (EPS) were $1.33, surpassing the average expectation of $1.16 [1][2] - The key profitability metric, transaction profit, grew by 7% to $3.72 billion, exceeding expectations by $100 million [2] Strategic Shift - The company is focusing on profitability over sales volume, moving away from a previous strategy that prioritized growth at all costs, which led to lower profit margins [1][2] - CEO Alex Chriss emphasized a unified business strategy that includes various services such as Venmo and PayPal USD, aiming for 10%-13% EPS growth by 2027 [2] Market Reaction - Despite the strong performance, PayPal's stock price fell by 0.32% as of the report [3]

Financial Data and Key Metrics Changes - In Q4 2024, sales decreased by 1% to $1,000,000,000, but adjusted operating income increased by 17% to a record $231,000,000, with return on sales (ROS) expanding by 370 basis points to 23.8% [10][20] - For the full year 2024, sales were $4,100,000,000, with adjusted operating income of $959,000,000, up 12%, and adjusted EPS of $4.33, up 15% [11][12] - The company generated record free cash flow of $693,000,000, marking a nearly 26% year-over-year increase [29][30] Business Line Data and Key Metrics Changes - Flow segment sales decreased by 5% in Q4 to $361,000,000, while commercial sales increased by 7% [22] - Water Solutions segment sales decreased by 4% in Q4 to $258,000,000, with reportable segment income growing by 21% to $62,000,000 [25] - Pool segment sales grew by 5% in Q4 to $354,000,000, driven by both price and volume [26] Market Data and Key Metrics Changes - The company expects total sales in fiscal 2025 to be approximately flat to up 2%, with flow sales expected to increase slightly and water solutions sales expected to decline by low single digits [32][39] - Pool sales are projected to increase by approximately 4% to 5% in 2025, benefiting from a recent acquisition [40] Company Strategy and Development Direction - The company is focused on transformation initiatives and the implementation of the "eightytwenty" strategy to drive profitability and operational efficiencies [16][18] - The ROS target has been increased to 26% by the end of 2026, reflecting confidence in achieving higher profitability despite macroeconomic uncertainties [28] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was a transformative year with strong performance across all segments, despite macroeconomic challenges [7][9] - The company anticipates a recovery in residential markets in the second half of 2025, contingent on interest rate stabilization [111] Other Important Information - The company has increased its dividend by approximately 9%, marking the 49th consecutive year of dividend increases [30] - The company is committed to maintaining a disciplined capital allocation strategy, focusing on organic growth and strategic acquisitions [30] Q&A Session Summary Question: What is the split between the legacy transformation program and the new eightytwenty program? - Management indicated that the benefits of transformation will be captured in the productivity column, with eightytwenty helping to focus the business [44][45] Question: How is pricing being managed in light of tariffs? - The company expects to implement a price increase of 1.5% to 2%, which includes adjustments for tariffs, and anticipates that price will offset additional tariff costs [46][48] Question: What is the outlook for the pool market? - Management remains cautious about new pool builds, expecting low single-digit growth in new and remodeled pools, with aftermarket sales also projected to grow [56][106] Question: How are tariffs affecting the financial outlook? - The company has embedded the impact of tariffs in its adjusted EPS guidance, with expectations for minimal impact in Q1 and more significant effects in subsequent quarters [55][62] Question: What is the expected contribution from the recent acquisition? - The acquisition is expected to contribute approximately $35,000,000 in revenue for 2025, with a net benefit of about $30,000,000 [77]