Pentair (PNR) 22 Oct 242024 Q3 Earnings call transcript

Welcome to the Pentair Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Shelly Hubbard, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and welcome to Pentair's Third Quarter 2024 Earnings Conference Call.

me and Stauch, Financial Bob with Chief President Officer. call Officer; Executive Fishman, the are our John and On our Chief quarter On on the will we press performance third morning's today's in as provide release. outlined call, our details

reference. to GAAP can for that and as Investor a GAAP. slide non-GAAP release events and superior considered of additional of performance provide investors The is to be the the a you which we measures remarks prepared between on our supplement included earnings understanding reconciliation On have addition the financial are our prepared provided website, substitute clarifying results. impact and during with measures or accordance these further find to measures should Pentair aid intended Relations to company's will in in items non-GAAP and financial deck, today's financial the differences call financial items as performance the They not in

Form control the let Listeners that are factors predictions, remind in current our uncertainties begin, statements are differ uncertainties, Pentair. which other about materially statements many carefully risks Before you or certain the cautioned risk statements, difficult of expectations. to XX-K. presentation review and events. and that to future generally during from today, will are these We actual most results to forward-looking predict projections Form beyond These and we and our cause risks of me can are to advise XX-Q listeners we make subject which our recent

presentations and Day to Investor find visit reminder, As these website. IR Pentair for we presentations questions. and our our on materials. to click on the Pentair Instructions] Investor up our overview reference can remarks, call Events click website prepared Following investor you and Relations a will open Please [Operator

now will over to the John. turn call I

good morning, you, and everyone. Thank Shelly,

the with Slide on executive begin Let's summary X.

transformation of initiatives portfolio. a in and balanced geopolitical the dynamic performance We of and solid global our with success are very The our macroeconomic execution water strong pleased environment.

was enjoy and mitigate and risk Our to resilient move, segment strategy in across value. ability our shareholder improve Water drive evident as long-term we our diversify

For expansion the lower free and delivered operating XX% adjusted slightly adjusted double-digit sales. quarter, margin Pool and Flow Both expanded income year-over-year totaling was points triple-digit EPS ROS this and and Pool in triple-digit the in growth despite X% was year up far example, post the Adjusted so operating sets EPS third XX.X%. expansion XXX adjusted spin-off XX%, while record million. in by we basis $XXX to from up record Pentair XXXX. grew a margin cash delivered QX. invent We sales flow achieved This income

rising are to continue aristrocrat balanced We of proud a of allocation a dividend dividends. capital XX-year very marking streak and approach to follow disciplined and status, our

over employees thank value our our For dedication for your our XX,XXX share to you to I deliver and for create for want Pentair owners. customers

and hard by for quarter also devastating to hurricanes. extend I scary that imagine only the tireless I impressive you. can sympathies recent Thank be. results. Your heartfelt my led to of those work how can want affected another

Moving to guidance.

the provide to year-to-date performance adjusted operate call. our to ongoing in ability and We confidence will raising is our This around details EPS to our changing more full year-over-year. later an due guidance a year increase XX% strong Bob representing environment. are in approximate $X.XX, effectively in

Let's Slide X. turn to

pressured. remained and at each, X some great quarter, of of verticals each As areas segments have have the we slightly our opportunity that look we noted when last and within seen

vertical normalizing our year-over-year international the impact business. spend and has environment Manitowoc delayed commercial continue affected commercial customers. global example, another Flow, from our business slow our our vertical, effects market For record. housing interest comparison. Solutions, Within a have CapEx Higher sales industrial interest to in vertical pressures amidst impact experienced rates new Higher to reached our strong, and and residential in continued the and our economic filtration residential business business difficult well remains Water ICE rates performed of

PFAS QX product have in had certification that commercial start. parts launched meet per We of new now filtration solid certified first a that the standard XX was XX Our NSF trillion. products

focus quality products. increasing enthusiastic the growth Given in and on the the of systems, interest rising filtration these long-term about are water point-of-use potential

market quarter, continue Pool, higher in year-over-year sales a slower consecutive Lastly, pools. and pool and the second predominantly rates in remodeled demand, sustained new to grew for while impact interest housing

roughly XXXX XX,XXX QX. new As industry data. the Pool -- aftermarket in XX,XXX unique Pentair. quarter, last said, perform with in compared That We believe and advantages XXXX appealing for to to XX X,XXX to is in highly near industry our in favorable be business range to mega mentioned in-ground well the competitive pools expected continued XXXX trends are for

for important change instance, products. we an smart, believe the in For meet to position being climate demand issue, with a is sustainable growing strong Pentair

pumps expansion. we represents Sun pool ability mix to to we remain migration long-term of confident pioneering our the can the growth reduce benefit from speed innovate which costs, We that challenges to continuing a to we sales. products. for and sustainable expect continue favorable near-term economic and that new and we way variable And energy a large have expect remodeled led smart, and drive by in states, to are Despite margin Belt the serve pools, with housing Pentair's

with effectively. and us segment and In believe water general, enables we diversification our it improve enjoy risk success we manage as are move, to across very pleased

Let's turn to X. Slide

made have with progress transformation our steady We initiatives.

substantial us and integrated To excellence. productivity mentioned during operational from X X and have come sourcing. Day, in our we and sourcing we successfully As XXXX completed for date, the a Investor wave majority of March will that anticipate savings most

and portfolio. global optimizing also our are We to better our focused with footprint align balanced water

and to early made stages. strategic in efficiencies drive organization objectives. our even have We our the XX-XX have though it still is implemented pricing progress strategic actions we We've the taken value-based portfolio, across across be to also on

and XX-XX analysis completed QX, of revenue to During the trained employees, additional over bringing streams, total our we the X,XXX. most we across

We focusing Quad core while on in action wins, less such X growth as and profitable are in unprofitable plans profitable and X. achieve Quad driving executing X, to quick exiting revenue sales

motivated insights measures We profitable by teams implementing are our drive the the growth. are early and sustainable, proactive of to greatly XX-XX

Bob, to it Before to which Slide over let's highlights X, quarter I turn turn our takeaways. third key

$X.XX, year-to-date can profitable free to XX-XX driven year-over-year drive flow. We Importantly, operating year Transformation and that full approximate an margin focused increased to income our expansion, continued solid drive benefit little execution cash earnings driving confidence more adjusted strong increase despite XXXX to initiatives Early strong from further insights are and guidance EPS our growth. it approximately reflecting growth transformation volume XX% growth. accelerate and adjusted by into

footprint, and reduce our their of trends, states, believe composition quality, we and environmental which address with and concerns Sun concerns to commercial, impacting sales. we living to fun for taste opportunities favorable clean, which safe people growing driving outdoor favorable include human for to of positioned pools and water, housing pool Lastly, public secular municipal carbon migration about aging and consumers' reliable contaminants increased large exercise desire a infrastructure, water gathering in awareness access are well made interest of mix healthy the represents Belt

in performance I and results will our to call now will pass the detail. discuss Bob? more financial over Bob

morning, Good everyone.

Sales expectations and earnings Let's triple-digit with did of our EPS double-digit start Slide lower We margin income volume. despite margin X. another adjusted earnings. expansion adjusted growth outperformed and on achieved strong quality as and quarter

growth adjusted Water XX% In to increased X% in by by was offset larger orders XX.X%, QX, Solutions were by year-over-year, XX% the were able $XXX primarily sales million. increased both Pool, In ship as supply a XXX from driven X%. Flow basis Solutions. X% EPS in driven down a operating and to Adjusted a X% and decline decline and ROS Transformation Water were period, backlog the million, Flow income X% chain $X.XX. year to expanded prior sales to Core improved. which $XXX in points down

In XXXX, water work to and our of transformation balanced continue of highlight our the Similar the John's success more our of backlogs dedication power comments, team our the initiatives, Pentair to portfolio, hard normalized and results earlier entire to levels. returned globally. our

quarter continued residential higher turn driven XX% the marking to were declined Flow quarter down Slide near year-over-year compared pressure delayed X% sales consecutive declined X. end year. markets. XX%, X%, Commercial rates largely sales as ninth to sales growth. CapEx. industrial record last a of rose Please sales interest to sales by year-over-year Residential And

of sales initiatives progress mix. has Flows time points strong first was on favorable noted a XXXX. exceeded or X%, we basis marking expansion transformation we to the XX%. expanded reached Segment quarter, last to half grew uncertainty signs for projects in of economic As we see delay income were on causing second the XXX and had The result return and scheduled of continued starting XX.X%, that margin our the ROS

$XXX In million, turn declined Water Please in Solutions sales XX. driven to declines by commercial both to QX, Slide and X% residential.

be X declined business grew expectations in acquisition more deliver significant years continued in QX. achieving offset rollout. down to basis XXXX early ability Segment higher volume. commercial a over light exceed XX.X% Manitowoc by expected backlog We basis to our contracted in and years. was prior by sales was and services which Solutions, $XX the again project million Ice Ice's filtration has XXX X lower orders Commercial as in X% record larger than business sales year, on XX Water last return Manitowoc higher income driven commercial a to to our points and by productivity of case Within our inflation XXXX. points ROS expanded target to

QX, return points on million. sales driven X% turn XX% transformation. Slide up In Please was by income XX. $XXX growth XXX to Pool million, sales $XXX increased and to to XX%, increased sales and Segment basis

Please turn Slide XX. to

pleased of We transformation the initiatives. success our are very with

return to March on Day. XXXX by of committed Investor our year-end We a are at XX% XXXX mentioned goal as sales

a of We our increasing guide after to are current XX% initial ROS guide to fast of off XXXX our start XX%.

$XX achieved on year-end, ROS by an in expected savings XXXX approximately $XXX of that the year-to-date our have savings $XXX part a aspiration of million These to our case, for million year. are million of XX%. transformation way XXXX savings would which, of full We of drive

Slide Please to XX. turn

side, products, our left how the X prioritizing the highest Those those the the customers products. while X quadrants are our through and are customers quadrant across to and illustrate of we serve falling to revenue cost in our complexity portfolio. On and lens the opportunity business reflect reduce X quadrant

As efforts the margin across we in all we transformation years quadrants, and growth X and expect to accelerate ahead. sales XX-XX drive take core actions expansion further our

XX-XX we As in of stages making John the progress. are good mentioned, early and

capital. Slide million Please flow post continuing improvement XX. driven in operations achieved the significant delivered free higher net to cash and we turn $XXX In million, working of cash $XXX by strong invent flow record of we Year-to-date, income QX, from free separation.

quarterly pay We also reinvestment future growth, through drive to variable and rate capital debt, shares dividends. repay deployed repurchase

X.Xx, debt now net a year leverage Our ago. ratio is from down X.Xx

During total repurchased for million $XX million shares the we this quarter, of year. a of $XXX

program. additional have million our share available We an repurchase $XXX on

Long We shareholder returns. Lastly, we flexibility area our high term, targeting highest to remain with to ROIC capital have plan disciplined capital are teens additional over the and ROIC. with XX%. allocate our to strategically was

Moving to Slide XX.

full from be a approximately $X.XX $X.XX year, This our guidance For for challenging roughly full EPS the guidance. flat which increasing driven is our roughly expect $X.XX, the to billion approximately year-over-year. to Also X%, by or we to year, up we down billion unchanged are is to previous XX% economy. adjusted sales

to adjusted We increase operating income approximately XX%. expect

to $XXX in million savings transformation this year. We approximately continue drive

down quarter, to approximately we expect million, $XXX fourth $XXX be million X%. sales the For X% to approximately to

stages portfolio's income We're operating cultural growth adjusted very actions strategic quarter XX%. opportunities. of introducing EPS excited approximately made which the the adjusted year roughly We're a macroeconomic strong we fourth challenges expect of about with change fourth the quarter drive of Transformation both This for and $X.XX and company. expect for progress increase shareholder and profitability long-term been pleased We're benefits the reflects XX-XX to improve global up early on continued XX-XX significant to long-term approximately Transformation, also to our guidance value. this have XX%. water and We has also our guidance

for will open operator the after have questions. turn Operator, I'd please call Thank the line a Q&A to few remarks. now which over for like closing you. the John to

RBC We question-and-answer the Capital with Dray will session. question first now Instructions] Markets. [Operator The comes begin from Deane

for Thank And needle be sense everyone. we enterprise-wide confirm, now how morning, of start this really give is mover much with to size a impact? you of you. Can is pricing you Can the implementation? because automated? can can Maybe Good a us this you. value-based this just

So Deane. you the thank for question,

sure question, say go I it's to a mover. these it stages. we're a think, lot trying all, and it's getting X first that of the go your liable in you're be easier transformation most they pretty to would those quad quad and And prompts pricing say is be in X. what to standard and to XX-XX to make your that time back your across X value-based of to on initiatives and part on that me to I'd the to and going focus that as do I to -- best second products are right customers X, a But versus can reminder, all value your early customers because

I think started across were all we And pricing the much when value-based it we exercise, quadrants. pretty doing

and like businesses and out business. every this further have Deane. this We we're of along rolled global are But in the areas to introduced farther think playbook behind, I Pool some

So future great opportunity in sure. the for

was about give can just we're the pushed, surprised. not election, cetera? delays getting then some just Maybe some Great tie it's customers context reference but you by together of spending to about that in -- related demand terms there et And can projects to sentiment hear. CapEx in you

Yes. still larger I Beer level through. beverage I projects we that mean customers. that going optimistic to come the those on the our think feel that this for of we're isn't they're Flow our and with our comfortable of profile to primarily see And business some larger Membranes customers the and relates think yet. I But at investment projects some

them think it That's Deane. I what relates really several to So they're quarters. delaying

Citigroup. next Andy The comes question Kaplowitz from with

in about after early price you and Pool? channel strong talk in everyone. inventory headed would in Pool Morning your Pool you you're overall. you how increase And mentioned John the in September into 'XX assess then seeing could obviously, price what

versus regarding would pricing in you I but think point? holding up this well concerned price bit inflation say been the past, at you've a versus inflation, is

in let here well. the chime little as Yes, I'll first take Bob part. I'll a

after all, the We're of I we earnings. of playing it think sell-through, and continue the we have is some seeing states first we the generally industry our and after way tweaked market expected think, slightly to I we the out it we're key stronger QX to inventory I extra hurricanes, little see the able a is we're Florida up facilitate demand coming with that as like and out and feel got here well. balanced. pretty then to going bit to of sure And ramping think to well make

the revenue been in pricing, which mix further have, overall the also I able they of mentioned have pull buying optimize On we the overall, making are the just levers we're sure that pricing earlier, the help customers' customers as side, good have that our on value-based along customers higher-end the and the pricing and to pretty to is really receipts solutions. and

year. remodeling think better is and optimistic a to it think we that end. recovery and going I the pool wanted And year aftermarket out overall, next in year since next we the we're be very see to, the where at So year are we're even a still the a will builds overall playing lower

feeling know you optimistic don't about we're pretty if add? to want I So XXXX. Bob,

of the And would roughly X inflation, would pretty price X a Yes, say it, X good and to done points QX, that's we points had in level. then, saw price job in saw. We points QX. we've company points X call inflation. in We and said forecasting X QX, just X and in about out point read on QX at what I

mix product in to due is movement that of Some the quarter.

is it's the and But X% it due overall, X% level out as the compare it's that's we guided X the points. From year. to at perspective, to roughly had inflation total playing well. versus of pretty Some that cost, been an of how pricing previous to

like what like? early, on something the ask maybe assume might follow-up remodeling give but sort past, next any year? you've of impacts delayed helpful. the a it's you And what maybe look perspective a in could that or know can I some us impact, it seen on that, like be I hurricane sizing John, there's impact I

Yes.

those for all, First involved. hurricanes devastating of

customers. for and able root we're dealers, deck all make and it's we a sure weather our So servicing serve that being don't to customers their on events. certainly to hands But are servicing channel

which running product if damage. stay the could main affected, from they see people, be get So tools to up are and make sure we pumps, water can, demand And and they clear. that certainly want usually those that

is playbook for hurricane pretty state see every we pool important demand is model. and guide. us, Florida of there different, little I'm So our a no factored we'll sure a -- into that is and some bit here

from Barclays. comes question next The with Julian Mitchell

on an the outlook. I off, wanted first savings just update productivity Maybe

think I guided next maybe XXX the so year rate entering year. you so or left in before strong million million XX new a for about QX, run year, the

of So and the the should maybe expect 'XX what plan, aggregate transformation productivity of kind help in we when understand taking you're please? sort of base us XX-XX

transformation Yes. Thanks in of Julian. towards after QX. point, were this for means we the third doing million which another with transformation savings the the quarter, million $XX $XX in tracking your last Again, very pleased question, year, roughly to readout year. million $XXX are that

back the about $XXX driving which year, savings $XXX this I had Overall, include million 'XX, aspirational to of a would would we're Investor million March to in ROS, good 'XX. 'XX at start. By Day, off talked we say XX% an doing

about think XX-XX call perspective. next would million starting over be a from years, $XXX point good the X a it, spread transformation So

right fast savings start And now. again, overall, We're lot to to we're a But not giving us committing confidence. that transformation still the XX%. is XX% the on this more

revenue sort project be turnaround freely. pace around visibility of low got a start maybe to projects and example. Understanding those would next XX follow-up these delays And the the in in Flow. confidence move us on positive and in Ice, months? sales of of the trend either the understand year-on-year help my kind of where Water sort seeing just maybe tough Maybe sort you've the for in more And then the Flow, just of comp Water, you of a had Manitowoc

Yes.

very the have commercial for of we comps, had revenue seeing held that streams pleased First all, our up way those gives sequential movement we're outlook some think I that even we're more encouraging difficult though businesses. an still with us and year-over-year

movement, We are almost of a company, still rates or the seen clearly, we're still in across houses row and away. a And quarters meaning that decline rooting as jump now start X we removing building get that's XX% residential. exposed a mortgage hoping movements residential houses. to challenges. several where people that's and quarters rate And little to And think interest some overall the year-over-year for in portfolio people we've

And so levers. we're continuing to transformation the work

We by growth the year that, encouraged see are be next we of that early achievable. prospects and will signs do

to a help transformation, productivity. add reminder, will to as And growth Bob's

So we've of this been without of growth transformation. doing the a contribution lot in the

we programs on and if we what So achieve. can on continue we're top, growth pretty encouraged get can these

The Tusa next with question comes from JPMorgan. Steve

Flow Can was Water much did and XX-XX And the how you -- here. maybe pool the some revenue non-pool just clarify quite all on I accelerate is bit in market? pricing, Or mean is initiatives? just the decline that a of that this it stuff then of

you for think full year? what heading quarter-to-quarter, next expect pricing I and do fourth into into the quarter

and on not as counting that I'll take second thinking -- spaces, and the primarily have we adjusted agriculture answer Bob one, of haven't is now. in half, recovery I second This say in we're generally we all forms and better is I'll X, the probably the X what see plus Steve, here, just would market, we're we'd and the first one. residential

year. are as into right the so it's think easier agricultural But I through much comparisons Obviously, on these now, wrap residential pretty that are challenged. working job a and markets they're And next this. and they're good doing we cost,

the X.X% Pool to QX moderates the pricing X% they've QX to be the bit little here in QX, for X% that from Pool X%. for somewhere on gone And company, will between to X% total again, year to QX. in And in to for get X% and then a in

those pricing, prior of things and year. So of the types the mix products, attributable value-based versus the that lumpiness, compare again, to the

previous that good for increases large X% this X.X% out feeling such overall, Pool in So reading the years. after to price year

The next with Blair comes from question Bryan Oppenheimer.

Thank you.

ahead Bob, or Is XXXX, XX-XX see [ you're been in of XX% ] plan target that Transformation, you and you've aspirational terms that it the and mentioned level the So set in perhaps say going transformation as runway much loss an $XXX and million initial there's pacing even on of remaining higher thereabout referencing savings of that is fair 'XX outlook? the [ above ] you're XX% terms the that in contribution time? the as toward perhaps to to

mean, at the Day, growth The goal. to got our Analyst back the that's off to we now at gave year transformation. that guided start. to million. I we're at a We beginning are XXX faster return and looking and Certainly, drive again, of had XX $XXX

sourcing. So by savings the transformation were led

are If we'll next third though, year. complete really quarter, this I you'll that operational spend over remember, Wave liked Wave across manufacturing X X year, and then again. the process will Wave and complete is below start really balanced and X What sourcing, the had line. about we

So good perspective. X balance a areas from across transformation those

confidence is that's enabler an the to being other our transformation. increasing The really XX-XX and thing that

think at the Quad size, minimum X% roughly While as it X XX-XX times, now X. number quantities, And again, techniques and people rolled price, we to in different out Quad are company, Quad using very right now lot X. growth a the we're being like products the techniques being number revenue. providing X,XXX we've Quad within reducing standard of there's training over a our There's lead things customers, play, is complexity that of extending but options. Quad of B B standard a there of X our offering focused our looking able we're SKUs, the versus of in on that a reducing fewer order X really And

are our but customers using treat differently. teams are our to the is the there. of that goal Again, fairly, those techniques So all

X. reduce So Quad the there to opportunity complexity in is an

costs. is As our serve Quad X somewhere a to reminder, in the between overall of XX% cost XX% to

up customer that we've dollars to to We've far in really Quad we've great sites. Quad that manufacturing creates a an we the experience team, as lots so in of the opportunity we've to capacity out of improve rolled from X. reduced our freed resources now And examples so support, the reallocated well. number have it And X

So X, really which that on time once we start quadrant. we eliminate story. in traction improve can transformation the take improving already to and complexity to experience, we've started in it's more customer starting the overall And our again, Quad spend first

so again, to to of that sitting And lead into Quad think our about where service X, provide channel, insight have revenue product opportunity XX% times, better information. delivery, to our we the on-time improve in availability, product automation, businesses, training, either their through

it's major that's embark to a as a XX-XX. the going huge we change accelerator on again, So transformation And cultural plan. think we be for

are makes very and sense, all That encouraging. trends

Given do to if cadence you growth in XXXX, you're stronger the lever have, positioned now that. operational obviously environment a well that have we

on I stronger balance in being now addition, point? your team to a lever the deployment environment pushback In And How over good near capital can't imagine is there. term any focused looking is at shape. forward? your sheet pretty demand hopefully this your deal that is further pipeline going

that we would returns. now, at to a we're Always precious are the so anything to think environment isn't mindful we're right looking economic the of is look is, global our use the that and and very has capital we making best sure and trickle. of we're It drive mindful given possible putting pipeline working within. say And how all I I gushing it

to and we back XXXX, we the very closed of deal question, leverage A pleased X.X, When your at now with in July within answer Manitowoc X.Xx. we're are we on company. had X.X X.Xx. were the ago, year at we And levered the to up

driven, to debt, repay we to continue repurchase from that the to were was very a EBITDA this we've obviously flow multiple. perspective We had streak. invest to and growth. debt some down continued with capital our improve We that that driving the and billion balance strong. over be share in with EBITDA So it leverage $X in cash paid the continued the testament dividend QX that really is able of will a overall, the free and The year

The next Saree with Boroditsky question comes Jefferies. from

I This go XX-XX. of James on for Saree. kind is on to wanted back

but stream on I the revenue here. still did in that So know you of early analysis it's the stage most

can provide what from you do benefit realize kind of due discontinue like percentage So unprofitable mature expect And of when revenue expect to XX-XX? you color the products? you to more like to on

Yes.

a call revenue of mean, normalized I in we period time. you if environment Quad what would get said, across be the any mathematically the of X Bob X% out very of and would It's could look be that you unlikely of XX-month company. what roughly in As that portfolio, all improbable

You have you have contracts, obligations.

where you of certain how requirements can serve dealers have You and distributors those buy.

be So of this would case be standpoint, would the probably half exiting in that a best scenario an from opportunity.

of months would over a you'd most volume then streams. expect lost And mostly into recover to period, XX, that XX that be transferred the customer A

do taking and efforts, care long-term to not said, your organic What free should you and as to is to to innovation and really prioritize your higher drive customers up best it around reduction. be resources of products resources allow should top a growth. So you overall, allow revenue XX-XX your Bob drive

the to we're where future able being right? reducing growth by get paid, to in think ultimately way complexity company. So is that we paid get reinvest Quad got I of and expect to So then in really the the X

the So transformation you in it nominal, lost and the revenue the and I margin through should driving that think a period, see it in is is a from amount XX-month pipe XX-XX. efforts of we're transfer but the

a And it. on follow-up here. business Pool the Got

prebuy kind to from more discuss you orders? saw like [indiscernible] and you and can ship the you when So of those expect on the

and reminder, to labor first of hire the people our a balance not Yes. bunch buy then purpose We take and the have as let early and go. price them all, factories -- teams generally we our increases put of is to in whipsaw our of a

requirements allow that have channel to us could work talented sure workforce. So our keep and QX minimal we with we in to that the QX make

prices with in And business. quarters then a put then on to QX the early us product. they increases as in a worth that about what channel price get it orders QX. later the and So old our in mind, we and places that be QX. announced buy that that will We new normal prices in those terms ship for setting in pay of revenue rough them allow Think generally at we

revenue are still And states product quarters, open needed, loads those the and QX then take standard for still the the level we that's and and that's through QX what still that orders streams.

question Inc. with comes next Markets Hammond KeyBanc from The Jeff Capital

go of maybe go and that do assessment, with about I'm savings to XX% the One, sales. that on cut of you half you XX% XXX maybe just Just those XX-XX. the cost XX% above cost back mentioned what And XX% of this X% think do XX-XX? through a to kind is wondering there you sales, of over the to number with to cost? as

of opportunity the that X obviously related going to it's first packaging all to to sustainability of for cost efforts like of I we're the depreciation, don't there's efficient Quad different shipping, at insurance products streams all aren't efforts, that as expecting even have addressable be B XX% that compliance -- I in kinds you think So work customers addition and think factory in to fixed. is overhead reduce. because all, think cost least a more But

Jeff, is we cost to and expect of the the in show will what transformation And rid to And so goal, the them. that with is get savings. that do up

we original targets guidance valued we to in right? be. some at productivity long-term we think know transformation to update our as has mentioned, would these as so expectations not time, and did And what guides, in have benefits what at, the XX-XX And XX-XX have Bob we'll point reflect the are

transformation. just As like reminder, things in we we're a waves doing in did

an addressed we've of year. revenue from orientation about this XX% So the action

then next out We half that read be we'd in finally the expect second of next And XX-XX train to and we to year. probably everybody expect that year.

then the of one to just Okay. And on clicks a couple Pool back buy. early

any how slower were we balance new Just about on half And year. green I then of green that Thanks. know first some shoots. as think least know between should we and to move, just early cuts, I 'XX, buy pretty at rate have any last just or to mortgage start XQ balanced rates shoots the been the timing see you but remodel

buy I Yes, first of Jeff. I mean, this we is completely would define all, early normal. --

it. to back view a I think normalized more we're of

the so And -- predictions and happens is address builds in next dealer, make QX new we with with know yet. We we that and reliant more monthly on and to customer, be we checks next position happens think the premature we what remodeling thinking call year we earnings could of do we'll run I chain forecasts when voice yet. and a what don't announcement. the year prepared so also It's be that. that share will dealer pool sure from that supply to And guide to We're growth too on and for that those be what to aftermarket. do channel understand

from comes question next with The Andrew Krill Bank. Deutsche

around the this for XXX Let me on margins sequentially. XQ bps year. implied help XX%, some I'm get about getting down

more normally, Just flattish you through, the of the pieces how be I you're sequentially? quarter-over-quarter? margins they're bit can moving why on walk a us kind think down expecting to I guess,

Well, directionally close. first of all, you're

think revenue view. our peak and quarters, that I mean, and historically off a applying I an QX would be when the the traditionally, tend QX and our We our QX fully we're base. cost are that's from drop QX to see utilizing teams to and full appropriate factories So

typically, drop softer. we in margins from QX the and little a become or to down generally take why revenue, little QX QX So a that's

to work on purchases tends also holiday ease and during by of people a off servicing holidays the periods. that end customers those their lot of is want don't couple due A and distribution holiday season the houses the year channel their dealer its the work, way the of the to towards schedules that with the way the that the and we

expect X quarter, year-on-year do Solutions expansion we're perspective, up be we a contributing is to balance across to the QX ROS Flow, Water better it in was fourth to the the significantly story. in segments, ROS see similar news Pool third going from quarter. Good And how that all to and in all

which the the to the back you Any Great. we Or pretty by more spread evenly and $XX them million for being [indiscernible] Very then or savings should [indiscernible]? less? think help among expect final could so or transformation And going segment, about benefit helpful. XQ.

perspective, X transformation really Yes. segments, of all you fourth ROS expect benefiting can increase the X for quarter. in because From all the segments those our

with Jones from comes Nathan The next Stifel. question

bit interest guess I I'm ask rate question philosophical to cuts. going a more about a of

new about stuff. called start impacted talk few businesses? that those you what of to has begins rate flow, construction, kind negatively out a businesses typically kind You've interest say you that got pool residential you impacting Can of before lag cuts it

Yes.

variable to for X would head people continue markets Nathan. rates, encouragement of not to even being they're they that rate did out, the mortgage it's just instance, But later. not up down. X able credit the feeling think think I maybe go refinance Obviously, seeing impact, borrowing ticked we're rates see and down to saw that yet start going you could a that to a and necessarily probably meaningful rates get go the mortgage reflect to lower months

consumers to we're encouraged So more we're that to need few bunch still going before are are confident single larger a their lower rates I think a and we've a future. be while movement, of by got borrowing in going the customers that

it year first second maybe half of the half after? to starts the next year into And and of impact

Probably that assumption. look a it. understanding, to better at reasonable have finish but a Up good QX way be and we would as

impacts today initiatives your Can that for? of the an the pillars initiatives operational couple excellence, too there There's on effectiveness. we the and haven't organizational give much just a on you talked you're looking us around expected transformational update

in want and and more organization We sales and and the I streams. reinvest that work really to we're of marketing some offset, more effectively. mean certainly out of big X is are innovation drive as excellence working the there of nonproductive supporting customers Yes, the an our organizational one activities right?

being lot it's a because the we up invest. So talked to free significant P&L, about positive it'll to resources but a important haven't

lot of we've sure great leverage get the piece headwinds, types negatively the the from impact that activities, of made insurance, companies we most we've I'm On footprint. across things while some footprint, as have, operational a to the seen lot, then And the factory those and of progress, will overdriven growth but P&L. need operational we've a help actually utilities, property taxes,

progress to So get across manufacturing that probably while making trying highlighted have those probably enough, haven't hit there. the side hit of some elements of we're than we're we P&L. ahead they harder the just And overall inflationary great

comes from question with Halloran next Mike Baird. The

on just ones to going then the how here. bit Water any commercial side between of quick just things. on One, is variance side the maybe ICE a Two businesses? talk Solutions, on that the cross-selling And Everpure and little

Ice, return a filtration this performing to for perspective, next ROS from as XXX after reminder, commercial to with continue a those Again, from this last Overall, digits We well. we our had their perform Manitowoc year is Yes. growth year to roughly year, pleased very year. expect just down how businesses them guided mid-single year. do record perspective

and revenue commercial benefit So recurring pressure quarter, portfolio pleased with That lead within for the a the in with where Solutions filtration, down but faced then in system do road. has Water from with bit the year we Overall Ice. selling some third filtration and under the Manitowoc total. with last also the we of the little compare to commercial efforts of

investment revenue an stream. that today in make and you drive overall, then the systems So recurring

the pleased things a quarter in play So and but water the year. with few commercial at the for generally for performance there,

more Everpure the what of to filtration And And talked It going the Ice the come synergies, it then way pleased. synergies on your cross about we was revenue is side. Manitowoc other to seeing year lot I Manitowoc the that's be pulling around. couldn't this a really question wasn't you're in

we XXXX to we're and look model, on or above of our at So expectations. deal be those expectations expect ahead that when

So committed and really feel business the synergies this we performance of that to. good about the

Are up the on the your certainly it perspective from usage how the here? your on in lean approach piece. light would a doing sits a of as earlier things. In take what's from and side today. What M&A And through something equation it on then to capital maybe following here process? you more little thought I walk bit in question to consistent understand of buybacks mind that, that

Yes.

I at generate think we're pleased that Bob and most to. the that starting we levels expected I cash to are really

to little pay strategic acquisitions. to that of reminder, a as see headwinds far still acquisition 'XX as and opportunity EBITDA, to have as down. that we that's us a want have ability in to as we debt a continue the lot an our restructuring have lot $X and powder ramp to And accomplish. going more for always we As off confidence what want still billion transformation a more flexibility the we give in 'XX and we

we of weren't. what a be and of to We some to company are a collection acquisitions strategic some want completely those as that

acquisitions things we want we do want in product we that we from our buy they're they to And to what the that when so is want more customers to the that at us. pipeline, I and do that we're make today sure sure we think synergistic to want giving look make to

So sure at. And we're being make type it that looking disciplined our returns has what of really to expect. shareholders in the we want

continuing down the debt. the and shares back we're buy meantime, in has been. focus the where That's So pay to

with Giordano comes TD Cowen. question from Joe next The

Highlighted more maybe I'm it like the in what's Like industrial And there? you who's customers, there? the opportunity uptake slide buying? developed. just scale been guys if early products the some have like can curious, of PFAS and Has been that you the municipalities

Yes.

a in -- first of revenue still on basis, huge we're of early So growth, stages the percentage mean, I all, there. but it's immensely

encouraged think interested. So let's say, I we most have are customers of north $X that million. sets we're of several extremely that But

enthusiastic customers partner something First of working dealers out are distributors product and them all, can new about. there and excited solve and a to their put who's to like they're Pentair our needs their a talk with that gives line it that

really bit hospitality of the as are in the encouragement residential care of and uptake to been the their a we they customers. up the most and in quality where seen of they about really, markets giving in little water that has But servicing well. areas paying have the commercial predominantly But people

a So it's wakening people's in really lot overall, more just conversation little and enthused mindset well, feeling quality about to more to hopeful we're their drinking. the spur confident of water bit water for a bit value -- and a little that and a the paying starting start,

for me. last just then And

one's projects. one does CapEx And be guess is side about like about talking I quarters industrial the mentioned other like we the and pushouts. it I industrial companies, everyone you on And talk talking mentioned several the like become other. to significant delays but could cancellations, one You guess no when

Yes.

that's meaningful. when think good not them that I And funnel always backlog funnel. they're look think because leaving because at still it indication about front projects people expect timing then not more types backlog you'd always the busy in what quoting. a front quarters, projects it log, project things I you're maybe. those grow in that stay the placing is you should starting is Usually, I being the and and we're goes side, are engineers several line of and the that think to which is

growth This there's isn't comment that now double-digit piece It's growth. of have a meaningful for a more could relative business been to flattish that's us. that coming back just our that of

The next question Linzey Mizuho. comes from Brett with

] for [ This Koss Peter on Linzey. is Brett

and you product after through you How revenue went just segment? more all thinking the So guys opportunity XX-XX streams about are one the on the lines. by

we're really As combination the all Bob working participation we moment, sign opportunity to across segments. are is equal a thought we're through than It of time and mentioned, the an in get over global longevity, our equal confident P&Ls, that to chase equal be a up all across very X would they X adjacencies Those customers segments. of but our And at are XX-XX. the going bigger today. opportunities who to X are playbooks, have is desire always favorite we segments segment all

all especially equal and an in a growth like probably be and flow Some into residential and have margin will be Solutions, areas businesses the the that Water will Everpure Manitowoc think will would be opportunity. others of more I but slide capability, Pool which end focused, to on

The Seaport with Research. comes Scott next Graham question from

your fourth looks a little I implied industrial like fourth and wondering of are again, there guidance prebuy for slower sales the implication from quarter implied sales, was because the those lower pushouts? the So than So quarter And quarter? the both is the your that was fourth that's bit third side. a the new guidance, reasons quarter if project it on

what and forecast guide might equal have Scott. but the higher, we Our forecast, guide slightly our remains been had same. I put acknowledge out, we this last is the in consensus that will to that

year growth managing is I think out transformation last have. that playing is we it we the consistent think through way way the the opportunities we're I with quarter. and the And saw

check math that follow Shelly. up I'll I Okay. with it no problem.

to sales level sort quarter the of guide prebuy it fourth loading Pool, in slightly this is down? down we of would what fourth in mid-single Pool imply of year's last full so year the took And a if Why prebuy equal For I'm wondering largely is the in quarter. would into the mechanics implied be year's quarter. terms fourth

Yes. actually quarter. we up Within quarter, for our our overall guide down for have to the fourth Pools the guidance Solutions slightly Flow slightly get Water and and

quarter. So fourth Pool the in is up

and volumes? had dollar last guess, simply both was I The Okay. so Flow benefit would some all Water actually in those Solutions negative from imply which there productivity if Was areas. the that the that negative maybe is, productivity, number you question transformation you. out x thank

we've global. we And the the some been challenged global generally extremely Solutions the mean this to the outside cost That No. takes out, more bases United really I hard were quarter. productivity of working side cost longer of it business attack to is in Water but get States.

Bob challenged. a was and compare margins as be said, in So those And Water last to in were year-over-year we had year, still those opportunities which future. expect the Solutions record we

you'll in I improvement see QX it do and return XXXX. can about there, what we're in margin think confident

did price drive than that ROS offset QX expansion they more along story. have to from able transformation will really with a a The Flow were And the inflation. nice

there a for with questioner, last understand will be time I is Karas that and And UBS. Damian

Covered a lot of ground.

for wondering that seems for kind XXX% question related happen. the cash of to the anything quick above flow. quarter, year. just is a like well the I'm year-to-date. factors there strong guide been expect Just pretty conversion It typical It's free you'd to the you're beyond seasonal just fourth

in, QX being our seasonality point largest QX a expect the play made, in with cash free to does flow We typical you pretty quarter. and QX and QX

closing, In wanted I themes. Thank joining you key our us. reiterate for to

water margin portfolio significant consecutive for First, across balanced solid quarter. our the expansion drove execution tenth

our our environment. which and adjusted EPS a reflects maintain continued where strategy confidence and Second, XXXX agility in increasing we can are to guidance we ability mitigate risk dynamic in our

value initiatives to to our expansion a expect great Thank deliver strategy are our everyone, continue XX-XX adjusted solid EPS foundation you, day. we a Third, believe to water our and execution we transformation growth. margin have XXXX building and year. to fiscal strong continue creation drive focused beyond the finally, in And and

for The conference attending now presentation. has you Thank concluded. today's

disconnect. now may You