Q4 2021 Pentair PLC Earnings Call
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Speaker 1: Thank you for sending by. Welcome to the Q4 2021 Pinter earnings conference call. At this time, all participants are in illicit and only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jim Lucas. Thank you. Please go ahead. Thanks, Stephanie.
Good day and thank you for standing by welcome to the Q4 2021 Pentair earnings conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today, Jim Lucas. Thank you. Please go ahead.
Thank you Stephanie and welcome to Pinterest fourth quarter of 2021 earnings Conference call. We're glad you could join US today I'm, Jim Lucas Senior Vice President Treasurer F. P&A in Investor Relations and with me today is John Stout, our President and Chief Executive Officer, and Bob Fishman Chief Financial Officer.
Speaker 2: conference call. We're glad you could join us today. I'm Jim Lucas, Senior Vice President, Treasurer FPNA and Investor Relations. And with me today is John Stahl, our President and Chief Executive Officer, and Bob Fishman, our Chief Financial Officer.
Speaker 2: Today's call, we will provide details on our fourth quarter and full year performance as outlined in this morning's press.
Call, we will provide details on our fourth quarter and full year performance as outlined in this morning's press release before we begin let me remind you that during our presentation. Today, we will make forward looking statements listeners are cautioned that these statements are subject to certain risks and uncertainties many of which are difficult to predict and generally beyond the control of pentair. These.
Speaker 2: Before we begin, let me remind you that during our presentation today we will make forward looking
Speaker 2: Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict, and generally beyond the control of dentaire.
Speaker 2: These risks and uncertainties can cause actual results to differ materially from our current expectation.
These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors in our most recent Form 10-Q and Form 10-K as well as today's release, we will also reference certain non-GAAP measures reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the investor relation.
Speaker 2: We advise listeners to carefully review the risk factors in our most recent form TINQ and form TINK as well as today's release. We will also reference certain non-GAT measures. Reconciliation of these non-GAT measures to the most directly comparable GAT measures can be found in the Invest Relations section of PENTAIR's website.
Section of <unk> website, we will be sure to reserve time for questions and answers after our prepared remarks I would like to request that you. Please limit your questions to one and a follow up in order to ensure that everyone has an opportunity to ask their questions I will now turn the call over to Jonathan.
Speaker 2: We will be sure to reserve time for questions and answers after our prepared remarks. I would like to request that you please limit your questions to one and a follow-up in order to ensure that everyone has an opportunity to ask their questions. I will now turn the call.
Speaker 3: Thank you, Jim, and good morning, everyone. Please turn to slide number four, titled Executive Summer.
Thank you Jim and good morning, everyone.
Let's turn to slide number four titled Executive summary.
Speaker 3: We exit 2021 feeling very grateful for the tireless efforts of all of our employees who helped NCHER deliver far customers and create value for shareholders despite significant inflation and global supply chain challenge.
We exit 2021, and feeling very grateful for the tireless efforts of all of our employees, who helped pentair deliver for our customers and create value for shareholders, Despite significant inflation and global supply chain challenges.
Speaker 3: I am humbled and proud of our employees who made Agile and accountable throughout all of 2021.
I'm humbled and proud of our employees, who made agile and accountable throughout all of 2021.
Speaker 3: Well, we faced ongoing supply chain disruptions and inflation that was almost five times higher than during 2020. Our 2021 results exceeded our expectations and create momentum heading into 2022.
While we faced ongoing supply chain disruptions and inflation that was almost five times higher than during 2020 or 2021 results exceeded our expectations and create momentum heading into 2022.
Speaker 3: The L0 is over 20% while segment income and adjusted EPS increased over 30%.
Sales grew over 20% while segment income and adjusted EPS increased over 30 percentage return on sales expanded 100 basis points for the full year to over 18% despite significant inflation pressures.
Speaker 3: Our return on sales expanded 100 basis points of the full year to over 18% despite significant inflation pressure.
Speaker 3: We're in another strong year of free cash flow generating over 550 million, which represented over 100% conversion to that income.
We had another strong year of free cash flow generating over $550 million, which represented over 100% conversion to net income.
Speaker 3: We return to fractionally half of our cash to shareholders through dividends and sharey purchases, while also funding two strategic acquisition.
We returned approximately half of our cash to shareholders through dividends and share repurchases. While also funding two strategic acquisitions.
Speaker 3: We announced a dividend increase at the end of last year, and the first quarter dividend in 2022 will mark Penter's 46th consecutive year of increasing dividends. We are especially proud of this record as we are in a small and distinguished group of companies who can say that.
We announced the dividend increase at the end of last year and the first quarter dividend at 2022, well Mark Penn terrorists 46th consecutive year of increasing dividends, we are especially proud of this record as we are in a small a distinguished group of companies, who can say that.
Speaker 3: Our balance sheet ended the year in excellent shape and is poised to be deployed to drive additional shareholder value.
Our balance sheet ended the year in excellent shape and is poised to be deploy to drive additional shareholder value.
Speaker 3: We are introducing Q1 in full year 2022 guidance today, which Bob will highlight in more detail later in the call.
We are introducing Q1 and full year 2022 guidance today, which Bob will highlight in more detail later in the call.
Speaker 3: For 2022, we are looking for continued sales, income, and earnings growth, as well as further margin expansion. While Q1 faces a tough comparison to last year, through the largest price versus cost impact, and continued disruptions caused by COVID-19, our full year outlook remains optimistic and we believe our businesses are well positioned to create further value for Cheryl.
2022, we are looking for continued sales income and earnings growth as well as further margin expansion, while Q1 faces a tough comparison to last year due to the largest price versus cost impact and continued disruptions caused by COVID-19, our full year outlook remains optimistic and we believe our businesses are well positioned to create further value.
For shareholders.
Speaker 3: Our residential businesses serve mainly the installed base. We estimate that there is overall exposure to new residential construction is roughly 10% to the entire company.
Our residential business is served mainly the installed base.
Estimate <unk> overall exposure to new residential construction is roughly 10% for the entire company.
Speaker 3: Our pool business benefits from a large installed base, movement to more autonomous and more energy efficient pools, and favorable population migration trends.
Our pool business benefits from our large installed base movement to more autonomous and more energy efficient pools and favorable population migration trends.
Speaker 3: Our want of treatment business has built momentum on the residential side with smarter connected solutions. While a more profitable commercial business has recovered nicely, the flight restaurant traffic still not back to 2009.
Water treatment business has built momentum on the residential side with smarter connected solutions will be more profitable commercial business has recovered nicely. Despite restaurant traffic still not back to 2019 levels.
Speaker 3: Finally, our industrial businesses exited 2021 with continued growth in orders and backlog, particularly in our food, and beverage, and sustainable gas business.
Finally, our industrial businesses exited 2021 with continued growth in orders and backlog, particularly in our food and beverage and sustainable gas businesses.
Speaker 3: Overall, we believe we are well positioned entering the new year, although we recognize that disruptions from COVID-19 are impacting the global supply chain as we start 2020.
Overall, we believe we are well positioned entering the new year, although we recognize that disruptions from COVID-19 are impacting the global supply chain as we start 2022.
Speaker 3: Please turn to slide five labeled ESG priorities are integrated with business strategy.
Please turn to slide five labeled ESG priorities are integrated with business strategy.
Speaker 3: It's becoming a pure place sustainability focus company about four years ago. We have been focused on integrating our ESG priorities with our business strategy.
Since becoming a pure play sustainability focused company about four years ago, we have been focused on integrating our ESG priorities with our business strategy.
Speaker 3: We believe that supports our efforts in cultivating a long-term value proposition for Pentea. It is the right thing to do. It is good business and is tied to what our employees, customers, and shareholders value.
We believe this supports our efforts in cultivating a long term value proposition for pentair.
Is the right thing to do it is good business and is it tied to what our employees customers and shareholders value.
Speaker 3: This painability is more than an initiative at Pentea. It is core to how we operate. The Pentea we are united in our belief that our products and actions are making a difference.
Sustainability is more than an initiative at pentair. It is core to how we operate the pentair, we are United in our belief that our products and actions are making a difference.
Speaker 3: We are providing clean, safe water to millions of people while eliminating plastic bottles that are harming our environment. Our products help people use less chemical detergents in their lives through our water treatment solutions. We have many products that help reduce carbon-based electricity needs through variable speed pumps and LED lighting. And we are building a growing business for capturing COT gas.
We are providing clean safe water to millions of people, while eliminating plastic bottles that are harming our environment.
Our products help people use less chemicals and detergents in their lives through our water treatment solutions, we have many products that help reduce carbon based electricity needs through variable speed pumps in led lighting and we are building a growing business for capturing C. O T gas for reuse, we believe our solutions help make the most of life's most essential resources.
Speaker 3: Rebellion of our solutions help make the most of life's most essential.
Speaker 3: We're also focused on decreasing our carbon and water footprint with energy efficient processes and model-free facilities.
We're also focused on decreasing our carbon and water footprint with energy efficient processes and Basel III facilities.
Speaker 3: In 2021, we established formal goals to reduce pentares scope one and two greenhouse gas emissions and water withdrawals. We are driving in
In 2021, we establish formal goals to reduce pentair scope, one and two greenhouse gas emissions and water withdrawals.
We are driving an inclusive and diverse workforce and leadership team as a member of the CEO action for diversity inclusion coalition, leading our organization forward on diversity and inclusion efforts is a priority and I am proud of the work. We are doing in this regard that contributes to us being an employer of choice.
Also working to build a more sustainable supply chain. They have continued to make progress while we are navigating global supply chain disruptions.
Speaker 3: Finally, we believe we have always had strong governance practices, and we remain focused on ensuring that these are the best practice.
Finally, we believe we have always had strong governance practices and we remain focused on ensuring that these are the best practices. We have strong diversity on our board of directors and we also have strong board oversight of ESG, we recognize that our work will never be done, but we believe we are focused on the right priorities and we will continue to engage with our stakeholders and focus areas.
We can improve.
Speaker 3: Please turn to slide six, label building a track record of consistent growth.
Please turn to slide six labeled building a track record of consistent growth.
Speaker 3: As we highlighted during our investor day last June , we believe we are well on our way to establishing a track record of consistent growth. We believe that we are in the right spaces for the future. Global water awareness is increasing and we serve large and stable end markets. In fact, our two largest businesses, Pool and Water Treatment, are serving sectors that one combined are nearly 40 billion size and are growing faster than GDP.
As we highlighted during our Investor Day last June we believe we are well on our way to establishing a track record of consistent growth.
That we are in the right spaces for the future global water awareness is increasing and we serve large and stable end markets and in fact, our two largest businesses pool and water treatment are serving sectors that when combined are nearly 40 billion size and are growing faster than GDP.
Speaker 3: Growing the core is not just about top line improvement, but continued income growth and margin expansion. We know we must focus on all elements of growth, and we believe we are better aligned on this focus today more than at any time in Pantera's history.
Growing the core is not just about top line improvement with continued income growth and margin expansion. We know we must focus on all elements of growth and we believe we are better aligned on this focused today more than at any time at Penn terrorist history.
Speaker 3: Over the last few years, we have been investing in building our brand, our digital capabilities, and our innovation around smart and sustainable solutions.
Over the last few years, we have been investing in building our brand our digital capabilities and our innovation around smart and sustainable solutions.
Speaker 3: We have successfully rebranded Pelican acquired in 2019 to penge our water solutions in the water treatment space. And we believe we are delivering compelling and consistent messaging across all consumer touch points to generate awareness and provide consumer confidence in our solutions and expertise.
We have successfully rebranded pelikan acquired in 2019, Pentair water solutions and the water treatment space and we believe we are delivering compelling and consistent messaging across all consumer touch points to generate awareness and provide consumer confidence in our solutions and expertise.
Speaker 3: We recently launched the new Homewater Platform on Pentair.com to empower consumers to learn, shop, purchase, and gain service and support on our website.
We recently launched the new whole water platform on pentair dotcom to empower consumers to learn shop purchase and gain service and support on our website.
Speaker 3: We have improved consumer engagement with multiple digital properties, such as web, app, social and digital ads, to optimize customer journeys and deliver consistent, differentiated brand messaging across all platforms. We saw a double digit increase this last year, new visitors to Pentair.com. In fact, this increased engagement has led to a substantial number of leads in our pool business.
We improved consumer engagement with multiple digital properties, such as web apps, social and digital ads to optimize customer journeys and deliver consistent differentiated brand message across all platforms. We saw double digit increases last year, new visitors to pentair Dotcom. In fact this increased engagement has led to us.
Substantial number of leads in our pool business.
Speaker 3: While we are leader in pool equipment today, we must continue to best maintain and improve our position with customers and consumers. A major part of our effort is around building an effortless pooled ecosystem.
While we are leader in pool equipment today, we must continue to invest to maintain and improve our position with customers and consumers a major part of our effort is around building an effortless pool ecosystem I mean, not only strive to have the most reliable products in the pool industry. What we are also focused on providing the best information about pool ownership and we believe we offer the highest level of true.
Speaker 3: We not only strive to have the most reliable products in the pool industry, but we are also focused on providing the best information about pool ownership. And we believe we offer the highest level of training and education of anyone to the professional channel. We are also increasing our-
Education of anyone to the professional channel.
We are also increasing our services offerings in many of our businesses.
Speaker 3: The acquisition of KBI last year brought service capabilities to our commercial water treatment business and helped us create end-to-end solutions for our customers.
Acquisition of Kb I last year brought service capabilities to our commercial water treatment business and helped US create end to end solutions for our customers. We are also focused on expanding services within pool and are developing network to easily connect homeowners the appropriate partnered service provider to take care of their needs in a proactive improvement.
Speaker 3: We are also focused on expanding services within POOL and are developing network to easily connect homeers to the appropriate partner and service provider to take care of their needs and a proactive improvement situation.
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Speaker 3: We're also developing more connected products that provide information about the form-server equipment that will enable our channel partners to quickly react to the needs of the consumer.
We're also developing more connected products that provide information about the performance of our equipment that will enable our channel partners to quickly react to the needs of the consumer.
Speaker 3: When we talk about strategic growth initiatives to accelerate the top line, this is about prioritizing, sequencing, and resourcing. The critical few ideas that we can deliver to our customers while also driving shareholder value. This is primarily around investments that are leading pool and water treatment businesses, but there are other opportunities such as our sustainable gas business in industrial and flow technology.
When we talk about strategic growth initiatives to accelerate the top line Miss about prioritizing sequencing and Resourcing. The critical few ideas that we can deliver to our customers while also driving shareholder value.
This is primarily around investments that are leading pool and water treatment businesses, but there are other opportunities such as our sustainable gas business.
In industrial and flow technologies.
Speaker 3: We are focused in two areas today, bio gas and carbon capture. Our technology helps capture and purify both CO2 and biomethane. In addition to capturing excess CO2 created and manufacturing processes that can be purified and reused.
We're focused in two areas today biogas and carbon capture our technology helps capture and purify both COPD and Biomethane. In addition to capturing excess Sidoti created manufacturing processes that can be purified and reused.
Speaker 3: We are also driving transformation to both unlock value and to fund growth. In 2021, we launched and committed resources to drive transformation across Pentea. This is a multi-year initiative to transform how we do business and how we serve our customers.
We're also driving transformation to both unlock value and to fund growth in 2021, we launched and committed resources to drive transformation across pentair. This.
As a multiyear initiative to transform how we do business and how we serve our customers well.
Speaker 3: We are focused on four transformational areas, pricing, sourcing, operations, and organizational effect.
We're focused on four transformational areas pricing.
Sourcing operations and organizational effectiveness last year was all about completing our planning and assessment phase and we are moving to the implementation phase in 2022.
Speaker 3: Last year was all about completing our planning and assessment phase, and we are moving to the implementation phase in 2020.
Speaker 3: Crising, sourcing, and operations are big opportunities to drive our gross margin improvement, while we expect organizational effectiveness should help drive efficiencies across Pentea. We believe that transformation will be an important contributor to our goal of greater than 300 basis points of margin improvement by 2025. In addition to helping fund our strategic growth initiative.
<unk> sourcing and operations are big opportunities to drive our gross margin improvement, while we expect organizational effectiveness should help drive efficiencies across pentair.
We believe that transformation will be an important contributor to our goal of greater than 300 basis points of margin improvement by 2025. In addition to helping fund our strategic growth initiatives.
Speaker 3: Finally, we believe our balance sheet provides flexibility to our long term value up.
Finally, we believe our balance sheet provides flexibility to our long term value opportunity.
Antero has been a consistent cash flow generator and we have built a successful track record of disciplined capital deployment. We ended 2021 with our balance sheet leverage at only one times, which is below our targeted leverage this balance sheet flexibility allows us to fund acquisitions and our key growth areas such as KBR in water treatment and fleet Cohen.
Pool, which we completed during 2021.
We believe that we are well positioned to continue delivering consistent growth and we look forward to updating you on our journey.
I would now like to turn the call over to Bob to discuss our performance and our financial results in more detail after which I'll provide an update on our overall strategic position.
Thank you John Please turn to slide seven labeled pentair sales performance I.
I will also be discussing slide eight to help frame, how we exited the year and context to our full year performance.
Fourth quarter sales grew 24% with core sales increasing 19% consumer.
Consumer solutions core sales growth was 23% and industrial and flow technologies delivered core sales growth of 13%.
For the full year sales grew 25% with core sales growing 21%.
Tumor solutions deliver 30% core sales growth in industrial and flow technologies saw core sales grow at 9%.
We were encouraged to see price readout, the strongest of the year in the fourth quarter.
Nearly half of the price for the year came through in the fourth quarter.
We have discussed all year with multiple price increases we implemented across all of our businesses and the fact that there has been a delay in some of the price reading out given the strong backlogs we have carried throughout the year we.
We believe the fourth quarter demonstrates our ability to have price read out.
And we expect that momentum carry over into the new year.
For the fourth quarter segment income grew 18%.
Return on sales declined 80 basis points.
Margin degradation reflects further acceleration in inflation. In addition to the lower margin contribution of last year's acquisitions.
We would note that we experienced inflation in the fourth quarter that was double what occurred for all of 2020.
Adjusted EPS grew 24% in the quarter.
For the full year segment income grew 33% and return on sales expanded 100 basis points to 18, 2%.
Adjusted EPS increased 36% for the year to $3 40.
Our tax rate ended the year at 15% and our share count was 167 5 million.
Please turn to slide nine labeled Q4, 2021 consumer solutions performance.
In addition to the fourth quarter performance for consumer solutions I will also be referencing that full year performance on slide 10.
Consumer solutions grew sales, 31% in the fourth quarter with pool sales, increasing 35% and water treatment up 23%.
For the full year consumer solutions grew 34% with pool up 40% for the year and water treatment increasing 24%.
Growth was fairly consistent throughout the year and a testament to the hard work of the teams to meet record demand, while facing significant supply chain disruptions throughout the year.
The pool industry has received a great amount of attention the past couple of years with the acceleration of demand.
Were already positive industry dynamics have grown stronger.
Pools have become enhancements to residential properties and are desirable features that new homebuyers are searching for and their future homes.
Population migration to warmer climates as another positive trend for the industry as homeowners are looking to add pools to existing homes or purchase new homes with pools and warm weather states.
We believe the science continues to be strong for pool growth to continue not only in 2022, but well into the future.
Channel inventories ended the year approaching levels more in line with historical levels.
There are still some product lines and geographies, however, where channel inventory levels are not back to normalized levels.
Our full team did a great job meeting robust demand, while managing supply chain disruptions and expanding capacity at the same time we.
We have also developed capabilities to enhance our ability to better procure products and improve a smoother delivery for our customers.
We completed the co acquisition during the quarter and this adds to pools aftermarket capabilities.
<unk> made great progress in improving its customer service capabilities and we believe that continues to be a differentiator for our leading pool business not only with industry dealers, but increasingly with consumers.
We saw strong growth across all product categories, and we believe that pool exited the year better positioned to face the ongoing supply challenges in order to continue meeting strong industry demand.
Water treatment saw continued growth in residential and further improvement in commercial with.
In residential we saw growth across all channels and within our legacy tanks and valves businesses.
While the teams, we're battling inflation and supply chain challenges throughout the year, we continued to invest in the future.
With Roche and being integrated at the Pentair at the beginning of 2021, we made great progress in commercializing. The first product that is expected to be launched this year.
We are excited about the innovation that Roche and brings to consumers around point of views countertop technology, and we look forward to updating you on the progress of the launch as the year progresses.
The recovery in our commercial business continued with industry traffic is still not back to 2019 levels.
We continue to focus on the integration of <unk> and the creation of an end to end solution for our customers has generated an increasing amount of interest.
By offering both products and services, we believe our commercial business is better positioned to benefit from continued recovery in the industry. In addition to benefiting from new customers that are showing interest in our solutions.
For the fourth quarter consumer solutions grew income, 10%, while Ross declined 410 basis points.
The margin decline is due to three areas.
First both <unk> fleet co joined Pentair with lower margins than our segment average.
<unk> in particular as a services business with lower Ross with strong recurring revenue and cash flow.
Second the margin pressure is in the form of higher inflation, which should not come as a surprise.
In fact consumer solutions experienced nearly half of its full year inflation in the fourth quarter alone.
Finally margins were under pressure due to ongoing supply chain disruptions that have continued to be a challenge.
For 2021 consumer solutions group segment income, 32%, while margins were down slightly for the year due to the fourth quarter inflationary pressures that we experienced.
We believe that this will begin to move back in the right direction, starting in the second quarter as price catches up with inflation.
And we began to see some pressure taken off of many areas of our supply chain.
Please turn to slide 11 labeled Q4, 2021 industrial flow technologies performance.
In addition to the fourth quarter performance for industrial and flow technologies I will also be referencing the full year performance on slide 12.
ISP grew sales, 14% in the fourth quarter with residential flow up 14% commercial flow, increasing 4% and industrial filtration growing 24%.
For the full year, <unk> sales, 12% with residential flow up 15% commercial flow, increasing 6% and industrial filtration up 12%.
Residential flow delivered double digit sales growth all four quarters of 2021.
We believe many of the population trends that have been driving demand for pool are also benefiting residential flow.
Our broad portfolio of products are found in more rural and suburban areas. We.
We exited the year with strong tailwind as many of our dealers are still facing low inventory levels.
The growth in residential flow is all the more impressive given the strong focus on complexity reduction.
The business exit many older or less profitable product lines.
Commercial flow has been focused on complexity reduction and improving margins with good progress made throughout 2021.
We have seen improvement in our water supply and disposal businesses, while infrastructure has slowed due in large part to us being more disciplined on that.
Industrial filtration has benefited from stabilization at some of the smaller product lines.
Both food and beverage and sustainable gas continues to build backlogs and see their businesses readout.
We have seen accelerating interest in our Brewers assessed Iot enabled service for brewing and we now have over 20 connected systems.
Sustainable gas experienced strong double digit growth in 2021 and exited the year with further increases in backlog.
We have had good success in our biogas offerings with a number of wins during the year and the final remains strong.
We're also seeing more and more interest in our carbon capture technology.
For the fourth quarter Iot grew segment income, 63%, while Ros expanded 440 basis points.
For the full year Iot grew segment income, 30% and Ros expanded 210 basis points to 15%.
IFC was hit, especially hard on the demand side when the onset of COVID-19 brought demand to a halt.
The business is focused on the elements within its control and the combination of growth and higher margin businesses further complexity reduction and overall productivity.
These evolving contributors to the rebound in margins throughout 2021.
I a piece or all three of its businesses exiting the year with strong backlog and we would expect another year of growth and margin expansion for Iot.
Please alert please turn to slide 13 labeled balance sheet and cash flow.
This slide is one we have been proud of all year and it improved as we ended the year.
For 2021, we generated $557 million of free cash flow.
We ended the year with our balance sheet Levered at only one times.
And our return on invested capital exceeded 19%.
We returned roughly half of our free cash flow to shareholders through dividends and share repurchases we.
We also funded two strategic acquisitions, <unk> and <unk> to further the strategies of water treatment and pool.
It is worth noting that <unk> co also contributed a little to Iot as it brought some clean clean air filtration technologies.
It nicely with one of our existing product lines.
Drill filtration.
We plan to remain disciplined with our capital and we believe that we have more than enough flexibility to return capital to shareholders and fund growth both organically and through acquisitions.
Please turn to slide 14 labeled Q1, and full year 2020 to pentair outlook.
Today, we are introducing Q1 and full year 2022 guidance.
For the full year, we expect sales to grow 6% to 9%.
Segment income to grow 10% to 13%.
And adjusted EPS of $3 70 to $3 80.
We're up 9% to 12%.
Embedded in our guidance is our continued expectation for growth in all three of our verticals.
Residential is roughly 60% of our sales with 80% of that surfing replacement and only 20% exposed to new construction.
While we would expect new construction overall to moderate following two stellar years of growth we.
We believe this will free up labor to serve strong demand in the replacement market that has been underserved due to the growth in new construction.
Commercial represents roughly 20% of sales primarily in our water treatment business.
We are encouraged with the growth at commercial experienced in 2021, given that industry volumes are still not back to 2019 levels.
Industrial is the remaining 20% of sales and a strong exit to 2021 across ISP informs our expectations than industrial growth should continue in 2022.
Within our full year sales guidance, we expect consumer solutions to grow mid to high single digits.
<unk> to grow approximately mid single digits for the year.
On the income side for the full year, we do expect price to offset inflation given that many pricing efforts. We undertook in 2021 are reading out and we expect inflation headwinds to lessen in the back half of the year.
We also expect that our transformation activities will move to the execution phase and benefit us in 2022 and beyond.
As a result, we expect further ros expansion in 2022 to approximately 19%.
While we expect to see continued topline growth in Q1 due to the strong demand in many of our businesses.
We expect to continue to be challenged with higher inflation and supply chain challenges.
While we anticipate price reading out higher in the first quarter, we do not expect it to fully offset inflation until the second quarter, which is putting pressure on our Q1 profitability.
We do expect roughly 50% of EPS for the year to be in the first half.
In line with historical norms.
Below the operating line, we expect corporate expense to be approximately $20 million in Q1, and roughly $80 million for the full year.
We are forecasting net interest to be approximately $5 million in Q1 and between $16 million to $18 million for the full year.
We expect the tax rate to be roughly 16%.
And the share count to be 167% to $168 million for both Q1 and the full year.
Finally, we expect free cash flow to approximate net income.
I would now like to turn the call over to Stephanie for Q&A.
After which John will have a few closing remarks.
Stephanie Please open the line for questions at this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad again that is star one.
First question comes from the line of Andrew Kaplowitz with Citigroup.
Good morning, guys good morning.
Good morning.
John you've talked in the past about construction moderating replacement accelerating but you've talked about dealers having backlog in the second half of the year and pool. So do you basically have visibility into the end of the year at this point in pool and I think you mentioned channel inventories are more normalized but not completely normal.
So can you give us more color there and then why wouldn't be a big number for pool with 22, so pool revenue can be at or higher than that consumer solutions guidance of mid to high single digits.
Yeah, I'll take the first part I'll have Bob.
Chip in here yeah.
We're exiting the year with a pretty lofty backlog and while inventories in the channel have moderated to more normal levels, we're still seeing strong sell through and we're still chasing our backlog and trying to work it down so you're seeing that impact in Q1 and Q2.
As we think about the year the way the full year will play out most of the dealers will take stock of where they are some time around the Q3.
Quarter, and then assess what the 2023 outlook looks like and then adjust either their inventory or their purchasing desires as they head into the 2023 full year. So we have visibility that we feel like there's pent up demand, but we won't know exactly how that's going to play out in Q3 Q4 and next year until we get through Q2.
Bob you want to add the pricing comments, yeah, we expect pool will have another strong year after growing 17% two years ago and 40% last year, we expect significant growth again from pool.
We want to be realistic in our guidance and not to get ahead of ourselves Covid continues to be a challenge, but we do expect a strong.
Full year led by price.
Got it guys. That's helpful. And then can you give us a little more color on the implied margin that you were assuming for 'twenty two for both of your segments. I know you mentioned the acquisitions diluting consumer solutions inflation pressure, but are you assuming flat to down margin in consumer and then can you sustain the strong incremental.
And as you achieved in the second half of the year and I S T.
So to answer the question overall for for Pentair, the guidance that we've given as the Ross expanding to 19% from that 18, 2% that we finished 2021 with so up 80 basis points after being up 100 basis points and very much in line.
<unk> with what we discussed at our.
Analyst day earlier in 2021.
We would be disappointed if <unk>.
Consumer solutions did not expand its Ross.
For 2022, and certainly we see continued momentum with from from IMT.
So again helped by <unk>.
Price cost favorability for the year and the transformation activities, but both of the segments will expand margin.
Helpful. Bob Thanks.
Thank you.
Your next question is from Joe Giordano with Cowen.
Hey, Good morning. This is Rob Jameson on for Joe I, just wanted to quickly touch on like inventories it looks like there's a little bit of build in the quarter here.
Is that just you know.
Trying to get yourself set up where you can help meet demand for for 2022 I'm. Just wondering if you could provide some color there.
I'm a little bit of the build is acquisition related around.
Felipe Cohen and Kpis.
First is us setting ourselves up for the higher demand in.
In 2022.
Overall, they thought had very much in line with what we've seen historically.
Okay. Thank you and then I'm sorry, if I missed this but what's the what's the pool growth embedded in your guidance for the full year.
Have any breakdown between new versus replacement.
We've given guidance for consumer solutions up mid to high single digits. So you can extrapolate from that what you say.
Thanks, Paul or might be.
And.
I would say that our water treatment will continue to have another good year, but we've given guidance that the consumer solutions level.
Okay. That's great and then if I could just sneak one more in I appreciate the sustainable gas update that you provided it sounds like that business is performing well.
Im just wondering if you could kind of talk about the growth opportunity there.
We've seen a lot of corporations come out with our carbon reduction carbon neutral initiatives for 2000 22000 32050.
Not looking for guidance, but just how should we be thinking about that growth opportunity for you going forward like in the medium term do you think that should help accelerated what are your thoughts there.
Yes, I mean, we grew that business roughly 20% last year and we would think that we can continue to grow.
As we look into 'twenty, two and beyond.
Clearly all of those initiatives, creating an opportunity for us to participate.
In quotes and activity and we're really encouraged about what the potential front log in backlog could look like in this business.
That's great. Thanks, so much.
Thank you.
Your next question is from Mike Halloran with Baird.
Hey, good morning, gentlemen.
Hey, good morning.
So could you just talk through some of the competitive dynamics in the pool space right now.
I think different players are deciding to go out with price increases of different times handle handling backlog changes differently.
No capacity Onboarding differently. So maybe just kind of sync all those things together talking about how pentair is doing in the marketplace.
And also layer in some capacity commentary there if you don't mind.
Yes, maybe I'll start with that one and then.
But.
John add to it.
Obviously the demand has.
Been strong within the pool business.
Backlogs.
We're up significantly most of last year and coming into this year.
We.
As we looked at the backlog.
Last year wanted to honor the commitments that we made to our customers.
That loyalty was important and will serve us very well in the future.
When we look at the backlog entering the year.
That backlog has been re priced and will read out fully in the second quarter.
So we think we struck the right balance.
Around dealing with the higher orders in the backlog.
That that re pricing of the backlog will help us.
With our strong second quarter.
And it's not lost on us that our Q1.
Started.
Below the guidance the consensus that was out there and thats because price does not fully readout in the first quarter and inflation remains high.
The good news from our perspective is that.
Q2 will rebound quickly.
So we're not asking for investors to wait for the back half of the year Youll see a strong first half.
Pat there.
Is that back.
Backlog re prices in the second quarter.
That would be my response to your question John is there anything that you'd want to add no Mike I think Bob Bob answered that.
Great and then second question just on the complexity reduction initiatives.
<unk>.
Where do we stand in as far as that journey goes and what are what are the next steps as you look forward from here.
Yeah, I think we've made tremendous progress and I want to compliment the team.
This business, while Mike I mean, these are 100 year old brands 100 year plus brands right. So there's there's a lot of skus and a lot of part numbers and they've been doing a really good job of reducing and trying to aggregate into more common buys and more common part numbers and products. So I'm excited about where we have progressed.
From two but that being said, there's still so much substantial opportunity in front of us.
Just the way that we.
Think about our global supply chain think about the way that we bring a product through distribution.
And I'm really excited about the momentum, but I'm more excited about the opportunity.
Yes.
I appreciate it thank you.
Thank you.
Your next question is from Jeff Hammond with Keybanc capital markets.
Hey, good morning, guys.
Good morning.
So just back on price.
How should we think about price in the guide I mean, I think you've got five points in 2021, and maybe it looks like a mirror image in 'twenty two but.
Just how much price is kind of built in.
Yeah.
The best way to think about it is.
<unk>.
The growth guidance that we gave is primarily price. So if prices are significant yet.
Impact to our overall revenue growth.
Little bit of acquisitions, but primarily price.
Okay, and then just on supply chain.
Can you maybe just speak.
As you know third quarter, what you see is starting to get better or stabilizing and what's still.
Maybe most challenging.
Yeah, I'll start and I'll have Bob chip.
I'm actually proud of the fact that we made sequential progress every year or every quarter within 2021, which means we expanded our capability and processes. So we still got the same global supply shortages that everybody else is dealing with and were still balancing around the freight disruptions and needs.
About getting the product to the right locations at the right time and I think the team has done a great job of moving through all of that as we started 2022.
Covid reared its ugly head again in the form of Omicron, and we still have to use them as rates.
Increase in our factories for the first time in a very long time, but what you also saw those same increases across the entire global supply chain and so I think as we think about it getting better which it is better now we still have to think that we're not through this and we need to be cautious and realistic about what Q1 could look like.
Okay. Thanks, guys.
Thank you.
Your next question is from Nathan Jones with Stifel.
Good morning, everyone.
Good morning, good morning.
Just a question on on some of the volume it sounds like volumes.
Roughly flat in the guidance.
Love your commentary there that it's primarily price a little bit of acquisitions.
I know you talked about expecting you can.
Instruction to moderate a little bit can you talk about which pieces of the business that you're thinking are going to see volume growth in which patients are likely to see some modest volume declines.
Yeah, I mean, I think it's prudent to enter 2022 steel still optimistic and excited about the contributions that we're making especially in water treatment residential irrigation flow and pool across the residential channel and I think if we were thinking about the first half versus second half, we think we have volume price and equity.
Contribution.
In the first half and I think we have a little bit of volume moderating as far as the thoughts around the new housing builds and or the way the channel reacts to those expectations for 2023, so while we still feel really good about where these markets are going.
It's it's prudent at this stage to assume that we'll see a little bit of moderating in the back half of the year as it relates to people taking stock of the 2023.
<unk> season.
So a little bit of just caution on the back half given some answer D. There at the moment.
Second question I wanted to ask was one of your prepared comments. John you said you were looking to build a more sustainable supply chain can you talk about what that means to pentair and how you measure those the to try and ensure a more sustainable supply chain.
So we are spending in one of our top transformation initiatives is sourcing.
And like many other companies our global sourcing.
You know just a whole entire supply chain is from 10 to 15 years ago and you can see that there's been more of a.
Demand in the United States and more on shoring and we've got to make sure that our supply chain is related to the lead times that we need for our customers and is optimized which you know.
It's not just a cost issue, but it's a total landed in total end to end cost.
As well as making sure it has the right availability.
No.
You can measure it through our west expansion and you can assume that as far as our transformation initiatives over the next several years, we believe sourcing was a significant contributor to that expansion.
Okay. Thanks for taking my questions.
Thank you.
Your next question is from Brian Lee with Goldman Sachs.
Hey, guys. Good morning, Thanks for taking the questions kudos on the strong quarter.
I guess a couple questions just again around the guidance.
Q1 revenue guidance, it's a it's only a bit ahead of revenue growth outlook for the full year.
Comps, obviously are going to be much tougher for you in the second half, but are you expecting to kind of maintain positive growth year.
Year on year through 2022 is Q1 kind of the high watermark here, just how should we be thinking about seasonality in 2022.
That's that party is what's encouraging about our guidance as we see growth throughout the year, even as we bought up against those those tougher comparison in Q3 and Q4.
Obviously, it helps having the stronger price that's built in in the price reading out fully in the second quarter, but overall pretty good balance you know, we mentioned that there'd be 50% of our EPS in the first half of the year and the remaining 50% in the back half that's more in line with historical norms.
John touched on the fact that we've given realistic guidance that we have not gotten ahead of ourselves on volume for the back half, but hopefully we will be pleasantly surprised there with the positive trends that we talked about in our prepared remarks. So our view is that we'll have a very strong and balanced 2000.
'twenty two that will enter 2023 with lots of momentum.
Around the demand and also the transformation.
One thing I'll add to Bob's comments, because I think he answered that very well is that Q2 is historically, our strongest quarter and we think 2022 that that is how it will play out again.
Okay.
Alright, that's super helpful. And then I guess just shifting.
Shifting to <unk>.
The profitability I know you alluded to this a few times throughout the call but.
Segment income is flat in Q1.
You are expecting EPS and income growth.
To be ahead of revenue for the year off with 19% and I think you've quantified kind of the price, but there's a few other moving parts.
That gets you kind of that that leverage as you move through the year can you give us a little bit more qualification outside of price as to you know what some of the big levers are.
To get our earnings they don't come close above revenue for the year and for that Ross.
To get to that 19% expansion level. Thanks, guys.
The expansion in margin from the 18th two that we did in 2021 to 19, we'll be primarily us.
Being ahead from a price cost perspective, so overall, we're very feel very confident that price.
Well exceed inflation for the year that will help expand margins and then the transformation we talked about.
<unk> opportunities sourcing operation and then organizational.
<unk> fees that we would drive 2021 was very much a planning year for transformation, we're moving into the execution phase in 2022, and that's going to significantly help our ros expansion as well.
Alright, Thanks, a lot guys.
Thank you.
Your next question is from Bryan Blair with Oppenheimer.
Thanks, Good morning, guys.
Good morning.
I was just hoping you could offer a little more color on fleet kill integration and Hell, hopefully just performing relative to your deal model and in the early stages and I think you would you would frames something in the range of a 100 million of of revenue and Ross.
You know approaching 20% is that still the outlook.
Yeah. Our fleet co is performing very well. It was included in our for a couple of months in our Q4 results very.
Very strong aftermarket business, great cultural fit with our pool business and very much in line with the numbers that you've talked about so.
For us just a.
Strategic acquisition, it performing very well.
I appreciate the detail.
A follow up.
Is there any nuance or anything unusual and how the assets being managed.
I believe it's about two thirds pool, some more b to C alignments, and one third industrial filtration more <unk> type exposure.
Just curious how you are managing that now being in the consolidated portfolio.
Yeah.
Really we've talked about you are right in terms of the two third one third split and we talked about the.
The filtration business fitting nicely with our <unk> portfolio in terms of that one third so really.
Not operating it much differently than how fleet co ran it.
They have a separate manufacturing facility in Louisville.
The factories are running well and.
Again, they benefit from having being part of our consumer solutions portfolio and also our IMT. So really no significant difference from from how that business was run in the past it's been run as you know the unit itself is being run.
Same way in the past and then we're scorekeeping the ICT related revenue in Iot and the pool related Rev.
Revenue in consumer solutions.
Understood that makes sense. Thanks again.
Thank you.
Your next question is from Deane Dray with RBC capital markets.
Thank you and good morning, everyone.
<unk>.
Our impressive.
Growth in pool for 'twenty, one and and also your implied guidance. There. So like seeing that just a couple of clean up questions on pool.
Just to add.
This got discussed last quarter, but just to verify there was no early by.
This quarter it was not needed and just what's your perspective on that.
Yeah, I mean, there was a modest early buy to what we'd call the non warm weather states Dean so.
But it was it was managed very very modestly in the in the extent that we're just positioning them to have the inventory they need for.
Are there particular.
Business when it ramps up in Q2, and obviously not running the program was really more about that we're still in catch up mode from backlog and it made little sense to put more backlog on top of existing backlog. So.
I think as we head into next year. We're planning that you know will have some level of that as we take a take stock at the way the channel may or may not need to position itself for 2023.
Good and.
As a resident of one of those non warm weather states I. Appreciate your comments about the migration trend that's happening into a warmer states.
So that would suggest the demand will be there, but how about the capacity either.
Ill or pool build capacity do you think that will take time as that increase.
Increasing.
A proportion or will that take some time to read out.
Yeah, as Bob was saying I mean, the channel has historically and we think it played out exactly this way in 2021 as well you know puts.
Puts their energy towards the new pools, and then begins when that starts to.
Moderate moves to the remodel pools, and then get serious about the aftermarket upgrade opportunity. So it's generally worked in those three tiers.
And that's why we're excited that as it moderates the new pool builds we get that focus again on getting those variable speed pumps, the Leds more timeless pools back into either the remodel pool or the aftermarket upgrade side to the service channels. So you know this.
This is a great industry.
It's a great set of products and we wanted to come back to what I'd call a more normalized pattern, which gives us that better predictability to manage our supply chain more efficiently.
Got it and then just last one for me is we have seen already seen this earnings season of companies, giving what constitutes lower first quarter guidance and certainly effects of price cost is.
And inflation.
Chronic such right is it sector watch so we're really not surprised to see that but I did like seeing a point estimate and your guidance, which would suggest there's a pretty good visibility for you to give that to be that specific so just maybe talk about the visibility for the first quarter where.
Yeah.
January out of that readout and that would all be helpful. Thanks.
Let me, let me take that one.
It was important for us to indicate that 50% of our EPS would come in the first half in line with historical norms.
We have strong headlight into the second quarter, primarily because of the repricing of the backlog.
We will have that benefit.
In.
In the second quarter more fully so.
The improvement in the second quarter is driven by <unk>.
By price.
Our view is that inflation will continue to be high.
But we will get better in the second half of the year.
So we've not gotten ahead of ourselves with regards to inflation. So good headlights into Q1 and Q2 Youll January for US was to be honest, a little bit slower because of the COVID-19 impact on our suppliers.
And out of our own production facilities. So good news is we've we've seen improvement in the last week or so.
We're wrapping up to achieve our commitment, but we did see a slower start in January and.
That's one of the reasons why we've been able to.
Then have better headlights into the second quarter.
That's completely understandable. Thank you.
Thank you.
Your next question is from Scott Graham with loop capital markets.
Hello.
Mr. Graham go ahead.
Your next question comes from Steve Tusa with J P. Morgan.
Hey, guys good morning.
Good morning, good morning.
Just from that 80% of the pool business that.
You identify as being remodel.
What what did that grow in 2021 in total.
North of double digits.
[laughter] yeah.
That's pretty clear I guess, a little more specifically did it grow above the the aquatics average.
No. It didn't I mean, it was a significant contributor to the 40 ish percent growth that pool had but we saw the new pool increase if you think of that 20% and you think about what size that was up.
It would probably be like half and half contribution from each of those two quadrants.
But see what I was also saying, though theres, an aftermarket and theres the remodel right. So the remodel piece at the best opportunity to talk to the homeowner around.
Upgrades, because you're re plastering. The pool are you doing some other types of things that allow you to add more penetration and then the third element is really more of the service and or the.
Break and fix piece, and we think theres an opportunity to upgrade the channel and the break and fix that was kind of not focused on in 2021, and that's where we think our upside is on the aftermarket side.
And so just to be clear you guys. You guys are guiding like the pool does this volume to be like low singles for the year for 'twenty. One just trying to kind of we're not we're not doubt we're not down Steve I mean, because we you know we see it.
Pretty strong Q1, Q2, and then we feel like we've got the price in the back half of the year, but right now, we're being cautious about where the dealers and distributors, but we repositioning their inventory levels as they look into 2023 and I think what's captured in this particular guide is.
The most realistic case of assuming that there'll be some type of pause as they reset and look forward to what theyre going to do in 2023, and I think it's very important we don't get out ahead of ourselves and anticipate that growth continues and then we're here talking at the end of the year about our adjustments.
Adjustments in the channel in Q3 and Q4 yeah.
Yeah, No no that's no that's totally fair.
So you've been talking you talked a lot about your opportunity I mean are you, saying that you think that the.
Let's call it the non new consumption.
Everything not not new pool construction.
Consumer spending on like you know everything, but new construction in pools will be kind of your addressable market I would call. It that will be kind of flattish on Brazil outperformed because you'll be able to kind of execute on these opportunities we're talking about.
Is that political is about it.
Okay.
I don't think Thats, a bad way to think about it I think we believe we see the thrust of the new pools being finished right and theres still going to be we think new pool demand continues to increase.
As we head into 2023, we think the market will continue to reposition the labor to serve the remodel side and then we will move into the aftermarket side of the equation and then Steve not to not to really confuse you, but I think we see product lines like heaters moderate which has been a huge product line growth.
Play for US right as people moved into those.
States and extended their season, there was a big heater penetration and then we think things more on the autonomous the.
Automation coordinators those types of things start to see more penetration in accelerating and those two things start to offset each other.
Okay Awesome Kokkola Crusade.
Thank you.
Your next question is from Brett Linzey with.
Ms Zhu home.
Thank you and good morning all.
Hi, Brett, but wanted to hey wanted to come back to the price and repricing, obviously outsized versus history, given the operating backdrop get that.
Are those actions list price increases are you seeing some surgical surcharges around logistics and just thinking if we do see a pullback here in commodities or other inflationary pressures do you see some of that price receipt or what's been the historical precedent there.
We are focused on list.
So what Bob is sharing with you is list price increases.
And ultimately we care most about realized.
Prices right. So we don't want to just raise list pricing and negotiated away. So we believe that we're in what we're sharing with you today as are our realistic view of what we're going to realize in 2022.
Okay got it and then.
Consumer very strong pricing in Q4 10 points is that actual like for like price or is part of that mix.
Mix up.
The higher Asps, given the industry shift from single speed to variable speed or is that just simply all pure price.
That is price.
So there is no mix okay.
Great and then just last one if I could sneak one in here just recently.
In regards to the Doe efficiency change over last year.
Fairly significant step up in the cost of the replacement pump as we entered the selling season do you guys see or expect any negative demand response, there to those higher prices or do you actually think the ESP starts to gradually come down as that becomes the base offer any thoughts there.
No I think we think that that continues to be the heartbeat of the pool pad is where people are you you need that product to run your pool and theres been a significant.
Interest level is upgrading and even in within 2022, where we're launching a new version of that which even smarter than the current version and we think we will continue to see the interest level there from the trade channel and the consumers.
Okay, great. Thanks, a lot last longer is better and it's ultimately chosen because of its variable speed in the energy efficiency, but it's just a better overall product.
Mhm makes sense, okay. Thanks, a lot appreciate the color.
Thank you.
Your next question comes from Josh Pro question Winski with Morgan Stanley .
Hey, good morning, guys.
Hi, Jesse.
Hey, John I want to follow up on Steve's question regarding tenants or model versus replacement dynamic so everything outside of the new in the pool space, but what's kind of the typical level of visibility that you would have I would guess and remodel because break fix sort of implies that you don't see it coming.
What do you normally have at this time of year like maybe some context on what you have this year.
Just doesn't seem very consumer like to play in the stuff out too too far in advance.
But I get that maybe there is some deferrals or lack of availability from from last year. So how does that look and how would you kind of numerically score it.
Yeah, I mean, the pool season plays out through Q3. So it starts in Q4 and it goes out to Q3 of 2022 as an example, and we feel like we've got really good visibility and we partner really well on that particular part.
Yeah.
There is the dynamics of how they do against their volume discounts and rebates that go into that Q3 by and then we start all over again in Q4 of 2023, and we're not we're not signaling anything other than we have great visibility this year.
And we are pausing as we think about working with the channel to see what they see for 2023.
It's confusing is.
It's the same dealers, who do the news it's the same dealers that do the remodel and most of those same dual dealers also do service, so it's where they spend and focus their time.
We're always working with them. So we see the visibility, thereby but we want to be a little bit more surgical on where they are spending the time and then give them the tools and capability to begin to work with consumers on getting those upgrades on the aftermarket pads.
Got it that's helpful. And then your dealers are obviously very integral to the business kind of across the various product lines.
The place where you're watching for bottlenecks on the installer side, so not a pentair employee per se, but kind of further down the chain, where the industry just can't grow faster because theres not enough warm bodies turning wrenches.
Well, we've seen it this year I mean, it's not just the labor. It's also the supply availability of all the products that go into the pool around the pool right.
And it's getting better I think the supply chain is better so it's probably taking a little less time to build those pools, but that's delayed the remodel efforts, which is then delayed some of the aftermarket effort. So I'd say I think this is going to be a great pool season, and I think we're going to continue to see the sustained demand into 2023.
I just think right now we are we're making sure that we call 2022 pool season accurately and then we'll deal with 2023, when we're done with 2022.
Alright, Thanks, guys best of luck.
Q.
Okay.
Thank you we have reached the allotted time for questions I would like to turn it back over to John Stout for closing.
Thanks, Stephanie and thank you for joining US today, we have delivered on commitments in 2021, whether measured by sales income EPS cash flow or ROIC.
The good news is we believe there is still significantly more value to deliberate pentair since.
Becoming a pure play sustainability focused company in 2018, we've been building a track record of consistent growth, while also driving our commitment to creating long term shareholder value.
We are proud of our pool business with pentair as more than just a pool equipment provider, our water treatment flow and industrial solutions offerings are all proving to be sustained value contributors within our portfolio.
When we combine our growth momentum with our transformation efforts and our balance sheet I am excited about the future value creation opportunities for our shareholders.
If any you can conclude the call.
This concludes today's conference call you May now disconnect speakers. Please hold the line.
Mhm.
[music].