NYSE$WTS

Watts Water Technologies Inc. · Q1 2021 earnings

Q1 2021 earnings · · Investor relations

Briefing

Reported an increase in sales and earnings, driven by strong performance across all regions and effective cost management.

Watts Water Technologies reported strong Q1 2021 results, with sales increasing by 8% to $413 million and organic sales up by 4%. GAAP EPS and adjusted EPS both increased by 31% to $1.23 and $1.24, respectively. The company is increasing its full year outlook for 2021.

  • Sales increased 8% to $413 million; organic sales increased 4%.
  • GAAP operating margin of 14.4% and adjusted operating margin of 14.5%, both up 190 bps.
  • GAAP EPS of $1.23 and adjusted EPS of $1.24, both up 31%.
  • The company amended and extended existing credit facility in the second quarter, enhancing financial flexibility.

Headline financials

Total Revenue

$413M

Previous: $383M+8.0%
EPS (adj)

$1.24

Previous: $0.95+30.5%
Total Organic Sales Growth

3.7%

Previous: -1.2%+408.3%
Americas Organic Sales Growth

3.1%

Previous: 0.4%+675.0%
Europe Organic Sales Growth

1.7%

Previous: -2.3%+173.9%
APMEA Organic Sales Growth

43.2%

Previous: -22.5%+292.0%
Capital Expenditures

-$4.9M

Previous: -$8.9M+44.9%
Free Cash Flow

$36.8M

Previous: $23.1M+59.3%
Net Income

$41.7M

Previous: $32M+30.3%
Operating Income

$59.6M

Previous: $47.8M+24.7%
Gross Profit

$174M

Previous: $163M+6.7%
Cash & Equivalents

$225M

Previous: $245M-8.1%
Total Assets

$1.78B

Previous: $1.77B+1.0%
Stock-Based Comp

$2.9M

Previous: $3.6M-19.4%

Revenue & EPS history

Watts · Revenue · Quarterly

$413M

Q1 2021+8%vs Q1 2020
Beat estimate in 16 of 16 quarters(100%)
ActualEstimate

Revenue by segment

Watts · $413M total across 3 segments · Q1 2021

  • Americas
    $273M+4.0%
  • Europe
    $123M+11.5%
  • APMEA
    $17.6M+76.0%

Forward guidance

The company anticipates that consolidated organic revenues may increase by 2% to 7% and consolidated adjusted operating margin may expand by 30 to 70 basis points, compared to last year.

Tailwinds

  • Consolidated organic revenues may increase by 2% to 7%.
  • Consolidated adjusted operating margin may expand by 30 to 70 basis points compared to last year.
  • Company maintains ample liquidity.
  • Company continues to invest for the future.
  • Company has navigated the pandemic well and is a stronger, more agile company.

Headwinds

  • Market uncertainties, including supply chain disruptions concerns.
  • Inflation requires continued monitoring.
  • Vaccine implementation outside of the United States requires continued monitoring.
  • Market uncertainties could impact the second half performance.
  • Supply chain disruptions could impact the second half performance.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2021

Historical avgQ1 2021

+0.7%

Avg return

Earnings day

+2.1%

Avg return

5 days after

+2.6%

Avg return

30 days after

53%

36 / 68 earnings

Positive

+12.7%

Q2 2015

Best reaction

-7.8%

Q4 2014

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.1%+2.6%+7.6%
Q4 2025+6.8%+4.7%-5.4%
Q3 2025-6.7%-2.4%-3.4%
Q1 2025+10.2%+15.0%+15.6%
Q4 2024+7.6%+2.5%-1.1%
Q3 2024-3.6%-1.1%+9.1%
Q2 2024-5.7%-9.2%-3.7%
Q1 2024+1.0%+2.3%-10.5%
Q4 2023-7.8%-8.2%-5.5%
Q3 2023+7.3%+7.4%+13.6%
Q2 2023+0.8%+3.0%+1.1%
Q1 2023+3.5%+4.7%+3.5%
Q4 2022+3.2%+3.3%-3.1%
Q3 2022-3.8%-1.0%+9.2%
Q2 2022+7.2%+5.8%-1.6%
Q1 2022+7.3%+3.4%+6.2%
Q4 2021-5.0%-8.7%-8.0%
Q3 2021+2.6%+6.2%-2.1%
Q2 2021+2.7%+4.6%+8.8%
Q1 2021+4.2%+10.5%+13.1%
Q4 2020-2.9%-5.3%-4.3%
Q3 2020-1.2%-2.8%+1.5%
Q2 2020+3.5%+8.9%+16.4%
Q1 2020-4.2%-4.7%+11.7%
Q4 2019+7.2%+6.8%-9.0%
Q3 2019-2.2%-0.3%+1.7%
Q2 2019-1.5%-2.1%-2.1%
Q1 2019+2.1%+0.5%-4.0%
Q4 2018+8.6%+5.9%+3.9%
Q3 2018+4.7%+7.8%+3.5%
Q2 2018+0.9%+0.2%-3.6%
Q1 2018+0.4%+3.3%+4.9%
Q4 2017+3.8%+6.0%+10.5%
Q3 2017+4.5%+2.4%+9.4%
Q2 2017+4.7%+3.1%-2.5%
Q1 2017+7.9%+3.8%+3.9%
Q4 2016-3.5%-4.6%-5.5%
Q3 2016+2.6%+5.7%+14.9%
Q2 2016+3.3%+3.5%+8.8%
Q1 2016-3.6%
Q4 2015+3.5%
Q3 2015-6.7%
Q2 2015+12.7%
Q1 2015-1.9%
Q4 2014-7.8%
Q3 2014+2.1%
Q2 2014-1.0%
Q1 2014-6.0%
Q4 2013+2.8%
Q3 2013+0.3%
Q2 2013+0.5%
Q1 2013-4.7%
Q4 2012-2.8%
Q3 2012+6.4%
Q2 2012+3.5%
Q1 2012-1.7%
Q4 2011-0.6%
Q2 2011-0.6%
Q3 2011+0.2%
Q1 2010-1.9%
Q1 2011-1.9%
Q2 2010-4.1%
Q4 2008-4.1%
Q4 2010-4.1%
Q3 2009-0.9%
Q3 2010-0.9%
Q2 2009-1.2%
Q4 2009-1.2%

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