Watts Water Technologies Inc. · Q1 2022 earnings

Briefing

Watts Water Technologies reported record results due to double-digit organic sales growth across all regions and strong operating margin expansion.

Watts Water Technologies reported a strong first quarter in 2022, with sales of $463 million, a 12% increase, and organic sales increased by 14%. GAAP EPS was $1.61 and adjusted EPS was $1.63, both up 31%. The company is increasing its full year 2022 outlook for adjusted operating margin expansion to 20 to 60 basis points.

• Sales of $463 million increased 12% on a reported basis and 14% organically, driven by double-digit growth in all regions.
• Operating margin increased 100 basis points on a reported basis and 120 basis points on an adjusted basis, driven by price, volume, productivity and cost savings.
• Americas sales increased 15% on a reported basis and 14% on an organic basis, with most product lines growing by double-digits.
• Europe sales increased 6% on a reported basis and 14% on an organic basis, with growth in both Fluid Solutions and Drains platforms.

Headline financials

Revenue & EPS history

The company is increasing its full year 2022 outlook for adjusted operating margin expansion to 20 to 60 basis points from its previous outlook of zero to 40 basis points. We are maintaining organic sales growth of 3% to 8%, compared to last year, due to the uncertainty caused by the war in Ukraine.