NYSE$WTS

Watts Water Technologies Inc. · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Record results were achieved, driven by global economic recovery and strong performance across all regions.

Watts Water Technologies reported a record second quarter in 2021, with sales of $467 million, up 38% compared to Q2 2020. GAAP EPS was $1.11, up 88%, and adjusted EPS was $1.48, up 100%. The company is raising its adjusted full year 2021 outlook due to accelerating demand.

  • Sales of $467 million, up 38% reported and 32% organically.
  • GAAP operating margin of 11.3%, up 210 bps; adjusted operating margin of 14.9%, up 380 bps.
  • GAAP EPS of $1.11, up 88%; adjusted EPS of $1.48, up 100%.
  • Increased adjusted full year 2021 outlook.

Headline financials

Total Revenue

$467M

Previous: $339M+37.9%
EPS (adj)

$1.48

Previous: $0.74+100.0%
Total Organic Sales Growth

32.0%

Previous: -19.0%+268.4%
Americas Organic Sales Growth

27.9%

Previous: -18.0%+255.0%
Europe Organic Sales Growth

41.3%

Previous: -21.0%+296.7%
APMEA Organic Sales Growth

51.0%

Previous: -18.0%+383.3%
Capital Expenditures

-$8.3M

Previous: -$14.9M+44.3%
Free Cash Flow

$29.2M

Previous: $5.3M+450.9%
Net Income

$37.5M

Previous: $20.2M+85.6%
Operating Income

$52.7M

Previous: $31M+70.0%
Gross Profit

$200M

Previous: $135M+48.3%
Cash & Equivalents

$240M

Previous: $149M+61.5%
Total Assets

$1.86B

Previous: $1.65B+12.6%
Stock-Based Comp

$7M

Previous: $1.8M+288.9%

Revenue & EPS history

Watts · Revenue · Quarterly

$467M

Q2 2021+37.9%vs Q2 2020
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Watts · $467M total across 3 segments · Q2 2021

  • Americas
    $307M+29.4%
  • Europe
    $137M+55.3%
  • APMEA
    $23.1M+75.0%

Forward guidance

The company is updating its adjusted full year 2021 outlook. We now expect consolidated organic revenue growth of 10% to 14% and consolidated adjusted operating margin expansion of 100 to 150 basis points, compared to last year.

Tailwinds

  • Consolidated organic revenue growth of 10% to 14%
  • Consolidated adjusted operating margin expansion of 100 to 150 basis points

Headwinds

  • Monitoring nonresidential new construction activity
  • Supply chain issues
  • Inflation
  • Vaccine implementations
  • Impact of the virus variants

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 Q2 2021

Historical avgQ2 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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