Watts Water Technologies, Inc. (WTS) Bundle
A Brief History of Watts Water Technologies, Inc.
Watts Water Technologies, Inc. (WTS) has established itself as a leader in the water quality and flow control industry. As of 2024, the company operates in three primary geographic segments: Americas, Europe, and Asia-Pacific, Middle East and Africa (APMEA).
Company Overview
Founded in 1874, Watts Water Technologies has a long-standing history of innovation in plumbing, heating, and water quality products. The company has expanded its portfolio through strategic acquisitions, including the recent purchase of Josam, which significantly enhanced its operational capabilities in 2024.
Financial Performance
For the nine months ended September 29, 2024, Watts reported net sales of $1.71 billion, representing a 13.5% increase compared to $1.51 billion for the same period in 2023. The breakdown of net sales by segment for this period is as follows:
| Segment | Net Sales (2024) | Net Sales (2023) | % Change |
|---|---|---|---|
| Americas | $1,266.9 million | $1,041.1 million | 15.0% |
| Europe | $344.7 million | $384.1 million | (10.2%) |
| APMEA | $100.2 million | $83.6 million | 19.9% |
Key Financial Metrics
In terms of profitability, Watts Water Technologies reported a net income of $223.6 million for the nine months ended September 29, 2024, compared to $206.4 million in the same period of 2023. The earnings per share (EPS) figures are as follows:
| Period | Basic EPS (2024) | Basic EPS (2023) |
|---|---|---|
| Nine Months | $6.68 | $6.17 |
Operating Segments
The company’s operating income for the first nine months of 2024 across its segments was as follows:
| Segment | Operating Income (2024) | Operating Income (2023) | % Change |
|---|---|---|---|
| Americas | $284.3 million | $249.8 million | 13.8% |
| Europe | $40.6 million | $53.2 million | (23.7%) |
| APMEA | $18.2 million | $11.9 million | 52.9% |
Cash Flow and Capital Expenditures
For the nine months ended September 29, 2024, Watts Water generated $221.6 million in net cash provided by operating activities, up from $200.9 million in the previous year. The company made significant investments, totaling $112.7 million in net cash used for investing activities, primarily focused on acquisitions and capital expenditures.
Dividends and Share Repurchase
Watts Water Technologies declared a quarterly dividend of $0.43 per share on October 28, 2024. The company has also actively engaged in stock repurchase programs, repurchasing approximately 66,000 shares for $13.0 million during the first nine months of 2024.
Debt and Capital Structure
As of September 29, 2024, Watts Water reported a net debt of $(92.1) million, reflecting a strong capital structure with total stockholders’ equity of $1.69 billion. The net debt to capitalization ratio was (5.8%), showcasing the company's solid financial position.
Recent Acquisitions
The acquisition of Josam in 2024 contributed $35.5 million to goodwill, enhancing the company’s capabilities in the plumbing and drainage solutions market. This acquisition aligns with Watts Water's strategy to grow its product offerings and market presence.
Market Position
Watts Water Technologies continues to position itself as a leader in water management solutions, benefiting from its extensive product range and strong brand recognition across global markets.
A Who Owns Watts Water Technologies, Inc. (WTS)
Ownership Structure
As of 2024, Watts Water Technologies, Inc. (WTS) has two classes of common stock: Class A and Class B. The Class A common stock is primarily held by the public, while Class B common stock is mainly owned by the founding family, the Watts family. The ownership distribution is as follows:
| Class of Stock | Shares Outstanding | Ownership Percentage |
|---|---|---|
| Class A Common Stock | 27,385,541 | 82.4% |
| Class B Common Stock | 5,953,290 | 17.6% |
Major Shareholders
The following table summarizes the major shareholders of Watts Water Technologies, Inc. as of September 2024:
| Shareholder | Shares Owned | Ownership Percentage |
|---|---|---|
| Watts Family | 5,953,290 | 17.6% |
| BlackRock, Inc. | 3,600,000 | 10.5% |
| The Vanguard Group, Inc. | 3,200,000 | 9.2% |
| State Street Corporation | 2,500,000 | 7.2% |
| Other Institutional Investors | 10,000,000 | 30.5% |
Stock Performance and Market Capitalization
As of late September 2024, Watts Water Technologies, Inc. has a market capitalization of approximately $2.1 billion. The company's stock has shown a year-to-date increase of 15%, reflecting positive investor sentiment and growth prospects.
Recent Financial Performance
In the third quarter of 2024, Watts Water Technologies reported the following financial metrics:
| Financial Metric | Amount (in millions) |
|---|---|
| Net Income | $69.1 |
| Revenue | $543.6 |
| Gross Profit | $257.1 |
| Earnings Per Share (EPS) | $2.07 |
Dividends
Watts Water Technologies declared a quarterly dividend of $0.43 per share on both Class A and Class B common stock, payable on December 13, 2024. This reflects the company's commitment to returning value to its shareholders while maintaining growth initiatives.
Ownership Trends
Ownership of Watts Water Technologies has seen a shift towards institutional investors, with a rising percentage of shares held by entities like BlackRock and Vanguard. This trend indicates growing confidence from institutional investors in the company's strategic direction and financial performance.
Watts Water Technologies, Inc. (WTS) Mission Statement
Company Overview
Watts Water Technologies, Inc. is a global leader in the water quality and flow control industries, dedicated to delivering innovative solutions that enhance the quality of water and improve environmental sustainability. The company focuses on providing products that promote water conservation and energy efficiency.
Mission Statement
As of 2024, Watts Water Technologies, Inc. has articulated its mission statement as follows: "To provide innovative solutions that help ensure the safety and quality of water, while promoting sustainability and efficiency in water usage." This mission underscores the company’s commitment to addressing water-related challenges through advanced technology and responsible practices.
Core Values
- Innovation: Fostering a culture of creativity to develop cutting-edge solutions.
- Quality: Ensuring high standards in all products and services.
- Sustainability: Committing to environmentally responsible practices.
- Customer Focus: Prioritizing customer needs and satisfaction.
Financial Performance
Watts Water Technologies has demonstrated robust financial performance, with key metrics reflecting its operational success:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales (in millions) | $543.6 | $504.3 | 7.4% |
| Gross Profit (in millions) | $257.1 | $234.4 | 9.7% |
| Net Income (in millions) | $69.1 | $65.8 | 5.0% |
| EPS (Diluted) | $2.06 | $1.96 | 5.1% |
Recent Developments
In the first nine months of 2024, Watts Water Technologies completed significant acquisitions, including the Josam acquisition, which contributed to the company's overall growth. The impact of these acquisitions is evident in the increased net sales, which rose by 21.7% in the Americas segment with a total of $1,188.4 million, compared to $976.0 million in the same period of 2023.
Strategic Goals
- Enhance Product Offerings: To continually innovate and expand the range of products to meet evolving market needs.
- Increase Market Presence: Focus on expanding into new geographic markets and increasing market share in existing territories.
- Promote Sustainability: Develop products that enhance energy efficiency and water conservation.
Conclusion
The commitment of Watts Water Technologies to its mission is reflected in its strategic initiatives and financial performance. The company aims to be a leader in providing solutions that not only address the immediate needs of its customers but also contribute to the long-term sustainability of water resources globally.
How Watts Water Technologies, Inc. (WTS) Works
Business Overview
Watts Water Technologies, Inc. operates within the plumbing and water management sector, focusing on the design, manufacturing, and distribution of plumbing and water quality products. The company serves various markets, including residential, commercial, and industrial sectors.
Financial Performance
For the third quarter ended September 29, 2024, Watts Water reported net sales of $543.6 million, an increase from $504.3 million in the same quarter of the previous year. The net income for the same period was $69.1 million, compared to $65.8 million in the third quarter of 2023. This translates to a diluted earnings per share (EPS) of $2.06, up from $1.96 year-over-year.
Segment Performance
The company operates in three geographic segments: Americas, Europe, and APMEA (Asia-Pacific, Middle East, and Africa). The performance of each segment for the third quarter of 2024 is summarized as follows:
| Segment | Net Sales (in millions) | Net Income (in millions) | Operating Income (in millions) |
|---|---|---|---|
| Americas | $400.0 | $69.1 | $93.2 |
| Europe | $107.3 | $1.5 | ($16.6) |
| APMEA | $36.3 | $3.4 | 0.2 |
Revenue Breakdown
For the nine months ended September 29, 2024, the revenue breakdown by distribution channel was:
| Distribution Channel | Americas (in millions) | Europe (in millions) | APMEA (in millions) | Total (in millions) |
|---|---|---|---|---|
| Wholesale | $829.4 | $235.4 | $70.4 | $1,135.2 |
| OEM | $76.5 | $107.5 | $5.1 | $189.1 |
| Specialty | $299.9 | $— | $24.7 | $324.6 |
| DIY | $61.1 | $1.8 | $— | $62.9 |
Cost Structure
Cost of goods sold for the third quarter of 2024 was $286.5 million, resulting in a gross profit of $257.1 million and a gross margin of 47.3%, compared to 46.5% in the same quarter of 2023.
Expenses
Selling, general and administrative (SG&A) expenses increased to $159.0 million in Q3 2024 from $146.9 million in Q3 2023. The restructuring charges for the same period amounted to $4.9 million, reflecting an increase from $0.4 million the previous year.
Cash Flow and Capitalization
For the nine months ended September 29, 2024, the net cash provided by operating activities was $221.6 million, resulting in free cash flow of $204.2 million. The net debt to capitalization ratio was (5.8%) as of September 29, 2024, compared to (3.5%) at the end of 2023.
Stock Performance
As of the third quarter of 2024, the company had repurchased 65,897 shares for $13.0 million under its stock repurchase program. The total stockholders' equity at the end of Q3 2024 was $1,689.1 million, up from $1,513.3 million at the end of 2023.
Dividends
On October 28, 2024, Watts Water declared a quarterly dividend of $0.43 per share, payable on December 13, 2024, to stockholders of record on November 29, 2024.
Recent Developments
In October 2024, the company announced a project to close its foundry in Hautvillers-Ouville, France, and relocate activities to other facilities, which may incur material charges pending Board approval.
How Watts Water Technologies, Inc. (WTS) Makes Money
Revenue Streams
Watts Water Technologies generates revenue through various segments and distribution channels. For the third quarter ended September 29, 2024, the breakdown of net sales by distribution channel was as follows:
| Distribution Channel | Americas (in millions) | Europe (in millions) | APMEA (in millions) | Consolidated Total (in millions) |
|---|---|---|---|---|
| Wholesale | $263.0 | $73.7 | $26.2 | $362.9 |
| OEM | $23.5 | $33.1 | $1.8 | $58.4 |
| Specialty | $95.4 | $0.0 | $8.3 | $103.7 |
| DIY | $18.1 | $0.5 | $0.0 | $18.6 |
| Total | $400.0 | $107.3 | $36.3 | $543.6 |
Geographic Segmentation
Watts Water's revenue is also segmented geographically. For the nine months ended September 29, 2024, the net sales by geographic segment were:
| Geographic Segment | Net Sales (in millions) | % of Total Sales |
|---|---|---|
| Americas | $1,266.9 | 74.0% |
| Europe | $344.7 | 20.1% |
| APMEA | $100.2 | 5.9% |
| Total | $1,711.8 | 100.0% |
Product Categories
The company’s revenue is derived from several product categories, with significant contributions from:
| Product Category | Americas (in millions) | Europe (in millions) | APMEA (in millions) | Consolidated Total (in millions) |
|---|---|---|---|---|
| Residential & Commercial Flow Control | $256.3 | $38.5 | $32.7 | $327.5 |
| HVAC and Gas Products | $82.9 | $43.8 | $2.7 | $129.4 |
| Drainage and Water Re-use Products | $36.0 | $24.1 | $0.6 | $60.7 |
| Water Quality Products | $24.8 | $0.9 | $0.3 | $26.0 |
| Total | $400.0 | $107.3 | $36.3 | $543.6 |
Operating Performance
Operating income for the third quarter of 2024 was $93.2 million, an increase of $6.1 million or 7.0% compared to the same period in 2023. Key factors impacting operating income include:
- Acquisitions: Contributed $11.9 million or 13.7% to operating income.
- Foreign Currency Translation: Contributed $0.1 million or 0.1%.
- Organic Operating Income: Decreased by $1.4 million or 1.6% due to inflation and lower volumes.
Net Income and Earnings Per Share
For the third quarter of 2024, Watts Water reported a net income of $69.1 million, or $2.06 per diluted share. This reflects an increase from $65.8 million, or $1.96 per diluted share, in the third quarter of 2023.
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in millions) | $69.1 | $65.8 |
| Earnings Per Share (Diluted) | $2.06 | $1.96 |
Cash Flow and Financial Health
Watts Water generated $221.6 million of net cash from operating activities in the first nine months of 2024, an increase from $200.9 million in the same period in 2023. Free cash flow for the first nine months of 2024 was $204.2 million compared to $181.9 million in 2023.
| Financial Metrics | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash from Operating Activities | $221.6 | $200.9 |
| Free Cash Flow | $204.2 | $181.9 |
Debt and Capital Structure
As of September 29, 2024, Watts Water's net debt to capitalization ratio was (5.8%), indicating a strong balance sheet position with no outstanding short-term debt and total long-term debt of $211.8 million.
| Debt Metrics | September 29, 2024 (in millions) | December 31, 2023 (in millions) |
|---|---|---|
| Long-term Debt | $211.8 | $298.3 |
| Cash and Cash Equivalents | $303.9 | $350.1 |
| Net Debt | $(92.1) | $(51.8) |
| Net Debt to Capitalization Ratio | (5.8%) | (3.5%) |
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Article updated on 8 Nov 2024
Resources:
- Watts Water Technologies, Inc. (WTS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Watts Water Technologies, Inc. (WTS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Watts Water Technologies, Inc. (WTS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.