Sep 24, 2023

Watts Q3 2023 Earnings Report

Achieved record sales, operating earnings, operating margin, and EPS, even compared to a strong Q3 2022.

Key Takeaways

Watts Water Technologies reported a 3% increase in sales to $504 million, with flat organic sales. EPS increased by 12% to $1.96, and adjusted EPS rose by 14% to $2.04. The company also increased its full-year 2023 operating margin outlook and completed the acquisition of Bradley Corporation.

Reported sales increased 3%; organic sales were flat versus prior year

Reported operating margin of 17.3%, up 80 bps; adjusted operating margin of 18.0%, up 120 bps

Reported EPS of $1.96, up 12%; adjusted EPS of $2.04, up 14%

Closed on the acquisition of Bradley Corporation on October 23, 2023

Total Revenue
$504M
Previous year: $488M
+3.4%
EPS
$2.04
Previous year: $1.79
+14.0%
Total Organic Sales Growth
0.4%
Previous year: 12%
-96.7%
Americas Organic Sales Growth
0.5%
Previous year: 12.8%
-96.1%
Europe Organic Sales Growth
-0.5%
Previous year: 6.3%
-107.9%
Gross Profit
$234M
Previous year: $218M
+7.6%
Cash and Equivalents
$363M
Previous year: $220M
+65.2%
Free Cash Flow
$182M
Previous year: $34.3M
+430.3%
Total Assets
$2.02B
Previous year: $1.89B
+7.0%

Watts

Watts

Watts Revenue by Geographic Location

Forward Guidance

The company is increasing its full-year 2023 operating margin outlook. Adjusted operating margin is now expected to range from 17.6% to 17.7%, raising the midpoint by over 60 basis points.

Revenue & Expenses

Visualization of income flow from segment revenue to net income