Pentair PLC

Please note, this event is being recorded. I would now like to turn the conference over to Shelly Hubbard, Vice President, Investor Relations. Please go ahead.

Thank you, Drew, and welcome to Pentair's fourth quarter 2023 earnings conference call. On the call with me are John Stouck, our President and Chief Executive Officer, and Bob Fishman, our Chief Financial Officer. On today's call, we will provide details on our fourth quarter and full year performance as outlined in this morning's press release. On the Pantera Investor Relations website, you can find our earnings release and slide deck, which is intended to supplement our prepared remarks during today's call and provide a reconciliation of differences between GAAP and non-GAAP financial measures that we will reference. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the company's performance, in addition to the impact these items and events have on the financial results. Before we begin, let me remind you that during our presentation today, we will make forward-looking statements, which are predictions, projections, or other statements about future events. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Pinter. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors in our most recent Form 10-Q and Form 10-K. Following our prepared remarks, we will open the call up for questions. Please note that we will limit your questions to two after which we ask you to then re-enter the queue in order to allow everyone an opportunity to ask questions. Similar to previous quarters in 2023, we have included slides four through seven in our earnings slide deck, which provide a brief overview of Pinter as well as our investment thesis. I will now turn the call over to John.

Thank you, Shelly, and good morning, everyone. Our record performance in 2023 demonstrates the power of our balanced water portfolio and our focused growth strategy post the separation of Invent. We completed year one with our three-segment structure, flow, water solutions, and pool, and we finished our first full year with Mansfock Ice. Our flow segment, which moves water where it's needed and removes water where it's not wanted, along with our water solutions segment, which improves water, both posted a record year for sales in ROS. And our pool segment, which enables people to enjoy water, delivered record ROS despite significant volume headwinds. I'm extremely proud of our approximately 10,500 global employees for their solid execution in a challenging macroeconomic environment. As we enter 2024, we are leveraging our balanced portfolio for continued growth and profitability with expectations for new records of financial performance. Additionally, we look forward to sharing more about our strategy and three-year outlook at our Investor Day on March 6. Now let's begin with our executive summary Q4 2023 on slide 8. We finished Q4 with record performance in the fourth quarter post the separation of the invent in 2018, specifically record segment income and ROS, marking the seventh consecutive quarter of ROS expansion. This is important to note with strong comparables in Q4 2022. In the fourth quarter, Sales were down 2%, which included slightly better than expected pool performance. Segment income increased 8%, and ROS expanded by 190 basis points. Adjusted EPS was $0.87, up 6%, and we generated $97 million of free cash flow in the quarter. Let's move to slide 9, titled Executive Summary, Full Year 23. 2023 was a record year for segment income, ROS, and adjusted EPS. post the event separation, as previously mentioned, despite sales ending the year flat. In full year 23, we delivered sales of $4.1 billion, record segment income of $855 million, up 11%, record annual ROS of 20.8%, expanding 220 basis points, and record adjusted EPS of $3.75. Flow & Water Solutions set new sales records in 2023, we delivered significant margin expansion across all three segments setting a new annual record rls for each transformation and solid execution across all three segments continue to drive operational efficiencies throughout the year lastly we generated significant free cash flow of 550 million and increased our dividend for the 48th consecutive year further solidifying our status as a dividend aristocrat let's turn to slide 10 titled Balanced Water Portfolio. We are helping the world sustainably move, improve, and enjoy water through our three segments, each with over $1 billion in sales in 2023, and together creating a balanced water portfolio. Our strategy is working, and we have been delivering on the expectations that we have shared with you. I will now pass the call over to Bob, who will discuss our performance and financial results in more detail.