Pentair PLC

I would now like to hand the call to Shelly Hubbard, Vice President, Investor Relations. Please go ahead.

Thank you, and welcome to Pentair's first quarter 2024 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 first quarter 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-K and Form 10-U. 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 re-enter the queue in order to allow everyone an opportunity to ask questions. Note that we have now published our Pentair Investor Overview on our IR website, which includes the overview slides we previously included in our quarterly earnings presentations. Please visit our Pentair Investor Relations website and click on Events and Presentations to find this new overview. I will now turn the call over to John.

Thank you, Shelley, and good morning, everyone. First, I want to thank all of you who attended our 2024 Investor Day in New York last month. We appreciated your time and your insightful questions as we dove deeper into the business and provided our path to 24% ROS by full year 2026 with the potential for upside. Now let's begin with our strong Q1 results on slide four. The eighth consecutive quarter, we continued to drive margin expansion. In Q1, ROS expanded 90 basis points despite sales being down slightly against peak channel inventory challenges in our residential segments. We exceeded our first quarter guidance as our Pentair teams drove solid execution across all three segments. In the first quarter, segment income and adjusted EPS also increased year over year. Our transformation initiatives remained on track to deliver margin expansion as we highlighted at our recent investor day. Approximately 50% of our total revenue is adopted and implemented value-based pricing as part of our strategic pricing initiatives. We are well into wave two of our sourcing initiatives, which we expect to begin to drive benefits in the second half of this year. And we've continued to drive operational footprint optimization and plan to continue this going forward. And we have recently introduced 80-20 training to 50% of Pentair's revenue streams and have identified some quick wins and larger term opportunities. Lastly, we are encouraged by signs that we are returning to a more normal operating environment for the first time in nearly four years. Both our lead times and our backlog have been normalizing and our order rate trend has been in line with our expectations. As we expect to return to a more normal operating environment, we have seen a mix of trends across our residential, commercial, and industrial verticals within our three segments. For example, in flow, commercial and industrial verticals performed well in Q1, while higher interest rates continue to impact residential and agricultural verticals. Within water solutions, our commercial businesses servicing the food service and hospitality verticals performed as expected. We believe residential will improve as year-over-year challenges moderate. Lastly, in pool, a majority of our revenue is in the Sunbelt states with a focus on higher-end in-ground pools. In Q1, higher-end pools and the Sunbelt states remain resilient with the exception of California, where weather had a slight impact. From our recent dealer survey, remodeled pool projects appear to be increasing, and servicers we surveyed were optimistic about the aftermarket. Let's turn to slide six. Last week, we published our 2023 corporate responsibility report with an update on our progress. At our investor day last month, our leader of ESG and sustainability, Carla Robertson, provided a preview of our 2023 results on this slide. I'm very proud of the work Carla and our sustainability team are doing and the progress our teams throughout the company are making against our strategic targets. Before I turn it over to Bob, let's turn to slide seven. We delivered another quarter of quality earnings with better than expected results. Our investor day key themes remain on track. Our 80-20 training and workshops are underway with what we believe are promising early readouts. And we are reiterating our full year 2024 outlook while introducing strong Q2 guidance, with adjusted EPS midpoint up 13% as compared to the same period last year. All in, we continue to build a strong foundation to drive long-term growth and profitability across our diverse water portfolio. I will now pass the call over to Bob, who will discuss our performance and financial results in more detail.