Pentair Reports Slight Decline in Net Sales for Fiscal Year 2024

Pentair plc reported a slight decline in its financial performance for the fiscal year ending December 31, 2024, with consolidated net sales of $4.08 billion, a decrease of 0.5% compared to $4.10 billion in 2023. The company's gross profit increased by 5.2% to $1.60 billion, resulting in a gross margin of 39.2%, up from 37.0% in the previous year. Operating income rose by 8.7% to $803.9 million, reflecting a margin of 19.7%. Net income from continuing operations was $625.6 million, compared to $622.9 million in 2023, leading to earnings per share of $3.78, a slight increase from $3.77.

The company experienced significant changes in its operational segments. The Flow segment saw a 4.3% decline in net sales to $1.51 billion, primarily due to decreased sales volume in residential flow and industrial solutions. Conversely, the Pool segment reported a 6.9% increase in net sales to $1.44 billion, driven by higher demand and the acquisition of G & F Manufacturing, which was completed on December 2, 2024, for $116 million. The Water Solutions segment, however, faced a 3.9% decline in sales to $1.13 billion, attributed to decreased volume and the completion of a large project in 2023.

Pentair's strategic initiatives included the ongoing Transformation Program aimed at enhancing operational efficiency and margin expansion. The company reported transformation costs of $59.8 million in 2024, up from $37.4 million in 2023. Additionally, Pentair implemented an 80/20 analysis to focus on high-value customers and products, which is expected to drive future growth. The company also reduced its workforce by approximately 575 employees as part of its restructuring efforts.

In terms of operational metrics, Pentair's employee headcount stood at approximately 9,750 as of December 31, 2024, with about 50% located in the U.S. The company reported a backlog of orders totaling $611.2 million, a decrease of 17.2% from the previous year, primarily due to improved manufacturing capacity and lead times. Pentair's international sales accounted for 31% of total net sales, highlighting its geographic diversification.

Looking ahead, Pentair anticipates continued challenges from inflationary pressures and supply chain disruptions, which may impact its cost structure and pricing strategies. The company plans to maintain its focus on capital allocation, including reducing long-term debt and returning cash to shareholders through dividends and share repurchases. Pentair's effective tax rate for 2024 was reported at 13.0%, reflecting changes in tax laws and the impact of the OECD's Pillar Two Model Rules. The company remains committed to its sustainability goals and strategic growth initiatives as it navigates the evolving market landscape.