Watts Water Technologies Inc

Latest Results (19.11.2025):

Watts Water Technologies Inc reported its first quarter 2025 financial results, showing a modest decline in reported net sales to $558 million (down 2% compared to Q1 2024) but demonstrating strength in adjusted performance metrics. The company improved its adjusted operating margin to 19.0% (an increase of 80 basis points) and grew adjusted diluted EPS by 2% to $2.37, even as operating margin slipped by 120 bps. Additionally, a 21% increase in quarterly dividend payments, alongside supportive cash flow and maintained full year 2025 guidance on organic sales and adjusted operating margin, underscored its resilient execution amid market challenges.

Sales Performance

Reported net sales for Q1 2025 were $558 million, representing a 2% decline from Q1 2024. Organic sales also fell due to fewer shipping days and ongoing market weakness, with incremental acquisition sales within the Americas contributing modestly to reported growth.

Operating Margins

The reported operating margin decreased to 15.7% (a 120 bps drop), impacted by higher restructuring charges. In contrast, the adjusted operating margin improved to 19.0% (up 80 bps) thanks to favorable pricing, productivity, and cost actions that offset some volume and inflationary pressures.

Earnings per Share

Diluted EPS increased by 2% from $2.17 to $2.21, with adjusted diluted EPS also up 2% reaching $2.37, reflecting the company’s focus on robust adjusted earnings performance.

Dividend Increase

Watts Water Technologies Inc announced a 21% increase in its quarterly dividend payments, raising the quarterly dividend from $0.43 to $0.52 per share beginning in June 2025.

Regional and Cash Flow Insights

Regionally, while the Americas showed stability with flat reported earnings and a slight organic decline, Europe experienced significant sales pressure, and APMEA delivered strong organic growth. Operating cash flow for the quarter improved to $55.2 million with free cash flow at $45.6 million, bolstered by lower income tax payments, positioning the company well for its capital allocation initiatives.

Outlook

Looking ahead, Watts Water Technologies Inc has maintained its full year 2025 outlook with stable organic sales and adjusted operating margin guidance, despite ongoing economic uncertainties and market headwinds.