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WWATTS Watts Water Technologies , Inc. Q2 2026 Earnings Conference Call August 6 , 2026
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2© 2026 Watts Water Technologies, Inc. Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, effective tax rate, capital expenditures, cash flow, market growth including data center market growth, acquisition strategy and integration, construction outlook, inflation and management goals and objectives. Watts cautions investors that any such forward-looking statements made by Watts are not guarantees of future performance. All forward-looking statements are subject to known and unknown risks, uncertainties, and contingencies, many of which are beyond the control of Watts, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Factors that might affect forward-looking statements include overall economic and business conditions, changes in tariff rates, competitive factors, changes in laws affecting Watts, future acquisitions of material assets or businesses by Watts, the demand for Watts’ products and services and other factors identified in “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K and in subsequent reports filed with the SEC.
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3© 2026 Watts Water Technologies, Inc. Q2 Overview and 2026 Outlook * See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures. Q2 2026 Performance Record Q2 exceeded expectations Organic sales* increased 12% driven by strong data center sales, favorable price, and pull-forward demand Adjusted operating margin* of 21.0%, decline of 60 bps due to acquisition dilution and PY price/cost Balance sheet strength provides capital allocation flexibility Business Updates Acquisition integrations and synergy realization on track through utilization of One Watts Performance System Successfully managing impact of Middle East conflict and fluid tariff environment Data center demand continues to offset challenged new construction markets Continued progress toward sustainability goals; annual sustainability report published in June 2026 Outlook Increasing FY sales and margin outlook ▲ YTD performance and Q3 outlook ▲ Price ▲ Data center demand ▼ Middle East conflict uncertainty ▼ Inflation and commodity prices ▼ Higher-for-longer interest rates
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© 2026 Watts Water Technologies, Inc. 4© 2026 Watts Water Technologies, Inc. Data Center Growth Initiative • Q2 2026 data center sales more than tripled year-over-year; year- to-date data center sales represent 8% of total sales • Sales concentrated in Americas and APMEA, with emerging opportunity in Europe • Project-based demand, creating some quarter-to-quarter variability • Building on core competencies through investments in talent, product innovation, and scaling capacity • Expanding relationships with contractors, OEMs and hyper-scalers * Source: McKinsey & Company, MUFG; growth estimate is calculated using 2026 baseline and projections through 2030 Outpacing Market Growth With Large Market Opportunity Served Addressable Market ~$2B Estimated Market Growth* ~15%-20%+ CAGR ~$25K to ~$100K Potential Content / MW Range depends on: liquid vs air cooling, amount of content in each project 3% MSD to HSD 2025 2026 Full Year % of Sales
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© 2026 Watts Water Technologies, Inc. 5 Q2 2026 Financial Summary * See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures. Segment sales • Americas: $585M; +12% organic; acquisitions added $28M; 80/20 impact of -$8M • Europe: $125M; +9% organic; $3M FX benefit; 80/20 impact of -$1M • APMEA: $54M; +31% organic: acquisition added $6M; $3M FX benefit • Adj. EBITDA: $177M, +15% • Adj. operating income: $160M, +15% • Acquisition dilution -70 bps to OM% • Segment margin - Americas: 25.7%; -150 bps - Europe: 13.3%; +160 bps - APMEA: 19.9%; +100 bps • Operations: +$0.40 • Acquisitions / FX: +$0.06 • Net interest / other income: +$0.01 • Tax: +$0.10; Adj. ETR 23.1% FCF ($M)* • YTD cash flow decline due to: - Accounts receivable timing - Strategic inventory investment • Anticipate further sequential improvement in FCF • Balance sheet remains strong - Net debt to cap ratio: (12%) - Net leverage: (0.4x) $644 $763 2025 2026 $3.09 $3.66 2025 2026 $105 $98 2025 2026 Adj. OM Adj. EBITDA 21.6% 21.0% 23.8% 23.1% 2025 2026 Adj. EBITDA and Adj. Operating Margin (%)*Sales ($M) -70 bps +18% -7% +19% Reported +12% Organic* Adj. EPS ($)* Record Sales, Operating Income and EPS -60 bps
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6© 2026 Watts Water Technologies, Inc. Q3 and Full Year 2026 Outlook* Previous FY Outlook Updated FY Outlook Q3 Outlook Sales Growth Reported +8% to +12% Organic +2% to +6%** Reported +14% to +17% Organic +8% to +11%** Reported +11% to +14% Organic +5% to +8%** Segment Organic Growth Americas: +3% to +7% Europe: -4% to Flat APMEA: +4% to +8% Americas: +9% to +12% Europe: 1% to +4% APMEA: +9% to +12% Americas: +7% to +10% Europe: Flat to +3% APMEA: +6% to +9% Acquired Americas ~+$110M to +$115M APMEA ~+$18M to +$20M Americas ~+$105M to +$110M APMEA ~+$21M to +$22M Americas ~+$30M to +$33M APMEA ~+$5M to +$6M 80/20 Americas ~-$25M to -$30M** Europe ~-$10M to -$15M** Americas ~-$25M to -$26M** Europe ~-$6M to -$8M** Americas ~-$6M** Europe ~-$2M** FX Sales ~+$18M EPS ~+$0.06 Sales ~+$18M EPS ~+$0.06 Sales ~-$3M EPS ~-$0.01 Adj. EBITDA Margin 21.5% to 22.1% / -40 bps to +20 bps 22.1% to 22.7% / +20 bps to +80 bps 22.2% to 22.8% / +130 bps to +190 bps Adj. Op. Margin 19.1% to 19.7% / -50 bps to +10 bps 19.8% to 20.4% / +20 bps to +80 bps 19.8% to 20.4% / +130 bps to +190 bps Americas: 23.4% to 24.0% / -110 bps to -50 bps Europe: 13.0% to 13.6% / -30 bps to +30 bps APMEA: 18.6% to 19.2% / +30 bps to +90 bps Acquisition dilution: ~-50 bps Watts / ~-100 bps Americas Americas: 24.3% to 24.9% / -20 bps to +40 bps Europe: 13.5% to 14.1% / +20 bps to +80 bps APMEA: 18.6% to 19.2% / +30 bps to +90 bps Acquisition dilution: ~-50 bps Watts / ~-100 bps Americas Americas: 24.4% to 25.0% / +70 bps to +130 bps Europe: 13.1% to 13.7% / +90 bps to +150 bps APMEA: 19.6% to 20.2% / +20 bps to +80 bps Acquisition dilution: ~-50 bps Watts / ~-100 bps Americas Free Cash Flow ≥ 90% of Net Income ≥ 90% of Net Income * Outlook incorporates estimates as of August 5, 2026. Assumes no change in the level of impact resulting from the Middle East conflict. Incorporates the estimated impact of tariffs in place or announced as of August 4, 2026. Does not include the impact of tariff refunds and any tariff refunds received in future periods will be treat ed as non-recurring special items and therefore not included in adjusted results. See Appendix for other Outlook assumptions. ** Organic growth guidance includes 80/20 product rationalization. Excluding product rationalization organic growth outlook woul d be approximately 1% higher.
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© 2026 Watts Water Technologies, Inc. 7 Strong Q2 performance exceeded expectations across all regions Driving growth through strategic initiatives and strong data center demand, offsetting continued weakness in residential and non-institutional commercial new construction markets Raising full year 2026 sales and margin outlook due to strong H1 and Q3 outlook Healthy balance sheet and cash flow provide continued capital allocation flexibility Key Takeaways
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Appendix
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9© 2026 Watts Water Technologies, Inc. Other 2026 Outlook* Inputs Previous Other FY Inputs Updated Other FY Inputs Other Q3 Inputs Corporate Costs ~$60M $64M to $66M ~$17M Net Interest Expense ~$3M to $4M ~$1M to $2M Flat to $1M Stock-based Compensation ~$22M ~$27M ~$7M Adj. Effective Tax Rate ~25% ~25% ~25% Share Count ~33.5M ~33.5M ~33.5M Capex $50M to $60M $60M to $65M $20M to $25M Depreciation and Amortization ~$70M ~$67M ~$17M FX Europe (EUR at 1.16) ~+$13M Americas (CAD) ~+$2M APMEA (RMB/AUD/NZD) ~+$3M Europe (EUR at 1.15) ~+$10M Americas (CAD) ~Flat APMEA (RMB/AUD/NZD) ~+$8M Europe (EUR at 1.14) ~-$3M Americas (CAD) ~-$1M APMEA (RMB/AUD/NZD) ~+$1M * As of August 5, 2026. See Appendix for reconciliation of non-GAAP measures to their corresponding GAAP measures.
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© 2026 Watts Water Technologies, Inc. 10© 2026 Watts Water Technologies, Inc. Driving Value Creation Through Sustainability Strategy • 2025 Sustainability Report released mid-June • Continued commitment to high-performance solutions that solve our customers’ challenges, while promoting safety, sustainability and efficiency • Advanced progress on second generation of environmental goals, adopted in 2024 SOLVING CUSTOMERS’ CHALLENGES ACROSS OUR “TRIPLE PLAY” CHALLENGE SOLUTION Safety & Regulation Data center liquid cooling systems demand leak-proof valves to protect equipment and maintain uptime Interlock ball valves (ILBVs) minimize risk of leaks and ensure maximum safety for data center equipment and facilities Water Conservation Commercial / institutional restrooms are very high water-consuming areas in buildings The MOMENTUM® Flush Valve enables high-impact, retrofit-friendly water conservation Energy Efficiency Water heating can be a major source of energy usage, leading to high greenhouse gas emissions AERCO, PVI, & LYNC high efficiency boilers, water heaters, and heat pumps helped customers avoid >115,000 MT of CO2 Access Our Full 2025 Sustainability Report Here
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11© 2026 Watts Water Technologies, Inc. Watts Water Snapshot (NYSE: WTS) *Reflects proforma sales assuming all 2025 acquisitions were acquired as of January 1, 2025 2025 Key Statistics With 5 Year Performance vs. 2020 $10.58 Adj. EPS +22% CAGR 19.6% Adj. Operating Margin +670 bps Expansion $1.99 Dividends +17% CAGR 20.5% ROIC (GAAP) +880 bps Expansion 103% 5-yr Avg Reinvestment 100% 5-yr Avg Free Cash Flow Conversion $2.4B Net Sales 10% CAGR 76% 17% 7% Geography* Americas Europe APMEA 60% 40% Repair & Replace New Construction End Markets 60%24% 11% 5% Products* Residential & Comm. Flow Control HVAC & Gas Drainage & Water Re-use Water Quality 66% 10% 21% 3% Channels Wholesale OEM Specialty DIY 70% 30% Non-Residential Residential End Markets*
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12© 2026 Watts Water Technologies, Inc. Key Themes Focus on Innovation and Profitable Growth Continuing investment in digital strategy Driving One Watts Performance System to expand margins Recognized Leader Global reach with leading market positions in commercial, residential and light industrial water space Aligned to Long-term Secular Trends and Diverse Markets Solutions aligned with global macro trends Broad portfolio diversifies market exposure Resilient Business Model Tested Across Economic Cycles Large installed base; strong repair and replacement footprint Focused on long-term strategy Accretive Capital Deployment and Strong Balance Sheet Targeting >100% cash conversion with efficient capital structure Balanced capital allocation
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© 2026 Watts Water Technologies, Inc. 13 Consolidated Statements of Operations Second Quarter 2026 2025 B/(W) % Net sales $763.2 $643.7 $119.5 19% Cost of goods sold 389.1 317.8 (71.3) (22%) Gross profit 374.1 325.9 48.2 15% 49.0% 50.6% -160 bps Selling, general & administrative expenses 214.5 187.2 (27.3) (15%) 28.1% 29.1% -100 bps Restructuring 5.6 3.4 (2.2) (65%) Operating income 154.0 135.3 18.7 14% 20.2% 21.0% -80 bps Other expense 0.3 0.6 0.3 50% Income before taxes 153.7 134.7 19.0 14% Provision for income taxes 35.4 33.8 (1.6) (5%) Net income $118.3 $100.9 $17.4 17% Diluted earnings per share $3.53 $3.01 $0.52 17% (M) (Unaudited)
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14© 2026 Watts Water Technologies, Inc. Reconciliation of Net Sales to Organic Net Sales Second Quarter Americas Europe APMEA Total Net sales 2026 $585.0 $124.6 $53.6 $763.2 Net sales 2025 $498.5 $111.0 $34.2 $643.7 Dollar change $86.5 $13.6 $19.4 $119.5 Net sales % increase 17% 12% 57% 19% Foreign exchange impact - (3%) (9%) (1%) Acquisition impact (5%) - (17%) (6%) Organic sales % increase 12% 9% 31% 12% (M) (Unaudited) Six Months Americas Europe APMEA Total Net sales 2026 $1,100.1 $246.0 $94.3 $1,440.4 Net sales 2025 $916.6 $219.4 $65.7 $1,201.7 Dollar change $183.5 $26.6 $28.6 $238.7 Net sales % increase 20% 12% 44% 20% Foreign exchange impact - (7%) (8%) (2%) Acquisition impact (7%) - (18%) (6%) Organic sales % increase 13% 5% 18% 12%
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© 2026 Watts Water Technologies, Inc. 15 Reconciliation of GAAP to Non-GAAP Measures Second Quarter Six Months 2026 2025 2026 2025 Net Sales $763.2 $643.7 $1,440.4 $1,201.7 Operating income $154.0 $135.3 $287.0 $223.0 Operating margin % 20.2% 21.0% 19.9% 18.6% Adjustments for special items: Restructuring $5.6 $3.4 $5.8 $20.7 Acquisition-related costs 0.4 0.4 3.1 1.5 Adjusted operating income $160.0 $139.1 $295.9 $245.2 Adjusted operating margin % 21.0% 21.6% 20.5% 20.4% Net income $118.3 $100.9 $217.9 $174.9 Adjustments for special items - tax effected: Restructuring $4.2 $2.5 $4.3 $15.5 Acquisition-related costs 0.3 0.3 2.4 1.0 Tax adjustment items - - - (8.3) Adjusted net income $122.8 $103.7 $224.6 $183.1 Diluted earnings per share $3.53 $3.01 $6.50 $5.22 Adjustments for special items 0.13 0.08 0.20 0.24 Adjusted diluted earnings per share $3.66 $3.09 $6.70 $5.46 (M) (Unaudited)
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16© 2026 Watts Water Technologies, Inc. Segment Earnings and Margin Summary Second Quarter 2026 Americas Europe APMEA Corp. Consolidated Segment earnings / Corp expenses / Adj. OI $150.1 16.6 10.6 (17.3) $160.0 Segment margin / Adjusted operating margin % 25.7% 13.3% 19.9% 21.0% Adjustments for special items ($2.3) (3.7) - - ($6.0) Operating Income $154.0 Operating Margin 20.2% (M) (Unaudited) Second Quarter 2025 Americas Europe APMEA Corp. Consolidated $135.8 13.0 6.5 (16.2) $139.1 27.2% 11.7% 18.9% 21.6% ($0.4) (3.4) - - ($3.8) 135.3 21.0% Six Months 2026 Americas Europe APMEA Corp. Consolidated Segment earnings / Corp expenses / Adj. OI $274.7 33.2 18.2 (30.2) $295.9 Segment margin / Adjusted operating margin % 25.0% 13.5% 19.3% 20.5% Adjustments for special items ($4.0) (3.8) (1.1) - ($8.9) Operating Income $287.0 Operating Margin 19.9% Six Months 2025 Americas Europe APMEA Corp. Consolidated $233.6 28.1 12.0 (28.5) $245.2 25.5% 12.8% 18.2% 20.4% ($1.5) (20.6) (0.1) - ($22.2) $223.0 18.6%
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© 2026 Watts Water Technologies, Inc. 17 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Six Months 2026 2025 Net cash provided by operating activities $120.8 $124.9 Less: additions to property, plant, and equipment (22.6) (19.8) Free cash flow $98.2 $105.1 Net income $217.9 $174.9 Cash conversion rate of free cash flow to net income 45% 60% (M) (Unaudited)
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18© 2026 Watts Water Technologies, Inc. Reconciliation of Long-term Debt (Including Current Portion) to Net Debt to Capitalization Ratio June 28, 2026 December 31, 2025 Current portion of long-term debt $ - $ - Plus: Long-term debt, net of current portion 108.0 197.7 Less: Cash and cash equivalents (347.9) (405.5) Net debt ($239.9) ($207.8) Net debt ($239.9) ($207.8) Plus: Total stockholders' equity 2,189.4 2,027.7 Capitalization $1,949.5 $1,819.9 Net debt to capitalization ratio (12%) (11%) (M) (Unaudited)
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© 2026 Watts Water Technologies, Inc. 19 Calculations of EBITDA & Gross and Net Leverage (M) (Unaudited) Second Quarter Ended June 28, 2026 Second Quarter Ended June 29, 2025 Trailing Twelve Months Through June 28, 2026 Sales $763.2 $643.7 $2,677.3 Net income – as reported $118.3 $100.9 $383.8 Plus: Interest expense, net 0.5 0.4 1.6 Plus: Income taxes 35.4 33.8 125.5 Plus: Depreciation 9.8 9.1 37.5 Plus: Amortization 6.0 4.9 22.8 EBITDA – Earnings before interest, taxes, depreciation and amortization $170.0 $149.1 $571.2 EBITDA Margin % 22.3% 23.2% 21.3% Adjustments for special items (excluding depreciation & amortization) & amortization of cloud computing arrangements 6.7 3.9 18.0 Adjusted EBITDA – Adjusted earnings before interest, taxes, depreciation and amortization $176.7 $153.0 $589.2 Adjusted EBITDA Margin % 23.1% 23.8% 22.0% Gross debt as of June 28, 2026 $108.0 Less: Cash & cash equivalents as of June 28, 2026 (347.9) Net debt ($239.9) Gross debt to EBITDA ratio (Gross leverage) 0.2x Net debt to EBITDA ratio (Net leverage) (0.4x)
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20© 2026 Watts Water Technologies, Inc. Reconciliation of “Adjusted” Non-GAAP Effective Tax Rate Second Quarter Six Months 2026 2025 2026 2025 Income before income taxes $153.7 $134.7 $285.1 $221.6 Provision for income taxes $35.4 $33.8 $67.2 $46.7 Effective tax rate 23.0% 25.2% 23.6% 21.1% Income before income taxes $153.7 $134.7 $285.1 $221.6 Total adjustments for special items 6.0 3.8 8.9 22.2 Adjusted Income before income taxes $159.7 $138.5 $294.0 $243.8 Provision for income taxes $35.4 $33.8 $67.2 $46.7 Tax effect of total adjustment for special items 1.5 1.0 2.2 14.0 Adjusted provision for income taxes $36.9 $34.8 $69.4 $60.7 Adjusted effective tax rate 23.1% 25.2% 23.6% 24.9% (M) (Unaudited)
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© 2026 Watts Water Technologies, Inc. 21 Reconciliation between GAAP and Non-GAAP Measures Included in 2026 Outlook* Third Quarter 2026 Full Year 2026 Net Sales Net sales growth +11% to +14% +14% to +17% Forecasted impact of acquisition / FX (6%) (6%) Organic net sales growth +5% to +8% +8% to +11% Operating Margin Operating margin range 19.7% to 20.3% 19.4% to 20.0% Forecasted restructuring / other costs 0.1% 0.4% Adjusted operating margin range 19.8% to 20.4% 19.8% to 20.4% * As of August 5, 2026.