Pentair plc, UK

COMPANY WATCH

Metso Corp, Finland

Pentair plc, UK

Key Figures (E million) Second quarter ended 30.6 2017 2016

Orders Received Of Which: Flow Control

749

761

174

168

Sales Of Which: Flow Control

675 671 152

167

Cost of Goods Sold

488

475

Gross Profit

187

196

Selling, General and Admin Expenses

127

130

Operating Profit Of Which: Flow Control

60

70

16

21

Profit before Taxes

53

61

Profit for the Period

36

42

Personnel at the end of the Period 11 788 Of Which: Flow Control 2685

12 099



2878

Six months ended 30.6 2017 2016

Orders Received Of Which: Flow Control

1482

1424

347

337

Sales Of Which: Flow Control

1323 1272 311

315

Cost of Goods Sold

952

900

Gross Profit

371

372

Selling, General and Admin Expenses

253

256

Operating Profit Of Which: Flow Control

119

120

40

40

Profit before Taxes

103

99

70

69

Profit for the Period

COMMENT Metso Corp’s Flow Control segment, home to the company’s pumps business, saw second quarter sales fall 9% to E152 million. The decrease reflects lower project order intake in the second half of 2016, while services sales remained stable compared to last year.

July 2017

Second quarter Flow Control orders were up 3.6% to E174 million, with year-on-year gains in both the equipment and services business. Valve orders were healthy, while pump orders increased significantly. n www.metso.com



Key Figures (US$ million) Three months ended 30.6 2017 2016

Net Sales Of Which: Water

1265.3

1301.2

753.7 761.7

Cost of Goods Sold

782.1

819.4

Gross Profit

483.2

481.8

Research and Development

28.7

28.7

Segment Income Of Which: Water

255.2

241.0

Operating Income

212.8

203.4

Net Income

263.7

142.8



161.0 153.6

Six months ended 30.6 2017 2016

Net Sales Of Which: Water

2448.8

Cost of Goods Sold

1543.3

1578.1

905.5

913.1

Gross Profit Research and Development

2491.2

1436.6 1427.4

58.7

57.2

Segment Income Of Which: Water

438.7

418.9

Operating Income

351.2

356.1

Net Income

351.5

250.2

277.0 254.8

COMMENT Pentair plc’s second quarter 2017 sales slipped 3% to US$1.3 billion, while operating income was up 5% to US$213 million. Return on sales (ROS) was 16.8%, an increase of 120 basis points on the second quarter of 2016. During the second quarter, Pentair completed the sale of its Valves & Controls business, using the proceeds to reduce its debt by approximately US$3 billion. Pentair plans to separate into two publicly-traded companies next year through a tax-free spin-off of its Electrical business to its shareholders. “Our second quarter results saw

both of our businesses continue to build momentum driven by strength in our Residential, Commercial, and short cycle Industrial businesses,” said Randall Hogan, Pentair chairman and CEO. “With the completion of the sale of our Valves & Controls business, our balance sheet is significantly strengthened, and we remain disciplined in our capital allocation strategy. Significant work is underway on all activities leading to the separation of our Water and Electrical businesses, which remains on track to be completed in the second quarter of 2018.” n www.pentair.com

Pump Industry Analyst

9