Pentair plc (NYSE:PNR) Q4 2014 Earnings Conference Call - Final Transcript

Feb 03, 2015 • 09:00 am ET

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Pentair plc (NYSE:PNR) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. My name is Elisa and I will be your conference operator today. At this time, I would like to welcome everyone to the Pentair Q4 2014 Earnings Conference. [Operator Instructions]

Thank you. Jim Lucas, you may begin your conference.

Executive
Jim Lucas

Thanks, Elisa. And welcome to Pentair's Fourth Quarter 2014 Earnings Conference Call. We're glad you could join us. I'm Jim Lucas, Vice President of Investor Relations. With me today is Randy Hogan, our Chairman and Chief Executive Officer; and John Stauch, our Chief Financial Officer. On today's call, we will provide details on our fourth quarter 2014 performance, as well as our first quarter and full year 2013 outlook as outlined in this morning's release.

Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in Pentair's most recent 10-K and 10-Q in today's release. Forward-looking statements included herein are made as of today and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results.

Today's webcast is accompanied by a presentation, which can be found in the Investors section of Pentair's website. We will reference to these slides throughout our prepared remarks. Any references to non-GAAP financials are reconciled in the appendix of the presentation. We will be sure to reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and follow-up and get back in the queue for further questions in order that everyone has an opportunity to ask their questions.

I will now turn the call over to Randy.

Executive
Randy Hogan

Thanks, Jim. And good morning, everyone. Let me just begin with the summary of 2014 on Slide 4. As we highlighted during our outlook call in December, we are very pleased with the integration of Flow Control and our progress for last two years demonstrates the power the Pentair integrated management system or PIMS as a differentiating tool for integrating acquisitions. We are very pleased with how the company has come together and one Pentair culture has been firmly established. Yes, we know the best is still to come.

In 2014, we delivered 2% core sales growth which we recognize as mid-pack at best. But our 160 basis points the margin expansion, 24% adjusted EPS growth and very strong free cash flow clearly places us in the upper quartile of performance last year compared to our peer group. In addition, we returned $1.4 billion to our shareholders through share repurchases and dividends, a very solid year indeed.

While the market environment remains challenging, we've further simplified the business and have consolidated GBU. We are more closely aligned around channels solutions than ever, and we have structured our four business units as reporting segments allowing even more strategic alignment. 2014 was another good year for Pentair, as we built momentum on our