Pentair Financial Model
Industrial Equipment Company Financials Example (Free Excel Download)
Pentair plc is a global water treatment and sustainable fluid management company that provides solutions for residential, commercial, and industrial applications.
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About this model
This model provides a comprehensive three-statement forecast and discounted cash flow valuation for Pentair plc to help equity analysts assess the impact of its ongoing transformation programme and margin expansion targets on its intrinsic value.
Pentair plc is a global water treatment and sustainable fluid management company that provides solutions for residential, commercial, and industrial applications.
- Pool (approx. 35-40% of revenue): Energy-efficient pool equipment and accessories.
- Flow (approx. 35-40% of revenue): Fluid treatment and pump products for residential, commercial, and industrial use.
- Water Solutions (approx. 20-25% of revenue): Commercial and residential water treatment products and filtration systems.
The United States is the primary market, with international sales accounting for approximately 31% of total revenue. The company operates an asset-light manufacturing and assembly business model, with a strong focus on value-based pricing and 80/20 operational efficiency initiatives. Pentair is a market leader in pool equipment and water filtration, competing with companies like Hayward Holdings, Xylem, and Franklin Electric. Recent major events include a strategic realignment of business segments, the acquisition of G & F Manufacturing in 2024 for $116 million, and a multi-year Transformation Programme driving significant return on sales margin expansion.
The downloadable Pentair financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsPentair financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $3.76B | $4.12B | $4.10B | $4.08B | $4.18B |
| Gross profit | $1.32B | $1.36B | $1.52B | $1.60B | $1.69B |
| Operating income | $636.9M | $595.3M | $739.2M | $803.8M | $857.5M |
| Net income | $553.0M | $480.9M | $622.7M | $625.4M | $653.8M |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Pentair
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Pool
- Segment name: Pool
- Revenue driver formula: Installed Base x Replacement Rate x Average Selling Price + New Pool Construction Volume x Equipment Content per Pool
- Historical growth rate: 7% in 2024 and 9% in 2025.
- Key growth levers and headwinds: Weather conditions, housing market dynamics, consumer discretionary spending, and the regulatory shift towards energy-efficient variable speed pumps.
- Pricing dynamics: Strong pricing power driven by brand loyalty and regulatory shifts requiring energy-efficient equipment.
- Revenue recognition notes: Recognised at a point in time upon shipment of equipment to distributors.
- Seasonality: Strongest in the second and third quarters due to the Northern Hemisphere pool building and opening season.
Flow
- Segment name: Flow
- Revenue driver formula: Volume (Residential/Irrigation + Commercial/Infrastructure + Industrial) x Average Selling Price
- Historical growth rate: Declined 4% in 2024, grew 3% in 2025.
- Key growth levers and headwinds: Agricultural demand, infrastructure spending, industrial capital expenditure, and foreign currency translation.
- Pricing dynamics: Value-based pricing initiatives have successfully offset inflation.
- Revenue recognition notes: Primarily point-in-time recognition upon delivery.
- Seasonality: Mild seasonality, with slightly higher agricultural pump demand in the spring.
Water Solutions
- Segment name: Water Solutions
- Revenue driver formula: Commercial Filtration Volume x Price + Residential Filtration Volume x Price
- Historical growth rate: Declined 3% in 2025.
- Key growth levers and headwinds: Commercial foodservice recovery, residential water quality awareness, and replacement filter recurring revenue.
- Pricing dynamics: Highly competitive residential market, but strong contractual pricing in commercial foodservice.
- Revenue recognition notes: Point-in-time for equipment and consumables.
- Seasonality: Relatively stable throughout the year.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Raw materials (metals, resins, motors), direct labour, manufacturing overhead, and inbound freight.
- Gross margin range: 35% to 40.5% (expanding recently due to pricing and productivity).
- Key input costs: Copper, steel, plastics, and electronic components.
- Scaling: Step-function scaling with manufacturing capacity, benefiting heavily from 80/20 rationalisation.
Operating Expenses
- R&D: Typically 2% to 3% of revenue, expensed as incurred, covering new product development and energy-efficiency engineering.
- SG&A: Typically 15% to 18% of revenue, heavily headcount-driven, including sales commissions, marketing, and corporate overhead.
- Depreciation & Amortisation: Approximately 2% to 3% of revenue, split evenly between tangible manufacturing assets and acquired intangibles.
- Stock-Based Compensation: Approximately 1% of revenue.
- Restructuring: Frequent charges related to the Transformation Programme (targeting $70 million to $80 million in net savings).
Margin Profile
- Gross margin: 35% to 40.5%.
- EBITDA margin: 20% to 26%.
- Operating margin: 19% to 25% (Adjusted Return on Sales reached 25.2% in 2025).
- Net margin: 12% to 16%.
- Margin trend: Expanding rapidly due to the Transformation Programme and value-based pricing.
Balance Sheet Structure
- Total assets: Approximately $5.0 billion to $5.5 billion.
- Key asset categories: Inventory, accounts receivable, property, plant and equipment, and a large goodwill balance from historical acquisitions.
- Goodwill & intangibles: Typically 50% to 60% of total assets, reflecting a history of bolt-on acquisitions.
- Working capital profile:
- Days Sales Outstanding (DSO): 40 to 50 days.
- Days Inventory Outstanding (DIO): 60 to 80 days.
- Days Payable Outstanding (DPO): 50 to 65 days.
- Net working capital as % of revenue: 10% to 15%.
- Working capital is positive, requiring investment as the business grows.
- PP&E: Approximately 10% of total assets, reflecting an asset-light assembly model.
- Right-of-use assets: Material but manageable, representing leased warehouse and assembly facilities.
Capital Expenditure & Investment
- Capex as % of revenue: 1.5% to 2.5%.
- Maintenance vs. growth: 60% maintenance, 40% growth (automation and facility upgrades).
- Major programmes: Investments in manufacturing automation and digital transformation.
- Capitalised software: Minimal relative to total capex.
- M&A pattern: Consistent bolt-on acquirer (e.g., G & F Manufacturing for $116 million in 2024).
Debt & Capital Structure
- Total debt: Approximately $1.5 billion to $2.0 billion.
- Debt/EBITDA ratio: 1.5x to 2.5x.
- Credit rating: Investment grade.
- Key debt instruments: Senior unsecured notes and a revolving credit facility.
- Maturity profile: Staggered maturities over the next 5 to 10 years.
- Interest rate profile: Predominantly fixed-rate bonds with some floating-rate bank debt.
- Covenants: Standard leverage and interest coverage ratios.
- Share repurchases: Active programme ($225 million repurchased in 2025).
- Dividend policy: Dividend Aristocrat/King, 50th consecutive year of increases in 2026, payout ratio around 20% to 25%.
Cash Flow Characteristics
- Operating cash flow conversion: >100% of net income ($815 million OCF in 2025 vs $654 million net income).
- Free cash flow margin: 15% to 18% ($748 million FCF on $4.176 billion revenue in 2025).
- Major non-cash items: Depreciation, amortisation of intangibles, and stock-based compensation.
- Working capital impact: Seasonal build in Q1/Q2, release in Q3/Q4.
- Capex intensity: Very low, driving high free cash flow conversion.
- Cash tax rate: 15% to 18%, benefiting from the Irish tax domicile.
Sheet Structure
- Assumptions: Hardcoded drivers for macroeconomic inputs, segment growth, margins, and capital allocation.
- Revenue_Build: Segment-level volume and pricing drivers for Pool, Flow, and Water Solutions.
- Income_Statement: GAAP and Adjusted views, linking revenue, COGS, SG&A, restructuring, and interest.
- Balance_Sheet: Assets, liabilities, and equity, driven by working capital schedules and debt.
- Cash_Flow: Indirect method, starting from net income, adjusting for non-cash items, working capital changes, capex, and financing.
- Working_Capital: Schedules for accounts receivable, inventory, and accounts payable based on days outstanding.
- Depreciation_Amortisation: PP&E rollforward and intangible asset amortisation schedules.
- Debt_Schedule: Tranche-by-tranche debt rollforward, interest expense calculation, and mandatory repayments.
- Shareholders_Equity: Share count rollforward, buybacks, dividends, and retained earnings.
- DCF_Valuation: Unlevered free cash flow calculation, WACC build, terminal value, and implied share price.
Key Financial Relationships
- Pool Revenue = Prior Year Pool Revenue x (1 + Pool Volume Growth + Pool Price Growth)
- Flow Revenue = Prior Year Flow Revenue x (1 + Flow Volume Growth + Flow Price Growth)
- Water Solutions Revenue = Prior Year Water Solutions Revenue x (1 + Water Solutions Volume Growth + Water Solutions Price Growth)
- Total Net Sales = Pool Revenue + Flow Revenue + Water Solutions Revenue
- Segment Income = Segment Revenue x Segment Return on Sales Margin
- Total Segment Income = Pool Segment Income + Flow Segment Income + Water Solutions Segment Income
- Adjusted Operating Income = Total Segment Income - Corporate Expenses
- GAAP Operating Income = Adjusted Operating Income - Restructuring Charges - Intangible Amortisation
- Accounts Receivable = (Total Net Sales / 365) x Days Sales Outstanding
- Inventory = (Cost of Goods Sold / 365) x Days Inventory Outstanding
- Accounts Payable = (Cost of Goods Sold / 365) x Days Payable Outstanding
- Interest Expense = Average Debt Balance x Weighted Average Interest Rate
- Free Cash Flow = Net Cash Provided by Operating Activities - Capital Expenditures
- Dividends Paid = Shares Outstanding x Annual Dividend per Share
- Ending Shares Outstanding = Beginning Shares Outstanding - (Share Repurchase Amount / Average Share Price)
Cross-Sheet Dependencies
- Assumptions feeds all other sheets with growth rates, margin targets, and days outstanding metrics.
- Revenue_Build feeds the top line of the Income_Statement and the denominator for DSO in Working_Capital.
- Income_Statement generates Net Income, which feeds the top of the Cash_Flow statement and Retained Earnings in Shareholders_Equity.
- Working_Capital calculates changes in operating assets and liabilities, feeding the Cash_Flow statement.
- Debt_Schedule calculates interest expense for the Income_Statement and ending debt balances for the Balance_Sheet. This creates a circular reference if interest expense reduces cash, which increases debt, which increases interest expense. A toggle switch is required to break the circularity.
- Cash_Flow generates the ending cash balance, which feeds the Balance_Sheet.
Sign Convention
- Revenue and income items are positive.
- Expenses (COGS, SG&A, Interest, Taxes) are entered as positive numbers and subtracted in formulas.
- Assets are positive; Liabilities and Equity are positive.
- On the Cash Flow statement, cash inflows are positive, and cash outflows (e.g., capex, dividends, debt repayment) are negative.
- Contra-asset accounts (e.g., accumulated depreciation) are positive and subtracted from gross assets.
Things Most Likely to Go Wrong
- The company reports "Return on Sales" which is equivalent to segment operating margin; confusing this with gross margin will break profitability forecasts.
- Restructuring and Transformation Programme costs are excluded from Adjusted Operating Income but represent real cash outflows that must be captured in the cash flow statement.
- Pentair is domiciled in Ireland, resulting in a structurally lower effective tax rate than US-domiciled peers; applying a standard US statutory rate will severely undervalue the company.
- The Pool segment is highly seasonal, with Q2 and Q3 generating the bulk of revenue and cash flow; quarterly models must incorporate this seasonality to avoid cash shortfalls in Q1.
- Foreign currency translation can swing reported revenue by 2% to 4% year-over-year; the model should ideally separate core growth from FX impacts.
- The company frequently engages in bolt-on M&A; failing to model acquired intangibles amortisation will cause a disconnect between GAAP and Adjusted EPS.
- Share repurchases are a major component of capital allocation; the model must dynamically reduce the share count to accurately forecast EPS.
- The Flow segment contains diverse end markets (residential, commercial, industrial) with different cyclicality; treating it as a single homogenous growth driver will miss macroeconomic nuances.
Validation Checks
- Total Assets must equal Total Liabilities plus Shareholders' Equity in every period.
- Adjusted Return on Sales should trend towards management's target of 26% by 2026; flag if it exceeds 28% or drops below 20%.
- Free Cash Flow conversion (FCF / Net Income) should remain above 100% due to low capital intensity.
- Capex as a percentage of revenue should remain between 1.5% and 2.5%.
- The effective tax rate should remain in the 15% to 18% range.
- Debt to EBITDA should not exceed 3.0x to maintain the investment-grade credit rating.
- The dividend payout ratio should remain between 20% and 30% of net income.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Pool Revenue Growth | 5.0 | % | Normalised growth following 2024/2025 recovery |
| Flow Revenue Growth | 2.0 | % | Stable growth in line with industrial and infrastructure trends |
| Water Solutions Revenue Growth | 1.0 | % | Modest growth reflecting competitive residential markets |
| Pool Return on Sales | 33.8 | % | Based on 2025 actual segment margin |
| Flow Return on Sales | 22.8 | % | Based on 2025 actual segment margin |
| Water Solutions Return on Sales | 23.5 | % | Based on recent historical averages |
| Corporate Expenses | 2.5 | % of Rev | Historical run-rate for unallocated corporate costs |
| Days Sales Outstanding | 45 | Days | Based on historical receivables turnover |
| Days Inventory Outstanding | 70 | Days | Based on historical inventory turnover |
| Days Payable Outstanding | 60 | Days | Based on historical payables turnover |
| Capex as % of Revenue | 2.0 | % | Asset-light manufacturing model |
| Effective Tax Rate | 16.9 | % | Based on 2025 actual adjusted tax rate |
| Annual Dividend per Share | 1.08 | $ | Based on 2026 quarterly run-rate of $0.27 |
| Share Repurchases | 225 | $M | Consistent with 2025 actual capital return |
| Weighted Average Interest Rate | 4.5 | % | Blended rate on existing senior notes and credit facility |
| WACC | 8.5 | % | Standard discount rate for industrial machinery peers |
| Terminal Growth Rate | 2.5 | % | Long-term GDP and inflation expectations |
Data Sources & Benchmarks
- SEC EDGAR for 10-K and 10-Q filings.
- Pentair Investor Relations website for earnings presentations and Transformation Programme updates.
- Key peers for benchmarking: Xylem (XYL), Franklin Electric (FELE), Hayward Holdings (HAYW), and A. O. Smith (AOS).
- Industry data sources: US housing starts, pool permit data, and industrial production indices.
- Consensus estimates: FactSet or Bloomberg for near-term revenue and EPS estimates.
Sources
Do more with the Pentair model
Frequently asked
What does Pentair plc do?+
Pentair plc is a global water treatment and sustainable fluid management company. It provides solutions for residential, commercial, and industrial applications across its Pool, Flow, and Water Solutions segments. The company is a market leader in pool equipment and water filtration.
How does Pentair generate its revenue?+
Pentair generates revenue primarily through the sale of energy-efficient pool equipment, fluid treatment and pump products, and commercial and residential water treatment and filtration systems. Its Pool and Flow segments each contribute approximately 35-40% of total revenue, with Water Solutions making up the remaining 20-25%. The United States is its primary market, supplemented by international sales.
What revenue growth rate is assumed in the Pentair financial model?+
The financial model for Pentair assumes a revenue growth rate of approximately 8.54% for its forecast horizon from FY2026 to FY2030. This assumption helps project the company's future top-line performance, reflecting its ongoing transformation program and market position.
What is the main purpose of the Pentair financial model?+
The Pentair financial model aims to provide a comprehensive three-statement forecast and discounted cash flow valuation. This helps equity analysts assess the impact of Pentair's ongoing transformation program and margin expansion targets on its intrinsic value.
Can I download an Excel financial model for Pentair?+
Yes, an Excel financial model for Pentair is available for download. This model offers a detailed three-statement forecast and discounted cash flow valuation, covering a forecast horizon from FY2026 to FY2030.
How does Pentair manage its capital expenditures?+
Pentair maintains an asset-light manufacturing and assembly business model, reflected in its capital expenditure as a percentage of revenue, which typically ranges from 1.5% to 2.5%. Approximately 60% of this capex is for maintenance, while 40% is allocated to growth initiatives like manufacturing automation and facility upgrades.
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