Watts Water Technologies Inc (NYSE: WTS)

Watts Water Technologies, Inc. (WTS) is a company that operates in the water technologies and solutions industry. It was established in 1874 by Joseph E. Watts and has since grown into a global manufacturer and provider of water technologies and solutions. The company's main business activities include the sale of a broad range of products and solutions, which are categorized into four segments: Residential & Commercial Flow Control and Protection, HVAC & Gas, Drainage & Water Re-use, and Water Quality.

The Residential & Commercial Flow Control and Protection segment accounts for approximately 56% of WTS's total net sales. This segment includes the sale of products such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, and emergency safety products and equipment. Many of these products are now smart and connected enabled, allowing customers to monitor and control their water usage remotely.

The HVAC & Gas segment accounts for approximately 29% of WTS's total net sales. This segment includes the sale of products such as commercial high-efficiency boilers, water heaters, and heating solutions, hydronic and electric heating systems for under-floor radiant applications, custom heat and hot water solutions, hydronic pump groups for boiler manufacturers, and alternative energy control packages. Most of these products feature advanced controls that enable customers to easily connect to building management systems for better monitoring, control, and operation.

The Drainage & Water Re-use segment accounts for approximately 10% of WTS's total net sales. This segment includes the sale of drainage products and engineered rainwater harvesting solutions for commercial, industrial, marine, and residential applications, including connected roof drain systems.

The Water Quality segment accounts for approximately 5% of WTS's total net sales. This segment includes the sale of point-of-use and point-of-entry water filtration, monitoring, conditioning, and scale prevention systems for commercial, marine, and residential applications.

WTS has a strong competitive position in the water technologies and solutions industry. The company's products are designed to meet the needs of a variety of customers, including plumbing, heating, and mechanical wholesale distributors, original equipment manufacturers, specialty product distributors, and major do-it-yourself and retail chains. WTS's key competitors include other manufacturers of water technologies and solutions, such as Emerson Electric, Honeywell International, and Pentair. The company differentiates itself from its competitors through its focus on safety, energy efficiency, and water conservation, as well as its commitment to innovation and customer satisfaction.

In terms of revenue generation, WTS's products are designed to meet the needs of a variety of markets, including commercial and residential buildings, industrial facilities, and marine applications. The company's customers include a diverse range of companies and organizations, including plumbing, heating, and mechanical wholesale distributors, original equipment manufacturers, specialty product distributors, and major do-it-yourself and retail chains. The company's top ten customers accounted for approximately 21.4% of its total net sales in 2023.

WTS is committed to innovation and has a strong commitment to research and development. The company has a global new product development program that is designed to leverage new technologies, in-house expertise, and electronics capabilities to expand its smart and connected strategy. WTS also has a robust college internship program to identify and cultivate an early-in-career pipeline of talent.

The company believes that its employees are its greatest asset and aims to provide a safe, inclusive, and high-performance culture where employees can thrive. WTS has a global employee referral bonus program to attract qualified candidates and reward employees, and offers a variety of training and development opportunities, including leadership and professional development training, performance management training, and a comprehensive suite of online LinkedIn Learning courses.

WTS is also focused on sustainability and has demonstrated its commitment to environmental sustainability by reducing its impact on the environment in multiple areas of its global business. The company provides a portfolio of products, components, and systems that conserve water, save energy, reduce waste, and preserve water quality and safety. WTS is also focused on social responsibility and has supported those in need through donations of money and products to several non-profit charitable organizations and through the volunteer efforts of its employees.

In terms of governance, WTS believes that good corporate governance and an environment of high ethical standards are important for the company to achieve business success and to create value for its stockholders. The company's Board of Directors is committed to high governance standards and continually works to improve them. WTS has adopted a Code of Business Conduct applicable to all officers, employees, and Board members worldwide that serves as the foundation for its ethics and compliance program, and drives policy development, training initiatives, and reinforcement of its values throughout the global organization.