Badger Meter : Investor Overview Presentation

Badger Meter

General Investor Presentation*

April 2024

*See separate Q1 2024 Earnings Slide Deck

© 2024 Badger Meter, Inc.

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Forward Looking Statements

Certain statements contained in this presentation as well as other information provided from time to time by Badger Meter, Inc. (the "Company") or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those statements. The words "anticipate," "believe," "estimate," "expect," "think," "should," "could" and "objective" or similar expressions are intended to identify forward looking statements. All such forward looking statements are based on the Company's then current views and assumptions and involve risks and uncertainties. The Company's results are subject to its ability to develop and manufacture technologically advanced products that are accepted by the market, supply chain risk, legal and regulatory risks, political and general economic risks, risks related to doing business in foreign countries, including foreign currency risk, competition for skilled employees, material and labor cost increases, competitive pricing and operating efficiencies, the effects of climate change, cybersecurity attacks and disruptions to our information technology and the successful integration of acquisitions. See the Company's Form 10-K filed with the SEC for further information regarding risk factors, which are incorporated herein by reference. The Company disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.

In this presentation certain non-GAAP financial measures may be used. Please see the supplemental financial schedules at the end of this presentation for a reconciliation to the appropriate GAAP measure.

© 2024 Badger Meter, Inc.

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Badger Meter is a Premier Smart Water Solutions Provider

$

Q1 '24 TTM

Sales of

$741M

Installed base

in 50+

countries

119 years of

>2,000

operationsemployees

AAA

MSCI ESG

5 R&D

Ratingcenters

• Comprehensive suite of digital smart water offerings including flow measurement, water quality, pressure and network monitoring with software
• • analytics solutions
• Industry leader in North American smart water solutions; global niche position in flow measurement; expanding international presence
• Attractive, long-term growth fundamentals:
• • Technology/digital adoption accelerating - improve operating efficiency, resiliency and sustainability
  • Stable business model supported by replacement demand
  • Expansive and growing suite of offerings with both organic and acquisition-related investments
• Culture of innovation, continuous improvement and sustainability
• Premium financial profile and exceptional operational track record

© 2024 Badger Meter, Inc.

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Comprehensive "Choice Matters" Portfolio of Smart Water Offerings to Solve

Customer Challenges

Secular Drivers

Population Growth	Workforce Churn /
Demand Change	Retirements
Aging
infrastructure	Customer Experiences
Asset Maintenance	Stakeholder Participation
Regulations and
ESG	Quality and Safety
	Water Scarcity / Climate
Energy Efficiency	Change

Our Product and Digital Solutions

	Hardware/Data			Communications
•	Flow (total and rate)		•	Wired / wireless networks
•	Water quality		•	Cellular communications
•	Fluid chemistry		•	Cloud software & APIs
•	Static and high-frequency	•	RTUs
	pressure	+
			Connections for SCADA, building
•	Temperature		automation, billing, and other systems
	Software Intelligence			Support
•	Trend analyses		•	Training
•	Exception		•	Turnkey Installation
	detection/notifications		•	Start-up / field support
•	System monitoring
	•	Calibration

• Multi-devicecorrelation
• Predictive maintenance

Outcomes

Revenue and

Capacity

Efficiency Benefits

Water Conservation

GHG Reduction

Compliance

© 2024 Badger Meter, Inc.

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Over the Past Five Years We've Evolved and Expanded Our Served Market

Capitalizing On Macro Growth Tailwinds

CEO Transition	Early 2020s	Today
Defend and grow	Premier AMI	Comprehensive & scalable
US Utility Sales	solutions provider	water management solutions

• Strategy evolution aligned with customer desire for comprehensive and tailorable solutions from trusted source
• Broad and expanding portfolio to meet each customer at their pace on the smart water journey
• • Smart measurement hardware - meters, pressure, water quality, network monitoring
  • Reliable, secure communication solutions
  • Integrated software - data and analytics that enable intelligence, decision support and consumer engagement
  • Training, project management, installation oversight, support
• Ample financial capacity for continued organic and M&A investments to further evolve solution offerings

© 2024 Badger Meter, Inc.

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We Have Fundamentally Improved Our Financial Profile Delivering Strong Sales Growth, Recurring Revenue, Improving Margins and Cash Generation

Full Year 2023

24%Sales

Growth

SaaS

revenue

6% of sales

+140 bpsOperating Margin

106% Free

Cash Flow

Conversion

39%EPS

Growth

Consolidated Sales Growth		SaaS Revenue Growth
Revenue in Millions $							Revenue in Millions $
$800									$50
$700									$40
$600									$30
$500									$20
$400									$10
$300									$0
2019	2020	2021	2022	2023	2019	2020	2021	2022	2023
Reduced Working Capital Intensity	Improved Operating Profit Margins
		Net Working Capital as a % of Sales
26.4%	25.5%											16.8%
		24.5%
					22.1%	22.1%	15.3%	15.6%	15.4%
									14.6%

2019	2020	2021	2022	2023	2019	2020	2021	2022	2023
		© 2024 Badger Meter, Inc.					6

Longstanding Capital Allocation Priorities with Ample Liquidity to Execute

Internal Investment to support organic

growth and sustain core business

Grow the dividend annually in line with earnings

• Strong free cash flow, working capital management
• No outstanding debt obligations and $199M of cash at March 31, 2024; $150M untapped revolver
• August 2023 dividend increase of 20% marked 31 consecutive years of dividend increases.

Accelerate acquisitions that align to strategy and return targets

Dividend

Aristocrat

© 2024 Badger Meter, Inc.

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First Quarter Financial Snapshot Demonstrates Continued Strong Operating Performance

(US$ in millions, except per share data)	Q1 2024	Q1 2023	Change
Sales	$196.3	$159.1	23.4%
Gross Margin	77.2	62.8	22.9%

• Utility water sales increased 29% with strong AMI demand inclusive of cellular endpoints, BEACON SaaS and ultrasonic meters; water quality, pressure and network monitoring also contributed

	39.3%	39.5%	(20) bps
SEA	40.6	37.8	7.5%
	20.7%	23.7%	(300) bps

• Flow instrumentation sales declined 3% against a difficult comparison that benefitted from supply chain easing; sales increased 13% sequentially from Q4 2023

Op Income	36.6	25.0	46.2%
	18.6%	15.7%	290 bps
Income Tax Rate	23.5%	24.3%
EBITDA	44.6	32.0	39.4%
	22.7%	20.1%	260 bps
EPS	0.99	0.66	50.0%
Free Cash Flow	$18.8	$13.7	37.2%

• Gross margin in normalized range on strong volumes and favorable sales mix, offset by inflationary cost pressures
• Continued favorable SEA spend leverage despite ongoing investments for growth
• Robust 50% year-over-year increase in EPS
• Cash flow reflects typical Q1 seasonality

See last slide for reconciliation of GAAP to Non-GAAP measures

© 2024 Badger Meter, Inc.

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Providing Insight into Recent Investor Topics of Interest

(Please refer to transcript of the Q1 earnings call for further details on each item)

Common Investor Topics	Badger Meter View
An ultrasonic meter is a smart meter	Meter measurement technology is not what makes a meter "smart" - it is the addition of a communication device. An
	ultrasonic meter can be read manually, and a mechanical meter can connect with Cellular AMI/BEACON software
Long term growth algorithm	While macro fundamentals and our portfolio of solutions remains supportive, the cycle of bids, awards and installations, all
	are inherently uneven. Advanced from MSD to now endorsing HSD growth in utility water over the cycle, with variation year-
	to-year. Law of larger numbers also affects rateof growth.
Status of federal infrastructure investments	Some "chatter" but little AMI activity financed with federal infrastructure spend to-date.
	Badger Meter has several Build America "BABA" compliant offerings.
	Recently chose to file a response to an EPA "request for information" for manufacturers regarding BABA. The letter
	supplemented a WWEMA (industry trade group) similar comment letter. This was not a "waiver" request. Goal was to inform
	EPA of:
	• Lack of electronics availability in US supply chain (applicable to all industry participants)
	• Customer (and EPA) benefit from industry-level versus project-by-project waivers for electronics
Drivers of gross margins / "normalized" range	We operate with a continuous improvement mindset. While there are underlying structural sales mix benefits over the long
	term, there are also realities of competition, inflation, technology/electronics complexity that limit "stairway to heaven" on
	gross margins
How do you win in the market	Respect all competitors; believe our durable growth driven by (among other items):
	• "Choice matters" broad portfolio of solutions
	• Innovative and differentiated Cellular AMI - span and scope of reference accounts
	• Breadth of solutions beyond metering/AMI - water quality, pressure, network monitoring, software, etc.

© 2024 Badger Meter, Inc.

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2022 Sustainability Report Highlights Progress on ESG Journey

• Demonstrated outperformance from both a financial and sustainability perspective
• ESG integral to our business - both value preserving and value creating
• • Profitable growth solving customer water challenges; ~95% of revenues generated from water-related applications
  • Attracting and retaining talent to drive innovation, customer loyalty
  • Ethics, values and risk management cornerstone of culture
• Recognized outcomes
• • Barron's Top 100 Sustainable Companies
  • AAA rating- MSCI
  • USA Top Companies / Global Top Manufacturing

• 32%

GHG emissions

intensity 2020-2022

• 55%

TCIR improvement

2018-2022

• 93%

Employee Engagement

Survey Participation

17%

Positions filled via employee referrals

© 2024 Badger Meter, Inc.

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