You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: I'd especially like to applaud our manufacturing, supply chain and logistics teams.
During the first quarter, the teams dealt with numerous issues around component availability, transportation bottlenecks, customer fulfillment needs and the ongoing pandemic.
I'm proud of how they worked together to serve our global customers' demand.
We had a solid start to the year.
The severe winter freeze experienced in the South Central U.S. in mid-February caused widespread plumbing infrastructure problems and was an unexpected benefit that we estimate positively affected consolidated sales by about 3%.
The underlying market conditions in Europe and APMEA were stronger than we had anticipated.
Lastly, part of the year-over-year upside was driven by an easier comp in APMEA, which was heavily impacted by COVID in Q1 of 2020.
Adjusted operating margin exceeded expectations supported by continued cost actions and incremental sales.
We also delivered strong cash flow in the quarter, and shortly after the quarter ended, we completed the renegotiation of our credit agreement extending the facility through March 2026 and amending terms to mirror current market conditions.
We have ample capacity, which affords us a lot of flexibility.
Finally, we announced a double-digit dividend increase starting in June.
Shashank will review the financials in more detail momentarily.
Operationally, commodity increases, especially in copper, steel and packaging supplies coupled with the increases in logistics costs have driven us to announce additional price increases globally.
These will go into effect later in the quarter.
We won't see the real benefit of that price increase until the second half of 2021.
Supply chain constraints have increased significantly as well driving potential component and product availability issues.
Entering the first quarter, we maintained higher inventory levels, which allowed us to proactively meet the heavier freeze demand.
However, constraints in the local and global supply chains are now resulting in higher costs.
During the quarter we continue to invest for the future.
We incrementally spent approximately $2 million of which over half was invested in our smart and connected products.
We plan to increase investment spending for the full year from $13 million to $16 million primarily to support additional growth in productivity projects.
We announced a proposal to close or sell a small plant in Mery, France.
We are currently consulting with the works councils and local government authorities, so timing for making a final decision to close or sell the plant and related costs have yet to be determined or approved.
Our goal is to move the Mery operation to other existing plants in France.
Our proposal impacts approximately 85 employees.
On a net basis we anticipate downsizing by approximately 50 people.
Now, I'd like to provide an update on our end markets.
From a macro perspective, since we last spoke in February, GDP forecasts have been revised upwards in the U.S., Canada and parts of Asia Pacific while other key areas in Europe including France, Germany and Italy have seen GDP expectations reduce.
Market expectations in the Americas for new construction in both the commercial and residential markets continue to be mix and vary by submarkets.
New residential single-family constructions continues to look steady for the year with recent March and year-to-date housing starts positive and multifamily residential starts although lumpy showed some buoyancy recently with March starts up over 30% sequentially.
We anticipate non-residential new construction growth will remain challenged at least through 2021.
We still see a diverging growth prospect depending on the end market.
A recent AGC survey of about 1,500 contractors noted that 77% saw new projects either postponed or canceled in 2020, and 40% are seeing further project cancellations or postponements for the January to June 2021 period.
Our drain product lines that are installed early during commercial construction projects saw continued negative sales growth in the quarter.
The latest industry indicators have been more positive, which may indicate new commercial construction growth as we head into 2022.
For now, non-residential repair and replacement market is holding up very well and with the positive impact of the freeze in the South Central region has offset the air pocket in new construction.
As mentioned, GDP expectations for the U.S. and Canada have increased, so we expect that to continue to drive repair and replacement activity.
Certainly the South central U.S. freeze helped during Q1 and we anticipate that tailwind will continue into the second quarter.
That sudden freeze demand has also caused reduced channel inventory levels, so we expect there'll be channel restocking in the second quarter as well.
Feedback from many contractors in the Americas that business has picked up and look solid in Q2.
In Europe, except for drains, the underlying markets look better.
In our drains business, the commercial marine market is expected to continue to be challenged for the foreseeable future.
Government sponsored home energy subsidies in Germany and Italy should continue to provide support and we see stronger wholesaler activity in France, at least in the near term.
However, the second half of the year is still unclear.
Strength in Italy has been driven by government-sponsored programs protecting employment that are in place through June, and successful vaccine implementation across Europe is still a concern as many countries are lagging the progress in the U.S. and the U.K. In the Asia Pacific region, our China markets have come back strong especially in commercial valve sales, and we see growth in both the Australian and New Zealand markets where the governments have done a good job controlling the pandemic.
The Middle East is still being challenged by COVID and we expect minimal market expansion there for the balance of 2021.
Regarding our outlooks for Q2 and the remainder of the year, we expect a strong year-over-year performance in the second quarter given the negative impact COVID had last year and the expected positive impact from the freeze and channel restocking.
We are increasing our full year outlook given the stronger than expected first half.
We still have some concerns about the second half with the main issues being supply chain and logistics disruptions, the final impact of the commercial new construction air pocket, inflation, and vaccine roll outside the U.S. Finally, I want to mention a few points as we continue along our ESG journey.
First, we remain vigilant toward the health and safety of our employees, which remains a priority.
Masks, social distancing and sanitation protocols remain embedded in our operations.
Second, we recently took part in Project 24 in partnership with the Planet Water Foundation.
We sponsored the installation of an integrated water system and funded a water health and hygiene education program for more than 600 students in a small Vietnamese town.
Since the beginning of our partnership with Planet Water in 2016, we provided approximately 30,000 people in nine countries with safe, clean drinking water.
Finally, we'll be issuing our Annual Sustainability Report in June.
The enhanced report will discuss our latest accomplishments and some important near-term ESG goals.
Sales of $413 million were up 8% on a reported basis and up 4% organically.
As discussed, we had an easier compare in APMEA during the quarter and we estimate sales increase by approximately 3% because of the freeze in the South Central United States.
Price was favorable in both the Americas and Europe, and Europe's organic volume was stronger than expected.
Foreign exchange, primarily driven by a strong euro, increased the year-over-year sales by roughly $13 million or 3%.
Acquisitions net of divestitures accounted for $4 million of incremental sales year-over-year.
Adjusted operating profit was $60 million, up 24% compared to last year, and adjusted earnings per share were up 31% to $1.24.
Adjusted operating margin of 14.5% was up 190 basis points as volume, price, productivity and cost actions more than offset inflation and incremental investments.
The adjusted effective tax rate was 28% comparable to the first quarter of 2020.
Our free cash flow for the quarter was $32 million as compared to negative $8 million in the first quarter of 2020.
The cash flow improvement was due to better working capital management, higher net income, and less net capital spending.
Our goal is to drive free cash flow conversion at 100% or more of net income for the year.
During the quarter, we repurchased approximately 31,000 shares of our common stock for $3.8 million, and as Bob mentioned, announced a double-digit increase in our dividend.
The Americas posted a solid quarter where organic sales up approximately 3%.
This was primarily driven by the tailwind from the freeze in the South Central Region of the U.S., which we estimate provided almost 4% of incremental growth.
Absent the freeze impact, sales would have been in line with our first quarter expectations.
We saw growth in plumbing and electronics, which is partially offset by lower heating and hot water and water quality sales.
Adjusted operating profit increased by 11%, and adjusted operating margin increased by 110 basis points.
The margin expansion was driven by volume, price, cost actions and productivity being only partially offset by inflation and incremental investments.
Europe delivered a solid quarter with organic sales up approximately 2%, and adjusted operating margin expanded by 350 basis points.
Reported sales also increased by 10% from favorable foreign exchange movements.
Organic sales were better than we anticipated as we saw growth in France in the wholesale plumbing channel, driven by higher residential demand and in OEM electronic products with customers pre-buying due to supply chain and inflationary concerns.
In Italy, growth was driven by government heating subsidies.
Sales in these regions were partially offset by lower sales in Germany and in Scandinavia, both from a continued contraction in the commercial marine business.
From a platform perspective, plumbing and HVAC sales growth more than offset continued softness in rates.
Adjusted operating margin expanded from volume, price, cost actions and productivity more than offsetting inflation.
APMEA's year-over-year results was primarily driven by the easier comp to last year's soft first quarter that was negatively impacted by COVID and to a lesser extent by stronger than expected growth in China.
Reported sales increased by 76% including 43% of organic growth, 23% from net acquisitions and 10% from favorable foreign exchange movement.
China's organic sales grew from commercial valve sales in the data centers.
Organic sales outside China were flat with growth in Australia and New Zealand being offset by continued softness in the Middle East.
The AVG acquisition provided approximately $3 million of sales, which was in line with our expectations.
Adjusted operating margin increased 15.5 percentage points due to higher third party and intercompany sales volume, and from cost actions and productivity offsetting inflation and investments.
China intercompany activity was up 80% organically benefiting from the U.S. freeze-driven demand.
slide six provides our assumptions about our second quarter operating outlook.
We expect a strong year-over-year compare given COVID's major impact on Americas and Europe in the second quarter last year.
Further, we anticipate an additional sales benefit of approximately 4% from the continued impact of the freeze in the U.S. and expect restocking actions in the wholesale market.
As Bob mentioned, we have announced a second price increase globally to offset commodity and supply chain inflation.
These become effective later in the second quarter and so will have a minimal impact.
In total, we estimate consolidated sales may grow organically between 19% and 24%.
In addition, acquired growth should approximate $4 million for the second quarter.
We estimate our adjusted operating margin could range from 13.5% to 14.5% for the second quarter driven by volume and offset partially by incremental investment spending of $4 million and incremental cost of $6 million related to temporary spending reductions in 2020 that we expect will return All-in we estimate the incremental volume to drop through between 25% and 30%.
Corporate cost should approximate $10 million.
We expect interest expense should approximate $2 million in the second quarter or about half of last year's interest charge.
Under the new debt agreement, we locked in current market rates, which are lower than what we were paying under the old agreement and we have less outstanding debt than last year as well.
The adjusted effective tax rate should approximate 27%.
Foreign exchange should be a tailwind when compared to the second quarter last year given the current euro-dollar exchange rate.
We estimate that organically Americas sales may increase in the range of 2% to 7% for 2021, driven by the freeze benefit and the second price increase neither of which was anticipated in our February outlook as well as stronger growth in non-residential repair and replace due to higher GDP expectations.
Sales should increase by about $4 million for the full year from the acquisition of the Detection Group.
We expect adjusted operating margin in the Americas may be up versus 2020, driven by the drop through benefits of the freeze, along with the incremental cost savings and productivity initiatives.
For Europe, we are forecasting organic sales to increase between 1% and 5%.
The increase will be driven by the second price increase as well as slight growth in underlying residential markets in France, and growth in Germany and Italy due to government energy initiatives.
This will more than offset expected GDP reductions.
Adjusted operating margin maybe up from incremental drop-through on volume, price and cost savings initiatives.
In APMEA, we now expect organic sales to grow from 10% to 15% for the year.
Sales should also increase by approximately $6 million from the AVG acquisition in the first half.
We anticipate adjusted operating margin for the year to be similar to 2020, if not marginally higher, depending on intercompany volume in the second half of the year.
Overall, on a consolidated basis, we anticipate Watts' organic sales to range from up 2% to 7% in 2021.
This is approximately 7% higher than our previous outlook and is primarily driven by the impact of the freeze in the South Central region of the United States, the second inflation driven price increases, and the slightly better end market expectations in our key regions.
However, we are still cautious about the second half due to the impact of the potential supply chain issues and the impact of the air pocket in new construction in the United States.
Also in Europe, there is the risk of potential shutdowns due to the delays in vaccine rollouts.
To date these risks have been more than offset by the impact of the freeze and a more robust repair and retrofit market.
We estimate our consolidated adjusted operating margin maybe up 30 to 70 basis points for the year.
This is primarily driven by the drop through from incremental volume, price, restructuring savings of $14 million, and productivity being offset partially by 2020 cost headwinds of $15 million, incremental investments of $16 million, and general cost inflation.
And regarding other key inputs.
We expect corporate costs will approximate $42 million for the year.
Interest expense should be roughly $7 million for the year.
Our estimated adjusted effective tax rate for 2021 should approximate 27.5%.
Capital spending is expected to be in the $38 million range.
Depreciation and amortization should approximate $46 million for the year.
We expect to continue to drive free cash flow conversion equal to or greater than 100% of net income.
We are now assuming a 1.19 average euro-U.S. dollar FX rate for the full year versus the average rate of EUR1.14 in 2020.
Please recall that for every $0.01 movement up or down in the euro-dollar exchange rate, our European annual sales are impacted by approximately $4 million and our annual earnings per share is impacted by $0.01.
We expect our share count to approximate 34 million for the year.
The first quarter was better than we anticipated with growth in all regions that was aided by an unexpected freeze tailwind in the U.S. and an easier compare in APMEA.
We expect to benefit from the freeze impact in the second quarter as well.
Supply chain issues were minimal in our operations in the first quarter, but we see potential issues in Q2 and beyond that our team is managing on a daily basis.
Inflation is also accelerating and we've announced a second price increase to help offset the cost increases.
We are on top of both matters and monitoring closely.
We are increasing our investments for growth for 2021 while continuing to focus on cost controls.
Market expectations in residential end markets are consistent with our February outlook.
Near term, the non-residential outlook is better, fueled by the freeze, channel inventory restocking, and stronger repair and replacement demand, which is overshadowing the weak new commercial construction market.
We are still cautious about the second half because of supply chain constraints, the air pocket impact due to lower non-residential construction starts, and vaccine rollout progress outside the U.S. The leading indicators are suggesting we'll see growth in non-residential new construction in 2022.
Watts is well capitalized.
We have ample liquidity to drive our capital deployment strategy.
The second quarter should be strong given the easier compare due to COVID last year and freeze benefits this year.
We have increased our full year outlook given the strong start to the year while remaining prudent concerning the second half.
Finally, we continue to execute on a day-to-day basis to meet our customer needs while managing through the ongoing pandemic and supply chain challenges.
The company is well positioned both financially, operationally and commercially to take advantage of market opportunities.

user
q1 sales rose 8 percent to $413 million.
q1 adjusted earnings per share $1.24.

assistant