nVent Electric (NVT) 31 Oct 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the nVent Q3 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to J.C. Relations. Investor President, Vice Weigelt, Please go sir. ahead,

outlook Beth Thank XXXX third performance earnings Regina Investor Zawoyski, and call our an and and Officer. and Executive Vice provide welcome, quarter third Relations; details are fourth the quarter. on we nVent's Chief to also our call. Sara quarter our for of Chief Officer; everyone President you, Wozniak, Today, I'm will Financial Weigelt, J.C. our on provide

that any subject Before made let and we and remind you with Securities results outlined statements begin, company's nVent's the forward-looking uncertainties risks the financial release and to statements anticipated today's the me about risks press Exchange in filings such Commission. are as future

to undertakes reflect nVent's prepared update such remarks. be by can materially found We'll over our Beth. is for Forward-looking statements are a after in I events References the made questions of the subsequent from have the are webcast which as results company obligation of to time statements presentation. anticipated And publicly Investors' website. no in of could to appendix reconciled turn non-GAAP accompanied circumstances. presentation, the today, call the Actual or will Today's differ section now results. to financials and

Thank us We you, today. everyone. J.C., joining and appreciate you good morning,

you those As and we navigate through healthy. the to hope are safe around pandemic, you and continue that we

our an discuss third Our goal outlook results, behind fourth on and this the quarter. quarter details to call we additional for are is trends provide seeing provide

me top nVent Slide remains They working employees safety and start our like thanking summary continue with our priority. to our dedication. commitment tirelessly. on well-being to Their would are I their and executive Turning to inspire X. who by

reflect the with sales results execution quarter exited return across sequentially margin and each third XX.X% on quarter segment. We both sales. improved as Our strong

high margins ability strong million these challenging and and very Our generation flow in above of am proud our flow up free cash year. to I a year-to-date XX% $XXX cash environment. at maintain was prior robust

transformation, to critical continue We digital strategy. growth our and of elements products invest in new

focus deployment emerge We confident positioned inorganic cash to and our our we to can growth. are a have on shifted organic grow. from well focus preservation and We actions, remain stronger that both cash through with

delivered net to I the the XX% strong saw like third the XX.X%. contracted a executed XX X to Electrical for challenging and would Now down were with to & Electrical X%, quarter on in Fastening turn results, improvement. Return performance of performance decrementals & income. of Cash with this Slide relative terrific strength environment $XXX demonstrating XX% on sales, Sales adjusted well, points remained our XXX% strong summary million, quarter sales during Fastening. performance. from of return achieving approximately conversion basis sequential Enclosures sales portfolio.

We nVent priorities launched continue to have growth our and new XX year-to-date on execute products.

Looking for ahead, we the fourth quarter. are issuing guidance

for Our October. saw is on a third gradual trends outlook recovery and into exiting we quarter the based

actions earnings the of quarter. Our the we cost outlined million execution reflect $XX of last

furloughs the reductions quarter. the not companywide extending are or fourth We salary into

execute. to ability in We are our confident

uncertainty the with remains world. its the and However, pandemic around impacts

verticals, vertical, largest trends commercial In basis. optimistic sequentially. as industrial, infrastructure we of cautiously a on some demand and at well Looking relative and top perform to our our are continue residential improve

improvements This CapEx in play We is acquisition commercial, saw we believe positioned, implemented. cycles. sequential and we sites. the spend Enclosures partners seen to segment job as our we In economic have gradual given past operational better improvement out and even as a Today, contractors are we Eldon returned OEMs expect see a have increase trend to our global we recovery over channel inventory. restock

for new and closely are products construction activity. We monitoring demand renovation

some data of ahead. And and Fastening some Infrastructure detail are build to in we reflective in sales to allocation and residential expect results, is update continues and One toward cautious and to sales centers call third healthcare will I solutions, quarter to to Thermal more we education. to - of while help expect Sara timing the momentum. gas to offset continue signs & MRO which the networking our more of positive is balance We year rail Sara, an weighted this This fourth please is and see includes expect on oil see Management our on and where and recovery additional Electrical continue in for and go be nVent, over should capital utilities we turn well. and grow sequential quarter, expect gradual to We area backlog to uncertain. Overall weak. segments. a believe Enclosures pressure. our we expect improvement for outlook. rebound, we the perform

Thank you, Beth.

emerge our Let me by strong, continue in to execute remains we position financial begin to stronger. well investing us saying the growth foundation and to continue gives which

performance. to Slide third in of $XXX X% Enclosures like XXXX XX% relative & Electrical and Let's last of acquisitions Fastening, and take quarter. talk a orders review down and were the points to with to Sales growth. to Eldon were turn WBT in In X four about added sales. quarter generally The to declined moment I'd about line to trends year million organically.

we momentum remained with positive large included a tough weak saw a year Thermal a comparable, in project LNG arctic orders ago. we throughout booked Management September. However, and

we at quarter. trends orders to sales For nVent, third relative as we the both and were improve looked to encouraged see October,

productivity offset actions. to Third points cash versus flow $XX our improvement year, prior free more quarter continued Price temporary which million. executed both and XX%, teams as an improve is sequentially structural up well on inflation, decrementals of were than plus XX and cost

was of in pandemic, goodwill Management. release result impairment our to in economic morning, we a impairment and million recognized and the reflected the leading reported sustained This combined in you charge volatility the $XXX potential results. non-cash the in to market the industry. oil with press gas, downturn our a energy As this charge adverse in of conditions was saw Thermal related during quarter This

to million XX% and Now X oil a we while improved please organically. starting Sales gas, weakness and third as high single-digits networking Data down, quarter. We our grew exited the solutions industrial for saw quarter and X% discussion performance, of rail segment trends declined double-digits. and Slide of in center and overall automotive with Enclosures. turn remained $XXX grew and

down focused expectations, these to expect continue our and margin verticals with pro mark, strengthen. and low strong well X-year industrial forma the expansion. single-digits We along Eldon to another exceed At quarter perform continues of with sales to

only sequential versus prior cost segment IEC and XX%, an factories XX% controls drove strong to second began execution we year. basis see Enclosures Importantly, in the portfolio. income decrementals, wins return XX X% and versus points our Disciplined almost with a improvement sales reached quarter. newly down declined is XX-point launched first our which on

saw Electrical largest Now make declines income productivity Fastening. on as down The last year. We return vertical, verticals. to sales was flat moderating utility evidenced inflation. progress lean and commercial. grow and million of Segment in continues in seismic, team over improvement by in saw of X% to on on to journey prefab Price $X $XXX Sales million XX.X%, nicely & We continued infrastructure and and in was offset our and contributed X% strong capital. great and their working strength relative organically. declined X% pockets the and sales to

in and to decline Sales Thermal of Management. saw XX% organically. environment. Flow, Cash strong XX% million revolver. a an $XXX industrial and down Balance positive we sales quarter steepest to Management, generate entitled MRO X return mainly to Working income was were and approximately for impact. project We our industrial XXX past remains the available to million, Segment improved year. flow. last days. while of the down payable had terrific productivity although relatively million in We continued mid and earlier continue teams the Thermal and Similar MRO. make sheet one-third our ended not hand days Slide challenging $XXX one enough million the to On managed million single-digits. mix declined on had due sales, Sheet on cash points, basis receivable healthy with with sales we top repaid capital additional continue $XXX progress which spend We and lower grew the quarter. despite balance year, a and We declined cash to priorities, account $XXX free borrowed have declines of negative to our proactively net and volume of volume quarters in of Commercial Moving our on reductions offset $X line residential this roughly our due

we've inventory managed & Slide Update. we increased to days our great segment. in turn made overall While Please X Allocation supply Electrical as our titled Capital Fastening chain, strides

remains framework Our unchanged.

shareholders. We two net X.X ratio the times, within reinvest attractive with leverage, We which M&A return pursue quarter and target excess X.X to to our in debt-to-adjusted will business, cash of range our our a third EBITDA at is times. manage exited

generation cash the strong in growth. organic both to and Our provides invest inorganic foundation

We maintain products and million, believe for approximately priority line in with last Fastening. XX funnel digital remains CapEx the invest & of execute in are nVent well. full on we a continue transformation acquisitions and in year. upon believe in us. and that prior $XX great a new and we top the integrate proof our points Enclosures strengths opportunities both of months, our two strategy, to With forecast we our rich build of bolt-on year brands We have M&A Electrical can these a

We opportunities. in company see space competing are of $X a highly so $XX billion we plenty a billion fragmented

attractive a in of dilution. share which competitive shares We approximately to pay $XX year-to-date, offset continue dividend million a to to helps cash remains which brings and returning key bought it with our component total shareholders. back We repurchases October, yield, an

Moving QX Outlook. X nVent to titled XXXX Slide

to XX% sales We organically. decline to expect XX%

with gradual sequential a quarter to segment, in expect be disruptions Electrical to recovery recovery, see Enclosures Thermal a continue improvement, Management. COVID-XX. any By third we fairly to the modest We absent consistent slower material & and expect from Fastening

to We more of furloughs extend the salary lower due our true margin to $X.XX and this second, factors quarter: be year. expect $X.XX. the to EPS between planning not this quarters typically Two and note reductions; of first, important modeling business, when the expect seasonably is quarter are hold the and to to companywide fourth or fourth mix we adjusted one we

year, XXX% For adjusted over income. see to we expect of the net conversion full

uncertainty economic and a as business to As we shown restock. look back history look after partners back, channel subsides our has downturn bounces

For example, industrial the suggests & lever control spend XXXX, maintenance mid-to-high grew recession these Electrical is costs, And double-digits. XXXX Management, Thermal XXXX, pulled In Fastening resumed. segments in first single-digits. eventually in to and single-to-low grew history plant and high while critical the following mild Enclosures MRO

and from Although remains the recovery. positioned for well are be we timing downturn believe different this other we might the cycles uncertain,

we've In times. conclude we we continue say concludes and and expected Beth. April, challenging my now how As execute I in to I'm to will comments, scenarios executed financial during better the remarks, that and emphasize over perform. both well we want to strong we my prepared pleased exited This I laid out decrementals to I cash, to to the on back these turn call a position. as quarter

Slide everywhere. On world for nVent. labor-saving future our enclosures Sara. how needs are solutions you, electrification in we The means with the trends believe and macro the see want Thank We of to electronics the favor. need XX, of data for and everything protection the for proliferation more I discuss the

the vehicles, move will cities, storage our for industrial drive electric demand and buildings energy and the Things Internet expect products. of XG, We smart toward increased

storage, meet our strengthened and are world. almost our With electrical well electrification and bonding around addition solutions have Electrical the with grounding we connectors, Enclosures any positioned & the can Fastening, specification smart for solutions with portfolio the flexible and everything, of Eldon, low-voltage Similarly, and grids energy provide build-out. infrastructure e-mobility, of

efficiency toward the With are shortage labor, CADDY driven labor-saving skilled our solutions nVent positioned well portfolio. with the of trend and we by

fasteners and labor-saving leader We prefab further into have extended and for a been solutions. have, decades, innovator with

Our industrial ownership. with launched controls the Management has total grow of Thermal family segment Internet reduce to of cost connected of the ELEXANT and Things

nVent week, Platform and temperature-critical we RAYCHEM designed assets. to of connect, the announced the monitor Just this launch Supervisor control

solutions. as such and customers partners with nVent HOFFMAN, brands offering, of brands applications nVent mind RAYCHEM. CADDY high-quality and foundation and are innovation, expertise top nVent our breadth Our leading consists and of These products of with channel

the of recent are of our the velocity. digital survey, speak and had hallmark foundation strong culture system, In which a participation an questions. our improved XX% Spark. engaged we we fact rate energized and saw People lean, XX% have of consists is employees in elements: engagement are five to results The employee building at growth, Another management scores the nVent. high-performance Spark people, at global and our core of

are two we digital. growth, of more building closely marketing element capabilities and the through and even commercial the On on improving with our sales excellence, integrating focus

integrated continue have in lean and to culture supply our drive We and chain improvements business a processes. will

to across Our us our digital or factory lean it's seamlessly foundation our back-office Digital drive automation Agile robotics enterprise, allowed with entire to improvements transformation. help implement whether process is happening automation.

attributes the have efforts last is products, journey as having content, it's configurators a margins profile, a sales do programs. and company. nVent On path improve and and electrical to And and improve to and space lean and top-tier speed lean our but customer We focus high-performance through our as Spark, for as over We upon the efficiency build and driving ourselves on with we efforts. grow velocity see scale, accelerated have capability, built strong of element and in or we efficiencies. a digital margins our as marketing only believe cash, we in we differentiators cash digital time digital whether everything these these digital new not our see also

I know start now Q&A. take actions over we the taking With we emerge we believe we are in to that, turn stronger. will to may While confident call well the and recovery are operator the longer, to the positioned are

Instructions] Mitchell first of question Our the Julian come will from ahead. Barclays. go Please [Operator line with

morning. around question the the business. first Hi, good Thermal Maybe just

goodwill of Are was take of Thermal parts about in sales did on give the a quite placed business write-down there large easier has portfolio? much segment us synergies And be Maybe that could with two? doesn't as how you're perhaps the next. look pruned? portfolio third remind that year you the quarter. that, or pre-COVID. other the us this So, update growth an the The tough that maybe in help It thinking

Okay.

the one-third this there's So - having - let project one-third we've and in one-third Thermal these MRO me saying of in always with start talked commercial. business, industrial by about a Thermal, more side in

we synergies around also where with, but start see a commercial the particularly to lot channels. of portfolio distribution our so And the has been through

only has that But channel, strategies So, say, when tougher think and be is about what's not this solutions, our data I place. around networking we've Thermal and think but gas forward, about and One driving we nVent we to as driving benefited pandemic had going digital. just verticals grow go a greatly fair think verticals like of to faster we oil through commercial, to core going

about about think couple even and of we think priorities Enclosures electrical up you've seen as do build growth, portfolio the more we us our us, for growth So of Electrical both inorganic us some of and in & a acquisitions that had Fastening.

So keep what scale believe there priority have electrical we core we there really with we fragmentation portfolio. say, we're such going because that opportunity an where fair just our to do really to to from that's

down And you. it, up. thank Got side and sort the operating just maybe on of leverage then

saw figure context recoveries. thinking we a year-on-year good QX, that to Just some thinking understand, sales XX% trajectory similar you on that then when margin you gave you're for about want very of recovery, kind QX? in historical the the are in that's to about decremental And

Just us wondered leverage or see we operating as on help should the incremental margin type what sales if come way the could back? with you of up,

Yeah. I'll Hi that. Julian, take

have expect impact less decrementals folding So expect QX. there. couple headwind be that with actions line of from from largely with the But that expect QX takes QX, And One, should fold cost do in kind cost begin and as from a those benefit as the to overall, to roughly also to be the QX QX decrementals a just puts perspective, is and into we we recovery if of actions gradual we line a we structural perspective. Offsetting acquisition those in to to you that that of QX. will. of in, well really from some temporary a

some we've about we're that structural recovery it's so equation. next we price the is manage be manage think As very expect is would of to And in modest had way to relates really going past of year, while incrementals this that $XX would more price/cost we range. to expansion. that those really savings with range. to plus that look to environments, look preliminary, we that to through that we're some able operating the so price/cost actions it of The benefit cost do We'd But million inflationary cost expect inflationary we million to as year, We year we year. successes year. think ongoing We in have also in pressures our next really that And expect productivity. about XX% expect next working in next ROS actions plans to to took that it good the do we target $XX also still equation. we're to see context have gradual

things Some transformation, off in our pay terms Beth digital efficiencies. in talked that about to of some the back-office of our of that's beginning

We continue footprint. to our optimize

So, those expansion. year, are in top in actions, recovery time benefit and next XX% ROS the manage some gradual carryover with range in drive our to productivity, and that and over the those temporary we can that we that continue for modest while our think just line feather fold of to going costs incrementals on plus cost underlying from

thank you. Great,

question Capital the with come of Markets. line Dray Deane from Your go will next RBC ahead. Please

back so And it to an just like really you this it's the stay are just furloughs, really and hoping earnings that all, in are those temporary speaks to coming also on - Julian of the in guidance rolling but one you that we your announce Would see companies said It was to be the left XXXX. to off. just we of uncertain time. the I first everyone. you explained where impact those in also you finished maybe reductions to morning, would otherwise Sara, pretty Good you first Great. on business. well. nice topic And off see in feathering in that back costs be you'll decrementals. back salary visibility going

quarter, and a comes trying fourth temporary on the be side? I'm could then how XXXX into much you size into that of much to the So get sense if would how coming

Yeah.

about But $XX roughly this reductions, actions, cost that included retention discretionary from here year. things like million reductions in T&E. like $XX temporary cost the fee million reductions we've that but salary range et things our and that included spend cetera. included And So talked or total furloughs, it also for

all comments And top about part, of we kind think travel, latter going on think so that more that are spend, we overall to the continuing feather line, more say right? different So in these drop-in about my see at and we're on recovery doing to to when when we're one. we discretionary business continue so of as not also to virtual in going feather not that's just day kind ways that leveraging of all. would and some digital I the of world, even may find

the So think that as on salary over will. to going back of we think $X kind feather will temporary million-ish range. QX these temporary of in next some and expect again, to furloughs reductions, in time, kind of And kind the about if about that it of coming in actions that the you more of specifically we $XX - context that this kind is QX, year, reduction million in into of

hot in to expectations res it And be on continues really side, industrial button if any non there's a That's the helpful. construction.

a new your you air this of of in roll Is lighting what there's that there's where from just have some of the see is pocket? you projects especially EFS, today, sit air with coming still green big current And projects. concern some a insight construction about terms kind projects in? that don't an there expectation of there. And continuity good the worry pocket off all as new You

buildings activity. Well, complete. I view continue although think, that, seeing some and construction to And down, a into I is there's third quarter, otherwise. been started retrofit there still Anything we've with coming way slow all, under is renovation and healthy what Dean, things that will first think is we the to that's going and of see

year So it's QX I look if an grow - lot know QX QX. to should are saying slower. the we've where ways. pocket much different it's our EFS in is going I for for said down. performance next could of economists have be position This in a saw really you be we things that to think to us, but don't certainly air and commercial done this to like portfolio And

over outperform. a And even if been down, we launched is that we're driving shows say win in where area we extends know our have products, new and growth this seismic the solutions. we moving us changes products and area, the to can seismic So, fastening code adoption reason new I new contractors. of commercial being economy an like ability areas is the This still and believe into lot that for of are that we

has is Our with going EFS and of that seen electrification, the where trends. the energy And in that been we've prefab growing one then positioned, and not the about as want is of we e-mobility, all so is just believe all to portfolio And grow just area out. to also of with more portfolio. I I with strength that those to EFS of continue talked balance storage, be Electrical to we things commercial, double-digits this able want globally business an we're that's to build

of think a we So, go from EFS forward. perform that have to opportunities to standpoint, with continue we we as lot

Appreciate colors. that all Thank you.

Please ahead. line Your Nigel Coe next of comes Research. go question the Wolfe with from

everyone. morning, Good Thanks.

based in down cycles? So like mix. with by I MRO is context understand we should than Thermal just And recovery down that Can down expect of what kind prior profile XX% put versus held core maybe well. maybe commercial performance? being Sounds and the I how want then you are on that down rather more MRO cycles? confirm to considering looks And is, stick weighed Thermal it prior margins sales up the MRO just the profile

Yeah.

that So first I'll the take question. of part

were commercial down and in project actually the considerably for up down performance because actually, out than nice in overall backlog was more QX in we Thermal MRO we So order here. commercial, Thermal, the to look from. again, standpoint, being as mid-teens. at improving low right, saw we build as And have continue you're the actually the quarter an rate to projects down single-digits quarter the overall From that from sales in a a

significantly. MRO to maintenance is history, down what's the And at expect that's just install come do just more see And as that required. base we critical eventually that but that look first again, So recover. we that past Thermal, the based control costs pulled in on that's lever eventually to is back have given the sizable

solutions and back our businesses dropped went that oil at cycles. price all we with MRO business 'XX like down during these XXXX, - and And in controls the And in over looked we've and when our even going And just all connected needing way launched of of high we better monitoring. forward the it all because XXXX 'XX, we've and period. is that But what declined our these in positioned came different 'XX, portfolio found then labor-saving trends single-digits. back and I the think mid is oil just

there has said, could view. confidence it back better. stability, high and we'll At we come and So we'll if that some see that's single-digits our point the that do for us, MRO see grows and/or history is

an air down. you market about on week, seeing decoupling being talked signs it's a seen this demand center follow-up of question my so you've color. understand important dropped a bit or center demand center growth great And Are center. of on pockets data the initiative. what data far? earlier any bomb Intel huge data based market, I kind a is of data but I is an in mean, That's end not on

No.

again, not on where and we integrators there that business to data we're sites, expect the start In going fact, us, the to Enclosures networking some having about comment back side. our for year through saw to improve on of see the growth system job half actually we similar solutions

thanks much. Great, very

Please Your the with of Research. Vertical come next Jeff question from line ahead. Sprague go will

kind products, significant or to dollar incremental growth of Beth, On in But benefit? in our sense everyone. talking new we're what help something give us the us you growth these sales prefab. can morning, on us of are how of Good Thanks. expect percent you gave an terms here get a versus you of rate incremental XXXX, kind head XXXX from of around

Yeah.

that But point think of we see products. so Jeff, over these I time, about normally, times. trying these growth are new unusual to, we're one want with to drive

And get normal so those in products some channels it. contractors to But the our I'd we through trying think know, win we're in - a for we that's portfolio, because that's we we positioned contractors with extend portfolio about in us, can example. for our when our over cases, year, say how

to we've would And taken it it portfolio, needed that momentum like IEC Eldon to there we've significance give here because gained and a really things important example for to launch so complete keep here that do were a be to we example felt is, year Enclosures, driver positions America that the investing that us for I to we into in Asia think I next will able us of but to year. an manufacture that follow was - whole be next future. And going is of we would say, going is, one is we're and something North that a then portfolio for and That's we meaningful Pacific.

So, it's important.

Yeah.

that you talking size a normal all? multiple you can X%? are of Or at that So,

point we in it too but there with mean point. No. is the as But back, at very confidence I'm about, to I it's rebounds to that because just starts spend, this growth hard going markets call that that X% fast right? we how Enclosures at strong, and to CapEx industrial end come that talked depends stay that know

But you back seeing, and what inventory. differences on comments put some finer or a couple distinct Enclosures clarify maybe a and you're EFS. there's little was there could And kind come just if bit more of a point I and between wonder

between Thermal Or thinking think kind kind your two those different totally about restocking that's, seeing impacting way, difference fact, is business? of But there is EFS, of materially any dynamic. any I and a notable in Enclosures you, channel segments? in are

the match So, EFS our I that's and to largely partners saw improved orders quarter, continued but we channel in for October. that to say Enclosures, our through into both And even improve would third demand.

with a say So because inventory EFS they're one we're of or industrial seen just - because typical stronger through Enclosures that's not that What bounces probably normally I the what But end know looking structures do in with is thing we're Enclosures, is next watching significant we at that stronger we would similarly. rebate happen quarter that fourth year. right we're and certain restock when closely year. being side, And being very watching we've going think now, to going is are the the cautious. back. behaving toward they're positions this And comes year, the not take positioned into may distributors the

So, the typically to we what we see still jump matching more distributors see demand certainty, see inventory We're yet. we're levels that's will that end going the we stability is. until point really there not and think to that And up. Enclosures

leave I'll thanks. it Yeah, there.

Please from Scott Rosenblatt Securities. go with comes Graham question next ahead. line Your of the

morning. good Hey,

the to better I a on the comment little October. about So, wanted understand bit September into

is really the the usually industrial in third largest. and month quarter the September is of So

the mean than better better first September, when So year-over-year September say months? you you did two in was

Scott, the rate. looking Correct, at

And Right. October...

in just yeah. Yeah, dollars. the That's absolute

than better year-over-year quarter rate year-over-year? October the third rate And the

Correct. QX, And the orders. better than rate's on and sales October both

nice. Right,

something Help while me Okay, you, here. understand have Sara, the cost yes. I reductions.

find just what I what in First alone? cost-out But it. And if the not number could of if quarter seeing - it's it. can't us I was the apologize you third all, here, for tell

Over combination that's million, structural. temporary $XX and Yeah. of both and a

Right.

you you And say? $XX talked sort would about, million. that in of the proportions $XX million, right,

Yeah.

Right.

yet of So executing to the quarter some maybe you cost of reductions, here. the Is million variable on those going Can or in more there am over you're fourth you're roll back then, structural if I you $XX say missing? dots? connect what

Yeah.

so And look reductions under those cost be we're million. if at just we targeting QX, to $XX

temporary we to the structural And of the that into but rolling costs some said kind so we P&L. into that rolling of back on some reflects actions do half, additionally going of the were those rolling

that I Does know should I from just And mean, sounds largely happy improvements question you're from not on particularly you. thank the did then up throughput? Sara, was in that capital, working working there? the happy working like But it I as mean with you're EFS, Great, improvement the focused Last better to in never - you're that so EFS. Enclosures, is, in have said start never that. margin when capital. show capital

so couple a maybe Yeah, of things.

look as I So, mature capital, one most do their working journey would are, they were are, we overall I and of measure lean our or probably working EFS, of at you say, how they every I how right, a runway would businesses. say given, got because at our had say that the on opportunity, at will, particularly, we good would journey. I overall lean if that on we've just where looking across capital

think improvements Electrical put Fastening, nice And they've and with inventory days. year-over-year laser our team I & some together So a really there. focus in we've some had seen

more look, runway called do, think I And I so there's they that's out there. Scott, out. still I tend And why your hand-in-hand. singled to have point, sort to of go to But that and

that some while working delivered you strong You see improving even and X%, down ROS see productivity in saw sales were some and also and ROS organic flat XX.X% improvement. they really the factory. capital nice was a And

we're productivity great capital in seeing improvements. factories good the side momentum on the and working So, on

focus other every one our on cash us to of read there's Now with capital as in the segments working to capital here overall expect for and out those all also across working would initiatives runway continue and move forward. that laser metrics being provide we said,

Understood. the another have in get Thanks. I I'll do queue. but back question

Your the of KeyBanc. Please Hammond ahead. Jeff question from line comes with go next

Hi. Good morning.

Oil So, - level under pressure. has you been gas lot a on and of set us. maybe just can

run today or Just within of as inventory where would it? how deferral? that as just levels on rate is the portfolio MRO, you part Thermal big it say destock more are you you product seeing then line? are the And And

Yeah.

that just would sales So also in typically our is energy our piece the downstream. smaller say of is and midstream, overall it's mix Thermal within But that XX%. that I

number. electrical utility in that in overall business energy shows EFS Our also up

So, overall of XX% smaller and is a the piece piece oil of gas that sales.

for the saw everything just some we QX, decreased. much go product a so the And One, through is so channel MRO with product things. channels the like distribution in there's and through buy couple there does business,

by started you cut. in those I again, of all it's that - Although like has Enclosures, MRO driven did at would lot QX. in cutting and just really, the and say that of things look EFS everything spend and one measures a just is to But CapEx they somewhat first been a plants, cost improve lot oil, of price companies of really

had as of to certainty over of significantly some saw it some return. talked tied It's - So we And there's has will is it our that maintenance. return critical just once plant time to about, because that view down. Sara it's more

capital It in on some good here back quarter. the then stock And you to Okay. see just was buy allocation.

Just lean a of the stock the see allocation sense is of on and give in in pipeline terms where price what capital based in your what us your near-term? you is,

is And But been share offset always we've for paused framework, our a very prioritize view on and and engaged. And to opportunities, our we're priority it growth said going M&A executed a see bit actively as we but in our we rich buybacks there some funnel. Well, starting growth. dilution. we're little to we're always has have to on

just that's and organically we'll out the And so I investing But see how and next first into growth. year into our plays inorganically think year. priority,

Okay. Thanks so much.

from comes Please question next CL Silver Your go with of the David King. line ahead.

morning. Good Hi,

Sara eye-catching. in to that EFS on question. And a model, mean the the please. is a was The a zero side. precisely quarters ceiling on was it right, of terms maybe in on to the mentioned ROS. the had I I noted performance margin journey, But a of last seems also of that that number think it's years. been XX.X% margin of wanted bit my I pretty the I it So be I in little that, segment, couple

when what kind pro or a in that range journey of improvement But originally in can margin think full Pentair, here? operating year. it from XX% of maybe that, terms was forma think from go a And purchased on I a the for XX% had the So, segment things margin I business think might do be opportunities of like there and what be the there? drive two above of going to the you that. know moving get I strategies of XX.X%, to margins do volumes But there's the to or sales one that tactics incrementally recent parts, number highs and what see maybe or a Thanks. you

business that me in we EFS let have. the margin strong start Well, value profile just proposition that the really reflects Yeah. our

solutions. which labor-saving around is So - really

take we way a labor the anytime job with product, up come innovate off site. a better So, we to new

up from our higher So, - our $X. standpoint, they a than about for makes selling on one them we've talked time we number contractor saves a actually more the less this, product pay product, than may price And for. that it but is job

proposition to - every we that. new we're value time product, to So labor what So, out and looking margins, take looking the really do And higher at a how continue products launch new we're we just holds. right? at launch we do to

products it a ERICO, new just very piece wasn't element business, remember, But is this from second So, and big are lean it. mature acquired the a of standpoint. we

in digital, doing with to a making approach, CapEx which improve right, - there. things that is improvements that just So, been driving margin end-to-end profile thinking, investments lean driving we've

above and we're this we're that do think the So, to ever of to still XXs the that in it's there's to strong because portfolio going to don't proposition be runway we believe that going enhance think improvements going XX%, can high still because portfolio, all I see value its range. of we I with get but things there.

thank a I And had guess, then you launches. product about that. your Okay, question, I new for

destination? think like In changes all XX to work? you decided that or maybe of products launched? a between to And when XX. target another year be now, you if still it's I you to unusual between them gap in didn't going So, won't mind, thinking and this any are the here, the kind be an - XX be couple you proposition and the it third is product you now, of you a the and were criteria wouldn't your return overall stipulate provide there redesigned you'll gap you being angles. XX reworked if product in why due going words, target bit way are to you you're in have and new scorekeeper look efforts, see product of at extra merit range, some And I was all gap think just and efforts commercialization has value number little a where or a the behind look to your just But then now. you're So, quarter just something Or been from taken wondering of I of get other Or of the - the year said, to being overall maybe seeking? new great. XX think apologies the the you for still was the but for slower I that get the where of to development it are as January because be maybe those would at same but you where meet you're is the maybe market,

that actually be get that linear. to we're back-end think close just terms our an we're more fair, was that going decided loaded, in was that of to always those was plan had of And to - continue XX wanted products. we've it never executing Well, this wanted And new investment. I a we to we - we digital, so pretty some area like

sessions, of new we just have virtual think of new I sudden, our And products. having had remotely. launches ship to some - training Sure, to do to do been Now better because the new we expect is the have products, conversions in have of been a contractors. to - conditions, virtually We products products. did able been to on we anything, be we've launched do slower. our contractor these way? We've we've able business, how to what along But our get as EFS engineers do if because learn the uptake are challenges to able to and work able market we've the all to been

training and with think, a all based of efficient bit all the to that sessions, to these on and more be we're revenue little pickup doing still end the launched just the the markets. stream, going same just is these seeded but because I getting great effort we getting products into maybe we're so It's are slower even where - market. And

So, we're agile talk a we're velocity also we've and an things. to from - execution how I about doing approach implemented more standpoint, mean, we

here think when I it launches. we're product still accelerating So, to comes new

thinking similar and at they XXXX, level the Yes. that be the that of but XXXX bit you new importance just my to Thanks. a that your little to it of little product ask a of initial to And launches? thing. I question Will relate of your in does kind strategy? growth aspect But last do was meant How a velocity lower? higher, kind about little bit anticipate

really new Well, areas. it's our two extensions product is and because likely new of accelerate for process in to all we've think lot of I'd our those of and us we But like that. ability take more this standpoint launching going a on our to that and a we're year got launch time from always - to spent what be But velocity development big effectively, sometimes and smaller it platforms time, depends sometimes to similar. count we've

end So, year. if serve And you're believe similar see to see really I to next away our see going markets we be to improve, positioned. execution think we some uncertainty if well go we'll I or start

you much. Thank very

come will Please the Your Bergner ahead. with from G. go Research. Justin line question next of

Beth. difficult Good Nice in Sara. a morning Good environment. morning execution

Thank you.

Thanks.

how To Or start, disclosed? could on you shares give you the wait that's and the repurchase formally out until price? whenever specifics what Q like or share the many rather October would

Justin, started. we'll and shares October that in until - information, was just didn't any that QX give program it but began Q as those repurchase to wait of we probably the

that's Okay, fine.

gross that that of $XX million a to you clarify structural unwind? to suggesting $X the million million or of actions there $XX cost net wrap were around $XX side, that Just XXXX the savings on basis were to temporary will million, on cost the cost in

So, to that temporary structural the That year and again, those actions, And feathered in They're tempered next drop those over over savings we took expect we gross carry carryover was that expect that should be cost was based to on the day into the time. cost actions not that in this going gross. one. year. would we

potential Okay, the the nVent's certainly expenses. that it sense. bill an sure I'm makes and businesses. you what just understand thinking of infrastructure have picture. for Maybe for about discretionary big could been guys mean some I

on get where bill thoughts of see big quarters as we most it infrastructure any to sort a So, you the business? the in coming upside if relates your

where is - mentioned us from too build-out, Well, we said, electrical there Enclosures. an the that's anything for so positioned important. Remember, have certainly, EFS our we business, infrastructure I products in is infrastructure but some I our EFS that our particular, of business electrical - enclose everything. well as is

it's whether stimulus well XG, to it's - an infrastructure infrastructure. water, Enclosures whether very So related with improve any with will infrastructure mean, I around do EFS and

Understood.

ago? recently, may I in your of update competitors, sort you of of one sort that vertical months so so. approach your on of guess, And investors further? inroads where positively be they Are approach as the to weren't there sort any opportunities were aware some six of that push on guess doing commending Lastly, occurring vertical for copied you I

that question. for you thank Yeah,

would is, particularly through and that sell EFS we're nVent, we've of I One always things the say lot channels. a Enclosures, we said - very

verticals. teams, in go been Our view more did this commercial after we've really we and targeted to investing –and upon launch some

and networking talked we taking commercial, about solutions, that for we're further. talked even we so Well, example. And about data

there through verticals, channel have that it's and you view the user driving for Enclosures example are that customers, if have even because you've to have is your ensure the understand really you coverage. to demand, got end that to sold our are products a understand you sub food commercial we end at we and teams it's think whether our really further so when beverage, So, and looking business, around having whether about XG,

with we gas as chemical, Thermal more our putting even And environment, balancing the tougher sales end And about Pacific. particularly so vertical and in building approach. we we're for verticals also with recently And really approach. our that think and say demand and being user Enclosures channel of I furthered would Asia the is have a out good like oil business, example, focus focus one their in with EFS business things has

So saw solutions, at the installer the we're years have of to in partners had success value and points we distributors what the you contractor. couple chain demand from even we networking data started we to ago, user channel along And and all create that the a or end through further. replicating even

commercial And of so lot that's and work of excellence there, our we've done part a journey.

you. Thank helpful. very That's Great.

you. Thank

come will from line Scott ahead. Our Securities. Rosenblatt go Graham of with question the Please final

Yeah, good morning.

are to wondering not that questions. customers great. literally would whether when championed distribution to receptivity the some first they the but on And where went people, are out your time, Eldon again, particularly or the see and we - of follow-up out receptivity just sales since helps things more short-cycle channels, focus you demand, if and Just that to see how your of two also the stabilization obviously, there, a the weakness nVent, customers. of but in had can into since distributors over if met had many more their realigning your nVent sales and was just be to you're with that your you one if you a you then strategy it's starting the with we recession, Beth, of starting see this. approaches, One you I'm One answer starting took one top bring

Sure, yeah.

thought working new the as distribution us, opportunities America. through of was that our But that at would matching we're be that a QX that seeding two acquisition, opportunities end terms extension actively orders doing We're a there well, Eldon some would channel say in And I these channels demand distributor, their We're level. of very we although saw we that a into some at a earlier One, could certainly well. hard we're in with of product across channels. that mentioned conversions are I working large So, bringing restock. couple there. branch say these I into versus our pickup the global the at of what and North - products from largely

ensuring could we that well. as North in America it So, we earlier launching it, were manufacture I mentioned

be that's And distribution a new partners. into so our channel portfolio brought to

the driving. that effort strategic have as the that most would with then to we're a consistent it's say, many as So, didn't But it have also Eldon we but $X have, I positioned billion organization, Europe, relationships. strongly was size in

expand the Eldon in portfolio similarly, have parts is over into we further But of can Asia allow there Pacific. portfolio our then that's going through we're into and And that next for India going Asia that Europe, across we Europe. there already. us strong piece we as to our But to so look XXXX. partners a us as So, also channel penetration plan at big ensure Pacific, is is in want of Eldon to with we other manufacture that

a a be your would that lot customers exposure of company year. obviously to that, remotely So, like to you you, also more in question in say wondering, of crept two than fact, remotely, earlier reclosures buy this would is of well, other them those just what was a Europe the it I'm to of we're United right? into is but Thank and different ways, in that's were about, you some today States Nevertheless, starting great stepped the world ability answer. My customer and changed and to see in US-centric. has forward, much not service customers answer sites the the going closure question has being much necessary? if you're others the

agree seeing can I I just gauge with to you, to comment on in but tend Europe. we're and difficult maybe It's Yeah. what

that in learned of and safe how we've digital social employees around And to I our this shut sites to lot distancing. But masking like communicate use the operate to think to how days early ourselves, So, down keep customers. tools pandemic, including with there learned and a things were world. we've got our

sites course, we manufacturing Europe down. and our see manufacture shut none we is what So, of are currently, in of

to operate customers seeing things are continue maybe our that. down, better able serve so seeing things I digital believe to way. right, limited a more in which and or other we're like But we're restaurants travel We shut or social

gradual or can gradual their thing everyone our just And that why environment suppose on I recovery is and customers. we customers. we keep we because found is managing think Scott, to if our that only CapEx operate with maybe just things does operate I about just have plants think connected channel managed, depends, it just But really it so I effectively, a do but in controlled employees stay we are how And why is the just with and this I costs still and a safe, we know safe talking - engage to and there's way in this cautious remain it's think but very a pointing their partners recovery. keep keep

Thank you, Beth.

you, Thank Scott.

now to I'll any further management turn remarks. back it over for

us Well, thank morning. you for joining this

pleased our as are our stronger. performance in to proof These We of with confident and another third execution. emerge are we're actions the results taking serve strong quarter point

uncertain foundation, a concludes you for safe We to nVent. us. we these through a This again believe there's you. ahead Thank hope times. and call. have We the bright navigate we joining remain for as future strong continue Thanks

you your may call will and conclude all disconnect. gentlemen, for and for Ladies Thank that today. all you joining