nVent Electric (NVT) 7 Feb 232022 Q4 Earnings call transcript

Good morning and welcome to the nVent Electric Fourth Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note that this event is being recorded.

to of conference Investor like Riter, to now President Vice Relations. would turn over the Tony I Please go ahead.

Thank you, call. quarter XXXX and welcome to nVent's fourth earnings

Chief Zawoyski, call Officer; the with are Wozniak, On me and Chief our our Sara Financial Officer. Beth Executive

fourth on outlook first full-year provide and full-year the and our will performance, quarter We quarter XXXX. details an for

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

materially Forward-looking to anticipated today update statements and results. subsequent of statements obligation such differ no reflect to undertakes Actual from are publicly circumstances. as events the made or company could results

presentation the can are day, by time We'll in York forward investor References Today's March the find Investors nVent's that we next of New accompanied financials for morning X to to after want section remarks. non-GAAP look hosting webcast appendix presentation. is which our the you Tuesday, I of of City. also in website. prepared to have add, questions in a reconciled the

to and turn that, slide With call now three, to the turn over please Beth. I'll

nVent double-digit It's quarter the you, and consecutive share for with our a fourth Thank full was seventh great fourth quarter growth. our of year morning and with Tony, you good year everyone. record quarter be marking to today to organic results. XXXX

products, acquisitions. on high overcoming team our focusing executed chain verticals, successfully our responding new challenges. on nVent customers to strong Our exceptional supply global demand and results delivered serving and by strategy, expansion growth We

it outstanding This year grew XX% adjusted again As in with a do well creation, EPS of of value impressive was XX%. an and to we're and full XXXX. positioned sales result, another performance year

year-over-year we $XXX organically flow, with fourth grew up segments four, summarizes XX% sales Fourth of free sales XXX an Segment and return quarter Adjusted verticals. income and growth EPS XX% our up full generated were QX all performance. million broad-based XX%, impressive basis Our results with points. terrific. and of were year XX% quarter Slide on across grew cash

key with up Infrastructure up double-digit commercial Looking mid power data well, growth. all and solutions the finally, had the double-digits growth by America. low North our verticals, utilities. quarter. grew Energy way grew broad-based led led And strong Industrial strong at by in residential single-digits driven and double-digits. performed

we regions up up impacts Europe continue Turning North to declined broad-based developing America, double-digits. to growth geography, due high strong single-digits. to primarily organic segments, all in sales in China. COVID-related by see grew in

orders in a a QX as QX earnings comparisons. January orders seasonal distributors distributors our to we Lastly, increased growth, and have a continue have call, XX% sell to orders tough Recall were to strong. and year-over-year. Orders we we discussed in in had as Overall, returned through customer ago expected backlog. destocking. Also, demand moderate our year robust we flat since remain

EPS sales For increase organically was segment in grew XXXX. up $X.X and also an full had Adjusted XX% on of we XX% income record XX%. year, the of XX% top of billion,

full year, the flow. For of free $XXX over cash we generated million

highlights. Let share few a me more

our product vitality now launched and new new First, is XX XX%. we products

sales products growth. contributed three to points approximately our New

renewables Infrastructure Second, a name power with from up our verticals, teens utilities, our focus XX% low solutions, on and sales, includes now of to data high e-mobility infrastructure spit. is growth approaching at few.

areas. and sub continue rapidly, are these in our we expand these of solutions to growing verticals All and portfolio

now represents in For sales, data in XX% over and solutions $XXX million grew XXXX. example,

then. overall And growth in Lastly, from from we in have sales added exceeded sales acquisitions more than annual million growth. since nVent $XXX XXXX, acquisitions

when healthy pipeline we did remain acquire in built in had success disciplined not we our our growth and extend have a opportunities. any approach position verticals. XXXX, and that in solutions high we complete companies differentiated very products While We've acquisitions that new of

scale our to global in fantastic We've ample execute shareholders. growth We're to them and returns reach through higher XXXX. rapidly we distribution for been well-positioned has footprint. channels, our and with believe able led on capacity This to M&A approach

at expect sustainability, demand will and to anticipate the Inflation and continue Infrastructure investments accelerate. digitalization solutions. Looking our to macro We Reduction we trends, products Act the and the from drive electrification, Bill for

benefit investments from On trends power and automation verticals, e-mobility. the continued growth electrification Infrastructure resiliency. see chain expect industrials in supply in utilities, investments with we renewables to and with will

centers, continued Overall, strong expect energy to benefits. given expected our slow. is We with efficiency growth liquid data commercial the for cooling and portfolio

saving for However, and for as labor growth well as products the our power need data infrastructure. demand more solutions drive will in

be to of fuels see and represents carbon our projects expected capture. energy, to we portfolio. with X% clean MRO, than decarbonization In but soft, and by is Residential growth continued less with supported expect LNG,

While supply to chains remain improve. challenging, expect we do gradually them

We also inflationary environment. expect an

manage cost to price We shown are have positive. able we

we confident are to perform. continue can We

our we proud team am and delivered nVent I record in of the XXXX. results Overall,

We change profile verticals growth the the We strong value creation. and to secular will higher on longer-term tied year focusing believe growth of of continue trends. to XXXX growth company be another

outlook. now will some as Sara, please as results the Sara over well I on our turn for call go details to our XXXX ahead.

sales of EPS flow. growth, cash expansion, and another I'm pleased execution quarter return growth with double-digit to strong free robust on sales Beth. you, double-digit Thank great share

on growth. points Sales to verticals. segments added sales volumes all slide last with XX%. begin compared up across Overall, up or Let's of organically. were were last and fourth modestly to XX% year, to and price grew our XX $XXX five results. compared million year, quarter

Foreign exchange four-point was headwind. a

on $XXX versus and was strong basis year-over-year. Better Return with segment strong points XX%. XX% million, was sequential price quarter XX.X%, up sales drove of improvements cost XXX our the up incrementals expectations. income productivity Fourth outperformance

the inefficiencies. and Price million chain roughly supply from impact of inflation than contributions offset more continued $XX

range. $X.XX, make marketing above up In with end guidance productivity. addition, digital EPS the to and and and in XX% adjusted investments we continue high growth sales R&D, and our of for QX

capital million the in year-over-year. cash, in resulting $XXX XX% working quarter, delivered free improvements On of flow, cash significant up we

where Now, businesses. please of strength turn will six segment continued quarter three you performance, see for fourth sales all to slide discussion across our

with enclosures, million growth led both nicely industrial. sales organically broad-based all data grew by Sales Europe. up was led approximately followed and with Infrastructure Starting across also solutions XX% $XXX Geographically by America with increased contributing. volume verticals of North XX%. price

Enclosures fourth basis on catching execution was up million, return. strong price on XX% XXX an up quarter cost. by impressive of XX.X%, segment and year-over-year, income increased driven $XX sales points Return

basis year, XX For the points full to ROS expanded XX%.

was with over power slightly. organically million by Moving America. North all XX%. to regions fastening. utilities by XX% increased with grew volume Sales contribution, price led Geographically, electrical infrastructure up growth Sales $XXX while of strong was and led down

up was consecutive ROS sales year for fastening Electrical and electrical segment the million, year was to last expansion and up XXX costs. XX%. compared Return solid points basis $XX of fastening. on marks execution fourth and income on XX.X%, This price

million Russia verticals while Turning with grew in by by management. of America Sales both led impacted chemical. headwinds. organically, to Europe particular thermal commercial Geographically, price and industrial grew North strength contributing. grew $XXX X% with lead and All large projects, resi modestly MRO volume and with

project and down due X%. to segment was higher decline income investments. sales mix XX.X% $XX to year-over-year. XX on points up was million Return was management sales Thermal R&D of of This basis

organically. year results. $XXX $X.X of turn sales with income XX% year XXXX We record billion, to XX%. ended Now sales XX% the slide basis grew and expanded return to our of or XX% seven up on XX million, full Segment for recap to points

the X% free up flow with XX% Adjusted XX%. adjusted up was $XXX year. of the full million, outs A And for for EPS cash year net income. was call $X.XX, conversion few

volume contributed to First, growth. sales points six

Second, all organic expanded segments and sales, margins. grew double-digits

outstanding Third, the the solutions customers. of we This is And we cost. portfolio acquisitions two year. summary was and XXXX to our demonstrated price have manage sales. provide ability to consistently testament our lastly, added a to In points strength to our an

cash slide revolver. we flow, eight sheet and $XXX million hand will on titled see on and On available million year with our you of the $XXX cash exited balance

never position balance sheet stronger. and financial been Our have

In million. balanced million we to nine, prioritize and XXXX, to and Turning we a share $XX $XXX dividend returned shareholders, a to to slide of execute approach capital continue competitive disciplined allocation. repurchases growth including

times. exited cash to deliver growth attractive have flows we of shareholder net and We M&A EBIT returns. believe including a adjusted X.X our strategy, with capacity strong debt and ratio on execute ample to We

to Moving slide XX, our outlook. XXXX

X% We of expect range single growth assumes growth, and to in This price. X%. volume organic points three of the digit low sales roughly

given While we growth the expected uncertainties. expect and sales pricing backlog growth reflects price robust to quarter, a stronger macroeconomic each is carryover. also be half This first and in positive

year to is Our EPS of few outlook important growth adjusted to A for X% represents which $X.XX, full items note. to X%. $X.XX

persistent offset plus to price productivity than expect we First, inflation. more

favorable and margin Second, in growth. and we new stronger invest capacity third, to price And will digital year-over-year half comparisons, continue we performance in first cost. the products, given for anticipate

higher This constrained free Lastly, we cash reflects CapEx XX%. expect of investments flow in areas. conversion approximately

We continue strong capital improvements. underlying to expect working

A on rate rates and XXX rate of net XXXX XX.X% to our line approximately a item variable approximately to include million. higher expense assumptions the to range few higher call interest like out million we'd $XX below shares due debt, tax of XX% of

to million $XX $XX $XX of corporate of million we costs Additionally, million. CapEx and anticipate approximately

Moving to XX and quarter slide our outlook. first

We growth performance. We X%. of of the strong quarter expect in range another margin sales to organic X% anticipate

year year-over-year. $X.XX to our results outstanding of year. In EPS range in well-positioned to And per believe expect another of we earnings XX% For I adjusted share, we in strong delivered another the XX% for up are closing, XXXX. team $X.XX

call now will back over I Beth. the that, turn With to

you, Thank Sara.

to great moments to want slide XX, our of Turning the recognizing spend team. nVent few I a work

to of appreciated ability course year, respond chain by the and the Over challenges customers. our to demand supply our was strong overcome

a to top our have performing the areas, when partners distributor suppliers in it quality. and placed still we came While, challenging us delivery few

As we success. you few customer commitment our a for the can recognitions our received highlighting the slide, of and many partnership we're to see on

product extended value nVent. safety, These recognitions performance measures and delivery, about just in to we weren't innovation these

and the significant Another in area we EFG commitments. electrified at performance. We've our build our as world. recognition EFG is our a more made center is sustainability of of progress sustainable strategy

Sustainability consecutive Ecovadis. second awarded the a were again For year, Silver from we Rating

placing score X% our overall which and focus assessed companies is in percentile all to the industry, success a our our companies we culture, and to improved on of top people XXth assessed. be of in believe differentiator. Our the our us Key

workplace. great to a diversity We us inclusion a for have priority and create made

diverse, very directors XX% place we our as proud is best are recognized boards. on that XX-XX board by work. we were to women a I'm Also, certified and of

to committed our inclusion success. Our and are contribute we building people strength. of culture priority every and employee a our are allows And thrive to to that

value building Turning on up for Wrapping our of XX, slide to and nVent differentiated Day outstanding our upcoming year month, for is shareholders. Investor XXXX a electrified and more XX, how sharing slide another world. customers and to nVent look next I forward performance sustainable delivering was

We digitalization are expect of trends. electrification And another to and sustainability the strong we XXXX financial year well-positioned of everything, with be performance.

is future Our bright.

will to now turn over start With to that, operator the Q&A. call I the

Thank you.

question the yourself begin now up. that and answer will to one Instructions] session. limit We and one question please We [Operator follow you ask

you question go the this momentarily have re-enter queue. to our Please will questions, Jeff roster. you from we And will pause first from may At be assemble Research. If ahead. question additional time, Sprague Vertical the

Good morning. you. Thank

Good morning.

couple a off price - obviously jump just The just continuing good page. the Hey, numbers to morning.

fight about XXXX, I to finer need you inflation offset line in to price enhancement? actually you into all able And offsets that dip margin just you nice think productivity Do plus you bridge. XXXX, to price inflation. in to in wonder productivity XXXX? drop were that. like the XXXX, Just through It bottom But think for productivity the I some on actually if seems point said thinking put I said right, could a you inflation.

chain think, some just I me And price the needed well supply offset to of let to the productivity as we due with Yes, as start negative XXXX, XXXX. inflation saw, inefficiencies.

took essence, seeing volume our with more -- robust growth. service demand to us us a the So and were we cost it strong in customers

course more context expect And a going that's to of gradual cost. just help And turn would be in XXXX, call, constrained that those going year. supply on factories as me chain so, that we're talked productivity last that the improvement. But offset we to what's in some we've and as we productivity focus help of walk is on remove improvement really really investments those productivity and supply of would we've provide And the chain the about And price to we focusing well positive. to that in, that areas XXXX. our as expect to the to in over throughout to this

maybe QX channel. of or happened like the and beginning address seeing the the degree, a concern distributors just on bit that some here? of that the like, channel, the certainly maybe color drawdown of exiting kind And but you some in may that be, health little to look There the as what have rebalancing, and look year of into material was you're doesn't it we'd

Yes.

we our QX destocking. seasonal we we normal As to to would had on call, say return did see some discussed that. And expected see I

through drop we we As progress certainly quarter, a the up orders. in saw

see strong we our was distribution did partners. what and from However, sell-through demand

So some were resetting their they levels. of inventory

we Now, to January, those turn increase. as year we've orders this and seen

they so management us got think demand. are I some sharing of level, like, And if with good still that there but was inventory good that they've you backlogs,

see XXXX. believe that go we going so, up through we're to And we pick as here

for the color. Thanks Right.

you. Thank

ahead. next the from from be Please go Coe question And will Nigel Wolfe.

Nigel. in filling [ph] Bastion is This for Hi.

for was about pockets of And then could on price orders? maybe expectation, contribution And what you price if then is do kickbacks? So you fill you realization contribution price question on XX%. obviously, the my expect price XXXX on any see XXXX on and touch XXXX

Well, let me talking just price. about start by

Our view supply costs, labor, still challenges, inflationary still energy cetera. is it's there's chain et environment. There's an inflated

inflationary stated, price. hold environment, aim as we so, is an our to And so our

the However, forward. with level we go it's same as year, assumption we shared as as Sara were last at not s your

Yes. so -- I think

you. Thank Alright.

inflationary piece of I'll moment our just for then, do give color one ability in is to kind innovate the ability a add of that, on customers. terms our to deliver reflecting point and that I a that of a our environment Maybe expand stickiness. Yes. to think maybe on bit to And just to it. of it

well Something roughly look expenses. our total all if you is as as structure, operating to $X.X keep cost of in mind at our That's that's billion. COGS

And than cost overall so, metals are specifically XX% less structure. of that

on inflation relates side, we seeing as and metals, seeing we're some easing else. it while the are So inflationary to everything

pressure. labor, got you've you've that got to, we're alluded components, electrical Beth where energy, seeing as services, inflationary So is professional electronics, logistics, that

XXXX, so, XXXX. going equation manage cost consistently And to like demonstrated and footed and going we've in XXXX, price we're keep front in consistently that into

Would year Great. Thank is for we margin, you. the of the would weak be XX% should enclosure quarter range? sustainability above And enclosure? be, you margin typically then, my XX%, about fourth expect since full question to how XQ think the

No.

the enclosures, quarters, and one So we that of that the look how commented is at most we terms on progressed demand our things inefficiencies. supply of was the if segment you with had chain challenges in

was very -- it it so, it et labor cetera. was whether shortages, whether freight, And was

some -- So to some the extent, end several year we had some inefficiencies, we the improve that cost. that to of towards back and profile the shown margin years. normal expect last We we've on to more price over backhand ketchup would the return

level we that that so, at don't expect going And QX. into to margin be

Right. Thank you.

Joe Thank Sachs. go Ritchie you. next is Please the from ahead. And with question Goldman

Thank you. everyone. Good morning,

morning. Good

different And I'll So, -- the a different little I'm angle take ask here. last a question. hopefully, going pricing bit just of a little to

There's believe to sounds XXXX. put that carryover is And XXXX. you'll pricing because it inflationary, is of the be in comes into to So also going in like, be got pricing there you pricing likelihood did additional kind some that increases you million good through. $XXX backdrop over some

So just pricing on and pricing you plan can XXXX? maybe comment carryover you to through whether in put the additional

Yes.

see years to as of price the But done And organic well in points that progresses, year is cost inflationary said announced. growth, I as that as prepared manage X%, carryover, that environment X% equation already that we're that's three really to we've past. Joe, price, are continue part mean, going we that that As of of in reflective there, to our of remarks as that's much the we today. things

infrastructure then demand see right, just helpful. And you're have our your much yet, low maybe to super backdrop good. Most volumes, it's sounds single-digits. be, That's through to still the thinking volumes the like great. for And money of very very Okay, companies yet bill. calling up from

color you any bill, provide to that'd be on from could infrastructure then help square So that. the if any you're starting And whether benefit me helpful? see

uncertainty, still remains a there of think I right. lot macro

to And the ports broadband infrastructure and When funding, and and moving very of reduction we so, the of know. our act, and through it's some bridges the how airports, most infrastructure put roads states, and for and it's it's that the comes that's bill and reflected it bill, allocated both transportation as you together. water guide in inflation -- and

particular and And to comes going the to be that in as Reduction to we But we that like it When growth. But see solar to renewables see EFS we e-mobility. flow. where look investments okay, see at enclosures for where it. of we point are we more drive more where Maybe half it's where working and is on see could multi-years we areas to the and think start we're towards year of be I as more those EFS in all and the funds those and going that's here's towards that some to and be flow. back some currently areas is could positioned, as Act, expect where start this our a say, back I we're demand to half enclosures some Inflation think it'll have the come business --

Okay. Thank you.

the Please go And from from ahead. Mitchell question is Julian Barclays. next

morning. good Hi,

morning. Good

good Just morning. --

operating bit Just a look more. margins to at the wanted little

up I So about the think guided be for you've sort XX of bps those may XX, year.

enclosures And that's quarter, Just we color that how check is bigger the sort margins then please? right in Are increase, a more year-on-year to seeing fourth to the segment. thinking by then trying basis, we very after on around of segment about of Any wanted are thermal that, different sort that? range. had understand flattish. roughly Just and a you maybe

into you a kind say segment margin, ballpark, color that in it's ballpark, of a I if the Julian. things. that would And back income of a by just Yes. from would perspective, from then by kind I perspective segment, saying start couple

that to year expansion. from volume, going to come to cost going that's be but or is this year, be Yes, year from another XXXX in confident First, positive contribution going we're margin is of the the next year price productivity. right also

expect perspective. performance comparisons year in the from one the We first cost. the given, in be here lapping negative just high margin a that's stronger We're set second forward, twofold. serve, price really half And to half, some first just stronger our QX, as ago. right, to saw also of half. It's than year-over-year carrying chain some you that and of also, productivity supply we're a cost But versus

if So, segment perspective, building from expect ROS XXXX. to year a off that you in at continue look enclosures, that XX% the of we largest that the expansion they exited really with from

see So again, improvement see first here from enclosures continue to QX cost also and productivity margin to expect benefit enclosures I I tremendous a the that strongly. say mean, just so. left modest the mix grow expect has in expecting to four really and expansion, management, management, given to half, with pressures price both we thermal more then right? EFS that of gradual in the standpoint. and still over expansion thermal in on And years, expect some come back had here we bit a just last margin margin said, expansion board as projects would

at, Sara. And much, seven. trying to slide very Thanks say, just looking

buckets sort So just second, on when you've productivity very net of to and helpful thinking the lower on about income for a XXXX. got the that focus we're left. bridge segment price And

spread million net a of $XX got versus between You've productivity price XXXX. sort in odd a

comments through about Just cost as yet? tailwind, a don't maybe of sort I go year your XXXX price of light kind in investments, spread called but of and the the becoming think we you out understand in do trying think to how we productivity narrows around that

Yes.

inflation. terms colored a mean, of catch will, that balance and Julian. in in embedded we XXXX, that think price price quarters you've a I while that, you narrower $XX past. of being million, in then degree And some inflation, saw headwind, we So rather I well, I cost productivity, of if of but productivity with in was perspective, right, offset to was what terms that in again, expect million than $XXX negative do it think up, a to

to do productivity we through expect sequentially So that the improve year.

gradual right the continue supply to even for at chain, see to QX. in not So but gates from we good improvement here QX QX,

continue course to that expect continue into the of and through the QX We year.

little XXXX. but contributing So both we more positively bar that than weighted in cost, to bit see a productivity that towards price

Great. Thank you.

question The Please ahead. from Markets. from go Dray Deane is Capital next RBC

Thank you. Good morning, everyone.

morning. Good

free Sara, hoping strong I was some us really take finish take through Did the much in working to you was cash down capital you just of play? flow, at How dynamics of year. guide, here? happens flow referenced buffer for working that through inventory capital XXXX the just inventory? I you free but what buffer from the improvements, know take some to us cash that, the

Yes.

capital improvements from QX, to free sales performance And So down our really we even And it inventory flat, QX, chain grew. to QX. some that and were QX look inventory. in were the QX pleased with was And flow cash really if that of at working supply some seeing. then while take we of was you reflective of did we

to times service we lead down, able levels, as our to still of inventory. make the we I areas be got it's up were of there's saw and to are -- know some own some or we're some we But want not say, still, our some in yes, But surgical. where very we've those a there So that investments. that would tighten come

challenging made chain So, going times. approach improves, a surgical to progress it lead make we're investing areas but can supply We we very that continue QX. that in that that make sure we're or progress the those know that have to to during to as are pleased also that we with need we more continued there's constrained we're to take

we on then Can more solutions some That's the helpful. center color data for business. Beth. get And

sense outgrowing that how us versus give cooling? driven liquid You is the by you are Can enclosures of being of significantly a market much there.

a when areas. fastening and racks enclosures two with centers, solutions, getting talked centers, direction way data at more those is liquid before cooling we the data seeing but way efficient look we of and we're would When cooling really with where about growth, selling across do our energy off, data all those solutions that center it's we've One I efficient and liquid data we're And sell -- hotter, and cooling its that this solutions. and in into applications. say, chips

from cooling. liquid So growth significant

would from saw area, where power units. growth comment I on is our we other The distribution

So that as liquid the growth rest what how really we power think and about solutions. pulls our it And of do, we led all by and is through distribution fastening outlook but predominantly units. cooling here, our of our enclosures

Thank That's great. you.

And the next KeyBanc. ahead. question from Hammond go Please is from Jeff

Hey, good morning, everyone.

morning. Good

Good morning.

I margin. the back just wanted to to go Enclosure

So very quarter. good the in

Beth said, think not you I would that that repeat. you expect to

So, maybe sustainability why know some there? wondering, back? aberrations et dynamics, just cetera. just on that steps there the were But any seasonality, I I'm wondering or there's if

year. I'll the upon price quarter, said. Sara. right, is of some the Maybe This up was Beth early mean, QX in the from perspective, build from what Yes. a part catching I really of that

cost QX QX were price. So exceeded and

we when alone, QX stand return looked sales. so, And impressive on at excellent,

we know, but well a have very sort quarter-to-quarter that sort strong you of sequentially. As in of ROS, usually, was seasonal downtick

we look put sales of that for we full at in context XX% we full the So I'll expect perspective. year enclosures. a the exited return maybe on as year, from year at, the And

strongest in cost comparison year into build expect margin on of the we sort XXXX. full would and to price be the the so, And carryover. expansion strongest see half that And upon first would heading that expect year-on-year we margin expansion to based that to

here some in quarter one performance year-over-year do nice margin expect margin from we So perspective. a

Okay.

a had smaller you big price and really, a going is that maybe catch it's cost up, bit forward? little So gap

Yes. as of ago Because comparing of thing QX its year in that, kind well. stood where

there. I on then, and color back the data solutions. And just appreciate Okay. outgrowth

wondering, hyperscale all kind the bit. showing just little that's cutting outlook XXXX. but up Thanks. around at trends It of back or data for the a Just like and the on order center, cutting lot particularly, there's seems emerging maybe people if backlog, demand and of give in of a us just in concerns, your kind some there rates? view some And guys

technology liquid types The we're our backlog these expenses, on. cooling, despite seeing increase actually way solutions we strong or look operating demand in that at is, And everything because to else for of this seeing reduces there. is we're which going that conversion backdrop of of

more it's technology So shift. efficient a a It's way.

think retrofit. conversion, is to And data applications, center we so across that and multiple going both to and continue extend new

demand continue. that's that we're So seeing to such why strong expect and

then, just your above three points. that on that's or is solutions Would based? you data of business And more that kind front. say, you outgrowth, broad Okay. would running say

not the three just we're points tracking that? sure Can I'm you explain growth. maybe with about

I the points new contributed outgrowth. to three think that you said products

data Is how So much? wondering is that broad Or just more I'm towards lean solutions? it based?

those power would points in of than I data EFS Well, across side the both and say growth products. that it's based distribution that three is for three significantly, growth from broad and higher that on about points but the thermal, cooling enclosures the seeing center we're

much. Okay. Thanks so

from Please ahead. question And the Graham is Loop. Scott go next from

earnings really deliveries, outbound we've questions little time getting that better, tendency good execution. the I chain things of bit that the the terrific, myself, one this to sort necessarily not I'm order been shrinking, this and just with customer was a supply I Well, a wondering, is, season of Hey, great of have there's for morning. deliveries, couple natural hearing fourth versus and that chain, because versus between in in supply you versus say much, whole kind dynamic? destock, some delivery sort order from quarter, flat about their on-time demand comp was talk you orders you'd So, could how and already of the of the both in that out maybe let's improvement parse the with backlog, of right? kind being your

Well, of those would it's Scott, both I things. say

some some was QX doing of their in occur were our destocking. inventory levels saw and looking we what that distributors So, at

that again think, do as up rates, sell in had remember, And I so hence, in was XXXX. seeing I strong. crazy made we picked still XXXX, January. rates now, in through orders order just But very have We we've order that growth. order And our reduced were progressed of comment XX% and the rates our QX

us give partners, customers to point, we saying, could that definitely visibility orders respond. at were more we and our our to us placing so So, demand on

orders, visibility. seeing they're I those not as think us placing months give we're So that out chains improved, supply six to that,

And so said sell-through we're picked seeing is having good, it more up. orders have But that, balanced.

And part I of think supply that the gradual just that's so, we're chain seeing. improvements

Yep. Thank you for that.

within don't what if volume you -- not products, just in to number? the X% you as just there. was like assume, I the new new pricing really big how do And a And I'm guess How On XXXX, assume sort much a contributor looks could it's of hazard that anything. I a the wondering price, number. handicap want so

don't really products. better think providing outsized reducing driving about that labor, When we they're to -- products, operational they're they're So we the new energy we're Yes, right? performance. efficiency value, we or always looking or see new launch way

with launched therefore, margin we're new that creating. a So because the value higher expectation, we of products

that's how about pricing, versus it we think right. So

this it's that with would look go we're say, to as into, or time, XX launch volume great them, from there's we to always can we look to look think, So will. get point always one whole to cycle to way -- we're going year, at continue I strive And, least products of drive were higher products. launch value. in We at as we we a growth. XXXX, differentiated them and we at growth like And faster margins, improved least we I new if have want but to

Very and my taking good. time your you questions. Thank for

you. Thank

David Silver King. [Operator from next Instructions] CL ahead. question go Please The is from

you. Good Yes. Hi. morning. Thank

morning. Good

R&D and spend, think forward. would -- about maybe your the that My going about be your has Yes. thinking question

XXXX And your I -- year was R&D. R&D a spends highest four towards each the quarterly had XX% was quarters it on so. this interesting four up thought that quarter, spend, So, record highest for of the or

seems direction are am an wondering were goals if it particular I'm within of R&D wondering many those or some customers? In or your increasing, don't been and mind could projects there's words, with me, if know. spend. highlight collaboration the maybe And in customers you. maybe an I nature evolution let's you're about currently? I spend R&D in thinking your Thank the you done, collaborative directly with say, the To like, in how priorities there's if So, other

-- going right, as made we such increase And been have to percent has low it our also And we R&D when were increases, of always impact, has spot top on grown we've Well, was always was our line we so terrific. right. well. end. but a we've our intent All spend, thought those the stated because which had sales that we

to how market So platform we the think changes approach. us in very it may collaborative major some that understanding but products I the folks, a reduce a serve be in to XX% by we've that application. a really developing cycle between our year productivity. results And great for every specific done cases, development realize to our needs. supply with us particular work great In a to think customers customer, folks, of marketing It can is R&D and we've and the job process. And right? starts velocity, then XX%. technology multiple it's driven times tried such That's through we a chain our It's

improved also launch we've then, the And process.

positioned as partners, it launch getting have we've those we And inventory, product, of new a of got information continue there impact. product we'll we've invest launch we have collateral, us to having when way distribution just the available. all that through digital more I believe greater allowed our returns. great right, without things product And, a a it's quickly can't you got have we to that see digital So such

that. for you Thank Okay.

qualitatively, question wouldn't out to constraints spending maybe least capital top of a calling capital recall, priorities alternatively those about some What's to some your a is be projected will constraints you XXXX. the had exploit to points calling you be bump areas capital But at there. of There where of the spent see. just highest I discretionary your discretionary just And for I'm alleviate mind opportunities maybe little I of Thanks. that that couple couple bit if the XXXX needed Sara, or in maybe out for a was just addressed. Next spending? wondering of portion you

growing is start I'll our center liquid data solutions Maybe significantly. talked and so by saying, about cooling we've our

growth to us capacity some investments that that for So an where we to expansion verticals. having make capability to high And further and within also Mexico, need or our of to able need plant to our these have be manufacturing particular additional growth we involves to extended product campus expand the campus some high areas line. add for

Yes.

new really just to maybe transformation, to digital couple is high add on a growth So mean, products, our focused of things that. I verticals. CapEx

consistent XXXX going So that's into here.

things I and those enabling capacity But customers very, to. of supply it do to We our believe XXXX, we of in for really a alluded well. in deliver constrained that areas. uptick in some us in is our very just position think Beth us that just are chain is strength terms for here

frankly, It's existing this enclosures, so, our have automation, out seeing. in in these reflects Mexico, our efficient as to that in building of really bottlenecks forward. that particularly increasing some as allow of as what out And better modernizing we and factory for we're capacity. more well some in addressing building of well output But investments our go output we some also as

just the Okay. that. last question, products. new for Thank then about you And

of with a new XX. started years this XX a year out was the couple Beth, number I You noticed think ago, target And I in products.

forward resist can't product I XX you. hurdle asking the new new the So, as XX is as introductions? far going will Thank for rate be

just in projects. Well, fastening are new And we products, that, smaller it to which platforms, types always whether our we on more Yes. depends brand of to business, of want faster XX. whether have tend they're to types have fasteners, or answer the

that if driving new growth, time, we're least So reducing as it really not having just think a at at depends. margins, more. year, But cycle XX point a then striving I for and products what higher of least

Thank much. Terrific. you very

Thank you.

conference Wozniak like and Ladies I remarks. Beth back to for gentlemen, to any the turn concludes and our this closing session. over answer would question

terrific the work you strategy. on joining profile year. our concludes a call. again I'm of for our proud outstanding We're us. this finish growth for changing growth grateful customers we Thank the I execute of This our and Thanks us team to the believe joining of for support strong are nVent. to morning. our

concluded. for attending The today's conference has presentation. you Thank now

disconnect. now may You