nVent Electric (NVT) 27 Oct 232023 Q3 Earnings call transcript

Hello, and welcome to the nVent Electric Third Quarter 2023 Earnings Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Tony Riter, Vice President of Investor Relations. Please go ahead, sir.

Thank you, and welcome to nVent's Third Quarter 2023 Earnings Call.

me and Wozniak, Financial Sara with Chief Chair Officer. call Officer; Executive Zawoyski, the are our Beth and On our Chief outlook year XXXX Today performance, and our on outlook. update for an an full provides quarter the our third to fourth details provide quarter

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

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

Thank you, to share with I'm growth, income great robust record cash everyone. Tony, and morning, free to the results. our today flow. very had and third quarter with execution exceptionally strong It's our pleased you in be We good quarter. ROS expansion

will performed pleased execution come additions nVent. was on shortly. of geographic our expansion. execute QX we ECM addition we to with everything. In up positioned Overall, on mixed up record I quarter, an focused XX% acquisitions we of strategy, we ] [ strong acquisitions well are We and the TEXA great believe very EPS to with a had on new are and which had third continue the We electrification Industries. verticals, our performance, and with high-growth environment, are despite products, the impressive sales well XX%. Adjusted The

our year of sales a were Slide on a on the quarter to slightly for third up ago. in Organic quarter XX% Now summary X performance. of top

channel see cash XXX quarter, organic to generated low X%. impressive was orders of up XX% we XX% up sales grew lower-than-expected XX% an points. free continue adjustments EPS the flow, of on income single Adjusted in up were year return digits. Segment basis inventory year-over-year, in growing a resulting ago, and $XXX on Organic We top million sales. positive and

me a Let touch highlights for on quarter. the few

year. and of New products launching contributed over growth, approximately goal ahead the our points X we well XX of sales to for products are new

These We're part globalize and we to our TEXA [ ILSCO power to with points the excited of Asia position XX product us and executing electrification they further income. With ECM, as to its for ECM delivered of added and are Europe sales to Turning strong QX, on the acquisitions. portfolios team verticals we high-growth ] on to connection we Pacific. globally. portfolio. certifications plan In the In in working particular, have nVent. are acquisitions better-than-expected expand the which everything have believe offering

coverage. are We expand distribution partners our progress with to making

as was believe one Greenest one America's Fortune's named a our executing would year. We starting with executing share Newsweek's both there also growth to as pulling We the our through expand our some ECM workplaces distribution we We in of that also plan road of TEXA, channels. With we portfolio on recently Similarly, on European next nVent and received. working are acquisitions products America. channels. significant alongside enclosures expansion are to a manufacturing its to we nVent position addition, of In we potential companies. of like awards portfolio cooling global were to best are map product through industrial is and couple our for production. named the on North

Supplier of ILSCO, which IMARK the part the of portfolio. of we the awarded highlights that Finally, ECM Year product strength for were

sales environment. quarter. our mixed performance by the saw were we commercial growing the vertical at Overall, a quarter. in Looking industrial led single in each and low Organic digits resi

is In to largely rate adjusting commercial, slowing. solutions of growing, pockets and of single channel low to digits. and growth. Infrastructure improved. is electrical declined saw double Solutions chain Data the in industrial our as due customers we growth digits, inventories their fastening partners While continued supply grow

acceleration meet making We in growth remain confident capacity and in legislative ramp demand to funding infrastructure driven expanding expected by everything are electrification progress liquid with vertical growing our the the XXXX. footprint and of to the good cooling of for the of on AI. We

in positive seeing energy Finally, with the flat energy but the order trends. are quarter, was transition, we

Turning by sales to geography. organic

digits. continue North primarily single Europe by digits, in declined our Russia wind Asia America, primarily China. led Pacific due We to low due declined single see to and low to up down growth

environment. raising we and full This a mix expectations ahead, Looking updating sales are reflects EPS on our our continued year our view adjusted guidance.

either also in us. new products, productivity execute, ability believe for our we strengths confidence acquisitions, cash, all Importantly, our are it to reflects and pricing,

We expect drive to digitalization continue electrification, sustainability to demand. and

in onshoring with strength energy transition. the expect in the in trends and in infrastructure industrial of energy data with we solutions Specifically, automation and

quarter and to ahead. continue expect for now turn XXXX. third detail some over proud our updated call results to execution. please our very have We pockets for of outlook and commercial strength. Overall, event the of to the I vertical resi our our Sara, I'm on Sara team will go

expansion free We Beth. solid flow. with margin and had you, cash Thank a robust quarter

points price points. Acquisitions of X our relative to and review contributing million in growth to growth. a meaningful were added to or $XXX sales last turn to were Let's Sales third $XXX million X down sales slightly year. Organically, points XX% XX up X results. to quarter Slide volumes up with

up XX%. Return sales Third basis on XXX income impressive an year-over-year. $XXX million, segment up was quarter XX.X%, was points

and Our ECM the driven accretive strong continued improvements return sales performance on productivity was acquisition. by from

high offset end acquisition. We CapEx ECM cash adjusted $X.XX investments included and for the more from above of just of robust of generated EPS inflation growth in This included million, addition, was $XXX better-than-expected $XX contribution XX% guidance free X%. up from the price up flow and range. higher the the quarter In capacity. the impact and This over $X.XX, than a million. QX

industrial Slide were Now sales please million sales. Industrial contributed third to was with Europe automation. strength solutions Geographically, solid sales in down. Enclosures, $XXX Enclosures, down. Commercial up and X%. and while data and China to sales of with up up digits, flat mid-single Return low on performance. XXX in our million, growth was points positive in into and X XX% up continued increased XX.X% TEXA third basis in turn productivity. solutions segment double price and price was each driven X.X our X% volumes increased cost XXXX. America by quarter expect increased and North year-over-year, points America. our strength a this slightly This and with of for Organically, business acquisition segment investments of discussion QX The up Starting in income ramp digits includes $XX and to led with data resi Infrastructure was North quarter were

mix organic Fastening. was declined channel infrastructure commercial & $XXX resi, to and in sales acquisition of The segment in customer America reductions. XX%. grown Sales growth up productivity. were each Electrical a Europe. This was Fastening highest in North partially driven and million that and year, scaling segment. Notably, low solid price/cost, mainly basis ECM XX%. increased points on growth Organic single-digit stemmed by growth contributed margin mid-single which favorable quarter our X%, from orders digits. Electrical digits to to this up $XX on relative by notable Moving low sales year. Geographically, further single low & inventory million, sales single has was offset XX.X%, Return digits XX income growth declined last up XXX points

Turning digits, up China backlog The volumes Management. $XX million was the our sales Geographically, declined, decline Management year-over-year resi were while to organically. XX.X% North X% Balance while Russia. income Sheet double down down was were were Thermal Return sequentially. The ended up and by lower and down double partially titled X%. negative. of by quarter remained projects Sales Flow. mix. On X, contributed flat driven to was segment grew of to and Cash and of year-over-year We due X million on Slide Europe business was energy and wind the energy. Industrial million driven healthy demand our provides on available down We by including our Thermal points transition America sheet orders believe volumes on low digits, invest grew digits, revolver. on million to cash $XXX MRO of balance solid. Notably, our single in mid-teens, strategy. $XXX in $XXX offset capacity execute hand growth, and us Price commercial low with growth with ample

year-to-date, year on you have As million ago. nearly nearly in invested we up slide, CapEx $XX can XX% versus a see the

generation back ECM $XXX cash We had of cash to strong share ECM cash including a invest We exited outline and million generation shareholders the return and year our range and of we the strong ahead Turning to of is performance. our repurchases. our cash XX% year-to-date, our to sheet a Slide deliver capital growth, a us to X, robust continue in believe balance and returns. We priorities. quarter ago. flow great allocation a growing and position in compared to in to free our returned to dividends net we to testament X.Xx, X.Xx, EBITDA after have within QX adjusted to where ratio a strong well flow targeted Year-to-date, with acquisition. X shareholders, debt expectations This puts

for X Slide year outlook. our full to Moving updated

forecast full XX% sales reflect the growth guidance of versus adjustment. of We environment in to of is are guidance to This Reported range and year our of to the our organic X% to organic X% expected be our mixed inventory prior to reflects X%. growth channel expected now XX% versus updating and reported XX%. and prior to sales X% XX%

expect approximately growth. continue points acquisitions to sales contribute X We to to

guidance EPS continued to our We XX% acquisition our to expect to execution contribute $X.XX $X.XX. to our versus performance, XX% year-to-date are approximately performance. reflects guidance $X.XX to to We of our range raising $X.XX up better acquisitions previous to expectation of $X.XX. versus of EPS This new a guidance now $X.XX, prior and adjusted adjusted strong $X.XX

with our Slide XX were on X%. sales. Organic points to expect XX, sales reported we sales to Looking contributing fourth X% approximately to outlook at to XX% be expected quarter grow to up XX% acquisitions

cash for concludes EPS $X.XX up, we relative Beth. expect to the delivered the quarter positioned year. Wrapping robust I and another call will and reflects growth to expansion and margin are be year. to and well adjusted We my last turn between back XX% which, now This midpoint, great remarks, $X.XX of flow over another at

building you, driving world. Thank events, for XX. and to funding a verticals, to infrastructure has electrification, on in the At are believe I'm acquisitions. Starting our trillion macro products new confident Please $XXX focus future, are the to and years. electrified demand in products U.S. sustainability and high-growth secular macro Slide European our $X.X and next sustainable our with we for million digitalization given the X-plus more solutions. turn trends the $XXX about and we with Sarah. trends million legislative potential in between the nVent over strategy add and trends, sales The

Looking expand our cooling to at us driving of is demand trend product future portfolio to digitalization, artificial intelligence solutions, drive to growth. for leading our capacity investments liquid increase the and

at quarter energy seeing project sustainability, our we up orders were traction. Thermal third are the our Notably, gain in Looking transition Management digits segment. double

our focus new on and is high-growth Next products. verticals

we Investor are XX% more secular sales exposed of at shared trends. As than our our Day, to

focused Some power solutions, energy renewables verticals transition. include on data utilities, are of automation, the the we and high-growth industrial

the in double sales our liquid portfolio, business million Denver show we we hosting forward example, over where to investors the we our solutions. in next expect way, trade our cooling grow reach at innovative including continue to next month, Supercompute to Data digits For By $XXX showcase Solutions year. and will look

significant Turning to growth. new have seen products, we

introduction improved Year-to-date, have our time increasing We we launched of product new X way sales products revenue. points have and process, products velocity have new new to our to growth, XX ahead contributed expectations. and

to play We a portfolios acquisition space. opportunities ECM sales. and acquisitions. the and scale billion This framework. to to for expand our the product on we grow fragmented to TEXA everything. in electrification approximately in acquisitions with verticals with of points highly X add year, We to invest $XX Recall, we high-growth position and that see in Lastly expect look our differentiated strengthen tremendous continue we can

average deals on to weighted strong our years. In have in balance We our to X to value-creating sheet. and we of expect X track a exceeding continue capital strong record deals active with execute of funnel summary, cost

with We record of everything. Wrapping XX. had adjusted are EPS. on quarter a Slide up electrification excited and the strong about We sales

We of sales growth. expect XXXX adjusted EPS and to double-digit be another year

While is been the current our has environment strong. mixed, execution

We are new products. driving growth with

We well are acquisitions. executing on

cash robust and are delivering are We productivity margins expanding and with flow. we price

X performing than quarters ratio We are completing target in have after been are within additions our TEXA invent ever. The meaningful and well. leverage acquisition and to our ECM less largest acquisitions

We proud and of of team I'm our combined our how scale portfolios. are about well performing. growth excited the is very

believe with funding we the and well Looking and ahead believe investments we legislative We sustainability will positioned are infrastructure trends. [indiscernible]. in to XXXX, the digitalization start electrification, to

continued and transition, of We acceleration to intelligence we in. our from sales synergies expect the artificial the see the to expect layer energy to and begin acquisitions

for our bright. With that, the call I excited future will turn now to are We is start future, over operator our to Q&A. the

Instructions] first Research. from question [Operator Vertical comes Today's Sprague with Jeff

Could we more on detail gave the the you just touch bit on kind channels little of that call. a

the maybe your point, underneath in kind liquidations we go. of confidence channel kind kind So of year kind deteriorating actually normalization as eroding of what versus we're of wondering And at this inventory surface fundamentals parsing here a kind into of of kind just right? just is

we I started place And expected earlier commercial still would it's I we in I of continuing, in say some of saw the as place activity think see in activity think some as And has I see improved. saw slowness of slowness be industrial so we've this markets that our then so early very say -- resi some we to QX. some have as commercial of it some so partners mixed. And year think well. But slowing. of taking some in done continue Then I some there. on, that But we've and some chains taking to seeing started choppy, would somewhat continued, it seen positive we are and we are end places been to sell-through to in we're that supply some the slowing there. also is positive. channel the see and some

the caddy [ last over quarters. seen portfolio ] nice has event growth Our several some

And the big chain mixed, I it's adjustment. with drivers seeing. think that's of and the Jeff, do I think really improving, what we're is supply one of been

additional And in you they positive is thermal. particular Enclosures? and in issue you're were that there? inventory How And did did EFS note orders through a perform working there

Yes.

On the puts very of But industrial we in was there, -- they side, and data is takes down, it's that slowing. strong. what and saw were again, some infrastructure enclosure solutions

it adjustments of So areas some to is starting it some some of is inventory industrial and slow.

And maybe just one. last

a what a kind ability continued environment. was kind of confidence your volume Just to price the on in called of flat

that was price, year going to I Well, makes think although we continuing our to we that think as through started slow where price of lap we've strong we you've it sense. quarter we seen had We're do just to progress said some increases every increases. some the because of how price

we comes For expect price still that positive example, I will we've look Europe. we into in some price. think it as we when year, And increases to had be next

comes question The Wolf Research. next Nigel from with Coe

maybe I process We've adjustments, but that question we're some deep right stronger, getting it, I'm 'XX certainly going channel thinking but you're going answer appreciate weakening, off quite to now. start environment. into a your the about with probably got to just not some

'XX? solutions tailwind, got are confident, of 'XX. [ actually coming this -- about growth plan kind interested on you've [indiscernible] do what perhaps the you're into backlog TM you obviously, thinking ] for in ] But up of I for how you setup [ next favorable but are investing data center and comps data I'm business, channel build the in obviously, So environment mean the in year? you some

on, year some Well, remarks, saying of I and into us. this we're ramp can infrastructure of you being because solid XXXX. money was some in in my And that that, about in a some concluding when look, spending first, that of that impact see to we know we think -- have an confident quoting we're XXXX growth And for start things will have starting actually flow so we to XXXX. as

investments make more at in look given out of Solutions, right? that have the we we build rates those has Second, To order some significant the Data confidence, which us capacity. and

good where hyperscale cooling. we're with some that demand is in especially got the this liquid visibility, driving of we've the AI, with So and for case, which involved

Management a look take you increasing. our at we when those see Third, Thermal business, orders

particular, we we've And and orders it's about in on capture. So whether energy nice that wins double-digit around talked growth some renewables or transition. seen carbon

funding into seeing we're transition. energy that going So

been adjustments year year had bit than think have in synergies the start been everything sales the have XXXX. little a and always and driver working great I things been growth will those new of to I So on, for we we out of channel our this have acquisitions course, couple, for begin last want products, we've inventory that new those this control, but that's two we've the products been working in us. a more add, And one to will just we've of on that

a So year. up growth for I year believe, all that, us sets next of solid

a top just rollover the will year, at bit in And point an the And negligible see maybe a it from Nigel, of thing, that next roughly one a business a thermal, we'll have X of other while modeling perspective This line. from down of impact a year-over-year QX on of nVent was headwind going the to little impact year. add Russia wind into our in level, standpoint too. in

we have that headwind So won't either.

XQ a down in margin. step pretty embeds significant So obviously,

just quarter. the year get So into think $X.XX pickup. the nice call, a $X.XX in obviously the fourth it we that the I the X% that's of to hope dig in maybe M&A but implies contribution I because on just I quarter, into want for

the half of spending the pointing You're investment to some year. and integration back in

M&A the of right guess attrition [ pushing is, some question the -- to I upside on driving the maybe wondering the out Just what's that ]?

is we price cost perspective. into the fold nVent well a a I very things. productivity well control I I from cost mean, team think think it's One, executing bring an I ECM also as think the that they're here, of executing couple and from measures. overall that Yes.

point just Nigel, So we would -- I I there. other mix make the benefit too, is some it's have think I think also

As distribution we business and is you largely but look that OEM actually and you also at business, have growing through distribution, that remember, it's retail e-commerce growing if nicely.

positive So there. from keep look we mind as we're couple getting QX things QX, of as a contribution mix in is there there's to in well. But some

position Beth be investments, that side You EFS we the sales the And normal to form business, a in take in seasonality good business. very we're that's have engineering marketing, to And sales talked on those digital similar next will begin synergies some and ramp to the investment et about of And excited about. for going that some really us to year. that investments, cetera. holds for what

from comes RBC Deane question Markets. Dray next The Capital with

like you're here data that talk to would I about a making. bit investment solutions

at when last give about of super talked this do I you But customer the base [ for quarter. cooling in size space. hyperscale adding us, think guys into hear the and like And compute. it that you've broadly have sense ] how what think you us all concentration. once more this How extends about CapEx, and just come liquid could frame? It fastest the moved hoping your but capacity You does you us have looks I are a probably time the customer we'll online? much told was

Okay.

been adding has we've this So -- capacity. been

realized new wasn't cooling. And so you liquid Mexico, a more we plant will, enough. Minnesota for in we if that expand could capacity within then opening our campus, First,

capacity. And show. the distribution of accounts, things and look custom doing think in distribution can when trade I as more standard on to cooling. And we the addition have going but say, center of to our that. go of shelf. we're couple that's they're take moving enterprise more our we some capacity. actually been for extend to through maybe to solution, supercompute creating offerings display we've But a well that thinking we're something at products the serve a a as location we'll maybe mean, the to how we're also accounts Maybe out liquid So at are These where for looking been it's channels some hyperscale that some we've not double more of it than ready about that I off new

can a attendance of just give can -- the our in those we So breadth different we all capability for overview there.

So to a an systems to now. years often get that with account takes We've several of years talked certified. work doing couple about, for been we've these

that what's we that, starting So believe we come will liquid that future. are here and see to used that, year. types the growth there because online. cooling, also our play a some even And efficiency into energy be accelerating just of long chips being new are these customers the of next of just the That's runway part of

be so revenue back Nigel products are us still that that certification of earlier. for go me most synergies couple to frame you've Asia the how But of it it's maybe separate take sounds of was that these some business asking well, Can ECM like a in front on synergies some still that of captured cost unlike enclosures time Europe happens. ECM. selling to is Let of points about into and And much might you the the as far?

So frame do time revenue? synergies stand on you and where for cost

Well, synergies. I'll cost with the start

So start to we're a a from I off say, standpoint. synergy would Deane, cost great

really some of million of some If million estimated roughly the of is the realization you I those of doing a overall recall, quarter synergies the and at is some $XX by nice execution cost of freight faster-than-expected think our looking it's combining finding whether of synergies, insurance that parcel kind early. year job rates those a X to we team in $XX programs,

we're of achieve million so to million on that And synergies. track to $XX well $XX cost

seeing the thing synergies million of per well $X it of roughly just also across period. other to $X to talked point XX-year we amortization up shows out, in and really XX- too, and that cash million I would kind we flow on as our cash tax are this, numbers the track about is year think I

we're distribution been through still track. And but So say channels. working in of the going to said products synergy well on on front the tax we cost is and the our they're would we've revenue ECM what expand us, on, the I synergies,

I we'll at we so through their we've channels discussions. year. Similarly, been and mentioned I channels. bring unique portfolio products had see as that in layer the next engaged we've and And of what from to can that, ECM start go some in those that think been our we looking

product, overweight. those for are And I think again, a to where you've So certifications. different bit global trying get takes product. obviously, little And the longer That discussions modifications distribution. the make some we're are certify got to those there to we because

going So I when to to we start start is see those XXXX synergies think into layer in.

The next question comes from Julian Mitchell with Barclays.

a margin off. question, just Maybe first

So embedding, [ something. the down think, or margin it looks the revenue like flattish points. fourth sort guide, at basis to ] XXX of I sort quarter you're sequentially XXX-ish is XXX of But operating

roughly So time if but just if particular that sequentially, often any down have or it's just you there understood and margins conservatism? driving aspect was was in I wondered seasonally this correct them I QX

recall, that has you that Julian, consistently If there's out a QX played seasonality QX to historically. margin to

of and of some is front it the just going think an versus on EPS of the piece in acceleration the to I thermal. Enclosures it, think just the be to other perspective. I from terms point would mix you about EFS is business when So the investment And

our that is of So about we be prepared on big investment data the solutions remarks. A to of side that piece things. talked going in

as historical that well. EPS there in nothing pattern beyond So seasonal really

less ] rock it's point the equation I other think up overall perspective, just the be we from accretive, [ that's a an side ECM. because show to initially. would it EPS than But of doesn't thing the ECM to, have believe do expected on seasonality just will just of necessarily contribution, I that still what it. added that's element again, We that to going stronger

around orders destocking, industrial line. as to translates such question quickly, suppliers delays back into we again those to selling improvement the any in the and growing kind a feeding orders on that's starting comments And assume yourself? projects Should through of sales commercial project in in into pull then sales then around say, EFS to QX, distributors just heard broadly, that, I top you seeing more their are or in And that second EFS.

I'll point the et Well, couple ground to to just construction, maybe in of that used would [ then where now like and down and cetera. really it's area was last weeks. utilities rods and lead an times one This you example, we're -- years, are I we like long ] in had over is telecommunications months. an And stock, area give

what so inventory channel and then we saw end was built had that even that at been there customers. partners up was was there there And inventory our at

That's one but just make slowed some some of And go even Sara. so there going are projects. generally, the impacts, that electrifying, everything is components EFS that have of I occurring know area, we the And for that end continue mainly they're grow. And a one category some don't characterized we that's But is as future this would seeing. the in just it's to we what -- understand that's perhaps we inventory to though with ahead, customers that waiting -- other those we're I inventory one to when is tried where we accounts, is for know beyond say that example. ground rods adjustment saw have we at,

do see from sales EFS in to then And expect QX. in we a Yes. just perspective, growth QX modest

expect that So at you management -- Russia just of that resi step to commercial lead if thermal growth a that then back X% expect be take to to and EFS growth we continue look expect enclosures modest and organic on in to of points is characterize impact that down X a in to continuing little with QX. specifically And those thermal some that and business roughly just on bit, impact. Russia trends X%,

Goldman with comes Joe Your Sachs. from next question Ritchie

there just acquisition we going the through know Just as margins? EFS start on you've maybe can got I well. that

negative that step to about recognizing If north of down How there growth, of you XQ. of we now expected Fully organic these think from think I margin margins is XX%, here? the kind of the do think in trajectory north about XX%. EBITDA

Yes.

here's think I cost managing what I incredible is, one, -- would price done the that equation. has job say team an I of think

kind expected within see that walls we're productivity heading as have beginning think would half. ] of into ramp I back the X the to [ icker we

will, like sales [ if I think of that just to commensurate the with it return cut back enclosures that some to margins would an in to with continue mix customers. in we're what uneven that if electrical volume X $XX the up supply that and remarks. showing excellence, Riter's our fasting, revenue, plus still you typically products. look that see this levels of The the for well, tend goes on products sort of is we of and in piece referred had mix as at -- we're if ] we number and driving I looks because argue QX that's quarter. But chain And we productivity, opportunities. of just I higher providing productivity to underlying really other will. going And we're the that ahead have that's improving productivity, new improving in across our Those within you expansion to is that not while new normalized value strong margin walls, prepared

to family. still like doing automation, lean, plenty simplification go. product So We're things runway optimization, also there's of transportation there of

the with leverage excellence there's there you just functional lot see that as an we're general on do from getting going SG&A a perspective. So well, along

ECM the include and QX doing begin we're margin other that acquisition things broader of QX in next within to would making improvement Enclosure only here well as I segments year. really as Fastening Solutions we investments as lots the ongoing future does that plan thing Electrical to to that make on as is within there's is, and So well into & The ramp well thermal. to incremental that will the QX drive

Sarah. It's several at the your on if of depending I last commercial been And performance a look helpful, at all. the question to the And tough business, mean look hard it's maybe commercial. take then on not it I just I'm businesses has -- pretty kind piggybacking Got or you months. Julian's around it's you start and data, it. of of square growing. growing each over That's interesting. the different been resi guess

thermal, if just there's better of holding potentially bit a than to you EFS resi why maybe more a there? little be bit as so little kind anything in add give us could in commercial And up insight might like

Yes.

to product our think I it do portfolio. has with

nVent and think of et and power CADDY think products think it's in construction industrial, smarter that done around just and more really we to in what in we new you invest a and type getting reward hospital And building, whether power applicable any is is construction, new line. plants, we've all of about in do it's infrastructure, if or data a everything data which supporting remodel. And lot to brand, there's our product with So a cetera. you

it EFS, think XX%. and product vitality digits, portfolio, new was so we're our we acquired that seismic, is different So I that where doing when single there just that are. approaching things And we ubiquitous

there. seeing, doing protection different. in ubiquitous Our we're tracing within maintaining applications we're just or is think we're doing the difference the a I as we're building commercial heat the things water little hot just doing so bit because that -- that's portfolio freeze heating And thermal one are not underfloor or a of it

add has to more that as thing the other business of Impacting one here well. perspective. maybe growth from a Management too, resi rate the And Thermal

follow-up and what the we maybe into commercial all starts that I your ultimately, business? Maybe for I there mean, I detail. and Yes. -- appreciated helpful, is, data there the should that very reading means is guess be that's

think is growth which be where of industrial just And in right, tends pockets thing bit some this in battery general, construction for investment Well, a to new lot of one construction things. we've our of other and more got then little we're a products. is growth. I and is one plants driving There's seeing

we And to even that's us. driving area though growth industrial because commercial another construction, sometimes that it's those products may but think headed I look more for tell, it can't with is CADDY,

comes question with next Vlad Bystricky from Citi Group. The

back, increased to stepping seen as wanted on ask I rates recently. just you, So pressure we've interest

further approaching in Just of what be financing. see direction other funding the of their are versus you partners how could cycle hearing their increased how you swing your and in influencing destock recent channel of cost just they cost some sort inventory destock increased that own terms this could cycles is from given of they're whether risk

really not played here thinking they're what's a cost about certainly And that capital what's considerations. it's at that think -- really in course of know with we how out chain multitude think this sharing And looked we improving, the don't XXXX. they've factors, with over one that's of they us in it. Well, out year explicit supply those played but that's inventory. that's they're of and their of we But certainly

I just maybe, think, mentioned, growth. digits you double then And in China, thermal, low

good you're can growth great So about in in China versus you the in thermal? China of thinking not region? what's for overall sustainability just talk And backdrop about of sort that specifically how a driving

business. in got one our project Well, with business I the would we've lot a of based type things of say China,

that And to orders last on that's that for and industrial over some energy projects or could of there on chemical side on on of the the side side. little been started while, see that and And so growth working we've some be us. where, the

from Hammond next The Capital Markets. comes question Jeff Keyport with

at ]. effects you of different guide organic to that to simply driving lowered And X% that's a It go growth the like to wondering X% your if destocking kind [ if just in change? else the or way. X% X% from that's Maybe looks there's just anything to I'm

it. basically That's

we've As channel they're inventory through our indicated and partners, that we QX. some think, to through going noted, some of have that adjustments then continue are

that going of that QX quarter. being that see into to it's So we choppy, was fourth -- in improvement lower that but would we because adjustment we inventory of just light from QX, and did view sort to continue it just that is our just

liquid just or and if maybe of Okay. competition I about new these are products Great. seems emerging competitors? companies maybe like don't on you're different And are seeing liquid lot then and cooling It other landscape, talking know complementary capacity kind a or new of competitive update just investments? cooling. on if us

at some while of Well, of X ramping. and time, chain manufacturing some for We've really free last really they're developed a have even things. spend to the a with supply that the over long years working took solutions the leading couple been capability of a course optimize And customers. this big these

it two I as takes So mentioned, years to test.

So and takes are others, in and there it I manufacturing. think time for to some, but to it start-ups scale time get some takes

So I that good position we're we're think a in accelerating.

AI, we solutions channels that there's we're can think for and to a over we scale with been into here, lot more what we're the to hyperscalers more interest from sell through adoption. I next or years, that's going several solutions really think have expanding clearly enterprise see And distribution accounts. where of start to

feel that have I from partnerships. several So standpoint the we

units. solutions it's the we're doing got liquid our air, immersion, we've are whether or the late to the to variety I that liquid. manifolds, -- a [ We've mean, -- So actually, -- ] we we a it's close whether in have distribution liquids got from portfolio.

I of So an area think a good growth, going strong I think and on got be it's start it. we've to

last just then one on And ECM.

margin the invent kind sounds I EFS. higher think a with it in deal, our I adjust that [ kind from margin overall maybe we it's like well think for you to do business kind coming announced But line the lot the of when was need of contribution in below structure and of maybe expectations ]?

Yes.

I that little two, bit But nVent. think be profile out accelerate that prior the investment. margin continue over we keep ECM the kind -- mean, profile have couple But a we overall of of to it's say that that revert that accretive out our to the probably it is the would said the in believe I profile to Jeff, that And third they're we're mix things. think given said, is be and execute would game. piece the of So dilutive, on margin growth time. And accelerates, ECM I do that the a bit of to margin I as cost will to gate, of I Like would should just going a mind, back too, synergies, profile.

now team, cost synergies. and you're management good cost price some great very execution right So by is early I what seeing think the

I think about those even and and making into the some investment think plan you -- think capture increased the line is about we sales what next you top just ramp on synergies. to year QX something think as to more of that really

with from next The Research. Graham question comes Seaport Scott

to When said Beth, on your mean organic earnings you do growth, or maybe 'XX, sorry. you just ask both? to So elaborate comment or you

mean I growth. about overall Well, our talking I But was both. specifically

inorganically, We expect these grow to and organically, EPS. obviously, to with acquisitions grow

you, The third Very down quarter? quarter Sara. the the bit in drop gap has because peaked price/cost is the peaks good. in little quarter a margin in fourth And and in the kind quarter, positive third that in from for narrows the incremental fourth one of

productivity though, into terms performance would on came narrow. half, to of Well, here's cost half. the half, what different price in time, I I first is expecting the second the that would second say. same At ramping. We There's Scott, say nothing

of to that one us pricing return in cadence was roughly basis some our into to look you that's our keep best expansion play. had coming when turn it at XXX on if the points, and we QX think last last on thing began I mind of were year, kind actions is year, sales of

difficult one return comps, on think I in Enclosures basis expanded by it's like the quarter. over our so of And sales points XXX most

in in across got to organically. of another the despite impact we're on standpoint, to, to just QX, We've if would difficult come roll back year. nVent of up quarter I just so of sight growing expansion year-over-year it's kind a per you comp, the good So we look as nice acquisitions, year-over-year line a really at from and share it positive of summing end margin the earnings then a planning you

Last you one, if don't mind.

for that. allocation to the for Just know of sort understand Fed. great to higher the to capital that, you continue that I you've guys? that understand mantra given wanted slow your opportunity Does got get hear we the from things thinking the longer down

bit that [indiscernible]? pause does anything, you Or thinking in little here? that criteria if Just you maybe have that environment? your What's are changing, to a

we always first, been and disciplined I always in Well, allocation. And we've support we we've want think fundamentally how at strategic look, said, capital growth. our look very to

within can the growth, and I data solutions, dividend execute framework. M&A our right investments at for position. offset that done that and products, expansion, and think digital we've we're we seen competitive always that good returns make in we that dilution a And look so pay sure the you've and And in for we still our looking as remains things new like

So different we how us think think I priorities. in giving perspective our don't any about it's

would to Wozniak Beth Thank any question-and-answer session. comments. I this for return like the And to call concludes and you the closing now

We nVent This and in top-tier electrification QX. our joining concludes today. Thank of Thanks is us very you for well I'm everything, high-performance company, for believe for sustainability us. digitalization pleased electrical joining positioned the with again a performance trends. call. the of

Thank you.

as disconnect now concluded. your you for mentioned, conference and Thank now may lines. the attending presentation, Now you has today's