nVent Electric (NVT) 6 Aug 242024 Q2 Earnings call transcript

Good day, and welcome to the nVent Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Tony Riter, Vice President, Investor Relations. Please go ahead.

Thank you, and welcome to nVent's Second Quarter 2024 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, quarter and on details outlook. update for and an full we'll quarter the our our to third provide performance second

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

financials turn statements nVent's in today, turn can will X, webcast Forward-looking time for now results. Today's Investors such website. and company reconciled of presentation. remarks. in non-GAAP prepared find to over the [indiscernible] could events are please reflect or results our you call anticipated to to References from is With publicly We'll the are update the accompanied the of differ made that, Slide as questions have materially to Actual appendix circumstances. by Beth. of obligation a the I statements subsequent section which and to presentation, after

Thank you, to share with great strong everyone. Tony, morning, to results. today and second quarter It's our you be good

XX% to up high-growth and on a delivered adjusted the In continue up geographic froth expansion acquisitions. sales, focus strategy EPS verticals, with We execute our on and products, we new second record X%. quarter,

year and Management we margin and to cash Our performance with Thermal adjusted business. execution our first flow. pleased strong week, are announced sell expansion income raising double-digit we our growth are guidance. Last agreement in of quarter robust our full Overall, another operating an and free resulted sales half

which and trends. July, seventh further and the growth, making electrification, leader. These sustainability ] is with electrical higher positions acquisition for marking transformation, connection invent digitalization of part We also nVent. [ our more a invent and Trachte portfolio the closed focused our on moves are protection acquisition in This

on performance. led summary a quarter our of quarter X% Slide Now infrastructure organically, to by industrial. the second in up Sales and X for were

X we sales products income a cash first and growth, improvement XX an over year-over-year return on last half. basis over year. contributed new New in points XX%. XX% points flow, of a over basis XX on sales the Adjusted with operating grew up ago. grew products $XXX generated XXX to XX% top top up X% on million EPS point year free launched of Adjusted We impressive of

for year. track on are strong another We

a Index. our nVent share place work on Equality we to the Disability were military nVent earned am top awards employer work recognized In [indiscernible] for are the for and third XXXX as excited continue recognized addition, that of in families. a the great inclusion We we're United earned certified proud reflection of awards members. to a our Vets States. the Indexes veterans I the great in were receive. We numerous place We very consecutive of recognitions and to supporting designation by awards the the to the disability These recently work best year. disability employer for work team And of score as

market and single Looking digits data digits. performance with strong continued solutions organically, softness. is Infrastructure our single high mid-single led digits. digits double declined low at the Commercial/Resi way key up across Industrial growing each verticals, with Energy end grew

broad-based regions growth. led mid-single up North All modestly, led grew, Turning grew and digits. Asia Pacific America, sales had by by key strong to Thermal Europe Management geographic organic by geography.

QX in to declined timing digits. organic Adjusting orders. Solutions of Lastly, grew year-over-year low single due Data for orders orders this,

orders data in significant Importantly, in July, we saw solutions.

expect the infrastructure we vertical a strongest growth from continue ahead, XXXX. perspective, to in have to Looking

it to in by strength Industrial, be growth be to cooling. with expect energy and flat expect in the energy, down. we soft, also driven we anticipating In power continued both being transition. residential remains data solutions expect positive. We Commercial

outlook, half year are we full our reflecting guidance, first our performance and of raising For sales Trachte. the addition

We of adjusted nVent I'm of continue Overall, deliver and team range. our midpoint on are year. and how our full organic go updated and for and Sara shareholders. Sara, very for We're customers proud year the EPS please for execute further track will now sales the maintaining detail our range ahead. to we strong our for to call outlook and another our turn our I XXXX. over rereleased on second

Thank second record quarter with flow. robust margin cash you, Beth. strong a had free We sales, expansion and

up results. essentially sales flat. Slide review to growth. points were turn to million contributed and Volumes Acquisitions Record sales X X points last up X% growth was million of $XX relative X added organically. to or $XXX Let's to XX% price our to to or year

Foreign slight exchange was headwind. a

in in Second adjusted with $X.XX our was and This included roughly contribution with up up year-over-year. XX%, quarter the $XXX $X.XX, performance. flow EPS free sales from X% adjusted on of Return XX was up XX%, points quarter of XX%. generated operating million, $XXX our million in reflecting Inflation was million, a income quarter. QX We acquisition. ECM XX%, incrementals was operational the basis $XX line the cash guidance. impressive strong up

perspective, delivered our Texa team segment XX%. Enclosures, $XXX of turn with sales price second outstanding please points to X the in The power strengths and solutions sales a Now X performance. Slide quarter X%. up double Organically, added for with another down. with data This vertical a to quarter. increased digits of cooling. acquisition slightly included million over XX% both discussion in sales. Starting infrastructure growth From led increased volume

in commercial also growth We and industrial. saw

million, digits. on driven Geographically, This XX.X% was basis XXX improvement year North income XX%. increased ago. quarter segment second up by Return points XXX on double basis a up $XXX in growth a year-over-year, low of top execution. sales Enclosures point of led strong America was

is in Fastening. positive reflecting organic sales lower contributed price organic mid-May down million of XX%. XX -- increased our $XXX Organic Electrical were volumes. points ECM is And to & and growth. in Moving sales X%, Sales as The to of results. acquisition

As was commercial declined sales. softer and down expected, to year normalization in due organic resi Europe, North basis channel while down sales strong X% income infrastructure was Asia Pacific mainly inventory was volumes XX.X% up sales comparison. Commercial/Resi prior and America points, due XXX and Fastening $XX ECM a mix. million, customer to solid Return year-over-year. Electrical due up. and segment declined a & was Geographically, sales on to and lower

million contributed industrial up strength Management. to points. in each organically. Sales Price volume MRO. by Turning and $XXX with Thermal were was X Growth led of X% continued

and impacted Management flow delivering Balance available million segment Sheet $XX led nearly acquisition. transition with sales basis $XXX In XX.X% a down ended We term ] million of the Trachte million $XXX addition, we mix drew cash backlog X%. income Pacific. cash Slide new energy on In with the half Return and revolver of $XXX quarter, fund mid-July, a sales our the Geographically, loan titled was by project Cash Asia to sequentially, free was of by Thermal of Europe [ year-to-date. the points on year-over-year $XXX we representing strong million in had million revolver. X, on mainly grew a Flow, quarter to backlog. due and hand now of projects. On XXX year-over-year, growth and on down was and

strong X, and to and inorganic capital capital deliver disciplined Slide remains with outlined organic we to approach where both our Growth a to allocation returns. our allocation priority, balanced priorities. Turning first

XX% in roughly increasing liquid on and new Trachte, return are the beyond. expect sales We and million, cooling $X of in rate backlog On growing synergies. $XXX for investments of full sales in million support capacity run approximately year to cost inorganic, XXXX we of over

to expect year $XX to weighted cost returned the we X. lastly, deals, capital of Like first our million average exceed we shareholders. prior Trachte in our dividends And have half in by

anticipated shape. thermal from expect in net sales. to good is strong, nearly Cash sheet in have is billion generated we deployment available proceeds balance from the cash XXXX for flow management Our $X capital and and

Slide XX% X guidance to half and reported growth full raising solid full first year XX% Moving to performance year Trachte we XX% sales outlook. to previously. With the to our X% are versus acquisition, and our

to the in X% X%, to And growth. of range volume expect year. including to acquisitions to the approximately points organic positive continue for we contribute now and price We expect strong growth X

previously, income operating year XX% the Full to be note: First, up to to X% $X.XX $X.XX. to our impact both XX% EPS of X% interest $X.XX, net prior to million $X.XX versus maintaining be to modeling is guidance adjusted expected previously; are XX% million We expected the up our versus of Trachte acquisition. reflecting to the assumptions $XX to of updated XX% range adjusted narrowing range versus second, now by approximately $XXX A of is the midpoint couple to

timing and outlook For sale recent of our clarity, full in signing of approvals. due year we QX have the the agreement Thermal left and regulatory to Management

and expect QX plan operations to when Management historical move Thermal time. reporting results that to our discontinued recast and financials our We to guidance at earnings

we growth purposes, nVent Thermal expect modeling XX%. XXXX overall a in line of organic guide, tax and to margins For rate expand sales with to Management's approximately be

to Slide on XX. quarter Turning third our outlook

growth & to be to expected X%. in Electrical with X% modest to and Fastening sales XX% approximately reported This grow sales sales. more Enclosures to Organic contributing We positive. expect points acquisitions reflects turning X to up are X%

and $X.XX capacity We we includes Data R&D, make previously investments EPS online in $X.XX, new between have expect we and and to investments which gearing bring engineered as Solutions adjusted be are we increased as my positioned our Beth. the am pleased back another well concludes I to This over and strong performance believe call for and will remarks, second up, discussed. Wrapping I year. now turn with quarter in

XX. you, Slide Sara. Turn Thank to

on new and expansion we global the verticals, Our strategy on and products, elements executing has remained acquisitions. focused are high-growth consistent, core

make we which to growth acquisition As us Thermal will includes part the Trachte. business higher we of Management announced the a higher strategy, company. growth of of sale more And believe the our are and verticals, focused transforming

give expand a acquisitions to announced to Last we verticals early deploy with close a believe of plan into XX. Management to is business. its this and to Management both nVent. with for transaction build great Management Thermal and and about and to the further to from $X.X strong more sale This Thursday, adjustments. proceeds solutions its energy a we the subject entered and business leading growth the the Slide on Management sale to and enable we to sell is by for XXXX, drive transition. the definitive Thermal repurchases. We Thermal agreement will differentiated planned I'd a move Moving billion, customary positions expected Thermal to like the positive across is team Thermal net detail share sale that

and sustainability of For and consistent with ongoing digitalization. electrical megatrends step the positioned growth nVent, to strategy the connection well a a higher focus leader more electrification, and sale protection represents becoming significant with our

Trachte, Turning of solutions manufacturer closed infrastructure on designed acquisition to custom of critical a Slide our recently building protect XX. control leading engineered assets. to We've

in growing utilities, new in pictures been are transformation significant Slide on other see nVent's nVent has electrical the with digits at is the chart, company look that overall its nVent in us verticals formed even enclosures buildings sales more robust solutions If addition high-growth the enclosures strategic are aging business a build and a and XX% for these data you'll the power XXXX. larger control an that fit need great within increase houses demand is the that to approximately expand and provides. on you centers into platform strengthens The of with a Trachte them of since control giving essentially and increasing XXXX. provides move with strong for was XX, us can of needs portfolio renewable upgrading, This a further visibility energy with the we to overview our with double infrastructure an potential. On data centers. The backlog, more in grid, growth renewables. The products and

that Our starts finding the aligned verticals for have with high-growth and acquisition invest to ability growth. scale products to framework companies with great

million adding $XXX date, We sales. to acquired to companies have X more than

higher be ago. strong have we're record. With is to XX% sales. more We to Trachte value of and than portfolio acquisition growth two trends and to moves, expecting This X/X about transformation expected for track Infrastructure XX% us creation. long-term Thermal years be exposure positions our secular to our a compared

electrified We more with work building growth. Wrapping on up sales, record sustainable We are expansion and another strong and margin XX. had flow. robust a quarter Slide cash

on secular well transform we execute to portfolio a and We as greater emphasis infrastructure to our strategy have on trends. continue our

guidance with operating sustainability, full positioned well our year income. believe and raising sales we digitalization We adjusted are the trends. electrification, are We

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

Mitchell [Operator first Instructions] Julian The from from Barclays. question comes

on Maybe just question [ op first profit the around ] Slide bridge X.

sort million So look productivity in we QX minus sort if of is I year-on-year flattish the combined, and $X in they're at net price quarter. gross suppose or revenue and of so price in

should gross number just to the we price I year, in think of And profit? sort the what sales? of our the how in also So effect is that of then about price likely productivity balance for sort net wondered be

take I'll one. that

we just more So by I volume. more expecting much a came start would into year and saying modest contribution the price

We that and also with we volume part said expected coming productivity volume. productivity seeing on more in nice that in

So expected to we half From continue getting perspective, coming as modest price I we expect would a year. to largely, the seeing the second full pricing overall say, we're back to here in the half, year. do positive for be into

pricing mean, From I I seeing programs. pricing just is bit a going line. new the doesn't that Within mix we're that productivity a product, mean, productivity. reminder, on in mix up quick of vary strong standpoint, quarter, of a of to products in terms show And as

$XX roughly First half, million.

productivity some to, contribution of costs expect but back around volume the again, to lot seeing, by as transformation. strong that be, work that again, in also of the ongoing We teams the we're just as a done relates process well half

the to through ramp I the call course would thing the did we other year. the expect out I investments is of think

some in QX, talking in as higher in we've capacity that. expect with You're about part QX, percentage year bring solutions of a been that being the that first in in because R&D days the through here here sales. associated the In seeing costs we increased investments that to the half we as be online there's of ramp-up particular, do

then And follow-up. one helpful. That's just maybe very

mentioned, you Sara. QX, As

I think the way that QX it's QX But around. the sequentially and like So then EPS up in down for this your at sequentially. of seasonality is it nVent is looks other in normally, looking guide year,

that's the got the sequentially think QX you've because in don't EPS Trachte QX. EPS deal I neutral. So down that's and sequentially then up

in investment around? versus something with spend the that is or to third do the So fourth it phasing quarter the of moving else something

investment it of spend think be QX. the QX just I would No, in versus terms

revenue I think thing to the QX. timing little more data call in We're of other of in QX overall. drops that that versus as the is out just seeing a bit solutions

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

proceeds we Thermal platform? exactly -- the just I that here. for. of it's acquisition, space divestiture love you say the buybacks? that's the the the seeing organizational of kind on some -- simplification looking implications were Can What's initiative what white implications there M&A that? and So be the And might where for Trachte adjacencies around some between you are of when a bias new

that. take I'll Deane. Okay,

So early I've on to remarks, in we expect my we thermal to in quite with allocation prioritize for sale, sale said the proceeds as timing. we used net the share And never be growth stated think acquisitions both complete capital expect our first, acquisitions, you has and and XXXX. prepared that we And I strategy repurchases. been that And inorganic. organic control always the

repurchases. for have So that's believe that why available have we will share we opportunity we cash that some some

when is acquisition, a platform area made have is the talk just an comment a really I enclosure. previously. and we that Trachte with enclosures new we not being This it the On larger played where about it

type other is for ways. a and see type there's And serving end that verticals. not this product think platform before. other have offering us commented, this we a as so enclosure because, we we've believe enclosure to different enclosure can fully new markets expand products. enclosures several inside build more opportunity that also we into in I that maybe as on we pull-through Two, of it One, We served of

believe add solution and previously we there, now area putting there storage, that there's solutions talked play have this think platform can well our that enclosure opportunities as of area. an I cooling a an extension a and for we've could about as we liquid together M&A larger we battery that's having So energy on in other where believe we

we think great and a great it's there. for a potential acquisition, us So growth fit more

to it's we begs out all liquid what manufacturers all how enter developing order much is -- What appreciate cooling. about we entry recalibration a regarding on But question a related questions. question be it by you're way when cooling, there. that in with two just I existing specifically, looking announcements out? another equipment from serve may other announcement is your And to -- liquid know partnering the and that don't names liquid the that saying capacity update making question to know about very to Xx. to sense perspective does And the to to demand, far what's there's investments you of increased been when a you But based looking well liquid That's customers. players sense some And cooling take not into you One second see then unpack is going how we're see the give there's just cooling. name capacity us -- behind a liquid does you? big lot proprietary I give really rates. we are? Could in and just an certainly of cooling. that how barriers scenes, some them, growth you're then other helpful. getting some know by they're us of announcements we the far get upon And of players

capacity. with starting So

you Some and distribution facility of capacity know, expanded moving space we our that is had center. a as online. out coming And in Minnesota already

look continually on where It's into I takes will now think for through we efficiencies at But couple right expand. see. to 'XX next the year. serve we'll us who and year capacity think years need that that very working is we'll maybe 'XX this and else well, we knows, and view of dynamic. and And we're our that that So into -- next through us

in I of some other as think some think to well. add GPU are in see these that that done footprint, might there. And lots players should know of be about cooling overall into those existing and area. the We entering cooling different have as from new demand space that landscape, think I is that cooling. already require expected start-ups because our chips When the expansion we I you We the

see we've you're ourselves partnerships, the entrants done couple years. and of think that I last and going So to over various

new we push what pre-spend R&D. really solutions. are to think I the we've and investments at continuing new ourselves is and to continue and ability develop that think And proven offerings working and that to matters on have our making portfolio, I been scale this products in

So I think grow, and to and see entrants, at space going been that the many different at. overall, we feel going confident just grow ability our is we're in our and we've to rates that very to growing solution

question Coe next The Research. Wolfe with comes Nigel from

sort to back of the seasonality. Going the XQ

then up back I third the correct. for of XQ? want understand pushed large shift quarter. growth think you Just back that's quarter XQ? of I the think, of called dynamics is XQ more there Solutions it Data in Is out an to Or make Sara, lined to sort want the half to you I unusually in year. shipments and XQ mentioned that between just sure into maybe EFS XQ? And kind

things So yes, couple a of there.

behind in expectation. back EFS Beth articulated. They'll some growth infrastructure those headwinds largely have our QX, them to of So that's that yes,

been QX some and that more in sales of kind see build those as beginning to we've into we XXXX. also the talking year We exit about of synergies ECM

we of -- other to saw is dynamic, in We of And of investments taper the solutions half. there sorry, that QX growth into think in that to the a terms programs. contribution that of there thing data and and I QX should expect see and thing great in QX just timing QX. just the the taper here here QX, first the in then should bit the biggest is I'm terms again, level In customer

We into in versus greater timing $XXX just continue of here year. that QX to in more that track QX. expect for that some elements pushes XXXX full growth the on there's overall data million exceed good to here than solutions It's

to So QX those mainly dynamics. impacting are the that are two things that QX

How half Great. just X% you of you mentioned negative -- for That's see the that year? great year. in full do think on think developing And price pricing the the I flat back then Enclosures. the color. I the

seeing we Enclosures this if if Just of the deflation deferred year, in well? price Solutions hone pressures are Or the do Data -- half? as how that And was Enclosures [indiscernible] think sort about we curious, half in the we be of portion? pricing? we core the more deepening on back Would back

QX. the again, Solutions So play price just it nVent, out Enclosures, price we show it's overall show necessarily coming of to price And we're in pricing for more that's clarify, the modest the And the expect it positive line. a continuing for what's extent would in price volume, and price. the back that we to the the play still in we year, how mix Data something the half. of more product, products, X, a be price would how it's line. to here that the expect overall that pricing much that's in specifically across program half. for and we new given that be seeing out said out positive projects. wouldn't of year-over-year that's a the would, new products up on, into the To up year. included the again, it extent and dynamic that first in And not right, is And segments for expect across going be again, would specifically any From mix X impact going here to had segments, to

half, the with of overall in back again, So expect modest what first saw. price consistent the we half generally we

nVent? total for price Modest

For total nVent.

comes next Sachs. The with Joe from Goldman question Ritchie

the dramatically progressed? Can trends as seeing the both and like the infrastructure that you Enclosures, across and on in weather diverging touch you're quarter EFS changed end trends market guys maybe

Sure.

some of areas utility the is of just in saw come things have the times telecom inventory I had earnings and think and also and adjustments we our QX channels. lead stated both call in, in -- last some been that where the there in one through

to QX. from out in played that So EFS QX our business largely

what seen we've that's So there.

be has say EFS. I very other the and Solutions hand, Data for both to On strong continued Enclosures would

strong very So a we as we did QX. for saw QX

I both positive on softer. two So those side, would say, that and where be it things the was other major would the

And on the maybe What's year? for adjustments inventory the your Beth, through back we're this think do into picking adjustments at up EFS, you in expectation like of then those those point? half volumes

-- we as do already Well, EFS Sara noted, grow as expect to QX. we in

we we So some infrastructure. that working we is start some -- strength to see expect that that adjustments way their as those as -- in other some out well opportunities other of and

enough. recognized going that as And Fair to Okay. is then about that you thinking you're pipeline your today? both potential to Thermal priorities, capital, what to and lastly, I capital know M&A from sway congratulations about making. on kind changes deploy M&A deployment of given the the portfolio buyback. expecting business, you're you're I that guess your dilution the

it are long-term I change these would because doesn't priorities. say priorities our

think so see But same. And the to at priorities in other allocation and I followed in and opportunities. the areas capital when remain XXXX, Growth we as long-term strategy certainly, of share dividend get repurchases. and acquisitions where first sale our terms other concludes, does we'll we're by

Jeff Hammond KeyBanc. comes next The question with from

point end to, want kind talked construction So back a on markets. finer utility, commercial does end two some what utility. just just you're those to destocking I incremental seeing and in I in but weakening seem had about and know guess, of there's like come I you two it markets,

things are the long-term including have of we we trends like certainly different lead components, that because on some the significantly had Yes, utility I really ground seen -- saw but think they're brought, improved year-over-year. good, just times lead what times been we've of in has

and times. was there of year, lot lead period longer a last of so acquiring And having a inventory channel,

the I'd soft. of out. markets say construction, utility, would thank And commercial so say way overall working And very those end the its seen remains all positive. just I we've commercial prospects construction, that's our renewable, And that for But you.

And we EFS. particularly gone that in see as we've so through,

to market soft be a little So have we at seen that point. this tend

just you And to getting data hear liquid projects? is Or the [indiscernible] I that Can the on -- standardized your Okay. lead product good times but focus more distribution build cooling, out? in the center your hyperscalers, through to then progress 'XX maybe in has long-term that pace business. building is of around And to speak starting in the on just just just been new with think channel? any and backlog

So backlog preferences how as online. ramping for bringing this in programs terms their just just they're capacity to our also out when And those XXXX, it recall, are comes also in customer having laying capacity. we're of of is some more

of overall it's been and offerings. When standardized to new go as our have So all programs XXXX. developing comes we into those more portfolio, things it

of of And capability we we're CDUs, some our used at for more can our so look various products when that manifold even some be that some creating standardized solutions. different

distribution can our an be important is that to So our channel through that's solutions to through sold strategy have part of also partners. through enterprise or system and integrators

that's as progression well. in so And

Nicole DeBlase Bank. from from question next comes Deutsche The

off. outlook just impact that, for the I and there we margins quarter, think from M&A think dilution second I was a still bit half? the go an through EFS the in rolls in Can of that

see is margins it So that revenue? possible with positive turn EFS we could

be to here just still in say, saw that And we in of would muted sales QX So margins say, sort and that return really a to dynamic EFS strong, QX of I point at going said, sales, QX. of, a I on of would forward but And just is that seeing based wouldn't expect a on perceived by mix of mix helping kind that these look, time, were on mix, sales XX%. we is I we year, we sales we think normalizes. in way expect north sales there's elevated last return what

Beth And of sort in talked takes and that et that in puts some infrastructure, of what an these on of was is terms some going of about cetera.

into what be large QX QX do than full a year in specifically. and contributions year. to entered we we margins of in said it's and lapping from no the for expect year, overall, sales the really EFS mix And different we ago So here, due muted really it's to as part the

Got it.

to be margins going Thermal then the But year-on-year around too, drove for what just And decline margin if is curious, in half, back we clear. not That's I the as talk well [ in the about outlook for Okay. as much in longer. quarter. know could ] the Thermal second

I guys growth. have little bit of think you a might expected

return return we sales for Beth And here factor is sales prepared expansion look project biggest good. half. mix the We from QX The good back book the in dynamics. was in half. growth her half, backlog on And if the the The this to expect here order back in trajectory good. to the alluded remarks, continue the into on performance do with we expect back do QX the is that, in sales

next comes Vlad with from Citi. The question Bystricky

So I focus know NPI, a for been on maybe just has which you.

highlighted full NPIs X of new XQ. think from over I Any growth to color you on thinking products you're in contributing about of year? the how for tailwind sort points

Well, get our view wanted we said to on new points growth. X products, as of always we've

And so X. we're already at

we're element growth we're to So vitality continue of key to that. pleased overall And it's we a very our going that and a with new ensure strategy. robust product have really

talk see the into Obviously, in early here to quick in That's the as as helpful terms And potential you synergies? quarters follow key on months the up of days the I can wanted it's it's priorities Great. very color. But X wins business come for you any then you just Okay. your about portfolio. what see just and and Trachte first acquisition.

want we acquire we our company positioning -- is growth. to always it ensure we that are for Well, a when

as very backlog. mentioned, has Trachte a strong I certainly, so And

at the that's that ensure identify backlog. the indirect So we or want et sourcing, looking early cetera, to synergies, spend. synergies, the that same execute At trying time, we we're on particularly cost whether to through in can days,

work we on to and our of feel as people very and be things into So overall making well company those welcome processes part nVent. integrate as

months So work and through early say segments really different to wins early them. the opportunity we customer the we there's opportunities those those whether I longer, pull-through, weeks. usually identify start expand because for us think too been product So to synergies, early for But just it's it's ensuring to whether identify us, just right? there's several growth the but in hard work and on end take of integration to markets or

stranded then or about Thermal helpful. And really on for think one me. Appreciate comments last Any the we color should That's Great. just it. divestiture? that with costs potential

portfolio with those on initiatives improvement Solutions a we go better something with experiences can M&A lot as into the I this whether one along ongoing perspective, perspective are ours Beth going going have from to segments, And transformation. is would forward an standpoint, to driving from terms focus from to go-to-market that's cost use of well productivity overall that thing with to think at. overall, also nVent been show to say, share how that an as that's an say marketing the we Electrical how that digital we I a of and Enclosures, other faster proceeds, continue this employee & would underlying look to, two some better process via repurchases. net about we the But up in as believe supplier we'll of things we're business we Well, has bring alluded things standpoint, as also overall just these these but customer From drive the experiences, Fastening experiences.

The William with next Brian comes from question Drab Blair.

First that the growth big. your wondering, business market just are throughout in to concerns for week boots year? the were the surfaced market investment so down I'm intensity of in expectation could AI XXXX bit and got has pace their a in you you've that spooked You're the has more how there major on of ago, over the some about what's center the Data little and I'm evolved ground, customers in developed stock throughout and wondering Solutions one is type the the if speak, how just generative potential data seeing a about you're exposure your mean market. and what projects about on going really year? talk hearing I from demand. seeing that the with real and

chips understood architectures cooling relooking had had the building and manufacturers I at loads that infrastructure. some their I comment capability. is and had we strategy with Certainly, is announced the power would that there capacity when one their things that higher is think one respect of right the whether that AI everyone and heat the their forward on that of have new and to moving chip customers they system

as we natural which accelerated heat things that and of that result changed a is a see, And so different or always as dynamic being are moved a creates these I result, loads, different sometimes or think projects progression.

dynamic I expect of our forward standpoint. talked continue. half think year, that into see it's long-term So through the about we that But very and we've backlog in to investment the the going And do growth very in. perspective we go there's as is building here We've strong first XXXX. seen

years. see around like grow of it's it's next it we'll and technology, for think scale, it, the to I excitement continue several -- going any and a will there's So new lot it to

the curious and And I growth for finer for reaffirmed on you of your maybe expectation Q&A, million the more cooling cooling, in a on XXXX. could think But you the that, revenue just following and is or Solutions if put point specifically Data Solutions power then expectation business just Data I'm what the for in in XXXX? power up terms $XXX in earlier

we've Well, cooling and seen strong remain have Sara going think faster, often we to we've I although of expect rate. But management revenue, expected first very our million said same that the as we growth growing full see will over commented cable power that grow through might be very year and $XXX that sometimes were double-digit to that at robust. half and always

Scott from Seaport next Graham comes with [Operator question Instructions] The Research.

couple for have of I you. a questions

X of like Could things got post give leverage some you going Thermal? out the months. and You've us in idea looks pro net debt, an forma obviously, in what next

think, the say, layering here. Scott, would Trachte, I think in I first I what is here's Well, step

this year, kind in leverage. to range, X of net So to end at it still Trachte within expect we right, you be would layer X.Xx the our of of the

I So plus look, $X long-term flow cash free us I about returns and generate, cash in gives take really that cash well my and just and think acquisitions, go value that $X shareholder that billion that that manage The the is just to you suggesting we deploy gives if $X.X great to the strong net you of talked there. proceeds remarks billion, that roughly do we that ratio. leverage within these referenced a our billion view of generate prepared that ability

terms that's look and it deploy. So to think we it up the kind of I that frame way in go just capital of deployment at

Sara. that, Appreciate

little us On the minus a quarter. the the kind organic and more? help on just third and get little Thermal Could you maybe Thermal walk and us then orders, that could that the through you we of bit fourth back in what in bit a the organic

Well, were right? as let orders to just we And talk through backlog. me our Thermal building said orders QX positive for business, that we're Management

So nice order growth there.

We energy transition. expect continue to the that with

orders. positive had we EFS, For

bit of across For look that say, Enclosures, had I this July orders July, significant data just -- little Solutions -- some very had we as we also been would Data orders But some through positive. through some segments good. of dynamic was X for And have a overall, that all we year-over-year.

nice and So than I'm momentum specific really to some is sure now the trajectory we and it. comments not a really right good a behind other backlog Thermal Thermal on has think

mean think didn't I if answered just -- to. overall, I it. I good. company talking I'm Yes, you Thermal, said but didn't about was I

session. over any question-and-answer Wozniak the would turn closing Beth our like back concludes conference to to This remarks. for I

today. of and thank us very proud for I'm Thank you, joining performance QX. you in our

continue high-performance We is digitalization positioned concludes Thanks shareholders focus executing transforming We for electrical the portfolio. on for our of our our again a growth for delivering believe This employees and the electrification top-tier us. call. nVent customers, trends. and to and by joining everything, on well company will sustainability strategy

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