nVent First Quarter 2025 Earnings Presentation May 2, 2025 Caution Concerning Forward-Looking Statements This presentation contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "like ...

Financial Performance - Reported sales in Q1 2025 totaled $809 million, representing an 11% increase year-over-year, with organic sales growth of 2%[4] - Earnings per diluted share (EPS) from continuing operations were $0.52, up 2%, while adjusted EPS was $0.67, reflecting a 10% increase[5] - Operating income for Q1 2025 was $130 million, down 1% from $132 million in Q1 2024, but adjusted operating income increased by 4% to $162 million[6] - The company reported a net income from continuing operations of $87 million for Q1 2025, compared to $85 million in Q1 2024[21] - Net income from continuing operations for Q1 2025 was $87.0 million, slightly up from $85.2 million in Q1 2024, reflecting a growth of 2.1%[25] - Total net sales for Q1 2025 reached $809.3 million, an increase of 10.5% compared to $732.1 million in Q1 2024[28] - Adjusted operating income for Q1 2025 was $162.2 million, up from $155.9 million in Q1 2024, indicating a growth of 4.0%[28] - The company’s total reportable segment income for Q1 2025 was $189.3 million, compared to $180.0 million in Q1 2024, indicating a growth of 5.0%[28] Cash Flow and Investments - Net cash provided by operating activities was $64 million, a 31% increase compared to $49 million in Q1 2024, with free cash flow of $44 million, up 32%[7] - Cash and cash equivalents at the end of Q1 2025 were $1,343.0 million, significantly higher than $201.4 million at the end of Q1 2024[25] - The company reported net cash provided by operating activities of continuing operations at $63.9 million for Q1 2025, compared to $48.6 million in Q1 2024, a growth of 31.7%[25] - The net cash provided by investing activities for Q1 2025 was $1,567.4 million, a significant increase from $(15.8) million in Q1 2024[25] - Free cash flow for Q1 2025 was reported at $44.4 million, up from $33.6 million in Q1 2024[40] Guidance and Projections - The company raised its full-year 2025 sales guidance to a growth range of 19% to 21%, up from the previous guidance of 8% to 10%[12] - Full-year 2025 adjusted EPS is now expected to be between $3.03 and $3.13, an increase from the prior guidance of $2.98 to $3.08[12] - The second quarter 2025 is projected to see reported sales growth of 22% to 24% and organic sales growth of 4% to 6%[13] - For Q2 2025, nVent forecasts organic net sales growth between 4% to 6%, with total net sales growth projected at 22% to 24%[38] - The full year 2025 organic net sales growth is expected to be between 5% to 7%, with total net sales growth estimated at 19% to 21%[38] Segment Performance - The return on sales for the Systems Protection segment was 20.5% in Q1 2025, down from 21.6% in Q1 2024[28] - The Systems Protection segment experienced a total net sales growth of 15.5% in Q1 2025, driven by a 16.2% contribution from acquisitions[37] - The Electrical Connections segment achieved an organic net sales growth of 3.9% in Q1 2025[37] - nVent reported a Q1 2025 organic net sales growth of 1.6%, with total net sales growth at 10.5% due to acquisitions[37] Acquisitions and Strategic Moves - The acquisition of Avail Electrical Products Group is expected to strengthen the company's position in high-growth infrastructure sectors, including power utilities and data centers[4] - nVent's total net sales growth for the year is influenced by a projected 14% contribution from acquisitions[38] Capital Expenditures - Capital expenditures for Q1 2025 were $21.1 million, up from $15.3 million in Q1 2024, reflecting an increase of 37.9%[25] - Capital expenditures for Q1 2025 amounted to $21.1 million, compared to $15.3 million in Q1 2024[40] Currency Impact - Currency effects negatively impacted organic net sales growth by 0.9% in Q1 2025[37] Dividends - Cash dividends of $0.20 per share were approved, payable on May 9, 2025[14]

Core Viewpoint - Avail Infrastructure Solutions has entered into a definitive agreement to sell its Electrical Products Group business unit to nVent Electric plc for an enterprise value of $975 million, which is expected to close in the first half of 2025 [1][3]. Group 1: Transaction Details - The transaction is valued at $975 million, subject to customary adjustments [1]. - The deal is anticipated to close in the first half of 2025, with HSR approval already obtained [3]. - Avail and Fernweh will collaborate with nVent to ensure a smooth transition for approximately 1,100 employees of the Electrical Products Group [3]. Group 2: Strategic Implications - The acquisition is seen as a crucial step in enhancing EPG's position as a leading provider of electrical products, with expected benefits in the datacenter and utilities markets [2]. - The transformation of EPG since its acquisition in 2022 is highlighted as a testament to the partnership between Fernweh and AZZ, focusing on growth, innovation, and operational efficiency [2]. Group 3: Company Background - EPG is recognized as a leading provider of specialized products and solutions for industrial and electrical applications, focusing on safe and reliable power transmission [4]. - EPG operates a diverse portfolio that includes custom switchgear, electrical enclosures, and medium and high-voltage bus ducts [4]. - Fernweh Group is an investment firm with expertise in strategy, M&A, and operational transformation in the industrial and industrial technology sectors [5].

Core Insights - Avail Infrastructure Solutions has entered into a definitive agreement to sell its Electrical Products Group (EPG) to nVent Electric plc for an Enterprise Value of $975 million, subject to customary adjustments [1][2][3] Group 1: Transaction Details - The transaction is expected to close in the first half of 2025, with HSR approval already obtained and subject to customary closing conditions [3] - Avail and Fernweh will collaborate with nVent to ensure a smooth transition for approximately 1,100 employees of EPG [3] Group 2: Strategic Importance - The acquisition is seen as a crucial step in solidifying EPG's position as a leading provider of electrical products, enhancing its brand and creating significant value for customers, employees, and stakeholders [2] - The transaction positions EPG to deliver best-in-class electrical products and solutions, benefiting from growth in the datacenter and utilities markets [2] Group 3: Company Background - EPG is a leading provider of specialized products and solutions for industrial and electrical applications, focusing on safe and reliable power transmission [4] - EPG operates a portfolio that includes custom switchgear, electrical enclosures, and medium and high-voltage bus ducts through various entities [4] Group 4: Fernweh Group Overview - Fernweh Group is an investment firm with leaders from global institutions, focusing on strategy, M&A, and operational transformation in the industrial and industrial technology sectors [5] - The firm aims to create value for stakeholders by providing tailored management capabilities and capital for mid- and small-cap companies [5]

Core Insights - Avail Infrastructure Solutions has entered into a definitive agreement to sell its Electrical Products Group (EPG) to nVent Electric plc for an Enterprise Value of $975 million, subject to customary adjustments [1][2][3] Group 1: Transaction Details - The transaction is expected to close in the first half of 2025, with HSR approval already obtained and subject to customary closing conditions [3] - Avail and Fernweh will collaborate with nVent to ensure a smooth transition for approximately 1,100 EPG employees [3] Group 2: Company Background - EPG is a leading provider of specialized products and solutions for industrial and electrical applications, focusing on safe and reliable power transmission [4] - EPG's portfolio includes custom switchgear, electrical enclosures, and medium and high-voltage bus ducts through various entities [4] Group 3: Strategic Importance - The strategic combination with nVent is expected to enhance EPG's brand and create significant value for customers, employees, and stakeholders [2] - The transaction marks the completion of EPG's transformation since its acquisition in 2022, highlighting the partnership between Fernweh and AZZ [2]

Financial Performance - In 2024, net sales increased by 12.6% to $3,006.1 million, compared to $2,668.9 million in 2023, driven by acquisitions and organic growth[160] - The gross profit margin slightly decreased to 40.2% in 2024 from 40.3% in 2023, primarily due to inflationary increases in labor costs[160] - Enclosures segment net sales increased by 13.5% to $1,823.3 million in 2024, with segment income rising by 16.3% to $403.1 million[173] - Electrical & Fastening Solutions segment net sales grew by 11.3% to $1,182.8 million in 2024, with segment income increasing by 7.2% to $354.5 million[179] - The total net cash provided by operating activities from continuing operations was $501.0 million in 2024, reflecting a net income of $472.0 million[186] - Free cash flow for the year ended December 31, 2024 was $562.0 million, an increase from $464.6 million in 2023[216] Acquisitions and Divestitures - The company completed the acquisition of ECM Industries for approximately $1.1 billion in cash on May 18, 2023, enhancing its Electrical & Fastening Solutions segment[155] - The acquisition of Trachte, LLC was finalized on July 16, 2024, for approximately $687.5 million, aimed at strengthening the Enclosures segment[157] - The company entered into an agreement to sell its Thermal Management business for $1.7 billion in cash, with the sale completed on January 30, 2025[158] Research and Development - Research and development expenses increased by 19.7% to $66.1 million in 2024, reflecting the company's commitment to innovation[160] Taxation - The effective tax rate rose significantly to 43.9% in 2024 from a negative 22.5% in 2023, influenced by changes in international tax laws[160] - The effective tax rate increased by 66.4 percentage points in 2024, influenced by higher earnings in jurisdictions with elevated tax rates[170] - As of December 31, 2024, the total gross liability for uncertain tax positions was estimated to be $11.7 million[214] Cash Flow and Financing - Net cash used for investing activities was $750.8 million in 2024, primarily due to the Trachte acquisition costing $677.7 million[189] - The company issued $500.0 million in long-term debt in 2024, contributing to net cash provided by financing activities of $146.2 million[191] - Cash on hand as of December 31, 2024, was $131.2 million, with $53.2 million held in jurisdictions with limited repatriation capabilities[184] - The company had $400.0 million available for share repurchases under the 2024 Authorization as of December 31, 2024[207] - The company repurchased 1.5 million ordinary shares for $100.0 million under the 2024 Authorization during the year ended December 31, 2024[206] Future Outlook - The company plans to focus on higher growth verticals and new products to achieve differentiated revenue growth in 2025[159] - Inflationary cost increases, particularly in labor and raw materials, are expected to continue impacting operations into 2025[159] - Revenues and operating profit beyond 2030 are projected to grow at a perpetual growth rate of 3.0%[227] Financial Ratios and Covenants - The company’s debt agreements contain financial covenants, including a maximum consolidated debt to EBITDA ratio of 3.75 to 1.00[204] - The borrowing capacity under the Revolving Credit Facility was $600.0 million as of December 31, 2024[200] Market and Currency Risks - At December 31, 2024, the company had outstanding foreign currency derivative contracts with gross notional U.S. dollar equivalent amounts of $259.3 million[250] - A 10% appreciation or depreciation of the U.S. dollar relative to the Euro would result in a change in Accumulated other comprehensive loss of $13.6 million[251] - A 100 basis point increase in interest rates would result in a $63.1 million decrease in the fair value of fixed-rate debt[253] - A 100 basis point increase in interest rates on variable-rate debt would result in an $8.7 million increase in interest incurred[253] Pension and Other Post-Retirement Benefits - The company recorded a pre-tax, non-cash pension and other post-retirement mark-to-market gain of $0.1 million in 2024, compared to a loss of $13.4 million in 2023[169] - The discount rates on the pension plans ranged from 1.00% to 5.39%, 1.00% to 4.88%, and 1.00% to 5.22% in 2024, 2023, and 2022, respectively[238] - A 0.25 percentage point change in the discount rates is estimated to impact the total projected benefit obligation by approximately $4.6 million[240] Shareholder Returns - Dividends paid per ordinary share were $0.76 for the year ended December 31, 2024, compared to $0.70 for the years ended December 31, 2023 and 2022[208] - The company’s distributable reserve balance was $2.4 billion as of December 31, 2024, down from $2.7 billion in 2023[211]

Core Viewpoint - nVent Electric plc reported its fourth quarter and full year performance for 2024, providing insights into its financial results and outlook for 2025, with a focus on the Thermal Management business being reported as discontinued operations starting Q3 2024 [3]. Financial Performance - The company will present details on its fourth quarter and full year performance, emphasizing results on a continuing operations basis for 2023 and 2024 [3]. - The earnings call includes participation from various financial analysts from major investment firms, indicating a strong interest in the company's financial health and future prospects [1][2]. Management Commentary - The call features key executives including the CEO and CFO, who will provide insights into the company's strategic direction and financial outlook [3].

Financial Data and Key Metrics Changes - Q4 2024 reported sales growth was 9%, with adjusted EPS growth of 7% [7][10] - Full year 2024 reported sales growth was 13%, with adjusted EPS also up 7% [7][12] - Segment income for Q4 grew 12% year over year, with return on sales up 50 basis points [10][12] - Free cash flow for the full year was $427 million, growing 20% [31][34] Business Line Data and Key Metrics Changes - Enclosures (now systems protection) sales increased 16%, with organic sales down 1% [28] - Electrical and fastening (now electrical connections) sales were flat organically [29] - Data solutions within infrastructure grew approximately 30% in 2024, contributing significantly to sales [13][141] Market Data and Key Metrics Changes - North America organic sales declined low single digits, while Asia Pacific grew in the mid-teens [12][29] - Organic orders were up low teens in Q4, with double-digit order growth in data solutions [12][104] Company Strategy and Development Direction - The company is focused on electrification, sustainability, and digitalization trends, with a 2025 guidance reflecting approximately 9% sales growth and 22% adjusted EPS growth [9][36] - The divestiture of the thermal management business positions the company for higher growth in electrical connection and protection [15][36] - The company plans to launch over 75 new products in 2025, contributing to sales growth [24][36] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q1 2025 may start slow, they expect organic growth to accelerate as the year progresses due to growing backlogs and positive order trends [50][54] - The company anticipates continued demand for liquid cooling solutions driven by energy efficiency needs in data centers [82][129] Other Important Information - The company expects nearly $2 billion in capital available for deployment in 2025, including proceeds from the thermal management sale [8][36] - The company has a strong liquidity position with $190 million in cash and $600 million available on its revolver [32][34] Q&A Session Summary Question: Organic growth expectations for 2025 - Management expects organic growth to be heavily weighted towards volume, with price also playing a role [56] Question: Operating margin guidance - Q1 is expected to see modestly lower return on sales due to higher corporate costs and ongoing investments [66] Question: Channel inventory status - Management noted that channel inventory adjustments impacted Q4, but orders have picked up in January [92][93] Question: Impact of tariffs on COGS - Minimal impact from tariffs on imports from China, with low exposure from Mexico and Canada [96] Question: Liquid cooling business dynamics - Demand for liquid cooling remains strong, with ongoing investments in capacity and innovation [82][129]

Financial Performance - Fourth quarter 2024 sales were $752 million, up 9% compared to Q4 2023, but down 1% organically[5] - Full-year 2024 sales reached $3.0 billion, representing a 13% increase from 2023, with a 2% organic growth[5] - Fourth quarter 2024 adjusted EPS was $0.59, up 7% from $0.55 in the prior year, while reported EPS was $(0.10), down 108%[5] - Full-year 2024 adjusted EPS was $2.49, up 7% from $2.32, while reported EPS decreased by 48% to $1.43[5] - Net sales for Q4 2024 reached $752.2 million, a 8.9% increase from $690.5 million in Q4 2023[26] - Operating income for the twelve months ended December 31, 2024, was $527.1 million, up from $462.7 million in 2023, reflecting a 13.9% increase[26] - Net income from continuing operations for 2024 was $240.8 million, down from $459.7 million in 2023[31] - The diluted earnings per share from continuing operations for 2024 was $1.43, compared to $1.53 in 2023[46] Cash Flow and Assets - The company generated free cash flow of $150 million in Q4 2024 and $427 million for the full year[7] - Cash and cash equivalents decreased to $131.2 million in 2024 from $179.6 million in 2023[29] - Total assets increased to $6,734.9 million in 2024, compared to $6,161.7 million in 2023[29] - Long-term debt rose to $2,117.5 million in 2024 from $1,748.8 million in 2023, indicating increased leverage[29] - Free cash flow for the full year 2023 was $356.7 million, with $427.5 million reported for the twelve months ended December 31, 2024[56] - Total free cash flow for the full year 2023 was $464.6 million, with $562.0 million reported for the twelve months ended December 31, 2024[56] Product Development and Market Strategy - nVent launched approximately 90 new products in 2024, with the Data Solutions business growing approximately 30%[4] - The company is focused on expanding its product portfolio in the infrastructure vertical, particularly in data centers and power utilities[4] - The company plans to continue focusing on organic sales growth and strategic acquisitions to enhance its market position[40] Future Projections - The company expects 2025 reported sales growth of 8% to 10% and organic sales growth of 4% to 6%[15] - Full-year 2025 EPS guidance is projected to be between $2.45 to $2.55 on a GAAP basis and $2.98 to $3.08 on an adjusted basis[15] - The company forecasts adjusted net income from continuing operations of $503 million for the full year 2025, with a first-quarter forecast of $110 million[50] - Diluted earnings per ordinary share from continuing operations for the full year 2025 is projected to be between $2.45 and $2.55, with a first-quarter estimate of $0.52 to $0.54[50] - The company expects organic net sales growth of 7% to 9% for the full year 2025, with a first-quarter forecast of 0% to 2%[55] Segment Performance - In 2024, nVent Electric plc reported total net sales of $3,006.1 million, a 12.6% increase from $2,668.9 million in 2023[35] - The Enclosures segment generated net sales of $1,823.3 million in 2024, up from $1,605.9 million in 2023, reflecting a growth of 13.5%[35] - The Electrical & Fastening Solutions segment achieved net sales of $1,182.8 million in 2024, up from $1,063.0 million in 2023, marking a growth of 11.2%[35] - The company reported a total reportable segment income of $757.6 million for 2024, compared to $677.2 million in 2023, indicating a 11.9% increase[35] - The return on sales for the Enclosures segment was 22.1% in 2024, compared to 21.6% in 2023[35] Operating Metrics - Fourth quarter 2024 operating income was $117 million, flat compared to Q4 2023, while adjusted operating income increased by 12% to $158 million[6] - Adjusted operating income for 2024 was $652.0 million, compared to $566.6 million in 2023, representing a 15.1% increase[46] - The adjusted return on sales for 2024 was 21.7%, an improvement from 21.2% in 2023[46] - The company achieved an adjusted return on sales of 21.2% for the full year 2023, with quarterly figures of 19.1% in Q1, 22.3% in Q2, 22.7% in Q3, and 20.5% in Q4[47]

Core Insights - nVent Electric (NVT) is expected to report quarterly earnings of $0.59 per share, reflecting a decline of 24.4% year-over-year [1] - Revenue forecasts stand at $770.43 million, indicating a decrease of 10.5% compared to the previous year [1] - Analysts have revised the consensus EPS estimate down by 0.3% over the last 30 days, suggesting a reevaluation of initial estimates [1][2] Revenue Estimates - Analysts project 'Net Sales- Enclosures' to be $490.40 million, representing a year-over-year increase of 21.9% [4] - 'Net Sales- Electrical & Fastening Solutions' is estimated at $293.72 million, indicating a growth of 1.9% from the prior year [4] - 'Net Sales- Thermal Management' is expected to reach $179.87 million, suggesting a year-over-year increase of 5.4% [5] Stock Performance - nVent shares have decreased by 7.9% over the past month, contrasting with the Zacks S&P 500 composite's increase of 2.7% [6] - The company holds a Zacks Rank 4 (Sell), indicating expectations of underperformance relative to the overall market in the near term [6]