Q3 2025 Financial Performance - Net sales for Q3 2025 were $735 million, a 10.6% decrease compared to $822.4 million in Q3 2024[12] - Net income for Q3 2025 was $43 million, a 65.2% decrease compared to $123.4 million in Q3 2024[12] - Adjusted EBITDA for Q3 2025 was $99.9 million, a 51.5% decrease compared to $206.1 million in Q3 2024[12] - Adjusted diluted EPS for Q3 2025 was $1.63 per share, a 57.1% decrease compared to $3.80 per share in Q3 2024[12] Business Updates and Outlook - Q3 2025 net sales include 2% organic volume growth compared to the prior year[11] - The company is maintaining its full-year outlook midpoint for Adjusted EBITDA and increasing its outlook for full-year Adjusted Diluted EPS[11] - The updated FY 2025 outlook for net sales is $2.8 billion to $2.9 billion, for Adjusted EBITDA is $390 million to $410 million, and for Adjusted Diluted EPS is $6.25 to $6.75[30] Segment Performance - Electrical Safety & Infrastructure net sales decreased by 14% to $521.3 million, with Adjusted EBITDA decreasing by 55.5% to $81.2 million[21] - Safety & Infrastructure net sales decreased by 1.4% to $214 million, but Adjusted EBITDA increased by 2.3% to $30.7 million[22] Cash Flow and Debt - The company's FY25 year-to-date cash flow from operating activities was $192 million[28] - The company's FY25 year-to-date capital expenditures were $85 million[28] - The company's FY25 year-to-date stock repurchases were $33 million[28]

Core Insights - Franklin Electric reported consolidated sales of $587.4 million for Q2 2025, an 8% year-over-year increase, with growth across all segments [2][24] - The company achieved GAAP diluted earnings per share of $1.31, reflecting a 6¢ increase year-over-year, driven by a 6% improvement in Energy segment sales [3][24] - Operating income margin reached 15%, up 40 basis points year-over-year, attributed to SG&A efficiency despite higher acquisition costs [3][26] Sales Performance - Water Systems segment sales grew 8% year-over-year, with U.S. and Canada sales up 5% and global sales outside the U.S. and Canada up 12% [4][27] - Distribution segment sales were $200 million, a 5% increase, with operating income margin improving by 300 basis points to 8.1% [5][28] - Energy segment sales reached $77.5 million, up 6% year-over-year, with operating income margin improving to 37.5% [6][29] Financial Metrics - Gross profit margin for Q2 2025 was 36.1%, a decline of 70 basis points year-over-year, influenced by product mix and acquisition effects [3][25] - SG&A expenses increased to $123.5 million, primarily due to acquisition-related costs, but underlying SG&A decreased by $2.3 million year-over-year [6][25] - The effective tax rate for the quarter was 25%, up from 23% in the prior year, due to increased foreign earnings and higher tax rates [30] Strategic Initiatives - The company plans to accelerate capital spending for new facilities in Turkey and India, linked to supply chain and nearshoring initiatives [8][66] - A quarterly cash dividend of $0.265 per share was declared, payable on August 21, with a record date of August 7 [7][31] - Share repurchases totaled 1.4 million shares for $120 million in Q2 2025, including approximately 1.2 million shares from Shaper Trust for about $104 million [7][31] Market Outlook - The full-year sales outlook is reaffirmed at $2.09 billion to $2.15 billion, with GAAP EPS guidance maintained at $3.95 to $4.25 [8][31] - The company anticipates a non-cash pension impact of approximately $1 per share in Q3 2025, which is excluded from current EPS guidance [10][32] - Management expressed confidence in maintaining a book-to-bill ratio above one across all segments, indicating strong future demand [9][10]

Financial Data and Key Metrics Changes - The company reported record sales of $963 million, up 30% year-over-year, with organic growth of 9% driven by both volume and price [13] - Adjusted EPS grew 28% to $0.86, exceeding guidance [15] - Adjusted operating income increased 18% year-over-year with a return on sales of nearly 21% [9][15] Business Line Data and Key Metrics Changes - Systems Protection sales increased 43% to $632 million, with organic growth of 10% [15][16] - Electrical Connections sales rose 11% to $331 million, with organic sales up 7% [17] - Infrastructure vertical led with organic sales growth over 20%, while commercial residential sales grew mid-single digits and industrial sales were down slightly [9][10] Market Data and Key Metrics Changes - All key geographic regions experienced growth: Americas up 9%, Europe up 10%, and Asia Pacific up low single digits [10][16] - The backlog increased more than fourfold compared to the previous year, driven by strong demand in data centers and power utilities [7][39] Company Strategy and Development Direction - The company is focused on becoming a higher growth electrical connection and protection company, with significant investments in data solutions and infrastructure [6][26] - The infrastructure vertical is expected to account for over 40% of sales, with data centers and power utilities each contributing approximately 20% [27] - The company is prioritizing growth initiatives, including new products and acquisitions, to enhance its market position [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and growth outlook, particularly in data centers and power utilities [11][12] - The company raised its full-year sales and adjusted EPS guidance, reflecting strong Q2 results and increased visibility in growth areas [22][24] - Management acknowledged the dynamic tariff environment but emphasized their ability to manage pricing and productivity to offset impacts [11][92] Other Important Information - The company launched 50 new products in the first half of the year, contributing over three points to sales growth [9] - Free cash flow for the quarter was robust at $74 million, with a strong balance sheet supporting capital allocation strategies [19][20] Q&A Session Summary Question: What is the timing of converting the backlog? - Management indicated that the backlog is expected to convert into sales through 2026, driven by growth in the data center solutions business and recent acquisitions [39] Question: How does the company view competition from hyperscalers developing their own cooling solutions? - Management stated that partnerships with hyperscalers remain crucial, as many do not wish to manufacture their own solutions, allowing for continued collaboration [42] Question: What is the outlook for commercial residential performance? - Management noted healthy performance in commercial residential but remained cautious, expecting it to be flattish for the year due to market uncertainties [51][102] Question: How is the company managing tariff and inflation pressures? - Management confirmed that pricing strategies are in place to offset tariff impacts, with expectations for improved margins in the second half of the year [92] Question: What is the expected growth for the Tracke business in 2025? - Management reported that the Tracke business is growing at double digits, with strong orders and healthy backlog contributing to raised guidance [52] Question: How is the company approaching modular data centers? - Management indicated that they are expanding capacity for modular data centers and integrating other OEMs' equipment, which will enhance overall margins [68][94] Question: What is the company's strategy for acquisitions? - Management emphasized a disciplined approach to acquisitions, focusing on high-growth verticals and complementary products to enhance capabilities [131]

Financial Data and Key Metrics Changes - The company reported record sales of $963 million, up 30% year-over-year, with organic growth of 9% driven by both volume and price [12] - Adjusted EPS grew 28% to $0.86, exceeding guidance [14] - Adjusted operating income increased 18% year-over-year, with a return on sales of nearly 21% [8][14] Business Line Data and Key Metrics Changes - Systems Protection sales increased 43% to $632 million, with organic growth of 10% [14][16] - Electrical Connections sales rose 11% to $331 million, with organic sales up 7% [16] - Infrastructure vertical led with organic sales growth over 20%, while commercial residential sales were up mid-single digits and industrial sales were down slightly [8][16] Market Data and Key Metrics Changes - All key geographic regions experienced growth: Americas up 9%, Europe up 10%, and Asia Pacific up low single digits [9] - The backlog increased more than fourfold compared to the previous year, driven by strong demand in data centers and power utilities [6][10] Company Strategy and Development Direction - The company is focused on becoming a higher growth electrical connection and protection company, with a significant shift towards the infrastructure vertical, which is expected to account for over 40% of sales [25][26] - Investments are being made in data solutions to support the AI build-out, with a focus on innovative power and cooling solutions [27][29] - The company is prioritizing growth initiatives, including new products and acquisitions, while maintaining a strong balance sheet [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and growth outlook, particularly in data centers and power utilities [10][11] - The company raised its full-year sales guidance to reflect strong Q2 results, expecting reported sales growth of 24% to 26% [21] - Management acknowledged the dynamic tariff environment but emphasized their ability to manage pricing and productivity to offset impacts [10][87] Other Important Information - The company launched 50 new products in the first half of the year, contributing over three points to sales growth [8] - Free cash flow for the quarter was robust at $74 million, with a healthy balance sheet supporting disciplined capital allocation [18][19] Q&A Session Summary Question: Timing of converting backlog and its duration - Management indicated that the backlog is expected to convert into sales through 2026 and beyond, driven by growth in the data center solutions business and recent acquisitions [36][37] Question: Concerns about disintermediation in liquid cooling - Management clarified that they partner with hyperscalers to provide complete system solutions or specific products, maintaining strong relationships despite market changes [38][41] Question: Performance of commercial residential segment - Management noted healthy performance in the commercial residential segment but remained cautious about the overall industry outlook, expecting it to be flattish for the year [47][49] Question: Backlog growth and expectations for the second half - Management confirmed that backlog has grown significantly, particularly in the systems protection business, which is expected to grow ahead of the electrical connections segment [54][55] Question: Price recovery from tariff impacts - Management stated that they expect to recover tariff impacts through pricing and productivity, with a focus on maintaining healthy margins [85][87] Question: Modular data centers and integration of other products - Management indicated that they are integrating other OEMs' equipment into their modular data center offerings, which will enhance their capabilities over time [90][91] Question: Growth opportunities in international markets - Management attributed outperformance in international markets to a focus on high-growth verticals and strong distribution partnerships [117] Question: Margin protection amid inflation and tariffs - Management confirmed that they have mechanisms in place to adjust pricing in response to tariffs and inflation, ensuring margin protection through long-term contracts [119]

Financial Performance - nVent delivered record Q2 sales of $963 million, up 30% year-over-year[10] - Adjusted EPS was $0.86, a 28% increase[12] - Adjusted operating income reached $200 million, up 18% year-over-year, with a ROS of 20.8%[12] - Free cash flow generation amounted to $74 million in Q2 2025[12] Growth and Orders - Organic sales increased by 9%[12] - Organic orders grew by over 20% year-over-year[10] - Total backlog increased more than four-fold year-over-year[10] - New products contributed over 3 percentage points to sales growth[12] Outlook and Guidance - nVent is raising full-year sales and adjusted EPS guidance[10] - The company expects sales to be up 24% to 26% reported, and 8% to 10% organically[33] - Adjusted EPS is projected to be between $3.22 and $3.30, a 29% to 33% increase[33]

Core Insights - ABB Ltd (ABBNY) is experiencing strong performance in its Electrification segment, driven by robust customer activities in key markets such as service and utilities, with orders in Q2 2025 reaching $4.52 billion, a 9% year-over-year increase on a comparable basis [1][8] - The order backlog has reached a record $8.69 billion, up from $7.55 billion in the same quarter last year, with revenues for the segment totaling $4.33 billion, reflecting an 11% year-over-year increase [2][8] - The Electrification segment benefits from effective execution of its order backlog, particularly in medium voltage and power protection, with positive customer activity and project wins expected to enhance growth [3][8] - ABBNY anticipates a favorable market response to its new SACE Emax 3 air circuit breaker, which is designed to enhance energy security in critical infrastructure [4][8] Peer Segment Performance - EnerSys' Energy Systems segment reported net sales of $399 million in Q4 fiscal 2025, an 8% year-over-year increase, driven by data center strength and recovery in the U.S. Communications market [5] - Emerson Electric Co.'s Software and Control Automation Solutions segment generated net sales of $1.42 billion in Q2 fiscal 2025, up 7% year-over-year, supported by momentum in the AspenTech business and strength in power and process markets [6] Financial Performance and Valuation - ABB shares have increased by 22% over the past six months, outperforming the industry growth of 16.4% [7] - The company is currently trading at a forward price-to-earnings ratio of 25.07X, above the industry average of 24.53X, and carries a Value Score of C [9] - The Zacks Consensus Estimate for ABB's 2025 earnings has risen by 1.2% over the past 60 days [12]

Financial Data and Key Metrics Changes - Organic sales grew 7% in Q2, following a 6% increase in Q1, with preliminary July sales per workday up approximately 10% year over year [5][12] - Adjusted EBITDA margin increased by 90 basis points sequentially, while adjusted EPS rose 6% compared to the prior year [6][14] - Total data center sales surpassed $1 billion in Q2, marking a 65% year-over-year increase [5][21] Business Line Data and Key Metrics Changes - Communications and Security Solutions (CSS) achieved 17% organic growth, driven by strong data center performance, while Electrical and Electronic Solutions (EES) grew 6% [5][18] - Utility and Broadband Solutions (UBS) experienced a 4% decline in sales, although investor-owned utilities showed signs of recovery [24][27] - CSS data center sales represented nearly 40% of CSS revenue in Q2, up from approximately 30% in the prior year [19][21] Market Data and Key Metrics Changes - The utility market faced headwinds but is expected to return to growth in the second half of the year, with preliminary July sales for UBS showing slight improvement [24][39] - Backlog increased across all business units, with CSS backlog up 36% year over year [40][41] - The overall demand for data centers remains strong, with no slowdown in customer demand reported [19][21] Company Strategy and Development Direction - The company is focused on executing cross-sell initiatives, managing margins, and delivering operational improvements through technology [10][42] - The outlook for organic sales growth has been revised upward to 5% to 7% for the year, driven by strong data center performance and broader electrical sales trends [37][39] - The company plans to prioritize deleveraging the balance sheet while remaining opportunistic regarding share repurchases and acquisitions [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the utility business, supported by trends in electrification and green energy [27][39] - The company acknowledged the uncertainty surrounding tariffs and the overall economy but remains optimistic about demand for data centers and improving electrical end markets [39][40] - Management highlighted the importance of strong customer relationships and visibility into future demand, particularly in the data center segment [65][68] Other Important Information - The company redeemed $540 million of Series A preferred stock, improving its capital structure and extending debt maturities [29][30] - Free cash flow for Q2 was $87 million, representing approximately 45% of adjusted net income, with a trailing twelve-month free cash flow of $644 million [27][28] Q&A Session Summary Question: Clarification on pricing and guidance - Management confirmed that no tariff impacts are included in the second half outlook, and July's strong start reflects genuine demand increase rather than just easier comparisons [49][50] Question: Insights on utility business trends - Management noted that investor-owned utilities returned to growth in Q2, with expectations for public power customers to follow suit in the second half [59][62] Question: Data center growth metrics - Management indicated strong visibility into data center demand, with significant growth in both white space and gray space, particularly driven by AI applications [65][68] Question: Net working capital intensity targets - Management aims to return to pre-COVID levels of around 19% for net working capital intensity, with ongoing improvements noted [79][80] Question: Pricing impacts and inventory gains - Management clarified that known price increases are factored into guidance, but future pricing actions related to tariffs are not included due to uncertainty [84][86]

Financial Data and Key Metrics Changes - Organic sales grew 7% in Q2 2025, following a 6% increase in Q1 2025, with preliminary July sales per workday up approximately 10% year over year [5][11][39] - Adjusted EBITDA margin increased by 90 basis points sequentially, driven by strong operating cost leverage and stable gross margin [6][12] - Adjusted EPS was $3.39, reflecting a 6% increase compared to the prior year [7][13] Business Line Data and Key Metrics Changes - CSS (Communications and Security Solutions) achieved 17% organic growth, while EES (Electrical and Electronic Solutions) grew by 6% [5][12] - Data center sales surpassed $1 billion in Q2, marking a 65% year-over-year increase, indicating strong demand driven by AI trends [5][19] - UBS (Utility and Broadband Solutions) experienced a 4% decline in sales, although investor-owned utility sales returned to growth in Q2 [22][24] Market Data and Key Metrics Changes - The utility market faced challenges but showed signs of recovery, with investor-owned utilities growing low single digits in Q2 [22][56] - Backlog increased across all business units, with CSS backlog up 36% year over year, reflecting strong demand in data center projects [36][65] - The overall data center sales represented approximately 18% of total sales in Q2, up from 10% in the previous year [19] Company Strategy and Development Direction - The company raised its full-year outlook for organic sales growth to 5% to 7%, up from a previous range of 2.5% to 6.5% [33][35] - Focus remains on executing cross-sell initiatives, managing margins, and delivering operational improvements through technology [9][38] - The company aims to prioritize deleveraging the balance sheet while remaining opportunistic regarding share repurchases and acquisitions [37][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory supported by trends in electrification, data center expansion, and infrastructure modernization [16][24] - The company acknowledged uncertainties related to tariffs and the overall economy but noted strong demand for data centers and improving electrical end markets [35][36] - Preliminary July sales indicate continued positive momentum, with expectations for mid to high single-digit growth in Q3 [39][41] Other Important Information - The company redeemed $540 million of Series A preferred stock, enhancing financial flexibility and stability [26][27] - Inventory management remains a focus, with a 60 basis point year-over-year improvement in networking capital intensity [25][37] - The company is actively managing tariff impacts and global trade uncertainties to protect margins [30][41] Q&A Session Summary Question: Clarification on pricing and demand trends - Management confirmed that no tariff impacts are included in the second half outlook, and July sales show genuine demand increase rather than just easier comparisons [45][46] Question: Insights on UBS margins - UBS margins were impacted by customer mix and increased SG&A costs, but management expects significant operating leverage as utility sales return to growth [48][50] Question: Utility business performance - Investor-owned utilities returned to growth in Q2, while public power customers are expected to follow suit in the second half of the year [56][58] Question: Data center growth metrics - Management highlighted strong visibility into data center demand, with significant growth in both white space and gray space projects [60][62] Question: Inventory gains and pricing impacts - Management indicated that inventory gains from price increases are temporary and will be reflected in future financials, but specific impacts are difficult to project [78][89]

Core Insights - Schneider Electric reported significant sustainability milestones in Q2 2025, achieving an SSI score of 8.06 out of 10 as part of its 2021–2025 Schneider Sustainability Impact program [1][5] - The company was recognized as the World's Most Sustainable Company for the second consecutive year and as Europe's Most Sustainable Corporation, reinforcing its leadership in sustainability [2] Sustainability Achievements - Schneider Electric surpassed its goal of training over 1 million people in energy management, emphasizing its commitment to inclusive energy transition and youth empowerment [3][5] - The Youth Education & Entrepreneurship Program, active in over 60 countries, focuses on equipping underserved communities with technical and entrepreneurial skills [3][4] Environmental Impact - The company has saved and avoided 734 million tonnes of CO₂ emissions for customers since 2018, surpassing the 700-million-tonne milestone [7] - Operational CO₂ emissions from Schneider Electric's top 1,000 suppliers have been reduced by 48%, nearing the year-end target as part of the Zero Carbon Project [7] Social Responsibility - The Decent Work Program achieved 79% coverage in Q2 2025, reflecting a 39-point year-over-year improvement in working conditions and compliance, particularly in the Middle East and East Asia & Japan [7] Recent Recognitions - Schneider Electric ranked 1 in the Gartner Top 25 Supply Chain 2025 and received multiple awards for its sustainability efforts, including "Best ESG Information" and "Corporate Social Excellence" [8]

HY 2025 Business Highlights HY 2025 Financial Performance Highlights 33 Expected Trends & Financial Target Q&A 38 Appendix Half Year 2025 Results - July 31, 2025 Strong revenue growth in H1; accelerated momentum entering H2 FY25 Target reaffirmed Internal Investor Relations – Schneider Electric Page 2 Disclaimer All forward-looking statements are Schneider Electric management's present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to d ...