Record sales and strong EPS; updating full-year
guidance
- Reported sales of $859 million up 15%, organic up slightly
- Reported EPS of $0.63, up 15%; Adjusted EPS of $0.84, up
27%
- Cash Flows from Operations of $145 million, up 7%; Free Cash
Flow of $136 million, up 8%
- Updating full-year sales and adjusted EPS guidance
- Reported sales growth of 12% to 13%; Organic sales growth of 3%
to 4%
- Reported EPS of $2.46 to $2.48; Adjusted EPS of $3.01 to
$3.03
Reconciliations of GAAP (reported) to Non-GAAP
measures are in the attached financial tables.
nVent Electric plc (NYSE:NVT) (“nVent”), a global leader in
electrical connection and protection solutions, today announced
financial results for the third quarter of 2023 and provided
guidance for the fourth quarter and full-year 2023.
“I am very pleased with our execution in the third quarter. We
had outstanding income growth and robust cash flow. The ECM
Industries and TEXA Industries acquisitions have been great
additions to nVent and are performing well,” said nVent Chair and
Chief Executive Officer Beth Wozniak.
“We believe we are well positioned with electrification,
sustainability and digitalization trends. We continue to execute on
our strategy for growth focused on high-growth verticals, new
products, acquisitions and geographic expansion. As a result of our
year-to-date performance and expected continued channel inventory
adjustments in Q4 we are updating our full-year sales guidance and
raising adjusted EPS guidance.”
Third quarter 2023 sales of $859 million were up 15 percent
relative to third quarter 2022 and organic up slightly, which
excludes the impact from currency fluctuations and acquisitions.
Third quarter 2023 earnings per diluted share (“EPS”) were $0.63,
up 15 percent, while on an adjusted basis, the company had EPS of
$0.84, up 27 percent. Segment income, adjusted net income, free
cash flow and adjusted EPS are described in the attached
schedules.
Third quarter 2023 operating income was $156 million, up 30
percent, compared to $121 million in the prior year period. On an
adjusted basis, segment income was $202 million, up 40 percent,
compared to $144 million in the prior year period.
nVent had net cash provided by operating activities of $145
million in the third quarter compared to $136 million in the prior
year period. Free cash flow generated was $136 million compared to
$126 million in the prior year period.
THIRD QUARTER PERFORMANCE ($ in millions)(1)
nVent Electric plc
Three months ended
September 30, 2023
September 30, 2022
% / point
change
Net Sales
$859
$745
15%
Organic
—%
Operating Income
$156
$121
30%
Reported ROS
18.2%
16.2%
200 bps
Segment Income
$202
$144
40%
Adjusted ROS
23.5%
19.3%
420 bps
Enclosures
Three months ended
September 30, 2023
September 30, 2022
% / point
change
Net Sales
$413
$388
6%
Organic
4%
ROS
21.7%
18.5%
320 bps
Electrical & Fastening Solutions
("EFS")
Three months ended
September 30, 2023
September 30, 2022
% / point
change
Net Sales
$302
$209
45%
Organic
-4%
ROS
32.3%
29.1%
320 bps
Thermal Management
Three months ended
September 30, 2023
September 30, 2022
% / point
change
Net Sales
$144
$148
-3%
Organic
-3%
ROS
24.2%
24.2%
0 bps
Certain figures presented in the tables
above are rounded.
GUIDANCE FOR FULL-YEAR AND FOURTH QUARTER 2023
The company now estimates reported sales growth for full-year
2023 of 12% to 13% versus prior guidance of 13% to 15%. The company
now expects organic sales growth of 3% to 4% versus prior guidance
of 4% to 6%. The company now expects full-year 2023 EPS of $2.46 to
$2.48 on a GAAP basis and adjusted EPS of $3.01 to $3.03, versus
prior guidance of $2.30 to $2.36 on a GAAP basis and adjusted EPS
of $2.85 to $2.91.
The company estimates reported sales for the fourth quarter of
2023 to be up 15% to 17%, which represents an increase of 1% to 3%
on an organic basis. The company estimates fourth quarter 2023 EPS
on a GAAP basis of $0.61 to $0.63 and adjusted EPS of $0.73 to
$0.75.
DIVIDENDS
nVent previously announced on September 26, 2023 that its Board
of Directors approved a regular cash dividend of $0.175 per share,
payable during the fourth quarter on November 3, 2023.
EARNINGS CONFERENCE CALL
nVent’s management team will discuss the company’s third quarter
performance on a conference call with analysts and investors at
9:00 a.m. Eastern today. A live audio webcast of the conference
call and materials will be available through the “Investor
Relations” section of the company’s website
(http://investors.nvent.com). To participate, please dial
1-833-630-1071 or 1-412-317-1832 approximately ten minutes before
the 9:00 a.m. ET start. A replay of the conference call will be
made accessible once it becomes available and will remain
accessible through November 10, 2023 by dialing 1-877-344-7529 or
1-412-317-0088, along with the access code 6819843.
About nVent
nVent is a leading global provider of electrical connection and
protection solutions. We believe our inventive electrical solutions
enable safer systems and ensure a more secure world. We design,
manufacture, market, install and service high performance products
and solutions that connect and protect some of the world's most
sensitive equipment, buildings and critical processes. We offer a
comprehensive range of enclosures, electrical connections and
fastening and thermal management solutions across industry-leading
brands that are recognized globally for quality, reliability and
innovation. Our principal office is in London and our management
office is in Minneapolis. Our robust portfolio of leading
electrical product brands dates back more than 100 years and
includes nVent CADDY, ERICO, HOFFMAN, RAYCHEM, SCHROFF and
TRACER.
nVent, CADDY, ERICO, HOFFMAN, RAYCHEM, SCHROFF and TRACER are
trademarks owned or licensed by nVent Services GmbH or its
affiliates.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release 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,” “likely,” “may,” “anticipates,” “estimates,”
“projects,” “forecasts,” “should,” “would,” “could,” “positioned,”
“strategy,” “future,” “are confident,” or words, phrases or terms
of similar substance or the negative thereof, are forward-looking
statements. All projections in this press release are also
forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to risks,
uncertainties, assumptions and other factors, some of which are
beyond our control, which could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. These factors include our ability to integrate ECM
Industries and other recent acquisitions successfully; our ability
to retain customers and employees of the acquired businesses;
adverse effects on our business operations or financial results,
including due to the overall global economic and business
conditions impacting our business; the ability to achieve the
benefits of our restructuring plans; the ability to successfully
identify, finance, complete and integrate acquisitions; competition
and pricing pressures in the markets we serve, including the
impacts of tariffs; volatility in currency exchange rates, interest
rates and commodity prices; inability to generate savings from
excellence in operations initiatives consisting of lean enterprise,
supply management and cash flow practices; inability to mitigate
material and other cost inflation; risks related to the
availability of, and cost inflation in, supply chain inputs,
including labor, raw materials, commodities, packaging and
transportation; increased risks associated with operating foreign
businesses, including risks associated with the conflict between
Russia and Ukraine and related sanctions; the ability to deliver
backlog and win future project work; failure of markets to accept
new product introductions and enhancements; the impact of changes
in laws and regulations, including those that limit U.S. tax
benefits; the outcome of litigation and governmental proceedings;
and the ability to achieve our long-term strategic operating goals.
Additional information concerning these and other factors is
contained in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K and our
Quarterly Reports on Form 10-Q. All forward-looking statements
speak only as of the date of this press release. nVent assumes no
obligation, and disclaims any obligation, to update the information
contained in this press release.
nVent Electric plc
Condensed Consolidated
Statements of Income (Unaudited)
Three months ended
Nine months ended
In millions, except per-share data
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Net sales
$
858.8
$
745.2
$
2,402.4
$
2,167.4
Cost of goods sold
505.6
455.2
1,414.1
1,362.3
Gross profit
353.2
290.0
988.3
805.1
% of net sales
41.1
%
38.9
%
41.1
%
37.1
%
Selling, general and administrative
178.7
154.8
508.8
445.3
% of net sales
20.8
%
20.8
%
21.2
%
20.5
%
Research and development
18.3
14.7
52.5
44.5
% of net sales
2.1
%
2.0
%
2.2
%
2.1
%
Operating income
156.2
120.5
427.0
315.3
% of net sales
18.2
%
16.2
%
17.8
%
14.5
%
Net interest expense
25.5
8.1
55.0
22.8
Gain on sale of investment
—
—
(10.2
)
—
Other expense
1.4
0.5
3.7
2.3
Income before income taxes
129.3
111.9
378.5
290.2
Provision for income taxes
23.8
18.5
66.3
49.1
Effective tax rate
18.4
%
16.5
%
17.5
%
16.9
%
Net income
$
105.5
$
93.4
$
312.2
$
241.1
Earnings per ordinary share
Basic
$
0.64
$
0.56
$
1.89
$
1.45
Diluted
$
0.63
$
0.55
$
1.86
$
1.43
Weighted average ordinary shares
outstanding
Basic
165.8
166.5
165.6
166.4
Diluted
168.6
168.3
168.2
168.2
Cash dividends paid per ordinary
share
$
0.175
$
0.175
$
0.525
$
0.525
nVent Electric plc
Condensed Consolidated Balance
Sheets (Unaudited)
September 30,
2023
December 31,
2022
In millions
Assets
Current assets
Cash and cash equivalents
$
113.3
$
297.5
Accounts and notes receivable, net
590.9
472.5
Inventories
464.9
346.7
Other current assets
130.8
112.5
Total current assets
1,299.9
1,229.2
Property, plant and equipment,
net
371.9
289.2
Other assets
Goodwill
2,559.8
2,178.1
Intangibles, net
1,538.4
1,066.1
Other non-current assets
155.7
139.6
Total other assets
4,253.9
3,383.8
Total assets
$
5,925.7
$
4,902.2
Liabilities and Equity
Current liabilities
Current maturities of long-term debt and
short-term borrowings
$
30.0
$
15.0
Accounts payable
243.4
252.1
Employee compensation and benefits
114.7
109.3
Other current liabilities
271.3
273.1
Total current liabilities
659.4
649.5
Other liabilities
Long-term debt
1,831.5
1,068.2
Pension and other post-retirement
compensation and benefits
132.1
128.5
Deferred tax liabilities
218.0
199.6
Other non-current liabilities
139.6
124.7
Total liabilities
2,980.6
2,170.5
Equity
2,945.1
2,731.7
Total liabilities and equity
$
5,925.7
$
4,902.2
nVent Electric plc
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Nine months ended
In millions
September 30,
2023
September 30,
2022
Operating activities
Net income
$
312.2
$
241.1
Adjustments to reconcile net income to
net cash provided by (used for) operating activities
Depreciation
36.1
32.8
Amortization
64.5
53.1
Deferred income taxes
(3.7
)
0.1
Share-based compensation
17.5
17.8
Gain on sale of property and equipment
(1.1
)
—
Gain on sale of investment
(10.2
)
—
Amortization of bridge financing debt
issuance costs
3.6
—
Changes in assets and liabilities, net
of effects of business acquisitions
Accounts and notes receivable
(30.5
)
(76.9
)
Inventories
(10.8
)
(71.6
)
Other current assets
(30.0
)
(21.3
)
Accounts payable
(27.7
)
12.7
Employee compensation and benefits
(4.5
)
(5.6
)
Other current liabilities
(20.9
)
18.7
Other non-current assets and
liabilities
(2.9
)
(1.1
)
Net cash provided by (used for) operating
activities
291.6
199.8
Investing activities
Capital expenditures
(48.9
)
(30.8
)
Proceeds from sale of property and
equipment
7.3
2.0
Proceeds from sale of investment
14.1
—
Settlement of net investment hedge
3.1
—
Acquisitions, net of cash acquired
(1,119.7
)
(8.6
)
Net cash provided by (used for) investing
activities
(1,144.1
)
(37.4
)
Financing activities
Net payments of revolving long-term
debt
—
(106.7
)
Proceeds from long-term debt
800.0
200.0
Repayments of long-term debt
(20.0
)
(6.2
)
Settlement of cash flow hedge
4.5
10.0
Debt issuance costs
(11.2
)
—
Dividends paid
(87.6
)
(87.7
)
Shares issued to employees, net of shares
withheld
1.6
0.3
Repurchases of ordinary shares
(15.2
)
(8.5
)
Net cash provided by (used for) financing
activities
672.1
1.2
Effect of exchange rate changes on cash
and cash equivalents
(3.8
)
(19.1
)
Change in cash and cash
equivalents
(184.2
)
144.5
Cash and cash equivalents, beginning of
period
297.5
49.5
Cash and cash equivalents, end of
period
$
113.3
$
194.0
nVent Electric plc
Supplemental Financial
Information by Reportable Segment (Unaudited)
2023
In millions
First Quarter
Second Quarter
Third Quarter
Nine Months
Net sales
Enclosures
$
391.0
$
400.0
$
412.7
$
1,203.7
Electrical & Fastening Solutions
205.7
266.7
302.3
$
774.7
Thermal Management
143.9
136.3
143.8
$
424.0
Total
$
740.6
$
803.0
$
858.8
$
2,402.4
Segment income (loss)
Enclosures
$
82.5
$
90.0
$
89.4
$
261.9
Electrical & Fastening Solutions
61.3
86.5
97.6
245.4
Thermal Management
30.9
28.6
34.8
94.3
Other
(26.7
)
(23.8
)
(19.8
)
(70.3
)
Total
$
148.0
$
181.3
$
202.0
$
531.3
Return on sales
Enclosures
21.1
%
22.5
%
21.7
%
21.8
%
Electrical & Fastening Solutions
29.8
%
32.4
%
32.3
%
31.7
%
Thermal Management
21.5
%
21.0
%
24.2
%
22.2
%
Total
20.0
%
22.6
%
23.5
%
22.1
%
nVent Electric plc
Supplemental Financial
Information by Reportable Segment (Unaudited)
2022
In millions
First Quarter
Second Quarter
Third Quarter
Nine Months
Net sales
Enclosures
$
359.4
$
380.8
$
387.7
$
1,127.9
Electrical & Fastening Solutions
187.6
200.9
209.2
597.7
Thermal Management
147.7
145.8
148.3
441.8
Total
$
694.7
$
727.5
$
745.2
$
2,167.4
Segment income (loss)
Enclosures
$
50.3
$
61.5
$
71.9
$
183.7
Electrical & Fastening Solutions
47.1
58.8
60.8
166.7
Thermal Management
32.4
28.3
35.9
96.6
Other
(19.6
)
(23.4
)
(24.6
)
(67.6
)
Total
$
110.2
$
125.2
$
144.0
$
379.4
Return on sales
Enclosures
14.0
%
16.2
%
18.5
%
16.3
%
Electrical & Fastening Solutions
25.1
%
29.3
%
29.1
%
27.9
%
Thermal Management
21.9
%
19.4
%
24.2
%
21.9
%
Total
15.9
%
17.2
%
19.3
%
17.5
%
nVent Electric plc
Reconciliation of GAAP to
non-GAAP financial measures for the year ending December 31,
2023
excluding the effect of
adjustments (Unaudited)
Actual
Forecast (1)
In millions, except per-share data
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Net sales
$
740.6
$
803.0
$
858.8
Operating income
124.1
146.7
156.2
% of net sales
16.8
%
18.3
%
18.2
%
Adjustments:
Restructuring and other
$
4.0
$
2.5
5.4
Acquisition transaction and integration
costs
2.3
4.9
3.0
Intangible amortization
17.6
21.3
25.6
Inventory step-up amortization
—
5.9
11.8
Segment income
$
148.0
$
181.3
$
202.0
Return on sales
20.0
%
22.6
%
23.5
%
Net income - as reported
$
93.8
$
112.9
$
105.5
$
105
$
417
Adjustments to operating income
23.9
34.6
45.8
26
130
Gain on sale of investment
—
(10.2
)
—
—
(10
)
Amortization of bridge financing debt
issuance costs
—
3.6
—
—
4
Income tax adjustments
(4.4
)
(12.0
)
(10.3
)
(5
)
(32
)
Net income - as adjusted
$
113.3
$
128.9
$
141.0
$
126
$
509
Diluted earnings per ordinary
share
Diluted earnings per ordinary share - as
reported
$
0.56
$
0.67
$
0.63
$0.61 - $0.63
$2.46 - $2.48
Adjustments
0.11
0.10
0.21
0.12
0.55
Diluted earnings per ordinary share - as
adjusted
$
0.67
$
0.77
$
0.84
$0.73 - $0.75
$3.01 - $3.03
(1) Forecast information represents an
approximation
nVent Electric plc
Reconciliation of GAAP to
non-GAAP financial measures for the year ended December 31,
2022
excluding the effect of 2022
adjustments (Unaudited)
Actual
In millions, except per-share data
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Net sales
$
694.7
$
727.5
$
745.2
$
741.6
$
2,909.0
Operating income
90.1
104.7
120.5
125.1
440.4
% of net sales
13.0
%
14.4
%
16.2
%
16.9
%
15.1
%
Adjustments:
Restructuring and other
2.0
2.3
5.9
1.5
11.7
Acquisition transaction and integration
costs
0.3
0.5
—
—
0.8
Intangible amortization
17.8
17.7
17.6
17.6
70.7
Segment income
$
110.2
$
125.2
$
144.0
$
144.2
$
523.6
Return on sales
15.9
%
17.2
%
19.3
%
19.4
%
18.0
%
Net income - as reported
$
67.8
$
79.9
$
93.4
$
158.7
$
399.8
Adjustments to operating income
20.1
20.5
23.5
19.1
83.2
Pension and other post-retirement
mark-to-market gain
—
—
—
(66.3
)
(66.3
)
Income tax adjustments
(3.4
)
(4.3
)
(5.2
)
0.1
(12.8
)
Net income - as adjusted
$
84.5
$
96.1
$
111.7
$
111.6
$
403.9
Diluted earnings per ordinary
share
Diluted earnings per ordinary share - as
reported
$
0.40
$
0.48
$
0.55
$
0.94
$
2.38
Adjustments
0.10
0.09
0.11
(0.28
)
0.02
Diluted earnings per ordinary share - as
adjusted
$
0.50
$
0.57
$
0.66
$
0.66
$
2.40
nVent Electric plc
Reconciliation of Net Sales
Growth to Organic Net Sales Growth by Segment
for the quarter ended
September 30, 2023 (Unaudited)
Q3 Net Sales Growth
Organic
Currency
Acq./Div.
Total
nVent
0.2
%
1.0
%
14.0
%
15.2
%
Enclosures
3.7
%
1.2
%
1.5
%
6.4
%
Electrical & Fastening Solutions
(3.7
%)
1.2
%
47.0
%
44.5
%
Thermal Management
(3.4
%)
0.4
%
—
%
(3.0
%)
Reconciliation of Net Sales
Growth to Organic Net Sales Growth
for the quarter and year
ending December 31, 2023 (Unaudited)
Forecast (1)
Q4 Net Sales Growth
Full Year Net Sales
Growth
Organic
Currency
Acq./Div.
Total
Organic
Currency
Acq./Div.
Total
nVent
1 - 3
%
1
%
13
%
15 - 17
%
3 - 4
%
—
%
9
%
12 - 13
%
(1) Forecast information represents an
approximation
Reconciliation of cash from
operating activities to free cash flow (Unaudited)
Three months ended
Nine months ended
In millions
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Net cash provided by (used for) operating
activities
$
145.0
$
135.9
$
291.6
$
199.8
Capital expenditures
(16.6
)
(10.0
)
(48.9
)
(30.8
)
Proceeds from sale of property and
equipment
7.1
—
7.3
2.0
Free cash flow
$
135.5
$
125.9
$
250.0
$
171.0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231026723432/en/
Investor Contact Tony Riter Vice President, Investor
Relations nVent 763.204.7750 Tony.Riter@nVent.com
Media Contact Stacey Wempen Director, External
Communications nVent 763.204.7857 Stacey.Wempen@nVent.com
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