nVent Electric PLC Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Deane Dray - RBC Capital Markets Wealth Management - Analyst : Thank you. Good morning, everyone. Happy Friday. Thanks. So first, welcome to Gary. It was great to meet you in New York a couple of weeks ago and then best of luck to Sarah. I'm not going to say it's a new role because it's not. You've been wearing the two hats. So, but now it's a dedicated role and so best of luck there. So look, I know there'll be lots of questions about tariffs. It looked very much in line with what we were expecting, but I'd rather put the spotlight first on the data solutions business and if you could give us further caller, Sara, before you write off the pace of orders. Any pushouts, just kind of like the tone of demand there and then you said double digit growth, but how's that square with America's being flat in for the segment. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, NVT.N - Q1 2025 nVent Electric PLC Earnings Call

Question: Deane Dray - RBC Capital Markets Wealth Management - Analyst : That's a great recap there. And just as a follow up, can you talk about the latest deals Avail and Trackee, just the contribution. Are there any synergies between those businesses? And did I hear Gary correctly? Avail's contribution, $0.05 in [ '25 ]?

Question: Deane Dray - RBC Capital Markets Wealth Management - Analyst : Great, thank you.

Question: Julian Mitchell - Barclays - Analyst : Hi, good morning, and I'll echo the congratulations to Sara and welcome Gary to this call. Maybe just my first question would be around the organic sales outlook. So, I think you're guiding the first half organic sales, up, sort of low single digits year on year. The second half implied is up, high single digits, year on year. So just sort of in the context of this macro backdrop, kind of help us understand, confidence in that second half acceleration. I see the orders the last six months very good. I'm not sure how much lead time there is from those into your 2H revenue though, and maybe any clarification around what drives the acceleration in terms of price step up or a specific end market or segment Or segments.

Question: Julian Mitchell - Barclays - Analyst : That's helpful, thank you. And then my second question just around the operating margins. So, I think those were about 20% in the first quarter. It looks like the guide is embedding maybe 20% in Q2 and in the second half. So, I just wanted to double check if that math is roughly right and how we should think about the tariffs. Affecting the margins, in those quarters in the balance of the year.

Question: Julian Mitchell - Barclays - Analyst : That's great. Thank you.

Question: Brian Drab - William Blair - Analyst : Hey, good morning. Thanks for taking my questions. First one, just on the tariff situation, if you see, if we see a reversal or, the trade war died down with China. what sort of impact could that have to the upside for your 2025 and your estimate of that $120 million in tariff headwind.

Question: Brian Drab - William Blair - Analyst : Okay. And then can you just put a finer point on the order growth, double digit order growth, but is that organic and which segment is contributing the most to that order growth? If you could just kind of peel that back a little bit, that would be great.

Question: Brian Drab - William Blair - Analyst : Okay, thanks very much.

Question: Joseph Ritchie - Goldman Sachs - Analyst : Hey guys, good morning. Good morning. So, Sara, thanks so much for all the help throughout the year. Wish you the best, in your, in your kind of new role, but, and then, and Gary, welcome on board. So, I guess just My first question is, if you think about just let's just start with the veil, it's kind of surprising to me that the contribution is only $0.05. It just seems like the margins are a little bit lower. I'm calculating to let's just call it like roughly a 10% EBITDA margin, for the rest of the year. So help me just kind of understand what the, what's going on there, what the expectation is for that business.

Question: Joseph Ritchie - Goldman Sachs - Analyst : Okay, great, yeah, I can walk through kind of the math I guess offline, but then the following question is look at the guidance range, that you've now reset and increased, it it's interesting because it seems like a lot of that is being driven by, the extra point and volumes, but clearly with the tariffs, there's going to be some incremental pricing as well. And so I know you're not breaking out the pricing anymore, but like I'm just curious like if the $120 million that that kind of equates like roughly 4 points of 4 points on top line. So are you expecting to offset most of it with price and if that's the case then ultimately if the tariffs are in place throughout the year, would we expect the organic growth number to go up commensurately?

Question: Joseph Ritchie - Goldman Sachs - Analyst : Okay, helpful, guys. Thank you.

Question: Jeffrey Sprague - Vertical Research - Analyst : Hey thank you good morning, everyone. Good morning. Hey, just, coming back to sort of, the commercial resi, like all the stuff that implicitly, didn't grow or declined, right, in the Americas. I think the comment was that you did have the single digit growth in those, kind of recently sluggish markets. Can you just speak a little bit to, that side of the portfolio, what you're seeing from a demand standpoint. Do you think inventories are now in the right place, kind of a set of questions around sort of the shorter cycle, elements of the portfolio.

Question: Jeffrey Sprague - Vertical Research - Analyst : Understood. And then just back on tariffs, is this number you're sharing all China or we've got some other countries, we've got steel and aluminium, can you put a little bit finer point on this kind of the origination of the tariff number?

Question: Jeffrey Sprague - Vertical Research - Analyst : Yeah, okay, but steel and aluminium's number one, not China, okay, and then, yeah, just maybe a little bit more color on what you are seeing on the power utility side, I think we've probably given us about all you want to say on data solutions. I appreciate that, but, I mean just how the portfolio is coming together there, kind of trajectory of orders in that business and, how you see the year playing out a little bit more specifically.

Question: Jeffrey Sprague - Vertical Research - Analyst : Great, thank you. Good luck, Sara. I hope we'll still see you around. I'm sure we will.

Question: Nicole DeBlase - Deutsche Bank. - Analyst : Yeah, good morning, thanks, and congrats to both Sara and Gary. I guess maybe just starting with a follow up question on the comments you made, Gary, around margins for the business for the rest of the year. Does that commentary hold for both businesses and maybe that kind of dovetails with the question of, is the tariff and price/cost impact kind of spread relatively similarly across the businesses, or is there one versus the other that's more impacted?

Question: Nicole DeBlase - Deutsche Bank. - Analyst : Okay perfect thank you and then just a clarification question on what you guys are doing from a pricing perspective is this via list price increases or surcharges or some combination of the two and have those price increases already been fully implemented and was that like an April 1, sort of date?

Question: Nicole DeBlase - Deutsche Bank. - Analyst : Thanks, Beth. I'll pass it on.

Question: Nigel Coe - Wolf Research. - Analyst : Thanks. Good morning, everyone, and Sarah, congrats and Gary, look forward to seeing you soon. So the, yeah, look, maybe a couple of follow ons here. So, I understand that the organic uplift is basically the price associated with the tariff measures volume unchanged, but if I put an extra point of price, I'm getting about $30 million extra price, versus $120 million of the tariff impact. So. I'd like to understand a little bit better the kind of the offsets against that $120million. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, NVT.N - Q1 2025 nVent Electric PLC Earnings Call

Question: Nigel Coe - Wolf Research. - Analyst : Okay, so there's more than a point of price, but it doesn't seem like there's 4 points of price, to offset the $120million. So, I'm just curious, if you could maybe provide a bit more color there. But maybe moving on to the avail acquisition. I have to agree with Joe. I'm getting more than $0.05 as well. So, I'm curious, on the assumption that we've got a like a high 10s EBITDA margin, which maybe clarify that. Are there any integration expenses or investment spending against that $0.05?

Question: Nigel Coe - Wolf Research. - Analyst : Yeah, we're still getting higher numbers, but we will follow up offline and then just maybe just a quick one on data solutions. I mean, if you just back into the mid-teens, kind of all in call and then 5 mid-signal digits X data solutions, we're getting to like 50% type numbers for data solutions. Is that in the right zone of growth there?

Question: Nigel Coe - Wolf Research. - Analyst : Right, okay, thanks guys.

Question: Vladimir Bystricky - Citigroup - Analyst : Hey, good morning team and congrats to, both Gary and Sara. Thanks for taking my questions here. I guess just a quick clarification on the increased CapEx outlook. Can you kind of Dissect how much of that is related to avail coming into the portfolio versus sort of core investments in legacy invent if you all.

Question: Vladimir Bystricky - Citigroup - Analyst : Got it. That's helpful, Gary. I appreciate it. And then, maybe just one follow up. So when I look at the segments, I guess, can you just talk a little about, the divergence between Declining America's sales and systems protection versus, the robust America's sales worth you saw in electrical connections and sort of what you think is Some of the driving factors behind the that that divergence and, how we should think about either as potentially a leading indicator going forward.

Question: Vladimir Bystricky - Citigroup - Analyst : Alright, that's helpful I appreciate it.

Question: Scott Graham - Seaport Research - Analyst : Hey, thanks for taking my question and, welcome aboard, Gary, great to meet you a couple of weeks back, and, Sarah, best of luck to you. You've been truly excellent. I wanted to ask a couple of questions, and I'll just ask them both and let you go at it. Is that the incremental margin in the quarter was sort of below what we've been seeing. Is that all inflation and investments and or was there maybe something else there and does that improve in the second half of the year? And then on acquisitions, how is the pipeline is, and is pricing better? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, NVT.N - Q1 2025 nVent Electric PLC Earnings Call

Question: Scott Graham - Seaport Research - Analyst : Thank you.