nVent Electric plc [NVT] Conference call transcript for 2022 q1
2022-04-29 15:04:05
Fiscal: 2022 q1
Operator: Good day and thank you for standing by. Welcome to the nVent First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's call is being recorded. I would now like to hand the call over to Tony Riter, Vice President, Investor Relations. Please go ahead, sir.
Tony Riter: Thank you, Charlie. Welcome to nVent's first quarter 2022 earnings call. I'm Tony Riter, Vice President of Investor Relations. On the call with me are Beth Wozniak, our Chief Executive Officer; and Sara Zawoyski, our Chief Financial Officer. Today, we'll provide details on our first quarter performance, provide an outlook for the second quarter and an update to our full year 2022 outlook. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties such as the risks outlined in today's press release and nVent's filings with the Securities and Exchange Commission. Forward-looking statements are made as of today and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation, which you can find on the investors section of nVent's website. References to non-GAAP financials are reconciled in the appendix of the presentation. We'll have time for questions after our prepared remarks. With that, please turn to slide three, and I'll now turn the call over to Beth.
Beth Wozniak: Thank you, Tony and good morning, everyone. It's great to be with you today to share our outstanding first quarter results. Our first quarter performance exceeded our guidance on sales and earnings. Our strategy to focus on high growth verticals, new products and global expansion, combined with strong execution are key to our success. We delivered record sales in Q1, growing 27% with strong growth across all segments. Orders grew 28% in the quarter, higher than sales. Adjusted earnings per share of $0.50 was up 16% year-over-year. Overall, we are pleased with these results to start the year and are raising our full year sales and adjusted EPS guidance. Now onto slide four for a summary of our first quarter performance. Sales in the quarter were broad-based, up 24% organically, with each segment up greater than 20%. This was well ahead of our Q1 guidance, primarily driven by strong volume of 13 points, coupled with 11 points of price. Our results show we are winning and executing well. New products added approximately 2 points to our growth rate and we're on track to deliver 50 new products again this year. We are focused on growth, serving our customers and delivering long-term value creation. We continue to have significant wins with the electrification of everything. For example, in Enclosures in the data solutions vertical, we had several wins from our CIS acquisition with our leading intelligent power distribution unit offering. We won a large program for a social media provider for their new hyperscale data center and are now a preferred partner. With the rollout of 5G and fiber-to-the-home, in Electrical & Fastening are easy-to-install hammerlock ground rod connection has been specked in by multiple telecommunication companies. We've seen good adoption with large North American utilities, resulting in a sevenfold increase in orders year-over-year. And in Thermal Management, we recently converted an account valued at over $5 million with a large chemical producer. We won with our heat tracing systems, including our advanced controls that enable longer circuit lengths, lowering costs and labor hours, providing benefits to both the project and the end use. In addition to these business wins, we received numerous awards and recognitions from our top distribution partners. Our Electrical & Fastening team recently received platinum recognition, highlighting our strong level of support and partnership. Our Thermal Management team was awarded the Above & Beyond service excellence award for their unprecedented support. And our Enclosures team earned the Operational and Technological excellence award in recognition of their innovative, state-of-the-art business practices and quality services. These recognitions are a testament to the great work of our nVent teams serving our customers and partners each and every day. I now want to comment on the verticals that we serve. We continue to see broad-based growth, with all verticals growing more than 20% year-over-year. Industrial led the way with continued growth in automotive, food and beverage, and material handling. Infrastructure continued its strong growth, led by strength in data solutions and power utilities. Commercial and residential continued its trend of double-digit growth driven by North America and Europe. And finally, in energy, we continue to see a nice recovery, particularly in MRO. A driving factor in our strong results is our focus on higher growth verticals around the electrification of everything where we believe we are one of the best positioned companies to grow with this mega trend. I will touch on these in more detail in a few minutes. Looking at our geographical sales performance. We continue to see the strongest growth in North America, up over 30%. Europe was up low double-digits, and developing regions grew low single digits. Looking ahead, we are raising our full year guidance, reflecting our strong start to the year. While our outlook is positive, we remain cautious given the impacts of the Russia/Ukraine conflict, COVID lockdowns in China and ongoing supply chain challenges. I'm very proud of our team and how we continue to perform and deliver outstanding results. I remain confident in our ability to manage through these challenges and deliver for our customers and shareholders. I will now turn the call over to Sara for some detail on our first quarter results and our updated outlook for 2022. Sara, please go ahead.
Sara Zawoyski: Thank you, Beth. Let's begin on slide five with our first quarter results. We are off to a strong start to the year. Sales of $695 million were up 27% relative to last year or an impressive 24% organically. We saw continued strong price realization, adding 11 points to the top line. Volumes were better than expected, adding 13 points to growth, while acquisitions added another 5 points. Sales growth was broad-based across segments and verticals. First quarter segment income was $110 million, up 13%, while return on sales of 15.9% was down 180 basis points, both better than expected. Recall, we forecasted Q1 year-over-year margin performance to be similar to the previous quarter, including a prior year corporate cost headwind. Price nearly offset total inflation of $69 million in the quarter despite higher than expected material, logistics and energy costs. Q1 adjusted EPS was $0.50, up 16% and above the high-end of our guidance range. Free cash flow was a usage of $3 million in the quarter, reflecting working capital investments due to robust demand. Now please turn to slide six for a discussion of our first quarter segment performance. Starting with Enclosures, sales of $359 million increased 30% and 23% organically, with another quarter of strong contribution from both volume and price. Growth was broad-based across all verticals with particular strength in industrial. Geographically, all regions grew double digits year-over-year and led by North America. Acquisitions also continued to perform exceptionally well, adding nine points to growth. CIS Global and Vynckier each grew more than 30% in the quarter, delivering outstanding growth and a testament to our high growth vertical focus. Enclosures first quarter segment income was $50 million, up 3%. Return on sales improved sequentially to 14%, while down 360 basis points year-over-year. There were several factors impacting return on sales. First, inflationary costs came in higher than we expected. Second, we experienced inefficiencies in our operations due to significantly higher output amidst a challenging supply chain. In addition, we continue to invest in growth and capacity to position us well for the future. Partially offsetting these impacts was strong price realization of 11 percentage points. We believe our increased output in inventory are key to winning new business. Moving forward, we expect return on sales performance to continue to improve sequentially with better price/cost and improved productivity. Moving to Electrical & Fastening. Sales of $188 million increased an impressive 29% organically, with strength across all verticals and double-digit growth in North America and Europe. Both pricing and volume contributed nicely to the top line, adding 19 and 10 points, respectively. As the electrification of everything accelerates, so does the growth trajectory of this business. For example, datacenters and power utilities were up over 40% in the quarter. Electrical & Fastening segment income was $47 million, up 20%. Return on sales was 25.1%, down 140 basis points relative to last year. This result was better than expected due to strong volume growth and price offsetting inflation. Lastly, Thermal Management grew 22% organically with sales of $148 million, driven by strength in industrial and infrastructure. High margin industrial MRO growth was strong for the fourth consecutive quarter, up 46%. Geographically, North America and China were both up strong double-digits. Orders and backlog grew double-digits year-over-year, including longer cycle projects. Thermal Management segment income was up a tremendous 54%. Return on sales expanded 500 basis points to 21.9%, driven by volume and positive mix contribution from industrial MRO. On slide seven titled balance sheet and cash flow. We ended the quarter with a cash balance of $51 million. We have an additional $446 million available on our revolver. We have a healthy balance sheet with ample capacity. Turning to our capital allocation priorities on slide eight. We exited Q1 with a net debt to adjusted EBITDA ratio of two times at the low-end of our target range of two to 2.5. We believe our robust balance sheet and cash generation puts us in a great position to invest in growth and execute on our M&A strategy. We returned approximately $38 million to shareholders in the first quarter, including a competitive dividend and share repurchases. We expect to continue to deploy capital to drive growth and attractive returns for shareholders. Moving to slide nine, titled 2022 nVent outlook. We are raising our full year guidance, reflecting our performance in the first quarter, along with strong orders and record backlog. We will continue to manage price/cost as inflation steps up. Our outlook now includes price contributing over 6% to full year sales growth. For the year, we still expect pricing plus productivity to offset inflation. We also expect supply chain challenges to persist, along with the greater overall macro uncertainty. We now expect organic sales to grow 11% to 13% versus our prior guidance of 6% to 9% and expect adjusted EPS to be in the range of $2.14 to $2.22 versus our original guidance of $2.10 to $2.20. This new guidance reflects earnings growth of 9% to 13% on top of the 31% EPS growth in 2021. And lastly, we expect another year of strong free cash flow performance with conversion of approximately 100%. Looking at our second quarter outlook on slide 10, we expect organic sales to be up 12% to 14%, and adjusted EPS to be between $0.52 and $0.54. At the mid-point, this reflects 6% earnings growth relative to last year. Wrapping up, I am pleased with our first quarter performance. We executed well to meet strong customer demand. We, again, demonstrated our ability to manage price/cost in this inflationary environment. Our acquisitions are growing faster than overall nVent. And importantly, we are investing in capacity and growth. With the successful first quarter, we believe we are setup for another great year. This concludes my remarks, and I will now turn the call back over to Beth.
Beth Wozniak: Thank you, Sara. Turning to slide 11. Since we became a new company, we put a strategy in place that's been working, and we keep executing on the elements of this strategy. In particular, one element has been to expand in high growth verticals that capitalize on the mega trend of the electrification of everything. We have added to our portfolio by launching new products, acquiring new businesses and partnering with technology companies. Let me touch on a few of these high growth verticals. Data solutions, which includes datacenters, communication infrastructure and IT networking, has been a significant area of emphasis for us. It has grown double-digits almost every year and we expect the strong growth to continue. We have advanced our differentiated liquid cooling capabilities, launching many new innovative products. We have a dedicated commercial team focused on expanding our wins through hyperscale accounts, system integrators and distribution channels. We also have completed two acquisitions in this space, CIS Global and WBT, adding power distribution units and cable trays to further extend our offerings. We've achieved significant wins with marquee customers and believe we are well-positioned for the future. With the move to more electrical infrastructure, our emphasis on power utilities and renewable energy continues to grow. We've expanded our commercial team and continue to launch more new products. The Vynckier acquisition provided us with a stronger non-metallic Enclosures portfolio, including a unique offering in solar. We see investments being made in infrastructure, which we expect to drive further demand for our products and solutions globally. In commercial, we've always had a strong position. And as buildings become smarter and more electric, we believe there's even greater opportunity for our products. In Electrical & Fastening, where we focus on power and data infrastructure, we see the number of connections growing in a building, whether it is more data, solar power or EV charging stations. All of this requires more of our products. We've been a leader in developing labor saving solutions that are faster, easier and safer to install. As we continue to see labor shortages, our portfolio provides outsized value, allowing contractors to save time on the job site. We believe we're well-positioned in this vertical and continue to innovate and increase our offerings. Finally, another example is industrial automation where we have a strong portfolio, particularly with Enclosures. Our Eldon acquisition expanded our global presence even further with an IEC offering. We've been setting up lines in our factories around the world to be able to manufacture this portfolio globally. This allows us to support global OEMs who specify our solution globally, yet want to be served locally. We've also been investing in new products and digital capabilities to be able to configure and build products with velocity. Our growth in our Enclosures portfolio over the last year is a result of many of these investments. As we see more IoT solutions and more automation, all the electronics need to be protected from the environment for safety and for security reasons. This means more and more enclosures will be required. And with our breadth and capability to meet almost any specification, we believe we are well-positioned to grow. These high growth verticals have become a more significant portion of our nVent sales, accelerating our growth trajectory. We believe we're well-positioned with the electrification of everything secular trends. Wrapping up on slide 12. We're off to a strong start. The momentum has continued from last year and we are executing well in a challenging environment. I'm very proud of our team and our ability to scenario plan, respond and execute. We expect double-digit sales and EPS growth for the year, and we believe we are positioned well for this year and beyond. Our future is bright. With that, I will now turn the call over to the operator to start Q&A.
Operator: Sure, ma'am. Your first question comes from the line of Julian Mitchell. Please go ahead.
Julian Mitchell: Thanks very much. Good morning.
Beth Wozniak: Good morning.
Julian Mitchell: Good morning. Maybe notable the strong volume growth, but perhaps starting off with price and inflation. So, you talked about $63 million of price in Q1 and I think $69 million of inflation on the cost side. What's dialed in for those numbers in your sort of Q2 guidance? And then, how do you see them in the back half?
Sara Zawoyski: Yeah. So, a couple of things. So, from a full year perspective, we came into the year thinking prices was going to be in that 4% to 5% range. And now we're saying that, that's going to be greater than that 6%. That incorporates what we did in Q2, and importantly, what we'll need to keep pace with from a price/cost perspective. So, we would expect just from a year-over-year perspective in Q2 for that price -- those price increases to fold in. I think, I would just call out, keep in mind from a year-over-year perspective, we did see considerable step-up in price last year in Q2. So, we were roughly at a point of price in Q1 and we saw five to six points here in Q2. So that's going to impact that year-over-year perspective. From an inflation perspective, while we expect kind of the higher inflation to stick, we did see sort of an outsized impact here in Q1 from a year-over-year perspective, because of the very favorable metal locks of a year ago. So, I think a nice way to maybe wrap this up, Julian, is that we expect that price/cost equation to improve in Q2 and through the back half of the year. And that's going to be one of the driving factors of the overall ROS margin performance improvement that we expect going into Q2 as well as into the back half.
Julian Mitchell: Thanks very much. And then, maybe looking at it sort of from a segment standpoint, I think your ROS for Q2 is implied at around 17%. So, it's up maybe 100 bps sequentially or so, or flattish revenue sequentially. Anything to call out there by segment? And I suppose people are particularly interested in that thermal business and the sort of sustainability of the very strong Q1 margin.
Sara Zawoyski: Yeah. So, a couple of things to point out there would be, one, from an nVent perspective, we have less of a year-over-year corporate cost headwind that was sort of outsized in Q1. And then, if you look at that margin sequentially from a ROS performance standpoint, we would expect Enclosures ROS to improve really largely on a better price/cost position, as well as just better leverage on some of these investments on growth and capacity that we're making. So, we would expect that ROS year-over-year to improve. From a Thermal Management perspective, we still expect great ROS expansion in the quarter, just not to the magnitude of Q1, and that's largely because that's when we begin to lap that industrial MRO recovery of a year ago that really began in earnest there in Q2. From an EFS perspective, we still expect nice year-over-year income growth. But just by way of the inflation being at elevated levels, even as that team prices that off from a price/cost perspective, we're still seeing that in the overall ROS performance.
Julian Mitchell: Great. Thank you.
Operator: Thank you. Your next question comes from the line of Joe Ritchie. Please go ahead.
Joe Ritchie: Thanks. Good morning, everyone.
Beth Wozniak: Good morning.
Sara Zawoyski: Good morning.
Joe Ritchie: Hey, so congrats on the nice start to the year. It's interesting. The organic growth rate this quarter was really good and you're expected to be kind of above the guidance range for the year in 2Q as well. And so, I guess, I'm just kind of trying to think about that full year number and whether you're just maybe dialing in some conservatism today, just based on how fluid the backdrop is. Any thoughts around that would be helpful.
Beth Wozniak: I think, we're very pleased with how we've been -- the orders growth and the momentum that we've had. And I think as we look at the full year, a couple of things. One, remember, we started to see tremendous growth as we got into Q2 of last year through Q3 and Q4. So, then we start to lap that, so to speak. And second, I think we're just pointing to the fact that there still are a lot of uncertainties out there in the environment. And we've been doing well in being able to respond, but not everything is within our control. So that's just part of the thinking into our guide.
Joe Ritchie: And Beth, maybe can you maybe comment on some of the uncertainties, specifically China, that's clearly been evolving since the end of the quarter. Just your exposures there and how your business is operating there? Any color there would be helpful.
Beth Wozniak: Okay. So, again, for us, China is not a significant portion of the overall nVent revenue. We don't have any manufacturing in Shanghai where there are lockdowns, but we do have manufacturing across the country. Like many others, we've had employees have lockdown, our salespeople. And I -- and we've certainly seen some slowness, I'd say, overall in APAC on some of the orders from where we were in Q1. And it's hard to predict how those lockdowns are going to occur across the country. I would say at this point, we're managing that well. And so, we just -- we'll just have to be able to respond, because I think it does create supply chain -- a greater supply chain disruptions for many companies. But overall, I think our guide for Q2 just reflects the position that -- where we think we are today.
Joe Ritchie: Okay. Great. If I could sneak one more in, just on the back of Julian's question on price/cost. It seems like the Enclosures business is the area where you're probably feeling some of the most pressure, but you still put through 11 points of price this quarter. I guess, maybe just talk through some of the dynamics there. Is Enclosures going to be price/cost positive as well as the year progresses?
Beth Wozniak: The quick answer to that is yes. We expect that to be price/cost positive. So, it's just a matter of timing from an Enclosures standpoint. I think the other thing to keep in mind, too, just by way of how that Enclosures P&L looks maybe a little bit different than the other two is, we do have a much higher labor as a percentage of sales, higher freight as a percentage of sales. So that cost tends to come in quicker, if you will, overall to the P&L. But look, we've got a lot of confidence that we're going to continue to see that ROS improve. We did from Q4 to Q1, 13% to 14%. And we expect it to continue to improve here into Q2 and the back half, largely on that price/cost equation, but also underlying productivity that the team is driving as well.
Joe Ritchie: Perfect. Thank you.
Operator: Thank you. Your next question comes from the line of Nigel Coe. Please go ahead.
Tony Riter: Hey, Nigel. Good morning. Are you there?
Nigel Coe: Hello?
Tony Riter: Hey, Nigel. We got you.
Nigel Coe: Hi. Sorry about that. That’s -- I don’t know, what happen there. Good morning, everyone. Sorry about that.
Beth Wozniak: Good morning.
Nigel Coe: So, I wanted to circle back to Thermal. You mentioned, I think, industrial MRO up 46%. If I'm not mistaken, you were down 40%, 45% in the prior quarter. And I know 2021 is -- in whole year all those puts and down. So, just given the math, it suggests that we're still running double-digit percentage below 2019 levels. Is that correct? And any reason why we shouldn't get back to peak-ish levels there?
Beth Wozniak: Well, here's what I would say that, that industrial MRO recovery began really in Q1 of a year ago by way of orders, right, but not yet sales. And then, we did begin to see that industrial MRO recover by way of some strong double-digit sales growth in Q2 of the last year. I would say that we still see further runway to get to that 2019 level from industrial MRO standpoint. And that's reflected in the growth profile, right, that's got to continue to improve, just both from a sales trajectory perspective and as well as from an MRO -- or as well as from an ROS expansion standpoint. And that's typically what we have seen in past cycles is that it takes a couple of years for that MRO to fully recover. So, we're in the midst of that improvement, if you like, sequential improvement and we've seen it now for four quarters.
Nigel Coe: Right. Right. That makes sense. And then Russia, I think you've got a chunky exposure in Thermal to Russia. I was just wondering how that's swinging your guide in the back half of the year.
Beth Wozniak: Well, for overall nVent, our sales in Russia are less than 2%, and you are correct in that it is weighted more towards our Thermal business. And our position there is that we're -- we suspended any new business activities in Russia. And so, we are just supporting and completing existing business. And the position we have there is fully reflected in our guide.
Nigel Coe: Okay. Great. And then just a quick one. You called out auto…
Beth Wozniak: Yes.
Operator: Mr. Coe has disconnected. Maybe we proceed with the next question.
Beth Wozniak: Okay.
Operator: Your next question comes from the line of Deane Dray. Your line is now open.
Deane Dray: Thank you. Good morning, everyone.
Beth Wozniak: Good morning.
Sara Zawoyski: Good morning.
Deane Dray: Hey, I really like that electrification of everything slide. That's a good road map for you. So, nicely put together.
Beth Wozniak: Thank you.
Deane Dray: A question is, can you quantify the supply chain impact in terms of any missed sales? Clearly, you've got the demand, but were you not able to ship any products, and can you quantify that?
Sara Zawoyski: Well, I would say, Deane, it's hard to say with the strong growth, right, that we didn't have good sales output, but it's still important to point out, right, that we're building backlog, right? So, as we continue to deliver for our customers, orders keep coming in, right? And so, I do think that -- I think it's less about -- we think about kind of lost sales, if you will, in the quarter. I think, what it does is it continues to give us great backlog, great order trends and visibility as we step into Q2 here.
Deane Dray: Got it. And I'm not sure if you commented on this, but how has April started?
Sara Zawoyski: Yeah. So, April, I think we commented upon this a bit, but I'll give a bit more color here. So, we continue to see April orders and sales up double-digits. And when we look at it from a segment perspective, Enclosures and EFS lead on both those fronts. From a geographical standpoint, consistent with what we saw in the Q1, I mean, North America continues to really lead from a growth perspective. Europe, we continue to see some growth. APAC is where we see a bit of that easing, if you will, and largely reflecting the China lockdowns that Beth referred to earlier.
Deane Dray: That's real helpful. And just last one. Any comment about inventory in the channel with distributors?
Beth Wozniak: Yeah. We've talked to our key distribution partners. And what we've seen for our products is that the sellout is more or less matching the sell-in. So, the perspective that we get is that we're imbalanced. So, we're keeping up with that strong pull-in demand that they're having from their flow through of sales.
Deane Dray: That’s really helpful. Thank you.
Beth Wozniak: Thank you. Thanks, Deane.
Operator: Thank you. Your next question comes from the line of Jeff Hammond. Please go ahead.
Jeff Hammond: Hey, good morning.
Beth Wozniak: Good morning.
Jeff Hammond: I also like the slide 11. That's a lot of good detail. I'm just wondering if you can frame either collectively or individually like how you would size those markets within your business.
Beth Wozniak: We haven't given you the full perspective on all of that, but I would just share with you that we have, for example, with data solutions shown to you that, that used to be less than $100 million of our portfolio, now mid-200s and we're growing that at double-digits. So, that just gives you a sense of that trajectory. When you look at our commercial portfolio, and we spoke to smarter buildings, but commercial has been around 20%-some of the overall nVent portfolio. And the others are more or less subsets, right, of what we look at in overall industrial. So, we haven't really given you all that perspective yet, but I just want to say these areas are just growing faster when we look at our -- an overall vertical view of our business.
Jeff Hammond: Okay. Great. And then, certainly, oil and gas pricing is moving up. I'm just wondering what you're seeing from an MRO and project quarter and order activity, any kind of incremental inflection around renewed focus on oil and gas?
Beth Wozniak: We have seen our orders and our quotations pick up, and that's been a steady increase. Certainly, the MRO activity has been very strong, as we've pointed out. So, one of the things we -- that we see is that everyone is looking for energy security or energy independence, if you like. And so, we do expect that there are going to be continued investments. And we're well-positioned to respond to any global investments that are made. So, we think that we're in an upturn here in terms of energy.
Jeff Hammond: Okay. Great. And then, just if I could sneak one more in. Just any size -- like what do you need to see -- or what do you need for things to happen in terms of productivity starting to get better, either less negative or moving back positive?
Beth Wozniak: Well, I would say it this way, Jeff, is, in our full year guide, we really didn't reflect meaningful improvement from a supply chain efficiency perspective, because -- so, we're not counting on that in our overall guide. So, if somehow that gets miraculously better and quick return, that should help. But we think we have it baked in with some of the current challenges that we see here today. And whether that be just a continued tight labor market -- so, the teams are doing a tremendous job to increase output, service the customer, but we're working a lot of over time. And as we bring in new people, it takes time to train them, and we're not as efficient initially. Material availability, I think that's becoming less of an issue, but still an issue in pockets, and it just adds to more of a choppy sign-up process, if you will. So, I think, the key point here is that we're not counting on that supply chain to get meaningfully better in our overall guide.
Jeff Hammond: Okay. perfect. Thanks for all the good color.
Operator: Thank you. And your next question comes from the line of Nigel Coe. Please go ahead sir.
Nigel Coe: Thanks for the . Just a quick one on auto. You called it out as an area of strength within your industrial vertical. And it's peak, because it's not something you talk about a lot. I'm assuming this is EV projects and maybe just talk about that and remind us how big auto is by nVent.
Beth Wozniak: Well, yes. What we're seeing are investments -- remember, where we play is we're not on the automobile. We are actually in the factories and in the operations. And so, as you start to see line changeovers to electric vehicles, as you start to see some of the automation that's going in, all of that is growth that we're seeing in our Enclosures portfolio.
Nigel Coe: Great. Thank you very much.
Operator: And that we have no further questions at this time, I would now like to turn the call over back to our presenters for closing remarks.
Beth Wozniak: Thank you for joining us today. We're very proud of the outstanding performance we delivered in the first quarter. We will continue to focus on delivering for our customers and shareholders by executing on our growth strategy. We will continue to make nVent a great place to work for our employees. And we believe nVent is a top tier high performance electrical company, well positioned for the electrification of everything. Thanks again for joining us. This concludes the call.
Operator: And this concludes today's conference call. You may now disconnect.
