nVent Electric plc | |||||||||||
Three months ended | |||||||||||
June 30, 2023 | June 30, 2022 | % / point change | |||||||||
Net Sales | $803 | $728 | 10% | ||||||||
Organic | 4% | ||||||||||
Operating Income | $147 | $105 | 40% | ||||||||
Reported ROS | 18.3% | 14.4% | |||||||||
Segment Income | $181 | $125 | 45% | ||||||||
Adjusted ROS | 22.6% | 17.2% | 540 bps |
Enclosures | |||||||||||
Three months ended | |||||||||||
June 30, 2023 | June 30, 2022 | % / point change | |||||||||
Net Sales | $400 | $381 | 5% | ||||||||
Organic | 5% | ||||||||||
ROS | 22.5% | 16.2% | 630 bps |
Electrical & Fastening Solutions ("EFS") | |||||||||||
Three months ended | |||||||||||
June 30, 2023 | June 30, 2022 | % / point change | |||||||||
Net Sales | $267 | $201 | 33% | ||||||||
Organic | 8% | ||||||||||
ROS | 32.4% | 29.3% | 310 bps |
Thermal Management | |||||||||||
Three months ended | |||||||||||
June 30, 2023 | June 30, 2022 | % / point change | |||||||||
Net Sales | $136 | $146 | -6% | ||||||||
Organic | -5% | ||||||||||
ROS | 21.0% | 19.4% | 160 bps |
nVent Electric plc | |||||||||||||||||
Condensed Consolidated Statements of Income (Unaudited) | |||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
In millions, except per-share data | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
Net sales | $ | 803.0 | $ | 727.5 | $ | 1,543.6 | $ | 1,422.2 | |||||||||
Cost of goods sold | 471.1 | 459.7 | 908.5 | 907.1 | |||||||||||||
Gross profit | 331.9 | 267.8 | 635.1 | 515.1 | |||||||||||||
% of net sales | 41.3 | % | 36.8 | % | 41.1 | % | 36.2 | % | |||||||||
Selling, general and administrative | 167.7 | 148.5 | 330.1 | 290.5 | |||||||||||||
% of net sales | 20.9 | % | 20.4 | % | 21.4 | % | 20.4 | % | |||||||||
Research and development | 17.5 | 14.6 | 34.2 | 29.8 | |||||||||||||
% of net sales | 2.2 | % | 2.0 | % | 2.2 | % | 2.1 | % | |||||||||
Operating income | 146.7 | 104.7 | 270.8 | 194.8 | |||||||||||||
% of net sales | 18.3 | % | 14.4 | % | 17.5 | % | 13.7 | % | |||||||||
Net interest expense | 21.7 | 7.5 | 29.5 | 14.7 | |||||||||||||
Gain on sale of investment | (10.2) | — | (10.2) | — | |||||||||||||
Other expense | 1.1 | 1.2 | 2.3 | 1.8 | |||||||||||||
Income before income taxes | 134.1 | 96.0 | 249.2 | 178.3 | |||||||||||||
Provision for income taxes | 21.2 | 16.1 | 42.5 | 30.6 | |||||||||||||
Effective tax rate | 15.8 | % | 16.8 | % | 17.1 | % | 17.2 | % | |||||||||
Net income | $ | 112.9 | $ | 79.9 | $ | 206.7 | $ | 147.7 | |||||||||
Earnings per ordinary share | |||||||||||||||||
Basic | $ | 0.68 | $ | 0.48 | $ | 1.25 | $ | 0.89 | |||||||||
Diluted | $ | 0.67 | $ | 0.48 | $ | 1.23 | $ | 0.88 | |||||||||
Weighted average ordinary shares outstanding | |||||||||||||||||
Basic | 165.7 | 166.4 | 165.5 | 166.3 | |||||||||||||
Diluted | 168.0 | 168.2 | 167.9 | 168.2 | |||||||||||||
Cash dividends paid per ordinary share | $ | 0.175 | $ | 0.175 | $ | 0.35 | $ | 0.35 |
nVent Electric plc | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
June 30, 2023 | December 31, 2022 | |||||||
In millions | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 138.5 | $ | 297.5 | ||||
Accounts and notes receivable, net | 546.5 | 472.5 | ||||||
Inventories | 475.3 | 346.7 | ||||||
Other current assets | 135.8 | 112.5 | ||||||
Total current assets | 1,296.1 | 1,229.2 | ||||||
Property, plant and equipment, net | 378.1 | 289.2 | ||||||
Other assets | ||||||||
Goodwill | 2,543.3 | 2,178.1 | ||||||
Intangibles, net | 1,547.5 | 1,066.1 | ||||||
Other non-current assets | 157.1 | 139.6 | ||||||
Total other assets | 4,247.9 | 3,383.8 | ||||||
Total assets | $ | 5,922.1 | $ | 4,902.2 | ||||
Liabilities and Equity | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt and short-term borrowings | $ | 30.0 | $ | 15.0 | ||||
Accounts payable | 241.3 | 252.1 | ||||||
Employee compensation and benefits | 99.1 | 109.3 | ||||||
Other current liabilities | 250.2 | 273.1 | ||||||
Total current liabilities | 620.6 | 649.5 | ||||||
Other liabilities | ||||||||
Long-term debt | 1,938.8 | 1,068.2 | ||||||
Pension and other post-retirement compensation and benefits | 135.9 | 128.5 | ||||||
Deferred tax liabilities | 205.2 | 199.6 | ||||||
Other non-current liabilities | 145.9 | 124.7 | ||||||
Total liabilities | 3,046.4 | 2,170.5 | ||||||
Equity | 2,875.7 | 2,731.7 | ||||||
Total liabilities and equity | $ | 5,922.1 | $ | 4,902.2 | ||||
nVent Electric plc | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
Six months ended | ||||||||
In millions | June 30, 2023 | June 30, 2022 | ||||||
Operating activities | ||||||||
Net income | $ | 206.7 | $ | 147.7 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities | ||||||||
Depreciation | 23.0 | 21.6 | ||||||
Amortization | 38.9 | 35.5 | ||||||
Deferred income taxes | (3.8) | (0.4) | ||||||
Share-based compensation | 11.4 | 11.9 | ||||||
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 | 7.7 | (53.0) | ||||||
Inventories | (18.5) | (61.1) | ||||||
Other current assets | (16.6) | (34.3) | ||||||
Accounts payable | (25.1) | 28.6 | ||||||
Employee compensation and benefits | (19.5) | (21.4) | ||||||
Other current liabilities | (45.2) | (12.2) | ||||||
Other non-current assets and liabilities | (5.8) | 1.0 | ||||||
Net cash provided by (used for) operating activities | 146.6 | 63.9 | ||||||
Investing activities | ||||||||
Capital expenditures | (32.3) | (20.8) | ||||||
Proceeds from sale of property and equipment | 0.2 | 2.0 | ||||||
Settlement of net investment hedge | 3.1 | — | ||||||
Acquisitions, net of cash acquired | (1,091.8) | (8.6) | ||||||
Net cash provided by (used for) investing activities | (1,120.8) | (27.4) | ||||||
Financing activities | ||||||||
Net receipts of revolving long-term debt | 100.0 | 51.2 | ||||||
Proceeds from long-term debt | 800.0 | — | ||||||
Repayments of long-term debt | (7.5) | (2.7) | ||||||
Settlement of cash flow hedge | 4.5 | — | ||||||
Debt issuance costs | (10.8) | — | ||||||
Dividends paid | (58.5) | (58.4) | ||||||
Shares issued to employees, net of shares withheld | (1.3) | (1.3) | ||||||
Repurchases of ordinary shares | (15.2) | (8.5) | ||||||
Net cash provided by (used for) financing activities | 811.2 | (19.7) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 4.0 | (10.5) | ||||||
Change in cash and cash equivalents | (159.0) | 6.3 | ||||||
Cash and cash equivalents, beginning of period | 297.5 | 49.5 | ||||||
Cash and cash equivalents, end of period | $ | 138.5 | $ | 55.8 |
nVent Electric plc | |||||||||||||||||||||||
Supplemental Financial Information by Reportable Segment (Unaudited) | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
In millions | First Quarter | Second Quarter | Six Months | First Quarter | Second Quarter | Six Months | |||||||||||||||||
Net sales | |||||||||||||||||||||||
Enclosures | $ | 391.0 | $ | 400.0 | $ | 791.0 | $ | 359.4 | $ | 380.8 | $ | 740.2 | |||||||||||
Electrical & Fastening Solutions | 205.7 | 266.7 | 472.4 | 187.6 | 200.9 | 388.5 | |||||||||||||||||
Thermal Management | 143.9 | 136.3 | 280.2 | 147.7 | 145.8 | 293.5 | |||||||||||||||||
Total | $ | 740.6 | $ | 803.0 | $ | 1,543.6 | $ | 694.7 | $ | 727.5 | $ | 1,422.2 | |||||||||||
Segment income (loss) | |||||||||||||||||||||||
Enclosures | $ | 82.5 | $ | 90.0 | $ | 172.5 | $ | 50.3 | $ | 61.5 | $ | 111.8 | |||||||||||
Electrical & Fastening Solutions | 61.3 | 86.5 | 147.8 | 47.1 | 58.8 | 105.9 | |||||||||||||||||
Thermal Management | 30.9 | 28.6 | 59.5 | 32.4 | 28.3 | 60.7 | |||||||||||||||||
Other | (26.7) | (23.8) | (50.5) | (19.6) | (23.4) | (43.0) | |||||||||||||||||
Total | $ | 148.0 | $ | 181.3 | $ | 329.3 | $ | 110.2 | $ | 125.2 | $ | 235.4 | |||||||||||
Return on sales | |||||||||||||||||||||||
Enclosures | 21.1 | % | 22.5 | % | 21.8 | % | 14.0 | % | 16.2 | % | 15.1 | % | |||||||||||
Electrical & Fastening Solutions | 29.8 | % | 32.4 | % | 31.3 | % | 25.1 | % | 29.3 | % | 27.3 | % | |||||||||||
Thermal Management | 21.5 | % | 21.0 | % | 21.2 | % | 21.9 | % | 19.4 | % | 20.7 | % | |||||||||||
Total | 20.0 | % | 22.6 | % | 21.3 | % | 15.9 | % | 17.2 | % | 16.6 | % |
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 | Full Year | |||||||||||||
Net sales | $ | 740.6 | $ | 803.0 | |||||||||||||
Operating income | 124.1 | 146.7 | |||||||||||||||
% of net sales | 16.8 | % | 18.3 | % | |||||||||||||
Adjustments: | |||||||||||||||||
Restructuring and other | $ | 4.0 | 2.5 | ||||||||||||||
Acquisition transaction and integration costs | 2.3 | 4.9 | |||||||||||||||
Intangible amortization | 17.6 | 21.3 | |||||||||||||||
Inventory step-up amortization | — | 5.9 | |||||||||||||||
Segment income | $ | 148.0 | $ | 181.3 | |||||||||||||
Return on sales | 20.0 | % | 22.6 | % | |||||||||||||
Net income - as reported | $ | 93.8 | $ | 112.9 | $ | 93 | $ | 392 | |||||||||
Adjustments to operating income | 23.9 | 34.6 | 37 | 120 | |||||||||||||
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) | (7) | (22) | |||||||||||||
Net income - as adjusted | $ | 113.3 | $ | 128.9 | $ | 123 | $ | 484 | |||||||||
Diluted earnings per ordinary share | |||||||||||||||||
Diluted earnings per ordinary share - as reported | $ | 0.56 | $ | 0.67 | $0.54 - $0.56 | $2.30 - $2.36 | |||||||||||
Adjustments | 0.11 | 0.10 | 0.18 | 0.55 | |||||||||||||
Diluted earnings per ordinary share - as adjusted | $ | 0.67 | $ | 0.77 | $0.72 - $0.74 | $2.85 - $2.91 | |||||||||||
(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 | |||||||||||||
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 June 30, 2023 (Unaudited) | |||||||||||||||||
Q2 Net Sales Growth | |||||||||||||||||
Organic | Currency | Acq./Div. | Total | ||||||||||||||
nVent | 3.9 | % | (0.3 | %) | 6.8 | % | 10.4 | % | |||||||||
Enclosures | 5.1 | % | (0.1 | %) | — | % | 5.0 | % | |||||||||
Electrical & Fastening Solutions | 8.1 | % | — | % | 24.7 | % | 32.8 | % | |||||||||
Thermal Management | (5.1 | %) | (1.4 | %) | — | % | (6.5 | %) | |||||||||
Reconciliation of Net Sales Growth to Organic Net Sales Growth | |||||||||||||||||||||||||||||
for the quarter ending September 30, 2023 and year ending December 31, 2023 (Unaudited) | |||||||||||||||||||||||||||||
Forecast (1) | |||||||||||||||||||||||||||||
Q3 Net Sales Growth | Full Year Net Sales Growth | ||||||||||||||||||||||||||||
Organic | Currency | Acq./Div. | Total | Organic | Currency | Acq./Div. | Total | ||||||||||||||||||||||
nVent | 1 - 3% | 1 | % | 14 | % | 16 - 18% | 4 - 6 % | — | % | 9 | % | 13 - 15% | |||||||||||||||||
(1) Forecast information represents an approximation |
Reconciliation of cash from operating activities to free cash flow (Unaudited) | |||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
In millions | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
Net cash provided by (used for) operating activities | $ | 77.2 | $ | 57.4 | $ | 146.6 | $ | 63.9 | |||||||||
Capital expenditures | (15.2) | (9.7) | (32.3) | (20.8) | |||||||||||||
Proceeds from sale of property and equipment | — | 0.1 | 0.2 | 2.0 | |||||||||||||
Free cash flow | $ | 62.0 | $ | 47.8 | $ | 114.5 | $ | 45.1 | |||||||||