nVent Electric Plc Q3 FY2025 earnings call

• Record sales and adjusted EPS in Q3 with sales over $1 billion and adjusted EPS $0.91. • Organic orders up ~65% driven by AI data center buildout, backlog grew strong double digits. • Strong cash flow, healthy balance sheet. • Prioritize growth investment, investing in R&D, CapEx, and expanding facilities. • Launched 66 new products year-to-date. • Liquid cooling highlights: Over a decade of experience, new Minnesota facility, NVIDIA partnership, debut of over 10 new products at Supercomputing Conference, new tagline 'We do cool stuff'.

Systems Protection: Sales were $716 million, up 50%. Acquisitions contributed 26 points to sales, organic sales grew 23%. Infrastructure grew over 50%, Commercial/Resi grew low double digits, Industrial up low single digits. Americas and Europe strong, Asia Pacific down low single digits. Segment income $146 million, up 40%, return on sales 20.4%. Electrical Connections: Sales were $338 million, up 11%. Organic sales up 5%, EPG acquisition contributed 6 points. Infrastructure led growth, Industrial up high single digits, Commercial/Resi flat. Americas led, Europe flat, Asia Pacific down low single digits. Segment income $102 million, up 10%, return on sales 30%.

• Full-year sales guidance raised to 27%-28%, organic sales growth 10%-11%, adjusted EPS range $3.31-$3.33. • Fourth quarter sales forecast 31%-33%, organic growth 15%-17%, adjusted EPS $0.87-$0.89. • Free cash flow expected to convert 90%-95%. • Corporate costs now expected ~$120 million vs ~$110 million previously.

Q: Joe Ritchie asked about data center orders, growth, and type of data centers booked.

A: Beth Wozniak responded that data center orders are accelerating, some through 2026 and beyond, seeing new customers, and a broader range of orders including cable management and power distribution units.

Q: Deane Dray asked about modular liquid cooling implications and margin impact of capacity expansion.

A: Beth Wozniak said modular approach allows flexibility and scaling, Gary Corona mentioned Systems Protection margin impacted by M&A and growth investments but was better than expected.

Q: Jeffrey Sprague asked about organic orders including Avail EPG and data center revenue percentage.

A: Beth Wozniak said organic orders exclude inorganic, Gary Corona mentioned data centers growing healthily with large orders.

Q: Julian Mitchell asked about operating margin outlook.

A: Gary Corona said Q3 margins impacted by acquisitions and growth investments, Q4 margins expected to be up sequentially, expecting margins to improve next year.

Q: Nigel Coe asked about book-to-bill and gross margin of liquid cooling.

A: Gary Corona said healthy book-to-bill, liquid cooling margins healthy and in line with Systems Protection averages.

Q: Brian Drab asked about margin impact of modular solution.

A: Beth Wozniak said modular suite of products will scale through distribution with stronger margins over time.

Q: Nicole DeBlase asked about EPG Avail performance.

A: Beth Wozniak said EPG Avail exceeded expectations with more applications and growth synergies, Gary Corona added double-digit apples-to-apples growth and better margins than initially forecasted.

Q: Jeffrey Hammond asked about challenges in ramping capacity and EPG Avail optimization.

A: Beth Wozniak said growth is hard but disciplined approach in place, similar optimization and capacity expansion efforts with Avail as with Trachte.

Q: Vlad Bystricky asked about M&A contribution and large order pipeline.

A: Gary Corona said Avail EPG performing well with better top line and margins, Beth Wozniak said large orders for data centers are lumpy but overall data center business is accelerating.

Q: Scott Graham asked about fourth quarter tariff impacts and net leverage.

A: Gary Corona said tariff dollars continue, price expected stronger in Q4, net leverage in target zone.