Nvent Electric Plc · NYSE:NVT
Nvent Electric — Electrical Products Group 2018 Annual Spring Conference
28 slides from Nvent Electric's conference presentation, May 23, 2018
Slide 1: Electrical Products Group Conference
Electrical Products Group Conference Beth Wozniak CEO May 23, 2018
Slide 2: Forward Looking Statement
Forward Looking Statement CAUTION CONCERNING FORWARD-LOOKING STATEMENTS This presentation 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 fo
Slide 3: Key Definitions
Key Definitions Except as Otherwise Noted, All References to nVent and All Amounts Included Herein Represent the Pentair Electrical Business Excluding the Pentair Water Business, Presented on an Adjusted Basis “Organic Sales" Refers to GAAP Revenue Excluding (1) the Impact of Currency Translatio
Slide 4: Introduction to nVent
Introduction to nVent $2.1B $334M 2017 Revenues 2017 Free Cash Flow Generation 20% ~8,600 2017 Return on Sales Employees 3 47 Highly Profitable Mfg., Distribution & Service Business Segments Facilities 4
Slide 5: Leading Electrical Company Focused on Connection & Protection
Leading Electrical Company Focused on Connection & Protection Company Characteristics 2017 Financials Industry-leading positions and strong brands $2.1B Focused on improving utilization, lowering Revenue costs and maximizing customer uptime Attractive margin profile 20% ROS Strong free cash
Slide 6: Three Businesses of Scale with Leading Product Portfolios
Three Businesses of Scale with Leading Product Portfolios Electrical & Fastening Enclosures Thermal Management Solutions ($935M) ($622M) ($541M) Equipment Electronics Building Industrial Fastening Electrical Protection Protection Infrastructure Heating Solutions Solutions Solutions Solutions 6
Slide 7: Mission-Critical Solutions That Create Value
Mission-Critical Solutions That Create Value Customer Productivity & Mission-Critical Solutions High Cost of Failure Total Cost of Ownership Our products… Our products… Our products… • Connect and protect • Protect equipment • Reduce labor cost in across broad range of and electronics in installatio
Slide 8: Industry Leading Positions
Industry Leading Positions We are a Leader in Connection and Protection • A global leader in electric heat tracing solutions • A global leader in complete heat management systems • A global leader in electrical and fastening solutions • A leader in North American industrial enclosures • A leader in
Slide 9: The nVent Strategy
The nVent Strategy One nVent Focus on Attractive Accelerate Innovation Grow Globally & in Verticals & Connected Solutions Developing Regions Drive Productivity & Velocity Pursue Targeted Bolt-on Acquisitions 9
Slide 10: Macro Trends are Favorable
Macro Trends are Favorable Technology & Electrification & Connectivity Urbanization Demographic Safety & Security Shifts Trends Drive use of More Electrical Products 10
Slide 11: Evolution of Our Management System: spark
Evolution of Our Management System: spark Growth mindset, Growth Commercial excellence Energize employees & People Create value Lean Enterprise Lean information flow Velocity Drive velocity in everything we do Digitize the customer Digital experience, products and processes Building on a Strong Foun
Slide 12: nVent Financial Overview
nVent Financial Overview Financial Profile Key Metrics at Spin • Focus on establishing reliable growth Net Leverage 2.2x • Favorable and competitive margin profile with ample opportunity for expansion • Consistent and robust cash flow generation Cash on Balance Sheet ~$50 million targeting 100% of a
Slide 13: Capital Allocation Structure
Capital Allocation Structure Selected Electrical Peers Dividend Payout % (excluding amortization)1 Median = 40.7% Median electrical peer group payout ratio ~40% NVT currently seeking required approval from High Court of Ireland • Approval timelines could be 2 months or longer from the spin date
Slide 14: nVent Capital Allocation Framework
nVent Capital Allocation Framework Potential cash available for strategic Convert 100% deployment Adj. Net Income Free Cash Flow Potential Dividend & Share Term Loan Amort. Cash Available Incremental Cash Balance Repurchases* for Deployment Possible framework of cash available for deployment on an
Slide 15: Long-Term Financial Framework
Long-Term Financial Framework Long-Term Goals Revenue Differentiated growth 1-2% above GDP Segment Income Margin Expansion EPS Top Tier Performance Free Cash Flow = Cash Flow 100% Adjusted Net Income Long-Term Value Creation Goals 15
Slide 16: Investment Thesis
Investment Thesis Mission-Critical Solutions Maximize Customer Efficiency Conservative Leading Industry Capital Structure & Positions, Brands Capital Allocation and Footprint Philosophy Value Creation Diversified Across Strong Cash Flow Products, Verticals Generation and Customers Strong Financial P
Slide 17: Thank You
Thank You
Slide 18: Appendix
Appendix
Slide 19: Enclosures Business Overview
Enclosures Business Overview Segment Description 2017A Sales Breakdown Geographies Verticals Provides Innovative Solutions That Protect, 1% 11% Connect, and Manage Heat in Critical 11% Other Developed Energy Electronics, Communication, Control, and Developing 10% Commercial Power Equipment 19% Weste
Slide 20: Thermal Management Business Overview
Thermal Management Business Overview Segment Description 2017A Sales Breakdown Geographies Verticals Provides Electric Thermal Solutions that 2% Connect and Protect Critical Buildings, 14% Other Developed 43% Infrastructure, Industrial Processes Developing Industrial 26% and People Commercial 55% &
Slide 21: Electrical & Fastening Business Overview
Electrical & Fastening Business Overview Segment Description 2017A Sales Breakdown Geographies Verticals Provides Electrical and Fastening Solutions that Connect and Protect Electrical and 10% 2% Other 10% Developed Mechanical Systems Developing Energy 18% 14% Western Infrastructure Europe 70% 2017A
Slide 22: Q1'18 nVent Performance
Q1’18 nVent Performance Sales ($ in millions) Financial Highlights (yoy) $21 $539 $3 $0 Organic sales up 3% $13 $502 • Enclosures: Up 9% ~7% • Thermal Management: Down 4% YoY • EFS: Up 1% 2 pts 1 pts 0 pts 4 pts Pro Forma Segment Income up 5%** Q1'17 Volume Price Acq. FX Q1’18 Pro Forma ROS at
Slide 23: Q2'18 nVent Pro Forma Outlook
Q2’18 nVent Pro Forma Outlook* Q2’18 Guidance Q2’17 Organic Sales +2% - 4% $513M Segment Income* +1% - 3% $106M ROS* 18% - 20% 20.6% EPS (reported) $0.33 - $0.36 EPS (adjusted) $0.41 - $0.44 Summary Other Considerations Continued Sales Strength Tax Rate: ~18% Sequential ROS Improvement Pro F
Slide 24: Full Year 2018 nVent Pro Forma Outlook
Full Year 2018 nVent Pro Forma Outlook* Enclosures Thermal Mgmt. EFS Total Organic Sales Up 3-5% Up 0-2% Up 2-4% Up 2-4% ROS ~Flat +50-70bps +30-50bps ~Flat Corporate Expenses ~$45M Int. Exp./Other ~$43M Tax Rate ~18% Reported EPS $1.38 - $1.48 Adjusted EPS $1.70 - $1.80 Shares ~181M Key Considerati
Slide 25: Reported to Adjusted 2018 Reconciliation
Reported to Adjusted 2018 Reconciliation nVent Electric plc Reconciliation of the GAAP Year Ended December 31, 2018 to the non-GAAP Excluding the Effect of 2018 Adjustments (Unaudited) Actual Forecast * First In millions, except per-share data Quarter Second Quarter Full Year Net sales $ 539 approx
Slide 26: Reported to Adjusted 2015-2017 Reconciliation
Reported to Adjusted 2015-2017 Reconciliation nVent Electric plc Reconciliation of the GAAP Year Ended December 31, 2017, 2016 and 2015 to the non-GAAP Excluding the Effect of 2017, 2016 and 2015 Adjustments (Unaudited) 2015 2016 2017 Net sales $ 1,809 $ 2,116 $ 2,098 Operating income 260 333 316 %
Slide 27: Q1 and FY 2018 Organic Sales Growth Reconciliation
Q1 and FY 2018 Organic Sales Growth Reconciliation nVent Electric plc Reconciliation of Net Sales Growth to Organic Net Sales Growth by Reportable Segment For the Quarter Ended March 31, 2018 (Unaudited) Q1 Net Sales Growth Organic Currency Acq./Div. Total nVent 3.1% 4.2% —% 7.3% Enclosures 8.9% 3.3
Slide 28: Cash Flow Reconciliation
Cash Flow Reconciliation nVent Electric plc Reconciliation of the GAAP Operating Activities Cash Flow to the non-GAAP Free Cash Flow (Unaudited) Three months ended In millions March 31, 2018 March 31, 2017 Free cash flow Net cash provided by (used for) operating activities - as reported $ 36 $ 87 In
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