Nvent Electric Plc · NYSE:NVT
Nvent Electric — Q2 2020 Earnings Presentation
17 slides from Nvent Electric's earnings presentation, Jul 31, 2020
Slide 1: nVent Second Quarter 2020 Earnings Presentation
nVent Second Quarter 2020 Earnings Presentation July 31, 2020
Slide 2: Forward-Looking Statement and Key Definitions
Forward-Looking Statement and Key Definitions 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 hi
Slide 3: Executive Summary
Executive Summary ➢ Executed well on our three near-term priorities COVID-19 ➢ Delivered sequential improvement on decrementals* and cash better year-over-year ➢ Confident in the steps we are taking to emerge stronger ➢ Sales of $447 million, down 17% and 22% organically ➢ ROS was 15.3%; decremental
Slide 4: Q2 '20 nVent Performance
Q2 ’20 nVent Performance Sales ($ in millions) Financial Highlights (YoY) $540 ➢ Sales down 17%, Organic down 22% $30 $447 • Acquisitions added 6 points of growth ($115) ($2) ($6) -17% ➢ Productivity more than offset inflation YoY ➢ Segment Income down 35% -22 pts 0 pts 6 pts -1 pt • Return on sales
Slide 5: Q2 '20 Segment Performance
Q2 ’20 Segment Performance Sales Segment Income Commentary ($M) ─ COVID-19 negatively impacted demand and operational costs Enclosures $219 $28 ─ Negative volume and price impacted margin Down 16% Down 41% Executed on cost actions and delivered strong cash flow Down 25% organic ROS 12.9% (-560bps)
Slide 6: Actions in Response to COVID-19
Actions in Response to COVID-19 ➢ Continued to execute our ~$50M cost action plan • ~$20M of temporary actions and ~$30M of structural actions Now ➢ Instituted additional cost actions of ~$20M targeting ~$70M of cost • ~$10M in temporary actions and ~$10M structural actions savings in ‒ Extended sal
Slide 7: Healthy Liquidity Position
Healthy Liquidity Position Credit Rating ➢ BBB- (Negative) / BBB (Negative) from S&P and Fitch, respectively Debt Structure* ➢ Total debt of $1.2B ➢ $600M revolving credit facility and term loan Key Financial • Net leverage ratio at 2.4x as of 6/30/2020 Covenant* • Maximum net leverage ratio not to
Slide 8: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow CASH FLOW CASH FLOW ($M) ($M) DEBT SUMMARY ($M) $1,212 Maturity Q2 YTD 2020 2020 Net Income $ 25 $ 44 $800 $300 @ 2023 66% Fixed Amortization 16 32 $500 @ 2028 Subtotal $ 41 $ 76 Depreciation 9 19 $412 Capital Expenditures (7) (17) 34% Variable 2023 Working Capital 29 (36
Slide 9: Scenario Planning and Q3 Outlook
Scenario Planning and Q3 Outlook ➢ Continue to see current demand environment point toward mild to moderate downturn in 2020 • Expect organic sales to improve sequentially in Q3 ‒ Q2 organic orders declined less than sales, down 15% ‒ Improvement in June and July orders from May trough ‒ July sales
Slide 10: Our Near-Term Goals Remain the Same During COVID-19
Our Near-Term Goals Remain the Same During COVID-19 1. We will focus first on the safety and well-being of our employees 2. We will continue business operations to serve our customers and support critical infrastructure 3. We will make nVent a stronger company, well-positioned to exit this crisis Wo
Slide 11: Emerging Stronger
Emerging Stronger New Products Digital Transformation Acquisitions ➢ 24 new products launched in the ➢ Launched new Thermal ➢ Eldon is now nVent HOFFMAN first half Management website ➢ Global IEC enclosure product line ➢ Significant external participation in ➢ Enhanced sales and marketing launched v
Slide 12: 2019 Social Responsibility Report
2019 Social Responsibility Report • nVent’s first Social Responsibility Report issued July 22nd • Reflects our commitment to driving progress for our people, our products and our planet • Highlights: • Established inclusion and diversity as a priority for the company • 67 percent of the company’s cu
Slide 13: Summary
Summary Near-term goals focused on employees, customers, operations and emerging stronger Executing on scenario plan to deliver ~$70 million in expected cost reductions Well-positioned with a healthy capital structure Remain focused on long-term strategy Confident in the actions we are taking to eme
Slide 14: Appendix and GAAP to Non-GAAP Measurements & Reconciliations
Appendix and GAAP to Non-GAAP Measurements & Reconciliations
Slide 15: Reported to Adjusted 2020 Reconciliation
Reported to Adjusted 2020 Reconciliation nVent Electric plc Reconciliation of GAAP to non-GAAP financial measures for the year ended December 31, 2020 excluding the effect of adjustments (Unaudited) In millions, except per-share data First Quarter Second Quarter Net sales $ 520.9 $ 447.2 Net income
Slide 16: Reported to Adjusted 2019 Reconciliation
Reported to Adjusted 2019 Reconciliation nVent Electric plc Reconciliation of GAAP to non-GAAP financial measures for the year ended December 31, 2019 excluding the effect of 2019 adjustments (Unaudited) In millions, except per-share data First Quarter Second Quarter Third Quarter Fourth Quarter Ful
Slide 17: Organic Sales Growth & Free Cash Flow Reconciliation
Organic Sales Growth & Free Cash Flow Reconciliation nVent Electric plc Reconciliation of Net Sales Growth to Organic Net Sales Growth by Segment for the quarter ended June 30, 2020 (Unaudited) Q2 Net Sales Growth Organic Currency Acq./Div. Total nVent (21.6%) (1.0%) 5.5% (17.1%) Enclosures (24.7%)