Slide 1: nVent Third Quarter 2023 Earnings Presentation
nVent Third Quarter 2023 Earnings Presentation October 27, 2023 1
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: Key Messages
Key Messages Record Q3 sales of $859M, up 15%; adjusted EPS of $0.84, up 27% Another quarter of impressive ROS expansion and robust free cash flow Integration of ECM Industries and TEXA Industries acquisitions on track Updating full-year guidance Strong performance in Q3 Q3 ’23 Earnings Presentation
Slide 4: Q3 2023 Summary
Q3 2023 Summary ▪ Sales of $859 million, up 15% and organic up slightly ▪ Segment income of $202 million, up 40%; ROS of 23.5%, up 420 bps Q3 2023 ▪ Adjusted EPS of $0.84, up 27% ▪ Free cash flow of $136 million, up 8% ▪ Organic sales led by Industrial and Commercial/Residential verticals Q3 ▪ Data
Slide 5: Q3 2023 nVent Performance
Q3 2023 nVent Performance Sales ($M) Financial Highlights (YoY) $104 $8 $859 $745 $27 ▪ Sales up 15%, organic up slightly $(25) - Price added 4 points to growth - Acquisitions added 14 points to growth +15% YoY ▪ Segment income up 40% (3) pts 4 pts 14 pts 1 pt - Year-over-year ROS expansion of 420 b
Slide 6: Q3 2023 Segment Performance
Q3 2023 Segment Performance ($M) Sales Segment Income Commentary Organic sales growth, led by Comm/Resi, Infrastructure and Industrial Enclosures $413 $89 Mid-single digits sales growth in North America Up 6% Up 24% Up 4% organic ROS 21.7% (+320bps) Data Solutions investments ongoing ROS exp
Slide 7: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Cash Flow ($M) Debt Summary ($M) $1,874 Maturity Q3 YTD 2023 2023 $500 @ 2028 $1,300 69% Fixed $300 @ 2031 Net Income $ 105 $ 312 Amortization 26 65 $500 @ 2033 Subtotal $ 131 $ 377 $574 31% Variable 2026-2028 Depreciation 13 36 Q3 ’23 Weighted Average Rate ~5% Capital Ex
Slide 8: Capital Allocation Update
Capital Allocation Update Manage Reinvest in Return Cash M&A Leverage the Business to Shareholders ▪ Net debt to adjusted ▪ Expect full-year capex ▪ Target ROIC > WACC ▪ Returned ~$103 million EBITDA ratio at 2.4X of $70 to $75 million in 2 to 3 years in cash to shareholders ▪ Target of 2.0X to 2.5X
Slide 9: 2023 nVent Outlook
2023 nVent Outlook Total nVent Expected Drivers ▪ Secular tailwinds continue in electrification Guidance as of 07/28/23 Updated Guidance ▪ Price realization offsetting inflation Up 13% to 15% Up 12% to 13% Sales Up 4% to 6% organic Up 3% to 4% organic ▪ Supply chain improvements ▪ Channel inventory
Slide 10: Q4 2023 nVent Outlook
Q4 2023 nVent Outlook Q4 ’23 Q4 ’22 Other Items Reported sales Up 15% to 17% $742M Tax rate ~19.5% Organic sales Up 1% to 3% 15% Net interest expense ~$27M EPS (reported) $0.61 to $0.63 $0.94 Shares ~169M EPS (adjusted) $0.73 to $0.75 $0.66 Expected Drivers ▪ Continued channel inventory adjustments
Slide 11: Electrification of Everything
Electrification of Everything Macro Trends High-Growth Verticals/New Products Acquisitions ▪ Potential sales opportunity of $250M to $500M ▪ >60% of nVent sales exposed to secular trends ▪ Highly fragmented $75B total opportunity where in infrastructure investments over 5+ years nVent plays ▪ Data S
Slide 12: Summary
Summary ▪ Record sales and adjusted EPS in Q3 ▪ Integration of ECM and TEXA Industries on track ▪ Well positioned with electrification, sustainability and digitalization trends 1 2 Our future is bright Q3 ’23 Earnings Presentation 12
Slide 13: Appendix and GAAP to Non-GAAP Measurements & Reconciliations
Appendix and GAAP to Non-GAAP Measurements & Reconciliations 13 13
Slide 14: Reported to Adjusted 2023 Reconciliation
Reported to Adjusted 2023 Reconciliation Q3 ’23 Earnings Presentation 14
Slide 15: Reported to Adjusted 2022 Reconciliation
Reported to Adjusted 2022 Reconciliation Q3 ’23 Earnings Presentation 15
Slide 16: Reported to Adjusted 2021 Reconciliation
Reported to Adjusted 2021 Reconciliation Q3 ’23 Earnings Presentation 16
Slide 17: Organic Sales Growth and Free Cash Flow Reconciliation
Organic Sales Growth and Free Cash Flow Reconciliation Q3 ’23 Earnings Presentation 17
Slide 18: 2022 Organic Sales Growth Reconciliation
2022 Organic Sales Growth Reconciliation Q3 ’23 Earnings Presentation 18