nVent Electric plc Ordinary Shares

Good morning and welcome to the NWEND Electric first quarter 2025 earnings conference call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Vice President of Investor Relations, Tony Reiter. Please go ahead.

Thank you, and welcome to Invent's first quarter 2025 earnings call. On the call with me are Beth Wozniak, our Chair and Chief Executive Officer, Gary Corona, our Chief Financial Officer, and Sarah Zawoisky, our President of System Protections. They will provide details on our first quarter performance, an outlook for the second quarter, and an update to our full year outlook. As a reminder, all results referenced throughout this presentation are on a continuing operation basis unless otherwise stated. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties. such as the risks outlined in today's press release and Invenz's filings with the Security and Exchange Commission. Forward-looking statements are made as of today, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation, which you can find in the investor section of Invenz's website. References to non-GAAP financials are reconciled in the appendix of the presentation. We'll have time for your questions after our prepared remarks. With that, please turn to slide three and I'll turn the call over to Beth.

Good morning, everyone. I'm pleased to share with you our strong first quarter results and cover some key business highlights. First, the way we have set up the call today is to have Sarah cover our first quarter performance and then have Gary provide our guidance and outlook. Sarah and Gary have been working closely together to ensure a smooth transition. This will be Sarah's last earnings call, and I'm grateful for her leadership and partnership. Sarah, in her new role as President of Systems Protection, will be leading our largest growth opportunities, from our data solutions business to our newest acquisitions, which includes Trachte and the Avail Electrical Products Group. I know she will be successful and drive our business to new levels. I'm excited to have Gary as part of our team. Gary has a strong growth and operational finance background and will continue to drive our track record of performance. With his most recent experience as acting CFO for Medtronic and over 25 years in General Mills, he brings broad expertise to InVent. Gary is getting up to speed very quickly. He will build upon the transformation strategy in place and his experience will help us scale and grow to create shareholder value and strong returns. Turning to the business performance, we're off to a strong start with double digit growth across the board and order sales adjusted EPS and free cash flow in Q1. In addition, we continue to see our backlog grow up double digits sequentially, giving us visibility through the year. We continue to make great progress on our portfolio transformation to become a more focused higher growth electrical company. We closed the thermal management divestiture early in the quarter and the avail electrical products group acquisition yesterday. Our balance sheet is strong and our disciplined capital allocation is focused on growth and returning cash to shareholders for continued value creation. We are raising our full year sales and adjusted EPS guidance to reflect the electrical products group acquisition, data solutions, and power utility strength in the second half, and it also includes the expected impact of tariffs. Now on to slide four for a summary of our first quarter performance. Sales were up 11% and 2% organically, led by the infrastructure vertical. New products contributed over two points to our sales growth, and we launched 35 new products in the quarter. The Trachte acquisition performed well, growing strong double digits year over year. Adjusted operating income grew 4% year over year, with return on sales of 20%. Adjusted EPS grew 10%, and free cash flow grew 32%. Looking at our key verticals, infrastructure led the way with sales up mid-teens with strength in both data solutions and power utilities. Commercial resi declined low single digits. Industrial and energy were each down mid-single digits. Turning to organic sales by geography, the Americas grew low single digits while Europe was down slightly. Asia Pacific grew in the high teens. Organic orders were up mid-teens, including strong double-digit growth in data solutions and mid-single-digit growth in the rest of the business. Looking ahead at our verticals, we expect infrastructure to have strong sales growth across both data centers and power utilities, which is now a more meaningful part of our portfolio. We expect industrial to grow low to mid-single digits. we now expect commercial resi to be flattish for the year. While there remains uncertainty given the dynamic environment, we continue to prioritize our key growth initiatives, which includes new products, acquisitions, and capacity expansion for high growth verticals. With regard to tariffs, we are taking mitigating steps that include pricing, productivity, and supply chain actions. We continue to closely monitor the situation, scenario plan, and execute our playbook. Overall, I am proud of our InvenTeam and how we continue to perform and deliver impressive results. We are on track for a strong year. I will now turn the call over to Sarah for further details on our first quarter results. Sarah, please go ahead. Thank you, Beth.