A O Smith Corp (AOS) 2024 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to A. O. Smith Corporation third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. (Operator instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 A. O. Smith Corporation 2024 年第三季財報電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後將進行問答環節。（操作員說明）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Helen Gurholt. Please go ahead.

我現在想把會議交給今天的發言人海倫·古爾霍爾特。請繼續。

Good morning, and welcome to the A.O. Smith third quarter conference call. I'm Helen Gurholt, Vice President, Investor Relations and Financial Planning and Analysis. Joining me today are Kevin Wheeler, Chairman and Chief Executive Officer; and Chuck Lauber, Chief Financial Officer.

早安，歡迎來到 A.O.史密斯第三季電話會議。我是海倫古霍爾特 (Helen Gurholt)，主管投資者關係與財務規劃與分析的副總裁。今天與我一起出席的還有董事長兼執行長凱文‧惠勒 (Kevin Wheeler)；和首席財務官查克勞伯。

In order to provide improved transparency into the operating results of our business, we provide non-GAAP measures. Free cash flow is defined as cash from operations less capital expenditures, adjusted earnings, adjusted earnings per share, adjusted segment earnings and adjusted corporate expenses exclude the impact of pension settlement income and restructuring and impairment expenses.

為了提高我們業務經營成果的透明度，我們提供非公認會計準則衡量標準。自由現金流的定義是營運現金減去資本支出、調整後收益、調整後每股盈餘、調整後分部收益和調整後公司費用，不包括退休金結算收入以及重組和減損費用的影響。

Reconciliations from GAAP measures to non-GAAP measures are provided in the appendix at the end of this presentation and on our website. A friendly reminder that some of our comments and answers during this conference call will be forward-looking statements that are subject to risks that could cause actual results to be materially different.

本簡報末尾的附錄和我們的網站上提供了 GAAP 衡量標準與非 GAAP 衡量標準的調整表。友善提醒，我們在本次電話會議期間的一些評論和回答將是前瞻性陳述，這些陳述可能存在可能導致實際結果產生重大差異的風險。

Those risks include matters that we described in this morning's press release, among others. Also, as a courtesy to others in the question queue, please limit yourself to one question and one follow-up per turn. If you have multiple questions, please rejoin the queue. We will be using slides as we move through today's call. You can access them on our website at investor.aosmith.com.

這些風險包括我們在今天早上的新聞稿中描述的問題等。另外，出於對問題隊列中其他人的禮貌，請將自己限制為每輪提出一個問題和一個後續問題。如果您有多個問題，請重新加入佇列。我們將在今天的電話會議中使用幻燈片。您可以在我們的網站 Investor.aosmith.com 上訪問它們。

I will now turn the call over to Kevin to begin our prepared remarks.

現在我將把電話轉給凱文，讓他開始我們準備好的發言。

Thank you Helen and good morning everyone. I'm on slide four and our third quarter results. As we previously announced, our third quarter sales and earnings decreased compared to last year as consumer demand in China and water heater demand in North America was weaker than expected.

謝謝海倫，大家早安。我在第四張投影片和我們第三季的業績。正如我們先前宣布的，由於中國的消費者需求和北美的熱水器需求弱於預期，我們第三季的銷售額和收益較去年有所下降。

China third party sales declined 17% in local currency. North America water heater sales decreased 4% as pricing actions were more than offset by lower volumes. I am pleased with the double digit growth we had in the quarter in our North America boiler and water treatment businesses as well in India.

以當地貨幣計算，中國第三方銷售額下降了 17%。北美熱水器銷量下降 4%，因為定價行動被銷售下降所抵消。我對本季北美鍋爐和水處理業務以及印度的兩位數成長感到滿意。

In October, we increased our dividend by 6%. We have increased our dividend annually for the last 32 years. In addition, we are on track to close Pureit by the end of the year. Please turn to slide 5. In China third quarter third party sales decreased 17% local currency as a result of weaker than expected consumer demand.

10 月份，我們將股息提高了 6%。過去 32 年來，我們每年都會增加股利。此外，我們預計在今年年底前關閉 Pureit。請翻到投影片 5。在中國，由於消費者需求弱於預期，第三季第三方銷售額以當地貨幣計算下降了 17%。

We believe our position in the premium portion of the market remains stable. However, we saw increased pricing and promotional pressure, particularly in the mid-price sector of the market. While we expect consumer demand softness to persist through the remainder of the year, a government sponsored appliance trade in program and other recently announced government stimulus programs may provide a positive impact beyond 2024.

我們相信我們在高端市場的地位保持穩定。然而，我們看到定價和促銷壓力增加，特別是在市場的中等價格領域。雖然我們預計消費者需求疲軟將持續到今年剩餘時間，但政府資助的家電以舊換新計劃和其他最近宣布的政府刺激計劃可能會在 2024 年以後產生積極影響。

In our North America water heater business, orders were softer than expected in the quarter in both the US and Canada for both residential and commercial water heaters. We believe a price increase related pre buy and a reduction in our order lead times and a softening in end market demand led our customers to adjust order patterns and reduce their inventories during the quarter.

在我們的北美熱水器業務中，本季美國和加拿大的住宅和商用熱水器訂單均低於預期。我們認為，與預購相關的價格上漲、訂單交貨時間的縮短以及終端市場需求的疲軟導致我們的客戶在本季度調整訂單模式並減少庫存。

As we have discussed, we launched our A.O. Smith design and manufactured tankless product in the second quarter, which is currently manufactured in our China facility. Early feedback has been positive on our innovative scale resistant design. While sales have lagged our expectations, we remain positive about the long term outlook and we are on track to launch two additional models in early 2025.

正如我們所討論的，我們推出了 A.O.史密斯在第二季設計並製造了無罐產品，目前在我們的中國工廠生產。早期回饋對我們創新的防垢設計非常正面。儘管銷量低於我們的預期，但我們對長期前景仍然持樂觀態度，我們預計在 2025 年初推出另外兩款車型。

Our North America boiler sales grew 15% in the quarter compared to last year. As our commercial condensing boilers continue to perform well in the market, we believe we are growing our share in the commercial condensing portion of the market led by our crest boilers with Hellcat Technology. North America water treatment sales increased 16% year-over-year due to acquisition related dealer sales and organic growth in our dealer and wholesale channels.

本季我們的北美鍋爐銷售額與去年同期相比成長了 15%。隨著我們的商用冷凝鍋爐繼續在市場上表現良好，我們相信我們在以採用 Hellcat 技術的 Crest 鍋爐為主導的商用冷凝市場中所佔的份額正在不斷增長。由於收購相關經銷商銷售以及經銷商和批發通路的有機成長，北美水處理銷售額年增 16%。

I'm now on slide 6. As we have discussed earlier this year, we commenced several expansion projects in 2024 to support our long-term growth strategy. We recently celebrated the grand opening of our new facility on our campus in Juárez where we will manufacture gas tankless water heaters for North America.

我現在在幻燈片 6 上。正如我們今年早些時候討論的那樣，我們於 2024 年啟動了多個擴建項目，以支持我們的長期成長策略。最近，我們慶祝了華雷斯園區新工廠的盛大開業，我們將為北美生產即熱式燃氣熱水器。

While there is still startup work to be completed, production is expected to begin in early 2025 with the ramp up through the year. We have also added additional heat pump capacity on the same site in support of increased demand for our residential heat pump water heaters. Also, we have made progress on our new state of the art commercial product development center, which is located on the same site as our Lebanon, Tennessee facility.

雖然仍有啟動工作需要完成，但預計將於 2025 年初開始生產，全年產量將持續增加。我們還在同一地點增加了額外的熱泵容量，以支援對住宅熱泵熱水器不斷增長的需求。此外，我們在最先進的新商業產品開發中心方面也取得了進展，該中心與我們田納西州黎巴嫩工廠位於同一地點。

This expanded facility, which is projected to be completed in mid-2025, will enhance our product development and testing capabilities and knowledge sharing by bringing together our commercial water heater and boiler engineering teams.

該擴建設施預計將於 2025 年中期竣工，將透過匯集我們的商用熱水器和鍋爐工程團隊來增強我們的產品開發和測試能力以及知識共享。

I'll now turn the call over to Chuck who will provide more details on our third quarter performance.

我現在將把電話轉給查克，他將提供有關我們第三季業績的更多詳細資訊。

Thank you, Kevin. Good morning everyone. I'm on slide 7. Third quarter sales in the North America segment were $703 million, a 1% decline compared with 2023, as higher boiler and water treatment sales and the benefit of year-over-year pricing actions were more than offset by lower residential and commercial water heating volumes.

謝謝你，凱文。大家早安。我在投影片 7 上。北美業務第三季銷售額為 7.03 億美元，較 2023 年下降 1%，原因是鍋爐和水處理銷售額的增加以及同比定價行動的好處被住宅和商業熱水量的下降所抵消。

North America segment earnings of $163 million decreased 4% compared with 2023. Segment margin was 23.1%, a decrease of 80 basis points year-over-year. The lower segment earnings and segment margin were primarily driven by lower water heating volumes that were partially offset by higher boiler and water treatment sales and pricing.

北美業務收入為 1.63 億美元，較 2023 年下降 4%。分部利潤率為23.1%，較去年同期下降80個基點。較低的部門收益和部門利潤率主要是由於熱水量減少造成的，而鍋爐和水處理銷售和定價的增加部分抵消了這一影響。

Moving to slide 8, rest of the world segment sales of $210 million decreased 10% compared to last year. The decline was primarily driven by lower sales of our core water heater and water treatment products in China India sales increased 12% in local currency in the quarter as our new products continue to be well received in the market.

轉到幻燈片 8，世界其他地區的銷售額為 2.1 億美元，與去年相比下降了 10%。下降的主要原因是我們的核心熱水器和水處理產品在中國的銷量下降。

Rest of the world segment earnings of $14 million and segment margin was 6.5% in 2024 compared to segment earnings of $23.2 million and segment margin of 9.9% in the prior year. The lower segment earnings and segment margin were driven by lower sales, partially offset by lower material costs that resulted from cost saving projects in China.

2024 年，全球其他地區的分部收益為 1,400 萬美元，分部利潤率為 6.5%，而前一年的分部收益為 2,320 萬美元，分部利潤率為 9.9%。較低的部門利潤和部門利潤率是由銷售額下降推動的，但部分被中國成本節約項目帶來的材料成本下降所抵消。

Please turn to slide 9, we generated free cash flow of $283 million during the first nine months of 2024, a decrease from the same period last year, primarily as a result of higher inventory balances as well as in higher incentive payments associated with record sales and profits. Last year, they were partially offset by lower accounts receivable balances.

請參閱投影片 9，我們在 2024 年前 9 個月產生了 2.83 億美元的自由現金流，較去年同期有所下降，主要是由於庫存餘額增加以及與創紀錄銷售相關的更高獎勵付款和利潤。去年，應收帳款餘額減少部分抵銷了這些損失。

Capital expenditures increased $35 million year-over-year due to the growth focused expansion projects that Kevin just reviewed. Our cash balance totaled $256 million at the end of September and our net cash position was $136 billion. Our leverage ratio was 5.9% as measured by total debt to total capital.

由於凱文剛剛審查的以成長為重點的擴張項目，資本支出比去年同期增加了 3500 萬美元。截至 9 月底，我們的現金餘額總計 2.56 億美元，淨現金部位為 1,360 億美元。以總債務與總資本衡量，我們的槓桿率為 5.9%。

Now turn to slide 10. In addition to returning capital to shareholders, we continue to see opportunities for organic growth, innovation and new product development across all of our product lines and geographies.

現在轉到投影片 10。除了向股東返還資本外，我們還繼續在所有產品線和地區中看到有機成長、創新和新產品開發的機會。

As previously announced, we signed an agreement to acquire Pureit from Unilever for $120 million. The acquisition aligns with our strategy of adding scale and enhancing our premium water treatment product portfolio distribution footprint in the South Asia region, particularly in India. The acquisition of Pureit is on track to close by the end of 2024.

正如先前宣布的，我們簽署了一項協議，以 1.2 億美元從聯合利華手中收購 Pureit。此次收購符合我們在南亞地區（特別是印度）擴大規模和加強優質水處理產品組合分銷足跡的策略。對 Pureit 的收購預計將於 2024 年底完成。

Earlier this month, our board approved a 6% increase to our quarterly dividend to $0.34 per share. We repurchased approximately 2.9 million shares of common stock in the first nine months of 2024, for a total of $237 million.

本月早些時候，我們的董事會批准將季度股息增加 6% 至每股 0.34 美元。2024 年前 9 個月，我們回購了約 290 萬股普通股，總金額為 2.37 億美元。

Please turn to slide 11 and our updated 2024 earnings guidance and outlook. We re-affirm our recently revised 2024 EPS outlook to an expected range of $3.70 to $3.85 per share. Our outlook is based on a number of key assumptions, including our guidance assumes that material costs in the full year 2024 will be roughly flat to 2023.

請參閱投影片 11 以及我們更新的 2024 年獲利指引和展望。我們重申最近修訂的 2024 年每股收益展望為每股 3.70 美元至 3.85 美元的預期範圍。我們的前景基於許多關鍵假設，包括我們的指導假設 2024 年全年的材料成本將與 2023 年大致持平。

Our guidance also assumes a relatively stable supply chain environment similar to what we experienced throughout 2023. For the year, CapEx should be between $105 million and $115 million, an increase year-over-year and from the past several years, due to our capacity expansion projects and expanded engineering capabilities.

我們的指導也假設供應鏈環境相對穩定，類似於我們在 2023 年所經歷的情況。由於我們的產能擴張項目和工程能力的擴大，今年的資本支出應在 1.05 億美元至 1.15 億美元之間，較上年和過去幾年有所增加。

We expect to generate operating cash flow of $525 million and free cash flow of approximately $415 million, a reduction from our previous guidance due to the lower earnings outlook, increased inventories and lower customer deposits in China.

我們預計將產生 5.25 億美元的營運現金流和約 4.15 億美元的自由現金流，由於中國盈利前景較低、庫存增加和客戶存款減少，較先前的指引有所減少。

Corporate and other expenses are expected to be approximately $70 million. Our effective tax rate is estimated to be approximately 24% and we expect to repurchase approximately $300 million of shares of our stock, resulting in an outstanding diluted shares of $147 million at the end of 2024.

公司及其他費用預計約為 7000 萬美元。我們的有效稅率估計約為 24%，我們預計將回購約 3 億美元的股票，導致 2024 年底流通稀釋後股票為 1.47 億美元。

I'll now turn the call back over to Kevin who will provide more color on key markets and top line growth outlook and segment expectations, all while staying on slide 1l. Kevin?

現在，我將把電話轉回給 Kevin，他將提供有關關鍵市場、營收成長前景和細分市場預期的更多信息，同時仍停留在幻燈片 1l 上。凱文？

Thank you, Chuck. We reaffirm our recently revised outlook for 2024 sales to be approximately flat to 2023, which includes the following assumptions. In China, we believe that the weakness we experienced in the market in the third quarter will persist through the remainder of the year.

謝謝你，查克。我們重申最近修訂的 2024 年銷售額展望與 2023 年大致持平，其中包括以下假設。在中國，我們相信第三季市場的疲軟將持續到今年剩餘時間。

While we are encouraged by the recently announced government stimulus programs, we expect minimal impact from the programs in 2024. As a result, we lowered our 2024 China third party sales guidance to be a decrease of between 6% and 8% local currency. Our forecast assumes a negative currency translation impact of approximately 1% for the year.

雖然我們對最近宣布的政府刺激計劃感到鼓舞，但我們預計這些計劃對 2024 年的影響微乎其微。因此，我們將 2024 年中國第三方銷售指引下調至以當地貨幣計算下降 6% 至 8%。我們的預測假設今年貨幣換算的負面影響約為 1%。

Our North America residential water heater orders have been weaker than we expected since July when we provided our prior guidance. With our improved lead times, reduced backlog, and some signals of softness in the market, we believe our customers have reduced their inventories and that inventories will remain at current levels for the remainder of the year.

自 7 月我們提供先前指引以來，我們的北美住宅熱水器訂單一直弱於我們的預期。隨著交貨時間的縮短、積壓訂單的減少以及市場疲軟的一些訊號，我們相信我們的客戶已經減少了庫存，並且庫存將在今年剩餘時間內保持在當前水平。

Our July outlook assumed we would outperform the market and slightly improve our share year-over-year. On weaker orders we project our share will remain similar to last year. We maintain our projection that the 2024 US residential industry unit volumes will be relatively flat to last year.

我們 7 月的展望假設我們的表現將跑贏市場，並且我們的份額同比略有提高。在訂單疲軟的情況下，我們預計我們的份額將與去年持平。我們維持 2024 年美國住宅產業單位銷售量將與去年相對持平的預測。

We have reduced our projection for the US commercial water heater industry volumes from a low single digit increase to approximately flat in 2024. There has also been an industry wide mix shift within the commercial categories where electric unit shipments have increased and gas unit shipments have decreased compared to last year.

我們已將 2024 年美國商用熱水器產業銷售的預測從較低的個位數成長下調至大致持平。商業類別內也出現了全行業的組合轉變，與去年相比，電力單位出貨量有所增加，天然氣單位出貨量有所下降。

We are pleased with our share in both categories. However, the change in the mix creates a headwind as the average price of a commercial gas water heater is approximately three times that of a commercial electric heater. The benefits of our previously announced price increases in North America water heating of 4% across most of our water heater products and 8% on heat pumps are included in our outlook.

我們對這兩個類別中的份額感到滿意。然而，這種組合的變化帶來了阻力，因為商用瓦斯熱水器的平均價格約為商用電熱水器的三倍。我們先前宣布的北美熱水器價格上漲 4%，大部分熱水器產品價格上漲 4%，熱泵價格上漲 8%，這些好處已包含在我們的展望中。

Our outlook assumes proactive replacement will remain at levels similar to last year. However, on signals of end market demand softening, we'll be watching our data closely. We revised our boiler sales growth guidance to be approximately 8% on the lower end of our previous range.

我們的前景假設主動更換將保持與去年相似的水平。然而，鑑於終端市場需求疲軟的訊號，我們將密切關注我們的數據。我們將鍋爐銷售成長指引修訂為先前範圍下限的 8% 左右。

We are pleased with our commercial boiler sales. However, we see weakness in our residential order rates. Our sales growth guidance for North America water treatment of an increase of 8% to 10% is unchanged. Based on our revised 2024 assumptions, we expect our North America segment margin to be approximately 24.5% and rest of the World third party segment margin to be approximately 8%.

我們對商用鍋爐的銷售感到滿意。然而，我們看到住宅訂單率疲軟。我們對北美水處理的銷售成長指引保持不變，即成長 8% 至 10%。根據我們修訂後的 2024 年假設，我們預期北美分部利潤率約為 24.5%，世界其他地區第三方分部利潤率約為 8%。

Please turn to slide 12. We are pleased with our boiler and North America water treatment sales growth in the quarter. Our China and North American water heater businesses experienced challenges in the third quarter. Although we have some caution around end market demand, we expect quarter-over-quarter improvement in North America water heater volumes and even though we expect the weak demand in China to continue through the end of the year, our outlook projects quarter-over-quarter sales improvements as fourth quarter sales are typically seasonally stronger in China due to shopping holidays. We are pleased with our year-to-date sales growth in our North America boiler business, particularly for our high efficiency commercial products.

請翻到投影片 12。我們對本季鍋爐和北美水處理銷售的成長感到滿意。我們的中國和北美熱水器業務在第三季遇到了挑戰。儘管我們對終端市場需求持謹慎態度，但我們預計北美熱水器銷量將環比改善，儘管我們預計中國需求疲軟將持續到今年年底，但我們的前景預計將環比增長由於購物假期，中國第四季度的銷售通常會季節性走強，因此季度銷售有所改善。我們對北美鍋爐業務今年迄今的銷售成長感到滿意，特別是我們的高效商用產品。

Market optimism continues. However, we have seen a modest slowdown in coating activity. As we have in the past we are assessing the current environment in China now, reviewing our operations to optimize the business to align with lower volumes and create a solid foundation to leverage profitable growth in the future. In our manufacturing facilities in North America, we have adjusted to operate more efficiently at the current lower volume rates while still maintaining our improved lead times.

市場樂觀情緒持續。然而，我們看到塗料活動略有放緩。正如我們過去所做的那樣，我們現在正在評估中國當前的環境，審查我們的運營，以優化業務以適應較低的銷量，並為未來的盈利增長奠定堅實的基礎。在我們位於北美的製造工廠中，我們進行了調整，以在當前較低的產量下更有效地運營，同時仍保持改進的交貨時間。

A.O. Smith has 150 year history of navigating through all economic cycles. We estimate replacement demand represents approximately 80% to 85% of US water heater and boiler volumes. That stable replacement as well as our strong balance sheet allows us to continue investing for the long-term in ourselves and through acquisitions.

A.O.史密斯擁有 150 年駕馭所有經濟週期的歷史。我們估計更換需求約占美國熱水器和鍋爐容量的 80% 至 85%。這種穩定的替代品以及強大的資產負債表使我們能夠繼續對自身進行長期投資並透過收購進行投資。

We are focused on servicing our customer and continue to grow our leadership position in heating and treating water. That concludes our prepared remarks and we are now available for your questions.

我們專注於為客戶提供服務，並繼續鞏固我們在加熱和水處理領域的領導地位。我們準備好的演講到此結束，現在可以回答您的問題。

(Operator Instructions) Susan Maklari, Goldman Sachs.

（操作員指示）Susan Maklari，高盛。

Thank you. Good morning, everyone.

謝謝。大家早安。

Good morning, Susan.

早安，蘇珊。

My first question is focusing on the North America residential water heater segment of the business. If I'm doing the math right, I think, considering your guide, that the industry volumes will be flat for the year. And based on what we know in terms of your commentary around price in that part of the business, it would suggest that you trailed the industry fairly significantly in the third quarter, and then you expect that to reverse pretty meaningfully going through the fourth quarter.

我的第一個問題是專注於北美住宅熱水器業務領域。如果我計算正確，考慮到您的指南，我認為今年的行業銷售將持平。根據我們對您對該部分業務價格的評論的了解，這表明您在第三季度相當明顯地落後於行業，然後您預計這種情況會在第四季度發生相當有意義的逆轉。

I guess. First of all, is that right? And second of all, if so, can you just talk to what's driving those big moves that we've been seeing in the last several months?

我猜。首先，這是正確的嗎？其次，如果是這樣，您能否談談是什麼推動了我們在過去幾個月中看到的這些重大舉措？

Yes, I think it's. Let me just step back on that a little bit. The price increase that we had in the second quarter, we talked about generated motors than we anticipated a 4% and particularly an 8% increase would generate. And that, that increased our lead times and pushed out some orders.

是的，我想是的。讓我稍微回顧一下這一點。我們談到第二季的馬達價格上漲，比我們預期的上漲 4%，特別是 8%。這增加了我們的交貨時間並推遲了一些訂單。

And when that happens, we have ERP systems in our customers that also start to generate more orders, and then we get behind. And then as we got into the second quarter and then even on our call in July, we had mentioned we saw some softness, and that was us working down our backlogs and really kind of bringing in line our lead times with again cause our distributors to reduce the inventories as they change their ERP systems back to a normal lead time.

當這種情況發生時，我們客戶的 ERP 系統也開始產生更多訂單，然後我們就落後了。然後，當我們進入第二季度，甚至在7 月的電話會議上，我們提到我們看到了一些疲軟的情況，那就是我們正在處理積壓訂單，並真正使我們的交貨時間與我們的分銷商保持一致。

So there's been some puts and takes moving up and down in the market, but a lot of that deficit is just the inventory imbalance and timing. So when you just look at it from a share perspective, from our customers getting their fair share of the market, we're in pretty good shape. But it's just some lumpiness that we experienced that just happens during some price increases or during some volatile time.

因此，市場上出現了一些看跌期權和看跌期權的波動，但其中很大一部分赤字只是庫存失衡和時機問題。因此，當你從份額的角度來看，從我們的客戶獲得公平的市場份額來看，我們的狀況相當不錯。但這只是我們經歷過的一些波動，只是在價格上漲或波動時期發生。

So nothing here from our side that I would tell you that we're concerned about. It's just something that we had to work through with our customers. And the only concern we have is maybe some softness that we saw in the market that we still have to work through.

因此，我們方面沒有任何事情可以告訴您我們擔心的事情。這只是我們必須與客戶一起解決的問題。我們唯一擔心的可能是我們在市場上看到的一些疲軟，但我們仍然需要克服這些疲軟。

And maybe just a couple of comments in addition. So, as Kevin said, there's a lot of timing that goes on with that. And we, we haven't changed our full year outlook. But in July, a flat industry, I would say we were thinking of it as flat being really the floor and probably flat to up.

也許還有一些評論。因此，正如凱文所說，這需要很多時機。我們沒有改變全年展望。但在七月，一個扁平化的行業，我想說我們認為它是扁平化的，實際上是地板，而且可能是扁平化的。

And now as we look at the full year being flat, we'd say that, the flat is probably the ceiling and more flat to down. So just kind of to gauge that for the fourth quarter, we feel very good about going into the fourth quarter, at least at the trend rate of what we see in orders, which have increased, really starting from August through September.

現在，當我們看到全年持平時，我們會說，持平可能是天花板，更平坦的是向下。因此，只是為了衡量第四季度，我們對進入第四季度感覺非常好，至少從我們看到的訂單趨勢率來看，訂單確實從 8 月到 9 月開始增加。

Jeff Hammond, KeyBank Capital Markets, Inc.

Jeff Hammond，KeyBank 資本市場公司

Hey, good morning, guys.

嘿，早上好，夥計們。

Good morning.

早安.

Just wondering about the stickiness of your March price increase. We've seen a lot of deflation in steel, and I'm just wondering if that's making it harder to push price in North America.

只是想知道三月漲價的黏性。我們已經看到鋼鐵業出現了嚴重的通貨緊縮，我只是想知道這是否會導致北美的價格上漲變得更加困難。

Well, how much we like to talk about pricing here, but it's a good question. And as we look at it, the increase was executed as we indicated. And I would tell you the markets are always competitive. But as I step back and how we build our business plan and what we expect out of volume and pricing, we're exactly where we thought we would be according to our plan.

好吧，我們多麼喜歡在這裡討論定價，但這是一個很好的問題。正如我們所看到的，增加是按照我們指出的那樣執行的。我會告訴你，市場總是競爭激烈。但當我退後一步，看看我們如何制定我們的業務計劃以及我們對銷售和定價的期望時，我們正是按照我們的計劃所認為的那樣。

So it's a competitive market, but nothing from a perspective that we're concerned about. Our goal is always, always come back to. Our goal is always to keep our customers competitive. And I feel we're in good position as we head into the fourth quarter.

所以這是一個競爭激烈的市場，但從我們擔心的角度來看，沒有什麼。我們的目標是永遠、永遠回來。我們的目標始終是保持客戶的競爭力。我覺得在進入第四季時我們處於有利位置。

Okay. And then just on China, I mean, the business has been down significantly, then uneven for some time and the returns are much lower than the North America business. Just wondering how you're thinking about that business strategically, long-term, does it make sense in the portfolio? As an analyst, we get increasing number of questions about that over the last, 12, 18 months. Thanks.

好的。然後就中國而言，我的意思是，業務大幅下滑，然後一段時間參差不齊，回報率遠低於北美業務。只是想知道您如何從長期策略角度考慮該業務，它在投資組合中是否有意義？身為分析師，在過去 12、18 個月裡，我們收到越來越多的相關問題。謝謝。

Yes, that's a fair question. I mean, let me step back. A. O. Smith is a long term company, and when we sit back and look at the markets, there's three markets that I think A. O. Smith should participate in and be a part of going forward on a long-term basis, obviously is the US. I would tell you China is right behind that.

是的，這是一個公平的問題。我的意思是，讓我退後一步。A. O. Smith 是一家長期發展的公司，當我們坐下來觀察市場時，我認為 A. O. Smith 應該參與並成為長期發展的一部分，這三個市場顯然是美國。我想告訴你，中國就是這背後的支持者。

It's the second largest economy moving potentially to the number one economy in the market still has a lot of upside from urbanization in the middle class. And the third is India. And you put those three countries together where we have footprints in those markets, strong brands, strong organization.

它是第二大經濟體，有可能成為市場第一大經濟體，中產階級的都市化仍有很大的好處。第三個是印度。將這三個國家放在一起，我們在這些市場上都有足跡，擁有強大的品牌和強大的組織。

So to answer your question more on a holistic standpoint, we're very comfortable in the markets that we're in and we see them have an upside, albeit some markets go through some tough patches and we're going through one in China. But long-term we still feel the demographics and so forth and the economics make sense for A. O. Smith.

因此，從整體角度更多地回答你的問題，我們對我們所處的市場感到非常滿意，並且我們看到它們有上升的空間，儘管一些市場經歷了一些艱難的時期，而我們在中國正在經歷一個時期。但從長遠來看，我們仍然認為人口統計等因素以及經濟學對 A. O. 史密斯來說是有意義的。

Matt Summerville, D.A. Davidson Co.

馬特·薩默維爾，D.A.戴維森公司

Maybe just to follow up on China. Obviously any early read you have on how we should be thinking about that business in 2025 in the context of the stimulus that you mentioned and do you feel like this is the beginning of a longer duration down cycle in China? I'm just kind of getting back to Jeff's comment, which I thought was a fair one. I mean, this business has not been able to sustain, string together a multiyear period of growth since the late 2010's.

也許只是為了跟進中國。顯然，您是否有關於在您提到的刺激措施背景下我們應該如何考慮 2025 年該業務的早期讀物？我只是想回到傑夫的評論，我認為這是一個公平的評論。我的意思是，自 2010 年代末以來，這項業務一直無法維持多年的成長。

Yes, I think it's a little early on the stimulus side. We do think that's a positive outcome that, that we still need more information about. But again, as you look at it, I think the government of China realizes that they need to do something. They've announced a number of stimulus programs to increase credit to the stall construction projects.

是的，我認為刺激措施還為時過早。我們確實認為這是一個積極的結果，我們仍然需要更多資訊。但同樣，當你看到它時，我認為中國政府意識到他們需要做些什麼。他們宣布了一系列刺激計劃，以增加對攤位建設項目的信貸。

They've canceled purchasing restrictions, lower mortgage rates down. They put out a litany of lists I think are going to have a positive impact. However, we still don't know the size of the stimulus and that's an important part of it. But again, when you look at the market, you look at our brand, you look at our value proposition there, we still think there's upside.

他們取消了限購，降低了抵押貸款利率。他們列出了一系列我認為會產生正面影響的清單。然而，我們仍然不知道刺激計劃的規模，而這是其中的重要組成部分。但同樣，當你看看市場、我們的品牌、我們的價值主張時，我們仍然認為有上升的空間。

Again, it's been a tougher haul the last few years, particularly coming out of COVID. But again, the stimulus programs, people are talking about our brand positioning, our distributors and so forth. We still feel good about the business. Now when's it going to come out of that? That's a whole different story.

過去幾年的情況再次變得更加艱難，尤其是在新冠疫情之後。但同樣，在刺激方案中，人們正在談論我們的品牌定位、我們的經銷商等等。我們對這項業務仍然感覺良好。現在什麼時候才能解決這個問題？那是一個完全不同的故事。

We don't forecast that, but we do prepare our business to do business in that environment and we talked about that, how we're assessing the business today. But overall it's, I think we'll get some good indication of what the stimulus looks like over the next few weeks and then we'll start to tie that back into what it means for our business going forward.

我們不會預測這一點，但我們確實準備好讓我們的業務在這種環境下開展業務，我們討論了這一點，以及我們今天如何評估業務。但總的來說，我認為我們將在接下來的幾週內得到一些有關刺激措施的良好跡象，然後我們將開始將其與我們未來業務的意義聯繫起來。

Then just as a follow up, you mentioned what sounds like it may be more of a sustained pivot in your North America commercial business to electric away from gas. Are you appropriately capacitized today to address that market trend? Help me kind of understand a little bit more about what's going on there.

然後，作為後續行動，您提到聽起來這可能更像是您的北美商業業務從天然氣轉向電力的持續轉向。您今天是否有適當的能力來應對這一市場趨勢？幫助我更多地了解那裡發生的事情。

Yes, Matt, we're very comfortable with our share in both electric and gas. And if you recall, earlier in the year we were talking a bit about being heavier on the gas side of the business, which helped us a bit in Q1 and Q2. And now it's real what we're really seeing is a little bit of an unwind of that and from a headwind.

是的，馬特，我們對電力和天然氣的份額感到非常滿意。如果你還記得的話，今年早些時候，我們曾討論過加大天然氣業務的力度，這對我們在第一季和第二季有所幫助。現在，我們真正看到的是，這種情況和逆風有所緩解。

We'll be facing that in the back half of the year. But we're very comfortable with our capacity and our position in both electric and gas commercial.

我們將在今年下半年面對這個問題。但我們對我們在電力和天然氣商業領域的能力和地位非常滿意。

Got it. Thank you guys.

知道了。謝謝你們。

Saree Boroditsky, Jefferies.

薩雷·博羅迪茨基，傑弗里斯。

Hi, good morning. Just as we look towards 2025, can you just walk us through the impact of the tankless water heater factory switch on both the rest of the world and North America segments? Because I think it should be a maybe a headwind to rest of world sales, but a margin benefit. So it should be helpful to kind of walk through those impacts as we look to next year.

嗨，早安。正如我們展望 2025 年一樣，您能否向我們介紹即熱式熱水器工廠開關對世界其他地區和北美市場的影響？因為我認為這可能會對世界其他地區的銷售產生不利影響，但會帶來利潤率效益。因此，在我們展望明年時，回顧這些影響應該會有所幫助。

Yes, we will reserve, kind of framing it in a lot of detail as far as what it actually means for 2025. But the headwind that we're talking about this year and we've been talking about 50 basis points to the full year to launch tankless and Kevin mentioned we're a little behind. So most of the weight, it'll be a little less than that because we're a little behind.

是的，我們會保留它對 2025 年實際意義的詳細描述。但我們今年談論的逆風，我們一直在談論全年推出無罐車的 50 個基點，凱文提到我們有點落後。所以大部分重量會比這個少一點，因為我們有點落後。

But most of the weight will hit the fourth quarter going into next year. We would still expect a headwind. There's some benefit to the rest of the world from the volume perspective. But as we've talked about, we'll be transitioning that product from manufacturing in China to our Juárez facility over the course of 2025.

但大部分影響將集中在明年第四季。我們仍然預計會遇到阻力。從數量角度來看，這對世界其他地區有一些好處。但正如我們所討論的，我們將在 2025 年將該產品從中國製造轉移到我們的華雷斯工廠。

So there will be a continued headwind into 2025, but we'll frame that a little bit closer as we get into the end of January and on our fourth quarter call.

因此，到 2025 年將會持續存在逆風，但當我們進入 1 月底和第四季度電話會議時，我們會更接近這一點。

Thank you. And maybe just digging into the residential water heaters in North America a little bit more. It seems like, quarter to date shipments are up for the industry. So you just help us understand how you performed in residential water heater volume from a volume perspective in the third quarter. How did this differ from the market, and if there was a difference, why is that the case? Thank you.

謝謝。也許只是再深入研究一下北美的家用熱水器。該行業季度至今的出貨量似乎有所上升。因此，您只是幫助我們從第三季的銷售角度了解您在家用熱水器銷售方面的表現。這與市場有何不同？謝謝。

Yes. Again, the data you see is always a month or two behind. So based on our September and how we finished the quarter, we look at the industry having a pretty good shift back down in that 10% range, if you will. It's going to come in line to where we thought that the 3% you're talking about, we don't believe it's going to stick. There's going to be further softening in that number.

是的。同樣，您看到的數據總是落後一兩個月。因此，根據 9 月的情況以及本季的結束情況，我們認為該行業在 10% 的範圍內出現了相當好的轉變（如果你願意的話）。這將與我們認為的你所說的 3% 一致，我們不相信它會持續下去。這個數字將會進一步減弱。

And that's why we're, we've been pretty consistent. We talked about it being flat for the rest of the year, and we're, as Chuck just mentioned, we think it's flat to maybe slightly down by the time we exit 2024. So, I just think it's timing in the orders and how things are, are actually going to play out in 2024. But we're very comfortable. We think that the industry is going to be relatively flat.

這就是為什麼我們一直都非常一致。我們談到今年剩餘時間它會持平，正如查克剛才提到的，我們認為到 2024 年退出時，它會持平甚至可能略有下降。所以，我只是認為訂單的時機和情況實際上將在 2024 年發揮作用。但我們很舒服。我們認為該行業將相對穩定。

Bryan Blair, Oppenheimer.

布萊恩布萊爾，奧本海默。

Morning, Bryan. Hey, Bryan. If you can hear us, we can't hear you.

早安，布萊恩。嘿，布萊恩。如果您能聽到我們的聲音，我們就聽不到您的聲音。

Bryan Blair from Oppenheimer. Your line is now open. Please proceed. One moment for our next question. Our next question comes from the line of Mike Halloran from Baird.

奧本海默的布萊恩·布萊爾。您的線路現已開通。請繼續。請稍等一下我們的下一個問題。我們的下一個問題來自貝爾德 (Baird) 的 Mike Halloran。

Good morning, everyone.

大家早安。

Hey, Mike.

嘿，麥克。

So just kind of following up on the last question there, maybe just talk about what sellout dynamics look like from an industry perspective. So I guess kind of twofold, is it more stable from a sellout perspective and then secondarily, when you look at your specific sellout data through your channel, I mean, is that what kind of backs up the stable share side of things from your perspective?

因此，只是跟進最後一個問題，也許只是從行業角度談談銷售動態。所以我想是雙重的，從銷售的角度來看它是否更穩定，其次，當你透過你的管道查看你的具體銷售數據時，我的意思是，從你的角度來看，什麼樣的支持穩定的份額方面？

Yes. I would tell you we don't have perfect Mike, we don't perfect sell out information, but we do communicate with our customers on a pretty regular basis. And it varies by market. But we have distributors that are plus, say, low single digits up to some that are low single down. I think some of them are leaning a bit more to kind of even. But the feedback we're getting is things have slowed a little bit.

是的。我想告訴你，我們沒有完美的麥克，我們沒有完美的售罄訊息，但我們確實定期與客戶溝通。而且它因市場而異。但我們有一些分銷商，例如低個位數的分銷商，也有一些低個位數的分銷商。我認為他們中的一些人更傾向於平衡。但我們得到的回饋是事情已經放緩了一點。

But know, overall, the market's still holding up and, but it's going to be in that kind of flattish zone as we go forward and don't see anything changing there right now based on the customer feedback that we have, and that goes for both our residential business and our commercial business.

但要知道，總體而言，市場仍然保持堅挺，但隨著我們前進，它將會處於那種平坦區域，根據我們掌握的客戶反饋，目前看不到任何變化，這也是如此。和商業業務。

Yes. And I would just add that, one of the insights we get is we do that proactive replacement survey. And so we did that again this quarter and it's maintained relatively in the same position. So proactive replacement has been fairly strong. So we don't, we don't see a concern on proactive replacement movement down as of this quarter.

是的。我想補充一點，我們得到的見解之一是我們進行了主動更換調查。因此，我們本季再次這樣做，並且保持相對相同的位置。所以主動替代已經相當強勁了。所以我們不認為，截至本季度，我們沒有看到對主動更換活動下降的擔憂。

Right. Thanks for that. And then secondarily, just maybe talk about how you're thinking about steel cost and kind of the price cost trend from here as we, as we look at the fourth quarter and then, kind of loose thoughts on steel curve into the front part of next year.

正確的。謝謝你。其次，也許可以談談您如何看待鋼鐵成本以及價格成本趨勢，因為我們在觀察第四季度時，然後對鋼鐵曲線的前半部分有一些寬鬆的想法明年。

Yes, I mean, we've gone to the fourth quarter. We had a little bit of help on steel since steel took a tick, favorable of about, maybe 15% movement from Q3 to Q4. Some of that also is timing as we slow down kind of volumes, we've got a little bit of a lag and we're going to experience that.

是的，我的意思是，我們已經進入第四季了。由於鋼鐵價格上漲，從第三季到第四季度，我們在鋼鐵方面得到了一些幫助，大約有 15% 的變動。其中一些也是因為我們放慢了交易量的時機，我們有一點滯後，我們將會經歷這一點。

But our price, the other costs, I mean, I think we, in our prepared remarks, we said overall material costs relatively flat. So while still is a little favorable for the fourth quarter year, fourth quarter and the year other material costs are a little bit unfavorable. So relatively flat. So price costs, we feel pretty stable on going into the fourth quarter.

但是我們的價格，其他成本，我的意思是，我認為我們在準備好的發言中說，整體材料成本相對平穩。因此，雖然第四季仍然有點有利，但第四季和其他材料成本有點不利。所以比較平坦。因此，價格成本，我們感覺進入第四季相當穩定。

David MacGregor, Longbow Research.

大衛‧麥格雷戈，長弓研究中心。

Yes. Good morning, everyone. Thanks for taking the questions. You had talked in your prepared remarks about with respect to North American water heater, the de-stock and just softer conditions, slightly slower coating activity, I think is what you said. Is it your sense that this is just replacement demand slowing down?

是的。大家早安。感謝您提出問題。您在準備好的評論中談到了北美熱水器的去庫存和更軟的條件，稍微放緩的塗層活動，我想這就是您所說的。您是否認為這只是更換需求放緩？

You've indicated proactive is stable, or is it just builder and particularly maybe multifamily starting to impact that? And I guess to what extent you can talk about these factors that you've identified as having a negative influence on North American second half. Are they expected to carry forward as earnings headwinds into '25, where you're largely looking upon these as second half '24 issues?

您已經表示主動性是穩定的，還是只是建築商，特別是多戶家庭開始影響這一點？我想您可以在多大程度上談論您認為對北美下半年產生負面影響的這些因素。預計它們是否會因為盈利逆風而延續到 25 年，而您在很大程度上將這些視為 24 年下半年的問題？

Yes, I guess I would take it that replacements obviously continues to be stable. As Chuck just mentioned, it's been four years that we've had proactive replacement at the higher level. So I'm almost calling that a trend now. And so when we look at the quarter and the lower order rates, we really believe that was primarily driven by inventory and just people rebalancing their inventories for one hour lead times, but also for maybe a bit slower demand over their counter. So that's really, I think the key part of it.

是的，我想我會認為替代品顯然繼續保持穩定。正如查克剛才所提到的，四年來我們一直在高層進行主動更換。所以我現在幾乎稱之為一種趨勢。因此，當我們看到本季和較低的訂單率時，我們確實認為這主要是由庫存推動的，只是人們在一小時的交貨時間內重新平衡庫存，但也可能是因為櫃檯的需求可能會放緩一些。我認為這確實是其中的關鍵部分。

It was an inventory correction driven by lead times coming down and I, the rest of the business seems to be pretty stable. Multifamily is down a little bit, but I don't think that's going to be a big driver as we close Q4.

這是由交貨時間縮短推動的庫存調整，而我，其餘業務似乎相當穩定。多戶住宅略有下降，但我認為隨著第四季度的結束，這不會成為一個很大的推動因素。

I'll add that, we do get comfort on kind of what we see in trends overall residential order rates. So we said on our last call in July, order rates were down. We saw August also a bit down in order rates and residential, but then September took a tick up in order rates and October months to date is also up a bit. So, that trend just is very positive and gives us a confidence that it's largely related to the pre buy as you go into the fourth quarter.

我要補充一點，我們確實對整體住宅訂單率趨勢中看到的情況感到滿意。因此，我們在 7 月的最後一次電話會議上表示，訂單率有所下降。我們看到 8 月的訂單率和住宅價格也略有下降，但隨後 9 月的訂單率有所上升，而 10 月迄今也有所上升。因此，這種趨勢非常積極，讓我們相信這在很大程度上與進入第四季時的預購有關。

Scott Graham, Seaport Research Partners

斯科特·格雷厄姆，海港研究合作夥伴

Hi. Good morning. Thanks for taking the questions.

你好。早安.感謝您提出問題。

Hey, Scott.

嘿，斯科特。

I wanted to just talk about China again because you had organic positive in the first half and third quarter was a pretty significant turnaround from that. And I know you talked about pricing and I guess it would be the upper middle price point, but that's, I thought, less than half of those sales. So could you unbundle that for us a little bit? What do you think caused the significant flip in China sales in the third quarter versus the first half?

我想再談論中國，因為上半年有有機正面的結果，第三季是一個相當重大的轉變。我知道您談到了定價，我猜這將是中上價格點，但我認為這還不到銷售額的一半。那您能為我們稍微分解一下嗎？您認為是什麼原因導致第三季中國銷售額與上半年相比大幅轉變？

Yes, I'm going to give you what we feel are some possible reasons for it. It comes back to consumer confidence. And if you look at the Q3, there's two items. GDP doesn't always tell us a whole lot, but one area that we look at constantly is property development and what's happened in that property market, and it got significantly worse, hasn't been addressed.

是的，我將向您提供我們認為的一些可能的原因。這又回到了消費者信心。如果你看 Q3，你會發現有兩個項目。GDP並不總是能告訴我們很多訊息，但我們經常關注的一個領域是房地產開發，以及房地產市場發生的事情，而且情況變得更加糟糕，但尚未解決。

And so if you look at it. If you own property, about 70% of the Chinese consumer’s wealth is in property, so that's continuing to decline. So I think that's driven some real poor confidence by the consumer and really holding back their spending.

所以如果你看看它。如果你擁有房產，那麼中國消費者大約 70% 的財富都在房產上，所以這個比例還在持續下降。因此，我認為這導致了消費者信心不足，並真正抑制了他們的支出。

And I think it accelerated in Q3. And if you look at employment also, it's been a challenge there. And a lot of that I think happened in Q3 and it just accelerated the lack of consumer confidence where consumers just stepped back and decided they weren't going to spend unless it was absolutely necessary.

我認為第三季加速了。如果你也看看就業狀況，你會發現這也是一個挑戰。我認為很多事情發生在第三季度，這加劇了消費者信心的缺乏，消費者只是後退一步，決定除非絕對必要，否則他們不會花錢。

Those, that's how we feel. The quarter, I mean, it was going along pretty well, as you talked about for the first six months, but there was a change there, particularly in the property sector, that I think got the consumers attention.

那些，這就是我們的感受。我的意思是，正如您在前六個月中談到的那樣，該季度進展得相當順利，但那裡發生了變化，特別是在房地產領域，我認為這引起了消費者的關注。

Just one other, one other add on to that and Kevin's, Kevin's comments cover the majority of the impact for the quarter. We also did launch our kitchen products last year in Q3, so we're anniversarying that and up against kind of our launch of that. We didn't have any benefit for kitchen products quarter-over-quarter, year-over-year. As we've come across that anniversary of launching those products.

僅此而已，還有凱文的評論，凱文的評論涵蓋了本季的大部分影響。去年第三季我們也確實推出了廚房產品，所以我們正在慶祝這一周年紀念，並與我們推出的產品進行比較。我們的廚房產品環比、同比沒有任何好處。當我們遇到推出這些產品的周年紀念日。

That makes a lot of sense. Thank you for that color. I guess really the other question is on tankless. I think obviously you had high hopes in that area. What do you think is the drawback here? Is it maybe just that the market has weakened a little bit for, let's say on the, maybe on the proactive side, it would seem, because the housing stats haven't really gotten worse. Right. So maybe on the proactive side, has that led into that sort of weaker reception to new products and in this case, the tankless?

這很有意義。謝謝你的那個顏色。我想實際上另一個問題是關於無罐的。我認為顯然您對該領域抱有很高的期望。您認為這裡的缺點是什麼？也許只是市場稍微走軟了，比如說，也許是在積極主動的方面，因為住房統計數據並沒有真正變得更糟。正確的。那麼，也許從積極主動的角度來看，這是否會導致人們對新產品（在這種情況下是無罐車）的接受度減弱？

No, I don't think it's that specific. Remember we launched one product category that was our premium condensed premix product line. So that's the upper end of the market as we launched it. And again, there's still two other product lines that we'll be launching in early 2025. It might have got caught up a little bit into Q3 and some of the destocking that happened there.

不，我認為沒有那麼具體。請記住，我們推出了一個產品類別，即我們的優質濃縮預混料產品線。這就是我們推出時的高階市場。同樣，我們也將在 2025 年初推出另外兩條產品線。它可能會在第三季受到一些影響，並發生一些去庫存的情況。

But if I step back, it's, this is a long term approach. You have to. My view is we're going to have to take share on a regular basis as we go forward. We think we have the product lines, the features and benefits. Being North America, having our own control, I think is going to be terrific. It's going to reduce lead times for our customers.

但如果我退後一步，這是一個長期的方法。你必須這樣做。我的觀點是，在我們前進的過程中，我們必須定期分享。我們認為我們擁有產品線、功能和優勢。作為北美，擁有我們自己的控制權，我認為這會很棒。這將減少我們客戶的交貨時間。

They'll be able to put it on their trucks with water heaters. So there's a number of things that come along here, but we're in the early, early stages. We just launched it in May, but we just wanted to give you some color, how things were going forward. But as we start to launch the new product, start to build out, we're still very comfortable and as we mentioned in our analyst meeting, that we feel there's $100 million incremental sales for us as we get towards 2026.

他們可以把它放在有熱水器的卡車上。所以這裡出現了很多事情，但我們還處於早期階段。我們剛剛在五月推出了它，但我們只是想讓您了解一些事情的進展。但當我們開始推出新產品、開始擴建時，我們仍然感到非常滿意，正如我們在分析師會議上提到的，我們認為，到 2026 年，我們的銷售額將增加 1 億美元。

So, Scott, I just think it's just too early to make any assumptions there. Well, the full product line, we should see a nice tick up as we enter in 2025.

所以，斯科特，我只是認為現在做出任何假設還為時過早。嗯，整個產品線，進入 2025 年時我們應該會看到一個不錯的增長。

Nathan Jones, Stifel.

內森瓊斯，斯蒂菲爾。

Good morning, everyone.

大家早安。

Good morning.

早安.

I wanted to just ask a question on the shortened lead times. My recollection is that your lead times have got back to normal post COVID, like a couple of years ago. So maybe you can provide just a little bit more color on what you're talking about on lead times. Did they extend out and they've come back in again, or have you reduced them further or just what the details around that comment are?

我只是想問一個關於縮短交貨時間的問題。我記得，你們的交貨時間在新冠疫情之後已經恢復正常，就像幾年前一樣。因此，也許您可以就您所談論的交貨時間提供更多的資訊。它們是否延伸出去並再次回來，或者您是否進一步減少了它們，或者該評論的詳細資訊是什麼？

I think your memory is perfect. But they did get extended out when we did the price increase in Q1 and Q2. And so, and as we talked about, that increase was a little bit lower. That increase was, we thought would have a minimal impact, but our customers really bought into the maximum amount they could. That raised our lead times up again. If you look at an overall part of our business, our boiler lead times are in good shape.

我認為你的記憶力是完美的。但當我們在第一季和第二季漲價時，它們確實得到了延長。因此，正如我們所討論的，增幅略低一些。我們認為這種增加只會產生最小的影響，但我們的客戶確實購買了他們能購買的最大金額。這再次延長了我們的交貨時間。如果您縱觀我們業務的整體情況，您會發現我們的鍋爐交貨時間狀況良好。

Our water treatment lead times are in good shape. But that point in time for North America water heating, that increase did put us out almost double our normal lead times. And that was a reason for it. It was a specific event, and this took us a little bit longer than we anticipated to work it down.

我們的水處理交貨時間狀況良好。但在北美熱水加熱的那個時間點，這種增長確實使我們的交貨時間幾乎是正常交貨時間的兩倍。這就是原因。這是一個特定的事件，我們花了比預期更長的時間來解決這個問題。

So that's why you're hearing lead times back and forth. But we're really across most of, I'd say all of our businesses. Our lead times are pretty much where they need to be, providing there's some kind of event like an increase that would change that.

這就是為什麼您會反覆聽到交貨時間的原因。但我們確實涵蓋了大部分業務，我想說的是我們的所有業務。我們的交貨時間幾乎已經達到了所需的水平，只要有某種事件（例如增加交貨時間）會改變這種情況。

Okay. And I wanted to ask a question on China from a different angle. It sounds like you don't have enough information to kind of figure out what impact this one will have. But you have been through cycles where China's provided stimulus to the market before, not deliberately for water heater markets, but for consumer spending.

好的。我想從不同的角度問一個關於中國的問題。聽起來您沒有足夠的資訊來弄清楚這會產生什麼影響。但中國之前曾經歷中國刺激市場的週期，不是故意刺激熱水器市場，而是刺激消費者支出。

Can you maybe just give us a little color on some of the previous stimulus impacts that you've seen from the Chinese government, kind of how long that typically takes to flow through to the consumer? Any kind of magnitude you can put around that just from a historical perspective?

您能否向我們介紹一下您從中國政府看到的一些刺激措施的影響，以及通常需要多長時間才能影響消費者？僅從歷史角度來看，您可以將其置於何種程度？

Yes. I would tell you this is probably a bit different than the prior stimulus is. There was still a lot of FDI going into the country and people were expanding and the environment's changed. So if you go back historically on this now it's just a different environment. The market is much more mature.

是的。我想告訴你，這可能與之前的刺激措施有所不同。仍有大量外國直接投資進入該國，人口不斷擴大，環境也發生了變化。所以如果你回顧歷史，現在只是一個不同的環境。市場更加成熟。

I think the property sector, this issue, there is one that they have to deal with they haven't had to deal with in the past. So I would really be cautious about us trying to predict how and when China will come out of this.

我認為房地產行業，這個問題，他們必須處理一個他們過去從未處理過的問題。因此，我對我們試圖預測中國將如何以及何時擺脫困境持謹慎態度。

I do think though, the steps that they're talking about taking in and it seems to be serious where they were doing more incremental stimulus and they're leaning in on a bit more larger stimulus package to move the economy. I think it's a good thing, but I couldn't really give you a prediction of when we think will come out of it. We know what they'll come out of it in some form or fashion down the road.

不過，我確實認為，他們正在談論的採取的步驟似乎很嚴重，他們正在實施更多的增量刺激措施，並且他們正在依靠更大規模的刺激計劃來推動經濟發展。我認為這是一件好事，但我無法真正預測我們何時會擺脫困境。我們知道他們將來會以某種形式或方式從中得到什麼。

We just, and again, I think what we're going to do is we're going to manage our business on the current environment, make the adjustments we need to make. We still have a strong brand there and then as it starts to come out, we'll be in position to really benefit from that as things start to get better in China from an economic standpoint.

我們只是，我想我們要做的是在當前環境下管理我們的業務，並做出我們需要的調整。我們在那裡仍然擁有強大的品牌，然後當它開始出現時，隨著中國從經濟角度來看情況開始好轉，我們將能夠真正從中受益。

I would add that we have in the past heard of appliance programs specific to appliances that have not really gained much traction. But I would say the most recent program that they've announced, a trade in program at least appears at early stages to be a little more specific, a little more qualified type of a program. So we'll see where that goes. But historically, the appliance programs have not been as specific as this last program, and again, it's early stages to that program.

我想補充一點，我們過去聽說過專門針對電器的電器計劃，但這些計劃並沒有真正獲得太多關注。但我想說的是，他們最近宣布的計劃，以舊換新計劃至少在早期階段看起來是一種更具體、更合格的計劃類型。所以我們會看看會發生什麼。但從歷史上看，家電計劃並不像最後一個計劃那麼具體，而且現在還處於該計劃的早期階段。

Damian Karas, UBS.

達米安卡拉斯，瑞銀。

Hey, good morning, everybody. A couple follow up questions on China. When you were talking about the water heater business there, it sounded like you're seeing varying trends in the premium side of the market versus the mid-tier price portion of your business. Could you maybe just break out the numbers to help us better understand kind of like what the difference was in the year of a trends for those two pieces?

嘿，大家早安。有幾個人跟進了有關中國的問題。當您談論那裡的熱水器業務時，聽起來您看到了高端市場與您業務的中端價格部分的不同趨勢。您能否簡單地列出一些數字，以幫助我們更好地了解這兩件作品的流行趨勢在當年有何不同？

Well, I would say overall, we're feeling that the entire market is a bit down. So, we're feeling that. I think we're down about 17% in local currency. And I'd say it's fairly, fairly even. We feel like we've protected the premium position that we had.

嗯，我想說，總的來說，我們感覺整個市場有點下跌。所以，我們有這樣的感覺。我認為以當地貨幣計算我們下跌了約 17%。我想說這是相當非常均勻的。我們覺得我們已經保護了我們擁有的優質地位。

So our share from how we can measure it. It's always a challenge to measure share in China that we predicted our premium position, but the whole market, we feel, is a bit down, probably down a little bit more on the upper mid-price of the market because we did not fully participate in all the promotional programs. But overall, we just feel the whole market is a bit depressed based on some of the factors that Kevin mentioned earlier.

因此，我們的份額取決於我們如何衡量它。衡量我們在中國的份額始終是一個挑戰，因為我們預測了我們的溢價地位，但我們認為整個市場有點下降，可能會比市場中高端價格下降更多一點，因為我們沒有充分參與在所有促銷計劃中。但總的來說，基於凱文之前提到的一些因素，我們只是覺得整個市場有點低。

And I would just add to that again, we've been very selective. You got to remember, we sell one water heater at a time to a consumer. So if we don't participate in a promotion, someone's going to maybe lean towards a competitive brand.

我想再補充一點，我們非常有選擇性。您必須記住，我們一次向消費者銷售一台熱水器。因此，如果我們不參加促銷活動，有人可能會傾向於競爭品牌。

But overall, our brand is strong, and we're going to continue to take our targeted approach to promotions and think about the long-term value of the A.O. Smith brand and our premium position, which I think is held up really well in this difficult environment.

但總的來說，我們的品牌很強大，我們將繼續採取有針對性的促銷方法，並考慮 A.O. 的長期價值。史密斯品牌和我們的優質地位，我認為在這個困難的環境中我們的地位非常好。

Got it. Okay. And then just thinking about that 17% core sales decline, how much of that was purely kind of volume pressures versus maybe negative price and mix impacts?

知道了。好的。然後想想 17% 的核心銷售下降，其中有多少純粹是銷售壓力，而不是價格和組合的負面影響？

Mostly all volume, Damian.

大部分都是卷，達米安。

Yes, it's substantially all volume. You know, there's pricing pressure, and again, we didn't participate in all of that pricing pressure, but there's a little pressure on next. But the majority of that decline in volume.

是的，基本上都是音量。你知道，存在定價壓力，而且我們沒有參與所有的定價壓力，但接下來會有一點壓力。但其中大部分是成交量下降。

David McGregor, Longbow Research.

大衛‧麥格雷戈，長弓研究中心。

Yes, thanks for taking the follow up. I guess. Just again, on China, where are unit volumes today on your premium segment, water heaters versus or maybe as a percentage of pre-COVID levels?

是的，感謝您的跟進。我猜。再說一次，在中國，您的高端細分市場的單位銷售（熱水器）與新冠疫情前的水平相比或可能佔其百分比是多少？

Well, if you go back, and if you go back pre 2019, 2018, the majority of our sales were falling into the premium category and keeping the same baseline measurement on how we define premium. In the third quarter, quarter-over-quarter, year-over-year, we actually saw an increase in the premium portion of our market that we sold. So a little over 60% on the water heating side is in the premium category. And I would say on the water treatment side, it's a little bit less. We're kind of hovering the 40% to 30% premium.

好吧，如果你回顧一下，如果你回顧 2019 年、2018 年之前，我們的大部分銷售額都屬於高端類別，並且對我們定義高端的方式保持相同的基準衡量標準。在第三季度，環比、同比，我們實際上看到我們銷售的市場的優質部分增加。因此，熱水方面 60% 多一點屬於高端類別。我想說的是，在水處理方面，它有點少。我們的溢價徘徊在 40% 到 30% 之間。

Great. I guess I was just trying to get a sense of a compare versus where you were pre-COVID.

偉大的。我想我只是想與新冠疫情爆發前的情況進行比較。

Pre-COVID. Before we saw a downturn a bit in the market, we were above 90% premium. The majority of our product was premium, particularly on the water heating side at that time.

新冠疫情之前。在我們看到市場略有下滑之前，我們的溢價超過 90%。我們的大部分產品都是優質產品，特別是當時的熱水方面。

Bryan Blair, Oppenheimer.

布萊恩布萊爾，奧本海默。

Good morning, everyone.

大家早安。

Good morning.

早安.

Unfortunately, it's a technical issue, so I cut out from the call for a bit. I apologize if I'm repeating any questions there. You mentioned optimizing costs both China and North America in response to demand conditions. Are there structural costs actions that are in flight right now? If so, can you quantify the anticipated savings or are these more variable moves for the timing?

不幸的是，這是一個技術問題，所以我暫時退出了通話。如果我在那裡重複任何問題，我深表歉意。您提到根據需求狀況優化中國和北美的成本。目前是否正在採取結構性成本行動？如果是這樣，您能否量化預期的節省，或者這些變化是否適合時機？

Well, I'll cover China separately from North America. I mean, I'll say in North America we've made a few moves by realigning, aligning production between plants. We've reduced some headcount through attrition.

好吧，我將分別介紹中國和北美。我的意思是，我想說在北美，我們透過重新調整、調整工廠之間的生產採取了一些措施。我們透過自然減員減少了一些員工人數。

We've balanced, really production and headcount at our largest facility. So taking some actions in the manufacturing facility to be able to adjust to the volumes in the third quarter, which did cause a headwind to our margin in Q3, but feel like we're in a decent position going out of Q3 into Q4 in North America. In China, when we're looking at China, we have really two pieces.

我們最大的工廠的生產和員工數量確實實現了平衡。因此，在製造工廠中採取了一些行動，以便能夠適應第三季度的產量，這確實對我們第三季度的利潤率造成了不利影響，但感覺我們在北方從第三季度到第四季度處於一個不錯的位置美國。在中國，當我們審視中國時，我們實際上有兩塊。

One is we're always looking at cost reduction. It's part of our process and it's part of our process through looking at product innovation, redesigning product to take cost out, process improvement in the plant. So that's an ongoing process along with that ongoing process, particularly since COVID is looking at the efficiencies of our store footprint, looking to streamline and improve the efficiencies and what we support for retail outlets.

一是我們一直在尋求降低成本。這是我們流程的一部分，也是我們流程的一部分，透過專注於產品創新、重新設計產品以降低成本、工廠流程改善。因此，這是一個持續的過程，特別是因為新冠疫情正在研究我們商店足跡的效率，尋求簡化和提高效率以及我們對零售店的支持。

So those things continue. And in the current environment, as we did going into COVID, we're challenging ourselves to evaluate structurally. Is this the right foundation? And we want to have the best foundation. So we're taking a look at kind of our cost in China to be in a stronger position for profitable growth in the future. We don't have a quantification of what that may or may not cost, but we'll be looking at that through the course of the quarter and be back talking about kind of where we're at on China when we get into January.

所以這些事情還在繼續。在當前環境下，正如我們在應對新冠疫情時所做的那樣，我們正在挑戰自己進行結構性評估。這是正確的基礎嗎？我們希望擁有最好的基礎。因此，我們正在考慮我們在中國的成本，以便在未來的獲利成長中處於更有利的地位。我們無法量化這可能會或可能不會花費什麼，但我們將在整個季度中對此進行研究，並在進入一月份時重新討論我們在中國的情況。

Understood. And perhaps offer a smart color on your pending peer at acquisition. I think high level and strategically makes a lot of sense. Just hoping you offer some detail on how the asset helps to accelerate profitable growth in South Asia and India in particular. The low to mid-single digit margin profile you have right now, the levers to the upside, is that as simple as scale channel presence? How else will that make your business that much stronger in the region?

明白了。也許還可以在收購時為您待定的同行提供智慧顏色。我認為高水準和戰略意義重大。只是希望您提供一些有關該資產如何幫助加速南亞和印度盈利增長的詳細資訊。您現在擁有的低至中個位數的利潤狀況，上行的槓桿，是否就像規模通道的存在一樣簡單？否則，這將如何使您的業務在該地區變得更強大？

Yes, those are two pretty important items that you just mentioned, scale and footprint, along with complementary brands in the markets. Pureit has some strengths. Certain markets like e-commerce that we don't. And you look at bringing the scale together and leveraging the various functions and so forth as we go forward, having access to different markets that maybe one side didn't then putting the combination together to, bring a package to a, some type of dealer or retailer. So the scale really matters. We're going to double our business in India, which is a big deal.

是的，這是您剛才提到的兩個非常重要的項目，規模和足跡，以及市場上的互補品牌。Pureit 有一些優勢。某些市場喜歡電子商務，但我們不喜歡。當我們前進時，你會考慮將規模整合在一起並利用各種功能等等，進入不同的市場，而這些市場可能是一方沒有將組合整合在一起，將一攬子計劃帶給某種類型的經銷商或零售商。所以規模確實很重要。我們將把印度的業務增加一倍，這是一件大事。

We're going to move to the number three market share position, which again, gives us that foundation that we're looking for. And it's been a goal for us. India is doing quite well, but organically, we just can't grow fast enough to get where we want to be.

我們將進入第三市場份額位置，這再次為我們提供了我們正在尋找的基礎。這一直是我們的目標。印度做得很好，但從有機角度來看，我們的成長速度不夠快，無法達到我們想要的目標。

And we think strategic acquisitions like Pureit are going to make a big difference as we scale that business up. I believe it's a perfect time coming up the election and where India is going to go. Having two strong water treatment brands in the market, being able to leverage the synergies between the two companies over the next year or two.

我們認為，隨著我們擴大業務規模，像 Pureit 這樣的策略性收購將會產生巨大的影響。我相信現在是大選的最佳時機，也是印度走向何方的最佳時機。在市場上擁有兩個強大的水處理品牌，能夠在未來一兩年內利用兩家公司之間的協同效應。

So when you put that all together, I think it's going to drive certainly incremental margins. And we're still in the early stages. We haven't closed, but I, we look forward to not only top line growth, but profitable growth and margin enhancement as we get into the first couple of years.

因此，當你把所有這些放在一起時，我認為這肯定會增加利潤。我們仍處於早期階段。我們還沒有結束，但我，我們不僅期待收入成長，而且在進入頭幾年時實現利潤增長和利潤率提高。

Andy Kaplowitz, Citigroup.

安迪‧卡普洛維茨，花旗集團。

Good morning, everyone.

大家早安。

Hey, Andy. Good morning.

嘿，安迪。早安.

Could you give us a little more color into how you're thinking about North American commercial water heaters? Obviously, you revised industry forecasts down a little bit, and you mentioned in the move toward electric versus gas, but what's the risk that commercial could still get a little worse before it gets better, given it does tend to lag? What happens in US residential water heaters?

您能否告訴我們您對北美商用熱水器的看法？顯然，您稍微下調了行業預測，並提到了向電力與天然氣的轉變，但考慮到商業確實往往滯後，在好轉之前仍然可能變得更糟的風險是什麼？美國住宅熱水器發生了什麼事？

It does lag a bit. But as we look at, again, we start with our coating, we look at our distributors inventory, replacement market. I think we don't really see a significant shift down coating still seems to be holding up pretty well. Again, remember, boilers plus water heating is 85%, 80%, 85% is replacement. And then, but there is a shift going on. We have a nice heat pump product line that is in the commercial space as well. And of course, we have the premier condensing commercial gas product line. So we just think there are just going to be different solutions we're going to have to work through.

確實有點滯後。但當我們再次審視時，我們從我們的塗層開始，我們專注於我們的經銷商庫存、替換市場。我認為我們並沒有真正看到明顯的向下轉變，塗層似乎仍然保持得很好。再次記住，鍋爐加水加熱是85%、80%、85%是替代品。然後，情況發生了轉變。我們在商業領域也有很好的熱泵產品線。當然，我們擁有一流的冷凝商用氣體產品線。所以我們只是認為我們必須解決不同的解決方案。

What I like about our position is we have a full portfolio from gas electric to heat pump technology to condensing high efficient gas product that we can provide that solution going forward. So again, we see it being relatively flat, but don't see a further downside to the business as we exit 2024.

我喜歡我們的立場，因為我們擁有從燃氣電動到熱泵技術再到冷凝高效氣體產品的完整產品組合，我們可以提供未來的解決方案。因此，我們再次看到它相對平穩，但隨著我們退出 2024 年，我們認為業務不會有進一步的下行趨勢。

That's helpful. And obviously boiler is still strong. I think you said you saw a modest slowdown in coating activity in boilers despite the overall strong growth. You mentioned the weaker residential boiler market. Are you at all concerned regarding slower slowdown in that market or generally still good outlook there?

這很有幫助。顯然鍋爐仍然很強大。我想您說過，儘管整體成長強勁，但鍋爐塗料活動略有放緩。您提到住宅鍋爐市場疲軟。您是否擔心該市場放緩速度放緩或整體前景仍然良好？

Well, we just look, we're kind of pointing out where we're at, what's happening here. Our commercial, our conditioned commercial boilers have outperformed the market this year. We've gained some share, feel really good about the pepper products, particularly some of the benefits that we have, like Hellcat technology.

好吧，我們只是看看，我們有點指出我們在哪裡，這裡正在發生什麼。我們的商用、空調商用鍋爐今年的表現優於市場。我們已經獲得了一些份額，對胡椒產品感覺非常好，特別是我們擁有的一些好處，例如 Hellcat 技術。

So there's still a lot of activity out there. We just said we saw some softness there. But again, I go back to 80%, 85% of this business is still replacement. We're heading into the cold season, which is always a good time for us. So just wanted to maybe just put that on the table.

所以那裡仍然有很多活動。我們只是說我們看到了一些柔軟的地方。但我再次回到80%，這個業務的85%仍然是替代品。我們即將進入寒冷的季節，這對我們來說總是一個好時機。所以只是想把它擺到桌面上。

But overall, business is going well. Our backlog is where we expect it to be. So overall performing really well. I do want to make one cautious. We were up significant, as we talked about, for the quarter, but if you go back, we were. That was a pretty easy comp. But we look going into Q4 as kind of a normalized run rate for our commercial boilers.

但整體而言，生意進展順利。我們的積壓工作正是我們所期望的。所以整體表現非常好。我確實想讓一個人保持謹慎。正如我們所說，本季我們的業績大幅成長，但如果你回頭看，我們確實是這樣。這是一個非常簡單的比較。但我們將第四季視為商業鍋爐的標準化運作率。

Jeff Hammond, KeyBank Capital Markets, Inc.

Jeff Hammond，KeyBank 資本市場公司

Hey, guys, just a quick follow up. Free cash flow. You cut pretty significantly, clearly the lower earnings, but just walk through the moving pieces.

嘿，夥計們，快速跟進一下。自由現金流。你大幅削減了收入，顯然收入也降低了，但只是簡單介紹一下那些變動的部分。

Yes, it's really two moving pieces there. One is inventory. Our inventory forecast is up. And you heard a little bit about us slowing a bit on our tankless plans. We still are very positive about tankless, but it's going to be a little slower out of the gate.

是的，這確實是兩個移動的部分。一是庫存。我們的庫存預測上調。你聽說我們在無罐計劃上放慢了一些速度。我們仍然對無坦克非常樂觀，但它的發展速度會慢一些。

And so we of our inventory, that's gone up a meaningful piece of that. Probably about 40% of the increase is due to carrying more tankless inventory than we would have at the end of last year. Some of that is planned. Some of that is just a little heavier than what we would have expected in July.

因此，我們的庫存增加了一個有意義的部分。大約 40% 的增長可能是由於我們擁有比去年年底更多的無罐庫存。其中一些是有計劃的。其中一些只是比我們七月份的預期重一點。

The other piece is in China. We get, we receive customer deposits in advance of shipments. And as we've seen, China slow, our projection on year end customer deposits just come down. So those are really the two major pieces.

另一件作品在中國。我們得到，我們在發貨前收到客戶押金。正如我們所看到的，中國經濟放緩，我們對年終客戶存款的預測剛剛下降。所以這確實是兩個主要部分。

Okay, thank you. Thank you. At this time, I would now like to turn the conference back over to Helen Gerhard for closing remarks.

好的，謝謝。謝謝。現在，我想將會議轉回由海倫·格哈德（Helen Gerhard）致閉幕詞。

Thank you for joining us today. Let me conclude by reminding you that our Global A. O. Smith team delivered solid execution while navigating many challenges in the third quarter. We look forward to updating you on our progress in the quarters to come.

感謝您今天加入我們。最後，我要提醒您，我們的全球 A. O. Smith 團隊在第三季克服了許多挑戰的同時，也提供了紮實的執行力。我們期待向您通報我們未來幾季的最新進展。

In addition, please mark your calendars to join our presentations at four conferences this quarter. Baird on November 12, North Coast on November 13, UBS on December 3, and Goldman Sachs on December 4. Thank you and enjoy the rest of your day.

此外，請標記您的日曆以參加我們在本季度的四場會議上的演講。貝爾德 (Baird) 於 11 月 12 日，北海岸 (North Coast) 於 11 月 13 日，瑞銀 (UBS) 於 12 月 3 日，高盛 (Goldman Sachs) 於 12 月 4 日。謝謝您，祝您有個愉快的一天。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。