A O Smith Corp (AOS) 2024 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the A. O. Smith Corporation fourth-quarter 2024 earnings conference call. (Operator Instructions)

您好，感謝您的支持。歡迎參加 A. O. Smith Corporation 2024 年第四季財報電話會議。（操作員指令）

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Helen Gurholt. Please go ahead.

請注意，今天的會議正在錄音。現在，我想將會議交給今天的發言人海倫古爾霍爾特 (Helen Gurholt)。請繼續。

Good morning, and welcome to the A. O. Smith full year and fourth-quarter conference call. I'm Helen Gerholt, Vice President, Investor Relations and Financial Planning and Analysis. Joining me today are Kevin Wheeler, Chairman and Chief Executive Officer; Steve Schafer, President and Chief Operating Officer; and Chuck Lauber, Chief Financial Officer.

早上好，歡迎參加 A. O. 史密斯公司全年和第四季度電話會議。我是 Helen Gerholt，投資者關係與財務規劃與分析副總裁。今天與我一起出席的還有董事長兼執行長 Kevin Wheeler；總裁兼營運長史蒂夫‧謝弗 (Steve Schafer)；以及財務長查克·勞伯（Chuck Lauber）。

In order to provide improved transparency into the operating results of our business, we provided 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 restructuring and impairment expenses and pension settlement income and expenses.

為了提高我們業務經營績效的透明度，我們提供了非公認會計準則指標。自由現金流定義為經營活動產生的現金減去資本支出。調整後收益、調整後每股收益、調整後分部收益和調整後企業費用不包括重組和減損費用以及退休金結算收入和費用的影響。

Reconciliations from GAAP measures to non-GAAP measures are provided in the appendix at the end of this presentation and on our website. A firmly 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. Those risks include matters that we described in this morning's press release amongst others.

本簡報末尾的附錄和我們的網站上提供了 GAAP 指標與非 GAAP 指標的對帳表。強烈提醒您，本次電話會議中的一些評論和答案將是前瞻性陳述，這些陳述存在可能導致實際結果產生重大差異的風險。這些風險包括我們在今天早上的新聞稿中描述的問題等。

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.

此外，為了尊重問題隊列中的其他人，請將自己每次只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。在今天的電話會議中，我們將使用幻燈片。您可以透過我們的網站 investor.aosmith.com 存取它們。

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

現在我將把電話轉給凱文，讓他開始我們的準備好的發言。請翻到下一張投影片。

Thank you, Helen, and good morning. First, I'd like to start off by saying that I'm pleased to have Steve Schaffer joining us on the call today. Steve joined A. O. Smith in March of last year, has spent the last 10 months getting to know our business, people, customers and operations.

謝謝你，海倫，早安。首先，我要說的是，我很高興史蒂夫謝弗今天能參加我們的電話會議。史蒂夫於去年 3 月加入 A. O. 史密斯公司，在過去的 10 個月裡一直在了解我們的業務、員工、客戶和營運。

His global leadership experience and strategic acumen have brought a valuable perspective to our business as we continue to create value for our key stakeholders. I'm pleased to have Steve as a member of our leadership team.

他的全球領導經驗和策略敏銳度為我們的業務帶來了寶貴的視角，讓我們能夠繼續為主要利害關係人創造價值。我很高興史蒂夫成為我們領導團隊的一員。

Turning to slide 4 and our financial performance. After a record 2023, our sales and earnings decreased in 2024. In North America, sales increased slightly as higher boiler and water treatment sales as well as water heater pricing benefits were offset by lower heater volumes. We experienced lower sales in China as a weak economy continued to negatively impact consumer demand, which led to a 4% price decrease in our Rest of World segment local currency third-party sales.

前往投影片 4，了解我們的財務表現。在創下歷史新高的 2023 年後，我們的銷售額和收益在 2024 年下降。在北美，鍋爐和水處理銷售額的增加以及熱水器定價優勢被熱水器銷售的下降所抵消，導致銷售略有增長。由於經濟疲軟持續對消費者需求產生負面影響，我們在中國的銷售額有所下降，導致我們世界其他地區分部當地貨幣第三方銷售額下降了 4%。

Our legacy Indian business sales grew 13% in Vulcan currency in 2024, which is approximately 2 times the market. We closed the Pure acquisition in the fourth quarter, which had a minimal impact on sales and earnings. With the strong business climate and the addition of Pureit, we continue to be excited about the long-term prospects of our India business. We returned $496 million of capital to shareholders with our dividend and share repurchases.

我們傳統的印度業務銷售額在 2024 年以 Vulcan 貨幣計算成長了 13%，約為市場的 2 倍。我們在第四季完成了對 Pure 的收購，這對銷售和收益的影響微乎其微。隨著強勁的商業環境和 Pureit 的加入，我們繼續對印度業務的長期前景感到興奮。我們透過股利和股票回購向股東返還了 4.96 億美元的資本。

And also in the fourth quarter, we completed construction of our tankless manufacturing facility. We put into action a strategy to improve the margin profile of our North America water treatment business. We began the process of reorganizing our China business to reduce costs and position us for profitable growth as the economy returns, and we announced our new sustainability goal of a reduction in water usage of 40 million gallons of water by 2030. This goal follows our previously announced and already achieved 10% greenhouse gas emission reduction goal.

並且在第四季度，我們完成了無水箱製造工廠的建造。我們實施了一項策略來改善北美水處理業務的利潤率。我們開始重組中國業務，以降低成本並在經濟復甦時實現盈利增長，並且我們宣布了新的可持續發展目標，即到 2030 年減少 4000 萬加侖的用水量。這一目標遵循了我們先前宣布的並且已經實現的10%溫室氣體減量目標。

Please turn to slide 5. We North America water heater sales decreased 1% in 2024 as pricing benefits were more than offset by lower volumes. We saw strong shipments in the first half of the year, which were then balanced out by lower second half as volumes were below our expectations. We project full year residential industry unit volumes were roughly flat to 2023.

請翻到投影片 5。由於定價優勢被銷售下降所抵消，我們北美熱水器銷售在 2024 年下降了 1%。我們看到上半年出貨量強勁，但由於下半年銷售量低於我們的預期，出貨量有所下降。我們預計，到 2023 年，全年住宅行業單位數量將大致持平。

We are confident in our stable retail and wholesale customer base, strong partnerships and competitive products. Based on customer conversations and certain stocking programs that we track, we believe our customers enter 2025 with water heater inventories in a normal to position.

我們對我們穩定的零售和批發客戶群、強大的合作夥伴關係和有競爭力的產品充滿信心。根據客戶對話和我們追蹤的某些庫存計劃，我們相信我們的客戶在進入 2025 年時熱水器庫存將處於正常水平。

During 2024, residential new construction and replacement demand were resilient compared to 2023. We believe commercial industry unit shipments increased marginally year over year driven by growth in commercial electric water heaters greater than 55 gallons. We project industry commercial gas units were down 3% to 4% in 2024.

2024 年，住宅新建和更換需求與 2023 年相比具有彈性。我們認為，受 55 加侖以上商用電熱水器成長的推動，商用產業單位出貨量較去年同期略有成長。我們預計，2024 年行業商業天然氣單位數量將下降 3% 至 4%。

As a reminder, commercial gas has an average selling price of approximately 3 times that of commercial electric units and therefore, impacting our results more meaningful than the commercial electric growth. Our North America boiler business performed as expected and sales increased 8% compared to 2023, led by an CREST commercial boiler with Hellcat technology as well as our night FTXL, one of our commercial boilers that was impacted by the 2023 channel inventory destocking.

提醒一下，商業天然氣的平均售價約為商業電力單位的 3 倍，因此，對我們的業績的影響比商業電力的成長更為重大。我們的北美鍋爐業務表現符合預期，銷售額與 2023 年相比增長了 8%，其中領先的是採用 Hellcat 技術的 CREST 商用鍋爐以及我們的夜間 FTXL，這是我們的商用鍋爐之一，受到 2023 年渠道庫存去庫存的影響。

We are pleased with our 2024 boiler performance and with our market share growth in that category. North America water treatment sales grew 10% in 2024, largely driven by acquisition-related geographic expansion. We saw growth in our dealer, direct-to-consumer and e-commerce channel that were partially offset by lower sales in the retail channel. We have taken action to rebalance our product portfolio and improve profitability.

我們對 2024 年鍋爐的性能以及該類別的市佔率成長感到滿意。2024 年北美水處理銷售額將成長 10%，主要得益於收購相關的地理擴張。我們看到經銷商、直接面向消費者和電子商務通路的成長，但零售通路的銷售額下降部分抵消了這一成長。我們已採取行動重新平衡我們的產品組合併提高獲利能力。

In the fourth quarter, we took a restructuring and impairment charge of $6 million to allow us to focus on the more competitive and financially attractive channels of the business. In China, full year third-party sales decreased 6% in local currency as a result of a weaker economy and soft consumer demand, particularly in the second half of the year. Higher sales of kitchen products were more than offset by lower volumes of our core water heater and water treatment products.

第四季度，我們提列了 600 萬美元的重整和減損費用，以便我們能夠專注於更具競爭力和財務吸引力的業務管道。在中國，由於經濟疲軟和消費需求疲軟（尤其是在下半年），全年第三方銷售額以當地貨幣計算下降了 6%。廚房產品銷售額的成長被我們核心熱水器和水處理產品銷售的下降所抵消。

In the fourth quarter, we took a restructuring charge of $11 million. The actions taken to reduce costs by optimizing our business structure to better position us for profitable growth when the economy improves. In the fourth quarter, the appliance trained stimulus program generated increased demand for our products relative to the third quarter. This increased cell demand helped our customers reduce their inventory levels and improve working capital.

第四季度，我們承擔了 1100 萬美元的重組費用。透過優化業務結構來降低成本，使我們能夠在經濟好轉時更好地實現獲利成長。第四季度，家電培訓刺激計畫使我們的產品需求相對於第三季增加。電池需求的增加有助於我們的客戶降低庫存水準並改善營運資金。

I'll now turn the call over to Chuck, who will provide more details on our full year and fourth quarter performance.

現在我將電話轉給查克，他將提供有關我們全年和第四季度業績的更多詳細資訊。

Thank you, Kevin, and good morning, everyone. We delivered sales of $3.8 billion in 2024, a decrease of 1% year over year. higher boiler and water treatment sales and the benefits of pricing actions were more than offset by lower water heater volumes in North America as well as lower sales in China. 2024 adjusted earnings were $3.73 per share compared with adjusted earnings of $3.81 per share in 2023.

謝謝你，凱文，大家早安。2024年，我們的銷售額為 38 億美元，年減 1%。鍋爐和水處理銷售額的增加以及定價行動帶來的好處被北美熱水器銷售的下降以及中國銷售的下降所抵消。 2024 年調整後每股收益為 3.73 美元，而 2023 年調整後每股收益為 3.81 美元。

Turning to slide 6. Full-year sales in the North America segment of $3 billion increased slightly compared to 2023. Pricing actions and higher boiler and water treatment sales were offset by lower volumes of water heaters. North America adjusted segment earnings of $714 million decreased 2% compared with 2023. Adjusted segment margin was 24.2% and a decrease of 60 basis points year over year.

翻到幻燈片 6。北美地區全年銷售額為 30 億美元，與 2023 年相比略有成長。定價舉措以及鍋爐和水處理銷售的增加被熱水器銷售的下降所抵消。北美調整後分部收益為 7.14 億美元，與 2023 年相比下降 2%。調整後分部利潤率為24.2%，較去年同期下降60個基點。

The lower adjusted segment earnings and adjusted segment margin were primarily driven by pricing benefits and higher boiler and water treatment sales that were more than offset by lower water heater volumes and continued strategic investments.

調整後分部收益及調整後分部利潤率的下降主要歸因於定價優勢以及鍋爐和水處理銷售額的提高，但熱水器銷量的下降和持續的戰略投資抵消了這一影響。

Moving to slide 7. Rest of the World segment sales of $919 million decreased 4% year over year, including unfavorable currency translation of $13 million primarily related to China. Segment third-party sales decreased 4% on a constant currency basis. Our sales decrease was primarily driven by higher sales of kitchen products that were more than offset by lower sales of water heater and water treatment products in China.

移至幻燈片 7。世界其他地區銷售額為 9.19 億美元，較上年下降 4%，其中包括主要與中國相關的 1,300 萬美元的不利貨幣折算影響。以固定匯率計算，分部第三方銷售額下降了 4%。我們銷售的下降主要是由於中國廚房產品銷售的增加，但被熱水器和水處理產品銷售的下降所抵消。

India sales grew 13% in local currency in 2024 and due to strong market demand for our premium products. Rest of the World adjusted segment earnings of $76 million decreased 24% compared to segment earnings in 2023, and primarily due to lower sales in China. Adjusted segment margin was 8.3%, a decrease of 210 basis points compared to 2023.

由於市場對我們優質產品的需求強勁，2024 年印度的銷售額以當地貨幣計算成長了 13%。世界其他地區調整後的分部收益為 7,600 萬美元，與 2023 年的分部收益相比下降 24%，主要原因是中國銷售額下降。調整後的分部利潤率為 8.3%，較 2023 年下降 210 個基點。

Please turn to slide 8. Turning to fourth-quarter performance. We delivered sales of $912 million in the fourth quarter of 2024, a decrease of 8% year over year, primarily due to higher boiler and water treatment sales and the benefits of pricing actions that were more than offset by lower water heater volumes in North America and lower sales in China. Adjusted earnings in the fourth quarter were $0.85 per share compared with adjusted earnings of $0.97 per share in the fourth quarter of 2023.

請翻到第 8 張投影片。談到第四季的表現。我們在 2024 年第四季的銷售額為 9.12 億美元，年減 8%，這主要是由於鍋爐和水處理銷售額的增加以及定價行動的好處，但北美熱水器銷量下降和中國銷售額下降抵消了這一影響。第四季調整後每股收益為 0.85 美元，而 2023 年第四季調整後每股收益為 0.97 美元。

Please turn to slide 9. Fourth-quarter sales in the North America segment were $690 million, a 7% decrease compared to sales in the fourth quarter of 2023 as a result of higher boiler and water treatment sales as well as benefits of pricing actions that were more than offset by lower water heating cost.

請翻到第 9 張投影片。北美地區第四季銷售額為 6.9 億美元，與 2023 年第四季的銷售額相比下降 7%，原因是鍋爐和水處理銷售額增加以及定價行動帶來的好處被較低的熱水成本所抵消。

North America adjusted segment earnings of $154 million decreased 11% compared to 2023. Adjusted operating margin of 22.4% decreased 110 basis points compared to last year. The lower adjusted segment earnings and adjusted segment margin were primarily due to the lower water heater volumes that were partially offset by pricing benefits and lower material costs.

北美調整後分部收益為 1.54 億美元，較 2023 年下降 11%。調整後營業利益率為22.4%，較去年同期下降110個基點。調整後分部收益及調整後分部利潤率的下降，主要是由於熱水器銷售下降，但被定價優勢及材料成本下降部分抵銷。

Moving to slide 10. Fourth-quarter Rest of the World segment sales of $237 million decreased 9% year-over-year, primarily driven by lower sales in China. India sales grew 11% in local currency in 2024 compared to 2023. Rest of the World adjusted segment earnings was $19 million and an adjusted segment margin of 8.1% were lower than 2023 adjusted segment earnings and adjusted segment margin of $30 million and 11.5%, respectively. The decreases were primarily due to lower sales in China.

移至投影片 10。第四季世界其他地區銷售額為 2.37 億美元，年減 9%，主要原因是中國銷售額下降。2024 年印度銷售額以當地貨幣計算與 2023 年相比成長了 11%。世界其他地區調整後分部收益為 1,900 萬美元，調整後分部利潤率為 8.1%，分別低於 2023 年調整後分部收益 3,000 萬美元及調整後分部利潤率 11.5%。下降主要是由於中國銷售額下降。

Please turn to slide 11. We generated free cash flow of $474 million during 2024, lower than 2023, primarily driven by lower earnings and higher inventory balances that were partially offset by lower accounts receivable balances. 2024 free cash flow conversion was 89%. Excluding the impact of the higher capital spending for investments we are making in 2024, our free cash flow conversion was 95%.

請翻到第 11 張投影片。2024 年，我們產生的自由現金流為 4.74 億美元，低於 2023 年，主要原因是收益下降和庫存餘額增加，但應收帳款餘額減少部分抵銷了這一影響。 2024年自由現金流轉換率為89%。不包括 2024 年投資資本支出增加的影響，我們的自由現金流轉換率為 95%。

Our cash balance totaled $276 million at the end of December, and our net cash position was $83 million. Our leverage ratio was 9.3% as valued by total debt to total capital.

截至 12 月底，我們的現金餘額總計 2.76 億美元，淨現金狀況為 8,300 萬美元。我們的槓桿率為 9.3%，以總負債與總資本的比率計算。

Let's now turn to slide 12. In addition to returning capital to shareholders, we see opportunities for organic growth, innovation and new product development across all of our product lines and geographies. In addition to the strategic acquisitions we made in 2024 to grow our domestic and global water treatment footprint -- we also increased investments in our business to ensure that we have the right product portfolio and capacity to continue strengthening our position as a leader across all the markets that we serve and providing the most value for our shareholders.

現在我們翻到第 12 張投影片。除了向股東返還資本之外，我們還看到了所有產品線和地區有機成長、創新和新產品開發的機會。除了我們在 2024 年進行的策略性收購以擴大我們在國內和全球的水處理足跡之外，我們還增加了對業務的投資，以確保我們擁有合適的產品組合和能力，以繼續加強我們在所有服務市場的領先地位並為我們的股東提供最大的價值。

Earlier this month, our Board approved our next quarterly dividend of $0.34 per share. We have increased our dividend for over 30 consecutive years. We've repurchased approximately 3.8 million shares of common stock in 2024 for a total of $306 million. We continue our strong track record of delivering returns to shareholders.

本月初，我們的董事會批准了下一季度每股 0.34 美元的股息。我們已經連續30多年增加股利。我們在 2024 年回購了約 380 萬股普通股，總額為 3.06 億美元。我們持續保持良好的業績記錄，為股東帶來豐厚的回報。

Over the last two years, we have returned almost $1 billion to shareholders through our dividends and share repurchases.

在過去兩年中，我們透過股利和股票回購向股東返還了近10億美元。

Please turn to slide 13 and our 2025 earnings guidance and outlook. Our 2025 outlook includes an expected EPS range of $3.60 to $3.90 per share. The midpoint of the EPS range is slightly higher than our 2024 adjusted EPS.

請翻到第 13 張投影片，了解我們 2025 年的獲利指引和展望。我們對 2025 年的展望包括預計每股收益範圍為 3.60 美元至 3.90 美元。EPS 範圍的中點略高於我們 2024 年調整後的 EPS。

Our outlook is based on a number of key assumptions, including our guidance assumes that steel prices in the full year 2025 will be similar to 2024 and that steel cost in the back half of the year will increase from where they are today. We project that our 2025 nonsteel materials and freight costs will be roughly flat to 2024.

我們的展望是基於一些關鍵假設，包括我們的指導假設：2025 年全年鋼鐵價格將與 2024 年相似，下半年鋼鐵成本將比現在的水平增加。我們預計，2025 年非鋼材料和運費成本將與 2024 年大致持平。

We project the launch of our tankless products, including tariffs in place today and higher shipping and other costs will be a headwind of approximately 50 basis points to our North America margins. We estimate that 2025 CapEx will be between $90 million and $100 million, a decrease compared to 2024, but higher than our historical CapEx as we continue to invest in our engineering capabilities and prepare for upcoming regulatory changes.

我們預計，無水箱產品的推出，包括目前實施的關稅以及更高的運輸和其他成本，將對我們的北美利潤率造成約 50 個基點的阻力。我們估計 2025 年的資本支出將在 9,000 萬美元至 1 億美元之間，與 2024 年相比有所下降，但高於我們的歷史資本支出，因為我們將繼續投資於我們的工程能力並為即將到來的監管變化做好準備。

We expect to generate free cash flow of between $500 million and $550 million. Interest expense is projected to be between $15 million and $20 million. Corporate and other expenses are expected to be approximately $75 million. Our effective tax rate is estimated to be between 24% to 24.5%.

我們預計將產生5億至5.5億美元之間的自由現金流。利息支出預計在1500萬至2000萬美元之間。公司和其他費用預計約為 7500 萬美元。我們的有效稅率預計在24%至24.5%之間。

Our Board has approved 5 million additional shares of stock for repurchase, and we expect to repurchase approximately $400 million of our shares of stock higher than previous years as we have confidence in our strong free cash flow generation, and we believe our shares have been undervalued in recent months. We project our outstanding diluted shares will be $142 million at the end of 2025.

我們的董事會已批准額外回購 500 萬股股票，我們預計回購的股票價值將高於前幾年約 4 億美元，因為我們對強勁的自由現金流產生有信心，而且我們認為我們的股票在近幾個月被低估了。我們預計，到 2025 年底，我們流通在外的稀釋股份將達到 1.42 億美元。

Our outlook does not assume a change in tariffs for China, Mexico or Canada, potential increase in China tariffs would temporarily negatively impact us with regard to our gas tankless imports from our facility in Nanjing until that production is fully transitioned to Juarez, Mexico. Our North America manufacturing footprint largely based in the US, gives us flexibility to competitively navigate potential future tariffs, which may impact trade between the US, Mexico, and Canada.

我們的展望並不假設中國、墨西哥或加拿大的關稅發生變化，中國關稅的潛在增加將暫時對我們從南京工廠進口的無罐式燃氣產生負面影響，直到生產完全轉移到墨西哥華雷斯為止。我們在北美的製造業務主要集中在美國，這使我們能夠靈活地應對未來可能產生的關稅，而這些關稅可能會影響美國、墨西哥和加拿大之間的貿易。

I'll now turn the call over to Steve, who will provide more color on our key markets and top line growth outlook and segment expectations for 2025, while still staying on slide 13. Steve?

現在，我將電話轉給史蒂夫，他將詳細介紹我們的主要市場和 2025 年的營收成長前景和細分市場預期，同時仍停留在第 13 頁。史蒂夫？

Thank you, Chuck, and good morning, everyone. Before discussing our outlook on 2025, I wanted to start by briefly sharing some early thoughts on my first 10 months with A. O. Smith. First and foremost, I've been impressed with the culture of how we do things at A. O. Smith.

謝謝你，查克，大家早安。在討論我們對 2025 年的展望之前，我想先簡單分享一下我在 A. O. 史密斯公司工作頭 10 個月的一些初步想法。首先，A. O. 史密斯公司的企業文化給我留下了深刻的印象。

We are laser focused on doing business the right way and ethical way smooth play. We also have a strong culture of innovation, collaboration, people development and driving performance that is a great fit to my own personal leadership style.

我們專注於以正確的方式和合乎道德的方式順利開展業務。我們也擁有強大的創新、協作、人才發展和推動績效的文化，這與我個人的領導風格非常契合。

As I've gotten to know our business better, we clearly have a portfolio of strong businesses in markets that we know well, with very close customer partnerships and industry-leading products. This positions us well to help lead the industry forward through future changes, disruptions and opportunities. I am energized and confident in the opportunities in front of us that first drew me to join this great leadership team.

隨著我對我們的業務越來越了解，我發現我們在自己熟悉的市場中擁有一系列強大的業務，與客戶建立了非常密切的合作夥伴關係，並且擁有領先業界的產品。這使我們能夠在未來的變化、顛覆和機會中引領產業向前發展。我對眼前的機會充滿信心和能量，這也是吸引我加入這個偉大領導團隊的原因。

Now turning to our 2025 guidance. While I'm positive about the future positioning of our business, as Chuck highlighted in our guidance, we expect 2025 to be another year of relatively muted growth on both the top and bottom lines. Our outlook is influenced by a relatively flat industry growth expectation in our core North America water heater and boiler markets, while we expect to continue facing a soft market environment in China.

現在來談談我們 2025 年的指導。正如查克在我們的指引中所強調的那樣，雖然我對我們業務的未來定位持樂觀態度，但我們預計 2025 年將是營收和淨利潤成長相對緩慢的另一年。我們的前景受到我們核心的北美熱水器和鍋爐市場相對穩定的行業成長預期的影響，同時我們預計中國將繼續面臨疲軟的市場環境。

We are also taking some portfolio actions that will reduce growth in North America water treatment in the short term but will better position our business going forward. On the bottom line, we anticipate the near-term benefits of our restructuring and realignment actions to be mostly offset in 2025 by the continued strategic investments we are making to launch and scale innovative new products in support of our North America water heating and boiler business.

我們也採取了一些投資組合行動，這些行動將在短期內減緩北美水處理的成長速度，但將使我們未來的業務處於更好的地位。從根本上講，我們預計，重組和調整行動的近期收益將在 2025 年被我們為推出和擴大創新新產品以支持我們的北美熱水和鍋爐業務而進行的持續戰略投資所抵消。

These investments will help ensure profitable growth over the long term and build upon our market leadership. Our top line outlook includes the following assumptions. We believe that US new home construction remains in a deficit and that new construction and proactive replacement will be similar to 2024.

這些投資將有助於確保長期獲利成長並鞏固我們的市場領導地位。我們的首要展望包括以下假設。我們認為，美國新屋建設仍處於赤字狀態，新建房屋和主動更換房屋的數量將與2024年相似。

Based on those factors, we project that 2025 residential industry unit volumes will be approximately flat to last year. We project US commercial water heater industry volumes to also be flat to 2024 as demand for our commercial electric products, greater than 55 gallons has returned to pre 2022 levels.

基於這些因素，我們預測 2025 年住宅產業單位數量將與去年大致持平。我們預計，到 2024 年，美國商用熱水器行業的銷量也將持平，因為對 55 加侖以上的商用電氣產品的需求已恢復到 2022 年前的水平。

In addition, our outlook includes carryover from our March 2024 price increases in North America, up 4% on most of our water heater products and 8% on heat pumps. In China, we believe the economy remains challenged with low consumer confidence in a weak real estate market. While we see the stimulus programs as a positive, we think it will take time to see real fundamental signs of recovery.

此外，我們的展望還包括 2024 年 3 月北美價格上漲的影響，其中大部分熱水器產品上漲 4%，熱泵產品上漲 8%。在中國，我們認為經濟仍面臨挑戰，房地產市場疲軟，消費者信心低迷。雖然我們認為刺激計劃是積極的，但我們認為要看到真正的基本復甦跡象還需要時間。

As a result, we project that our sales in China will decrease 5% to 8% in local currency in 2025 as the decline in consumer demand that we experienced in the second half of 2024 carries over into 2025. Our forecast assumes that the currency translation impact will be minimal in 2025. We anticipate that our restructuring program in China will be mostly implemented by the second quarter and we expect to realize annual savings of approximately $15 million. This would result in a recovery of operating margins to the 8% to 10% range for 2025, even with lower volumes.

因此，我們預計，由於 2024 年下半年經歷的消費需求下降將延續到 2025 年，2025 年我們在中國的銷售額以當地貨幣計算將下降 5% 至 8%。我們的預測是，到 2025 年，貨幣換算的影響將會很小。我們預計，我們在中國的重組計畫將大部分在第二季實施，並預計每年可節省約 1500 萬美元。即使銷量較低，這也將使營業利潤率在 2025 年恢復至 8% 至 10% 的範圍內。

I have worked closely with the team and feel confident the actions being taken will better position us to compete in the more mature and more competitive market environment while still positioning us well to realize the benefits when the Chinese economy improves. While we are cautious about the near-term market outlook, including the level of sustainable impact from the appliance discount trading program, we remain confident in our team in China.

我與團隊密切合作，並相信所採取的行動將使我們在更成熟和更具競爭力的市場環境中處於更好的競爭優勢，同時仍能使我們在中國經濟好轉時獲得良好的利益。雖然我們對近期的市場前景持謹慎態度，包括家電折扣交易計劃的可持續影響水平，但我們對我們在中國的團隊仍然充滿信心。

We project our North American boiler sales will grow between 3% to 5% in 2025. We expect to continue benefiting from the transition to higher energy-efficient boilers particularly as commercial buildings look to improve their overall carbon footprint.

我們預計，2025 年北美鍋爐銷量將成長 3% 至 5%。我們期望繼續受益於向更高能源效率鍋爐的轉變，特別是當商業建築尋求改善其整體碳足跡時。

We expect North America water treatment sales to be between $235 million to $245 million, a decrease of approximately 5%, as we execute a reprioritization of our business to more competitive and profitable channels and products, supported by our announced restructuring. We project this shift will drive an operating margin expansion of approximately 250 basis points in 2025 for the North American water treatment business.

我們預計北美水處理銷售額將在 2.35 億美元至 2.45 億美元之間，下降約 5%，因為我們在宣布的重組的支持下，將業務重新調整為更具競爭力和盈利能力的渠道和產品。我們預計，這項轉變將推動北美水處理業務的營業利潤率在 2025 年擴大約 250 個基點。

I am personally excited about the potential of the water treatment space in North America for A. O. Smith and believe the actions being taken by the team to focus on the most attractive opportunities will position us well going forward. We project mid-teens top line growth in our legacy India business as we continue to build out the A. O. Smith water franchise in this attractive market.

我個人對於 A. O. 史密斯公司在北美水處理領域的潛力感到非常興奮，並相信團隊所採取的專注於最具吸引力的機會的行動將使我們在未來獲得良好的發展。隨著我們繼續在這個具有吸引力的市場拓展 A. O. 史密斯水業務，我們預計我們的傳統印度業務的營收將實現十五六%的增幅。

We expect the addition of Pureit will add approximately USD15 million in sales in 2025. We do not expect Pure to have a significant bottom line contribution in 2025 as we work through the integration of this business. Based on these 2025 assumptions, we expect top line growth to be flat to up 2%. We expect our North America segment margin to be between 24% and 24.5% and Rest of World segment margins to be between 8% and 9%.

我們預計 Pureit 的加入將在 2025 年增加約 1500 萬美元的銷售額。在我們正在進行這項業務的整合過程中，我們預計 Pure 不會在 2025 年帶來顯著的獲利貢獻。根據這些 2025 年的假設，我們預計營收成長率將保持穩定至 2%。我們預期北美分部的利潤率在 24% 至 24.5% 之間，世界其他地區分部的利潤率在 8% 至 9% 之間。

As we exit 2024 and move into 2025, our commitment remains steadfast to lead the industry forward and support our customers. We are confident that our innovation and infrastructure investments position our business for profitable growth. We remain committed to driving the following top investment priorities from 2024 into 2025 to maintain this momentum.

當我們告別 2024 年、邁入 2025 年之際，我們的承諾依然堅定不移，引領業界前進，支持我們的客戶。我們相信，我們的創新和基礎設施投資將使我們的業務獲利成長。為保持這一勢頭，我們將繼續致力於從 2024 年到 2025 年推動以下首要投資重點。

Our continued investment in the launch and scale up of the Adapt gas tankless water heater with X3 scale prevention technology. We are on schedule to introduce two additional tankless products to round out the product line in the first half of 2025.

我們持續投資推出並擴大 X3 防垢技術的 Adapt 瓦斯即熱式熱水器。我們計劃在 2025 年上半年推出另外兩款無水箱產品，以完善產品線。

While there is a headwind to profitability today as we launched with production in China and then transfer production to Juarez, Mexico, we firmly believe that our gas tankless product line sets us off for long-term success in this product category. Also, our near completed investment in world-class commercial R&D testing and lab facility and Lumina, Tennessee.

雖然目前我們在中國啟動生產，隨後將生產轉移到墨西哥華雷斯，盈利能力面臨阻力，但我們堅信，我們的即熱式燃氣熱水器產品線將使我們在該產品類別中取得長期成功。此外，我們對世界一流的商業研發測試和實驗室設施以及田納西州 Lumina 的投資已接近完成。

The new center will house our commercial water heater and boiler engineers, where they will focus on the continued innovation of our commercial water heating and boiler portfolio. The collaboration and powerful exchange of ideas coming from this new facility will ensure that we continue to have leading-edge products, including heat pump technology for today and into the future.

新中心將容納我們的商用熱水器和鍋爐工程師，他們將專注於我們商用熱水器和鍋爐產品組合的持續創新。來自該新工廠的合作和強大的思想交流將確保我們繼續擁有領先的產品，包括適用於當前和未來的熱泵技術。

And finally, our ongoing manufacturing capacity investments to serve the market as regulatory changes in federal, state and local incentives drive demand higher for specific technologies. We have increased production of commercial heat pump water heaters and doubled our residential heat pump water heater capacity to meet this growing demand. We are also increasing our capacity to produce high-efficiency condensing water heaters.

最後，隨著聯邦、州和地方激勵措施的監管變化推動對特定技術的需求增加，我們將繼續進行製造能力投資以服務市場。為了滿足日益增長的需求，我們增加了商用熱泵熱水器的產量，並將家用熱泵熱水器的產能提高了一倍。我們也正在提高生產高效能冷凝熱水器的能力。

To sum up, while we expect some of the market challenges in China to continue and we anticipate growth headwinds in the first half of the year for the North American water heating business as we faced tough comps against last year's order pattern, we remain confident in our future. The investments we are making in our capacity footprint, our engineering capability and our product portfolio have us positioned well for the environment ahead, including any tariff or regulatory uncertainties.

總而言之，雖然我們預計中國市場的一些挑戰仍將持續，並且我們預計北美熱水業務上半年將面臨成長阻力，因為與去年的訂單模式相比，我們面臨著嚴峻的挑戰，但我們對未來仍然充滿信心。我們對產能、工程能力和產品組合的投資，使我們為未來的環境（包括任何關稅或監管的不確定性）做好了準備。

Additionally, the restructuring actions we have announced today will support our future growth and create more space for investments in more attractive space. A. O. Smith has a long history of managing through many economic cycles and uncertainties, and this proven experience will continue to serve us well.

此外，我們今天宣布的重組行動將支持我們未來的成長，並為在更具吸引力的領域投資創造更多空間。A. O. 史密斯公司在應對多個經濟週期和不確定因素方面有著悠久的歷史，這些成熟的經驗將繼續為我們帶來良好的服務。

While there are growth headwinds in 2025, our leadership position in all of the markets that we serve, our stable 80% to 85% replacement business in water heaters and boilers and our strong balance sheet allow us to continue to invest in our business, make attractive strategic acquisitions and maximize shareholder return.

雖然 2025 年面臨成長阻力，但我們在所有服務市場中的領導地位、熱水器和鍋爐領域穩定的 80% 至 85% 替換業務以及強勁的資產負債表使我們能夠繼續投資於我們的業務，進行有吸引力的戰略收購併實現股東回報最大化。

With that, we conclude our prepared remarks, and we are now available for your questions.

我們的準備好的演講到此結束，現在我們可以回答大家的提問了。

Mike Halloran, Baird.

麥克·哈洛倫，貝爾德。

Can you just help provide some thoughts on how you think demand cadence is out through the year? I certainly understand some of the remarks you made in the press release about less volatile first half to second half in the North America water heater business. But is this a year where it's returned to relatively normal seasonality you think quarter to quarter? Any puts and takes we should think about and just kind of how that levels out through the year.

您能否幫忙提供一些全年需求節奏的想法？我當然理解您在新聞稿中所說的有關北美熱水器業務上半年到下半年波動較小的一些言論。但您認為今年的季度環比季節性是否已恢復到相對正常的狀態？我們應該考慮任何得失，以及如何在全年保持平衡。

Sure, Mike, this is Chuck. Yes, it does. Our outlook for 2025 on the water heating side does return much more normal to the normal cadence. So we talk about 51% to 52% in the front half of the year. The way we've laid out next year is about 51% in the front half of the year.

當然，麥克，這是查克。是的。我們對 2025 年水加熱的展望確實會更正常地回歸到正常的節奏。因此我們談論的是上半年的 51% 到 52%。我們明年的版面是上半年實現約51%。

What to really recall is that in 2024, it didn't play out that way. 2024 laid out a bit different. The residential market was up 3% at the end of June. The commercial market was up 8% at the end of June. So in 2024, it was just not a normal cadence. So we'll have some difficult comps as we go through the first half of the year.

真正需要記住的是，2024 年的情況並非如此。 2024 年的佈局略有不同。6月底住宅市場上漲3%。6月底商業市場上漲8%。因此在 2024 年，這不是一個正常的節奏。因此，我們在上半年會面臨一些困難。

Residential being up 3% last year means we're going to probably see the industry down 3% to 4% in the first half and a little bit stronger on the commercial side, plus we had a bit of tailwind in 2024 in the first half for the commercial mix. So when you put it all together, 2025, we've got the cadence in North America closer to normal, maybe a little bit lighter on the front half of the year, but again, some pretty aggressive first half comps.

去年住宅市場上漲了 3%，這意味著我們可能會看到上半年該行業下降 3% 至 4%，而商業市場將稍微強勁一些，此外，2024 年上半年商業市場組合將略有順風。因此，當你把所有這些放在一起時，到 2025 年，北美的節奏將更接近正常水平，可能上半年會稍微輕鬆一些，但同樣，上半年的同比增速會相當強勁。

Then when you look to China, China, we're talking about volume decrease of 5% to 8%. I would say the first quarter, we're a little cautious around it. The appliance -- discount trade-in program was paused for a bit. Now it's back in place pretty quickly. And we have the Chinese festival.

然後當你看中國時，我們談論的是中國銷量下降 5% 到 8%。我想說，對於第一季度，我們對此有點謹慎。家電折扣以舊換新計畫暫時暫停。現在它很快就恢復原位了。我們還有中國節日。

And as Steve outlined, our restructuring program impacts us more in the back three quarters of the year. So just a couple of comments around that. I think boilers will play out pretty similar. Third quarter is typically pretty strong. So the caution I would have is back to closer to normal and just tough comps in the first half.

正如史蒂夫所概述的，我們的重組計劃對我們在今年後三個季度的影響更大。對此我只想提幾點評論。我認為鍋爐的運作情況將非常相似。第三季通常表現相當強勁。因此，我的謹慎態度會恢復到接近正常的水平，並且上半年的比賽會比較艱難。

And then on the North America margins, kind of a 2 times question. One, maybe any incremental color on what the treatment portfolio moves that you referenced were? And then secondarily, when you think about the 50-point drag from the tankless production in China. When that moves to war as -- does that go away? Or do you need some scale or any timing around how that should cadence?

然後關於北美的邊緣問題，這是一個重複兩次的問題。第一，您所提到的治療組合變動可能有什麼增量嗎？其次，當您想到中國無罐生產帶來的 50 點拖累。當戰爭爆發時──這種情況會消失嗎？或者您需要某種規模或時間來確定其節奏？

Yes. Let me take the tankless headwind for 2025, and I'll let Steve talk a little bit about water treatment restructuring. So we'll start transitioning production in -- from to during the early part of the year, introducing two new models in Nanjing and then eventually moving to ore. So that will be about midyear.

是的。讓我來談談2025年的無水箱逆風，並讓史蒂夫談談水處理重組。因此，我們將在年初開始轉型生產，在南京推出兩款新車型，然後最終轉向礦石。那將大約是在年中。

So that we're going to see a headwind in 2025 of about 50 basis points still, we believe, as we kind of go through the year, wouldn't wait that much different than kind of ratably through the year because we're going to be in flight on those transitions for the year. And then for the water treatment, I'll turn it over to Steve.

因此，我們仍將看到 2025 年約 50 個基點的逆風，我們相信，隨著我們度過這一年，等待的時間與全年的按比例計算不會有太大不同，因為我們將在這一年中實現這些轉變。然後對於水處理，我將把它交給史蒂夫。

I think regarding what we're doing on the portfolio and water treatment, we've been building out this growth platform over the last seven years, making a number of acquisitions we've taken approach of kind of an omnichannel go-to-market approach. And I think we've learned a lot about the business through that time. And the actions we're taking now, I think, are a natural progression to focusing on the parts of the market that we think are most attractive, where we can be most competitive and that are most profitable.

我認為關於我們在產品組合和水處理方面所做的工作，我們在過去七年裡一直在建立這個成長平台，進行了多次收購，我們採取了一種全通路進入市場的方法。我認為我們在這段時間裡對業務有了更多的了解。我認為，我們現在採取的行動是一種自然的進展，我們將重點放在我們認為最具吸引力、最具競爭力和最有利可圖的市場部分。

And so with that, obviously, the restructuring is helping us to do that repositioning we'll be kind of rotating and getting a mix benefit to moving towards the areas that we think are more profitable and that we see is getting us about 250 basis points of margin improvement in the year. But I think also just positioning us more successfully for the future going forward about where we're going to grow and how we're going to do it.

因此，顯然，重組有助於我們進行重新定位，我們將進行輪換並獲得混合效益，轉向我們認為更有利可圖的領域，並且我們看到這將使我們今年的利潤率提高約 250 個基點。但我認為這也只是讓我們在未來更成功地定位我們將在哪裡發展以及我們將如何實現這一目標。

Matt Summerville, D.A. Davidson.

馬特·薩默維爾，地方檢察官戴維森。

A couple of questions. Does what you're seeing in China and really what you've experienced in China over the last several years -- does that change kind of the growth algorithm as you guys sort of presented it last? And are you thinking differently about that business from a strategic standpoint? And then I have a follow-up.

幾個問題。您在中國看到的情況以及過去幾年您在中國經歷的情況是否會改變您上次提出的成長演算法？從策略角度來看，您對該業務有不同的看法嗎？然後我有一個後續問題。

Yes. I mean China is a market that has always moved fast, and you have to be prepared and ready to respond. And I think as we've looked at the market landscape, over the last few years. It led us to make some strategic decisions about how we pick out the business going forward.

是的。我的意思是，中國市場一直發展迅速，你必須做好準備並隨時做出反應。我認為，正如我們過去幾年所觀察的市場格局。它指導我們做出一些關於如何選擇未來業務的策略決策。

We've talked about launching into additional categories to help support our business and leverage our brand. And I think going forward, certainly, the last few years haven't met the growth and recovery profile that we had anticipated. But it's given us a chance to sort of learn a little bit about our market positioning. And again, our restructuring that we're announcing here today is a chance for us to do some of that, and I think really get more competitive.

我們已經討論過推出更多類別來幫助支持我們的業務並提升我們的品牌。我認為，展望未來，過去幾年的成長和復甦情況確實沒有達到我們預期。但它給了我們一個機會來了解我們的市場定位。再次強調，我們今天在這裡宣布的重組對我們來說是一個實現上述目標的機會，我認為這將真正提高我們的競爭力。

Now will the market come back? I think we feel confident it will. The question really is when, and it's really going to come back to consumer confidence, right? And I think when consumer confidence returns to China, we'll be able to participate in that recovery and with a stronger portfolio to do so.

現在市場會復甦嗎？我想我們有信心它會的。真正的問題是什麼時候消費者信心才會真正恢復，對嗎？我認為，當中國消費者信心恢復時，我們將能夠參與經濟復甦中，並擁有更強大的投資組合。

Yes. Maybe a little bit more on to that. We've always said that China was going to need some help from the economy, and quite frankly, we just haven't seen that materialize. And we were talking about what we outlined was about a 5% or 6% growth on -- in our Investor Day that first year, obviously, we're short of that.

是的。也許對此還有更多了解。我們一直說中國在經濟上需要一些幫助，但坦白說，我們還沒有看到這一點實現。我們在第一年的投資者日上提出了 5% 或 6% 的成長率，但顯然我們達不到這個目標。

But I think if you -- we still have three or four more years to move it forward, there are some real policy changes that are being talked about. But for us, we haven't given up on the 5% or 6%, but we do need help from the government, some stimulus to get the economy moving Steve is right on track with the consumer confidence. It's critical because that ties into new housing formations, which is a big part of our business as well as our premium products. So still some work to do.

但我認為，我們還有三、四年的時間來推動這項進程，我們正在討論一些真正的政策變革。但對我們來說，我們並沒有放棄 5% 或 6%，但我們確實需要政府的幫助，需要一些刺激措施來推動經濟發展，史蒂夫對消費者信心的預測是正確的。這很關鍵，因為這與新住房建設密切相關，而新住房建設是我們業務和優質產品的重要組成部分。因此還有一些工作要做。

We saw some really nice benefits from the appliance trade-in program. But again, we're moving into 2025 a bit cautious because the scope and scale of these policies still need to be more defined. But we still feel really good about China. We feel good about the long term urbanization and a growing middle class, but we do need some help from the economy to move this business forward.

我們從家電以舊換新計劃中看到了一些非常好的好處。但是，我們對 2025 年仍需保持謹慎，因為這些政策的範圍和規模仍需進一步明確。但我們仍然對中國抱持非常好的感覺。我們對長期的城市化和不斷壯大的中產階級感到樂觀，但我們確實需要經濟方面的一些幫助來推動業務向前發展。

A follow-up on the water treatment side of the business. Maybe it's not clear to me what channels you're maybe deemphasizing a bit versus where you're placing greater emphasis and as you get beyond this year, kind of the down mid-single digits, what does the three to five-year growth trajectory organically look like in that business?

對水處理業務方面的跟進。我可能不清楚你們在哪些管道上會稍微弱化，而在哪些管道上會更加重視，今年以後，你們的銷售額會下降到個位數的中段，那麼未來三到五年，該業務的成長軌跡會是什麼樣的呢？

Yes. The places that we're really focusing on going forward are going to be our direct-to-consumer businesses as well as our dealer and wholesale businesses. And what we're deemphasizing is on the retail side, and we just believe we can be more competitive and have a better offering and a financially more attractive business there.

是的。我們未來真正關注的領域是直接面向消費者的業務以及經銷商和批發業務。我們不再強調零售方面，我們只是相信我們可以更有競爭力，提供更好的產品和更具財務吸引力的業務。

And I think we still view water treatment as a growth engine for A. O. Smith. As I mentioned in my own comments, I'm excited about the space. I think there's good megatrend tailwinds there. And I think this is a natural progression of repositioning ourselves.

我認為我們仍然將水處理視為 A. O. 史密斯公司的成長引擎。正如我在自己的評論中提到的，我對這個空間感到興奮。我認為那裡有良好的大趨勢順風。我認為這是我們重新定位的自然過程。

And so our early estimates of double-digit growth. I think we will get back to that at some point. But I think it's maybe we're evolving in terms of exactly how we'll do that, and that's part of what our process was all along. It's still learn about the space, figure out where we compete and then focus on it going forward.

因此我們早期預計會實現兩位數的成長。我想我們最終會回到那個狀態。但我認為，我們可能正在不斷發展變化，確定具體如何實現這一目標，這也是我們一直以來的流程的一部分。它仍然是了解這個領域，弄清楚我們競爭的地方，然後專注於向前邁進。

And I'll just add that when we talk about our growth rate in water treatment, we've also talked about acquisitions, and that continues to be our focus to grow not only grow faster than the market but also bring into some additional acquisitions to grow water treatment at an accelerated rate. That's still our focus.

我還要補充一點，當我們談論水處理領域的成長率時，我們也談到了收購，這仍然是我們的重點，不僅要比市場成長更快，而且還要進行一些額外的收購，以加速水處理的成長。這仍然是我們的重點。

Damian Karas, UBS Securities.

瑞銀證券的 Damian Karas。

Steve, great to have you on the call. I was wondering if you could I was wondering if perhaps you saw a fall off of in North American water heater shipments in December. Because the data that we were privy to the October, November HR shipments, they did seem to show sequential improvement.

史蒂夫，很高興您來接聽電話。我想知道您是否可以發現 12 月北美熱水器出貨量有所下降。因為根據我們掌握的10月、11月HR出貨量數據，它們確實似乎顯示出連續的改善。

And I think with the normal seasonality that you see in the industry in December, your North American water heater sales would have likely been at least a few percent higher in the fourth quarter. So could you just maybe talk to the progression that you saw in water heater volumes over the course of the quarter?

我認為，由於 12 月行業呈現正常的季節性，北美熱水器銷售在第四季度可能會至少成長幾個百分點。那麼您能否談談本季熱水器銷售的變化？

Yes. Let me just talk about that sequence. I'm going to take you back to 2023. That was a record year for our business, and that record was largely driven by our North America water heater business. And so if you go back to -- because you're doing a comparison.

是的。讓我只談論這個序列。我要帶你回到 2023 年。這是我們業務創紀錄的一年，而這項紀錄很大程度上得益於我們的北美熱水器業務。所以如果你回去——因為你正在進行比較。

If you go back to 2023, we had a very strong back half of the year, really outperformed the market. If you remember, we had strong backlogs kind of lead times we're really out there. So our residential sell-in was strong. Our customers were kind of building some inventory to compensate for that for the lead times.

如果回顧 2023 年，我們上半年的表現非常強勁，確實跑贏了市場。如果你還記得的話，我們有大量積壓訂單，交貨時間確實很長。因此我們的住宅銷售強勁。我們的客戶正在建立一些庫存來彌補交貨時間。

And conversely, now you come to 2024 in our back half. And we entered the back half with our lead times back to normal we saw, and we talked about this last quarter. We saw our wholesalers and our retailers adjust our order rates, their order rates and their inventory levels.

相反，現在我們進入了 2024 年的後半段。進入後半段，我們的交貨時間已恢復正常，我們在上個季度討論過這個問題。我們看到我們的批發商和零售商調整了我們的訂單率、他們的訂單率和庫存水準。

And we had a lower back count volume. So -- to me, it's about timing. It's a situation with regards to what our customers were on the inventory side. But if you step back here with solid customers base still strong relationships, no major customer loss there. But just because of that dynamic and that timing, yes, you're right, we did see lower volumes, but there are some reasons behind it that are more situational than they are ongoing.

我們的積壓量也減少了。所以——對我來說，這關乎時機。這與我們的客戶庫存狀況有關。但如果你退一步來看，堅實的客戶基礎、強大的關係，就不會出現重大的客戶流失。但是僅僅因為這種動態和時機，是的，你是對的，我們確實看到了較低的交易量，但這背後的一些原因更多的是情境性的，而不是持續性的。

Okay. Got it. And then could you just confirm -- so you did see positive pricing in North American water heaters in the fourth quarter? Or was that comment more of a full year comment. And I'm just curious if kind of the industry, in general, has been pretty disciplined on pricing or if you're seeing any competitive discounting of note.

好的。知道了。那麼您能否確認一下—您確實看到第四季度北美熱水器的價格出現了積極變化？或者該評論更像是全年評論。我只是好奇，總體而言，這個行業在定價方面是否相當嚴謹，或者是否看到任何值得注意的競爭性折扣。

Yes. What I'll tell you is we saw -- yes, we had positive pricing. And the pricing that we implemented in the first quarter of last year kind of played out the way we expected it and met our expectations. So we have positive pricing across all of our categories in 2024. Yes, that's as far as we pretty much will talk about pricing.

是的。我要告訴你的是，我們看到了——是的，我們的定價是正面的。我們去年第一季實施的定價基本上符合我們的預期。因此，到 2024 年，我們所有類別的定價都將是正面的。是的，關於定價我們就討論到這裡。

There's always situational discounting here in markets. That doesn't change. But what happens in maybe Newark is it the same thing that happens in Los Angeles. So I would just tell you, we implemented. It played out what we thought. There's always a little bit of fade, but we had favorable pricing across all our categories as we planned.

市場上總是存在著情境折扣。那並沒有改變。但紐瓦克發生的事情也許和洛杉磯發生的事情是相同的。所以我只想告訴你，我們實施了。事情正如我們所想的。雖然總是會出現一些衰退，但是我們按照計劃對所有類別都進行了優惠定價。

Bryan Blair, Oppenheimer.

布萊恩布萊爾，奧本海默。

I wanted to follow up, digging a little bit more on the shift in your North American water treatment strategy. Your team has tabulated the benefits of the omnichannel kind of presence historically. Has there been a meaningful change in competitive dynamics, customer dynamics within retail over recent past that drove this decision? Or is it simply the sheer math of focusing more on wholesale dealer network, direct-to-consumer. You're having a much stronger margin profile and then deemphasizing the weaker economics of the retail stream.

我想進一步深入了解北美水處理策略的轉變。您的團隊已經從歷史上匯總了全通路業務帶來的好處。近期零售業的競爭態勢和客戶態勢是否發生了重大變化，促使我們做出這項決定？或者這只是更專注於批發經銷商網路、直接面向消費者的純粹數學計算。您將擁有更強勁的利潤率，從而弱化零售業務的較弱經濟性。

This is Steve. I would say there's definitely different competitive dynamics and market dynamics across those different channels. And part of having the omnichannel approach is to learn about the consumer, learn about these channels, learn about how you compete, learn about the competitors.

這是史蒂夫。我想說，不同通路之間肯定存在著不同的競爭態勢和市場態勢。全通路方法的一部分是了解消費者、了解這些管道、了解您的競爭方式以及了解競爭對手。

And I think as we've done that over the last few years, we've learned where we think our strength, our product portfolio and our go-to-market model play best. And it's not that we're exiting and totally shutting down other channels. I think we're still part of the learning process. But I think we've got more clarity now on where we want to focus and where we think we can kind of win in the marketplace. And that's representative of the shift that we're talking about.

我認為，正如我們在過去幾年中所做的那樣，我們已經了解到我們的優勢、我們的產品組合和我們的行銷模式在何處發揮最佳作用。這並不是說我們要退出並完全關閉其他管道。我認為我們仍處於學習過程的一部分。但我認為，現在我們更清楚我們想要關注的重點以及我們認為我們能在市場上獲勝的領域。這代表了我們正在談論的轉變。

Yes. I would just say our omnichannel approach is still there. It's just changing where we focus our time and energy. I think early on someone mentioned the word to deemphasizing -- we're not exiting any of the channels, but we are deemphasizing one area and really kind of putting more energy and effort into areas where we -- we believe we have competitive advantage and we can drive greater sales and margin growth. And we're excited about launching that this year and see what it would bring, but very confident in those parts of our business that really play well to our strengths.

是的。我想說我們的全通路方法仍然存在。它只是改變了我們集中時間和精力的地方。我認為早些時候有人提到過「弱化」這個詞——我們不會退出任何管道，但我們會弱化一個領域，並將更多的精力和努力投入到我們認為具有競爭優勢並能推動更大銷售和利潤增長的領域。我們很高興能在今年推出這項服務並期待它會帶來什麼，但我們對能夠真正發揮我們優勢的業務部分非常有信心。

Understood. And the margin benefit you've cited is notable. You mentioned top line expectations for Pureit. Can you remind us where margins are on a run rate basis and having owned the assets for a little bit now where you think medium-term profitability should check out.

明白了。您所提到的利潤收益是十分顯著的。您提到了對 Pureit 的最高預期。您能否提醒我們，以運行率為基礎的利潤率是多少，並且您認為現在擁有資產一段時間後，中期盈利能力應該在何處？

Yes. I mean, so roughly Pure is going to contribute in 2025, about $50 million in revenue. The earnings profile is very similar to our India business. Right now, we're really leaning into growth in India. And so the operating margins around mid-single digits, very similar to our business legacy business in India.

是的。我的意思是，Pure 預計在 2025 年貢獻約 5,000 萬美元的收入。獲利狀況與我們的印度業務非常相似。目前，我們非常傾向於印度的成長。因此，營業利潤率約為中等個位數，與我們在印度的傳統業務非常相似。

I would say for 2025, we've got a real focus on integrating Pure in a way that will set us up for continued growth in India. And that integration is going on track. It's been a couple of months but on track so far.

我想說，到 2025 年，我們將真正專注於整合 Pure，以便為我們在印度的持續成長做好準備。目前整合工作正按計劃進行。已經過去幾個月了，但目前一切都很順利。

Maybe just to touch base on we've been looking to scale India. This was a very important component for us to move forward. The Pureit business really complemented where we're at. They're very strong on the e-commerce. In retail, we're really strong retail on our dealer side of the business or general trade as they call it. But more importantly, that scale brings us to the number three position in the market.

也許只是為了了解我們一直在尋求擴大印度的規模。這是我們前進的一個非常重要的因素。Pureit 業務確實對我們所處的狀況進行了補充。他們在電子商務方面非常強大。在零售方面，我們的經銷商業務或所謂的一般貿易零售業務確實非常強勁。但更重要的是，這個規模使我們在市場上佔據第三的位置。

And I think that's a nice step up. And as Chuck mentioned, it's going to take some integration. But when you combine the business, you double the size of it, it gives you some optionality to continue to grow the business and drive cost and margin improvement.

我認為這是一個很好的進步。正如查克所提到的，這需要一些整合。但是當你合併業務時，其規模會擴大一倍，這會為你提供一些選擇權，以繼續發展業務並推動成本和利潤率的提高。

Scott Graham, Seaport Research Partners.

格雷厄姆（Scott Graham），海港研究夥伴。

Welcome, Steve. I think, Steve, you said a 4% water heater pricing, if I heard you wrong, please correct me. And that, that was a carryover number.

歡迎光臨，史蒂夫。我認為，史蒂夫，你說的是 4% 的熱水器定價，如果我聽錯了，請糾正我。那就是結轉數字。

In March, we went to the marketplace with a 4% water heater price that's March of 2024, of which that will be carrying over into 2025.

今年 3 月，我們向市場推出了 4% 的熱水器價格，即 2024 年 3 月的熱水器價格，這個價格將延續到 2025 年。

Okay. And then by extension, if you're expecting steel prices to rise in the second half of the year, like I think most of us are. Are we looking at another price increase sometime in the first or second quarter of this year?

好的。再進一步說，如果你預計下半年鋼鐵價格會上漲，我想大多數人也是這麼認為的。我們是否會考慮在今年第一季或第二季再次漲價？

Scott, it's Kevin. Listen, I think the way that we would frame this is that how we manage pricing hasn't changed for multiple years. And as I mentioned before, one of the things that we try to do with our customers is we have credibility because we take the increases before we pass it on to them.

史考特，我是凱文。聽著，我認為我們這樣表達是因為我們管理定價的方式多年來都沒有改變。正如我之前提到的，我們嘗試為客戶做的事情之一就是建立信譽，因為我們會在將增加的費用轉嫁給他們之前先收取費用。

And we also want to the market very closely, so we know when to take those actions. And so I would just go back to historically, Scott. We've been able to offset inflation given time. That's not going to change going forward. I just don't want to get any specifics about hypothetical if steel goes up or doesn't go up.

我們也非常密切地關注市場，這樣我們才知道何時該採取這些行動。因此我只想回顧一下歷史，斯科特。只要有時間，我們就能夠抵銷通貨膨脹。這狀況今後不會改變。我只是不想得到有關鋼鐵價格上漲或不上漲的假設的任何具體資訊。

I think if you just step back and look at our business and how we've managed it in the past, we have a really good track record of addressing any inflationary pressures, whether it's steel or any other type of products or components.

我認為，如果你回顧我們的業務以及我們過去的管理方式，你會發現我們在應對通膨壓力方面有著良好的記錄，無論是鋼鐵還是任何其他類型的產品或零件。

Susan Maklari, Goldman Sachs.

高盛的蘇珊馬克拉里 (Susan Maklari)。

My first question is going back to the channel inventories in water heaters, how would you generally characterize the tone of the conversations that you're having with customers? And what do you think their appetite is to restock over the course of this year? Are there any key points that you or your customers are watching for to kind of determine maybe the path or the cadence for some of that restock that could come through?

我的第一個問題是回到熱水器的渠道庫存，您通常如何描述與客戶交談的基調？您認為他們今年的補貨意願如何？您或您的客戶正在關注哪些關鍵點，以確定可能實現的部分補貨的路徑或節奏？

I just think -- I'll let others comment on this. I just think there's a backdrop of -- so I think when we're talking to customers, they're a bit cautious going in. I think the business is still good. We called it out to be flat on both residential and the commercial side of the business. 80%, 85% of that replacement. And people just don't go without it. And the other 15%, I think, is what you're talking about. We'll have to -- we'll see how things play out in that first quarter.

我只是認為——我會讓其他人對此發表評論。我只是認為有這樣的背景存在——所以我認為當我們與客戶交談時，他們會有些謹慎。我覺得生意還是不錯的。我們稱住宅業務和商業業務均持平。 80%、85%的替換。人們離不開它。我認為，剩下的 15% 就是您所談論的。我們必須——看看第一季的情況如何。

Susan, this is Chuck. I mean when we track order rates, and we said this on our last call. Sequentially, our order rates were better in Q4 than Q3. So we did see an increase. So as our customers are probably in a better normal position, they did increase orders.

蘇珊，這是查克。我的意思是當我們追蹤訂單率時，我們在上次通話中就說過這個。從環比來看，我們第四季的訂單率比第三季好。因此我們確實看到了成長。因此，由於我們的客戶可能處於更好的正常狀態，他們確實增加了訂單。

Then when we look into January 2025 not as large an increase that we saw in Q4 over Q3, but another increase slightly up, I don't know, a daily order rate which gives us some confidence that we're seeing that buyback in.

然後，當我們展望 2025 年 1 月時，我們發現第四季相對於第三季的增幅並不大，但每日訂單率又略有上升，這讓我們有信心看到回購。

I will note, like I said before, we have some tough comps. So order rates are not back up to 2024 first quarter, our January order rates yet and we probably won't see that for the quarter, but we were pleased that we saw a bit of an uptick in our rates in January.

我要指出的是，正如我之前所說，我們面臨一些艱難的競爭。因此，訂單率尚未恢復到 2024 年第一季的水平，我們的 1 月份訂單率尚未恢復，而且我們可能不會在本季度看到這一水平，但我們很高興看到 1 月份的訂單率略有上升。

Okay. All right. That's helpful. And then just wondering if you could talk a bit about the North America water treatment side, you guided for about a 5% decline there this year. Can you talk a bit about what you're seeing and what's driving that?

好的。好的。這很有幫助。然後我想知道您是否可以談談北美水處理方面，您預計今年該領域的銷售額將下降約 5％。您能否談談您所看到的情況以及推動這現象的因素？

The 5% decline in the top line is primarily driven by the repositioning of the portfolio that we talked about. So as we're deemphasizing certain products and certain go-to-market model, that will be a headwind to growth, but we are still confident we see growth in the remaining focused areas. So the net-net of that for 2025, which is a bit of a transition year for us, will be down about that 5%, but we feel confident that with our refocusing we'll get back to growth.

營業收入下降 5% 主要是因為我們談論的投資組合重新定位。因此，當我們不再強調某些產品和某些市場進入模式時，這將成為成長的阻力，但我們仍然相信，我們將看到剩餘重點領域的成長。因此，2025 年（對我們來說是一個過渡年）的淨利潤將下降約 5%，但我們相信，隨著我們重新調整重點，我們將恢復成長。

Nathan Jones, Stifel.

內森瓊斯（Nathan Jones），斯蒂費爾（Stifel）。

Just maybe a question on the China trade in stimulus kind of programs over there. I think you said the impact in folks to allow your distributors to reduce some of their inventory. So it doesn't sound like there was much impact for your business in the fourth quarter. Just any more color you can give us on what you're expecting from that in 2025 kind of how you've addressed that in the guidance of down five. It doesn't really sound like you're expecting it to have a lot of impact on the business. So just any color you can give us around your expectations there.

也許只是關於中國貿易刺激計劃的一個問題。我認為您說過這會對人們產生影響，從而允許您的分銷商減少部分庫存。所以聽起來這對您第四季的業務沒有太大影響。您能否向我們詳細介紹一下您對 2025 年的期望，以及您在下降五的指導中是如何解決這個問題的。聽起來你並不期望它會對業務產生很大的影響。因此，您可以根據您的期望為我們提供任何顏色。

This is Steve. I'll start by maybe just giving some character around in the Q4. We did see the impact in our market, right? And as we talked about, the channel and the retailers had a good sell-out performance actually had growth in the quarter just didn't flow all the way back to our business.

這是史蒂夫。我首先會介紹一下 Q4 中的一些人物。我們確實看到了對我們市場的影響，對嗎？正如我們所討論的，通路和零售商的銷售業績實際上在本季度實現了成長，但並沒有完全回流到我們的業務。

But it is a good indication that the trade-in program did have some demand generation effect. I think we're entering 2025 just cautious about what that sustainability looks like. It has been extended province by province, the execution of that program still is kind of working itself through.

但這很好地表明，以舊換新計劃確實發揮了一定的需求創造作用。我認為我們在進入 2025 年時會對永續性持謹慎態度。該計劃已在各省逐步推廣，目前仍在逐步實施中。

Some provinces the program is up and running. Some are still working on how it's going to get executed. Obviously, they're in a holiday period right now, but we'll see that in Q1 in terms of just sort of what kind of continued impact it's having. We're cautious right now because we wanted to understand how much of it is true fundamental demand generation, right?

一些省份已經啟動並運行該計劃。有些人仍在研究如何實施它。顯然，他們現在正處於假期，但我們將在第一季看到它會產生什麼樣的持續影響。我們現在很謹慎，因為我們想了解其中有多少是真正的基本需求產生，對嗎？

At the end of the day, consumers need to be installing more equipment. There might have been some pent-up demand there as people were waiting for this program. So we're working through that. It's encouraging that the impact it did have on Q4. It's encouraging that it has been extended through 2025. We're just cautious, and we're following it very closely to see what that impact will actually look like for us.

最終，消費者需要安裝更多的設備。由於人們正在等待這個項目，因此可能存在一些被壓抑的需求。所以我們正在努力解決這個問題。令人鼓舞的是它確實對第四季產生了影響。令人鼓舞的是，該期限已延長至 2025 年。我們只是保持謹慎，並密切關注，看看它實際上會給我們帶來什麼影響。

Is it fair to characterize the approach you've taken to guidance from that is that you're not really including any benefit from it?

是否可以公平地描述您所採取的指導方法，即您實際上並沒有從中獲得任何好處？

Maybe a little bit. I mean -- but I'd say we're very cautious, right? And it could swing where we see that benefit early parts of the year, later part of the year. But we really want -- what we're really watching for is at the end of the day is more kitchen remodeling happening. Our people living in the new apartments are people actually investing and upgrading -- and when that starts happening, fundamentally at the consumer level, that's why I think we'll have more confidence in the long-term health of the business.

可能有一點。我的意思是——但我想說我們非常謹慎，對吧？而且，我們看到，這種收益可能會在年初和年末之間波動。但我們真正想要的是——我們真正關注的是最終發生更多的廚房改造。住在新公寓裡的人實際上正在投資和升級——而當這種情況開始發生時，從根本上來說是在消費者層面，這就是為什麼我認為我們會對業務的長期健康更有信心。

Jefferies.

傑富瑞。

Maybe a little bit longer-term growth question. With China down another year, how do you think about your long-term guidance for I believe 5% to 6% growth through 2028? Like can sales recover stronger than that to make up for the weaker start.

這也許涉及一個比較長期的成長問題。由於中國經濟又下滑了一年，您如何看待到 2028 年的長期成長預期：我認為成長率為 5% 至 6%？例如，銷售能否強勁復甦，彌補開局疲軟的局面。

Yes. I think we talked a bit about that. I mean, it's the first year in our guidance. Even in our guidance, like I said, we were looking for some recovery -- so yes, obviously, you would have to recover at least at a higher rate as we go forward. But part of that also is not just the economy, it's our mix and our products and how we're growing our premium categories. So right now, we're behind the first year.

是的。我想我們已經討論過這個問題了。我的意思是，這是我們指導的第一年。正如我所說，即使在我們的指導中，我們也在尋求某種程度的復甦 - 所以是的，顯然，隨著我們前進，你必須至少以更高的速度復甦。但這其中的一部分不僅僅是經濟，還包括我們的產品組合和產品以及我們如何發展我們的高端類別。因此現在，我們已經落後了第一年。

But as we look forward, I mean, I think some of the things that we're seeing are positive. But again, for us to get to that 5% or 6% number -- percent number, we just need to see real growth that's sustainable, and that still needs to play out, as Steve has mentioned.

但當我們展望未來時，我認為我們看到的一些事情是積極的。但是，為了達到 5% 或 6% 的百分比數字，我們只需要看到可持續的實際成長，而且正如史蒂夫所提到的那樣，這仍然需要發揮作用。

And I would just add, as you think about 2025 we have two areas of growth for us in water treatment and in China that are going to -- we're anticipating right now to be repositioning years. And that's going to be a drag on our top line. And then I think we are also making investments and have been through last year and will continue this year, which is positioning us well, I think, for growth looking forward, but we've got to get through and get those investments executed.

我還要補充一點，展望 2025 年，我們在水處理和中國有兩個成長領域——我們現在預計這將是重新定位的幾年。這會對我們的營收造成拖累。然後我認為我們也在進行投資，去年我們已經進行了投資，今年還將繼續進行投資，我認為這為我們未來的成長做好了準備，但我們必須堅持下去並執行這些投資。

I appreciate the color. And then I know there's been a lot of talk on the North America water heater market, but just is one more, maybe just a little bit on the competitive environment. And your position, are you seeing any gains by competitors that are impacting the results and the volatility that we saw this year?

我很欣賞這個顏色。然後我知道人們已經對北美熱水器市場進行了很多討論，但再說一個，也許只是關於競爭環境的一點點討論。就您的立場而言，您是否看到競爭對手的任何進步對業績和我們今年看到的波動產生了影響？

Well, there's definitely some volatility out there and probably a little bit more than normal particularly up in the kind of the Northeast, Midwest area. But overall, I'm going to speak from an A. O. Smith perspective. We've navigated through that before.

嗯，那裡肯定存在一些波動，而且可能比正常情況要大一些，特別是在東北部和中西部地區。但總的來說，我將從 A. O. 史密斯公司的角度來發言。我們之前已經討論過這個問題。

And so nothing that I would consider to be new. It's just some changes, some distributor changes. And any 10 there is a change in the market. There's always some disruption, there's always opportunity. But overall, we navigated through these in the past, and we'll continue to do that.

因此我認為沒有什麼新鮮事。這只是一些變化，一些分銷商的變化。任何 10 個市場都會改變。總是會有一些混亂，也總是有機會。但總的來說，我們過去已經解決了這些問題，並且我們會繼續這樣做。

And I'll go back to our customer base is strong no loss of major customers in 2024. And those partnerships are decades long, and I think they'll continue to benefit both of us going forward. So nothing meaningful to A. O. Smith, but yes, some disruption in the market.

我將回到我們的客戶群，我們將保持強大的客戶基礎，到 2024 年不會失去主要客戶。這些合作關係已持續數十年，我認為它們將繼續使我們雙方在未來受益。因此，這對 A. O. 史密斯公司來說沒有什麼意義，但確實為市場帶來了一些幹擾。

Jeff Hammond, KeyBanc Capital Markets.

KeyBanc 資本市場公司的 Jeff Hammond。

I guess, Steve, good to have you on the call. I think in your prepared remarks, you talked about similar things that early observations and the things that impressed you about A. O. Smith, but just wondering where you see opportunity for change, whether it be commercial or op excellence maybe you take an early look at your tenure here?

我想，史蒂夫，很高興你來接電話。我想在您準備好的發言中，您談到了類似早期觀察的事情以及 A. O. 史密斯給您留下的深刻印象，但只是想知道您認為變革的機會在哪裡，無論是商業還是運營卓越，也許您可以提前看看您在這裡的任期？

Sure. As I said, I've been really impressed with the quality of the businesses that A. O. Smith has, market-leading position, market-leading products, really great, deep customer relationships has obviously been a lot of the last 10 months getting to know those better. But -- and had a great culture fit for me. So those are some of the positives. I do see opportunities where my experience and background has a chance to bring something new or add some value to A. O. Smith.

當然。正如我所說，A. O. 史密斯公司的業務品質給我留下了深刻的印象，它市場領先，產品領先，客戶關係非常好，很顯然，在過去的 10 個月裡，我對這些有了更多的了解。但是 — — 而且這裡的企業文化非常適合我。這些都是一些正面的方面。我確實看到了機會，我的經驗和背景有機會為 A. O. 史密斯公司帶來新的東西或增加一些價值。

I think I'd say right now, there's three areas that I'm kind of leaning into. One is our A. O. Smith operating system, which there's a great foundation here that we've built around a culture of problem-solving on the plant floor and I've got a personal experience in deploying and running different operating systems.

我想說現在我比較傾向三個領域。一個是我們的 A. O. 史密斯操作系統，這個系統有一個很好的基礎，是我們圍繞工廠車間解決問題的文化而建立的，而且我在部署和運行不同的操作系統方面有親身經歷。

And I think there's an opportunity to expand it even further kind of take it to the next level, be more focused on how we're driving waste elimination. So that's an area I'm leaning into.

我認為有機會進一步擴大它，將其提升到一個新的水平，更加專注於我們如何推動廢物消除。這是我所傾向的領域。

Second one is on the IT technology side. We've built and deployed our ERP system over the last few years. And that's also an area I have some experience as a previous employer, I led the implementation of their ERP system. And I think we're at the phase now about how do we get value out of both the IT investments we've made.

第二個是IT技術方面。我們在過去幾年建立並部署了我們的 ERP 系統。這也是我作為前雇主有一定經驗的領域，我領導了他們的 ERP 系統的實施。我認為我們現在正處於如何從我們所做的 IT 投資中獲取價值的階段。

And then it's also a space where technology is moving quite quickly. And how do we just position ourselves for where technology is going to be more competitive as a company. And I think initially that sort of internally, how we run the company and eventually it could be more involved in how it interacts with our products.

這也是一個科技快速發展的領域。我們如何定位自己，以使公司在技術上更具競爭力？我認為最初是內部的，我們如何經營公司，最終可能會更多地涉及如何與我們的產品互動。

And then the third area, I've spent a lot of time on is just on the portfolio side. And obviously, some of the restructuring announcements today are an outcome of some of that work, but thinking through how do we get more competitive with our portfolio? How do we drive innovation in the market spaces where we're at.

我在第三個領域花了很多時間，那就是投資組合方面。顯然，今天宣布的一些重組公告是這些工作的成果，但仔細想想，我們如何讓我們的投資組合更具競爭力？我們如何在所在的市場空間推動創新。

And then taking a big picture about where is the portfolio going in the future. So I'd say those are three areas that I spent a lot of time on. Again, it taps into a little bit of sort of my own experience that I'm bringing into A. O. Smith, and I think there's a lot of lot of opportunity to build out some good foundation and add more value.

然後從整體上了解投資組合的未來走向。所以我想說這是我花了很多時間的三個領域。再次，它利用了我為 A. O. 史密斯公司帶來的一些個人經驗，我認為有很多機會可以打下良好的基礎並增加更多價值。

Okay. Great. Appreciate the color there. Just a couple of cleanups. One, on the -- just the tariff dynamic and Mexico, Canada, can you talk about your footprint versus what you think your peers footprint, does that put yet maybe an advantage, disadvantage in any way should some of them the Mexico-Canada tariffs go in? And then just last one, corporate expense. What's driving the $10 million increase in 2025 in a tough environment?

好的。偉大的。欣賞那裡的色彩。只需進行幾次清理。首先，關於關稅動態以及墨西哥、加拿大，您能否談談您們的足跡與您同行的足跡相比，如果對墨西哥和加拿大徵收關稅，這是否會帶來優勢或劣勢？最後一個，公司費用。在艱難的環境下，是什麼推動了2025年增加1000萬美元？

Well, I'm going to have Chuck take the expense side of it, but I'll take the Mexico and the tariffs and so forth in our positioning. And I'm going to candidate as well because they're both in play and -- what I would tell you that A. O. Smith is positioned pretty well with regards to that. If you look at North America, in Mexico, we do have a facility down there. That's about maybe 15% of our production.

好吧，我會讓查克負責費用方面的問題，但我會在我們的定位中考慮墨西哥和關稅等方面的問題。我也會選擇候選人，因為他們都在發揮作用，而且 — — 我想告訴你的是，A. O. 史密斯公司在這方面處於相當有利的位置。如果你看看北美，在墨西哥，我們在那裡有一個工廠。這大概占我們產量的15%。

We have two large facilities in North America, which -- in the U.S., which gives us some optionality there, if needed. So -- and we're positioned well. So have a small footprint, but also having some factories that can we can lever if we need to is of comfort to us.

我們在北美有兩家大型工廠，如果需要的話，這可以給我們一些選擇。所以—我們的定位很好。因此，不僅佔地面積小，而且還擁有一些可以在需要時利用的工廠，這對我們來說很方便。

And I would say you up in Canada, we're the only major water heater company that has a water heater tank plant up in Montreal. So that gives us, again, some optionality to look at different views of capacity and manufacturing. So if I step back, just from a manufacturing footprint, we're in pretty good shape.

我想說的是，在加拿大，我們是唯一一家在蒙特婁擁有熱水器水箱工廠的大型熱水器公司。因此，這再次為我們提供了從不同角度看待產能和製造能力的選擇。因此，如果我退一步來看，僅從製造足跡來看，我們的狀況相當不錯。

I think in some cases, better than most of our competitors because we're not all in, in one area, and we have that flexibility with a number of plants and having -- Steve talked about the ERP system, but also having standardized products, just allows us to move that around, if necessary. So we feel -- listen, we don't know what it's going to take, but we feel we're in the a really solid position for A. O. Smith, but also to be competitive long term.

我認為在某些情況下，我們比大多數競爭對手做得更好，因為我們並不全部集中在一個領域，而且我們在多家工廠擁有靈活性——史蒂夫談到了 ERP 系統，但也有標準化的產品，這讓我們可以在必要時進行轉移。因此我們認為——聽著，我們不知道需要做什麼，但是我們覺得我們對 A. O. 史密斯來說處於一個非常穩固的地位，而且也能保持長期的競爭力。

And then your question on corporate expense up $10 million, that's $25 million versus $24 million? Yes. Okay. I mean there's some puts and takes on it, but roughly equally weighted -- the two largest pieces are interest income that is less in 2025 as that's lumped into that category as well as incentives that are at target versus lower than target versus lower than target in 2024.

然後您關於公司費用增加 1000 萬美元的問題，那是 2500 萬美元對 2400 萬美元？是的。好的。我的意思是，這其中存在一些利弊，但權重大致相同——最大的兩個部分是 2025 年較少的利息收入，因為它被歸入該類別，以及 2024 年達到目標與低於目標的激勵措施。

Andrew Kaplowitz, Citi.

花旗銀行的 Andrew Kaplowitz。

So you obviously have a very strong balance sheet. And Steve, I think you mentioned you're focused on where the AOS portfolio can go in the future. I know you just closed period, but would you expect AOS to get more aggressive in terms of portfolio management in the future, whether you ramp up an M&A or is something else? Like how do you think about that moving forward?

所以你的資產負債表顯然非常強勁。史蒂夫，我想你提到你關注的是 AOS 產品組合未來的發展方向。我知道您剛結束了一段時期的業務，但您是否預期 AOS 未來在投資組合管理方面會變得更加積極，無論您是加強併購還是採取其他措施？那麼您如何看待這項未來的發展呢？

I think it's something that we've always been looking at. And I think we are a company that is exploring where we should go next in terms of our portfolio and yet at the same time, still being disciplined about that.

我認為這是我們一直在關注的事情。我認為，我們是一家正在探索投資組合下一步走向的公司，但同時，我們仍在嚴格遵守這項原則。

So in terms of being aggressive or more aggressive or less aggressive, I'd just say it continues to be on our radar screen, and it's on my radar screen and certainly trying to bring my own sort of lens of how I think we can move that forward. But I think it's a lever available to us, but we're going to continue to be disciplined about how we pursue it.

因此，就採取積極態度、更積極態度或不那麼積極態度而言，我只想說，它將繼續出現在我們的雷達屏幕上，也出現在我的雷達屏幕上，我肯定會嘗試以自己的視角來看待我們如何推動這一進程。但我認為這是我們可以利用的一個槓桿，但我們將繼續嚴格控制如何追求它。

Very helpful. And then if I go about the last quarter, I think you said you saw a modest slowdown including activity in boilers, but your guidance for this year is still for 3% to 5% growth. So any color there on the boiler side still looks like you're pretty confident about another growth year for that side of the business?

非常有幫助。然後，如果我回顧上個季度，我想您說過，包括鍋爐活動在內的經濟出現了適度放緩，但您對今年的成長預期仍為 3% 至 5%。那麼，鍋爐方面任何顏色看起來仍然表明您對該業務的另一年增長非常有信心嗎？

Yes. I would -- this is Kevin. I would say that 3% to 5% that we have out there -- the driver for us is always our coating activity. That seems to be really stable. Quite frankly, some of our product categories, the CREST boiler is doing exceptionally well. So -- that's a market that tends to grow 1% to 2% units. We're going 3% to 5%.

是的。我會——這是凱文。我想說的是，我們已經擁有的 3% 到 5% 的市場份額 — — 對我們來說，驅動力始終是我們的塗層活動。這看起來確實很穩定。坦白說，在我們的一些產品類別中，CREST 鍋爐的表現非常出色。所以 —— 這個市場往往以 1% 到 2% 的單位數成長。我們的增幅將達到 3% 至 5%。

And I think a lot of it has to do with our products and also that continuing transition from a non-efficient to a high efficient product line and our boiler business does is sell high-efficient products. So it's a nice space to be in, and we think we'll get more than our fair share.

我認為這在很大程度上與我們的產品有關，也與我們不斷從低效率到高效產品線的轉變有關，我們的鍋爐業務就是銷售高效產品。因此，這是一個很好的領域，我們認為我們將獲得比我們應得的份額更多的回報。

David MacGregor, Longbow Research.

麥格雷戈（David MacGregor），長弓研究公司（Longbow Research）。

I guess just on China, the restructuring, can you just talk about the timing of the benefits of that restructuring? And when do you expect to see the first signs of success. And then maybe where within that Chinese sort of mix of businesses would we expect to see the greatest impact?

我想僅就中國重組而言，您能談談重組帶來的好處的時機嗎？您預計何時會看到成功的第一個跡象。那麼，我們可能希望在中國的各種業務組合中看到最大的影響嗎？

So we've already -- we're already underway with the restructuring. So we're a bit more than halfway through it already. So we'll start seeing benefits right now. And then we've got more to go. So we'll finish off the rest of the restructuring over this quarter and the following quarter.

因此我們已經—已經開始重組了。因此，我們已經完成了一半多一點。因此我們現在就能開始看到好處。然後我們還有更多的事情要做。因此，我們將在本季和下一季完成剩餘的重組工作。

And as I mentioned, by the end of Q2, we'll expect it to be pretty much fully implemented at that point. I would say a lot of it is just getting us more streamlined and better positioned to compete in China. So obviously, our business today is not the same size as it was a few years ago. We have to think differently about how we're organized.

正如我所提到的，到第二季末，我們預計它將基本完全實現。我想說，這在很大程度上是為了讓我們更加精簡，並讓我們在中國的競爭中處於更有利的位置。顯然，我們現在的業務規模與幾年前已經不一樣了。我們必須以不同的方式思考我們的組織方式。

So from that standpoint, different than how we characterize water treatment, it may be less about major portfolio ships and more about just getting more competitive and getting more streamlined about what we need to focus on going forward to compete in the China market.

因此，從這個角度來看，與我們對水處理的特徵不同，它可能與主要的產品組合關係不大，而更多是關於如何提高競爭力和精簡我們在未來中國市場競爭中需要關注的重點。

So if I'm hearing you correctly, are you saying the benefits are more kind of SG&A benefits than COGS benefits.

所以，如果我沒聽錯的話，您說的福利更多的是銷售、一般和行政費用福利，而不是銷貨成本福利嗎？

Yes, there's a lot of structural cost. I think I would say we're getting more efficient now.

是的，結構成本很高。我想說我們現在變得更有效率了。

Yes. I mean that this is Chuck. But that's specific to the restructuring. We always have initiatives to reduce costs, productivity improvement, cost out. So that will continue next year also. And there is a focus on certain parts of the portfolio that has more work to do there than others, and that's also well aligned. And I think where we're focused going forward.

是的。我的意思是這是查克。但這具體涉及重組。我們始終致力於降低成本、提高生產力、降低成本。明年這種情況還會持續下去。並且專注於投資組合的某些部分，這些部分比其他部分需要做更多的工作，而且這也是很好的協調。我想這就是我們未來的重點。

Got it. And the follow-up question is just on the balance sheet, I guess, inventories. What is kind of the target in terms of days of inventory? What would you like to get that down to?

知道了。我猜後續的問題只是關於資產負債表和庫存。就庫存天數而言，目標是什麼？你想把它歸結為什麼呢？

Yes. We're a little higher than we'd like to be. I mean if you look at our inventories, they're up about $35 million year over year. There's a couple of reasons. One is we did invest a bit in tankless inventory as we're rolling out those initiatives have a longer lead time. We're also looking at overall, just a little higher inventory as the volume was a little lighter than what we expected during the last quarter of the year, which we'll take that out.

是的。我們目前所處的位置比我們想要的要高一些。我的意思是，如果你看看我們的庫存，它們比去年同期增加了約 3500 萬美元。有幾個原因。一是，我們確實在無水箱庫存方面進行了一些投資，因為我們正在推出這些計劃，但準備時間較長。我們還發現，總體而言，庫存略有增加，因為去年最後一個季度的庫存量比我們預期的要少一些，我們會將這一部分剔除。

So our initiative on an overall days, when you kind of look at overall days on hand when you take receivables, inventory and payables is to be below that 40-day level and we are targeting to be below that 40-day level as we come into the end of 2025.

因此，當您查看應收帳款、庫存和應付帳款的總庫存天數時，我們的總體天數計劃是將其控制在 40 天以下，我們的目標是在 2025 年底時將其控制在 40 天以下。

I'm showing no further questions at this time. I would now like to turn it back to Helen Gurholt for closing remarks.

我目前沒有其他問題。現在我想請海倫古爾霍爾特作最後發言。

Thank you, everyone, for joining us today. Let me conclude by reminding you that our global AOS team continue to invest in ourselves even while navigating many challenges in 2024. We look forward to updating you on our progress in the quarters to come.

感謝大家今天的參與。最後，我想提醒大家，即使在 2024 年面臨許多挑戰的情況下，我們的全球 AOS 團隊仍將繼續自我投資。我們期待在未來幾季向您通報我們的進展。

In addition, please mark your calendars to join our presentations at two conferences this quarter. Citi on February 18 and North Coast on March 6. Thank you, and enjoy the rest of your day.

此外，請在您的日曆上標記參加我們本季在兩次會議上的演講。花旗銀行於 2 月 18 日成立，北海岸銀行於 3 月 6 日成立。謝謝您，祝您今天過得愉快。

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

今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。