A O Smith Corp (AOS) 2025 Q4 法說會逐字稿

Welcome to A. O. Smith Corporation fourth quarter 2025 earnings conference call. (Operator Instructions) I would now like to hand the call over to Helen Gurholt. You may begin.

歡迎參加A. O. Smith公司2025年第四季財報電話會議。（操作員指示）我現在想把電話交給海倫古爾霍爾特。你可以開始了。

Good morning, everyone, and welcome to the A.O. Smith full year and fourth quarter conference call. I'm Helen Gurholt, Vice President, Investor Relations and Financial Planning and Analysis. Joining me today are Steve Shafer, Chief Executive Officer; and Chuck Lauber, Chief Financial Officer.

各位早安，歡迎參加A.O. Smith全年及第四季電話會議。我是 Helen Gurholt，投資人關係、財務規劃與分析副總裁。今天和我一起出席的有執行長史蒂夫·謝弗和財務長查克·勞伯。

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 and adjusted segment earnings exclude the impact of restructuring and impairment expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the appendix at the end of this presentation 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.

為了提高公司經營績效的透明度，我們提供了非GAAP指標。自由現金流定義為經營活動產生的現金流量減去資本支出。調整後收益、調整後每股盈餘和調整後分部收益不包括重組和減損費用的影響。GAAP 指標與非 GAAP 指標的調整表在本簡報末尾的附錄中提供，該附錄可在我們的網站上找到。友情提醒：本次電話會議中的一些評論和回答屬於前瞻性陳述，存在一定風險，實際結果可能與預期有重大差異。

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.aomith.com.

這些風險包括我們在今天早上的新聞稿中描述的問題，以及其他一些問題。另外，為了不影響其他排隊提問的人，請每人每次只提一個問題和一個後續問題。如果您有多個問題，請重新排隊。在今天的電話會議中，我們將使用幻燈片。您可以在我們的網站 investor.aomith.com 上存取它們。

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

現在我將把電話交給史蒂夫，讓他開始我們事先準備好的演講。請翻到下一張投影片。

Thank you, Helen, and good morning, everyone. I want to take a moment to sincerely thank all of our employees for their outstanding dedication and hard work in 2025, allowing us to navigate a dynamic environment and deliver a record EPS.

謝謝你，海倫，大家早安。我想藉此機會衷心感謝我們所有員工在 2025 年的傑出奉獻和辛勤工作，使我們能夠應對瞬息萬變的環境並實現創紀錄的每股收益。

Their commitment to serving our customers, adapting to new challenges, and consistently delivering high-quality solutions is instrumental in our success. Each and every member of the A. O. Smith team has a vital role in building trust with our customers and upholding the values that define A. O. Smith. I am truly grateful for your ongoing passion and collaboration that has me excited for a potential together in 2026 and beyond.

他們致力於服務我們的客戶，適應新的挑戰，並持續提供高品質的解決方案，這對我們的成功至關重要。A. O. Smith 團隊的每一位成員在建立與客戶的信任以及維護定義 A. O. Smith 的價值觀方面都發揮著至關重要的作用。我衷心感謝您一直以來的熱情和合作，這讓我對2026年及以後與您合作的可能性感到興奮。

Now moving on to our 2025 financial performance. Please turn to slide 4. Our 2025 sales increased slightly as pricing benefits and higher commercial water heater and boiler volumes were offset by lower China sales. Our EPS increased 6% to a record $3.85 driven by profitability improvements in both segments.

接下來展望我們2025年的財務表現。請翻到第4張投影片。由於價格優勢和商用熱水器及鍋爐銷量增加，抵消了中國市場銷售下降的影響，我們2025年的銷售額略有成長。受兩個業務部門獲利能力提升的推動，我們的每股盈餘成長了 6%，達到創紀錄的 3.85 美元。

North America segment margin improved 20 basis points over 2024 adjusted segment margin, led by profitability improvements in our water treatment business as well as mix benefits from higher commercial sales. In our Rest of World segment, benefits from our 2024 restructuring actions and other cost control measures in China resulted in margin expansion of 40 basis points, even with lower China sales. We returned $597 million of capital to shareholders with our dividends and share repurchases. In the fourth quarter, we announced the acquisition of Leonard Valve, which we completed earlier this month. This acquisition expands our water management market reach, digital capabilities and integrated product portfolio. I welcome the Leonard Valve team to the A. O. Smith family.

北美業務部門利潤率較 2024 年調整後業務部門利潤率提高了 20 個基點，這主要得益於水處理業務的盈利能力提升以及商業銷售增長帶來的產品組合效益。在我們的世界其他地區業務板塊，得益於我們在 2024 年的重組行動以及在中國採取的其他成本控制措施，即使中國銷售額下降，利潤率也提高了 40 個基點。我們透過分紅和股票回購向股東返還了 5.97 億美元的資本。第四季度，我們宣布收購 Leonard Valve，並於本月初完成了收購。此次收購擴大了我們在水資源管理市場的覆蓋範圍、數位化能力和綜合產品組合。我歡迎 Leonard Valve 團隊加入 A. O. Smith 大家庭。

Now turning to our North America segment performance. North America water heater sales increased 1% in 2025 as cost and tariff-related pricing benefits and higher commercial volumes offset lower wholesale residential volumes. We project that full year 2025 residential industry unit volumes were roughly flat to 2024, and the commercial water heater industry volumes increased approximately 5%. We are pleased with our performance in the commercial market and retail residential channel. However, we faced some challenges in the wholesale residential channel in the fourth quarter.

現在來看我們北美地區的業績。2025 年，北美熱水器銷量成長 1%，成本和關稅相關的定價優惠以及更高的商業銷量抵消了住宅批發銷量的下降。我們預計 2025 年全年住宅產業銷量與 2024 年大致持平，而商用熱水器產業銷量則成長約 5%。我們對我們在商業市場和零售住宅通路的表現感到滿意。然而，我們在第四季的住宅批發管道遇到了一些挑戰。

This part of this market is experiencing pressure from a new construction slowdown and continued initiatives by retailers to expand into serving the professional, which is leading to increased competitive intensity. The benefit for us as an industry leader is that we have a strong presence in both the retail and wholesale channels, and we have a good line of sight into how the market moves, backed by data, analytics and extensive customer relationships. We are actively working with select customers to address the specific geographies and product offerings that are under the most pressure to deliver better outcomes in the wholesale market in 2026.

由於新建築項目放緩以及零售商不斷拓展服務專業人士的舉措，這部分市場正面臨壓力，導致競爭加劇。身為產業領導者，我們的優勢在於我們在零售和批發通路都擁有強大的影響力，並且憑藉著數據、分析和廣泛的客戶關係，我們對市場走向有著清晰的了解。我們正在積極與部分客戶合作，以應對在 2026 年批發市場面臨最大壓力的特定地區和產品供應情況，從而取得更好的成果。

Our North America boiler sales grew 8% compared to 2024 due to higher commercial and residential boiler volumes as well as pricing benefits. We are pleased with our 2025 boiler performance and the continued strong demand for our market-leading high-efficiency products. North America water treatment sales decreased 2% in 2025 as our strategic shift away from the on-the-shelf retail channel offset growth in our more profitable priority channels. Sales in our priority dealer, direct-to-consumer and e-commerce channels grew 10% in 2025. We also expanded operating margin by 400 basis points to almost 13% last year, which we expect to improve by an additional 200 basis points in 2026.

由於商用和家用鍋爐銷量增加以及價格優勢，我們的北美鍋爐銷量比 2024 年增長了 8%。我們對 2025 年鍋爐的性能以及市場對我們領先的高效產品的持續強勁需求感到滿意。2025 年，北美水處理產品銷售額下降了 2%，因為我們從貨架零售通路的策略轉變抵消了我們利潤更高的優先管道的成長。2025年，我們重點經銷商、直接面向消費者和電子商務通路的銷售額成長了10%。去年，我們的營業利潤率也提高了 400 個基點，達到近 13%，我們預計到 2026 年將再提高 200 個基點。

In China, full year third-party sales decreased 12% in local currency as a result of continued economic weakness and soft consumer demand, particularly in the second half of the year as government subsidy programs were discontinued. The restructuring actions we took in late 2024 and expense management drove profitability improvement of 130 basis points despite lower sales as the team executed well in a challenging environment. I'll now turn the call over to Chuck, who will provide more details on our full year and fourth quarter performance.

在中國，由於經濟持續疲軟和消費需求疲軟，尤其是下半年政府補貼計畫停止後，第三方全年銷售額以當地貨幣計算下降了 12%。我們在 2024 年底採取的重組措施和費用管理，儘管銷售額下降，但由於團隊在充滿挑戰的環境中表現出色，盈利能力仍提高了 130 個基點。現在我將把電話交給 Chuck，他將提供更多關於我們全年和第四季業績的詳細資訊。

Thank you, Steve, and good morning, everyone. We delivered sales of $3.8 billion in 2025, a slight increase over last year. 2025 earnings were $3.85 per share compared with adjusted earnings of $3.73 per share in 2024. Turning to slide 5, full year sales in the North America segment of $3 billion increased slightly compared to 2024. Pricing actions and the higher boiler and commercial water heater volumes were offset by lower volumes of residential wholesale water heaters.

謝謝你，史蒂夫，大家早安。我們預計2025年銷售額將達到38億美元，較上年略有成長。 2025年每股收益為3.85美元，而2024年調整後每股收益為3.73美元。翻到第 5 張投影片，北美地區的全年銷售額為 30 億美元，與 2024 年相比略有成長。價格調整措施以及鍋爐和商用熱水器銷售量的增加，被住宅批發熱水器銷售量的下降所抵消。

North America segment earnings of $728 million increased 2% compared with 2024 adjusted segment earnings. Segment margin was 24.4%, an increase of 20 basis points year over year. The higher segment earnings and segment margins were primarily driven by improved profitability of our water treatment business and higher commercial volumes.

北美業務部門獲利7.28億美元，比2024年調整後的業務部門獲利成長2%。分部利潤率為 24.4%，較去年同期成長 20 個基點。業務部門獲利和利潤率的提高主要得益於水處理業務獲利能力的提高和商業銷售的增加。

Moving to slide 6. Rest of the World segment sales of $880 million decreased 4% year over year primarily driven by lower sales in China that were partially offset by a 13% sales growth in our legacy India business and Pure sales of $54 million. Rest of the World segment earnings of $76 million were flat to 2024 adjusted segment earnings as the impact from lower sales in China was offset by the benefits from our 2024 restructuring actions and other cost saving measures. Segment operating margin was 8.7% and an increase of 40 basis points over 2024 adjusted segment margin.

切換到第6張投影片。世界其他地區業務銷售額為 8.8 億美元，年減 4%，主要原因是中國市場銷售額下降，但部分被印度傳統業務 13% 的銷售額成長和 Pure 業務 5,400 萬美元的銷售額所抵消。世界其他地區業務的收益為 7,600 萬美元，與 2024 年調整後的部門收益持平，原因是中國銷售額下降的影響被我們 2024 年的重組行動和其他成本節約措施帶來的好處所抵消。分部營業利益率為 8.7%，比 2024 年調整後的分部利潤率成長了 40 個基點。

Please turn to slide 7. Turning to fourth quarter performance. We delivered sales of $913 million in the fourth quarter of 2025, flat to the same period in 2024. Earnings in the fourth quarter were $0.90 per share, a 6% increase over adjusted earnings of $0.85 per share in the fourth quarter of 2024.

請翻到第7頁投影片。接下來分析第四季業績。2025 年第四季度，我們的銷售額為 9.13 億美元，與 2024 年同期持平。第四季每股收益為 0.90 美元，比 2024 年第四季調整後的每股收益 0.85 美元成長 6%。

Please turn to slide 8. In Fourth quarter sales in the North America segment increased 3% to $714 million compared to the same period in 2024, primarily as a result of pricing benefits. North America segment earnings of $165 million increased 7% compared to 2024. Segment margin of 23.1% increased 70 basis points compared to last year's adjusted segment margin. The higher 2025 segment earnings and segment margin were primarily due to pricing benefits and actions taken to improve water treatment profitability, which were partially offset by higher input costs.

請翻到第8張幻燈片。第四季北美地區的銷售額比 2024 年同期成長 3%，達到 7.14 億美元，主要原因是價格優勢。北美業務部門獲利1.65億美元，比2024年成長7%。分部利潤率為 23.1%，比去年調整後的分部利潤率提高了 70 個基點。2025 年業務部門收益和業務部門利潤率的提高主要歸功於定價優勢和為提高水處理盈利能力而採取的措施，但這些優勢被更高的投入成本部分抵消。

Moving to slide 9. Fourth quarter Rest of the World segment sales of $206 million decreased 13% year over year, primarily driven by lower sales in China. Organic India sales grew 18% in local currency in 2025, and Pureit contributed $8 million to sales in the quarter. Rest of the World segment earnings and segment margin of $16 million and 7.8% and respectively, in 2025 compared to adjusted segment earnings and adjusted segment margin of $19 million and 8.1% in 2024. The lower segment earnings and segment margins compared to the prior period were primarily due to lower sales in China, partially offset by the benefits of our 2024 restructuring actions and other cost saving measures.

切換到第9張投影片。第四季世界其他地區業務銷售額為 2.06 億美元，較去年同期下降 13%，主要原因是中國市場銷售額下降。2025 年，Organic India 的銷售額按當地貨幣計算增長了 18%，Pureit 在該季度貢獻了 800 萬美元的銷售額。2025 年，全球其他地區業務部門的收益和利潤率分別為 1,600 萬美元和 7.8%，而 2024 年調整後的業務部門收益和調整後的利潤率分別為 1,900 萬美元和 8.1%。與上期相比，分部收益和分部利潤率下降主要是由於中國銷售額下降，部分被我們 2024 年重組行動和其他成本節約措施帶來的收益所抵消。

Please turn to slide 10. We generated strong free cash flow of $546 million during 2025, a 15% increase over 2024, primarily driven by lower year-over-year capital investments as well as higher earnings and the benefit of a onetime tax adjustment. 2025 free cash flow conversion was 100%. Our cash balance totaled $193 million at the end of December, and our net cash position was $38 million. Our leverage ratio was 7.7% as measured by total debt to total capital. While our 2026 leverage will increase due to the cash we borrowed under a new credit agreement used to acquire Leonard Valve, we continue to have significant available capacity for future acquisitions.

請翻到第10張投影片。2025年，我們實現了強勁的自由現金流，達到5.46億美元，較2024年增長15%，主要得益於同比資本投資減少、盈利增長以及一次性稅收調整帶來的收益。 2025年自由現金流轉換率為100%。截至 12 月底，我們的現金餘額總計 1.93 億美元，淨現金部位為 3,800 萬美元。以總債務與總資本之比計算，我們的槓桿率為 7.7%。雖然由於我們根據一項新的信貸協議借入現金收購了 Leonard Valve，我們 2026 年的槓桿率將會增加，但我們仍然擁有大量可用於未來收購的可用資金。

Let's turn to slide 11. In addition to returning capital to shareholders, we continue to drive organic growth through the development of innovative product offerings and continuous improvement in productivity, two of our key strategic priorities. Consistent with our portfolio management priority, we continue to actively assess opportunities that meet our strategic and financial criteria. Earlier this month, our Board approved our next quarterly dividend of $0.36 per share. We have increased our dividend for over 30 consecutive years.

讓我們翻到第11張投影片。除了向股東返還資本外，我們還透過開發創新產品和不斷提高生產力來推動內生成長，這是我們的兩大關鍵策略重點。秉承我們投資組合管理的優先原則，我們將繼續積極評估符合我們策略和財務標準的投資機會。本月初，董事會批准了下一季每股0.36美元的股息。我們已連續30多年提高股利。

We repurchased approximately 5.9 million shares of common stock in 2025 for a total of $401 million. We continue our strong track record of delivering returns to shareholders. Over the last two years, we have returned almost $1.1 billion to shareholders through dividends and share repurchases.

2025年，我們回購了約590萬股普通股，總計4.01億美元。我們繼續保持著為股東帶來豐厚回報的良好記錄。過去兩年，我們透過股利和股票回購向股東返還了近 11 億美元。

Please turn to slide 12 and our 2026 earnings guidance and outlook. Our 2026 outlook includes an expected EPS range of $3.85 and to $4.15 per share. The midpoint of our EPS range represents 4% growth over our 2025 EPS. Our outlook is based on a number of key assumptions, including within material costs, our guidance assumes that steel prices in the full year 2026 will increase approximately 10% compared to 2025. Other material and freight costs including the carryover impact of tariffs will also be a headwind in 2026.

請翻到第 12 頁，查看我們 2026 年的獲利預測和展望。我們對 2026 年的展望包括每股收益預期在 3.85 美元至 4.15 美元之間。我們每股收益預測範圍的中點代表比 2025 年每股收益成長 4%。我們的展望基於一些關鍵假設，包括材料成本方面，我們的指導意見假設 2026 年全年鋼鐵價格將比 2025 年上漲約 10%。2026 年，其他材料和運費成本（包括關稅的結轉影響）也將成為一個不利因素。

Our guidance assumes no change to the current tariff levels that are in effect today, but we continue to monitor the situation closely. We will continue to invest in our gas tankless offering. As a market leader, we believe that it's important for us to offer best-in-class product in this category. We project our year-over-year impact to our North America margins would be minimal as we continue to build a foundation in this category and gain scale over time. We estimate that 2026 CapEx will be between $70 million and $80 million.

我們的指導意見假設現行關稅水準不會發生變化，但我們會繼續密切關注情勢。我們將繼續投資於我們的燃氣無水箱產品。作為市場領導者，我們認為提供該類別中一流的產品至關重要。我們預計，隨著我們繼續在該領域奠定基礎並隨著時間的推移擴大規模，我們對北美利潤率的同比影響將微乎其微。我們預計 2026 年資本支出將在 7,000 萬美元至 8,000 萬美元之間。

We project to generate a strong free cash flow of between $525 million and $575 million. Interest expense is projected to be between $30 million and $40 million, an increase over previous years due to the $470 million of additional debt incurred to acquire Leonard Valve.

我們預計將產生 5.25 億美元至 5.75 億美元的強勁自由現金流。由於收購 Leonard Valve 而額外產生了 4.7 億美元的債務，預計利息支出將在 3,000 萬美元至 4,000 萬美元之間，比往年有所增加。

Corporate and other expenses are expected to be approximately $80 million to $85 million and include advisory fees associated with the Leonard Valve acquisition. Our effective tax rate is estimated to be between 24% to 24.5%. Our Board has approved million additional shares of stock were repurchased and we expect to repurchase approximately $200 million of our stock in 2026. We project our outstanding diluted shares will be $138 million at the end of 2026. I'll now turn the call back over to Steve who will provide more color on our key markets and top line growth outlook for 2026 as well as the portfolio update staying all on slide 12. Steve?

公司及其他費用預計約為 8,000 萬美元至 8,500 萬美元，其中包括與收購 Leonard Valve 相關的諮詢費。我們的實際稅率估計在 24% 到 24.5% 之間。我們的董事會已批准回購數百萬股股票，我們預計在 2026 年將回購約 2 億美元的股票。我們預計到 2026 年底，我們已發行稀釋股份的市值將達到 1.38 億美元。現在我將把電話轉回給史蒂夫，他將詳細介紹我們的主要市場和 2026 年的營收成長前景以及投資組合更新，所有內容都在第 12 頁。史蒂夫？

Thank you, Chuck. Our top line outlook includes the following assumptions. While we believe that US new home construction remains in a deficit, we project that the softness in new construction will persist into 2026. We assume that proactive replacement remains steady and will be similar to 2025.

謝謝你，查克。我們的總體展望是基於以下假設。雖然我們認為美國新建住宅仍處於缺口狀態，但我們預計新建住宅的疲軟態勢將持續到 2026 年。我們假設主動更換率保持穩定，與 2025 年的情況類似。

Based on those factors, we project that 2026 US residential industry unit volumes will be flat to down compared to 2025. Our current projection assumes US commercial water heater industry volumes will increase mid-single digits in 2026 due to a buy ahead of lower efficiency non-condensing commercial gas products that are scheduled to be eliminated as part of the October 2026 commercial regulatory change. We assume that 2026 commercial electric industry volumes will be flat to 2025.

基於這些因素，我們預測 2026 年美國住宅產業單元銷售將與 2025 年持平或下降。我們目前的預測認為，由於低效非冷凝式商用瓦斯產品將在 2026 年 10 月的商業監管改革中被淘汰，市場將提前購買這些產品，因此美國商用熱水器產業的銷售量將在 2026 年實現個位數中段的成長。我們假設 2026 年商業電力產業的產量將與 2025 年持平。

In addition, our outlook includes carryover from our May 2025 price increases in North America. We project our North America boiler sales will grow between 6% to 8% in 2026 due to the carryover of pricing benefits and from the continuation of the transition of energy-efficient boilers particularly as commercial buildings look to improve their overall carbon footprint.

此外，我們的展望還包括了 2025 年 5 月北美地區價格上漲的延續。我們預計，由於價格優惠的延續以及節能鍋爐的持續推廣（尤其是在商業建築尋求改善其整體碳足跡的情況下），到 2026 年，我們在北美的鍋爐銷量將增長 6% 至 8%。

We expect North America water treatment sales will grow between 10% and 12% and due to tariff-related pricing benefits as we continue to grow faster than the market through the expansion of our dealer network. And turning to our outlook for China, we foresee continued headwinds in our markets due to continued low consumer confidence, a discontinued government subsidy program and ongoing competitive intensity. Because of these factors, we project that our 2026 China sales will decrease mid-single digits compared to last year. We expect the first half of 2026 to be particularly difficult as consumer demand remains subdued, and we will face comps from 2025 during which stimulus programs were in place. We anticipate a return to growth in the second half of the year.

我們預計北美水處理產品的銷售額將成長 10% 至 12%，這得益於關稅相關的定價優惠，同時我們透過擴大經銷商網絡，繼續以比市場更快的速度成長。展望中國市場，我們預期由於消費者信心持續低迷、政府補貼計畫終止以及持續激烈的競爭，我們的市場將繼續面臨不利因素。由於這些因素，我們預期 2026 年中國銷售額將比去年下降個位數中段。我們預計 2026 年上半年將格外艱難，因為消費者需求依然疲軟，而且我們將面臨與 2025 年同期相比的業績下滑，而 2025 年當時已經實施了刺激計劃。我們預計下半年將恢復成長。

We continue to manage our discretionary costs prudently in this environment. These decisive actions are designed to protect our profitability and strategically position the business to be competitive during an eventual recovery once market dynamics begin to improve. Our outlook excludes any potential outcomes of the ongoing China assessment.

在此環境下，我們將繼續謹慎管理可自由支配的成本。這些果斷的措施旨在保護我們的獲利能力，並在市場動態開始改善後，為最終的復甦做好策略定位，使企業保持競爭力。我們的展望不包括正在進行的中國評估的任何潛在結果。

We project our India business, inclusive of Pureit, will have top line growth of approximately 10% as we continue to leverage brand synergies and introduce innovative new products to grow faster than the market. Based on these 2026 assumptions, we expect top line growth of approximately 2% to 5%. 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，包括 Pureit 在內的印度業務的營收成長率將達到約 10%，因為我們將繼續利用品牌協同效應並推出創新產品，以實現比市場更快的成長。根據這些 2026 年的假設，我們預期營收成長約為 2% 至 5%。我們預計北美業務的利潤率將在 24% 至 24.5% 之間，而世界其他地區的利潤率將在 8% 至 9% 之間。

Please turn to slide 13. The 2025 was an exciting year of transition for A. O. Smith with several leadership changes, including myself. As I began my tenure as CEO last year, we announced three key strategic value creation levers that will guide A. O. Smith's path forward, portfolio management, innovation and operational excellence.

請翻到第13頁。2025 年對 A. O. Smith 來說是個令人興奮的轉型之年，公司領導層發生了多次變動，包括我自己。去年我上任執行長時，我們宣布了三個關鍵的策略價值創造槓桿，它們將指導 A. O. Smith 的未來發展方向：投資組合管理、創新和卓越營運。

These levers are fundamental to strengthening our industry leadership position, supporting our customers through a dynamic market environment and delivering long-term profitable growth. We will be providing periodic updates on each of these areas going forward. Today, we'll discuss portfolio management.

這些槓桿對於鞏固我們的產業領導地位、在動態的市場環境中支持我們的客戶以及實現長期獲利成長至關重要。今後我們將定期就這些領域提供最新進展。今天，我們將討論投資組合管理。

Over the past year, we have been actively working to transform our portfolio to be better positioned for long-term profitable growth. We have been focused on looking at strategic options in our China assessment to better position our business there to be more competitive going forward and take advantage of the eventual market recovery. The assessment is ongoing, and I'm pleased with the quality of discussions we are having with a number of potential partners.

過去一年，我們一直在積極努力調整我們的投資組合，以更好地實現長期獲利成長。我們一直專注於對中國市場進行策略性評估，以便更好地定位我們在中國的業務，從而在未來更具競爭力，並抓住最終的市場復甦機會。評估工作仍在進行中，我對我們與一些潛在合作夥伴的討論品質感到滿意。

We are also continuing to evaluate opportunities to strengthen our core North American water heater and boiler business. Example of actions we have taken include our recent investments in gas tankless, heat pump and commercial condensing gas product development and manufacturing capacity. We continue to evaluate broader options for strengthening our leadership position in this space.

我們也持續評估各種機會，以加強我們在北美的核心熱水器和鍋爐業務。我們採取的行動範例包括我們最近對燃氣無水箱熱水器、熱泵和商用冷凝燃氣產品開發和製造能力的投資。我們將繼續評估更廣泛的方案，以加強我們在該領域的領導地位。

We have also announced over the past year a number of actions to help scale and improve the profitability of our North American water treatment business. We have been learning much about the space through the acquisition of high-quality businesses we have used as the foundation of this platform and have taken actions to prioritize the channels and further integrate the business to create more synergy and scale. These actions have allowed us to improve the profitability of this business by 400 basis points last year. and we believe additional opportunities are still in front of us to both continue expanding margins and returning the business to higher growth.

過去一年，我們也宣布了一系列舉措，以幫助擴大北美水處理業務的規模並提高其獲利能力。我們透過收購高品質企業，不斷了解這個領域，並將這些企業作為本平台的基礎。我們已採取行動，優先發展管道，進一步整合業務，以創造更大的協同效應和規模。這些措施使我們去年的獲利能力提高了400個基點。我們相信，未來仍有更多機會繼續擴大利潤率，並使業務恢復到更高的成長水準。

Finally, we have done work to evaluate expanding into the broader market of water management. This includes the broader ecosystem of moving, controlling and mixing water across the residential and commercial markets. These products, systems and solutions often interact with our water technology products that serve as our core business today. Leonard Valve and its portfolio of mixing valves and control units represents our first action expanding into this attractive market opportunity.

最後，我們已經進行了評估工作，以擴大到更廣泛的水資源管理市場。這包括住宅和商業市場中水的輸送、控制和混合的更廣泛的生態系統。這些產品、系統和解決方案經常與我們目前的核心業務—水技術產品相互作用。Leonard Valve及其混合閥和控制單元產品組合代表了我們進入這一極具吸引力的市場機會的第一步。

Please turn to slide 14 as I share more details about our strategic rationale for this acquisition. Leonard Valve is well aligned with our strategic and financial criteria and is an excellent complement to our core water heater and boiler business. It enters us into the attractive water management market with a well-established premium Leonard and heat timer brands. Leonard's connected products, which represents approximately 30% of their sales and growing expand our digital platform and provide us capabilities to leverage going forward. By broadening and integrating our product offering, we will be able to create new and innovative solutions for our commercial and institutional customers.

請翻到第 14 頁，我將在此分享更多關於我們此次收購的策略理由的細節。Leonard Valve 與我們的策略和財務標準高度契合，是我們核心熱水器和鍋爐業務的絕佳補充。它使我們進入了極具吸引力的水資源管理市場，並擁有成熟的高端品牌 Leonard 和加熱定時器。Leonard 的互聯產品約佔其銷售額的 30%，並且還在不斷增長，這擴展了我們的數位平台，並為我們提供了未來可以利用的能力。透過拓展和整合我們的產品，我們將能夠為我們的商業和機構客戶創造新的創新解決方案。

Along with entire growth profile, the business also has predictable demand with approximately 80% of the volume associated with repair and replacement. Leonard is also a strong cultural fit as a value-based company with deep market experience, a strong brand and reputation across the industry and many long-tenured and dedicated employees that have a passion for serving their customers and the market well. Simply put, they do business a lot like how A.O. Smith does misses, and I'm looking forward to what we can do together. We expect Leonard Valve to contribute approximately $70 million in sales in 2026.

除了整體成長前景外，該業務還有可預測的需求，其中約 80% 的業務量與維修和更換有關。Leonard 是一家以價值為導向的公司，擁有深厚的市場經驗、強大的品牌和行業聲譽，以及眾多長期服務且敬業的員工，他們熱衷於為客戶和市場提供優質服務，因此在文化上也與我們非常契合。簡而言之，他們的經營方式很像 A.O. Smith 公司處理失誤的方式，我期待我們能一起做些什麼。我們預計 Leonard Valve 在 2026 年的銷售額將達到約 7,000 萬美元。

In summary, we are further strengthening our portfolio to deliver greater value to our customers and other stakeholders. We also remain focused on leveraging operational excellence and innovation in addition to portfolio management to drive long-term sustainable growth for A. O. Smith. As we have discussed, while we had challenges to navigate in 2025, we also had meaningful achievements.

總而言之，我們將進一步加強產品組合，為我們的客戶和其他利害關係人創造更大的價值。除了投資組合管理之外，我們還將繼續專注於利用卓越的營運和創新來推動 A. O. Smith 的長期永續成長。正如我們所討論的，雖然我們在 2025 年面臨許多挑戰，但我們也取得了意義重大的成就。

Highlights include the demonstrated strength and resiliency of our commercial water heater and boiler business. Our leadership in these markets is well recognized and valued by our customers. The significant profit improvement driven by our prioritized approach in North American water treatment. We are now better positioned for long-term growth and profitability. The disciplined cost management actions in China as we look to reposition that business for a more competitive future. The continued double-digit growth of our India business, now complemented by the addition of Pureit to drive continued growth at an even greater scale.

亮點包括我們商用熱水器和鍋爐業務所展現的實力和韌性。我們在這些市場的領先地位得到了客戶的充分認可和重視。我們優先發展北美水處理業務，從而顯著提高了利潤。我們現在更有利於實現長期成長和獲利。我們將在中國採取嚴格的成本管理措施，以期重新定位業務，未來將更具競爭力。我們在印度的業務持續保持兩位數成長，現在又新增了 Pureit，這將進一步推動業務以更大的規模持續成長。

And finally, the continued focus on making the necessary investments to ensure our bright future despite the challenging and uncertain market conditions. I am confident that the strategic actions we are taking today along with our continued disciplined operational approach will enable A. O. Smith to build on our leadership position become more agile and be better prepared to seize future opportunities.

最後，儘管市場環境充滿挑戰和不確定性，我們仍將繼續專注於進行必要的投資，以確保我們擁有光明的未來。我相信，我們今天採取的策略行動，加上我們持續嚴謹的營運方式，將使 A. O. Smith 能夠鞏固我們的領導地位，變得更加靈活，並更好地把握未來的機會。

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

至此，我們準備好的發言稿就結束了，現在我們可以回答各位的問題了。

(Operator Instructions) Saree Boroditsky, Jefferies.

（操作說明）Saree Boroditsky，Jefferies。

This is James on for Saree. I wanted to ask on the residential guidance here. Your outlook is calling for a flattish to down kind of industry volume here for 2026. And I think then this marks kind of third year. So flattish to decline in volumes which we haven't really seen for a while.

這是 James 為 Saree 做客。我想諮詢一下這裡的住宿指導問題。您的預測表明，2026 年該行業的交易量將保持平穩或略有下降。我想這應該算是第三年了。銷量基本上持平或略有下降，這種情況我們已經很久沒看到了。

So can you kind of provide me details on what is making this downturn or weaker is kind of more persistent? And can you provide more details on what you're kind of seeing in the market generally?

那麼，您能否詳細說明一下是什麼原因導致這種下滑或疲軟的局面持續存在？您能否更詳細地介紹一下您目前觀察到的市場整體狀況？

Yes. Thanks for the question. So just overall, as we look into 2026, there was really three components as we think about it, right? We have the emergency replacement, which is very resilient very reliable, very predictable, and we expect that to continue. We have proactive replacement, which we've talked about being fairly high the last five or six years.

是的。謝謝你的提問。所以總的來說，當我們展望 2026 年時，我們認為它實際上包含三個組成部分，對吧？我們有應急替代方案，該方案非常可靠、非常穩定、非常可預測，我們預計這種情況會持續下去。我們採取了積極主動的人員更替策略，過去五、六年裡，我們的人員更替率一直相當高。

We feel like that's pretty resilient at this point. It's -- it's been out there for five years at above 30% of total replacement. And so we're expecting that to continue. Where we're seeing some headwind is kind of the new home completions, multifamily and single family. We see pressure on that as we go into next year.

我們認為目前來看，這種韌性相當強。它——它已經存在五年了，佔總更換率的 30% 以上。因此，我們預計這種情況還會持續下去。我們看到一些不利因素，例如新房完工量，包括多戶住宅和獨棟住宅。進入明年，我們預期這方面將面臨壓力。

So yes, we've had a couple of years of flat volumes coming off some better growth years earlier that were a little lumpy due to COVID, but the pressure we're seeing next year is really in the new home construction, which we feel like without some stimulus with a lower interest rate or perhaps some velocity on new home sales is going to be a bit of pressure on our top line residential volumes.

是的，過去幾年銷量一直持平，此前幾年由於新冠疫情的影響，銷量成長略有波動。但我們預計明年真正的壓力來自新房建設，我們認為，如果沒有一些刺激措施，例如降低利率或提高新房銷售速度，將會對我們的住宅總銷量造成一定壓力。

Great. And I guess I wanted to ask a question on China. I think your guidance kind of implies like double-digit decline in first half and then return to growth here. What specific like indicators are kind of giving you confidence that it can kind of -- what is the return to growth in the second half?

偉大的。我想問一個關於中國的問題。我認為你的預測似乎暗示上半年會出現兩位數的下滑，然後下半年會恢復成長。哪些具體指標讓你有信心認為下半年能夠恢復成長？

Yes, some of it is we've got to work through a period where there was a lot of government subsidies that were driving some demand generation. So that's the challenge we're going to face in the first half of this year is we're now comping against that. The return to growth will be partly driven by as we move past that phase and we get back to the remodel wins and the refurbishments that still need to happen in China. And part of it is some of our own actions internally to get behind and focus and drive growth in certain areas.

是的，部分原因是我們需要度過一段政府補貼大量刺激需求的時期。所以，今年上半年我們將面臨的挑戰是，我們現在要跟這樣的競爭對手比較。隨著我們度過那個階段，重新開始進行改造和翻新工程，中國市場仍需完成這些項目，屆時經濟成長將部分恢復。部分原因在於我們內部採取了一些行動，以支持、集中精力並推動某些領域的成長。

Mike Holleran, Baird.

麥克霍勒蘭，貝爾德。

So can we first start on just the comments Steve you made about increased competitive intensity in the wholesale channel. Maybe just a little bit more context of two things, I suppose. One, what does it mean in terms of the price, share, et cetera, in that channel? And then secondarily, when you net the two together, with the strength you have on the retail side. How is that balancing out all else equal to give both the narrow view and the wholesale but then draw it back to the -- how that's impacting the cumulative market.

那麼，我們先來討論一下史蒂夫你提到的批發管道競爭日益激烈的問題吧。我想，或許還需要補充一些關於兩件事的背景資訊。第一，就該通路的價格、份額等而言，這意味著什麼？其次，當你把這兩方面結合起來，再加上你在零售方面的實力。在其他條件相同的情況下，如何平衡才能既提供狹義的觀點又提供宏觀的觀點，然後再將其拉回──這對累積市場有何影響？

Sure. I'll start by (inaudible) I mentioned, we have meaningful share in both the retail and wholesale side. So from that standpoint, we participate when there's some movement between the two. I'd say specific update on wholesale Mike, I mean, the dynamic of low new home construction, which we just talked about and the fact that retail has made some inroads in terms of share gains overall in the industry is just putting pressure on that part of the channel. And any time you've got kind of pressure that way, where there's limited growth or even there's some declines, it just makes it a more competitive environment.

當然。首先，正如我之前提到的，我們在零售和批發領域都佔有相當大的份額。所以從這個角度來看，當兩者之間出現某種互動時，我們就會參與其中。麥克，我想具體說說批發方面的情況。我的意思是，我們剛才討論的新房建設低迷的現狀，以及零售業在整體市場份額方面取得的一些進展，都給批發渠道帶來了壓力。任何時候，當成長受限甚至出現下滑時，都會造成競爭更加激烈的環境。

And from what we see right now, it's not really driven by a lot of kind of new entrants into the space. It is primarily the kind of the leaders that serve the wholesale channel today. And it's not new that there's dynamics playing out across the channel in terms of different partners and how that works. I would say a bit accelerated a bit in the last six months in particular just because of the pressure that's been in that market.

從我們目前所看到的來看，這並非是由許多新進入者所推動的。它主要指的是目前服務批發管道的那類領導者。而且，通路中不同合作夥伴之間的互動以及這種互動方式並不新鮮。我認為，尤其是在過去六個月裡，由於市場壓力，成長速度有所加快。

And I think as we look at it, and this is again another area where because we are such a large player in the space. We know all the industry participants. We know all the different distribution partners. We know where those pressures are the greatest, and that's really our focus going forward. So we obviously were happy with the gains we've made on the retail side and with our partners over there.

我認為，當我們審視這個問題時，會發現，這又是另一個因為我們在這個領域扮演著如此重要角色而顯得尤為重要的領域。我們認識所有行業參與者。我們了解所有不同的分銷合作夥伴。我們知道壓力最大的地方在哪裡，而這正是我們未來工作的重點。所以，我們顯然對我們在零售方面以及與那邊合作夥伴的進展感到滿意。

We think we can do better on the wholesale side to serve that market, and that's where our focus is going to be here right now.

我們認為在批發方面我們可以做得更好，並且更好地服務這個市場，這也是我們目前的工作重點。

And then maybe just some help with the cadencing through 2026 cumulatively. You have a lot of moving pieces front half to back half. So any thoughts on how the earnings and revenue should cadence relative to normal seasonality? Any 1H, 2H dynamics that are worth mentioning? Any help would be appreciated.

然後或許還需要一些幫助，以製定到 2026 年的累計進度計畫。從前半場到後半場，有許多環節需要協調。那麼，對於收益和收入相對於正常季節性波動該如何調整，大家有什麼想法呢？有哪些值得一提的1H、2H走勢？非常感謝您的幫忙。

Yes. So yes, as you look at 2026, Mike, it's going to look a little different than '24 and '25. Both those years, '24 and '25, on the residential side, in particular, on commercial water heating, we had price increases that pulled volume forward in the front half of the year. So '24 and '25 cadence on the residential within side was 53% in the front half, 47% in the back half. We look at 2026 and expect a much more normalized year maybe closer to 50-50 or 51-49.

是的。所以，麥克，展望 2026 年，它看起來會和 2024 年和 2025 年有所不同。2024 年和 2025 年，在住宅方面，特別是商業熱水方面，價格上漲導致銷售提前到上半年。因此，2024 年和 2025 年住宅區內的節奏在前半段為 53%，在後半段為 47%。我們展望 2026 年，預計這將是一個更正常的年份，可能接近 50-50 或 51-49。

So there will be tough comps in the first half of the year, both compared to '25 and '24 on the water heating side. As you also step into next year, our 2026 input costs, we're looking at those very closely. Steel should be up -- is expected to be up about 10%. And as you know, we have pretty good visibility into that in our forward view of what our pricing is. We'll have carryover tariffs into the first half of the year and other costs are also causing a bit of headwind.

因此，今年上半年在熱水供應方面，無論是與 2025 年還是 2024 年相比，都將面臨嚴峻的競爭。隨著我們邁入明年，我們將密切關注 2026 年的投入成本。鋼鐵價格應該會上漲——預計上漲約 10%。如您所知，我們對未來的定價策略有相當清晰的了解。上半年我們將面臨關稅結轉，其他成本也造成了一些不利影響。

And then thinking about China, and we've talked a lot in the past about the cadence in China, as Steve said, a bit around -- we'll see pressure in the first half of the year because the subsidy program was in place. In 2025 this year beginning -- actually beginning midyear last year, it was discontinued, and that's why we saw weakness in the back half of this year. We expect that to continue into next year until there's some traction. We think there was some pull ahead into the marketplace and expect some of that traction to come back perhaps in the second quarter or midyear. As you know, the first quarter is always a challenge in China because of the Chinese festival New Year.

然後，我們再想想中國，過去我們經常談到中國的節奏，正如史蒂夫所說，大約——我們將在今年上半年看到壓力，因為補貼計劃已經實施。2025 年，也就是今年開始——實際上是從去年年中開始，它就停止了，這就是為什麼我們在今年下半年看到疲軟的原因。我們預計這種情況會持續到明年，直到出現一些進展為止。我們認為市場出現了一些上漲趨勢，預計部分漲勢可能會在第二季或年中恢復。如您所知，由於春節假期，中國第一季總是充滿挑戰。

We expect that to be a little bit more accentuated this year because of discontinued to the subsidy program. And then return to, I would say, in the back half of the year for China, kind of the normal a little bit better in the third quarter and your outlook expects it to be improved in the fourth quarter like it historically has been with some of the holiday shopping.

我們預計今年這種情況會更加明顯，因為補貼計畫已經停止。然後，我認為，下半年中國的情況會恢復正常，第三季會略有好轉，而你的展望是，隨著假日購物季的到來，第四季的情況會像以往一樣有所改善。

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc Capital Markets。

This is Mitch (inaudible) on for Jeff. First, I was just wondering if you could give a bit more color on Leonard Valve, the go-to-market strategy, what end markets they play in? And maybe how much growth the $70 million in sales you're expecting this year, like what growth rate that reflects.

這裡是米奇（聽不清楚），替傑夫發言。首先，我想請您詳細介紹一下 Leonard Valve 公司，包括其市場進入策略以及他們所服務的終端市場。或許也可以問一下，您預計今年的銷售額將達到 7,000 萬美元，那麼這反映了怎樣的成長率。

Yes. In terms of markets, they're very strong in kind of the commercial markets, which was appealing to us. they serve in some ways, like with their -- the heat timer controls business, it's very much a spec-in driven business, very similar to like our lock-in-wire business. In fact, we show up on a lot of the same spec sheets together. So there's a similar go-to-market model that way.

是的。就市場而言，他們在商業市場非常強大，這很吸引我們。他們在某些方面提供服務，例如他們的熱定時器控制業務，這是一個非常依賴投機取巧的業務，與我們的鎖線業務非常相似。事實上，我們經常一起出現在許多相同的規格表上。所以，這種市場推廣模式也類似。

And there's just overlap in a lot of the channels, both in the representatives to take our products to market and in distribution as well. So it's close to our categories in that way. And then on the actual way the product is used, it interacts in an ecosystem similar to our product. So it's down in the mechanicals, where our products are often found, and I think that similar trades and contractors operate with the product. So from that standpoint, it's a very close adjacency in terms of product expansion.

而且許多通路都有重疊之處，無論是負責將我們的產品推向市場的代表，還是分銷通路。所以從這個意義上講，它與我們的分類很接近。而且，在產品的實際使用過程中，它會在一個與我們的產品類似的生態系統中相互作用。所以，我們的產品經常出現在機械設備領域，我認為類似的產業和承包商也會使用我們的產品。因此從這個角度來看，就產品擴展而言，它們非常接近。

And I think it's what got us excited strategically that there's both ways we can work together and serve the market better and how we go to market, but also ways in which we can innovate and find ways that our products get interface and create better solutions for our customers.

我認為，正是這一點在策略上讓我們感到興奮：我們既可以透過合作更好地服務市場，改進我們的市場策略，也可以透過創新，找到讓我們的產品更好地與客戶對接並創造更好解決方案的方法。

As far as growth rate, the business has been growing double digits. So in that 10% range, it's kind of baked into how we think about the growth rate, largely driven by the digital portion of the market that they serve.

就成長率而言，該業務一直保持著兩位數的成長。所以，在 10% 的範圍內，這在某種程度上已經融入了我們對成長率的思考方式中，這主要由他們所服務的市場中的數位部分所驅動。

Great. That's helpful. And I know there's a lot of moving pieces around price cost, just with tariffs and lapping price increases and whatnot. But can you maybe just give some thoughts about how you expect price cost to trend through the year?

偉大的。那很有幫助。我知道價格成本受很多因素影響，像是關稅、價格上漲等等。您能否談談您對今年價格走勢的預期？

Yes. I mean, Steve had comments around the competitive nature of what's happening in the marketplace today. We certainly -- we also commented that we have carryover pricing that we expect to carryover in the next year. And historically, and I'll say we do a really good job of protecting our price cost relationship. So we do expect that to continue over time.

是的。我的意思是，史蒂夫對當今市場競爭的本質發表了一些評論。當然，我們也提到過，我們有一些結轉定價策略，預計明年將繼續沿用。從歷史角度來看，我們在保護價格成本關係方面做得非常好。因此，我們預計這種情況會持續下去。

Also, historically, we generally see some fade we'll be watching that closely. I'll just kind of say that we're very committed to making sure in the competitive environment that we keep our customers competitive, and we'll be focused on that.

此外，從歷史經驗來看，我們通常會看到一些衰退跡象，我們會密切關注這一點。我只想說，我們非常致力於在競爭激烈的環境中確保我們的客戶保持競爭力，我們將專注於此。

Bryan Blair, Oppenheimer.

布萊恩布萊爾，奧本海默。

It would be great to -- I guess following up on Leonard Valve, great to hear a bit more about the build-out and prospects of your water management platform. I guess, how we think about TAM expansion given the new products and applications that are involved there or potential there? And in what way is LVC foundational to the buildout? And again, given the right opportunities, how aggressive would your team like to be on incremental M&A?

太好了——我想接著 Leonard Valve 的話題，很想多了解你們水資源管理平台的建設和前景。我想，考慮到涉及的新產品和應用，或潛在的新產品和應用，我們應該如何看待TAM的擴張？LVC 在建置過程中扮演著怎樣的基礎角色？再說一遍，如果機會合適，你的團隊希望在漸進式併購方面採取多積極的策略？

We're excited about the way we're defining kind of the water management market. As I mentioned, it's kind of thinking about how does water move, mix, get controlled through the ecosystem of residential and commercial, we play an important part in that today with the categories of our water heaters and boilers. And I think there's a lot of other products that help make that happen. And so we're still early in our journey of kind of shaping up where the right places are for us to participate. So your question around TAM, I think what we're excited about, that it does open us up to bigger market opportunities.

我們對我們正在定義的水資源管理市場類型感到興奮。正如我之前提到的，這涉及思考水如何在住宅和商業生態系統中流動、混合和控制，而我們如今透過熱水器和鍋爐的分類，在其中扮演著重要的角色。我認為還有很多其他產品有助於實現這一點。因此，我們仍處於探索和確定適合我們參與的領域的早期階段。所以，關於TAM的問題，我認為讓我們感到興奮的是，它確實為我們打開了更大的市場機會。

We've got what we think is an exciting and healthy pipeline of where we could go to do that. Obviously, when it comes to acquisition, there's a lot of things that have to come together to make that work, but we think our reputation in the industry helps us because we're a good spot for good high-quality companies to kind of come together around in how we serve the market. And I think there will be a near-term opportunities as we think about how we go together into the marketplace, provide these products that are well established categories today.

我們認為我們已經有了令人興奮且健康的計劃，可以朝著這個方向發展。顯然，在收購方面，有很多因素需要結合才能成功，但我們認為我們在業界的聲譽對我們有所幫助，因為我們是一個很好的平台，讓優秀的高品質公司聚集在一起，共同服務市場。我認為，當我們思考如何共同進入市場，提供這些目前已相當成熟的產品類別時，近期將會有一些機會。

And then longer term, I think it creates more growth for us because it allows us new ways to create value for our customers. Today, we do that in a meaningful way by driving more efficiency and performance in the water heater and boiler products that we serve the market. But if you think about how commercial customers use our products and are thinking about things like energy efficiency more broadly, having a way to serve the market with an ecosystem, I think is a way to create more value.

從長遠來看，我認為這會為我們帶來更大的成長，因為它使我們能夠以新的方式為客戶創造價值。今天，我們透過提高我們所服務的熱水器和鍋爐產品的效率和性能，以有意義的方式實現這一目標。但如果你想想商業客戶如何使用我們的產品，並且更廣泛地思考能源效率等問題，那麼透過生態系統服務市場，我認為這是創造更多價值的方式。

Okay. That makes a lot of sense. And you noted the strategic assessment of China is ongoing. So there isn't a definitive update, but you did mention a number of potential partners just curious if you could offer any other color on direction or whether options or considerations have narrowed and whether there's any connection to any of the incremental turnaround actions that are underway there.

好的。這很有道理。你也提到對中國的戰略評估仍在進行中。所以目前還沒有確切的最新消息，但您確實提到了一些潛在的合作夥伴，我只是好奇您是否能提供更多關於方向的信息，或者選擇或考慮因素是否已經縮小，以及這是否與正在進行的任何漸進式扭轉措施有任何联系。

Yes. I'd say we're moving with urgency because we know when we talk about an assessment of the business, right, we're still running the business, and we have employees and customers that we want to provide some confidence and certainty too. But I would say, while we do that with urgency, we're also being thoughtful to do it in the right way. And our goal, again, is to make sure that we set the business up to be as competitive as possible going forward. I can't get into the specifics of the folks that we're necessarily working with.

是的。我認為我們正在以緊迫的步伐推進，因為我們知道，當我們談論對業務的評估時，我們仍在運營業務，我們還有員工和客戶，我們也希望給他們帶來一些信心和確定性。但我想說，雖然我們以緊迫感來做這件事，但我們也在深思熟慮地以正確的方式去做。我們的目標仍然是確保公司在未來盡可能保持競爭力。我無法透露我們正在合作的具體人員資訊。

But we are learning, I think a lot about other options out there on what we can pursue. I think as I mentioned, the quality of the conversations have been terrific. Our local team in China has been very active and involved in that to make sure we're thinking about things the right way. And we'll continue to move that forward, and we'll continue to update you guys as we learn more. But at this point, we don't have anything in terms of how we've narrowed the scope in terms of what potential options and outcomes could come from it. But I'm pretty happy that we're -- the process itself has been very helpful for us.

但我們正在學習，我認為我們正在考慮很多其他的選擇，以及我們可以追求的方向。正如我之前提到的，我認為這些對話的品質非常棒。我們在中國的本地團隊一直非常積極地參與其中，以確保我們以正確的方式思考問題。我們將繼續推進這項工作，並在了解更多資訊後繼續向大家報告。但就目前而言，我們還沒有任何關於如何縮小範圍，以及可能出現哪些潛在選擇和結果的資訊。但我很高興我們——這個過程本身對我們非常有幫助。

David MacGregor, Longbow Research.

David MacGregor，Longbow Research。

I guess I want to start by talking about -- I wanted to begin by asking about the water treatment business. You called out the 400 basis points of margin improvement in 2025, which is quite an accomplishment. And maybe you could maybe talk a little further about just sort of the composition of that improvement. And I guess, as well, just where now in terms of where those margins go? And at one point, I think the goal had been to grow those margins at about 100 basis points a year through a variety of different initiatives.

我想先談談——我想先問問關於水處理行業的情況。您提到了 2025 年利潤率將提高 400 個基點，這的確是一項了不起的成就。或許您可以再詳細談談這項改進的具體構成。而且，我也想知道，這些利潤空間現在究竟會走向何方？我記得，公司一度的目標是透過各種不同的舉措，每年將這些利潤率提高約 100 個基點。

And how are you thinking now about kind of multiyear annual profitability growth in that business?

那麼，您現在如何看待該業務未來多年的年度獲利成長？

Yes. We like the space. And for A.O. Smith, we entered in it years ago because we understood the megatrends, and we felt like there was a lot we could bring into the space in terms of how we run our businesses. To kind of build the platform, we made a number of acquisitions.

是的。我們喜歡這個空間。而對於 A.O. Smith 來說，我們多年前就進入了這個領域，因為我們了解了大趨勢，並且覺得在經營業務方面，我們可以為這個領域帶來很多東西。為了建構這個平台，我們進行了一系列收購。

And I think what we've done recently is we've now taken kind of a state of what have we learned through the businesses that we bought and through running the businesses, and that helped define for us a little bit of our journey in our path going forward. And as we've been talking about for the last year or so, part of it was prioritizing which part of the market we wanted to really focus on and invest in. And that's been obviously a little bit of a growth drag for the business as we've decided to deprioritize some things.

我認為我們最近所做的，就是總結了我們從收購和經營這些企業中學到的東西，這有助於我們更好地規劃未來的發展方向。正如我們在過去一年左右的時間裡一直在討論的那樣，其中一部分是確定我們想要真正關注和投資的市場領域的優先順序。很顯然，由於我們決定降低某些專案的優先級，這在一定程度上拖累了業務成長。

The end of 2024, we took some restructuring charges to help reorient that business. And now I think -- what we're excited about is that we know the spaces in the market where we really want to focus and play, and that's helping us drive a more profitable part of the business, also the growth in the spaces where we want to play, we're very pleased with.

2024年底，我們提列了一些重組費用，以協助該業務重新調整方向。現在我認為——讓我們感到興奮的是，我們知道了我們真正想要關注和發展的市場領域，這有助於我們推動業務中更盈利的部分，而且我們對我們想要發展的領域的增長也感到非常滿意。

And then also along with that, it's the natural path of just sort of learning how to kind of integrate the businesses, take advantage of levers you can pull to create value by doing that. And that, I think, is a journey we're still on. And -- going forward, I think -- like I said, I think we're focused on where we want to play. We think we can continue to really add value into the water treatment market. We're excited about where this business can go.

同時，這也是學習如何整合業務、利用各種槓桿來創造價值的自然途徑。我認為，這仍然是我們一直在走的路。展望未來，我認為——就像我剛才說的，我們專注於我們想去的地方比賽。我們認為我們能夠繼續為水處理市場創造真正的價值。我們對這家公司的未來發展充滿信心。

We're still very excited about the market opportunity overall. And we think we can continue, as I've mentioned in my prepared comments, to drive meaningful growth with this business as well as continue to expand margins as we scale and as we continue to pull levers on integrating the business.

我們仍然對整體市場機會感到非常興奮。正如我在準備好的演講稿中提到的那樣，我們認為我們可以繼續推動這項業務實現有意義的成長，並且隨著我們擴大規模和繼續推進業務整合，我們還可以繼續擴大利潤率。

Can you offer any sort of thought on where those margins might be today versus sort of the North American segment averages? And then I have a follow-up.

您能否就目前這些利潤率與北美市場平均值相比的情況，提供一些看法？然後我還有一個後續問題。

Yes. I mean so the margins today at 400 expansion of basis points kind of takes you into the ZIP code of about 13% operating margins. And you know our North America margins at 24.4% this year. So expanding it to another 200 basis points because it's a 15% margins. And we like the fact that we're kind of back to that mid-teens digits and looking for opportunities for M&A to match with the business to continue to grow the business and maybe have opportunities to enhance that margin profile through an M&A transaction.

是的。我的意思是，如今利潤率擴張 400 個基點，就等於營業利益率達到了 13% 左右。您也知道我們今年在北美的利潤率為 24.4%。所以，由於利潤率為 15%，因此要再擴大 200 個基點。我們很高興看到我們的利潤率又回到了十幾位數，並且正在尋找併購機會來配合業務發展，以繼續擴大業務規模，或許還有機會透過併購交易來提高利潤率。

Great. Congratulations on that progress. As a follow-up, I guess, I just wanted to stay close to the water treatment business and just ask for any thoughts you've got and what you're seeing in the way of consumer demand patterns and how that may be evolving and how that's influencing your guide on '26 -- for water treatment.

偉大的。恭喜這樣的進展。作為後續問題，我想繼續關注水處理行業，並詢問您對消費者需求模式的看法，以及這些模式可能如何演變，以及這些變化如何影響您在 2026 年的水處理指南。

Yes. I think overall that business is closely connected to the consumer. So there's I'd say some caution that we see from consumers. In some segments of the market, we considered a discretionary spend item. So we're -- from that standpoint, I think there's maybe cautiousness as we enter 2026.

是的。我認為整體而言，企業與消費者密切相關。所以，我認為我們看到消費者確實存在一些謹慎情緒。在某些市場領域，我們將其視為可自由支配的支出項目。所以從這個角度來看，我認為進入 2026 年之際，我們可能會保持謹慎。

But overall, we still see it as growth because we see the category is still growing. We still see penetration opportunities, and we still see our opportunity to build out our own dealer network and grow even beyond the market.

但總體而言，我們仍然認為這是一個成長點，因為我們看到該品類仍在成長。我們仍然看到市場滲透的機會，也仍然看到我們建立自己的經銷商網絡並超越市場規模發展的機會。

Scott Graham, Seaport Research Partners.

Scott Graham，Seaport Research Partners。

I wanted to maybe get a little bit more color from you guys on maybe beyond what you provided with the initial question on this competition in distribution wholesale. And what I'm wondering is, are you kind of saying that like residential water heaters in that channel are now kind of more jump ball? Or is it that maybe some of the higher-end stuff because of the PROs that is what is maybe under a little bit of pressure. Is it -- so in other words, if wholesale is half of residential approximately, is that entire half an area of concern now? Or is it less?

我想從你們那裡獲得一些更詳細的信息，除了你們最初提出的問題之外，關於批發分銷領域的競爭。我想問的是，你的意思是說，現在家用熱水器市場的情況更難預測了嗎？或者說，有些高階產品因為有專業用戶，所以可能承受一些壓力。也就是說——換句話說，如果批發市場約佔住宅市場的一半，那麼這整整一半現在都是需要關注的領域嗎？或更少？

No, I don't think the characterization of a jump ball is what's happening. I would characterize it more of a lot of the industry dynamics that have always been out there, right? And you have channel partners that are dedicated to certain brands, and we partner very closely with them to help reach and serve the contractors and trade groups well and then there's others that carry multiple brands and there's some share shift that happens through those dynamics. I would say that those are the dynamics they've always been in that part of the market. There's still the dynamics playing out today.

不，我不認為現在的情況符合跳球的描述。我覺得它更像是一直以來存在的許多產業動態的體現，對吧？我們有一些通路合作夥伴專注於某些品牌，我們與他們密切合作，以更好地接觸和服務承包商和行業團體；還有一些合作夥伴銷售多個品牌，這些動態會導致市場份額發生一些變化。我認為，這部分市場一直以來都是這樣的動態。這種動態變化至今仍在持續。

What we find is oftentimes, when there are movements around share there's typically reactions to those movements and those take time to play out. And I think where we are right now in the wholesale market, like I said, it gets a little bit more intense when the market itself is not growing because the new construction builds aren't there, that the wholesale channel primarily is the mechanism that serves that part of the market. There's a little bit of pressure, as we mentioned, coming from the retail players who are really looking to make inroads with the professionals. So that intensity up a little bit, but the dynamics itself are not new.

我們發現，通常情況下，當股價出現波動時，往往會有相應的反應，而這些反應需要時間才能顯現出來。我認為，就我們目前在批發市場所處的位置而言，正如我所說，當市場本身沒有成長（因為沒有新的建築項目）時，情況就會變得更加緊張，因為批發管道主要是服務於這部分市場的機制。正如我們之前提到的，零售業者確實帶來了一些壓力，他們非常希望能夠打入專業市場。所以強度有提升，但動態本身並不是新的。

And I'd say they're ones that we typically know how to navigate. And we do it working closely with our customers. And like I said, there are actions and movements that happen there's typically reactions. And over time, those things work their way out, and that's our focus of what we're going to navigate here when we talk about the start of 2026.

而且我認為，這些都是我們平常知道如何應對的情況。我們透過與客戶緊密合作來實現這一目標。就像我說的，發生一些行動和運動後，通常會有相應的反應。隨著時間的推移，這些問題都會得到解決，而這正是我們在談論 2026 年初時要重點關注的內容。

Okay. I want to maybe just ask a follow-up question on capital. And with the Leonard Valve acquisitions, it's clearly more of a pivot to Stephen, what you said about water management. And so what I'm wondering here is that with this pivot, and I know you found Leonard Valve, and that's wonderful. But for many years, the focus was on water treatment pretty much as a silo.

好的。我想就資本問題再問一個後續問題。而透過收購 Leonard Valve，很明顯，正如 Stephen 所說，這是一種轉向，即水資源管理。所以我想知道的是，透過這次轉型，我知道你找到了 Leonard Valve，這真是太好了。但多年來，水處理一直被當作一個孤立的領域來關注。

And I'm just wondering how the pipeline is in water management with Leonard now done? Is that something that you have to build? Or have you been building a pipeline there?

我只是想知道，隨著 Leonard 的離開，水資源管理方面的管道系統現在情況如何？那是需要自己搭建的東西嗎？還是你們在那裡修建輸油管？

I think it's a pipeline that's been pretty visible for us for a while. I mean I think when you're in kind of the plumbing space, you know who the players are. Like I said, there's a lot of overlap on how you go to market. There's a lot of overlap in terms of how you serve contractors. So it's not a starting from scratch kind of pipeline.

我認為這條管道我們已經關注很久了。我的意思是，我覺得當你身處管道產業的時候，你就知道誰是關鍵人物了。正如我所說，在行銷方式上有許多重疊之處。在服務承包商方面，有許多重疊之處。所以這不是從零開始的流程。

I think that's been visible to us. I think the focus and attention we're putting on it is now kind of dialed up because there's a lot of different options of ways we could go. As you mentioned, we've been very focused on building out the water treatment platform. And this is a pivot that's not us walking away from water treatment. In fact, we think that's a very attractive growth platform that we're going to continue to invest in. But we do feel like there's more opportunity for us as a company. And we love our core water heater and boiler business today. It generates great cash flow. It's very resilient.

我認為這一點我們都看得出來。我認為我們現在對這件事的關注度和重視程度有所提高，因為我們有很多不同的發展方向可以選擇。正如您所提到的，我們一直非常專注於建造水處理平台。而這只是業務轉型，並非代表我們要放棄水處理業務。事實上，我們認為這是一個非常有吸引力的成長平台，我們將繼續投資。但我們確實覺得公司還有更多發展機會。如今，我們依然熱愛我們的核心熱水器和鍋爐業務。它能產生豐厚的現金流。它非常頑強。

We're a market leader in that space. And we want to think about how do we leverage that to actually find more growth opportunities that we participate. That's what we're trying to do with our water management effort. I think we know who the players are out there. But as I mentioned, with any acquisition strategy, there's a lot dependent upon what's available and when. And I think we can be competitive there. We're also going to remain disciplined in our approach on how we go after it.

我們在該領域處於市場領先地位。我們希望思考如何利用這一點，找到更多我們可以參與的成長機會。這就是我們進行水資源管理工作的目標。我想我們都知道場上有哪些選手。但正如我所提到的，任何收購策略都很大程度上取決於有哪些資源可用以及何時可用。我認為我們在這方面有競爭力。我們也會繼續保持嚴謹的態度，採取切實有效的策略。

Tomohiko Sano, J.P. Morgan.

佐野智彥，摩根大通。

This is Ethan on for Tomo. I wanted to ask for a little bit more color on India. It seems like the guys have delivered strong growth with the Pure integration adding incremental revenue. Can you share a little bit on the road map for scaling India over the next three to five years? And maybe any details on potentially further M&A within that area?

這裡是伊桑替托莫報道。我想請您多介紹一下印度的一些情況。透過與 Pure 的整合，該公司似乎實現了強勁成長，並增加了收入。能否簡要介紹未來三到五年內如何擴大在印度的業務規模？或許還能提供一些關於該地區潛在併購活動的細節？

I think right now, our primary focus is on how do we take advantage of the Pureit addition to our portfolio. India is a market that we've invested there significantly to get the business up and running and Obviously, the pure was an additional investment to that business. We've got a local team there that really understands the local market -- and we think we've got a lot of opportunities now kind of organically, if you will, with the combination of Pureit and A.O. Smith business. It's a market that requires a lot of high pace innovation, bringing new products out to market.

我認為目前，我們的主要關注點是如何利用 Pureit 的加入來豐富我們的投資組合。印度是我們投入大量資金建立業務的市場，顯然，Pure是對該業務的額外投資。我們在那裡有一支非常了解當地市場的本地團隊——而且我們認為，隨著 Pureit 和 A.O. Smith 業務的結合，我們現在有很多機會，可以說是自然而然地獲得了這些機會。這是一個需要高速創新、不斷推出新產品的市場。

That's a big driver of how we've been able to grow double digits for many years in a row. And that's we're now going to do at a bigger scale, as you mentioned. So that's our primary focus. Ultimately, over time, does it mean more acquisitions or not, I think that still has to play out, but our focus right now is primarily running the business we've got.

這就是我們能夠連續多年實現兩位數成長的重要驅動因素。正如您所提到的，我們現在將以更大的規模來做這件事。所以這是我們的主要關注點。最終，隨著時間的推移，這是否意味著更多的收購，我認為這還有待觀察，但我們現在的重點主要是經營我們現有的業務。

And looking more on the margin side for international, with India continue to scale up, can we kind of forecast out strength within operational improvements similar to this year out into maybe 2027 or looking more on a longer-term scale with China potentially improving in the second half of this year?

從國際市場的利潤率角度來看，隨著印度市場的持續擴張，我們能否預測，在營運改善方面，印度市場能夠像今年一樣保持強勁勢頭，並持續到 2027 年？或者從更長遠的角度來看，考慮到中國市場可能在今年下半年有所改善，我們能否繼續保持這種強勁勢頭？

Yes, this is Chuck. I would say a little bit more longer term still. I mean we're still investing in growth in India. We love the fact we're growing double digits together with Pureit bringing those business together, India is still in the growth profile. China, I think it's a little early to call out much margin improvement.

是的，這是查克。我認為還需要更長遠的時間。我的意思是，我們仍在投資印度的成長。我們很高興看到我們與 Pureit 攜手實現兩位數成長，將這些業務整合在一起，印度仍然處於增長期。我認為現在就斷言中國利潤率會有大幅提升還為時過早。

We're very pleased with how China performed this year in the fourth quarter, particularly the restructuring actions that we took in 2024 are paying off and the team managing through a tough top line did a very good job of managing the margin. So margin improvement in both businesses, I think, will take a little bit of time, and we'll have to see how that plays out. particularly the economy in China and as we grow scale and India investment growth.

我們對中國今年第四季的表現非常滿意，特別是我們在 2024 年採取的重組措施正在取得成效，管理團隊在艱難的營收成長中出色地完成了利潤率管理工作。因此，我認為兩項業務的利潤率提升都需要一些時間，我們需要觀察其發展情況，特別是中國經濟、規模擴大以及印度投資成長等因素。

Nathan Jones, Stifel.

Nathan Jones，Stifel。

One follow-up on steel prices. You guys said you're expecting steel prices to be up 10%. Can you just clarify what that means? Is that like average 2026 over average 2025? Or are you expecting steel prices to increase from where they are now?

關於鋼鐵價格的後續報道。你們說預計鋼材價格將上漲 10%。你能解釋一下這是什麼意思嗎？那是指2026年平均值與2025年平均值的比值嗎？或者您預計鋼材價格會從目前的水平上漲？

And then does that imply that you need to get more price in order to cover some of these inflationary pressures, along with some of the other things that you mentioned there are still inflationary pressures.

那麼，這是否意味著你需要提高價格來應對這些通膨壓力，以及你提到的其他一些因素，即仍然存在通膨壓力？

Yes. Steel pricing has gone up, right? So we've seen kind of a gradual increase in the index, which does drive what we pay on a 90- to 120-day lag. That 10% up is the year-over-year average I would say if you kind of box it in, it's 10%, 2026 over 2025 as well as 10% up quarter-over-quarter 2025. So we'll see steel, we project still to still rise a bit as we go through the back half of the year, but on average, up 10% year over year.

是的。鋼材價格上漲了，對吧？因此，我們看到該指數逐漸上升，這確實會影響我們支付的金額，落後 90 到 120 天。如果把這個數字框起來，我會說，10% 的增長是同比平均水平，也就是說，2026 年比 2025 年增長 10%，而且 2025 年的季度環比增長也是 10%。因此，我們預計鋼鐵價格在今年下半年仍將小幅上漲，但平均而言，年增 10%。

As far as price cost relationship, we do have carryover tariffs. We've got other costs that are going up. I'll just kind of point to kind of our historical ability to be able to, over time, kind of maintain and protect our price cost relationship and our margin profile.

就價格成本關係而言，我們確實有結轉關稅。我們還有其他成本也在上漲。我只想指出，我們過去有能力隨著時間的推移，維持並保護我們的價格成本關係和利潤率狀況。

Okay. I guess. And then my follow-up question. The slide on Leonard Valve as 2022 to 2025 revenue CAGR of double digits, I think you said it was about 10%. There was a lot of inflation, and I assume that there's a lot of metals in a lot of their products as well.

好的。我猜也是。然後是我的後續問題。關於 Leonard Valve 的幻燈片顯示，2022 年至 2025 年的收入複合年增長率將達到兩位數，我想你說過大約是 10%。當時通貨膨脹很嚴重，我估計他們的許多產品中也含有大量的金屬。

And a fair amount of that kind of growth was probably driven by price as well. Could you maybe just comment on what you think the long-term growth of that business is kind of the volume that they can generate rather than what I just assume is some price-driven growth that you've seen there over the last few years.

而且，這種成長很可能很大程度上也是由價格因素驅動的。您能否就您認為該業務的長期成長點發表一下看法？我猜想，該業務的長期成長點應該是其能夠創造的銷量，而不是像過去幾年您所看到的那樣價格驅動型成長。

Actually, the biggest source and Chuck mentioned of the growth in Leonard Valve has been the digital transition of mixing valves. So it's a technology upgrade that's happening that's adding a lot of value in the marketplace. And so more so than just a pure kind of pass-through of cost pricing.

事實上，正如 Chuck 所提到的，Leonard Valve 成長的最大來源是混合閥的數位轉型。所以這是一項正在進行的技術升級，它為市場增添了許多價值。因此，這不僅僅是成本定價的純粹傳遞。

That's been the big driver of the growth over the last few years. And it was one of the real appealing characteristics for us to both get more involved on that digital upgrade but also bring that kind of capability of thinking into the broader ecosystem of solutions that we can serve our customers. From that standpoint, we think it's a growth that has still more momentum to it.

這是過去幾年成長的主要驅動力。對我們來說，真正吸引我們的一點是，我們不僅能夠更深入地參與到數位化升級中，還能將這種思維能力融入到我們能夠為客戶提供的更廣泛的解決方案生態系統中。從這個角度來看，我們認為這種成長動能依然強勁。

And just to frame about 30% of their volume or the revenue is digital and connected products. it's a base that we look to grow over time.

其中約30%的銷售或收入來自數位和互聯產品。我們希望隨著時間的推移，這個比例能夠持續成長。

Andrew Kaplowitz, Citi.

安德魯‧卡普洛維茨，花旗集團。

Good morning. Steve, I know that the strategic review is ongoing in China, as you said, but restructuring does seem to be helping stabilize the margin of the business. So if, for instance, the market doesn't come back as you expect in the second half, do you have more restructuring that you can do? How do you think about the ability to sort of maintain margin if the market is still difficult.

早安.史蒂夫，我知道正如你所說，中國的戰略評估仍在進行中，但重組似乎確實有助於穩定業務利潤率。例如，如果下半年市場沒有如預期般復甦，你還可以進行更多重組嗎？如果市場依然艱難，您如何看待維持利潤率的能力？

Yes. I mean, look, over long periods of time, right, the answer in China is not continuing to restructure and cut cost and not be able to grow the business. So we're doing what we think is necessary to protect the business today and and we're making, I think, smart decisions around where we do cut. There's a lot still to play out in terms of how the market will kind of respond, especially as we start to lap these subsidies. So we're watching that carefully.

是的。我的意思是，你看，從長遠來看，在中國，解決之道不是不斷重組和削減成本，最終導致業務無法成長。所以，我們正在採取我們認為必要的措施來保護目前的業務，而且我認為，我們在削減開支方面做出了明智的決定。市場將如何反應，還有許多事情需要觀察，尤其是在我們開始逐步取消這些補貼的情況下。所以我們正在密切關注此事。

Obviously, the strategic assessment we're doing might change kind of how we approach our business in China. That's the high-quality discussions that we're having with partners whether there's more structuring in the future, I think we'll evaluate that as we go. I think ultimately, though, our goal is we need to find a way for the business to be even more competitive than it has been going forward.

顯然，我們正在進行的戰略評估可能會改變我們在中國開展業務的方式。這就是我們正在與合作夥伴進行的高品質討論，至於未來是否會有更多架構調整，我認為我們會邊走邊評估。但我認為，歸根結底，我們的目標是找到一種方法，使公司在未來更具競爭力。

And eventually, the market will recover. But when that is, I think it's still obviously a big uncertainty. But we'll do what we need to do to make sure we can maintain the competitiveness of the business there financially. But ultimately, we need to find a strategic path forward that allows the business to grow again.

最終，市場會復甦。但具體時間仍存在很大的不確定性。但我們會採取一切必要措施，確保公司在當地保持財務競爭力。但歸根究底，我們需要找到一條能讓企業再次發展的策略道路。

That's helpful. And then your boiler businesses continue to be pretty solid, and I think you have a good forecast for '26. So maybe just a little more color on the health of that market? I know your high-efficiency boat boilers are doing well, but is that mostly what this is? Or is it the market strength overall?

那很有幫助。而且你們的鍋爐業務也相當穩健，我認為你們對 2026 年的預測很樂觀。那麼，或許可以再詳細說說這個市場的健康狀況呢？我知道你們高效的船用鍋爐運作良好，但這主要是因為鍋爐的緣故嗎？或者說是整體市場強勢？

It's a good market, but I would say our lock-in bar brand, and it is the, I think, premier brand in that marketplace. We have great technology, as we've talked about, on the high efficiency and it's a great product. So it's a little bit of both. It's been a strong market. But also, I think we're performing well and even taking share in that market with the strength of our product portfolio.

這是一個不錯的市場，但我認為我們的鎖骨棒品牌是該市場上的頂級品牌。正如我們之前所說，我們擁有高效的先進技術，這是一款非常棒的產品。所以兩者兼而有之。市場行情一直很強。但同時，我認為憑藉我們強大的產品組合，我們表現良好，甚至正在搶佔市場份額。

Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Helen for closing remarks.

女士們先生們，隊列中不再顯示任何問題。現在我想把電話交還給海倫，請她做總結發言。

Thank you, everyone, for joining us today. Let me conclude by reminding you that despite many challenges, A.O. Smith achieved record EPS of $3.85 in 2025. We look forward to updating you on our progress in the quarters to come. In addition, please mark your calendars to join our presentation at three conferences this quarter. Citi on February 19. We North Coast on March 12 and JPMorgan on March 17. Thank you and enjoy the rest of your day.

謝謝各位今天蒞臨。最後，我想提醒大家，儘管面臨諸多挑戰，A.O. Smith 公司在 2025 年仍實現了創紀錄的每股收益 3.85 美元。我們期待在接下來的幾個季度向您報告我們的進展。此外，請在日曆上標記，參加我們本季在三場會議上的演講。花旗銀行於2月19日發布消息。我們北海岸將於 3 月 12 日舉行會議，摩根大通將於 3 月 17 日舉行會議。謝謝，祝您今天餘下的時間愉快。

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們、先生們，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了。