Lennox International Inc (LII) 2023 Q4 法說會逐字稿

Welcome to the Lennox Fourth Quarter and Full Year 2023 Earnings Conference Call.

歡迎參加 Lennox 2023 年第四季和全年財報電話會議。

(Operator Instructions)

（操作員說明）

As a reminder, this call is being recorded. I would now like to turn the conference over to Chelsey Pulcheon from the Lennox Investor Relations team. Chelsey, please go ahead.

提醒一下，此通話正在錄音。我現在想將會議交給 Lennox 投資者關係團隊的 Chelsey Pulcheon。切爾西，請繼續。

Thank you, Shelby. Good morning, everyone. Thank you for joining us this morning as we share yet another quarter of outstanding performance. With me today is CEO, Alok Maskara, our new CFO, Michael Quenzer; and our outgoing CFO, Joe Reitmeier. Alok, Michael and Joe will share their prepared remarks before we move to the Q&A session.

謝謝你，謝爾比。大家，早安。感謝您今天早上加入我們，我們將分享另一個季度的出色業績。今天與我在一起的有執行長 Alok Maskara、新任財務長 Michael Quenzer；以及我們即將離任的財務長 Joe Reitmeier。阿洛克、麥可和喬將在我們進入問答環節之前分享他們準備好的發言。

Turning to Slide 2, a reminder that during today's call, we will be making certain forward-looking statements, which are subject to numerous risks and uncertainties as outlined on this page. We may also refer to certain non-GAAP financial measures that management considers relevant indicators of underlying business performance. Please refer to our SEC filings available on our Investor Relations website for additional details, including a reconciliation of all GAAP to non-GAAP measures.

轉向投影片 2，提醒您在今天的電話會議中，我們將做出某些前瞻性聲明，這些聲明受到本頁概述的眾多風險和不確定性的影響。我們也可能參考管理階層認為基本業務績效相關指標的某些非公認會計準則財務指標。請參閱我們的投資者關係網站上提供的 SEC 文件，以了解更多詳細信息，包括所有 GAAP 與非 GAAP 指標的調整表。

The earnings release, today's presentation and the webcast archive link for today's call are available on our Investor Relations website at investor.lennox.com.

收益發布、今天的演示以及今天電話會議的網路廣播存檔連結可在我們的投資者關係網站 Investor.lennox.com 上取得。

Now please turn to Slide 3 as I turn the call over to our CEO, Alok Maskara.

現在請翻到投影片 3，我將把電話轉給我們的執行長 Alok Maskara。

Thank you, Chelsey. Good morning, and welcome. I'm proud to represent our 13,000 employees as we delivered another full year of record results. We are pleased with our 2023 growth, margin expansion and more important cash generation. Our strong results were noteworthy, given the unprecedented destocking faced by residential HVAC manufacturers last year. I'm deeply grateful for our employees and our customers whose hard work, loyalty and dedication drove the results that we will be discussing today. I would like to begin by highlighting 4 key messages on Slide 3.

謝謝你，切爾西。早上好，歡迎光臨。我很自豪能夠代表我們的 13,000 名員工，我們全年又創下了創紀錄的業績。我們對 2023 年的成長、利潤率擴張和更重要的現金產生感到滿意。鑑於去年住宅暖通空調製造商面臨前所未有的庫存減少，我們的強勁業績值得注意。我對我們的員工和客戶深表感謝，他們的辛勤工作、忠誠和奉獻推動了我們今天討論的結果。我想先強調投影片 3 上的 4 個關鍵訊息。

First, we delivered $3.63 in adjusted EPS for Q4, an increase of 41% year-over-year. Adjusted EPS for the full year was $17.96, a 27% increase year-over-year. Our 2023 full year results were also notable for 6% core revenue growth, 300 basis point expansion in adjusted segment margin. In addition, our operating cash flow more than doubled compared to prior year.

首先，我們在第四季度調整後每股收益為 3.63 美元，年增 41%。全年調整後每股收益為 17.96 美元，年增 27%。我們的 2023 年全年業績也引人注目，核心營收成長 6%，調整後的部門利潤率擴大 300 個基點。此外，我們的經營現金流量比去年增加了一倍以上。

Second, we continue to invest wisely in manufacturing capacity, distribution optimization, technology transitions and growth initiatives while maintaining our industry-leading ROIC of 44%. Third, while end market uncertainties linger, our transformation momentum sets a strong foundation and gives us confidence in our 2024 EPS guidance range of $18.50 to $20.

其次，我們繼續明智地投資於製造能力、分銷優化、技術轉型和成長計劃，同時保持業界領先的 44% 的投資回報率。第三，雖然終端市場的不確定性仍然存在，但我們的轉型動能奠定了堅實的基礎，並使我們對 2024 年每股收益指引範圍 18.50 美元至 20 美元充滿信心。

Fourth, given the robust progress on the self-help transformation plan, we are pleased to increase our previously announced 2026 financial goals. Now please turn to Slide 4 for more details at 2023 self-help accomplishments.

第四，鑑於自助轉型計畫的強勁進展，我們很高興能提高先前宣布的2026年財務目標。現在請翻到投影片 4，以了解 2023 年自助成就的更多詳細資訊。

In 2023, Lennox experienced significant success during the first phase of our self-help transformation plan. Our strategic initiatives allowed us to effectively navigate the destocking challenges, which demonstrated our resilience and exceptional execution. This phase laid a solid foundation for future growth and positioned us to capitalize on further growth opportunities.

2023 年，Lennox 在自助轉型計畫的第一階段取得了重大成功。我們的策略性舉措使我們能夠有效應對去庫存的挑戰，這證明了我們的韌性和卓越的執行力。這一階段為未來的成長奠定了堅實的基礎，並使我們能夠利用進一步的成長機會。

We accelerated growth by strengthening our distribution muscle to better serve our existing customers, attract new customers and increase our share of wallet from HVAC dealers. We are investing in our sales and stores teams to create greater alignment, accountability and autonomy for improving the customer experience.

我們透過加強分銷實力來加速成長，以更好地服務現有客戶、吸引新客戶並增加暖通空調經銷商的錢包份額。我們正在投資我們的銷售和商店團隊，以建立更大的一致性、責任感和自主權，以改善客戶體驗。

To ensure resiliency we implemented pricing excellence initiatives to recover margins from previously depressed levels as many long-term key account contracts which were signed before the recent inflationary period came up for renewal. We also achieved higher factory output, enhanced productivity and optimize product mix. Together, these measures contributed to the overall margin expansion and strengthened our margin resiliency. Finally, to ensure consistent execution, we implemented a balanced scorecard based operating system, which we refer to as Lennox Unified Management System. This system was instrumental in driving accountability and ensuring alignment with our strategic goals to accelerate revenue growth and expand margins. We also simplified our portfolio with the sale of the European businesses and improved our total life cycle value proposition with the recent AES acquisition.

為了確保彈性，我們實施了卓越定價計劃，以將利潤率從先前低迷的水平恢復過來，因為許多在最近的通貨膨脹時期之前簽署的長期大客戶合約需要續簽。我們也實現了更高的工廠產量、提高的生產力並優化了產品結構。這些措施共同促進了整體利潤率的擴張，並增強了我們的利潤率彈性。最後，為了確保一致的執行，我們實施了基於平衡記分卡的作業系統，我們稱之為 Lennox 統一管理系統。該系統有助於推動問責制並確保與我們加速收入成長和擴大利潤的策略目標保持一致。我們也透過出售歐洲業務簡化了我們的投資組合，並透過最近收購 AES 改善了我們的整個生命週期價值主張。

On the next slide, I will share more about how we fine-tuned our internal engine to ensure success of the transformation plan and accelerate growth throughout the journey. Slide 5 shows the 5 components that fueled Lennox's success in 2023 and are building momentum that will continue to power Lennox's bright future. At the heart of our transformation is our unwavering commitment to our vision and mission.

在下一張投影片中，我將分享更多有關我們如何微調內部引擎以確保轉型計劃成功並在整個過程中加速成長的資訊。幻燈片 5 顯示了推動 Lennox 在 2023 年取得成功的 5 個要素，並且正在積聚動力，繼續為 Lennox 的光明未來提供動力。我們轉型的核心是我們對願景和使命的堅定承諾。

These set the true north direction for everything we do, aligning our efforts towards a shared goal. Moving outward, the strategy to great will deliver accelerated growth, resilient margins, execution consistency, advanced technology portfolio and talent and culture that help us win every day. Next is the commitment to our customer charters, emphasizing our dedication to always being a partner of choice by delivering exceptional customer experience and quality solutions.

這些為我們所做的一切確定了真正的方向，使我們的努力朝著共同的目標前進。向外邁進，卓越策略將帶來加速成長、彈性利潤、執行一致性、先進技術組合以及人才和文化，幫助我們贏得每一天。接下來是對我們的客戶章程的承諾，強調我們致力於透過提供卓越的客戶體驗和優質解決方案來始終成為首選合作夥伴。

Another crucial element to our outstanding performance was the implementation of our Lennox Unified Management Systems. We are utilizing balanced scorecard to drive accountability, integrating standard processes and best practices and aligning operating cadence for efficiency. This represents our commitment to a unified approach that enables Lennox to shift into a higher gear and outperform competition.

我們優異表現的另一個關鍵因素是 Lennox 統一管理系統的實施。我們利用平衡計分卡來推動問責制，整合標準流程和最佳實踐，並調整營運節奏以提高效率。這代表了我們對統一方法的承諾，使 Lennox 能夠提升檔次並超越競爭對手。

Lastly, our core values and guiding behaviors serve as a foundation of our high-performance growth culture with a passion for improving the customer experience. Last year, we rolled out 9 guiding behaviors that improved the team's focus on critical behaviors such as positive engagement and sustainability. These 5 components not only helped us build momentum on our self-help transformation this year, but also act as a spring boom to continue our long-term journey of growth and expansion.

最後，我們的核心價值和指導行為是我們高績效成長文化的基礎，我們熱衷於改善客戶體驗。去年，我們推出了 9 項指導行為，提高了團隊對積極參與和永續性等關鍵行為的關注。這五個組成部分不僅為我們今年的自助轉型提供了動力，也為我們繼續長期的成長和擴張之旅提供了春天的繁榮。

Before we move into the detailed financial section, allow me a few moments to express my gratitude to our outgoing CFO, Joe Reitmeier. I am thankful for Joe's years of service to Lennox, and I'm especially grateful that stayed with us to train me, the new CEO, and to oversee a smooth transition to our new CFO, Michael Quenzer. Now for the last time on an earnings call, let me hand the call over to Joe.

在我們進入詳細的財務部分之前，請允許我花一些時間向我們即將離任的財務長 Joe Reitmeier 表示感謝。我感謝 Joe 多年來為 Lennox 提供的服務，尤其感謝他留在我們身邊培訓我這位新任首席執行官，並監督他順利過渡到我們的新任首席財務官 Michael Quenzer。現在，這是最後一次財報電話會議，讓我把電話交給喬。

Thank you, Luke, and greetings to everyone joining us this morning as we announce Lennox's record-setting performance and outlook. I've had the pleasure and privilege of serving as Lennox's Chief Financial Officer during a period of transformation and record-setting achievements. Portfolio changes enable a more intense focus on our key North American end markets, the team introduced new and innovative solutions. We delivered on initiatives that drove significant increases in profitability and that coupled with efficient capital allocation resulted in industry-leading returns on invested capital.

謝謝盧克，並向今天早上加入我們的所有人致意，我們宣布了倫諾克斯創紀錄的表現和前景。我很高興並榮幸地在 Lennox 轉型並取得創紀錄成就的時期擔任財務長。產品組合的變化使我們能夠更加專注於北美主要終端市場，團隊推出了新的創新解決方案。我們實施的措施顯著提高了獲利能力，再加上有效的資本配置，帶來了領先業界的投資資本回報。

We fortified the balance sheet and most significantly, we generated exponential increases in returns for our shareholders. Now before I hand it off to Michael, I'd like to reflect briefly on 2023. It was another year of exceptional performance while strengthening the foundation for the future by investing in our people, sustaining industry-leading innovation and enhancing our capabilities to better serve our customers. Now while I'm extremely proud of my time with such a great organization that has accomplished so much. I take even greater pride knowing that I'm leaving an extremely talented and seasoned team that is very well positioned both strategically and financially for long-term success.

我們強化了資產負債表，最重要的是，我們為股東帶來了指數級的報酬。現在，在我將其交給Michael 之前，我想簡要回顧一下2023 年。這又是業績卓越的一年，同時透過投資於我們的員工、維持行業領先的創新以及增強我們更好地發展的能力來加強未來的基礎。服務我們的客戶。現在，我為自己在這樣一個偉大的組織中度過的時光感到非常自豪，該組織取得瞭如此多的成就。當我知道我將離開一支才華橫溢、經驗豐富的團隊時，我感到更加自豪，該團隊在策略和財務上都處於有利地位，可以實現長期成功。

I'd like to wrap up my comments with a sincere thank you to all Lennox employees, our valued customers, the investment community and other stakeholders for your partnerships over the years. I'll now hand it over to Michael, who will take you through the details of Lennox's financial performance and outlook. Michael, take it away.

在結束我的評論時，我想對所有 Lennox 員工、我們尊貴的客戶、投資界和其他利益相關者多年來的合作夥伴關係表示誠摯的感謝。現在我將把它交給邁克爾，他將向您詳細介紹 Lennox 的財務表現和前景。邁克爾，把它拿走。

Thank you, Joe. Good morning to everyone.

謝謝你，喬。各位早安。

Please turn to Slide 6. As Alok mentioned earlier, 2023 has been a record year in the fourth quarter with no exception. Core revenue, which excludes our revenue operations was $1.1 billion, up 7% as price and mix drove the year-over-year improvement. The adjustment segment profit increased $44 million at $69 million of price and mix benefits were partially offset by inflation and investment in SG&A and distribution. Total adjusted segment margin was 15.9%, up 320 basis points versus prior year. For the fourth quarter, corporate expenses were $30 million, a decrease of $3 million. Our fourth quarter tax rate was 20% and diluted shares outstanding were 35.8 million compared to 35.6 million in the prior year quarter. The fourth quarter achieved record levels of revenue, segment profit and adjusted earnings per share, which grew by 41% to $3.63.

請參閱投影片 6。正如 Alok 之前提到的，2023 年第四季毫無例外地是創紀錄的一年。核心收入（不包括我們的收入業務）為 11 億美元，成長 7%，原因是價格和產品組合推動了同比改善。調整部門利潤增加了 4,400 萬美元，價格和混合收益增加了 4,400 萬美元，但部分被通貨膨脹以及 SG&A 和分銷投資所抵消。調整後的分部利潤率為 15.9%，比上年增長 320 個基點。第四季公司費用為 3000 萬美元，減少了 300 萬美元。我們第四季的稅率為 20%，攤薄後的流通股數為 3,580 萬股，而去年同期為 3,560 萬股。第四季營收、部門利潤和調整後每股盈餘均創歷史新高，成長 41% 至 3.63 美元。

Let's shift our focus to Slide 7 and review the financial results of our Home Comfort Solutions segment formerly referred to as a residential segment. The left graph shows revenue grew 1% to a record $709 million in the fourth quarter. The segment benefited from favorable mix of higher efficiency products and effective pricing execution. This was partially offset by volume declines.

讓我們將焦點轉移到幻燈片 7，回顧一下我們的家庭舒適解決方案部門（以前稱為住宅部門）的財務表現。左圖顯示第四季營收成長 1%，達到創紀錄的 7.09 億美元。該部門受益於高效產品和有效定價執行的有利組合。這被成交量下降部分抵消。

Although unit sales volumes for the segment declined by 5%, our direct-to-contractor sales volumes remained stable, signaling a resilient consumer demand landscape. Unit sales volumes through independent distribution channels declined more than 20% driven by continued industry destocking. Home Comfort Solutions profit decreased approximately 4% to $115 million, and segment margin also experienced a decline of 70 basis points to 16.2%.

儘管該細分市場的單位銷售量下降了 5%，但我們的直接面向承包商的銷售量保持穩定，顯示消費者需求格局具有彈性。由於產業持續去庫存，獨立分銷管道的單位銷售量下降了 20% 以上。 Home Comfort Solutions 利潤下降約 4%，至 1.15 億美元，部門利潤率也下降 70 個基點，至 16.2%。

The decrease was attributed to a $9 million decrease in sales volumes and $25 million impact from inflation and investments in distribution and selling.

下降的原因是銷量減少了 900 萬美元，以及通貨膨脹以及分銷和銷售投資造成的 2500 萬美元的影響。

Moving on to Slide 8. We will now review the performance of our Building Climate Solutions segment, formerly referred to as the commercial segment. The segment continues to consistently deliver outsize performance each quarter, resulting in another quarter of record revenue and profit. Revenue was $390 million in the quarter, up 19%. Combined price and mix were up 11% and volume was up 5%. Building Climate Solutions profit was $91 million or up 98% and segment margin expanded 930 basis points to 23.2%. These results were primarily driven by price and sales volume gains. The team's execution on several self-help initiatives aided in the recovery of previously depressed profit margins.

轉到投影片 8。我們現在將回顧建築氣候解決方案部門（以前稱為商業部門）的績效。該部門每個季度都繼續保持出色的業績，導致另一個季度的收入和利潤創下歷史新高。該季度營收為 3.9 億美元，成長 19%。綜合價格和產品組合上漲了 11%，成交量上漲了 5%。建築氣候解決方案利潤為 9,100 萬美元，成長 98%，部門利潤率成長 930 個基點，達到 23.2%。這些業績主要是由價格和銷售成長所推動的。該團隊執行了多項自助舉措，幫助恢復了先前低迷的利潤率。

These initiatives include price corrections, enhanced factory productivity and strengthened supply chain resiliency. The AES acquisition also played a role in the growth during the quarter. The integration is progressing smoothly with existing Lennox customers showing interest in the AES full life cycle value proposition. Ultimately, the fourth quarter continued the year's momentum and resulted in a strong finish to 2023.

這些措施包括價格調整、提高工廠生產力和增強供應鏈彈性。收購 AES 也對本季的成長發揮了作用。此次整合進展順利，現有 Lennox 客戶對 AES 全生命週期價值主張表現出興趣。最終，第四季延續了今年的勢頭，為 2023 年畫上了圓滿的句號。

If you will now turn to Slide 9, I will recap the full year Lennox results. For full year 2023, core revenue, excluding European operations, was $4.7 billion, up 6%. Adjusted segment profit increased $180 million as $348 million of price and mix benefits were partially offset by Home Comfort Solutions sales volume declines as well as inflation and investment in SG&A and distribution. Total adjusted segment margin was 17.9%, up 300 basis points versus prior year. Despite facing volume challenges in the residential end markets, inflationary pressures and ongoing investments, the Home Comfort Solutions segment achieved revenue and profit growth through successful execution of strategic pricing initiatives and the seamless transition to the new minimum SEER standard.

如果您現在翻到投影片 9，我將回顧 Lennox 全年的表現。 2023 年全年，不包括歐洲業務的核心收入為 47 億美元，成長 6%。調整後的部門利潤增加了 1.8 億美元，原因是 3.48 億美元的價格和組合效益被家庭舒適解決方案銷量下降以及通貨膨脹以及 SG&A 和分銷投資所部分抵消。調整後的分部利潤率為 17.9%，比上年增長 300 個基點。儘管面臨住宅終端市場的銷售挑戰、通膨壓力和持續投資，家庭舒適解決方案部門透過成功執行策略定價計劃以及無縫過渡到新的最低 SEER 標準，實現了收入和利潤成長。

The Building Climate Solutions segment also achieved impressive results in 2023. Healing supply chains and factory productivity played a key role in growing volumes in the second half of the year, and pricing execution helped the segment recover previously depressed profit margins from years of higher supply chain and production costs. Exceptional execution by both segments resulted in adjusted earnings per share growing to $17.96, setting a new record and representing a 27% increase compared to the prior year.

建築氣候解決方案部門在2023 年也取得了令人矚目的業績。供應鏈和工廠生產力的恢復在下半年銷售成長中發揮了關鍵作用，定價執行幫助該部門恢復了多年來供應鏈較高水平所帶來的低迷利潤率和生產成本。兩個部門的出色執行導致調整後每股收益增長至 17.96 美元，創下新紀錄，與前一年相比增長 27%。

Moving on to cash flow and capital deployment on Slide 10. Operating cash flow for the quarter was $306 million compared to $132 million in the prior year quarter. Capital expenditures were $125 million for the quarter, an increase of $91 million compared to the prior year. Net debt to adjusted EBITDA was 1.3x, down from 2x in prior year. Our approach to capital deployment remains consistent. We will prioritize organic growth investments with strong returns, grow dividends with earnings and continue to explore M&A opportunities and to supplement with share repurchases when necessary.

接下來是幻燈片 10 上的現金流量和資本部署。本季的營運現金流量為 3.06 億美元，而去年同期為 1.32 億美元。該季度資本支出為 1.25 億美元，比上年增加 9,100 萬美元。淨債務與調整後 EBITDA 比率為 1.3 倍，低於去年的 2 倍。我們的資本配置方法保持一致。我們將優先考慮回報豐厚的有機成長投資，以獲利增加股息，並繼續探索併購機會，並在必要時以股票回購作為補充。

Lennox's industry-leading ROIC of 44% reflects our dedication to delivering value to our stakeholders through strategic and targeted investments. We not only aim to maintain our high ROIC, but also aimed to make necessary investments to elevate our performance and competitiveness in the marketplace. We anticipate the successful completion of our upcoming commercial HVAC factory and production is slated to begin midyear. While overhead and ramp-up expenses posed known challenges in the first half of 2024, we anticipate the factory will realize productivity benefits in 2025. This facility plays a pivotal role in our sustained growth, enhancing our commercial production capacity by 25% by the end of 2024.

Lennox 業界領先的 44% 投資報酬率反映了我們致力於透過策略性和有針對性的投資為利害關係人創造價值。我們的目標不僅是保持高投資報酬率，還旨在進行必要的投資，以提高我們在市場上的績效和競爭力。我們預計即將建成的商業暖通空調工廠將成功竣工，並預計於年中開始生產。雖然管理費用和擴建費用在2024 年上半年構成了已知的挑戰，但我們預計工廠將在2025 年實現生產力效益。該工廠在我們的持續成長中發揮關鍵作用，到年底將我們的商業產能提高了25% 2024 年。

It will allow us to better address consumer demand and recapture market share in emergency replacement market.

這將使我們能夠更好地滿足消費者需求並重新奪回緊急更換市場的市場份額。

Now let's transition to Slide 11. Here, I will provide an overview of our full year financial guidance for 2024. We anticipating another year of profitable growth, the chart on the left provides key growth drivers with revenue expected to increase by approximately 7%. Alok will provide additional comments on end markets later in the presentation, but sales volumes are expected to remain relatively flat with a slight upward trend from Building Climate Solutions growth and stable Home Comfort solutions end markets. The combination of price and mix is anticipated to contribute to a mid-single-digit growth in revenue, price increases will sustain margins amid continued cost inflation and a slight favorable mix is expected due to the 2023 minimum efficiency regulatory change.

現在讓我們轉到幻燈片11。在這裡，我將概述我們2024 年的全年財務指引。我們預計又一年將實現盈利增長，左側的圖表提供了關鍵的增長動力，收入預計將增長約7%。 Alok 將在稍後的演示中對終端市場提供更多評論，但預計銷售量將保持相對平穩，建築氣候解決方案的成長和穩定的家庭舒適解決方案終端市場將呈現小幅上升趨勢。價格和組合的結合預計將有助於收入實現中個位數成長，價格上漲將在成本持續上漲的情況下維持利潤率，並且由於 2023 年最低效率監管變化，預計組合將略有有利。

In addition to the profit drivers from revenue, we have listed key costs and investment assumptions on the right side of the slide. Component cost inflation is expected to be up mid-single digits, including large increases in our cost to acquire R-410A refrigerant. We expect this to be partially offset by material cost reduction programs. We anticipate ramp-up costs of approximately $10 million for the new commercial HVAC factory along with additional costs associated with the refrigerant transition across our Home Comfort solutions manufacturing facilities.

除了收入的利潤驅動因素之外，我們還在幻燈片右側列出了關鍵成本和投資假設。組件成本通膨預計將上升到中個位數，其中包括我們購買 R-410A 冷媒的成本大幅增加。我們預計這將被材料成本削減計劃部分抵消。我們預計新的商業 HVAC 工廠的增加成本約為 1000 萬美元，以及與我們的 Home Comfort 解決方案製造工廠的冷媒轉換相關的額外成本。

We will continue to invest in information system advancements, distribution growth initiatives and projects to improve customer service. Additionally, we expect to support growth initiatives by making investments in both sales and marketing. While we continue to focus on managing SG&A expenses, we do expect moderate inflation area pressure in 2024. Our guidance for capital expenditures is approximately $175 million. This includes final spending for the new commercial HVAC factory and the 2025 low GWP refrigerant transition. Interest expense is expected to be approximately $50 million and tax rate is estimated to be between 20% and 21%.

我們將繼續投資資訊系統的進步、分銷成長計劃和項目，以改善客戶服務。此外，我們希望透過在銷售和行銷方面進行投資來支持成長計劃。雖然我們繼續專注於管理 SG&A 費用，但我們預計 2024 年通膨壓力將適中。我們對資本支出的指導約為 1.75 億美元。這包括新的商業 HVAC 工廠和 2025 年低 GWP 冷媒轉型的最終支出。利息支出預計約為 5,000 萬美元，稅率預計在 20% 至 21% 之間。

Incorporating all of these guidance items, we expect earnings per share to be within the range of $18.50 per share and $20 per share. Finally, we expect free cash flow to be within the range of $500 million to $600 million.

考慮到所有這些指導項目，我們預計每股收益將在每股 18.50 美元至 20 美元之間。最後，我們預計自由現金流將在 5 億至 6 億美元之間。

With that, please turn to Slide 12, and I'll turn it back over to Alok for an overview of 2024 business conditions.

接下來，請前往投影片 12，我會將其轉回給 Alok，以概述 2024 年的業務狀況。

Thanks, Michael. As we look forward to the coming year, it is important to recognize that while our transformation momentum has yielded positive results, we are still facing challenges in the end market. Within our Home Comfort Solutions segment, the health of the consumer will remain a significant driver of demand and greatly influence the repair versus replace dynamic.

謝謝，麥可。展望新的一年，我們必須認識到，雖然我們的轉型勢頭取得了積極成果，但我們在終端市場仍然面臨挑戰。在我們的居家舒適解決方案領域，消費者的健康仍將是需求的重要驅動因素，並極大影響維修與更換動態。

We are mindful of consumer sentiment, especially in an election year, and we'll continue to track macro data for early indicators. It is important to point out, we have not yet noticed any meaningful shift from replace to repair. EPA rulings have also introduced an element of uncertainty regarding industry inventory levels. Ahead of the R454B transition, we do not anticipate a large pre-buy due to inventory fatigue in the channel and the increased cost of carrying inventories.

我們專注於消費者情緒，尤其是在選舉年，我們將繼續追蹤宏觀數據以獲取早期指標。需要指出的是，我們尚未註意到從更換到維修的任何有意義的轉變。美國環保署的裁決也為產業庫存水準帶來了不確定性。在 R454B 過渡之前，由於通路庫存疲勞以及庫存成本增加，我們預計不會出現大量預購。

However, we do expect distributors to normalize inventory levels this year as the channel returns to its usual ordering patterns. We also expect ongoing benefits of the strategic pricing initiatives and potential share opportunity as Lennox historically win share during regulatory transitions. Turning our attention to building Climate Solutions, we predict solid demand in 2024. With the data we have from our National Account Services business, we know that rooftop units are aged past historical averages and will need to be replaced soon. 2024 demand may be impacted if key accounts delay installs pending new R454B product availability. End markets may also face challenges related to softening commercial new construction and project delays. Ultimately, our outlook on 2024 remains cautiously optimistic, though we acknowledge the complexities of the market conditions in the coming years.

然而，我們確實預計，隨著通路恢復正常的訂購模式，今年經銷商的庫存水準將會正常化。我們也預期策略定價措施和潛在份額機會將持續帶來好處，因為 Lennox 歷來在監管過渡期間贏得了份額。將我們的注意力轉向建立氣候解決方案，我們預測 2024 年需求強勁。根據我們從國民帳戶服務業務獲得的數據，我們知道屋頂單元的老化程度超過了歷史平均水平，需要盡快更換。如果關鍵客戶延遲安裝新的 R454B 產品，2024 年的需求可能會受到影響。終端市場也可能面臨與商業新建築疲軟和專案延誤相關的挑戰。最終，儘管我們承認未來幾年市場狀況的複雜性，但我們對 2024 年的前景仍然謹慎樂觀。

We trust that our proactive strategies focused on driving top line growth, expanding our margins and consistently executing on initiatives will continue to propel Lennox towards enhancing customer experience and shareholder value.

我們相信，我們專注於推動收入成長、擴大利潤和持續執行措施的積極策略將繼續推動 Lennox 提高客戶體驗和股東價值。

On the next slide, I will go into more depth on each of the strategies as it relates to 2024. On Slide 13, I want to take a moment to revisit our self-help transformation plan, which has been steering our current success. As a reminder, this plan is structured around 3 phases over the next several years.

在下一張投影片中，我將更深入地討論與2024 年相關的每項策略。在投影片13 上，我想花點時間重新審視我們的自助轉型計劃，該計劃一直在指導我們當前的成功。提醒一下，該計劃在未來幾年內分為三個階段。

Now let's dive into the specifics of our actions for 2024, where we will transition from the initial phase to the growth acceleration phase. This year is pivotal as it sets the stage for the next wave of growth through strategic investments and focused actions. First, we are investing in our sales force to expand customer touch points, enhancing the overall customer experience through digital innovations and anticipating improved output from our new commercial HVAC factory. Additionally, we aim to increase the attachment rate for parts and accessories, ensuring the holistic experience for our customers.

現在讓我們深入了解 2024 年我們的具體行動，我們將從初始階段過渡到成長加速階段。今年是關鍵的一年，因為它透過策略性投資和重點行動為下一波成長奠定了基礎。首先，我們正在投資我們的銷售隊伍，以擴大客戶接觸點，透過數位創新增強整體客戶體驗，並預計我們新的商業暖通空調工廠將提高產量。此外，我們的目標是提高零件和配件的安裝率，確保為客戶提供整體體驗。

Second, we are committed to driving resilient margins. This involves maintaining pricing excellence, leveraging greater productivity from volume recovery, realizing material cost reduction and reaping the mix benefits of transitioning to the new R454B product. These actions collectively fortify our financial position and solidify our sustainable competitive advantage.

其次，我們致力於提高有彈性的利潤率。這包括維持卓越的定價、利用產量恢復帶來的更高生產力、降低材料成本以及獲得過渡到新 R454B 產品的綜合效益。這些行動共同鞏固了我們的財務狀況並鞏固了我們可持續的競爭優勢。

Lastly, we will leverage the Lennox Unified Management System to streamline our operations and set clear priorities. Our focused strategy, investment in heat pump growth and enhancement to our distribution network further exemplify our commitment to consistent management execution. 2024 is a year of purposeful actions that will propel us into the growth acceleration phase and lay the groundwork for our journey into the expansion phase. I am confident that with our collective dedication and strategic approach, we are not just following a plan, we are shaping our future success.

最後，我們將利用 Lennox 統一管理系統來簡化我們的營運並設定明確的優先事項。我們的重點策略、對熱泵成長的投資以及對分銷網絡的增強進一步體現了我們對一致管理執行的承諾。 2024 年是採取有目的行動的一年，這將推動我們進入成長加速階段，並為我們進入擴張階段奠定基礎。我相信，憑藉我們的集體奉獻和策略方針，我們不僅僅是在遵循計劃，我們正在塑造我們未來的成功。

Now please turn to Slide 14 for an update on our long-term financial goals. It has been just over a year since we introduced our 2026 goals and are confident that our execution is ahead of schedule, even though market uncertainties persist. We are pleased that Building Climate Solutions has achieved record margins and that Home Comfort solutions demonstrated margin resiliency, even while facing significant volume headwinds.

現在請參閱投影片 14，以了解我們長期財務目標的最新情況。自從我們提出 2026 年目標以來僅一年多時間，儘管市場不確定性依然存在，但我們對提前執行充滿信心。我們很高興建築氣候解決方案取得了創紀錄的利潤率，而家庭舒適解決方案即使在面臨巨大的銷售阻力的情況下也表現出了利潤彈性。

With this year's achievements, we recognize the need to adjust our long-term goals to better reflect our current positions. For 2026 we are now targeting revenue of $5.4 billion to $6 billion, with total company target margin range of 19% to 21%. Our free cash flow conversion target is approximately 90% as we complete the necessary investments to support our growth.

憑藉今年的成就，我們認識到需要調整我們的長期目標，以更好地反映我們當前的立場。目前，我們的 2026 年營收目標為 54 億美元至 60 億美元，公司總目標利潤率範圍為 19% 至 21%。隨著我們完成支持成長所需的投資，我們的自由現金流轉換目標約為 9​​0%。

We are increasing the long-term target for Home Comfort solutions to a range of 20% to 22% ROS and building Climate Solutions to a range of 22% to 24% ROS.

我們將家庭舒適解決方案的長期目標提高到 20% 至 22% ROS，並將氣候解決方案的長期目標提高到 22% 至 24% ROS。

Now for a wrap up, please turn to Slide 15 for the reasons I continue to believe that Lennox is a great investment opportunity. Lennox operates in growth end markets, has resilient margins, demonstrates execution consistency and serves its customers through advanced technology and high-performance talent. The 5 reasons we remain confident in our ability to deliver strong results are: first, we will continue to make strategic growth investments to improve our go-to-market effectiveness and support consumer demand; second, our margins remain a focus as we continue to evaluate our pricing strategy, implement innovative solutions to increase productivity and optimize our direct-to-dealer network. Third, while leveraging the Lennox Unified Management Systems, our teams will be able to streamline processes, leverage best practices and consistently deliver strong results.

現在請參閱投影片 15 作為總結，因為我仍然相信 Lennox 是一個絕佳的投資機會。 Lennox 在成長型終端市場開展業務，具有彈性的利潤率，表現出執行的一致性，並透過先進的技術和高績效人才為客戶提供服務。我們對強勁業績的能力保持信心的五個原因是：首先，我們將繼續進行策略性成長投資，以提高我們的市場投放效率並支持消費者需求；其次，我們的利潤仍然是一個焦點，因為我們繼續評估我們的定價策略，實施創新解決方案以提高生產力並優化我們的直接經銷商網路。第三，在利用 Lennox 統一管理系統的同時，我們的團隊將能夠簡化流程、利用最佳實踐並持續交付強勁的成果。

The fourth aspect reflects our continued technology advancements that ensure Lennox will remain at the forefront of innovative solutions for our customers. Finally, the introduction of our guiding behavior enhance our team's focus on core values and fortified our high-performance culture. Our refreshed pay-for-performance incentive structure further aligns the talents of our team and the interest of our stakeholders.

第四個面向反映了我們持續的技術進步，確保 Lennox 始終處於為客戶提供創新解決方案的前沿。最後，我們的指導行為的引入增強了我們團隊對核心價值的關注，並強化了我們的高績效文化。我們更新的績效薪酬激勵結構進一步協調了我們團隊的人才和利害關係人的利益。

Allow me to wrap up by saying thank you to each of our dedicated employees and valued customers. I am proud for what we were able to accomplish this past year, and I'm looking forward to the promising future that lies ahead of Lennox as our best days are still ahead of us. Thank you.

最後，請容許我向我們每一位敬業的員工和尊貴的客戶表示感謝。我為我們在過去一年所取得的成就感到自豪，我對倫諾克斯充滿希望的未來充滿期待，因為我們最美好的時光仍在前方。謝謝。

We will now be happy to take questions. Easy questions can go to Michael and I and the harder questions should go to Joe Reitmeier. Operator, let's go to Q&A.

我們現在很樂意回答問題。簡單的問題可以問 Michael 和我，較難的問題應該要問 Joe Reitmeier。接線員，我們進入問答環節。

(Operator Instructions)

（操作員說明）

And we'll take our first question from Jeff Hammond with KeyBanc Capital Markets.

我們將回答 KeyBanc Capital Markets 的 Jeff Hammond 提出的第一個問題。

Joe, look forward to seeing you in Cleveland, look me up. Just on margins, I'm just trying to think about the puts and takes. You've got some profit incrementals on the left of Slide 11 and then you talk about a number of headwinds. I'm just wondering if you could put a finer point on just overall incrementals embedded in the guide and maybe how to think more fine point. Much of this refrigerant inflation, manufacturing efficiencies are going to cost similar to how you did for the factory ramp-up costs?

喬，期待在克里夫蘭見到你，來找我吧。只是在邊際上，我只是想考慮一下看跌期權和索取期權。在投影片 11 的左側，您看到了一些利潤增量，然後您談到了一些不利因素。我只是想知道您是否可以對指南中嵌入的整體增量提出更詳細的觀點，以及如何思考更精細的觀點。冷媒膨脹、製造效率的大部分成本將與工廠提升成本的成本類似？

Yes. So on the left-hand side, you can see our contribution margins. And on the right-hand side is the increase related to rate for costs as well as investments. So you have to join those two together see the full impact. But we do expect some margin improvement for the enterprise next year when you look at the combined. Our component costs are a big piece of our cost of goods sold are nearly 45% and then refrigerants also going to go up significantly. So most of that pricing should be there to maintain our current gross margins and then we'll get a bit of leverage on the volume and a little bit of leverage on the acquisition as well. But overall, we do expect margins to be up just not 300 basis points like we saw in 2023.

是的。因此，在左側，您可以看到我們的邊際貢獻。右側是與成本和投資率相關的成長。所以你必須將這兩者結合起來才能看到完整的影響。但從綜合來看，我們確實預期明年企業的利潤率會有所改善。我們的零件成本佔銷售成本的很大一部分，接近 45%，而且冷媒也將大幅上漲。因此，大部分定價應該是為了維持我們目前的毛利率，然後我們將在銷售上獲得一點槓桿，並在收購上獲得一點槓桿。但總體而言，我們預期利潤率不會像 2023 年那樣成長 300 個基點。

Okay. And then can you just talk about your inventory destock process with respect to your company-owned distribution? And just on the independent channel, where are you at? Or what are they telling you in terms of how much more to go on destock?

好的。然後您能談談您公司自有分銷方面的庫存去庫存流程嗎？就在獨立頻道上，你在哪裡？還是他們告訴你要繼續去庫存多少？

Sure. I'll take that, Jeff. On our own internal -- I mean I always think we can get more working capital improvements, but I think we are reaching a level, especially given the upcoming A2L transition, but I think the levels are going to be relatively flat. We might have to build up some towards the second half of 2024, and that's embedded in the guide just to ensure a smooth transition. On the independent channel, I mean, honestly, the destocking in Q4 was more than we expected. And we do think there's going to be some destocking happening in Q1, especially on product line (inaudible) whether that's impact of weather and all, we don't know. But I think from overall, we do expect some destocking bleeding into Q1, but remain confident that by second half or Q2, independent channel distribution destocking would be largely behind us, especially as the distributors get ready for a A2L transition and the EPA ruling allows them some sell-through in 2024 as well. So lots of moving pieces, but we've embedded all of that in the guide, Jeff.

當然。我會接受的，傑夫。就我們自己的內部而言——我的意思是，我一直認為我們可以獲得更多的營運資金改善，但我認為我們已經達到了一定水平，特別是考慮到即將到來的A2L 過渡，但我認為該水平將相對持平。我們可能需要在 2024 年下半年之前建立一些內容，這已嵌入到指南中，只是為了確保平穩過渡。在獨立管道上，我的意思是，老實說，第四季度的去庫存量超出了我們的預期。我們確實認為第一季將會出現一些去庫存的情況，特別是在產品線（聽不清楚）方面，這是否是天氣等因素的影響，我們不知道。但我認為，從整體上看，我們確實預計第一季會出現一些去庫存的情況，但仍然有信心，到下半年或第二季度，獨立通路分銷去庫存將在很大程度上過去，特別是當經銷商為A2L 轉型做好準備並且EPA 裁決允許時2024 年也會有一些銷售。傑夫，有很多感人的內容，但我們已將所有內容嵌入到指南中。

And we'll take our next question from Nigel Coe with Wolfe Research.

我們將回答沃爾夫研究公司奈傑爾·科 (Nigel Coe) 提出的下一個問題。

Congratulations, Joe. Enjoy your retirement. So I'm not sure whether it's a tough question or not. But just on the -- I think maybe on the back of Jeff's kind of question about incrementals. You've got price mix as a 90% incremental margin. So just wondering how that plays into the mid-single-digit component inflation math. So maybe I'm just asking Jeff's question again, but if you just see mid-single-digit contribution from price mix with 90% incremental, you get to sort of a $3 to $4 EPS tailwind. Is that how you're thinking about it?

恭喜，喬。享受你的退休生活。所以我不確定這是否是一個棘手的問題。但就在——我想也許是在傑夫關於增量的問題的背後。您的價格組合為 90% 的增量利潤。所以只是想知道這如何影響中個位數的通膨數學。所以也許我只是再次問傑夫的問題，但如果你只看到價格組合帶來的中個位數貢獻和 90% 的增量，你就會得到 3 到 4 美元 EPS 的順風。你是這麼想的嗎？

Yes. I mean what we have to do is look, it's predominantly price, price drops through to 100%. There's a little bit of mix that we'll get from the carryover benefit from the minimus year transition. So that will kind of drop through at 30%. When you blend the 2 together, you kind of get to the 90%, but then that then covers some of the cost inflations we have on the right-hand side where we think our components are going to be up significantly, both from the normal inflation, mid-single digits as well as the refrigerant.

是的。我的意思是我們要做的就是看，主要是價格，價格下降到 100%。我們將從最小年份過渡的結轉收益中獲得一些混合收益。所以這個比例會降到 30%。當你將兩者混合在一起時，你會達到 90%，但這涵蓋了我們在右側的一些成本通膨，我們認為我們的組件將顯著上升，無論是與正常情況相比通貨膨脹，中個位數以及冷媒。

So that kind offsets a lot of that, which maintains your gross margins. And then thereafter, we start to make investments in distribution and SG&A. And we still see overall operating margins improving think, of it maybe a little less than 50 basis points within the guide.

因此，這種抵消了很多，從而維持了你的毛利率。此後，我們開始對分銷和銷售管理費用進行投資。我們仍然認為整體營業利潤率有所改善，可能略低於指南中的 50 個基點。

Okay.

好的。

And I think if I could add to that, Nigel, keep in mind, the factory inefficiency both for the start-up in Saltillo or the commercial factory and for the A2L conversion, but that's fairly massive transformation we have to do. Every line has to be redone. We'll have (inaudible) factory shutdown. So we bake in all of that. So I understand your question. It's just we got to -- we baked in all of those inefficiencies in our guide.

我想如果我可以補充一點，奈傑爾，請記住，薩爾蒂約的初創企業或商業工廠以及 A2L 轉換的工廠效率低下，但這是我們必須要做的相當大規模的轉型。每條線都必須重做。我們將關閉（聽不清楚）工廠。所以我們把所有這些都烘焙進去。所以我理解你的問題。只是我們必須這樣做——我們在指南中吸收了所有這些低效率的地方。

I get it. I understand that now. And then just on the component inflation of mid-single digits. We talked to some of the motor manufacturers, some heat exchange suppliers. And it doesn't feel like they're targeting mid-single-digit price increases in 2024. So just curious where you're seeing that mid-single-digit price inflation. And maybe just talk about the R-410A, what your expectations are in terms of that commodity inflation in 2024.

我得到它。我現在明白了。然後就是中個位數的通膨成分。我們與一些電機製造商、一些熱交換器供應商進行了交談。而且他們的目標並不是 2024 年中個位數的價格上漲。所以只是好奇你在哪裡看到中個位數的價格通膨。也許只是談談 R-410A，您對 2024 年商品通膨的預期是什麼。

Sure. First of all, you should give me the list of all those people that were telling you that. So we can go and negotiate use their work on that. I'd love to get that Nigel. But no, more seriously, some of it comes down to the starting point. In some cases, on components, we did have long-term contracts that are coming up for renewal. So we may have like escaped some of the inflation in the past. The other thing you've got to see in the 410A, I mean, the spot pricing, the contract pricing and where we are still a lot of moving pieces. But based on the production quota reduction from EPA, we fully expect and have baked in inflation on 410A. And overall, I mean inflation is lower than before, but it's not gone away, whether it's SG&A or NAV factors. So we've built all of that in as we looked at what's going to happen in 2024 for us. but we do continue to see inflation in components, especially if our long-term contracts come up for renewal.

當然。首先，你應該給我所有告訴你這些的人的名單。所以我們可以去協商使用他們的工作。我很想得到奈傑爾。但不，更嚴重的是，其中一些歸結於起點。在某些情況下，在組件方面，我們確實有即將續約的長期合約。因此，我們過去可能逃脫了一些通貨膨脹。您在 410A 中必須看到的另一件事，我的意思是，現貨定價、合約定價以及我們仍然有很多變動的部分。但基於 EPA 的生產配額削減，我們充分預期並且已經對 410A 的通膨產生了影響。總的來說，我的意思是通貨膨脹比以前低，但它並沒有消失，無論是銷售管理費用還是資產淨值因素。因此，當我們考慮 2024 年將會發生什麼時，我們已經將所有這些內容納入其中。但我們確實繼續看到零件的通貨膨脹，特別是如果我們的長期合約需要續約的話。

Right. I'll e-mail those suppliers to you offline, okay?

正確的。我會透過離線電子郵件將這些供應商發送給您，好嗎？

Thanks, Nigel.

謝謝，奈傑爾。

We'll take our next question from Tommy Moll with Stephens Inc.

我們將回答湯米·莫爾 (Tommy Moll) 和史蒂芬斯公司 (Stephens Inc.) 的下一個問題。

I wanted to start on price mix and your outlook for the year, mid-single-digit contribution. Can you give us any sense of the phasing there? I presume it's going to contribute a little bit more to growth in the back half versus the second half? And then if you think about what's the art of the possible here over the next 2 years, Alok, I think in the past, you've said 15%, 15% plus is a good bogey to use for where we'll land by the end of 2025. But I wonder if you could just refresh us there? And are you any more or less confident on that outlook?

我想從價格組合和你們對今年的前景、中位數的貢獻開始。您能為我們介紹一下那裡的階段嗎？我認為與下半年相比，它對後半段成長的貢獻會更大一些嗎？然後，如果你想一想未來兩年這裡可能的藝術是什麼，阿洛克，我想在過去，你說過 15%，15% 以上是一個很好的柏忌，可以用於我們著陸的地方2025年底。但我想知道你能否讓我們在那裡恢復？您對這種前景有更多還是更少的信心？

Yes. So I'll first answer on the price, we see that mostly starting to build in through Q2, Q3 and Q4. As we announced in Q1, it will take a little bit of time to get that new price increase. But in Q1 is where you'll see the carryover benefit on the mix side from the minimum SEER product, we'll get the full year benefit of that.

是的。所以我首先會回答價格問題，我們看到價格大部分是在第二季、第三季和第四季開始增加的。正如我們在第一季宣布的那樣，需要一些時間才能實現新的價格上漲。但在第一季度，您將看到最低 SEER 產品在混合方面帶來的結轉效益，我們將獲得全年的效益。

I think, Tommy, on the overall, we stick to the 10% to 15% total pricing impact by 2025. A large part of that is going to happen in 2025 as like in R54 products start getting launched towards the tail end or second half of this year. So we will see a lot more of that benefit next year than they will see this year which is unfortunate because we'll see some of the manufacturing inefficiencies this year as we transition our line from 410 to 454B, a lot more of the benefit coming to as tail half of this year or like early next year is when we start seeing those benefits. But our view and outlook has not changed on that, and I was glad to see that others in the industry are also now catching up to that dynamic because there's extra cost of sensors, the extra cost of controls, there's extra cost that we're going to do as we look at the heat exchangers capacity, compressors. There's just a lot of extra cost that we must offset.

Tommy，我認為，總的來說，我們堅持到 2025 年對總定價的影響為 10% 到 15%。其中很大一部分將在 2025 年發生，就像 R54 產品在年底或下半年開始推出一樣今年的。因此，明年我們將看到比今年更多的好處，這是不幸的，因為今年當我們將生產線從 410 過渡到 454B 時，我們會看到一些製造效率低下的情況，更多的好處即將來到今年下半年或明年初，我們就會開始看到這些好處。但我們對此的看法和前景並沒有改變，我很高興看到業內其他人現在也正在追趕這種動態，因為感測器的額外成本，控制的額外成本，我們需要額外的成本。當我們查看熱交換器容量、壓縮機時要做的事情。我們必須抵消很多額外成本。

Good to hear. I wanted to follow up with a question on M&A. There's another participant in the market that's talked about potentially turning loose of some assets. Begs the question just about your appetite for M&A at this point or any insight you might share there?

很高興聽到。我想跟進一個有關併購的問題。市場上的另一位參與者正在談論可能會放鬆一些資產。引出了一個關於您目前對併購的興趣或您可能會分享的任何見解的問題？

Sure. I expected that to be one of the first question. I'm surprised it was a third question on the call today. So but (inaudible). Listen, I'll start by saying a few things, right? First of all, in the past, even before my time, Lennox has been very clear that if there is an industry consolidation opportunity, Lennox will like to participate. And we have specifically named out companies that we would like to participate if that came up.

當然。我預計這是第一個問題。我很驚訝這是今天電話會議的第三個問題。所以但是（聽不清楚）。聽著，我首先要說幾件事，對嗎？首先，在過去，甚至在我之前，Lennox就已經非常明確，如果有產業整合的機會，Lennox願意參與。如果發生這種情況，我們也特別列出了我們希望參與的公司。

So let me just confirm that, that view has not changed. We still believe that if there's an opportunity that Lennox would be a participant in that. Overall, when I look at it industry consolidation, it's good for quite a few reasons. As we look at increased regulations, as we look at dealer consolidation. I think we'll better serve our customers. We'll better look at technology to come to the consumer. I think it gives us the right kind of investments that we can make to succeed.

所以讓我確認一下，這種觀點沒有改變。我們仍然相信，如果有機會，倫諾克斯會參與其中。總的來說，當我審視產業整合時，它的好處很多。當我們考慮加強監管時，當我們考慮經銷商整合時。我想我們會更好地為客戶服務。我們將更專注於消費者的技術。我認為它為我們提供了正確的投資，使我們能夠取得成功。

So I think it's going to be good. We would like to participate as and when things become clear and available. I don't want to comment specifically on any specific company and the news. But all I can tell you is that we don't have to do this. I mean, we are very confident in our own stand-alone strategy as well. We have sufficient scale to compete. We are gaining share in respective segments. We have like a very good technology team and a great path forward. So I think that's kind of the balanced outlook on that is if there's an opportunity, we would like to participate, but we're also very confident on where we are positioned ourselves.

所以我認為這會很好。當事情變得清晰且可行時，我們願意參與。我不想對任何特定公司和新聞發表具體評論。但我只能告訴你，我們不必這麼做。我的意思是，我們對自己的獨立策略也非常有信心。我們有足夠的規模來競爭。我們正在各自的細分市場中獲得份額。我們擁有一支非常優秀的技術團隊和一條偉大的前進道路。所以我認為這是一種平衡的觀點，如果有機會，我們願意參與，但我們對自己的定位也非常有信心。

And we'll take our next question from Julian Mitchell with Barclays.

我們將回答巴克萊銀行朱利安·米切爾的下一個問題。

Thanks, Joe, for all the help. Maybe just a first question on the sort of cadence of earnings through the year, is it can be kind of tricky looking at -- does pre-COVID seasonality apply or has something changed and we have the nuance of the Mexican plant and the refrigerant change? So are we assuming it's a kind of sort of 50-50 split first half versus second half earnings and then Q1 and always seasonally low and maybe you're starting out the year with weak home comfort volume.

謝謝喬的所有幫助。也許只是關於全年收益節奏的第一個問題，這可能有點棘手——新冠疫情之前的季節性是否適用或發生了一些變化，我們有墨西哥工廠和冷媒變化的細微差別？因此，我們是否假設上半年收益與下半年收益呈 50-50 的比例，然後是第一季度，並且總是季節性較低，也許您在新年伊始的家庭舒適度較低。

Yes, I think I'd look at the revenue seasonality in kind of 50-50. Q2 and Q3 should be pretty similar kind of 30% of the year each then you have kind of 20-ish in Q1 and Q4 on the revenue guide. That's similar to what we saw in 2023.

是的，我想我會以 50-50 的比例來看待收入季節性。第二季和第三季應該非常相似，每年都有 30% 的時間，然後收入指南上第一季和第四季的時間大約是 20% 左右。這與我們在 2023 年看到的情況類似。

And then if we're thinking about the split within Home Comfort solutions for the year as a whole in terms of volumes. How wide a bifurcation should there be in the direct-to-contractor versus independent distribution? Just trying to understand kind of how quickly that delta narrows after being very significant in the fourth quarter.

然後，如果我們考慮全年家庭舒適解決方案在數量方面的劃分。直接面向承包商與獨立分銷之間的分歧應該有多大？只是想了解在第四季非常顯著之後，增量縮小的速度有多快。

Sure. I think overall, we expect that to get even by 2025. I mean, in the independent channels or the distribution channel, we fully expect, because of comps and because of inventory get to appropriate level, increase in sales versus last year. We're not sure of the timing on when that stops, given all the comps and everything else. But we do think inventory levels and order patterns normalize and we will see a bounce back in our sales to the channel, irrespective of what happens from the channel to the dealer.

當然。我認為總體而言，我們預計到 2025 年將實現平衡。我的意思是，在獨立通路或分銷管道中，我們完全預計，由於比較和庫存達到適當的水平，銷售額將比去年有所增長。考慮到所有的比賽和其他一切，我們不確定停止的時間。但我們確實認為庫存水準和訂單模式正常化，無論通路到經銷商的情況如何，我們都會看到通路銷售反彈。

On the dealer side, we were pleased with the resiliency that we saw, although volumes were down, they were better than most of us expected. And that resiliency gives us comfort going into 2024, and we expect and have baked in sort of flat to down numbers on that going into 2024. Just because of all the chatter around repair, replace, interest rate, election year, which so far has not turned out to be true, but we want to kind of make sure we put all of that and let (inaudible) decide. Like here are assumptions that you can decide how you look at it. We focused on what we control, and we know we are going to win share through the transition, and we are recovering our service levels nicely.

在經銷商方面，我們對所看到的彈性感到滿意，儘管銷量有所下降，但比我們大多數人的預期要好。這種彈性讓我們在進入 2024 年時感到安心，我們預計進入 2024 年的數字將持平甚至下降。僅僅因為圍繞維修、更換、利率、選舉年的所有討論，到目前為止，事實證明並非如此，但我們想確保我們把所有這些都放在一起，然後讓（聽不清楚）決定。就像這裡的假設一樣，你可以決定如何看待它。我們專注於我們控制的事情，我們知道我們將透過轉型贏得份額，並且我們正在很好地恢復我們的服務水準。

And we'll take our next question from Noah Kaye with Oppenheimer.

我們將回答諾亞·凱和奧本海默提出的下一個問題。

Here's a potentially easy one. What drove the rebranding of the segments? Any functional difference to be aware of?

這是一個可能很簡單的方法。是什麼推動了這些細分市場的品牌重塑？有什麼需要注意的功能差異嗎？

No, no functional differences to be aware of. We simplified it from 3 to 2. We had some internal confusion going on between business unit name and segment name so we embarked on a new branding, which I guess was the positive message. Overall, at Lennox, we have not focused on building a brand with dealers and consumers, and there were just different confusion going on. We simplified our websites. We have huge investments in improving our customers' experience, introducing new technology, updating even our e-mail addresses and our lennonx.com.

不，沒有需要注意的功能差異。我們將其從 3 簡化為 2。業務部門名稱和細分市場名稱之間存在一些內部混淆，因此我們開始採用新的品牌，我認為這是正面的訊息。總的來說，在 Lennox，我們並沒有專注於與經銷商和消費者建立品牌，只是存在著不同的困惑。我們簡化了我們的網站。我們在改善客戶體驗、引入新技術、甚至更新我們的電子郵件地址和 lennonx.com 方面投入了大量資金。

It was part of a big rebranding exercise. It was just about time to differentiate residential segment from business unit, but I wouldn't read anything more to it besides just simplifying our internal nomenclature and better reflecting what we do, right? Because what was called commercial also had a tiny bit of refrigeration in there. So I do think the new names better reflect what we do and are more consistent with our new branding guidelines.

這是一場大型品牌重塑活動的一部分。是時候區分住宅部門和商業部門了，但除了簡化我們的內部術語並更好地反映我們所做的事情之外，我不會再讀任何其他內容，對吧？因為所謂的商業設施裡面也有一點冷氣。因此，我確實認為新名稱更好地反映了我們所做的事情，並且更符合我們新的品牌指導方針。

Alok, as you talked about in your prepared remarks, a significant effort over the past year around the culture. You mentioned implementing more pay for performance. Can you highlight what some of those major changes were functionally in terms of pay for performance, what types of metrics you're trying to incent people towards, the timing of when you did those and how you might expect that to impact behavior and performance as we get into '24.

阿洛克，正如您在準備好的演講中所談到的那樣，過去一年圍繞著文化做出了重大努力。您提到實施更多績效工資。您能否強調一下這些重大變化在績效薪酬方面的功能、您試圖激勵人們採用哪些類型的指標、您執行這些操作的時間以及您預計這些變化將如何影響行為和績效？我們進入'24。

Sure. Let's start with me and the highest level on the executive staff. So last year was the first year where our short-term incentives had a growth component or a revenue component to end. So 20% of our short -- STI now comes from growth. And that just changed the mindset. Just to give you an example, but let's take it down to a few levels on where it really matters. So if you think about sales incentives and compensation, it used to be the other way around because only on revenue are not enough on profits and margins. So as we talked about accountability, autonomy and in deploying all of that in the sales force, we are now measuring our sales team more on profits, more like a distributor would measure them versus purely on revenue.

當然。讓我們從我和最高層級的管理人員開始。因此，去年是我們的短期激勵措施結束成長部分或收入部分的第一年。因此，我們現在 20% 的空頭海指 (STI) 來自成長。這只是改變了人們的心態。只是給您一個例子，但讓我們將其分解為幾個層面，看看真正重要的地方。因此，如果你考慮銷售激勵和薪酬，過去情況恰恰相反，因為僅靠收入是不夠的，只靠利潤和利潤率是不夠的。因此，當我們談論問責制、自主權以及在銷售隊伍中部署所有這些時，我們現在更多地根據利潤來衡量我們的銷售團隊，更像是分銷商衡量他們而不是純粹根據收入來衡量。

So that's kind of the 2 switch on the more senior level, more focused on growth and on the street level, more focused on profitability and profit margins. And that's a long journey because you can't change these things overnight, especially if they have been seeped into the culture for many, many years. But we are pleased with the early results and fully prepared for the long-term journey as we add technology and finance scorecards and metrics-driven behavior versus the storytelling behavior, sometimes pleased to get there.

因此，這是更高級層面上的第二個轉變，更注重成長，而在街頭層面上，更注重獲利能力和利潤率。這是一個漫長的旅程，因為你不可能在一夜之間改變這些事情，特別是如果它們已經滲透到文化中很多很多年了。但我們對早期結果感到滿意，並為長期旅程做好了充分準備，因為我們添加了技術和財務記分卡以及指標驅動的行為與講故事的行為，有時很高興能夠實現這一目標。

And we'll take our next question from Joe Ritchie with Goldman Sachs.

我們將回答高盛喬·里奇 (Joe Ritchie) 提出的下一個問題。

Thank you, Joe, for everything. Have a great retirement. It's well deserved. So my question is for Alok and Michael. It sounds like the implied 1Q guide is above where consensus is today and consensus is towards the high end of your full year guidance for the year. So, I'm just trying to understand kind of like the conservatism that might be baked in to the low versus the high end. So any color you want to provide there would be helpful.

謝謝你，喬，所做的一切。祝你退休生活愉快。這是當之無愧的。我的問題是問阿洛克和麥可的。聽起來隱含的第一季指引高於今天的共識，而共識則接近今年全年指引的高端。所以，我只是想理解低端與高端可能存在的保守主義。因此，您想要在那裡提供的任何顏色都會有幫助。

Sure, I'll start, and then Michael will jump in. Because we really did not consider consensus was giving guidance, and we don't give guidance by quarter. But here's what we did, right? We laid out the volume assumptions on Page 11, so you can look through that. And that kind of brackets are low end and the high end, all on the volume assumptions. As we look at it, Q1 is going to be a little weird because we get more mix benefits, as Michael said earlier, because last year, we still had old SEER and new SEER products. Some of the price increases go into effect in February for us, as you saw along with the other competition. So you get only half a quarter benefit on that.

當然，我會開始，然後邁克爾會介入。因為我們確實沒有考慮共識正在提供指導，而且我們不會按季度提供指導。但這就是我們所做的，對吧？我們在第 11 頁列出了交易量假設，因此您可以仔細查看。這種支架有低端和高端之分，全部基於體積假設。正如我們所看到的，第一季會有點奇怪，因為我們獲得了更多的混合效益，正如邁克爾早些時候所說，因為去年我們仍然有舊的 SEER 和新的 SEER 產品。正如您在其他競爭對手中看到的那樣，我們的部分價格上漲將於二月生效。所以你只能得到半個季度的收益。

And seasonality will be similar to what we have seen unless there are any unusual weather patterns. So honestly, we didn't spend tons of time looking at quarter-over-quarter. We were just thinking of the longer term where we are focused and drive that. Michael, what would you add to that?

除非有任何異常的天氣模式，否則季節性將與我們所看到的類似。老實說，我們沒有花費大量時間來查看季度環比情況。我們只是考慮了我們關注並推動這一目標的長期目標。邁克爾，你想補充什麼？

Yes. I would just add, we obviously don't give quarterly guidance. But generally, when you look at the seasonality that you plot as we just talked about, maybe a little bit more destocking as Alok talked about through the distributor business in Q1 and then starting to revert back up thereafter. And then a little better production out of the commercial factory, maybe a little better volumes in Q1 from commercial as well.

是的。我想補充一點，我們顯然不會提供季度指引。但一般來說，當你看看我們剛才討論的繪製的季節性時，可能會像 Alok 所說的那樣通過第一季度的分銷商業務進行更多的去庫存，然後開始恢復。然後商業工廠的產量會提高，商業工廠第一季的產量可能也會提高。

Got it. Okay. That's helpful. And I guess, look, just a follow-up question to M&A. Maybe just remind everybody what your criteria for M&A would be? And if you're looking for potential deals in the space. What is your kind of appetite to go broader internationally versus the footprint that you have today, which is predominantly U.S.

知道了。好的。這很有幫助。我想，看，這只是併購的後續問題。也許只是提醒大家您的併購標準是什麼？如果您正在尋找該領域的潛在交易。與您目前主要在美國的足跡相比，您對走向更廣闊的國際市場的興趣是什麼？

I mean I think from our perspective, we like where we are positioned. So let's start that like we think we are positioned in an attractive market. That happens to be North America, but it could be somewhere else. I mean what we look for is attractive end markets, where we can win, where we can succeed, where we can generate the appropriate returns. I don't think we exited Europe because of Europe. We exited because the margin profile was weak, and we did think we were positioned to win there.

我的意思是，我認為從我們的角度來看，我們喜歡我們所處的位置。因此，讓我們開始吧，就像我們認為我們處於一個有吸引力的市場一樣。那恰好是北美，但也可能是其他地方。我的意思是，我們尋找的是有吸引力的終端市場，在那裡我們可以獲勝，在那裡我們可以成功，在那裡我們可以產生適當的回報。我不認為我們因為歐洲而退出歐洲。我們退出是因為利潤率很弱，而且我們確實認為我們有能力在那裡獲勝。

So I don't want to make any specific comments and rule anything in or out at this stage. But we will look at those things is how does it benefit our shareholders? Are we positioned to win? Does it create attractive opportunities for us, versus share buyback? I mean, end of the day, we have done very well, and we'll continue to do well based on share buyback. But I mean we're going to look for markets where we are positioned to win.

因此，我不想在現階段發表任何具體評論並排除任何內容。但我們會看看這些事情是如何讓我們的股東受益的？我們有能力獲勝嗎？與股票回購相比，它是否為我們創造了有吸引力的機會？我的意思是，歸根結底，我們做得很好，並且基於股票回購，我們將繼續做得很好。但我的意思是，我們將尋找我們能夠獲勝的市場。

I will take our next question from Damian Karas with UBS.

我將回答瑞銀達米安卡拉斯 (Damian Karas) 提出的下一個問題。

I wanted to ask you about your commercial outlook for this year. You spoke to a lot of the pent-up demand and the older installed base. You're guiding the building come for volumes to up low singles. Could you maybe just kind of parse that out, how you're thinking about planned replacement versus emergency and new construction?

我想問一下你們今年的商業前景。您談到了許多被壓抑的需求和較舊的安裝基礎。你正在引導大樓的銷售量提高到低單打。您能否解析一下，您如何考慮計劃更換與緊急情況和新建？

Sure. So I'll tell you, it's maybe a [tale] of 2 halves that is quite a few moving pieces, but let's talk positives, right? I mean our order rate remains strong. Our backlog although doesn't matter, but in the short term backlog remains solid. Our sales team is pretty excited and we see no impact of any of the things that we read about, whether it's KBI index and all that, we do see some projects moving to the right. So we are a bit cautious as we go into it. We also -- as we talk to our key accounts find a lot of enthusiasm around the R454B product and are somewhat concerned that maybe towards mid- to late this year, they might say, "well, I'll just wait for the 454B versus take the existing product."

當然。所以我告訴你，這可能是一個兩半的[故事]，有很多動人的部分，但讓我們談談積極的一面，對吧？我的意思是我們的訂單率仍然強勁。我們的積壓雖然不重要，但短期內積壓仍穩固。我們的銷售團隊非常興奮，我們看到的任何內容都沒有影響，無論是 KBI 指數還是其他，我們確實看到一些項目向右移動。所以我們在進入這個領域時有點謹慎。當我們與主要客戶交談時，我們發現人們對 R454B 產品充滿熱情，並且有些擔心，也許到今年中後期，他們可能會說，“好吧，我會等待 454B 與採用現有產品。”

So that's kind of baked into us, we looked at the guide for different competing factors, just to go back to it, pleased with the current order rate, please with the current backlog, pleased with our production output, excited about this Saltillo factory even adding more to our output because we remain supply constrained versus demand constraint. And they just want to reflect some of the noise [slash] what we see in the future is slow in construction and any weird air pocket that could come in if you look at 454B transition.

所以這已經融入了我們，我們查看了不同競爭因素的指南，只是為了回到它，對當前的訂單率感到滿意，對當前的積壓感到滿意，對我們的產量感到滿意，甚至對這個薩爾蒂約工廠感到興奮增加我們的產出，因為我們仍然受到供應限製而不是需求限制。他們只是想反映一些噪音[斜線]，我們在未來看到的建設速度緩慢，以及如果你看看 454B 過渡，可能會出現任何奇怪的氣穴。

I guess just thinking about the overall industry outlook, I know you said you think consolidation could be a good thing for the market, but you're expecting to kind of gain share. I guess one of my observations coming out of the AHRI show, it does feel like there's a bigger push in the U.S. by some of these overseas players. I'm wondering if you're perhaps seeing any increased competition or expect to maybe see some over time.

我想只要考慮一下整個行業的前景，我知道您說過您認為整合對市場來說可能是一件好事，但您期望獲得一定的份額。我想我從 AHRI 節目中得出的一個觀察結果是，確實感覺這些海外參與者在美國有更大的推動力。我想知道您是否會看到競爭加劇或預計隨著時間的推移可能會看到一些競爭。

We saw that too -- and I'm sorry, I missed you at the AHRI show, but like I went to all the booths and it was impressive on some of the overseas players and the amount of money spent on the booth. I'll tell you the amount of money they spend in the booth was uncorrelated to the market share in U.S., it probably more reflects their aspirations for the future. I think what these players have done very well, it comes to mini splits and VRF, but if it comes to traditional unitary products, I think very few -- if any of them had any success, and that's where the core U.S. market remains very, very different and you know mini splits and all are still in single-digit market share overall and had a tough year in '23.

我們也看到了這一點——很抱歉，我在 AHRI 展會上錯過了你們，但就像我去了所有的展位一樣，一些海外玩家和在展位上花費的金額給我留下了深刻的印象。我告訴你，他們在展位上花的錢與美國的市場份額無關，這可能更反映了他們對未來的渴望。我認為這些廠商在迷你分離式和 VRF 方面做得非常好，但如果涉及到傳統的單一產品，我認為很少有人能夠取得成功，而這正是美國核心市場仍然非常重要的地方。 ，非常不同，你知道迷你分裂，所有市場份額總體上仍處於個位數，並且在23 年度過了艱難的一年。

But listen, we are -- on the only -- we are the only unaffiliated player in U.S. So we look at the international players, both as a threat and as an opportunity to be able to work with them to drive our joint market share in some areas. But we also look at it as a threat. So that's the way we look at it, but we were pleased with the interest we are getting on our own new products like at AHRI, we were pleased with people excited about new production capacity we're adding, the emergency replacement products that we displayed and just general energy from our sales team on how robust the activity was.

但聽著，我們是——唯一的——我們是美國唯一的獨立參與者。因此，我們將國際參與者視為威脅，同時也將其視為機會，能夠與他們合作，推動我們在一些地區。但我們也將其視為一種威脅。這就是我們看待它的方式，但我們很高興人們對我們自己的新產品感興趣，就像在 AHRI 一樣，我們很高興人們對我們增加的新產能、我們展示的緊急替代產品感到興奮以及我們銷售團隊對活動的強勁程度的整體評價。

It was the highest attendance AHRI show has had, which kind of makes me more optimistic on the economy than what I read in the newspapers.

這是 AHRI 展會上出席人數最多的一次，這讓我對經濟的看法比我在報紙上讀到的更樂觀。

(Operator Instructions)

（操作員說明）

We'll take our next question from Deane Dray with RBC Capital Markets.

我們將回答加拿大皇家銀行資本市場部 Deane Dray 提出的下一個問題。

Maybe if you could just expand on the comment, a lot of discussion on the new refrigerant. And Alok, I think you said you're not expecting a prebuy. And I think you added the term, there might be some -- was it inventory fatigue. Just it's an interesting concept. Maybe you can expand on that, please, if I heard that correctly.

也許您可以擴展一下評論，關於新冷媒的大量討論。阿洛克，我想你說過你不期待預購。我認為你添加了這個詞，可能有一些——是庫存疲勞。這是一個有趣的概念。如果我沒聽錯的話，也許你可以對此進行擴展。

Sure. I mean, historically, these transitions had a lot of prebuy from the independent channel. But because of the confusing EPA rulings that came out in sort of November, December, I think the channel is -- just a little concern about landing up with obsolete products. And since they see the manufacturers being pretty prepared, they may not feel the need higher interest rate works in that environment as well. And the overall given how much inventory people were holding because of the CEO transition just 2 years ago, because of the COVID disruption a year ago. Some of the distributors are just working with us and saying, why don't you manage that for us?

當然。我的意思是，從歷史上看，這些轉變得到了獨立管道的大量預購。但由於 EPA 於 11 月、12 月發布的令人困惑的裁決，我認為該管道只是對過時產品的有點擔憂。由於他們看到製造商已經做好充分準備，因此他們可能認為在這種環境下不需要更高的利率。總體而言，考慮到兩年前執行長換屆、一年前新冠肺炎疫情造成的混亂，人們持有多少庫存。有些經銷商只是與我們合作並說，為什麼你不幫我們管理呢？

Make sure your lead times are low, and I can get it quickly. I may not want to spend a warehousing space and the cash to build up. Now but listen, if you're wrong, we will have upside in '24 and downside in '25. I mean over a 2-year period, it normalizes anyway. So we will be prepared if people decide to have a prebuy, but based on as we were looking at it, we just said, let's not take any of that in.

確保您的交貨時間很短，我可以很快得到。我可能不想花費倉儲空間和現金來建立。現在聽著，如果你錯了，我們將在 24 年有上行空間，在 25 年有下行空間。我的意思是，在兩年的時間裡，它無論如何都會恢復正常。因此，如果人們決定預購，我們會做好準備，但基於我們正在考慮的情況，我們只是說，我們不要考慮這些。

And then second question, just on the longer-term targets, the free cash flow at 90% seems like you are underpromising there because this is not a capital-intensive business. You should be by -- from our perspective, closer to 100%. And I know you've had a big CapEx push over the near term, but are you baking in more capacity expansion in that free cash flow conversion, but it just seems light versus what your potential is.

然後第二個問題，就長期目標而言，90% 的自由現金流似乎你對此的承諾不足，因為這不是資本密集型業務。從我們的角度來看，您應該接近 100%。我知道您在短期內有很大的資本支出推動，但是您是否在自由現金流轉換中進行了更多的產能擴張，但與您的潛力相比，這似乎很輕。

That slide went through so many changes over the past 48 hours. We tried to give a range. We tried to -- but listen, if you're starting the year and you got $175 million of CapEx, you're not going to reach 100% in a 3-year period, right? I mean, just where we are. But in the long term, I think we'll get to 100% to have some investments.

這張投影片在過去 48 小時內經歷了許多變化。我們試著給出一個範圍。我們試圖 - 但聽著，如果你在今年開始時獲得了 1.75 億美元的資本支出，那麼你不會在 3 年內達到 100%，對嗎？我的意思是，就我們現在所處的位置。但從長遠來看，我認為我們將達到 100% 進行一些投資。

The other main driver is as we grow revenue, you're going to have net working capital growth with that revenue. CapEx to be closer to depreciation by 2025 and 2026. So it's mostly related to just growing working capital with the revenue growth.

另一個主要驅動力是，隨著我們收入的成長，淨營運資本將隨著收入而成長。到 2025 年和 2026 年，資本支出將更接近折舊。因此，這主要與隨著收入成長而增加的營運資本有關。

What's the working capital -- working capital sales target associated with that 90%?

與這 90% 相關的營運資金－營運資金銷售目標是多少？

Upper teens.

上十幾歲。

Yes, 15% to 20%, like it's higher on our direct model, lower on the indirect side, probably in the range of...

是的，15% 到 20%，就像我們的直接模型較高，間接模型較低，可能在…範圍內。

Upper teens is fine.

上十幾歲就好了。

Yes, it below 20 overall. But listen, one thing is our cash flow, we don't do any adjustments, right? I mean this is our -- the checkbook balances.

是的，整體低於20。但聽著，有一件事是我們的現金流，我們不做任何調整，對吧？我的意思是這是我們的——支票簿餘額。

And we'll take our next question from Ryan Merkel with William Blair.

我們將回答瑞安·默克爾和威廉·布萊爾提出的下一個問題。

I had 2 questions. First, on the fourth quarter, in terms of weather, how big of an impact was the mild winter? And did you see any lift with the cold snap in January? And then my second question is just on the cadence of commercial margins. It sounds like it might be up slightly year-over-year. Is the first half sort of down a little and the second half is up a little bit? Just any help.

我有兩個問題。第一，第四季度，從天氣方面來說，暖冬的影響有多大？一月份的寒流你看到有什麼提升嗎？我的第二個問題是關於商業利潤的節奏。聽起來可能會比去年同期略有上升。是不是上半年有點下降，下半年有點上升？只要任何幫助。

Sure. I'll let Michael answer the second one, and then I'll come back to the first one. So Michael, why don't you go ahead.

當然。我會讓麥可回答第二個問題，然後我再回到第一個問題。那麼邁克爾，你為什麼不繼續呢？

Yes. So on the commercial margins, yes, we'll see a little bit of a headwind, though, on the factory ramp up in the first half, but we'll get the benefit of the mix and a little bit of volume. That should kind of neutralize each other. So overall, margins should be up in commercial, but I think they'll be kind of flattish throughout the year with those 2 elements adjusting against each other.

是的。因此，在商業利潤方面，是的，我們會看到一些逆風，儘管上半年工廠的產能增加，但我們將從混合和少量銷售中受益。這應該會互相抵消。因此，總體而言，商業利潤率應該會上升，但我認為，隨著這兩個因素相互調整，全年利潤率將持平。

And I think to the first question on weather. I learned early in my career, Ryan, that never ever talk about weather when you have a challenging number set to be delivered. But based on like where we are, yes, Q4, we had some of the kind of the warmest winter, and that did negatively impact our daily order rates and we track the same things you guys would track on average heating days and cooling days. And yes, Q1 with the cold streak, we have had a good start based on, as you would expect on the weather, but we don't know what tomorrow looks like or February looks like, but both your statements are correct, Ryan.

我想到關於天氣的第一個問題。瑞安，我在職業生涯早期就知道，當你要交付一個具有挑戰性的數字時，永遠不要談論天氣。但根據我們所處的情況，是的，第四季度，我們經歷了最溫暖的冬天，這確實對我們的每日訂單率產生了負面影響，我們跟踪的數據與你們跟踪的平均供暖天數和製冷天數相同。是的，第一季伴隨著寒冷的天氣，我們有了一個良好的開端，正如你對天氣的預期一樣，但我們不知道明天或二月會是什麼樣子，但你的說法都是正確的，瑞安。

And we'll take our next question from Tim Wojs with Baird.

我們將回答 Tim Wojs 和 Baird 提出的下一個問題。

Thanks for the entry here. Joe, congratulations and it's been good working with you. Just 2 quick ones for me. First, as you look at '25, just given the transition kind of changing from -- I can't remember, just EPA or DOA and -- or DOE, allowing the sell-through. Would you expect to still sell through a fair amount of R-410A product next year through your own distribution?

感謝您的參與。喬，恭喜你，和你一起工作很愉快。對我來說只有 2 個快速的。首先，當你看看 25 年時，考慮到過渡的變化——我不記得了，只是 EPA 或 DOA 和——或 DOE，允許銷售。您是否希望明年仍透過您自己的通路銷售相當數量的 R-410A 產品？

And then just a second question on the kind of longer-term mix benefits from A2L, I think, Alok, you said 10% to 15%. Is that a change from what you said before? Or is it just kind of some rounding?

第二個問題是關於 A2L 帶來的長期組合收益，我想，Alok，你說的是 10% 到 15%。和你之前說的有什麼改變嗎？或只是某種四捨五入？

No. I think the second one for us, it's just kind of rounding because we give longer numbers, we'll get some benefit this year as well. So I'll try to portray what 2025 looks like, right? So that's just rounding. Maybe I should just stop giving ranges and pick a center line like 15% here.

不，我認為對我們來說第二個，這只是一種四捨五入，因為我們給了更長的數字，今年我們也會得到一些好處。所以我會試著描繪 2025 年的樣子，對嗎？所以這只是四捨五入。也許我應該停止給出範圍並選擇一條中心線，例如這裡的 15%。

Tim, on the first one, there's still some uncertainties and EPA is not coming up with the final rule, they have indicated to rules. Listen, our preference would be not to make 410A products. But based on currently the way it's written, we'll probably be forced to make some 410A products next year. And that would be then impacting the 10% to 15% number because there will be some 410A products, they're going through the factories as people can repair outdoor units using new 410A products. I know it's a weird dynamic there. So still waiting for some clarity on that. We would prefer not to make 454 -- not to be 410A for manufacturing efficiency and other reasons, but we are just at a stage that we've got to see how the final rules plays out and how each of the state adopts it, too.

提姆，關於第一個問題，仍然存在一些不確定性，環保署尚未制定最終規則，他們已向規則表示。聽著，我們寧願不生產 410A 產品。但根據目前的編寫方式，明年我們可能會被迫生產一些 410A 產品。這將影響 10% 到 15% 的數字，因為將會有一些 410A 產品，它們正在通過工廠，因為人們可以使用新的 410A 產品修理室外機。我知道那裡有一種奇怪的動態。所以仍在等待一些澄清。出於製造效率和其他原因，我們寧願不生產 454，也不想生產 410A，但我們正處於這樣一個階段，我們必須看看最終規則如何實施以及每個州如何採用它。

We'll take our next question from Jeff Sprague with Vertical Research.

我們將回答垂直研究的 Jeff Sprague 提出的下一個問題。

Two quick ones from me. Just back to kind of M&A, maybe just a little bit of color on where your comfort zone is on leverage. I think you talked about kind of normal leverage targets before. But like where is the flex target for something bigger that you'd be comfortable to work down from?

我的兩個快的。回到併購的話題，也許只是對你的舒適圈的槓桿作用做一點說明。我想您之前談過正常槓桿目標。但是，對於更大的事情來說，你可以放心地工作的彈性目標在哪裡？

I think when the time is right, we'll have that discussion with the board and put it all together. I mean, from our perspective, that have to be an opportunistic discussion on something that's attractive to the company. But yes, if it's attractive to our shareholders and we need to lever up. The key question would be is, would we get back to our preferred leverage range within a year or 2. I mean that's what our focus is going to be. So you can do the math backwards, right? I mean as long as we think there's real cash, and then we can use that cash to get back to our long-term leverage goals within a couple of years. I think we could make that work.

我認為時機成熟時，我們將與董事會進行討論並將所有內容放在一起。我的意思是，從我們的角度來看，這必須是對公司有吸引力的事情進行的機會主義討論。但是，是的，如果它對我們的股東有吸引力並且我們需要提高槓桿。關鍵問題是，我們是否會在一兩年內回到我們首選的槓桿範圍。我的意思是，這就是我們的重點。所以你可以倒著算，對吧？我的意思是，只要我們認為有真正的現金，我們就可以利用這些現金在幾年內恢復我們的長期槓桿目標。我認為我們可以做到這一點。

But investment grade rating is important to us, right? I mean we are not in (inaudible) shop or anything else like that. We'll maintain investment grade.

但投資等級對我們很重要，對嗎？我的意思是我們不在（聽不清楚）商店或其他類似的地方。我們將維持投資評等。

Understood. And then just on CapEx. Has the amount of CapEx expected for the total program, the new plans and otherwise changed. I think you were talking about $150 million in CapEx for 2024 previously. Now we're at $175 million. I was just kind of getting through it faster. Maybe you could just provide a little additional color there.

明白了。然後只是資本支出。整個計劃、新計劃和其他方面的預期資本支出金額是否有變化。我想您之前談論的是 2024 年的資本支出為 1.5 億美元。現在我們的資產為 1.75 億美元。我只是更快地完成它。也許你可以在那裡提供一點額外的顏色。

The total program is still the same. We just have some additional CapEx that we have in 2024 to prepare for the new refrigerant products and investments with (inaudible) and new refrigerant lines within the factory that also come in this year.

總的程序還是一樣的。我們只是在 2024 年有一些額外的資本支出，為新的冷媒產品和投資（聽不清楚）以及工廠內的新冷媒生產線做好準備，這些產品也將於今年投入使用。

And normal CapEx when we're all through this is $75 million to $100 million a year?

當我們經歷這一切後，正常的資本支出是每年 7,500 萬到 1 億美元？

Yes,e-with inflation, probably not closer to $100 million like...

是的，e-隨著通貨膨脹，可能不會接近 1 億美元...

Yes, I think it'd be closer to $100 million, $110 million, not $75 million to $100 million. Just growth and maintenance built into that, right? Maintenance might be $75 million, $80 million, but to support our growth, we probably will add more. So I would say it's north of $100 million.

是的，我認為它會接近 1 億美元、1.1 億美元，而不是 7500 萬美元到 1 億美元。只是其中的成長和維護，對吧？維護費用可能是 7500 萬美元、8000 萬美元，但為了支持我們的成長，我們可能會增加更多。所以我想說它超過 1 億美元。

We'll take our next question from Steve Tusa with JPMorgan.

我們將回答摩根大通史蒂夫·圖薩的下一個問題。

Yes, I missed you at AHRI. I'd say attendance of investors was also at a record which may be inversely correlated to multiples someday, but we'll see.

是的，我在 AHRI 想念你。我想說，投資人的出席人數也創下了紀錄，有一天可能會與本益比成反比，但我們拭目以待。

I saw you from far in a different company booth, but you were holding a good audience, I didn't interrupt.

我在另一個公司的展位上遠遠地看到你，但你有很多觀眾，我沒有打斷。

Yes, yes, yes. Lots of great details of that show, for sure. Just on the price capture dynamics. I think you guys had talked about doing some midyear price increases this year, your capture was in the fourth quarter around 2%. Can you maybe just talk about how -- what types of things you were doing at midyear and what your kind of net realization was and how that waterfall works?

對對對。當然，該節目有很多精彩的細節。只是關於價格捕獲動態。我想你們已經討論過今年年中漲價的問題，你們在第四季的漲幅約為 2%。你能不能談談你在年中做了什麼類型的事情，你的淨實現是什麼，以及瀑布是如何運作的？

Sure. I'll start. So I think the overall, as we talked about price increases, we talked about doing residential new construction price increase in the middle of 2023. That did go ahead as expected and as we looked at the overall drop-through that is about what we expected, maybe a share worse than we expected, to be honest. And I think that just came down to the mix between residential new construction and the seasonality baked in there. Not a whole lot of R&C gets shipped towards in the Q4 time frame. So from that perspective, that went as we expected.

當然。我開始吧。因此，我認為總體而言，當我們談到價格上漲時，我們談到了 2023 年中期新建住宅價格的上漲。這確實按預期進行，而且當我們看到整體下降情況時，這與我們的預期一致老實說，也許份額比我們預期的還要差。我認為這取決於住宅新建和那裡的季節性之間的混合。在第四季度的時間範圍內，並沒有大量的 R&C 被交付。所以從這個角度來看，這正如我們所預期的。

We have key account price increases going into effect this year, mostly early this year, and we know we announced a price increase, broader one and that goes into effect in February. So all the pricing actions that we talked about is gone as we had expected. We remain comfortable on where we are. And it's been good to see that the whole industry moving in that direction as well.

我們的大客戶價格上漲將於今年生效，主要是今年年初，我們知道我們宣布了更廣泛的價格上漲，並將於二月生效。因此，我們談論的所有定價行為都如我們預期的那樣消失了。我們對自己所處的位置保持滿意。很高興看到整個產業也朝著這個方向發展。

Yes. And I guess just on a unit basis, what was the actual revenue for the captive business in fourth quarter? And what was the -- putting parts aside, what was the unit volume for that business, the captive resi business?

是的。我想僅以單位為基礎，第四季自保業務的實際收入是多少？拋開零件不談，該業務（即自備稀土業務）的單位產量是多少？

Yes. So total revenue through distributors was down high to mid-teens and then the direct was up high single digits for Q4.

是的。因此，第四季度透過分銷商的總收入下降至十幾歲左右，然後直接增長了個位數。

So your unit volume in Q4 for that business was actually up.

因此，您在第四季度該業務的單位銷售量實際上有所增加。

Correct. Low single digits.

正確的。低個位數。

Okay. And one last one, just on the new A2L product. When is first call for you guys? And what's your -- when will you be able to actually ship that product? When will the distributors like see the specs and a physical product, like what's kind of the schedule of that rollout just on the ground physically?

好的。最後一項是關於新的 A2L 產品。你們第一次打電話是什麼時候？你的產品是什麼－什麼時候才能真正出貨？分銷商什麼時候會喜歡看到規格和實體產品，例如實際推出的時間表是怎樣的？

Sure. So I think with the key distributor, they're already seeing the spec. We're already going through the training and all that. First physical product probably comes out in the second half of this year. And we will start with sort of the high-end products, I think the consumer's appetite for going to R54B is going to be more and faster. And then we will slowly transition towards the lower SEER and the lower-end products. So we'll start with the higher end towards the middle of the year. And we are on track or ahead of schedule on each of those things. We don't expect any R454B for meaningful sales, can we put on a showcase on a display booths in first half of this year, yes. But for somebody to actually place a PO and buy, would be in the second half of this year.

當然。所以我認為主要分銷商已經看到了該規範。我們已經完成了培訓等等。第一個實體產品可能會在今年下半年推出。我們將從高階產品開始，我認為消費者對 R54B 的興趣將會越來越大、越來越快。然後我們會慢慢過渡到較低SEER和低階產品。因此，我們將從年中的高端開始。我們在每一件事情上都步入正軌或提前完成。我們預計 R454B 不會有有意義的銷售，我們可以在今年上半年的展位上進行展示嗎？是的。但如果有人真正下訂單併購買，那將是在今年下半年。

We'll take our next question from Joe O'Dea with Wells Fargo.

我們將接受富國銀行 Joe O'Dea 的下一個問題。

On the kind of commercial mix, can you just talk to how -- what percentage of the mix was emergency replacement in 2023 and how you're thinking about that stepping up in 2024. I think normalized as maybe something like 30%, but I think still on sort of a migration toward normal.

關於商業組合的類型，您能否談談 2023 年緊急更換的比例是多少，以及您如何考慮在 2024 年加強這一比例。我認為標準化可能約為 30%，但我仍然認為正在走向正常。

Yes. So listen, we were close to 0%. I think we hit double digit in '23 in terms of trying to get to emergency replacement. Barely, I would say, high single digit, double digits in 2023, and that includes both our direct and going some through our distribution partners. And we still think there's a lot of room ahead. We probably won't move that needle until Saltillo comes in production in the second half of this year. So expect us to hover in high single digits, low double digits until Saltillo comes online.

是的。聽著，我們接近 0%。我認為我們在 23 年在嘗試緊急更換方面達到了兩位數。我想說，到 2023 年，這個數字幾乎不會達到兩位數，其中包括我們的直接銷售和透過我們的分銷合作夥伴進行的銷售。我們仍然認為前面還有很大的空間。在薩爾蒂約今年下半年投產之前，我們可能不會採取行動。因此，預計我們將徘徊在高個位數和低兩位數之間，直到薩爾蒂約上線。

Got it. And then what are your thoughts on when we think about the residential side and the direct demand sounds like trended better than anticipated in '23 indirect sort of worse. And so how do you align those 2 things? Is your assessment that channel inventory is just thinner than historical averages? And why would direct trend better and indirect destock headwinds trend worse?

知道了。然後，當我們考慮住宅方面時，您有何想法？直接需求聽起來比 23 年預期的要好，間接需求更糟。那麼要如何協調這兩件事呢？您的評估是渠道庫存只是比歷史平均少嗎？為什麼直接趨勢會更好，而間接去庫存逆風趨勢會更糟？

Listen, as we talk to our distribution partners, and we're very close to them. It's not the channel inventory had more stock than we thought. And yes, with the EPA ruling and then everything, the channel essentially flows in Q4, especially they're worried that for a while remember the fear was that you would not be able to sell 410A products, unless it was replacement starting December 2024. So I think that ruling created just a freeze mentality in our channel, which I'm glad EPA issued some clarification and coming up with final ruling. But the direct business holding out better than we thought was actually a positive. I mean, which means the consumer is being resilient, and we were pleased with that resiliency.

聽著，當我們與我們的分銷合作夥伴交談時，我們與他們非常接近。並不是渠道庫存比我們想像的還要多。是的，隨著EPA 的裁決以及隨後的一切，該管道基本上在第四季度流動，尤其是他們擔心一段時間，記住擔心的是您將無法銷售410A 產品，除非從2024 年12 月開始更換。因此，我認為這項裁決只是在我們的管道中造成了一種凍結心態，我很高興美國環保局做出了一些澄清並提出了最終裁決。但直接業務的表現比我們想像的要好，這其實是個正面因素。我的意思是，這意味著消費者俱有彈性，我們對這種彈性感到滿意。

Now being the CEO of Lennox, I also think we gained share, so that's something we will watch out for as numbers normalize. It's hard to figure out share dynamics right now given things are unclear on how much of it is us winning share and how much is the fact that we are going direct, but I mean, from numbers that we see, I mean, we gain lots of shares. We just need to figure out how much of that is transitionary versus rail.

現在，作為 Lennox 的首席執行官，我也認為我們獲得了份額，因此隨著數字正常化，我們將密切關注這一點。鑑於目前還不清楚我們贏得了多少份額以及我們正在直接進行的事實有多少，所以現在很難弄清楚份額動態，但我的意思是，從我們看到的數字來看，我的意思是，我們獲得了很多股票。我們只需要弄清楚其中有多少是過渡性的而不是鐵路性的。

And I'll just add on the direct side, we executed very well on the minimum SEER transition.

我只想補充一點，我們在最小 SEER 轉換方面執行得非常好。

We'll take our next question from Gautam Khanna with TD Cowen.

我們將回答 Gautam Khanna 和 TD Cowen 提出的下一個問題。

I wanted to ask about the IRA and how well defined it is in the states in terms of the tax rebate.

我想問一下 IRA 以及它在各州在退稅方面的定義如何。

IRA has become such a topic for the past 12 months with very little to show for that we've kind of stopped banking on it. And one aspect of IRA, which was through the [C] tax credits that's kind of flowing through in some cases, some states are renewing it on their own. I don't think any of us saw the big impact we were expecting from IRA, but we're starting to see drips and dribblers. If the government really gets their act together and figure out this whole income qualification criteria to get the IRA piece, which there's no practical way to do it for a dealer right now, then I do think there's upside left, but we're not counting on it right now, especially given the election year, I don't know if the government will put this as a priority to figure it out with the state governments and dealers on how to make that work. But the rest of it is kind of slowly dripping in.

IRA 在過去 12 個月裡已經成為一個熱門話題，但幾乎沒有任何跡象表明我們不再依賴它了。 IRA 的一方面是透過 [C] 稅收抵免，在某些情況下會流動，一些州正在自行更新它。我認為我們中的任何人都沒有看到我們所期望的 IRA 帶來的巨大影響，但我們開始看到滴水和運球。如果政府真的齊心協力，找出獲得 IRA 部分的整個收入資格標準，而目前經銷商還沒有實際的方法來做到這一點，那麼我確實認為還有上升空間，但我們沒有計算在內現在，特別是考慮到選舉年，我不知道政府是否會將此作為優先事項，與州政府和經銷商一起弄清楚如何使其發揮作用。但剩下的部分是慢慢滴進去的。

Got you. And then given the confusion, I guess, the phase-in of the new refrigerant resi systems in '25, what are your updated expectations for pricing over the next 2 years, average pricing in the past, we've talked about something like 15% off of the '23 levels. Do you think that's still valid or do you think it's lower now?

明白你了。然後考慮到混亂，我想，25 年新冷媒 Resi 系統的逐步採用，您對未來 2 年定價的最新預期是什麼，過去的平均定價，我們討論過類似 15 '23 水平的 % 折扣。您認為這仍然有效還是您認為現在更低了？

Yes, that's a valid. No, it's still valid. I think that's still just working through the entire process, and that was the comment earlier as well maybe getting some of that this year, especially with the 410A numbers that we talked about this year. But at that number over 2 years still totally valid.

是的，這是有效的。不，它仍然有效。我認為這仍然只是在整個過程中進行，這也是早些時候的評論，今年可能會得到一些評論，尤其是我們今年討論的 410A 數字。但這個數字在兩年多的時間內仍然完全有效。

Okay. And given the potential slowdown in unitary that you mentioned and what we're seeing in resi. Have you seen any evidence anywhere in the industry of intensified price competition? Or is everyone still just getting -- pushing through price and getting that?

好的。考慮到您提到的單一化的潛在放緩以及我們在 Resi 中看到的情況。您是否在業界看到過價格競爭加劇的跡象？還是每個人都還在努力推動價格並得到它？

It's more the latter on an overall basis. But listen, if I speak to 1 salesperson in 1 corner, they will convince me that there's an intense price competition in their own territory, and that's why they're not meeting their numbers. But if you ignore those individual data points and you look at a broader trend, right now, the price seems to be sticking across the board. And it's no accident. I mean, the costs are going up too. I mean if you look at the overall margins, margins expanding nowhere close to what the pricing number we talk about. So some of it is just recovering the cost that we went through and are continuing to have to burden as we look at higher SEER products, new A2L refrigerants, better efficiency compressors and the labor and material inflation. So I don't see that going backwards because manufacturers have to offset the extra costs we are incurring.

整體來看更多的是後者。但聽著，如果我與 1 個角落的 1 名銷售人員交談，他們會讓我相信他們自己的領域內存在激烈的價格競爭，這就是他們沒有達到目標的原因。但如果你忽略這些單獨的數據點並著眼於更廣泛的趨勢，那麼現在價格似乎全面上漲。這並非偶然。我的意思是，成本也在上漲。我的意思是，如果你看看整體利潤率，你會發現利潤率的成長遠不及我們談論的定價數字。因此，其中一些只是收回了我們所經歷的成本，當我們考慮更高的 SEER 產品、新的 A2L 冷媒、效率更高的壓縮機以及勞動力和材料通膨時，我們將繼續承受負擔。所以我不認為這種情況會倒退，因為製造商必須抵消我們產生的額外成本。

And one last one for Michael. I just -- maybe could you further quantify the new facility costs in Q1 and Q2? And just -- like what are you specifically -- unabsorbed cost, if you will? What are you implying in the guide?

最後一張是獻給麥可的。我只是 - 也許您可以進一步量化第一季和第二季的新設施成本？只是 - 就像你具體是什麼 - 未吸收的成本，如果你願意的話？你在指南中暗示什麼？

Yes. Just thinking about it. We have a factory that we're going to start to staff with people. We're going to get them trained. We're not going to have very high productivity as we build units. And really, we won't even start to get any absorption until kind of mid- to late Q2. You have all of those ramp-up costs there. And then even in the second half, a portion of the $10 million will be lower efficiency, we will start to get some units out, but it won't be highly efficient. We won't be running at full efficiency until mid-2025. So it's probably going to be more to the front half, and it gets better as you get into the second half of that $10 million.

是的。只是想想而已。我們有一家工廠，我們將開始為其配備員工。我們要對他們進行培訓。當我們建造單位時，我們不會有很高的生產力。事實上，直到第二季中後期我們才會開始吸收。您在那裡擁有所有這些提升成本。然後即使到了下半年，1000萬美元中的一部分也會是效率較低的，我們會開始拿出一些單位，但效率不會很高。直到 2025 年中期，我們才能完全有效率地運作。所以前半部分可能會更多，當你進入這 1000 萬美元的後半部分時，情況會變得更好。

Got it. But in aggregate for the year, it's $10 million.

知道了。但全年總計為 1000 萬美元。

Correct.

正確的。

With the front end. Okay. I appreciate it.

與前端。好的。我很感激。

Yes.

是的。

Thank you for joining us today. Since there are no further questions, this will conclude Lennox's fourth quarter conference call. You may disconnect your lines at this time.

感謝您今天加入我們。由於沒有其他問題，倫諾克斯第四季電話會議將結束。此時您可以斷開線路。