濱特爾 (PNR) 2023 Q4 法說會逐字稿

Welcome to the Pentair Fourth Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Shelly Hubbard, Vice President, Investor Relations. Please go ahead.

歡迎參加濱特爾 2023 年第四季財報電話會議。 （操作員說明）請注意此事件正在被記錄。我現在想將會議交給投資者關係副總裁雪莉·哈伯德 (Shelly Hubbard)。請繼續。

Thank you, Drew, and welcome to Pentair's Fourth Quarter 2023 Earnings Conference Call. On the call with me are John Stauch, our President and Chief Executive Officer; and Bob Fishman, our Chief Financial Officer.

謝謝德魯，歡迎參加濱特爾 2023 年第四季財報電話會議。與我通話的有我們的總裁兼執行長 John Stauch；和我們的財務長鮑勃·菲什曼 (Bob Fishman)。

On today's call, we will provide details on our fourth quarter and full year performance as outlined in this morning's press release. On the Pentair Investor Relations website, you can find our earnings release and slide deck which is intended to supplement our prepared remarks during today's call and provide a reconciliation of differences between GAAP and non-GAAP financial measures that we will reference.

在今天的電話會議上，我們將提供今天上午新聞稿中概述的第四季度和全年業績的詳細資訊。在濱特爾投資者關係網站上，您可以找到我們的收益發布和幻燈片，旨在補充我們在今天電話會議期間準備好的言論，並提供我們將參考的GAAP 和非GAAP 財務指標之間差異的協調表。

The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the company's performance in addition to the impact these items and events have on the financial results.

所提供的非公認會計原則財務指標不應被視為替代或優於根據公認會計原則編制的財務績效指標。它們作為額外的澄清項目包括在內，以幫助投資者進一步了解公司的業績以及這些項目和事件對財務表現的影響。

Before we begin, let me remind you that during our presentation today, we will make forward-looking statements, which are predictions, projections or other statements about future events. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Pentair. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors in our most recent Form 10-Q and Form 10-K.

在開始之前，讓我提醒您，在今天的演示中，我們將做出前瞻性陳述，即對未來事件的預測、預測或其他陳述。請聽眾注意，這些陳述存在一定的風險和不確定性，其中許多風險和不確定性難以預測，並且通常超出濱特爾的控制範圍。這些風險和不確定性可能導致實際結果與我們目前的預期有重大差異。我們建議聽眾仔細查看我們最新的表格 10-Q 和表格 10-K 中的風險因素。

Following our prepared remarks, we will open the call up for questions. Please note that we will limit your questions to 2, after which we ask you to then reenter the queue in order to allow everyone an opportunity to ask questions. Similar to previous quarters in 2023, we have included Slides 4 through 7 in our earnings slide deck which provides a brief overview of Pentair as well as our investment thesis. I will now turn the call over to John.

在我們準備好的發言之後，我們將開始提問。請注意，我們會將您的問題限制為 2 個，之後我們會要求您重新進入佇列，以便每個人都有機會提問。與 2023 年頭幾季類似，我們在收益幻燈片中包含了幻燈片 4 至 7，其中簡要概述了濱特爾以及我們的投資論文。我現在將把電話轉給約翰。

Thank you, Shelly, and good morning, everyone. Our record performance in 2023 demonstrates the power of our balanced water portfolio and our focused growth strategy post the separation of nVent. We completed year 1 with our 3-segment structure, Flow, Water Solutions and Pool, and we finished our first full year with Manitowoc Ice.

謝謝你，雪莉，大家早安。我們 2023 年創紀錄的業績證明了我們平衡水產品組合的力量以及 nVent 分離後我們的重點成長策略。我們透過 3 部分結構（流量、水解決方案和水池）完成了第一年的工作，並透過馬尼托瓦克製冰完成了第一個全年的工作。

Our Flow segment, which moves water where it's needed and removes water where it's not wanted, along with our Water Solutions segment, which improves water, both posted a record year for sales in ROS. And our Pool segment, which enables people to enjoy water delivered record ROS despite significant volume headwinds. I'm extremely proud of our approximately 10,500 global employees for their solid execution in a challenging macroeconomic environment.

我們的 Flow 部門（將水移到需要的地方並在不需要的地方去除水）以及我們的 Water Solutions 部門（改善水）的 ROS 銷售額均創歷史新高。我們的泳池部分使人們能夠享受到創紀錄的 ROS 供水，儘管水量存在巨大阻力。我為我們約 10,500 名全球員工在充滿挑戰的宏觀經濟環境中的堅定執行力感到非常自豪。

As we enter 2024, we are leveraging our balanced portfolio for continued growth and profitability with expectations for new records of financial performance. Additionally, we look forward to sharing more about our strategy and 3-year outlook at our Investor Day on March 6.

進入 2024 年，我們將利用平衡的投資組合實現持續成長和獲利能力，並期望創下新的財務業績記錄。此外，我們期待在 3 月 6 日的投資者日分享更多有關我們的策略和 3 年展望的資訊。

Now let's begin with our executive summary, Q4 2023 on Slide 8. We finished Q4 with record performance in the fourth quarter post the separation of nVent in 2018, specifically record segment income and ROS, marking the seventh consecutive quarter of ROS expansion. This is important to note with strong comparables in Q4 2022.

現在讓我們從幻燈片8 上的2023 年第四季度執行摘要開始。在2018 年nVent 分拆後，我們在第四季度以創紀錄的業績結束了第四季度，特別是創紀錄的部門收入和ROS，標誌著ROS 連續第七個季度擴張。值得注意的是，2022 年第四季的可比較數據強勁。

In the fourth quarter, sales were down 2%, which included slightly better-than-expected Pool performance. Segment income increased 8% and ROS expanded by 190 basis points. Adjusted EPS was $0.87, up 6%, and we generated $97 million of free cash flow in the quarter.

第四季銷售額下降 2%，其中 Pool 業績略好於預期。部門營收成長 8%，ROS 成長 190 個基點。調整後每股收益為 0.87 美元，成長 6%，本季我們產生了 9,700 萬美元的自由現金流。

Let's move to Slide 9 titled Executive summary, full year '23. 2023 was a record year for segment income, ROS and adjusted EPS post the nVent separation, as previously mentioned despite sales ending the year flat. In full year '23, we delivered sales of $4.1 billion, record segment income of $855 million, up 11%, record annual ROS of 20.8%, expanding 220 basis points and record adjusted EPS of $3.75.

讓我們轉到標題為「23 年全年執行摘要」的投影片 9。正如前面提到的，儘管 2023 年銷售額持平，但在 nVent 分離後，2023 年的部門收入、ROS 和調整後每股收益都創下了紀錄。 23 年全年，我們實現銷售額41 億美元，分部收入創紀錄地達到8.55 億美元，成長11%，年度ROS 創紀錄地達到20.8%，擴大220 個基點，調整後每股收益創紀錄地達到3.75 美元。

Flow & Water Solutions set new sales records in 2023 and we delivered significant margin expansion across all 3 segments, setting a new annual record ROS for each. Transformation and solid execution across all 3 segments continue to drive operational efficiencies throughout the year.

Flow & Water Solutions 在 2023 年創下了新的銷售記錄，我們在所有 3 個細分市場中實現了顯著的利潤成長，為每個細分市場創造了新的年度記錄 ROS。所有三個部門的轉型和紮實執行將繼續推動全年營運效率。

Lastly, we generated significant free cash flow of $550 million and increased our dividend for the 48th consecutive year, further solidifying our status as a dividend aristocrat.

最後，我們產生了 5.5 億美元的大量自由現金流，並連續 48 年增加了股息，進一步鞏固了我們作為股息貴族的地位。

Let's turn to Slide 10 titled Balanced Water Portfolio. We are helping the world sustainably move, improve and enjoy water through our 3 segments, each with over $1 billion in sales in 2023 and together, creating a balanced water portfolio. Our strategy is working, and we have been delivering on the expectations that we have shared with you. I will now pass the call over to Bob, who will discuss our performance and financial results in more detail. Bob?

讓我們看標題為平衡水投資組合的投影片 10。我們正在透過 3 個細分市場幫助世界永續地移動、改善和享受水資源，到 2023 年，每個細分市場的銷售額將超過 10 億美元，共同打造平衡的水產品組合。我們的策略正在發揮作用，我們一直在實現與您分享的期望。我現在將把電話轉給鮑勃，他將更詳細地討論我們的業績和財務表現。鮑伯？

Thank you, John, and good morning, everyone. Let's start on Slide 11, titled Q4 2023 Pentair performance. I will also be discussing our full year performance on Slide 12. We delivered another strong quarter of earnings and significant margin expansion despite sales being down 2% year-over-year. Volume continued to improve sequentially and with substantial progress in Q4 as compared to Q2 and Q3, driven primarily by improvement in Pool volume.

謝謝約翰，大家早安。讓我們從投影片 11 開始，標題為 2023 年第四季濱特爾業績。我還將在幻燈片 12 上討論我們的全年業績。儘管銷售額同比下降 2%，但我們仍實現了另一個強勁的季度盈利和顯著的利潤增長。成交量持續連續改善，與第二季和第三季相比，第四季取得了實質進展，這主要是由於池成交量的改善所致。

Sales for Q4 were down 2%, which was slightly better than we guided. Core sales across all 3 segments were down slightly as compared to last year's record Q4 when our lead times began to improve from a recovering global supply chain, enabling us to ship more backlog orders.

第四季銷售額下降 2%，略好於我們的預期。與去年創紀錄的第四季相比，所有三個細分市場的核心銷售額均略有下降，當時我們的交貨時間因全球供應鏈的復甦而開始改善，使我們能夠運送更多的積壓訂單。

As we move into 2024, we expect to see a more normalized operating environment. Fourth quarter segment income increased 8% to $198 million and return on sales expanded 190 basis points year-over-year to 20.1%. This improvement was driven primarily by our transformation initiatives. Adjusted EPS of $0.87 was up 6% versus the prior year.

進入 2024 年，我們預計將看到更規範的營運環境。第四季部門營收成長 8%，達到 1.98 億美元，銷售回報率年增 190 個基點，達到 20.1%。這項改進主要是由我們的轉型措施所推動的。調整後每股收益為 0.87 美元，比上年增長 6%。

For the full year, sales were flat at $4.1 billion with core sales down 5%, driven by growth in Flow and Water solutions, which were offset by lower Pool volumes. Segment income grew 11% and return on sales expanded 220 basis points to a record 20.8%. All 3 segments significantly expanded margins and set new records. Adjusted EPS increased to a record $3.75.

全年銷售額持平於 41 億美元，核心銷售額下降 5%，這主要是受到流量和水解決方案成長的推動，但被池量下降所抵消。部門營收成長 11%，銷售報酬率擴大 220 個基點，達到創紀錄的 20.8%。所有三個部門的利潤率均顯著擴大並創下新紀錄。調整後每股收益增至創紀錄的 3.75 美元。

Turning to Slide 13, labeled Flow at a Glance. You can see the impressive 5-year financial performance. Sales rose over 4% compounded annually and margin expanded 300 basis points since 2019. In 2023, flow continued to reach new records in sales and ROS. We have also provided a sales view by region, channel and solutions, reflecting 2023 sales and the diversified nature of the business.

轉向投影片 13，標記為「流程概覽」。您可以看到令人印象深刻的 5 年財務表現。自 2019 年以來，銷售額年複合成長率超過 4%，利潤率擴大了 300 個基點。2023 年，流量在銷售額和 ROS 方面繼續創下新紀錄。我們還提供了按地區、通路和解決方案劃分的銷售視圖，反映了 2023 年的銷售情況和業務的多元化性質。

We have 8 iconic brands, some over 100 years old, and we rank first in quality, technical support and customer service.

我們擁有 8 個標誌性品牌，其中一些品牌已有 100 多年的歷史，我們在品質、技術支援和客戶服務方面排名第一。

Please turn to Slide 14, labeled Q4 2023 Flow performance. In addition to the fourth quarter performance for Flow, I will also be referencing the full year performance on Slide 15. Note that we have recently renamed our Industrial & Flow Technologies segment to Flow. In Q4, Flow grew sales 1% in the quarter to $379 million, a record fourth quarter. Industrial Solutions was up 9% and commercial was up 2% with residential down 7%. Segment income was flat and return on sales decreased 20 basis points to 17.2% due to a return to more normal seasonality following a record Q4 2022 and an unfavorable mix from our residential business.

請參閱投影片 14，標記為「2023 年第 4 季流量效能」。除了 Flow 第四季的業績外，我還將參考投影片 15 上的全年業績。請注意，我們最近已將工業和流量技術部門更名為 Flow。第四季，Flow 銷售額成長 1%，達到 3.79 億美元，創第四季紀錄。工業解決方案上漲 9%，商業解決方案上漲 2%，住宅解決方案下跌 7%。由於 2022 年第四季創紀錄的季度業績恢復到更正常的季節性以及住宅業務的不利組合，該部門收入持平，銷售回報率下降 20 個基點至 17.2%。

For the year, Flow sales increased 5% to $1.58 billion, primarily due to double-digit growth in Commercial and Industrial Solutions. Residential was down 4%, showing improvements sequentially from Q3. Full year segment income grew 17% and return on sales increased 170 basis points to 17.8%, a record margin for Flow, driven by transformation and price more than offsetting inflation.

今年，Flow 銷售額成長 5%，達到 15.8 億美元，主要得益於商業和工業解決方案業務的兩位數成長。住宅下降 4%，較第三季有所改善。在轉型和價格的推動下，全年部門收入成長了 17%，銷售回報率成長了 170 個基點，達到 17.8%，創下 Flow 的創紀錄利潤率。

Turning to Slide 16, titled Water Solutions at a Glance. You can see the strong 5-year financial record with a compounded annual sales growth rate of 17% and over 400 basis points margin expansion since 2019. Our iconic brands include Everpure and Manitowoc Ice. Our residential water solutions products have helped reduce the need for 7 billion single-use water bottles in 2023.

轉向投影片 16，標題為「水解決方案概覽」。您可以看到強勁的 5 年財務記錄，自 2019 年以來複合年銷售額增長率為 17%，利潤率增長超過 400 個基點。我們的標誌性品牌包括 Everpure 和 Manitowoc Ice。我們的住宅用水解決方案產品已幫助減少 2023 年對 70 億個一次性水瓶的需求。

Please turn to Slide 17, labeled Q4 2023 Water Solutions Performance. In addition to the fourth quarter performance for Water Solutions, I will also be referencing the full year performance on Slide 18. In Q4, Water Solutions sales decreased 5% to $270 million following a record Q4 2022. Commercial sales were down 4%, primarily due to the timing of projects within our services business, partially offset by growth in Manitowoc Ice and filtration. In Residential, Q4 sales were down 6%, but reflects significant improvement sequentially from Q3 of this year in which Residential sales were down 14%. Segment income grew 15% to $52 million and return on sales expanded 320 basis points to 19.1%, a new Q4 record driven primarily by productivity from our transformation initiatives and Manitowoc Ice.

請參閱投影片 17，標示為「2023 年第 4 季水解決方案績效」。除了Water Solutions 的第四季業績外，我還將參考投影片18 上的全年業績。繼2022 年第四季創紀錄之後，第四季Water Solutions 銷售額下降5%，至2.7 億美元。商業銷售額下降4%，主要是由於我們服務業務內專案的時間安排，部分被馬尼托瓦克製冰和過濾業務的成長所抵消。在住宅領域，第四季度的銷售額下降了 6%，但與今年第三季的住宅銷售額下降 14% 相比，季比出現了顯著改善。部門營收成長 15%，達到 5,200 萬美元，銷售回報率成長 320 個基點，達到 19.1%，這是第四季度的新紀錄，這主要是由我們的轉型計劃和 Manitowoc Ice 的生產力推動的。

For the year, Water Solutions sales grew 19%. Segment income grew 66% and return on sales increased 590 basis points to 21%, a new full year record. Commercial sales increased 54%, driven by the acquisition of Manitowoc Ice and growth in filtration. Manitowoc Ice had a record sales year with growth of 23% versus the prior year.

今年，水解決方案銷售額成長了 19%。部門營收成長 66%，銷售報酬率成長 590 個基點至 21%，創下全年新紀錄。受收購 Manitowoc Ice 和過濾業務成長的推動，商業銷售額成長 54%。馬尼托瓦克製冰公司 (Manitowoc Ice) 的銷售額創下歷史新高，較前一年成長 23%。

Please turn to Slide 19, titled Pool at a Glance. Looking at the 5-year financial performance, Pool was able to grow the top line significantly and increase margins to a record 31% or up 320 basis points since 2019. Our Pool business benefits from a very large installed base with roughly 80% of sales coming from remodel and break and fix.

請參閱投影片 19，標題為「泳池一覽」。從5 年的財務表現來看，Pool 能夠顯著成長收入，並將利潤率提高到創紀錄的31%，即自2019 年以來增加了320 個基點。我們的Pool 業務受益於龐大的安裝基礎，約佔銷售額的80%來自改造、破壞和修復。

Please turn to Slide 20 labeled Q4 2023 Pool Performance. In addition to the fourth quarter performance for Pool, I'll also be referencing the full year performance on Slide 21. In Q4, Pool sales declined 2% to $336 million, driven by a 6-point drop in volume, which was partially offset by 4 points of price. Note that volume improved significantly compared to the 28-point decline in Pool volume in Q3.

請參閱標示「2023 年第 4 季泳池表現」的投影片 20。除了Pool 第四季的業績外，我還將參考投影片21 上的全年業績。第四季度，Pool 銷售額下降2%，至3.36 億美元，原因是銷量下降6 個百分點，但這一下降被部分抵銷了價格上漲4點。請注意，與第三季池交易量下降 28 個百分點相比，交易量顯著改善。

For the year, Pool sales were down 18%. Segment income decreased 10% and return on sales increased 270 basis points to 31%, driven by price in our transformation initiatives.

今年，Pool 銷售額下降了 18%。在我們轉型計劃中價格的推動下，部門收入下降了 10%，銷售回報率增加了 270 個基點，達到 31%。

Please turn to Slide 22, labeled Transformation Initiatives. Similar to last quarter, we believe this slide provides a good illustration of our transformation initiatives and our ultimate goal of driving margin expansion. We have been targeting ROS of approximately 23% by the end of fiscal 2025, expanding margins over 400 basis points as compared to fiscal 2022. In 2023, we delivered ROS of 20.8% as transformation began to read out in Q3 and Q4, and we expect to deliver roughly 22% by the end of full year '24 which we believe puts us on track with our transformation initiatives.

請參閱投影片 22，標示「轉型計畫」。與上季類似，我們相信這張投影片很好地說明了我們的轉型舉措以及推動利潤率擴張的最終目標。我們的目標是到2025 財年末將ROS 提高到約23%，與2022 財年相比，利潤率擴大超過400 個基點。2023 年，隨著第三季和第四季轉型開始，我們的ROS 達到了20.8%，我們預計到 24 年全年末交付約 22%，我們相信這使我們走上了轉型計畫的正軌。

Please turn to Slide 23, labeled Transformation Runway. We have kept this slide as a reference to illustrate the staggered nature of each of the 4 initiatives and the various stages of each. We are pleased to note that we believe we are executing well on these initiatives going into 2024.

請參閱投影片 23，標示為「轉型跑道」。我們保留這張投影片作為參考，以說明 4 項舉措中每項措施的交錯性質以及每項措施的不同階段。我們很高興地註意到，我們相信我們在 2024 年之前將這些舉措執行得很好。

Please turn to Slide 24, labeled Balance Sheet and Cash Flow. In Q4, we generated $97 million in free cash flow, up nearly 100% year-over-year, reflecting another strong quarter. For the year, our free cash flow was $550 million, up nearly 94% year-over-year. Our net debt leverage ratio was 2x, down from 2.6x in Q1. Our total debt was less than $2 billion, and the average interest rate was approximately 5.2%. Our ROIC was 14.3% which includes the full impact from the Manitowoc Ice acquisition. With the focus on being good stewards of capital, we continue to target high teens ROIC. We plan to remain disciplined with our capital and continue to focus on debt reduction amid the higher interest rate environment with the potential for share buybacks.

請翻到投影片 24，標示資產負債表和現金流量。第四季度，我們產生了 9,700 萬美元的自由現金流，年成長近 100%，反映出另一個強勁的季度。今年，我們的自由現金流為 5.5 億美元，年增近 94%。我們的淨債務槓桿率為 2 倍，低於第一季的 2.6 倍。我們的總債務不到 20 億美元，平均利率約為 5.2%。我們的投資報酬率為 14.3%，其中包括收購 Manitowoc Ice 的全部影響。我們專注於成為良好的資本管理者，並繼續以高青少年投資報酬率為目標。我們計劃在高利率環境下保持資本紀律，並繼續專注於減少債務，並有可能進行股票回購。

Moving to Slide 15 (sic) [25], titled Q1 and Full Year 2024 Pentair Outlook. For the full year, we are introducing our adjusted EPS guidance of approximately $4.15 to $4.25 which represents a year-over-year range of up 11% to up 13%. We expect total Pentair sales in fiscal 2024 to be up approximately -- to be approximately $4.2 billion or up about 2% to 3%. We expect Flow sales to be up low single digits, reflecting low to mid-single-digit growth in our commercial and industrial businesses, offset slightly by a low single-digit decline in residential.

前往投影片 15（原文如此）[25]，標題為第一季和濱特爾 2024 年全年展望。對於全年，我們推出的調整後每股收益指引約為 4.15 美元至 4.25 美元，年增 11% 至 13%。我們預計 2024 財年濱特爾的總銷售額將成長約 42 億美元，成長約 2% 至 3%。我們預計 Flow 銷售額將成長低個位數，反映出我們的商業和工業業務的低個位數成長，但住宅業務的低個位數下降略有抵消。

Water Solutions sales are expected to be essentially flat, comping record 2023 performance driven by our commercial water business. Commercial sales in full year '24 are expected to be up low single digits and residential to be down low to mid-single digits. Pool sales are expected to increase approximately 7% in full year 2024, which aligns the historical compound annual growth rates of mid-single digits pre-pandemic. We expect Pool sales to increase, driven primarily by inventory headwinds in 2023 that we do not expect to repeat in 2024 and some benefit of price. We expect this growth to be slightly offset by the uncertainty that still exists regarding the macroeconomic environment, higher interest rates, the potential impact of financing for new and remodeled pools and potential repair deferrals in the aftermarket.

水解決方案的銷售額預計將基本持平，與我們商業水業務推動的 2023 年創紀錄業績相比。 24 年全年商業銷售預計將成長低個位數，住宅銷售將下降至中個位數。預計 2024 年全年，聯營銷售額將成長約 7%，這與疫情前中個位數的歷史複合年增長率保持一致。我們預計聯營銷售將增加，這主要是由於 2023 年庫存逆風（我們預計 2024 年不會重演）以及價格的一些好處所推動的。我們預計這一增長將被宏觀經濟環境、利率上升、新池和改造池融資的潛在影響以及售後市場潛在維修延期等方面仍然存在的不確定性所略微抵消。

We believe Pool remains a highly attractive market for us, and we look to deliver strong growth in 2024 while being mindful of macroeconomic dynamics.

我們相信 Pool 對我們來說仍然是一個極具吸引力的市場，我們希望在 2024 年實現強勁成長，同時專注於宏觀經濟動態。

We expect segment income to increase approximately 10% with ROS expansion of roughly 150 basis points. Also for the full year, we expect corporate expense of approximately $95 million, net interest expense of roughly $100 million, an adjusted tax rate of approximately 16.5% which is inclusive of changes in the global tax standards for a total impact to Pentair of about $0.07 per share and a share count of approximately 166 million to 167 million.

我們預計分部收入將成長約 10%，ROS 擴張約 150 個基點。同樣，對於全年，我們預計公司費用約為9500 萬美元，淨利息費用約為1 億美元，調整後的稅率約為16.5%，其中包括全球稅收標準的變化，對濱特爾的總影響約為0.07 美元每股，股數約為1.66億至1.67億股。

Lastly, we expect to deliver approximately $1 billion in EBITDA in full year 2024, a milestone we are very proud of.

最後，我們預計 2024 年將全年實現約 10 億美元的 EBITDA，這是我們非常自豪的里程碑。

For the first quarter, we expect sales to be down approximately 2% to 3%. As a reminder, many of our businesses were working down large backlogs in Q1 last year, as supply chains improved, and we were able to ship more backlog orders. In 2024, we expect more normalized seasonality in our businesses. We expect first quarter segment income to be flat to down 3%, primarily due to lower sales with corporate expense of approximately $25 million, net interest expense of roughly $29 million, an adjusted tax rate of approximately 16.5% and a share count of approximately 167 million.

我們預計第一季銷售額將下降約 2% 至 3%。提醒一下，隨著供應鏈的改善，我們的許多企業在去年第一季都在處理大量積壓訂單，我們能夠運送更多積壓訂單。 2024 年，我們預計我們的業務季節性將更加正常化。我們預計第一季部門收入將持平或下降3%，主要是由於銷售額下降，公司費用約為2,500 萬美元，淨利息費用約為2,900 萬美元，調整後稅率約為16.5%，股票數量約為167 股百萬。

We expect Q1 to drive ROS expansion, both sequentially and year-on-year. We are also introducing adjusted EPS guidance for the first quarter of approximately $0.88 to $0.91.

我們預計第一季將推動 ROS 擴張，無論是連續成長還是同比增長。我們也推出了第一季調整後每股盈餘指引，約 0.88 至 0.91 美元。

For the first time since 2020, we believe we are seeing a return to a more normalized operating environment globally. Thus, we expect to see seasonality resume to historical norms across all 3 of our segments in 2024 with transformation driving margin expansion.

自 2020 年以來，我們首次相信全球營運環境將回歸更加正常化。因此，我們預計 2024 年我們所有 3 個細分市場的季節性將恢復到歷史正常水平，轉型將推動利潤率擴張。

In the first half of 2024, we expect adjusted EPS to be slightly less than 50% of our full year adjusted EPS guide. Q1 is expected to be the lowest quarter for sales, segment income, ROS and adjusted EPS as compared to the remaining 3 quarters and full year '24. We have continued to accelerate transformation funnels and remain focused on investing in the long-term growth of our company.

2024 年上半年，我們預計調整後每股盈餘將略低於全年調整後每股盈餘指引值的 50%。與其餘 3 個季度和 24 年全年相比，第一季預計將成為銷售額、部門收入、ROS 和調整後每股收益最低的季度。我們持續加速轉型管道，並持續專注於投資公司的長期成長。

Turning to Slide 16 (sic) [26], titled 2023 Reflection. Our business continued to execute well and delivered what we said we would do. We drove margins as a result of our balanced water portfolio and transformation initiatives. Manitowoc Ice posted a record year, exceeding expectations. We drove performance accountability across the organization, ended the year with an even stronger balance sheet and free cash flow and maintained a disciplined capital allocation strategy. We believe we are well positioned going into full year '24.

轉向投影片 16（原文如此）[26]，標題為 2023 年反思。我們的業務繼續表現良好，並兌現了我們所說的承諾。由於我們平衡的水務投資組合和轉型舉措，我們提高了利潤率。馬尼托瓦克製冰公司今年取得了創紀錄的業績，超出了預期。我們推動了整個組織的績效問責制，以更強勁的資產負債表和自由現金流結束了這一年，並維持了嚴格的資本分配策略。我們相信，進入 24 全年，我們處於有利位置。

I would now like to turn the call over to the operator for Q&A, after which John will have a few closing remarks. Drew, please open the line for questions.

我現在想將電話轉給接線員進行問答，之後約翰將發表一些結束語。德魯，請打開提問線。

(Operator Instructions) The first question comes from Brian Lee with Goldman Sachs.

（操作員說明）第一個問題來自高盛的布萊恩李（Brian Lee）。

This is Grace on for Brian. First question on margin. Kudos on a margin execution. Just a quick question on the margin expansion trajectory here. So if I do the math correct here, your full year guide imply kind of like 140 basis point expansion while your 1Q guide imply like 20 basis points at the midpoint. So how should we think about the margin expansion trajectory moving the year? And which segment should we see the most margin expansion?

這是布萊恩的葛蕾絲。關於保證金的第一個問題。對保證金執行表示讚賞。這裡只是一個關於利潤擴張軌跡的簡單問題。因此，如果我在這裡計算正確，您的全年指南意味著 140 個基點擴張，而您的第一季指南意味著中點 20 個基點。那我們該如何看待今年的獲利擴張軌跡呢？我們該看到哪個細分市場的利潤率成長幅度最大？

Yes. Let me just take the first part, and I'll hand it to Bob. I just want to remind everybody that last year's Pool inventory correction didn't happen fully until Q2. So we're up against 1 more quarter of Pool compare from a Q1 perspective. And if you actually look at the performance exiting Q4 and compare it to our Q1 guide, you'll see that the continued operating performance is there. And the last point I'll just make before handing over to Bob is our Q1 EPS guidance is back to our normal seasonality as a percentage of the overall full year. So what you're really seeing is a reflection that we're back to our normal seasonality contribution. And therefore, the year-over-year compares are harder, one last time in Q1. Bob?

是的。讓我先講第一部分，然後將其交給鮑伯。我只是想提醒大家，去年的庫存調整直到第二季才完全發生。因此，從第一季的角度來看，我們面臨著比池多四分之一的情況。如果您實際查看第四季度的業績並將其與我們的第一季指南進行比較，您會發現持續的營運表現是存在的。在交給鮑伯之前我要說的最後一點是，我們的第一季每股收益指引已恢復到正常季節性佔全年的百分比。所以你真正看到的是我們回到了正常的季節性貢獻的反映。因此，同比比較更加困難，最後一次是在第一季。鮑伯？

Yes, I would agree with your numbers. So ROS expansion will continue in the first quarter as we drive approximately 150 basis points of ROS expansion for the full year. As you'd expect, with Q2 being our largest quarter, the ROS expansion will be significant in Q2 and will also play out well as we close out the year in Q3 and Q4.

是的，我同意你的數字。因此，ROS 擴張將在第一季繼續，因為我們推動全年 ROS 擴張約 150 個基點。正如您所期望的，由於第二季度是我們最大的季度，ROS 擴張將在第二季度顯著，並且在我們在第三季度和第四季度結束這一年時也將發揮良好作用。

Great. And then my second question is more on Pool. So your -- up 7% year-over-year. That's about like $90 million of revenue incremental. I think -- I believe you talked about like the destocking was about $150 million in '23. So I assume the delta is driven by -- you're cautious around -- you called out like uncertainty in the macro, higher interest rates. Is that correct? And second, how much visibility do you have on that 7% growth and can you talk about like the early buy activity? Is that -- does that give you enough confidence to guide 7% year-over-year growth?

偉大的。我的第二個問題更多的是關於撞球。所以你的——年增 7%。這大約增加了 9000 萬美元的收入。我想——我相信你談到 23 年去庫存的金額約為 1.5 億美元。因此，我認為三角洲是由——你對此持謹慎態度——你呼籲宏觀不確定性、更高的利率來推動的。那是對的嗎？其次，您對 7% 的成長有多少了解？您能談談早期購買活動嗎？這是否給了您足夠的信心來實現 7% 的年成長？

There's 2 questions with a lot of subparts, but let me see if I can summarize that. I mean, first of all, we have given 2 numbers on the inventory piece. We've given $150 million and $120 million. I just want to remind everybody it's about $150 million for Pentair from the end of Q1 to the end of Q4 2023. On a year-over-year basis, it's actually closer to $120 million which is -- then if you think about exactly what you're saying, you take our reported sales, add the $120 million, you'll get to the conclusion that price and volume is down. And I think that reflects several factors.

有 2 個問題有很多子部分，但讓我看看我是否可以總結一下。我的意思是，首先，我們在庫存件上給出了 2 個數字。我們已經捐贈了 1.5 億美元和 1.2 億美元。我只是想提醒大家，從 2023 年第一季末到第四季末，Pentair 的營收約為 1.5 億美元。與去年同期相比，它實際上接近 1.2 億美元，如果你仔細想想的話你是說，你把我們報告的銷售額加上1.2 億美元，你就會得出價格和銷售下降的結論。我認為這反映了幾個因素。

One is that we expect new pool builds to decline only modestly. But then we are not so sure what's going to happen with remodel pools. And we're also expecting some level of discretionary purchases in the aftermarket in the first half for sure, as people are maybe a little more cautionary depending on where the interest rates are. Net-net, it's still a fundamentally good growth rate for us as we set up the year and we're expecting really good conversion of ROS on that contribution.

一是我們預期新池建設只會小幅下降。但我們不太確定改造池會發生什麼事。我們也預期上半年售後市場肯定會出現一定程度的隨意購買，因為人們可能會根據利率水平而更加謹慎。 Net-net，在我們設定今年的時候，這對我們來說仍然是一個基本良好的成長率，我們預計 ROS 在這項貢獻上會有很好的轉換。

The next question comes from Julian Mitchell with Barclays.

下一個問題來自巴克萊銀行的朱利安·米切爾。

Just wanted to circle back to the sort of profit bridge numbers and maybe looking at Slide 12 to try and understand what's embedded for 2024. Any help you could give us around the sort of that inflation bucket, what you're dialing in. It was that sort of [190] number in '23? And when we look at productivity, very good exit rate in terms of $30 million or so tailwind in Q4. How are we thinking about that number for full year '24 as well, please? So yes, inflation and productivity, any finer points on the guide assumption?

只是想回到利潤橋數字，也許看看幻燈片 12，嘗試了解 2024 年的內容。您可以為我們提供有關通貨膨脹桶的任何幫助，您正在撥入的內容。 '23 中的那種[190 ] 數字？當我們考慮生產力時，第四季的退出率非常好，約為 3000 萬美元。請問我們如何看待 24 年全年的這個數字？那麼，是的，通膨和生產力，指導假設有什麼更好的觀點嗎？

Yes, understand. Thank you for the question, Julian. So we look at 2024 in the context of the ROS, we're thinking that price will offset inflation. So I think roughly 2 points of price offsetting inflation. That would mean that in order to grow to the midpoint of our guidance, we'll have roughly $40 million of volume. That $40 million is compared to the negative [460] that we saw in 2023. So when we talk about moving to a more normalized environment, we are very pleased that the challenging years are behind us, and we can start to grow. That's really how you bridge the revenue piece.

是的理解。謝謝你的提問，朱利安。因此，我們在 ROS 的背景下看待 2024 年，我們認為價格將抵消通貨膨脹。所以我認為大約有 2 個點的價格抵消了通貨膨脹。這意味著，為了成長到我們指導的中點，我們將擁有約 4000 萬美元的交易量。這 4000 萬美元與我們在 2023 年看到的負數 [460] 進行了比較。因此，當我們談論轉向更正常化的環境時，我們很高興充滿挑戰的歲月已經過去，我們可以開始成長。這確實是你彌合收入部分的方式。

When you move over to segment income, the price of, call it, 2 points will offset inflation. We'll get some drop through, call it, in the 30% range of that $40 million of income and that leaves you with roughly $75 million of transformation to drive the 150 basis points of ROS expansion. That $75 million compares to the $67 million that we did in 2023, but it also includes our -- us making investments back into the business. So as we drive innovation in places like commercial water and Flow and Pool, as we look to drive opportunities to improve and make life easier for our dealers and distributors, that's all included in that net $75 million number. And that's the bridge that would take you from the $855 million of income in 2023 to the midpoint guide of around $940 million. I hope that's helpful.

當你轉向細分收入時，2個點的價格將抵消通貨膨脹。我們將在這 4000 萬美元收入的 30% 範圍內獲得一些下降，這意味著您將獲得大約 7500 萬美元的轉型來推動 ROS 擴展 150 個基點。這 7,500 萬美元與我們 2023 年的 6,700 萬美元相比，但它也包括我們對業務的投資。因此，當我們在商業用水、Flow and Pool 等領域推動創新時，當我們尋求機會來改進並讓我們的經銷商和分銷商的生活變得更輕鬆時，這些都包含在7500 萬美元的淨值中。這就是將你的收入從 2023 年 8.55 億美元增至 9.4 億美元左右的中間指導值的橋樑。我希望這有幫助。

That's extremely helpful. And maybe just a quick follow-up on the top line outlook. So you start out Q1 down a couple of points. The full year is up a couple of points. How are you thinking about the sort of rate of improvement in that year-on-year sales line through the year? Is it just each quarter year-on-year get slightly better and is that true across all 3 segments kind of moving in a synchronized way from down slightly to up slightly. Any clarity on that, please?

這非常有幫助。也許只是對營收前景的快速跟進。所以你在第一季開始時就落後了幾分。全年上漲了幾個百分點。您如何看待這一年銷售線的年比改善率？是不是每個季度都比去年同期稍微好一點，所有三個細分市場都是如此，從小幅下降到小幅上升同步變化。請問有清楚的嗎？

That's really how we do view it. We expect growth to return in Q2. Again, Q2 is historically our largest quarter. We had a big Q2 in 2023, but we still expect growth and then we continue to grow in Q3 and Q4.

我們確實是這樣看待它的。我們預計第二季將恢復成長。同樣，第二季度是我們歷史上最大的季度。我們在 2023 年第二季表現強勁，但我們仍然預計會出現成長，然後在第三季和第四季繼續成長。

The next question comes from Nathan Jones with Stifel.

下一個問題來自 Nathan Jones 和 Stifel。

Let me start with a follow-up on the transformation initiatives. I think you guys have some pretty good visibility to the savings that you're going to generate over the next more than 1 year, 2, 3, maybe in 4 years. Can you talk about the linearity of savings realization there out of transformation, kind of when do those savings peak and start to level off? Just any color you can give us on the longer-term outlook?

讓我先介紹一下轉型舉措的後續情況。我認為你們對未來 1 年多、2 年、3 年甚至 4 年將產生的節省有一定的了解。您能否談談轉型過程中實現儲蓄的線性關係，這些儲蓄何時達到高峰並開始趨於平穩？關於長期前景，您能給我們什麼顏色嗎？

Yes. We're pleased with what we're seeing in terms of transformation reading out. It was $29 million in both Q3 and Q4 of 2023. And as I just mentioned, we're looking at roughly a net $75 million number in 2024. When we look at the funnel, we would expect those type of transformation numbers to continue over the next couple of years. We think the funnel supports the various waves, whether it's pricing, sourcing, the operations or the org excellence. So we think it's going to create runway for us over the next couple of years, for sure.

是的。我們對所看到的轉型讀數感到滿意。 2023 年第三季和第四季均為2,900 萬美元。正如我剛才提到的，我們預計2024 年的淨收入約為7,500 萬美元。當我們查看漏斗時，我們預計這些類型的轉型數字將持續超過未來幾年。我們認為漏斗支持各種浪潮，無論是定價、採購、營運或組織卓越。所以我們認為它肯定會在未來幾年為我們創造跑道。

And then I guess my follow-up on the Water Quality business. I think Manitowoc burned some backlog off that it had built up during supply chain challenges. Is it possible to quantify the tailwind that was there in 2023, that maybe is a bit of a headwind in 2024 and then what the underlying expectations are for growth for Manitowoc Ice in '24 and beyond?

然後我想我對水質業務的後續行動。我認為馬尼托瓦克燒掉了在供應鏈挑戰期間積壓的一些積壓訂單。是否有可能量化 2023 年的順風，2024 年可能有點逆風，然後對 Manitowoc Ice 在 24 年及以後的增長的基本預期是什麼？

Yes. Let me just give some color and then I'll let Bob close out. I mean, I think we enter 2024, especially in the Q1 phase with much more normalized backlog levels. We still grew nicely in Q4 in Manitowoc, and we expect to grow again in Q1. So I think we're at normal levels. Just as a reminder, this business was only taking 60 to 75 days of orders. So the backlog was more relative to what the nearer-term dynamics were, Nathan, not some level of large backlog that wouldn't be used in the future.

是的。讓我給一些顏色，然後我會讓鮑伯結束。我的意思是，我認為我們進入 2024 年，特別是在第一季度，積壓水平更加標準化。我們在馬尼托瓦克的第四季仍然取得了良好的成長，我們預計第一季將再次成長。所以我認為我們處於正常水平。提醒一下，該業務只接受 60 至 75 天的訂單。因此，內森，積壓更多地與近期動態有關，而不是將來不會使用的某種程度的大量積壓。

So obviously, we're -- had a great 2023. This business contributed nicely to overall Water Solutions and overall Pentair, and we couldn't be more pleased with where we are. In 2024, it's more about getting the filtration synergies lined up along with the Manitowoc Ice acquisition. They're the same business unit. And when we gave the numbers of what we expected this business to achieve and the longer term of '25, it was inclusive of those revenue synergies on both the services side and the filtration side. So very pleased where we are and very excited about the contribution we'll see in '24 and beyond.

顯然，我們在 2023 年度過了美好的一年。這項業務為整個 Water Solutions 和整個 Pentair 做出了很好的貢獻，我們對我們的現狀感到非常滿意。 2024 年，我們的重點是在收購 Manitowoc Ice 的同時獲得過濾協同效應。他們是同一個業務部門。當我們給出我們期望該業務實現的數字以及 25 年的長期目標時，它包含了服務方面和過濾方面的收入協同效應。我們對現在的處境感到非常高興，並對我們在 24 年及以後看到的貢獻感到非常興奮。

Yes. I would just add that historically, Ice is a mid-single-digit grower when we look back at the CAGR, that's historically what they've grown. The 23% increase in 2023 included some nice wins in China and working down the backlog. So as we look to 2024, we would expect that business to take a little bit of a breather down mid-single digits. But good news is that the business unit commercial water will actually grow low single digits. So you're seeing some benefit of filtration business as well as some of the synergies coming from the Ice acquisition, but being captured within services and filtration.

是的。我想補充一點，從歷史上看，當我們回顧複合年增長率時，Ice 是中等個位數的種植者，這就是他們歷史上的種植情況。 2023 年增長了 23%，其中包括在中國取得的一些不錯的勝利以及減少積壓訂單。因此，展望 2024 年，我們預計該業務將稍有喘息，下降到個位數左右。但好消息是，商業用水業務部門實際上將成長低個位數。因此，您將看到過濾業務的一些好處以及來自 Ice 收購的一些協同效應，但這些好處都體現在服務和過濾中。

So overall, I could not be more pleased with how Ice is performing and continue to -- once we get through 2024, be back on that mid-single-digit type trajectory.

因此，總的來說，我對 Ice 的表現非常滿意，一旦我們度過 2024 年，我將繼續回到中個位數的軌跡。

The next question comes from Mike Halloran with Baird.

下一個問題來自 Mike Halloran 和 Baird。

Can we just continue on the Water Solutions side and round out the residential piece. Easy comp, still expecting some pressure. I'm guessing the cadencing improves through the year. But any context on that piece would be helpful.

我們可以繼續在水解決方案方面繼續完善住宅部分嗎？輕鬆的比賽，仍然期待一些壓力。我猜今年節奏會有所改善。但關於那篇文章的任何背景都會有幫助。

Yes, they're easier comps, but it's also the most global of the businesses inside that portfolio, Mike. So we're balancing off Europe, China and North America. And while the comps are easier in North America, we do expect some return to growth. We're not yet seeing the interest rate environment propel new housing starts and/or a lot more movements, which is usually key indicators to drive that business. But we're at levels now where we're definitely growing off of these compares in North America but we're anticipating a little bit more choppier outcomes in China and Europe in that business. So net-net, probably slightly down, but getting closer to flat.

是的，它們更容易比較，但它也是該投資組合中最全球化的業務，麥克。所以我們正在平衡歐洲、中國和北美。雖然北美的競爭比較容易，但我們確實預期會出現一些成長。我們尚未看到利率環境推動新房開工和/或更多變動，而這通常是推動該業務的關鍵指標。但我們現在所處的水平肯定會比北美的這些比較有所增長，但我們預計中國和歐洲的該業務結果會更加不穩定。所以淨淨值可能略有下降，但越來越接近持平。

Makes sense. Appreciate that. And then a quick clarification as you said earlier, John, the expectation was for volume and price to be down. I'm assuming you mean that on a net basis and pricing is slightly up and volume as the majority of the downside. I just wanted to clarify.

說得通。感謝。然後快速澄清，正如您之前所說，約翰，預期數量和價格都會下降。我假設你的意思是在淨值基礎上，價格略有上漲，而成交量是主要的下跌因素。我只是想澄清一下。

That's correct. With respect to net price benefit and a contribution in line with the way that Bob shared it across the total Pentair portfolio. And the offset to that would be the volume, which would be the market challenges.

這是正確的。關於淨價格收益和貢獻，與鮑伯在整個濱特爾投資組合中分享的方式一致。對此的抵消將是數量，這將是市場挑戰。

The next question comes from Scott Graham with Seaport Research.

下一個問題來自海港研究公司的史考特‧格雷厄姆。

Just on -- 2 quickly. The fourth quarter price cost on the order side, I was just kind of wondering what happened there. That looks like there was some slippage. And does that reverse maybe in the first quarter or second quarter of this year?

快點——2。第四季的價格成本在訂單方面，我只是想知道那裡發生了什麼。看起來好像有些滑點。這種情況可能會在今年第一季或第二季發生逆轉嗎？

Yes. So a couple of dynamics there. I mean just as a reminder, price in Q4 does also reflect some of our early buy. So it's not the largest contribution to price in the quarter. Absent that, we were pretty much signaling that we would get closer to price offsetting cost versus having benefited substantially from price being much higher than costs in the first half of the year. So it came in line with expectations and I think as you head forward, as Bob said, we now expect it to be offsetting throughout 2024.

是的。所以有一些動態。我的意思是提醒一下，第四季的價格確實也反映了我們早期的一些購買。因此，這並不是本季對價格的最大貢獻。如果沒有這一點，我們幾乎是在暗示，我們將更接近價格抵銷成本，而不是從今年上半年遠高於成本的價格中獲得巨大收益。因此，它符合預期，我認為，正如鮑勃所說，隨著您的前進，我們現在預計它將在 2024 年全年得到抵消。

The next question comes from Jeff Hammond with KeyBanc Capital Markets Inc.

下一個問題來自 KeyBanc Capital Markets Inc. 的 Jeff Hammond。

So just on the early buy, I think there was some question on kind of how you're going to spread it 4Q, 1Q. I'm just wondering if you have more to go in 1Q? And then just I'm kind of the -- maybe just speak to brake fix, kind of how you're thinking about that market within the guide.

因此，就早期購買而言，我認為存在一些關於如何將其分散到第四季度、第一季的問題。我只是想知道第一季你是否還有更多要做的事情？然後我就是——也許只是談談煞車修復，就像你在指南中如何看待這個市場一樣。

Yes. Early buys came back to more normal levels in the fourth quarter. But again, as we typically do, that gets spread between Q4 and Q1. So in line with historically how it's done. In fact, the early buy component in terms of shipment in Q4 was probably a little bit less than historically what we've done.

是的。早期購買在第四季度恢復到更正常的水平。但正如我們通常所做的那樣，這會在第四季度和第一季之間傳播。因此符合歷史上的做法。事實上，就第四季的出貨量而言，早期購買的組件可能比我們歷史上所做的要少一些。

Yes. And on the brake fix, Jeff, I will concede that we probably have what I'd call a more cautious outlook. I would not call it conservatism, I call it more realistic. And we just don't know how the interest rate environment is going to affect the consumer being more thoughtful on what's discretionary, not discretionary in the pad. Clearly, we expect products like pumps and filters to be replaced as needed to keep the pool running. But some of your heaters, especially on the high end and/or some of your lighting could see some consumer discretion, push those off a quarter or 2. That's just our outlook. I don't say that that's right. I think it's better to take that flat and maybe air to the fact that if that doesn't happen, we're going to see a higher level of growth versus taking a more optimistic view and then having to reset the guide again to the lower end of the pool. So I would be very clear, I don't know. It's just what we have in our particular view.

是的。關於煞車修復，傑夫，我承認我們可能有我所說的更謹慎的前景。我不會稱之為保守主義，我稱之為更現實。我們只是不知道利率環境將如何影響消費者更考慮什麼是可自由支配的，而不是可自由支配的。顯然，我們希望根據需要更換泵浦和過濾器等產品，以保持泳池運作。但是，您的某些加熱器，尤其是高端加熱器和/或某些照明設備可能會受到消費者的一些判斷，將其推遲四分之一或兩個。這只是我們的展望。我並不是說那是對的。我認為最好採取平淡甚至空氣的事實，如果這種情況沒有發生，我們將看到更高水平的增長，而不是採取更樂觀的觀點，然後不得不再次將指南重置為較低水平泳池的盡頭。所以我很清楚，我不知道。這正是我們的獨特觀點。

Your next question comes from Brett Linzey with Mizuho.

您的下一個問題來自 Mizuho 的 Brett Linzey。

Wanted to come back to the capital allocation priorities. You noted the continued deleveraging path, but also the potential for share repurchase. I guess, what would be the gating factor there to drive that decision? And what would be the optimal leverage you'd be willing to flex for repurchases?

想回到資本配置的優先事項。您注意到了持續的去槓桿化路徑，以及股票回購的潛力。我想，推動這項決定的控制因素是什麼？您願意為回購而調整的最佳槓桿是多少？

Yes, based into the assumptions that we gave, the $100 million of interest expense and the share count, we have assumed share buyback resumes to offset dilution. So typically, Q1 is a negative free cash flow quarter, but we would also start a share buyback later in the year is what's based into our assumptions currently.

是的，根據我們給出的假設，即 1 億美元的利息支出和股票數量，我們假設恢復股票回購以抵消稀釋。因此，通常情況下，第一季的自由現金流為負，但我們也將在今年稍後開始股票回購，這是我們目前的假設的基礎。

And again, that's just to offset dilution at the moment. I think where we're at from a debt-to-EBITDA is prudent. I think at these particular interest rate levels, I think the focus still is on debt reduction. And the way we're going to look at incremental buyback or M&A is what long-term value to create for the share owner and therefore, which one is the best course of action.

再說一次，這只是為了抵消目前的稀釋。我認為我們的債務與 EBITDA 的比率是謹慎的。我認為在這些特定的利率水準上，我認為重點仍然是減少債務。我們看待增量回購或併購的方式是為股東創造什麼長期價值，因此哪一種是最好的行動方案。

Got it. And then I just wanted to circle back on the $75 million of transformation that's planned this year. Curious how that feathers across the individual segments as we model '24 and is this primarily from the Wave 1 measures and actions taken last year? Or are you doing more on the operational side in 2024?

知道了。然後我只想回顧今年計劃的 7500 萬美元的轉型。好奇我們在建模 24 世紀時如何在各個細分市場中體現這一點，這主要來自去年採取的第一波措施和行動嗎？或者說 2024 年你們會在營運方面做更多的事情嗎？

Primarily, the Wave 1 on the sourcing side, again, just as a reminder, Wave 1 last year, looked at electronics, motors, maintenance, repair and operations, packaging, logistics. So we're at the point where that will start making its way into the P&L and very early stages of Wave 2. Wave 2 looked at metals, moldings, resins, ocean rate and purchased finished goods. So I think we've got a nice cadence there of the Wave 1 reading out in 2024, and Wave 2 will straddle '24 and '25. We'll also start to see some benefits from both the pricing excellence and the operations.

主要是採購方面的第一波，再次提醒一下，去年的第一波關注的是電子、馬達、維修、維修和營運、包裝、物流。因此，我們現在正處於這個階段，它將開始進入損益表和第二波的早期階段。第二波專注於金屬、模製品、樹脂、海價和購買的製成品。因此，我認為我們在 2024 年讀出第一波的節奏很好，而第二波將跨越 24 年和 25 年。我們也將開始看到卓越定價和營運帶來的一些好處。

On the pricing excellence, we've now rolled the strategic playbook out to almost all of the different categories and [GMs]. So again, good cadence there from a transformation perspective.

關於卓越的定價，我們現在已將策略手冊推廣到幾乎所有不同的類別和[總經理]。再說一遍，從轉型的角度來看，節奏很好。

Brett, we've got to leave some information for Analyst Day to make sure everybody attends, comes and listens to us. And we'll go in a lot more detail as to how we see all of those ways working and connect it to what the segment expectations will be as well.

布雷特，我們必須為分析師日留下一些訊息，以確保每個人都參加、來聽我們的演講。我們將更詳細地介紹我們如何看待所有這些方式的運作，並將其與細分市場的期望聯繫起來。

The next question comes from Andrew Krill with Deutsche Bank.

下一個問題來自德意志銀行的安德魯·克里爾。

So I want to go back to pricing. I wonder -- I know you said about 2 points net for the company. But just wondering, do any of the 3 segments kind of benefit more or less relative to that 2%? And are these pricing increases, those base are to put through? Or does it require more price kind of midyear or at some point in the year?

所以我想回到定價。我想知道 - 我知道你說公司淨值約 2 分。但只是想知道，這 3 個細分市場中的任何一個相對於那 2% 來說是否受益更多或更少？這些價格上漲是否需要落實？或者在年中或一年中的某個時候是否需要更高的價格？

It doesn't vary greatly across the segments as far as the expectation. And yes, they are all announced and implemented at this stage.

就預期而言，各個細分市場之間的差異並不大。是的，它們都是在這個階段宣布和實施的。

The next question comes from Joe Giordano with TD Cowen.

下一個問題來自 Joe Giordano 和 TD Cowen。

So on the Manitowoc Ice, obviously, the growth there on an organic basis, like looks a lot different than the Water Solutions business as a whole. Can you kind of go through especially can you like buckets of what drove that? Like how much was just backlog? How much was like -- was priced in Manitowoc different versus like the underlying Water Solutions, 3 points for the year? Like how much were there like revenue synergies with the filtration reading out already into '23. Just if you can kind of just break those into large buckets for growth there.

因此，顯然，馬尼托瓦克冰廠的有機成長看起來與整個水解決方案業務有很大不同。您能具體講一下嗎？尤其是您喜歡驅動這一切的原因嗎？例如積壓了多少？馬尼托瓦克的定價與基礎水解決方案的定價有何不同，全年 3 個百分點？就像 23 年已經公佈的過濾收入協同效應有多少一樣。只要你能把它們分成大桶，以促進那裡的成長。

Yes. Let me simplify it. I mean, right now, we're seeing great traction, especially with Manitowoc and also then the filtration of Everpure through distributors into key accounts and also working our way through synergies there. I just want to mention that our services business had a very large project that it worked in 2022, which was for a large customer, the install of frozen carbonated beverages, and we ran up against a year-over-year headwind in that business in Q4. But if you actually look at the filtration and the Manitowoc contributing nicely and it's just offset slightly by the headwind of the services business.

是的。讓我簡化一下。我的意思是，現在，我們看到了巨大的吸引力，特別是與馬尼托瓦克合作，然後透過經銷商將愛惠純過濾到關鍵客戶，並透過那裡的協同效應來努力。我只想提一下，我們的服務業務有一個非常大的項目，它在 2022 年開始運作，該項目是為一個大客戶安裝冷凍碳酸飲料，我們在該業務中遇到了同比逆風。Q4。但如果你真的看看過濾和馬尼托瓦克的貢獻，它只是被服務業務的逆風略微抵消了。

The next question comes from Andy Kaplowitz with Citigroup.

下一個問題來自花旗集團的安迪·卡普洛維茨。

John, could you give us a little more color into your industrial CapEx [exposed] businesses with in Flow? I think you have the segment up low single digits for '24. Industrial businesses look good in Q4. So what are you seeing in Flow? And then how are you thinking about your commercial businesses there as well?

John，您能為我們介紹一下您在 Flow 中的工業資本支出（暴露的）業務嗎？我認為 24 年該細分市場的漲幅為低個位數。工業企業第四季表現良好。那麼您在 Flow 中看到了什麼？那麼您如何看待您在那裡的商業業務？

Yes. So thank you for the question. I mean, we've had pretty nice steady order rates and steady deliveries. And what we do is very, very important because we're turning waste in the value for a lot of our key customers. And we're seeing continued investment in that because it drives productivity for them. It's also a big sustainability play for them. So it's an area where doing the right thing for the plan, it also means a really good value for the customer.

是的。謝謝你的提問。我的意思是，我們的訂單率和交貨量都非常穩定。我們所做的事情非常非常重要，因為我們正在為許多主要客戶帶來價值浪費。我們看到這方面的持續投資，因為這提高了他們的生產力。這對他們來說也是一場永續發展的大戲。因此，在這個領域，為計劃做正確的事情，也意味著為客戶帶來真正的價值。

And so we've seen a steady order view there, and we feel like we're well positioned heading into 2024. On the commercial side, our larger pump business has benefited from expansion, what I call mainly infrastructure types of projects and the continued build-out in North America related to data centers, warehouses, et cetera, and we continue to see that trend as we enter 2024, holding up nicely as well.

因此，我們在那裡看到了穩定的訂單視圖，我們覺得進入 2024 年我們處於有利位置。在商業方面，我們更大的泵業務受益於擴張，我稱之為主要是基礎設施類型的項目和持續的北美與資料中心、倉庫等相關的建設不斷增加，進入2024 年我們將繼續看到這一趨勢，並且也保持良好勢頭。

The next question comes from Deane Dray with RBC Capital Markets.

下一個問題來自加拿大皇家銀行資本市場部的迪恩‧德雷 (Deane Dray)。

Just want to follow up there while we're talking about the formerly known as industrial flow technology, is there anything -- might just be cosmetic, but is there anything to read into the renaming as Flow? And just in answering Andy's question, the point of the business today for Pentair is more the focus on residential, commercial and the opportunities in Pool. And it seems less about industrial and data centers and so forth. And maybe I'm just reading too much into it. But my sense is, are you still the natural owner for this business? And is there any potential that you'd consider a separation?

只是想跟進一下，當我們談論以前稱為工業流程技術時，有什麼東西 - 可能只是裝飾性的，但是有什麼可以理解的重命名為流程嗎？在回答安迪的問題時，濱特爾今天的業務重點更關注住宅、商業和泳池的機會。而且它似乎不太涉及工業和數據中心等。也許我只是讀太多了。但我的感覺是，你仍然是這家企業的自然所有者嗎？您是否有可能考慮分居？

Yes. I know -- I appreciate the question, Deane. And we'll spend a little bit of time on this at the Analyst Day in March, but just to share with you how I'm thinking. The relabeling of Flow was actually more of a branding exercise. We want to have a web presence where we could tell our story and Flow represents 99.99% of everything we do in the formal industrial Flow technologies. We just didn't think worked as a naming nomenclature. So that's all it was. It's also shorter, which makes producing reports easier, and that's a big deal, right?

是的。我知道——我很欣賞這個問題，迪恩。我們將在三月的分析師日花一些時間討論這個問題，但只是為了與您分享我的想法。 Flow 的重新命名其實更多的是一種品牌推廣活動。我們希望在網路上講述我們的故事，而 Flow 代表了我們在正式工業 Flow 技術中所做的一切的 99.99%。我們只是認為它不能作為命名術語。這就是全部了。它也更短，這使得產生報告變得更容易，這是一件大事，對吧？

But ultimately, Deane, the way I think of the company is we're $1.5 billion in separations and membrane technologies. We're about $1.5 billion of pumps across the enterprise. And then even some of our specialty applications like heating and cooling of ice, a rising $800 million, which leaves you a couple of $100 million of lighting and $100 million of other.

但歸根結底，迪恩，我對公司的看法是我們在分離和膜技術領域擁有 15 億美元的資產。我們整個企業的泵浦價值約為 15 億美元。然後，甚至我們的一些特殊應用，例如冰的加熱和冷卻，也增加了 8 億美元，這意味著您可以節省 1 億美元的照明費用和 1 億美元的其他費用。

So when you think of the portfolio, we're not geared to residential other than that's where our dealer base is, and that's where our strength and our presence has been generally accepted around our brands. But as a reminder, we do a couple of $100 million of industrial wastewater today, and that's in the Flow side and we'll continue to build out that capability and technology to continually take advantage of water reuse projects around the world.

因此，當你想到產品組合時，我們並不適合住宅，除了我們的經銷商基地所在的地方，而這就是我們的實力和影響力已被我們的品牌普遍接受的地方。但提醒一下，我們今天處理了價值 1 億美元的工業廢水，這是在 Flow 方面，我們將繼續發展這種能力和技術，以持續利用世界各地的水回用項目。

So, you know it, we are -- we believe this business naturally fits and we're going to demonstrate that we use those membranes that get -- that are used for industrial wastewater applications, we're bringing those back into the residential applications, and we think it's going to give us a differentiated technology advantage as we do so. So really excited about the cross-pollination of technology and really excited about how the segments are working together while also maximizing what we think is the revenue opportunities within their individual swim lanes.

所以，你知道，我們 - 我們相信這項業務自然適合，我們將證明我們使用那些用於工業廢水應用的膜，我們將把它們帶回住宅應用，我們認為這樣做將為我們帶來差異化的技術優勢。我們對科技的交叉授粉感到非常興奮，對各部門如何協同工作同時也最大化我們認為在各自泳道內的收入機會感到非常興奮。

The next question comes from Steve Tusa with JPMorgan.

下一個問題來自摩根大通的史蒂夫·圖薩。

The -- just on this productivity number, can you just quantify how much investments you're throwing in there? Just roughly.

- 僅根據這個生產力數字，您能否量化您投入了多少投資？只是大概。

Not a lot. I just -- if you thought about $10 million to $20 million of reinvestment into the areas of sales and marketing, innovation, digitization, capturing data upstream and bringing that data to help our dealers be successful and then really just automating the experience between our dealers and our distributors and us are the 2 biggest opportunities we have. And then we've got some excitement around 3 or 4 of these innovation projects that we'll talk about further, Steve, at the Analyst Day. And I want to continue to invest in them because I think they could be game changers in the long haul. So I'm really pleased with the level of transformation we're realizing, and these are good businesses that we want to add a little bit of investment back into.

不是很多。我只是——如果你考慮在銷售和行銷、創新、數位化、捕獲上游數據並利用這些數據幫助我們的經銷商取得成功等領域再投資1000 萬到2000 萬美元，然後真正實現我們經銷商之間的體驗自動化我們的經銷商和我們自己是我們擁有的兩個最大的機會。然後，我們對其中 3 或 4 個創新項目感到興奮，史蒂夫，我們將在分析師日進一步討論這些項目。我想繼續投資它們，因為我認為從長遠來看它們可能會改變遊戲規則。因此，我對我們正在實現的轉型水平感到非常滿意，這些都是我們希望重新投入一點投資的好企業。

You should have thrown AI in there. You missed the opportunity. But on that number, so I guess...

你應該把人工智慧放在那裡。你錯過了機會。但就這個數字而言，我猜...

But you (inaudible) it for me, Steve. Now it's in the transcript. So thank you.

但你（聽不清楚）是為了我，史蒂夫。現在已經寫在文字記錄裡了。所以謝謝。

I guess, though, I thought that the messaging around productivity was more bullish than I guess, a $90 million growth number, if I just add back $20 million. Am I missing something there? Is there just like conservatism on the way some of that's coming through? I thought the productivity number you were messaging was higher than that.

不過，我認為圍繞生產力的訊息比我想像的更加樂觀，如果我再加上 2000 萬美元，成長數字將達到 9,000 萬美元。我在那裡錯過了什麼嗎？其中一些事情的發展過程中是否存在類似的保守主義？我認為您發送的訊息中的生產力數字比這更高。

Yes. I hate ever using the word conservatism. I think we definitely have a funnel that would suggest we could realize more. And certainly at the upper end of the range, we would be realizing more. So I think right now, as we sit here and we don't see any definitive movement in interest rates for the rest of the year, we haven't planned on any in this forecast. We think we're well balanced in the way we're positioning this.

是的。我討厭使用保守主義這個詞。我認為我們肯定有一個漏斗，可以表明我們可以實現更多。當然，在這個範圍的上限，我們會意識到更多。所以我認為，現在，當我們坐在這裡，我們沒有看到今年剩餘時間利率有任何明確的變動時，我們在這個預測中沒有任何計劃。我們認為我們的定位方式非常平衡。

This concludes our question-and-answer session. I would like to turn the conference back over to John Stauch, President and Chief Executive Officer, for any closing remarks.

我們的問答環節到此結束。我想將會議轉回總裁兼執行長約翰·斯托奇 (John Stauch) 發表閉幕詞。

Well, thank you for joining the call today. In closing, I want to reiterate some key themes on Slide 27.

好的，感謝您今天加入通話。最後，我想重申投影片 27 上的一些關鍵主題。

First, our balanced water portfolio and transformation initiatives continue to drive significant margin expansion in 2023.

首先，我們平衡的水務投資組合和轉型措施將繼續推動 2023 年利潤率大幅成長。

Second, we initiated 2024 guidance with expected growth in sales and profitability, reflecting confidence in our strategy and execution across the company.

其次，我們啟動了 2024 年指導，預計銷售額和獲利能力將成長，這反映出對整個公司的策略和執行的信心。

Third, our transformation initiatives have gained momentum in 2023 with expectations to drive further margin expansion in 2024.

第三，我們的轉型措施在 2023 年取得了勢頭，預計將在 2024 年推動利潤率進一步擴大。

And finally, we believe our focused growth strategy and solid execution are building a solid foundation for long-term growth, profitability and shareholder value. Drew, that does conclude the call.

最後，我們相信，我們專注的成長策略和紮實的執行力正在為長期成長、獲利能力和股東價值奠定堅實的基礎。德魯，電話會議到此結束。

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。