Regal Rexnord Corp (RRX) 2023 Q1 法說會逐字稿

Hello, and welcome to the Regal Rexnord First Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

您好，歡迎參加 Regal Rexnord 2023 年第一季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Robert Barry, VP, Investor Relations. Please go ahead.

我現在想將會議交給投資者關係副總裁羅伯特·巴里 (Robert Barry)。請繼續。

Great. Thank you, operator. Good morning, and welcome to Regal Rexnord's First Quarter 2023 Earnings Conference Call. Joining me today are Louis Pinkham, our Chief Executive Officer; and Rob Rehard, our Executive Vice President and Chief Financial Officer. I'd like to remind you that during today's call, you may hear forward-looking statements related to our future financial results, plans and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release and then, our reports filed with the SEC, which are available on regalrexnord.com.

偉大的。謝謝你，接線員。早上好，歡迎參加 Regal Rexnord 2023 年第一季度收益電話會議。今天加入我的是我們的首席執行官 Louis Pinkham；以及我們的執行副總裁兼首席財務官 Rob Rehard。我想提醒您，在今天的電話會議中，您可能會聽到與我們未來財務業績、計劃和業務運營相關的前瞻性陳述。由於多種因素，我們的實際結果可能與預測或暗示的結果存在重大差異，我們在今天的新聞稿中更詳細地描述了這些因素，然後我們向 SEC 提交了報告（可在 regalrexnord.com 上獲取）。

On Slide 3, we state that we are presenting certain non-GAAP financial measures that we believe are useful to our investors, and we have included reconciliations between the non-GAAP financial information and the GAAP equivalent in the press release and in these presentation materials. Turning to Slide 4. Let me briefly review the agenda for today's call. Louis will lead off with his opening comments. Rob Rehard will then provide our first quarter financial results in more detail, and provide an update to our 2023 guidance. We will then move to Q&A, after which, Louis will have some closing remarks. And with that, I'll turn the call over to Louis.

在幻燈片 3 中，我們聲明我們正在呈現某些我們認為對投資者有用的非 GAAP 財務指標，並且我們在新聞稿和這些演示材料中納入了非 GAAP 財務信息與 GAAP 同等信息之間的調節表。轉向幻燈片 4。讓我簡要回顧一下今天電話會議的議程。路易斯將首先發表開場白。然後，Rob Rehard 將更詳細地提供我們第一季度的財務業績，並更新我們的 2023 年指導。然後我們將進入問答環節，之後路易斯將發表一些結束語。然後，我會將電話轉給路易斯。

Great. Thanks, Rob, and good morning, everyone. Thanks for joining us to discuss our first quarter earnings, to get an update on our business, and for your continued interest in Regal Rexnord. Before getting into our first quarter results, I would like to spend a few minutes on our recent acquisition of Ultra, which we closed expeditiously on March 27. I will begin by extending an enthusiastic welcome to our new Regal Rexnord colleagues who joined us from Ultra. We are extremely excited about how together as part of a larger and strategically better positioned one Regal Rexnord team, we can accelerate our company's ongoing transformation into a faster growing and more profitable enterprise.

偉大的。謝謝羅布，大家早上好。感謝您加入我們，討論我們第一季度的收益，了解我們業務的最新情況，並感謝您對 Regal Rexnord 的持續關注。在介紹第一季度業績之前，我想花幾分鐘時間介紹一下我們最近對 Ultra 的收購，該收購已於 3 月 27 日迅速完成。首先，我對從 Ultra 加入我們的新 Regal Rexnord 同事表示熱烈歡迎。作為規模更大、戰略定位更佳的 Regal Rexnord 團隊的一員，我們能夠加速公司不斷轉型為一家發展更快、利潤更高的企業，對此我們感到非常興奮。

For the second time in 2 years, we have thoughtfully deployed capital to effect a positive step change in our business, with so much progress in such a short period of time, I would like our key stakeholders to pause for a moment and take stock of what Regal Rexnord has become. One of the most impactful elements of our transformation is the evolution of our sales mix by application. As you can see in the chart on the left, the Regal Rexnord portfolio is now weighted to automation, power transmission and industrial powertrain solutions, which together represent over 60% of our sales. These are businesses with highly attractive growth and margin dynamics, underpinned by differentiated technology that customers value.

兩年來，我們第二次深思熟慮地部署資本，以實現我們業務的積極變革，在如此短的時間內取得如此大的進展，我希望我們的主要利益相關者暫停片刻並評估一下Regal Rexnord 已成為什麼樣子。我們轉型中最具影響力的因素之一是我們按應用的銷售組合的演變。如左圖所示，Regal Rexnord 產品組合現在側重於自動化、動力傳輸和工業動力總成解決方案，這些解決方案合計占我們銷售額的 60% 以上。這些業務具有極具吸引力的增長和利潤動態，並以客戶重視的差異化技術為基礎。

The remaining portfolio is a combination of Air Moving subsystems and motors, which after 3 years of 80/20 management and targeted R&D investments is now an offering that is defined by differentiated technologies and sold to customers whose needs are well aligned with our value proposition. Another way to think about how the Regal Rexnord portfolio has evolved, is to consider its exposure to markets with secular growth tailwinds illustrated on the middle chart. The exposure of the legacy portfolio plus Ultra raises our exposure to secular growth markets to over 35%.

剩下的產品組合是 Air Moving 子系統和電機的組合，經過 3 年的 80/20 管理和有針對性的研發投資，現已成為由差異化技術定義的產品，並出售給需求與我們的價值主張非常一致的客戶。思考 Regal Rexnord 投資組合如何演變的另一種方法是考慮其對具有長期增長順風的市場的敞口，如中間圖表所示。傳統投資組合加上 Ultra 的敞口將我們對長期增長市場的敞口提高到 35% 以上。

If you also include the residential HVAC market with its consistent march towards higher minimum energy efficiency standards that require consistent innovation in motors, blowers and total systems design, our secular exposure is just under 50%. Adjusting for the faster growth we foresee in these markets puts us on track to having over 50% of our sales, generated in secular growth markets by 2025. In short, our market exposure today is inherently stronger than it was, just a few years ago.

如果您還包括住宅 HVAC 市場，該市場不斷向更高的最低能效標準邁進，需要電機、鼓風機和整體系統設計的持續創新，那麼我們的長期暴露率略低於 50%。根據我們預計這些市場的更快增長進行調整，到 2025 年，我們有望實現 50% 以上的銷售額來自長期增長市場。簡而言之，我們今天的市場敞口本質上比幾年前更強。

The chart on the right illustrates our evolution by revenue through the addition of Rexnord PMC, then Arrowhead and now Ultra, along with organic growth in 2021 and 2022 of 17% and 9%, respectively. We are poised to be a $7 billion plus enterprise this year. Regal Rexnord is now positioned to serve a wider range of customers and end markets do so with a broader portfolio of more technology-rich subsystems and digital solutions and go-to-market with enhanced channel positions that support higher service levels for our customers. Said another way, our transformation allows us to start approaching customers as a trusted adviser, a dramatic evolution from our legacy market position as more of a component provider.

右圖展示了我們通過添加 Rexnord PMC、然後是 Arrowhead 和現在的 Ultra 實現的收入演變，以及 2021 年和 2022 年分別實現 17% 和 9% 的有機增長。我們今年有望成為一家價值超過 70 億美元的企業。 Regal Rexnord 現在的定位是通過技術更豐富的子系統和數字解決方案組成的更廣泛的產品組合來服務更廣泛的客戶和終端市場，並通過增強的渠道地位進入市場，為客戶提供更高的服務水平。換句話說，我們的轉型使我們能夠開始以值得信賴的顧問的身份接觸客戶，這與我們作為組件供應商的傳統市場地位發生了巨大的演變。

Our customers are experiencing this evolution through our enhanced offering and service levels. Our shareholders will experience it through better organic growth, higher margins and stronger free cash flow. Our associates will experience it as a member of a team that is expanding its most important customer relationships, and is poised to more consistently win in the markets we serve. One way we plan to help investors better appreciate how legacy Regal plus Ultra leads to growth acceleration, is to spend a few minutes on each of our next several earnings calls introducing the product portfolios of our principal automation businesses.

通過我們增強的產品和服務水平，我們的客戶正在經歷這種演變。我們的股東將通過更好的有機增長、更高的利潤率和更強的自由現金流來體驗這一點。我們的員工將作為團隊成員體驗到這一點，該團隊正在擴大其最重要的客戶關係，並準備在我們服務的市場中更加持續地獲勝。我們計劃幫助投資者更好地了解傳統 Regal plus Ultra 如何加速增長的一種方法是，在接下來的幾次財報電話會議上，每次都花幾分鐘時間介紹我們主要自動化業務的產品組合。

I will start this quarter with Kollmorgen, our factory automation and controls business. The Kollmorgen business designs and manufactures high-performance motion systems for applications that include factory automation, aerospace and defense, automated guided vehicles or AGVs, medical imaging and robotics among others. Its principal products pictured on the right include machine control hardware and software plus highly engineered Servo and Stepper drives and motors. The business competes on its differentiated technology in precision engineering and focuses on customers in high-growth markets that have demanding performance standards. The fact that customers can count on Kollmorgen products to reliably perform to exacting specifications and do so consistently over time, has created extremely sticky customer relationships and annuity revenue streams with attractive margins.

我將從本季度開始與科爾摩根（Kollmorgen）合作，這是我們的工廠自動化和控制業務。科爾摩根業務部門為工廠自動化、航空航天和國防、自動導引車或 AGV、醫學成像和機器人等應用設計和製造高性能運動系統。右圖所示的其主要產品包括機器控制硬件和軟件以及精心設計的伺服和步進驅動器和電機。該業務憑藉其在精密工程領域的差異化技術展開競爭，並專注於具有苛刻性能標準的高增長市場中的客戶。事實上，客戶可以信賴科爾摩根的產品能夠可靠地滿足嚴格的規格要求，並且隨著時間的推移始終如一地做到這一點，這已經創造了極其粘性的客戶關係和具有有吸引力利潤的年金收入流。

We see so much opportunity to help a business like Kollmorgen grow faster. By leveraging the customer relationships, channel partners and global sales organization of a $7 billion global enterprise. We plan to bring Kollmorgen's offering to new customers and leverage its technology in a wider variety of applications, including as part of subsystems that include other Regal Rexnord products. A great example of where we are seeing such opportunities only 6 weeks in, is in our aerospace business where the legacy Regal and Kollmorgen teams are already collaborating on how best to leverage our expanded portfolio with our customers. I look forward to updating you on our progress, as we get further along, including once we define an outlook for Ultra sales synergies likely later this year.

我們看到了很多機會可以幫助像科爾摩根這樣的企業更快地發展。通過利用一家價值 70 億美元的全球企業的客戶關係、渠道合作夥伴和全球銷售組織。我們計劃將科爾摩根的產品帶給新客戶，並在更廣泛的應用中利用其技術，包括作為其他 Regal Rexnord 產品的子系統的一部分。一個很好的例子就是我們在僅僅 6 週內就看到了這樣的機會，那就是我們的航空航天業務，傳統的 Regal 和 Kollmorgen 團隊已經在與客戶合作，研究如何最好地利用我們擴展的產品組合。隨著我們的進一步發展，包括我們可能在今年晚些時候確定 Ultra 銷售協同效應的前景，我期待著向您通報我們的最新進展。

Now let's turn to the first quarter. Last night, we reported results that delivered on our prior commitment. Organic sales declined by 4% in the quarter. While we did see pressure from destocking and pockets of weaker underlying demand in PES. We also saw strong growth in AMC and industrial and solid performance in our IPS segment, driven by continued strong price realization, broad-based tailwinds from new products and rising industrial powertrain cross-selling synergies. The tailwinds we are seeing from our AMC and IPS teams executing PMC and Arrowhead sales synergies also bolsters my confidence, in our enhanced growth prospects with Ultra.

現在讓我們轉向第一季度。昨晚，我們報告了兌現我們先前承諾的結果。該季度的有機銷售額下降了 4%。雖然我們確實看到了去庫存帶來的壓力以及 PES 潛在需求疲軟的影響。在持續強勁的價格實現、新產品的廣泛推動力以及工業動力總成交叉銷售協同效應不斷增強的推動下，我們還看到 AMC 和工業領域的強勁增長以及 IPS 領域的穩健表現。我們從執行 PMC 和 Arrowhead 銷售協同效應的 AMC 和 IPS 團隊中看到的順風車也增強了我對 Ultra 增強增長前景的信心。

Our adjusted EBITDA margins in the quarter were solid, coming in at 19.7%, in line with our previously stated expectations. When comparing these results to the prior year, it is important to remember that the annual cost role provided a favorable impact in the prior year, but an unfavorable impact in the current year. Despite a modest top line decline, we saw resilient margin performance tied to our ongoing 80/20 and lean efforts and merger synergies. So perhaps the best example of our team's strong performance in the quarter is cash flow generation, underpinned by significant progress lowering working capital and inventory in particular.

本季度調整後的 EBITDA 利潤率穩定，為 19.7%，符合我們之前提出的預期。將這些結果與上一年進行比較時，重要的是要記住，年度成本作用對上一年產生了有利的影響，但對本年度產生了不利的影響。儘管收入略有下降，但我們看到了彈性的利潤率表現，這與我們持續的 80/20 和精益努力以及合併協同效應有關。因此，我們團隊本季度強勁表現的最好例子可能是現金流的產生，特別是在降低營運資本和庫存方面取得的重大進展。

In a quarter that typically faces seasonal headwinds on free cash flow, we delivered $174 million. That allowed us to end the quarter with net debt to adjusted EBITDA of 3.96 on track with our expectations. We are putting a particular emphasis on inventory reduction and on free cash flow generation more broadly, in order to delever our balance sheet quickly which includes tying a greater portion of our leaders variable compensation incentives to this goal. In short, what gets measured gets done. We will remain laser focused on cash flow generation and debt reduction to achieve our post '24 target of less than $2.5 million. A solid start to 2023 and for this strong execution pursued with a sense of urgency as well as continued adherence to our Regal Rexnord values, I want to say thank you to our Regal Rexnord associates around the world.

在自由現金流通常面臨季節性逆風的一個季度，我們交付了 1.74 億美元。這使得我們在本季度結束時淨債務調整後 EBITDA 為 3.96，符合我們的預期。我們特別強調庫存減少和更廣泛的自由現金流生成，以便快速降低我們的資產負債表槓桿，其中包括將我們領導者的大部分可變薪酬激勵措施與這一目標掛鉤。簡而言之，衡量的事情就完成了。我們將繼續專注於現金流生成和債務削減，以實現 24 世紀後低於 250 萬美元的目標。 2023 年有一個良好的開端，憑藉這種以緊迫感追求的強有力執行力以及對我們 Regal Rexnord 價值觀的持續堅持，我想對我們在世界各地的 Regal Rexnord 員工表示感謝。

Next, let's turn to orders. While our organic orders were down 9% in first quarter, this is slightly better performance than we anticipated and resulted in a book-to-bill for the quarter, just north of 1.0 and a marginal growth to our backlog. Destocking and market headwinds in our PES segment in particular residential HVAC, Pool Pump and certain short-cycle industrial markets posed a significant headwind, as expected. But performance elsewhere was on the whole, a bit stronger and included positive momentum in markets such as Arrow, energy, marine, solar and nonres construction.

接下來，讓我們轉向訂單。雖然我們第一季度的有機訂單下降了 9%，但這比我們預期的表現略好，導致本季度的訂單出貨比略高於 1.0，並且我們的積壓訂單略有增長。正如預期的那樣，PES 領域的去庫存和市場逆風，特別是住宅暖通空調、泳池泵和某些短週期工業市場，構成了重大逆風。但總體而言，其他地區的表現稍強一些，其中包括 Arrow、能源、海洋、太陽能和非雷斯建築等市場的積極勢頭。

We see this dynamic continuing into second quarter with destock and softer demand weighing on our consumer and short cycle industrial markets, but better performance in later cycle industrial, aerospace, energy, medical device and non-res markets. We also continue to model better orders performance in the back half, especially in the fourth quarter as destock headwinds likely abate, comps become easier and our growth initiatives continue to gain momentum. These include progress towards our goal of doubling our new product vitality by 2025, our maturing 80/20 growth initiatives, and rising PMC plus early Ultra cross-marketing synergies.

我們認為這種動態將持續到第二季​​度，庫存減少和需求疲軟給我們的消費者和短週期工業市場帶來壓力，但後期工業、航空航天、能源、醫療設備和非資源市場表現更好。我們還將繼續模擬下半年更好的訂單表現，特別是在第四季度，因為去庫存的阻力可能會減弱，競爭變得更加容易，而且我們的增長計劃繼續獲得動力。其中包括我們在實現到 2025 年將新產品活力翻倍的目標方面取得的進展、我們日漸成熟的 80/20 增長計劃，以及不斷上升的 PMC 和早期的 Ultra 交叉營銷協同效應。

The bottom line is our focus in 2023 and beyond will remain uncontrollable execution. Between our still ample backlog, a healthy new product pipeline, sizable M&A cost and cross-marketing synergies, significant ongoing 80/20 and lean initiatives and accelerating improvement in our working capital metrics. We have so many opportunities under our control to create value for our key stakeholders. Executing this self-help is where our focus will be, regardless of what the macro does.

底線是我們 2023 年及以後的重點將仍然是無法控制的執行。我們仍然擁有充足的積壓訂單、健康的新產品管道、可觀的併購成本和跨營銷協同效應、正在進行的重大 80/20 和精益計劃以及我們營運資本指標的加速改進。我們有很多機會可以為我們的主要利益相關者創造價值。無論宏做什麼，執行這種自助是我們的重點。

And with that, I'll now turn the call over to Rob to take you through our first quarter performance, and our updated outlook for 2023, which now includes Ultra.

現在，我將把電話轉給 Rob，帶您了解我們第一季度的業績，以及我們更新的 2023 年展望，其中現在包括 Ultra。

Thanks, Louis, and good morning, everyone. I'll also begin by thanking our global team for their strong execution and by welcoming our new colleagues, joining us from Ultra. We're excited to have you on board and about where we plan to take the company together.

謝謝路易斯，大家早上好。首先，我還要感謝我們的全球團隊的強大執行力，並歡迎來自 Ultra 的新同事加入我們。我們很高興您的加入，也很高興我們計劃將公司帶到哪裡。

Before getting into our first quarter results, I'd like to discuss a few administrative items. First, as we announced, when we closed the Ultra transaction on March 27, we implemented a new segment structure concurrent with closing the transaction. For reference, our new segments are listed on the right-hand side of this slide, in green, along with the percentage of our pro forma 2022 sales, that they represent. How we map to these new segments from our old structure is detailed on the left. In the appendix of this earnings call slide presentation, we provided segment financials for 2022 by quarter, for our legacy Regal Rexnord businesses under this new segment structure.

在討論第一季度業績之前，我想討論一些管理事項。首先，正如我們所宣布的，當我們於 3 月 27 日結束 Ultra 交易時，我們在完成交易的同時實施了新的細分結構。作為參考，我們的新細分市場以綠色顯示在這張幻燈片的右側，以及它們所代表的預計 2022 年銷售額的百分比。左側詳細介紹了我們如何從舊結構映射到這些新片段。在本財報電話會議幻燈片演示文稿的附錄中，我們按季度提供了 2022 年新部門結構下的傳統 Regal Rexnord 業務的部門財務數據。

I would also like to remind you that while we are reporting our Q1 results under this new segment structure, these results are only for our legacy Regal Rexnord business. Because we closed the acquisition of Ultra in the last week of the first quarter, and that period's impact is considered immaterial to our first quarter performance. Those few days of Ultra's Q1 performance will be reported with our second quarter results. We estimate the impact of this shift to be roughly $0.06 of adjusted earnings per share that will be included in our second quarter results.

我還想提醒您，雖然我們在這個新的部門結構下報告第一季度的業績，但這些結果僅適用於我們的傳統 Regal Rexnord 業務。因為我們在第一季度的最後一周完成了對 Ultra 的收購，而這一時期的影響被認為對我們第一季度的業績並不重要。 Ultra 第一季度業績的這幾天將與我們第二季度的業績一起報告。我們估計這一轉變對調整後每股收益的影響約為 0.06 美元，該影響將包含在我們第二季度的業績中。

Now, let's proceed to discussing our first quarter results by segment. Starting with automation and motion control, or AMC, organic sales in the first quarter were up 11.7% from the prior year. The result reflects growth in data center, aerospace and food and beverage markets. Adjusted EBITDA margin in the quarter for AMC was 23%, up 290 basis points versus the prior year, factoring benefits from price, mix and volume. Orders in AMC for the quarter were down 4% on a daily FX neutral basis. Book-to-bill in the quarter was 1.1. In April, book-to-bill tracked at roughly 0.9 inclusive of the Ultra business.

現在，讓我們繼續按部門討論第一季度的業績。從自動化和運動控制 (AMC) 開始，第一季度的有機銷售額比去年同期增長了 11.7%。這一結果反映了數據中心、航空航天以及食品和飲料市場的增長。考慮到價格、產品組合和銷量帶來的效益，AMC 本季度調整後 EBITDA 利潤率為 23%，比上年增長 290 個基點。按日匯率中性計算，本季度 AMC 訂單下降 4%。本季度的訂單出貨比為 1.1。 4 月份，包括 Ultra 業務在內，訂單出貨比約為 0.9。

Our AMC business is more of a long-cycle business, and therefore, order patterns do tend to be a bit lumpy. In fact, overall comparable backlog for AMC is up, roughly 3% year-over-year at the end of April. Turning to industrial powertrain solutions, or IPS, organic sales in the first quarter were up 1.3% from the prior year. Growth in the quarter reflects strong performance in global metals and mining, and energy end markets. Largely offset by project timing in alternative energy and weaker demand in agriculture and forestry markets. The adjusted EBITDA margin in the first quarter for IPS was 29.3%, up 290 basis points from the prior year. Margin benefited from merger synergies and lower freight costs. Segment orders for the first quarter were down 4% on a daily FX-neutral basis, tied largely to pressure in short-cycle industrial markets. Book-to-bill in the quarter was 1.0. In April, book-to-bill also tracked at 1.0, inclusive of the Ultra business.

我們的AMC業務更像是一個長周期業務，因此訂單模式確實有點不穩定。事實上，AMC 的總體可比積壓訂單有所增加，截至 4 月底，同比增長約 3%。談到工業動力總成解決方案（IPS），第一季度的有機銷售額比去年同期增長了 1.3%。本季度的增長反映出全球金屬和採礦以及能源終端市場的強勁表現。很大程度上被替代能源項目時機以及農業和林業市場需求疲軟所抵消。 IPS 第一季度調整後 EBITDA 利潤率為 29.3%，較上年同期增長 290 個基點。利潤率受益於合併協同效應和較低的貨運成本。在每日匯率中性的基礎上，第一季度的分部訂單下降了 4%，這主要與短週期工業市場的壓力有關。本季度的訂單出貨比為 1.0。 4 月份，訂單出貨比也達到 1.0，其中包括 Ultra 業務。

Turning to power efficiency solutions or PES. Organic sales in the first quarter were down 15.9% from the prior year. The decline was driven by significant channel destocking activity particularly in the North America Pool Pump, residential HVAC and shorter-cycle general commercial and general industrial markets in North America and China. This destock activity was fully anticipated, and is largely in line with the expectations that we outlined in our fourth quarter earnings call. Note, that we expect further headwinds from destocking in the second quarter, roughly on par with what we saw in the first quarter. But see this pressure moderating in the back half, especially in the fourth quarter. The adjusted EBITDA margin in the quarter for PES was 13.7%. This performance was as expected, and closely aligns to the guidance provided on our fourth quarter earnings call.

轉向電源效率解決方案或 PES。第一季度的有機銷售額比去年同期下降 15.9%。這一下降是由於渠道去庫存活動顯著，特別是北美泳池泵、住宅暖通空調以及北美和中國的較短週期一般商業和一般工業市場。這種去庫存活動是完全預料到的，並且基本上符合我們在第四季度財報電話會議中概述的預期。請注意，我們預計第二季度去庫存將帶來進一步的阻力，與第一季度的情況大致相同。但這種壓力在後半段有所緩解，尤其是在第四節。本季度調整後的 PES EBITDA 利潤率為 13.7%。這一業績符合預期，並且與我們第四季度財報電話會議上提供的指導密切一致。

As a reminder, when comparing to the prior year, in addition to lower volumes, this margin performance largely reflects the year-over-year impact of the annual cost roll, in that we saw a favorable impact last year and an unfavorable impact this year. As we look ahead to second quarter, we anticipate a significant sequential improvement in this segment's adjusted EBITDA margin to a mid-teens level. Shifting to orders. Orders in PES for the first quarter were down 20% on a daily FX-neutral basis. Book-to-bill in the quarter was 1.0. Book-to-bill in April also tracked at 1.0.

提醒一下，與上一年相比，除了銷量下降之外，這一利潤率表現在很大程度上反映了年度成本滾動的同比影響，因為我們去年看到了有利的影響，而今年則看到了不利的影響。展望第二季度，我們預計該部門調整後的 EBITDA 利潤率將顯著改善，達到中雙位數水平。轉向訂單。在每日匯率中性的基礎上，第一季度 PES 訂單下降了 20%。本季度的訂單出貨比為 1.0。 4 月份的訂單出貨比也為 1.0。

On the following slide, we highlight some additional financial updates. On the right side of this page, you'll see that we ended the quarter with a net debt to adjusted EBITDA ratio of 3.96x, which reflects impacts from Ultra financing net of our strong free cash flow generation in the first quarter. This metric is in line with the net leverage target we announced at close. Free cash flow in the quarter was very strong, coming in at $174.4 million. As Louis mentioned, the team did a great job, improving free cash flow performance in the quarter, owing in part to significant progress improving working capital and in particular, lowering inventories. We continue to see significant opportunities to augment our cash flow in 2023 by lowering inventory. As we previously stated, use of cash flow will remain heavily weighted to paying down our debt.

在下一張幻燈片中，我們重點介紹了一些其他財務更新。在本頁右側，您會看到本季度末我們的淨債務與調整後 EBITDA 的比率為 3.96 倍，這反映了超額融資對我們第一季度強勁的自由現金流產生的淨影響。該指標與我們收盤時宣布的淨槓桿目標一致。本季度的自由現金流非常強勁，達到 1.744 億美元。正如路易斯提到的，該團隊做得很好，改善了本季度的自由現金流表現，部分原因是在改善營運資本，特別是降低庫存方面取得了重大進展。我們繼續看到 2023 年通過降低庫存來增加現金流的重大機會。正如我們之前所說，現金流的使用仍將在償還債務方面發揮重要作用。

Moving to the outlook. On this slide, we are updating our weighted average 2023 end market growth expectation to include Ultra. Note, that our outlook for each legacy Regal Rexnord end market are unchanged. For reference, we have added a column in the center of this table, representing how our end market exposures changed by adding Ultra. Broadly speaking, our portfolio now has greater exposure to end markets with secular growth tailwinds. Regarding 2023 specifically, you can see in the last 2 columns on the right-hand side, that by adjusting our end market exposures to add Ultra, our weighted average estimated end market growth rate for 2023 rises by 50 basis points to down 3%. This benefit is captured in our estimates for Ultra accretion in 2023.

轉向展望。在這張幻燈片中，我們正在更新 2023 年終端市場加權平均增長預期，將 Ultra 包括在內。請注意，我們對每個傳統 Regal Rexnord 終端市場的展望均未改變。作為參考，我們在此表的中心添加了一列，表示添加 Ultra 後我們的終端市場風險敞口如何變化。從廣義上講，我們的投資組合現在對具有長期增長順風的終端市場有更大的敞口。具體到2023年，您可以在右側的最後兩列中看到，通過調整我們的終端市場敞口以添加Ultra，我們2023年的加權平均估計終端市場增長率上升了50個基點，下降了3%。我們對 2023 年超級增長的估計中體現了這一優勢。

On this slide, we are updating our financial guidance to include Ultra. As you can see in this table, starting on the left, we present our outlook for revenue, adjusted EBITDA and adjusted earnings per share for our legacy Regal Rexnord business, which is not changing. In the next 2 columns, we define our expectations of how adding Ultra will impact our revenue, adjusted EBITDA and adjusted EPS in 2023. Note that these impacts only reflect our ownership of Ultra from the transaction closing date of March 27. The last 2 columns, simply had the outlooks for legacy Regal plus Ultra to arrive at our current guidance, which calls for revenue in a range of approximately $6.5 billion to $6.8 billion, adjusted EBITDA in a range of $1.4 billion to $1.5 billion and adjusted earnings per share in a range of $10.20 to $11.10.

在這張幻燈片中，我們正在更新我們的財務指南以將 Ultra 納入其中。正如您在此表中所看到的，從左側開始，我們介紹了我們傳統 Regal Rexnord 業務的收入、調整後 EBITDA 和調整後每股收益的前景，該業務並未發生變化。在接下來的 2 欄中，我們定義了添加 Ultra 將如何影響 2023 年我們的收入、調整後 EBITDA 和調整後 EPS 的預期。請注意，這些影響僅反映我們自 3 月 27 日交易截止日期起對 Ultra 的所有權。最後 2 欄，只是對傳統 Regal plus Ultra 的前景進行了展望，以達到我們目前的指導，要求收入在約 65 億至 68 億美元範圍內，調整後 EBITDA 在 14 億至 15 億美元範圍內，調整後每股收益為範圍為 10.20 美元至 11.10 美元。

At the bottom of the table are various below the line modeling items. For reference, our assumption is that Ultra will add $0.15 to $0.25 to our adjusted earnings per share and factor sales at Ultra being flat to up 100 basis points versus 2022 levels or slightly above our expectations for legacy Regal Rexnord. We have also factored approximately $20 million of cost synergies, which equates to about $40 million on an annualized run rate basis, exiting 2023. Finally, as you can see at the bottom of this slide, we are expecting free cash flow conversion of this year of at least 100%. Our expectation in dollar terms is to generate at least $600 million in free cash flow.

表格底部是各種線下建模項目。作為參考，我們的假設是 Ultra 將使我們調整後的每股收益增加 0.15 美元至 0.25 美元，而 Ultra 的因子銷售與 2022 年的水平持平至上升 100 個基點，或略高於我們對傳統 Regal Rexnord 的預期。我們還考慮了約 2000 萬美元的成本協同效應，這相當於 2023 年退出時的年化運行率約 4000 萬美元。最後，正如您在這張幻燈片底部看到的，我們預計今年的自由現金流轉換至少 100%。以美元計算，我們的預期是產生至少 6 億美元的自由現金流。

Lastly, in light of the closing the Ultra transaction simultaneously revising our segment structure, we decided to provide more specific expectations for our second quarter performance by segment, to make it easier for the investment community to understand our near-term financial expectations for the business. Note, that we are not planning to adopt this approach on a go-forward basis but felt it did make sense at this time. In the table presented on this slide, we provide second quarter revenue and adjusted EBITDA margin expectations for each of our segments, under our revised segment structure. The expectations outlined for adjusted EBITDA margin factor a significant sequential improvement in performance and include benefits from PMC and ultra M&A synergies, along with our ongoing 80/20 and lean initiatives.

最後，鑑於Ultra交易的完成同時修改了我們的分部結構，我們決定按分部對第二季度業績提出更具體的預期，以便投資界更容易了解我們對該業務的近期財務預期。請注意，我們不打算繼續採用這種方法，但認為目前它確實有意義。在這張幻燈片的表格中，我們提供了根據修訂後的部門結構，每個部門的第二季度收入和調整後的 EBITDA 利潤率預期。調整後的 EBITDA 利潤率預期會導致業績顯著連續改善，包括 PMC 和超併購協同效應以及我們正在進行的 80/20 和精益計劃帶來的好處。

In summary, we are continuing to air on the side of caution, as we forecast market-related performance for our legacy business and as we add the Ultra business to our outlook. However, we do have line of sight to significant cost synergies, along with other cost savings initiatives that are well within our control. We also continue to gain traction on our growth initiatives. And as I mentioned earlier, our portfolio now has greater exposure to end markets with secular growth tailwinds, which further strengthens our resiliency. So on the whole, we are very pleased with the way we ended Q1. And while, the macro outlook remains a bit uncertain as we enter Q2, our outlook for the company remains very positive, considering the tremendous amount of self-help we have in front of us, on growth, margin and cash flow.

總之，我們繼續保持謹慎態度，因為我們預測了我們傳統業務的市場相關業績，並將 Ultra 業務添加到了我們的前景中。然而，我們確實看到了顯著的成本協同效應，以及我們完全可控的其他成本節約舉措。我們的增長計劃也繼續受到關注。正如我之前提到的，我們的投資組合現在更多地接觸到具有長期增長順風的終端市場，這進一步增強了我們的彈性。總的來說，我們對第一季度的結束方式感到非常滿意。雖然進入第二季度時宏觀前景仍然有點不確定，但考慮到我們在增長、利潤率和現金流方面面臨著巨大的自助，我們對公司的前景仍然非常樂觀。

And with that, I would like to turn the call back to the operator, so we can take questions. Operator?

這樣，我想將電話轉回給接線員，以便我們可以回答問題。操作員？

(Operator Instructions) Today's first question comes from Mike Halloran with Baird.

（操作員說明）今天的第一個問題來自 Mike Halloran 和 Baird。

So a couple of questions here. First, just a lot of moving pieces. Last quarter, we would have talked about, call it, 8% year 1 type accretion, I think mid-teens for 2024 cumulatively for the Ultra transaction. Can you gave guidance for this 9 months? Can you just rightsize us relative to those expectations? And, if there are any puts and takes, what would be driving the change either way?

這裡有幾個問題。首先，有很多移動的部分。上個季度，我們曾討論過，稱之為 8% 年 1 型吸積，我認為 2024 年 Ultra 交易累計將達到 10% 左右。您能給這9個月的指導嗎？您能否根據這些期望調整我們的規模？而且，如果有任何調整和調整，什麼會推動這種變化呢？

Sure, Mike. Thanks for the question. So the -- first of all, the accretion outlined on the slides for the first 3 quarters of ownership. In the first 12 months, we would say maybe roughly expect about 4% to 6% accretion in that time frame. You referenced the 8% estimate that we talked about last quarter. And that assumed that we were only going to adjust at that point to get that 8% for the lower than originally assumed financing costs.

當然，邁克。謝謝你的提問。首先，幻燈片上概述了前三個季度所有權的增加。在前 12 個月中，我們粗略預計在該時間範圍內的增長約為 4% 至 6%。您提到了我們上季度討論過的 8% 估計值。假設我們此時只會進行調整，以低於最初假設的融資成本獲得 8% 的利率。

And now that we've got a more holistic view of Ultra's fundamentals and tax and other interest rate increases in that, we're seeing that look more like 4% to 6% over that 12-month period. Now, I think what's most relevant is that the tremendous accretion that we expect over the next few years, the value creation and getting to that $18 earnings per share forecast for 2025 remains very much intact. And so yes, we are a little bit behind kind of to start relative to that first 8% because of some of the assumptions that I mentioned. But very much still in line with that $18 earnings per share target that we put out there.

現在我們對 Ultra 的基本面以及稅收和其他利率的增長有了更全面的了解，我們看到在這 12 個月期間看起來更像是 4% 到 6%。現在，我認為最重要的是，我們預計未來幾年的巨大增長、價值創造以及 2025 年每股收益 18 美元的預測仍然完好無損。是的，由於我提到的一些假設，我們相對於前 8% 來說有點落後。但仍然非常符合我們設定的 18 美元每股收益目標。

Just to clarify, Rob, were those more below the line, so tax, interest rate was the biggest driver of that? And then, fundamentals may be slightly lower? Or do I have that backwards?

羅布，我想澄清一下，這些是否低於底線，那麼稅收、利率是最大的驅動因素？那麼，基本面可能會稍微低一些？或者我有這樣的倒退嗎？

It is mostly below the line that you're referencing. That is almost all of the difference and what we've changed in our estimate on accretion.

它主要位於您所引用的行下方。這幾乎就是我們對吸積估計的所有差異和改變。

Perfect. And then, I'll dovetail into the next question, I think. So the orders expecting, call it, stabilization in the next couple of quarters, better in the fourth quarter. What's underpinning that? What are you seeing from an environment perspective to get to there? And I suppose, obviously, you can see the destocking impact that's happening in the PS side now.

完美的。然後，我想我將切入下一個問題。因此，訂單預計未來幾個季度會趨於穩定，第四季度會更好。其基礎是什麼？從環境角度來看，您認為要實現什麼目標？我想，顯然，你現在可以看到 PS 方面正在發生的去庫存影響。

Is it mostly just clearing that out, and getting to a point where you're getting something more normalized relative to end market demand? Is this also holding true for your more short-cycle industrial type pieces? Just any context to understand the confidence would be great.

是否主要只是解決這個問題，並達到相對於終端市場需求更加正常化的程度？這也適用於您的短週期工業型產品嗎？任何能夠理解信心的背景都會很棒。

Yes. It's really all that you said, Mike. I think you summed it up nicely. The orders were slightly better in Q1. Actually, orders sequentially improved from Q4. We do think there's still destocking going on, especially in resi HVAC. A pool is only 1%, but it's clearly destocking going on in pool as well. That's really what gives us confidence that the bottom hit in Q2.

是的。這確實是你所說的，邁克。我認為你總結得很好。第一季度的訂單略有好轉。事實上，訂單比第四季度有所改善。我們確實認為庫存仍在減少，尤其是在住宅暖通空調領域。一個池的庫存只有 1%，但池中的庫存顯然也在減少。這確實讓我們對第二季度觸底充滿信心。

From a short-cycle industrial perspective, we are seeing some headwinds there, but I'll tell you that we still see from our distribution channels that our COGS to them, meaning our sales to them, are slowing a bit. But they're still seeing growth. And so we feel pretty good from even short cycle industrial. And then, when you look at the overall drivers of the business, early cycle is where I really focus most of my comments, mid and late, Ultra actually mixes us up, a bit more than mid and late. And when you look at some of the proxies that we use for overall market trends, general industrial, ISM is below 50, China PMI is up now. And so we're starting to see in second quarter, some strength there.

從短週期工業的角度來看，我們在那裡看到了一些阻力，但我會告訴你，我們仍然從我們的分銷渠道看到我們對他們的銷貨成本，這意味著我們對他們的銷售正在放緩。但他們仍然看到增長。因此，即使是短週期工業，我們也感覺非常好。然後，當你看看業務的整體驅動因素時，早期週期是我真正關注大部分評論的地方，中期和後期，Ultra 實際上將我們混合在一起，比中期和後期要多一點。當你看一下我們用於整體市場趨勢的一些指標時，一般工業、ISM 低於 50，中國 PMI 現在有所上升。因此，我們開始在第二季度看到一些實力。

Like I said, on industrial distribution, continued growth, but certainly caution. Resi HVAC bottoming out in second quarter. Nonres commercial, which is about 6% of our portfolio now, still strike. So we feel good there. Food and beverage strength more so on food. Beverage, a bit weaker, alternative energy strength. We like the space.

就像我說的，就產業佈局而言，持續增長，但肯定要謹慎。 Resi HVAC 在第二季度觸底。非商業商業目前約占我們投資組合的 6%，但仍在罷工。所以我們在那裡感覺很好。食品和飲料的強度更重於食品。飲料，稍弱一點，替代能源實力強。我們喜歡這個空間。

Actually, one of our customers came out stating that with IRA, their demand might be up more than 25% this year. And then, we like our aerospace position. 5% of our business is in aerospace and aerospace is definitely growing. And medical is growing. So again, Mike, we do think Q2 will be the bottom of our orders, and then we'll grow from there. I hope that helped.

事實上，我們的一位客戶表示，有了 IRA，今年他們的需求可能會增長 25% 以上。然後，我們喜歡我們的航空航天地位。我們 5% 的業務屬於航空航天領域，而且航空航天領域肯定在增長。醫療也在不斷增長。邁克，我們確實認為第二季度將是我們訂單的底部，然後我們將從那裡開始增長。我希望這有幫助。

The next question comes from Christopher Glynn with Oppenheimer.

下一個問題來自克里斯托弗·格林和奧本海默。

I did want to also comment on the free cash flow is very strong, obviously, Louis, you mentioned a little change in incentive compensation structure to channel efforts on debt reduction. I'm wondering, if there's kind of an interim accelerated aspect to that. Obviously, there's long-term emphasis on it too, but there's always trade-offs. So I'm wondering, how you're staging that -- and if we would expect similar quarters of magnitude to your first quarter free cash flow, maybe not every quarter this year, but yes.

我確實想評論自由現金流非常強勁，顯然，路易斯，你提到了激勵薪酬結構的一些變化，以引導減少債務的努力。我想知道是否有某種臨時加速的方面。顯然，也有長期的重點，但總是需要權衡。所以我想知道，你們是如何安排的——以及我們是否預計第一季度的自由現金流量將達到類似的水平，也許不是今年每個季度，但是的。

Yes, Chris. So thanks for your comments and thanks for your question. Specific to compensation, we do believe what gets measured gets done. Trade working capital is a measurement that we have had historically in all of our compensation measures. We've increased that from about 20% of the variable pay -- annual variable pay bonus to 35% for this year.

是的，克里斯。感謝您的評論並感謝您的問題。具體到薪酬方面，我們確實相信衡量的事情就會完成。貿易營運資本是我們歷史上所有補償措施中所採用的衡量標準。今年，我們將可變薪酬（年度可變薪酬獎金）的約 20% 提高到了 35%。

Will reassess at the end of this year, if we want to make a different change. But we felt it was important to make it very clear to our organization that we need to reduce our inventory and free up cash because we are on a laser focus of reducing our net debt to EBITDA to below 2.5x by the end of '24. So that was the whole rationale, and we feel good about first quarter performance.

如果我們想做出不同的改變，將在今年年底重新評估。但我們認為，重要的是要向我們的組織明確表示，我們需要減少庫存並釋放現金，因為我們的重點是到 24 年底將 EBITDA 的淨債務減少到 2.5 倍以下。這就是全部理由，我們對第一季度的表現感覺良好。

And I'll just add on, Chris, just on the inventory side. So, we talked about that we're estimating somewhere between $150 million to $200 million of cash generated from lowering our inventories in the year. We saw about $47 million of that come from inventory and contributed in the first quarter, which certainly puts us on a nice track for the rest of the year.

克里斯，我補充一下庫存方面的內容。因此，我們談到，我們預計今年通過降低庫存可以產生 1.5 億至 2 億美元的現金。我們看到其中約 4700 萬美元來自庫存並在第一季度貢獻，這無疑使我們在今年剩餘時間裡走上了良好的軌道。

As far as the cadence of cash, as we go through the year, normally, in the first and second quarter, it is a little lower and it starts to ramp up in the back half. I think, from a modeling perspective, you can assume that we'll see the remaining cash that kind of goes to that above $600 million in the year. Maybe it trends up, slightly more in the back half than the first half or at least from Q2 to Q3, in particular. But fairly flat line, as we go through the year.

就現金的節奏而言，隨著我們全年的發展，通常在第一季度和第二季度，它會稍低一些，並在下半年開始增加。我認為，從建模的角度來看，您可以假設我們今年將看到剩餘現金超過 6 億美元。也許它呈上升趨勢，後半段比上半年略多，或者至少從第二季度到第三季度，尤其如此。但隨著我們度過這一年，這條線相當平坦。

Rob, could you clarify what the $600 million reference was? I didn't catch it.

Rob，您能解釋一下 6 億美元的參考值是什麼嗎？我沒聽清。

Yes. During my prepared remarks, I mentioned that we expect to see free cash flows of at least $600 million in the year.

是的。在我準備好的發言中，我提到我們預計今年的自由現金流至少為 6 億美元。

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

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

Just on PES and the destocking, I mean, it seemed more stark than what we had in our models, I think you said in line. I think, 2Q typically is seasonally stronger, but you have it still muted. Just trying to understand kind of what you're building in for additional destock? And then, just the margin cadence and really activity -- your revenue cadence for this business as you look into the second half?

我的意思是，就 PES 和去庫存而言，這似乎比我們模型中的情況更加明顯，我想你是這麼說的。我認為，第二季度通常會季節性較強，但仍然很弱。只是想了解一下您正在構建什麼來額外減少庫存？然後，只是利潤節奏和真正的活動——當你展望下半年時，你的這項業務的收入節奏是什麼？

Yes. So Jeff, from a destock perspective, we definitely -- well, first of all, for Q1, we think Q1 hit exactly where we expected from a sales perspective for PES. When you think about the overall segment, it really -- it will end exactly with our guidance that we had given at the end of Q4.

是的。因此，傑夫，從去庫存的角度來看，我們肯定——首先，對於第一季度，我們認為第一季度完全達到了我們從 PES 銷售角度預期的水平。當你考慮整個細分市場時，它確實會以我們在第四季度末給出的指導完全結束。

Now, specific to what our view is on Q2 and going forward, we still believe there's destock pressure. We think we're probably in the sixth or seventh inning. We also believe there's a bit more caution than a couple of years ago in the consumer space. And so some underlying demand moderation, you certainly probably have read the -- our HVAC OEM customers saying down high single digits for the year. We're forecasting because we're a component supplier in, we're forecasting more low teens. And so, really very much aligned, we expect that Q3 will be slightly better than Q2 and that Q4 will return to orders growth.

現在，具體到我們對第二季度和未來的看法，我們仍然認為存在去庫存壓力。我們認為我們可能處於第六或第七局。我們還認為，在消費領域，人們比幾年前更加謹慎。因此，一些潛在的需求放緩，您當然可能已經讀過——我們的暖通空調 OEM 客戶表示今年的需求下降了高個位數。我們進行預測是因為我們是零部件供應商，我們預測會有更多的青少年。因此，實際上非常一致，我們預計第三季度將略好於第二季度，並且第四季度將恢復訂單增長。

Let me just add on, if I could, Jeff, for you, just a little bit on your question about margin performance, as we move forward. We provided the second quarter look by segment. But, let me give you a sense of where we see full year rate. So, how we see by segment, each of the segments are performing and where we expect their full year rate to land based on our current guidance. So, I'll just give you the 4 segments here.

傑夫，如果可以的話，讓我在我們前進的過程中為您補充一點關於利潤表現的問題。我們按細分市場提供了第二季度的情況。但是，讓我讓您了解一下我們對全年利率的看法。因此，我們如何按細分市場看待每個細分市場的表現，以及根據我們當前的指導，我們預計其全年增長率將達到什麼水平。所以，我在這裡只給你 4 個部分。

At the AMC, we expect them to be somewhere in the low 20s. So certainly a bit ahead of the second quarter expectations with sequential progression, as we move through the year. For IPS, we're thinking mid-20s, again, ahead of second quarter expectations that we laid out with nice progression. PES, which is specific to your question, high teens for the year, with strong sequential progression throughout the year, but more weighted towards the fourth quarter. And then industrial, low double digits, again, with nice sequential progression. So hopefully, that gives you a good sense of the margins that we're expecting as we move through the year.

在 AMC，我們預計他們會在 20 多歲左右。因此，隨著今年的進展，第二季度的預期肯定會比第二季度的預期提前一些。對於 IPS，我們再次考慮 20 多歲左右，比我們以良好進展制定的第二季度預期要早。 PES，這是針對您的問題的，今年處於高位，全年都有強勁的連續進展，但在第四季度的權重更大。然後是工業，低兩位數，再次，有很好的連續進展。希望這能讓您更好地了解我們在今年的預期利潤率。

Just on Ultra, I think, they reported their 4Q that was kind of in line with how we were modeling. And I think you said 1Q in line. Can you just talk about any puts and takes you're seeing in their businesses, anything acting better or worse? And then, just as you look at the accretion, what are you baking in for synergies for that first 9 months? I know public company costs kind of come out right away.

我認為，就在 Ultra 上，他們報告了第四季度的情況，這與我們的建模方式有點一致。我想你說的是 1Q。您能否談談您在他們的業務中看到的任何看跌期權和看跌期權，以及表現更好或更差的情況？然後，正如您看到的增長一樣，您正在為前 9 個月的協同效應做哪些準備？我知道上市公司的成本很快就會出來。

Yes. So let me touch on Ultra, first overall. We couldn't be more excited. As we closed, as we get to know the teams even more culturally, a great fit we feel really good at this point. As you know, we -- our integration teams worked together from both the Ultra side and the Regal Rexnord side for a few months, getting ready for close. We leverage the playbook from our PMC merger that went so well, and we hit the ground running on day 1.

是的。首先讓我談談 Ultra。我們非常興奮。當我們結束時，當我們在文化上更加了解團隊時，我們在這一點上感覺非常好。如您所知，我們的集成團隊在 Ultra 方面和 Regal Rexnord 方面一起工作了幾個月，為關閉做好準備。我們藉鑑了 PMC 合併的經驗，進展順利，我們在第一天就開始運作。

We're already finding ways early on, on how to collaborate and feel really excited as I said in my prepared remarks, we're not -- we're really excited about the $160 million of cost saves. We're more excited about the cross-marketing opportunities between the business and feel that, that's going to accelerate. One item that I will emphasize here is that Ultra did not at all run their business from an 80/20 perspective. And, we feel strongly that, that's going to help them in the way they prioritize both from a growth perspective and a service perspective.

我們已經很早就找到瞭如何合作的方法，正如我在準備好的發言中所說，我們感到非常興奮，我們對 1.6 億美元的成本節省感到非常興奮。我們對業務之間的交叉營銷機會感到更加興奮，並認為這將會加速。我在這裡要強調的一點是，Ultra 根本沒有從 80/20 的角度來經營他們的業務。而且，我們強烈認為，這將幫助他們從增長角度和服務角度確定優先順序。

So right now, we're very, very focused on understanding the evaluation, the analysis and then putting our plans together of how we're going to drive the Ultra business from an 80/20 perspective.

所以現在，我們非常非常專注於了解評估和分析，然後將我們的計劃放在一起，以了解如何從 80/20 的角度推動 Ultra 業務。

And I'll just add one other piece to that, and that is the second half of your question on synergies. We do expect to realize the $20 million of synergies for Ultra in the year, which would equate to a $40 million exit rate, as we exit '23. And so far on the PMC side, which we also have synergies flowing through, we realized about $10 million of synergies in the first quarter related to the PMC merger. We expect $45 million in the year from PMC-related synergies, which equates to about $120 million exit rate on PMC.

我將添加另一部分內容，這就是您關於協同效應的問題的後半部分。我們確實預計 Ultra 今年將實現 2000 萬美元的協同效應，這相當於我們在 23 年退出時的 4000 萬美元退出率。到目前為止，在 PMC 方面，我們也有協同效應，我們在第一季度實現了與 PMC 合併相關的約 1000 萬美元的協同效應。我們預計今年 PMC 相關協同效應將帶來 4500 萬美元的收入，相當於 PMC 退出率約 1.2 億美元。

So all of that said, summarized, would be about $65 million realized between both acquisitions in the year and about $160 million exit rate for synergies between both of those. Now, one thing to bear in mind is on the Ultra synergies in terms of modeling, where those would hit from a segment standpoint, you'd assume about 80% of that goes to IPS and about 20% of that goes to AMC. So hopefully, that helps.

因此，總而言之，今年兩次收購之間將實現約 6500 萬美元的收益，而兩項收購之間的協同效應退出率將達到約 1.6 億美元。現在，需要記住的一件事是建模方面的 Ultra 協同效應，從細分市場的角度來看，你會假設其中大約 80% 屬於 IPS，大約 20% 屬於 AMC。希望這會有所幫助。

And then, just any puts and takes in the base business, end markets for Ultra?

然後，Ultra 的基礎業務和終端市場中是否有任何看跌期權？

No. I mean the purpose of putting the slide in the deck was to give a perspective on our market assumptions. We absolutely think that the ultra markets mix us up, a bit stronger. Our original '23 assumptions was a weighted average market down 3.5%. Ultra weights us to 3%. We think the Ultra markets are likely down a couple of percent. And we're guiding right now that Ultra is going to be flat to up. So we feel good about their market positions and where they're going.

不，我的意思是，將幻燈片放在甲板上的目的是為了對我們的市場假設提供一個視角。我們絕對認為超級市場讓我們變得更加強大。我們最初的 23 年假設是加權平均市場下跌 3.5%。 Ultra 的權重為 3%。我們認為 Ultra 市場可能會下跌幾個百分點。我們現在的指導是，Ultra 將會從平到上。因此，我們對他們的市場地位和未來發展方向感到滿意。

The next question is from Nigel Coe with Wolfe Research.

下一個問題來自 Wolfe Research 的 Nigel Coe。

Just a quick one, just a follow-up to Jeff's sort of math on Ultra. So the EBITDA range you gave for Ultra on Slide 15. Does that include the synergies? I mean it's a small number, but just -- does that include the $20 million?

只是一個快速的，只是 Jeff 在 Ultra 上的數學運算的後續。那麼您在幻燈片 15 上給出的 Ultra 的 EBITDA 範圍。這包括協同效應嗎？我的意思是這個數字很小，但這包括 2000 萬美元嗎？

Yes, it does.

是的，它確實。

I just want to make sure. And then, on the sort of the power efficiency or the PE segments. I mean, if you look at the flat sequential sales, it implies maybe high-teens organic decline versus mid-teens in 1Q. Is that the right way to think about it? And does that flat sequential sales will be very unusual. So I'm just wondering, are we seeing even greater pressure on inventory. I think you said similar pressure. It feels like there's even greater pressure, what are you baking in for that? And then, just on that second half ramp, it seems like you're pointing towards like 20% plus margins in the back half of the year. Just as kind of what gets us from mid-teens to high teens.

我只是想確定一下。然後，關於功率效率或 PE 段的排序。我的意思是，如果你看一下連續銷售的持平情況，這意味著第一季度的有機銷售額可能會出現高十幾歲的有機下降。這是正確的思考方式嗎？連續銷售持平是否會很不尋常？所以我只是想知道，我們是否會看到庫存壓力更大。我想你也說過類似的壓力。感覺壓力更大了，你在承受什麼？然後，就在下半年的增長中，您似乎預計下半年的利潤率將達到 20% 以上。就像我們從十幾歲的孩子到十幾歲的孩子一樣。

Yes. So from a revenue perspective, we do believe there's going to be continued pressure on destocking in Q2, but no worse than what we're seeing in Q1. And again, that's why we're guiding to flat overall sales sequentially Q1 to Q2. Now, from a year-over-year perspective, I'll remind you that from a stacking perspective, the stack here is a compare of 40% growth on a 2-year stack in '22. And, so '23 Q2 is a tough compare. But yes, right now, we're not seeing any further deterioration. We're saying that yet. There is some destocking still to go, and that will allow us to clear it out in Q2, and in Q3 start to see some return to normalized revenue levels.

是的。因此，從收入角度來看，我們確實認為第二季度去庫存的壓力將持續存在，但不會比第一季度更糟。同樣，這就是為什麼我們指導第一季度到第二季度整體銷售額持平的原因。現在，從同比的角度來看，我要提醒您，從疊加的角度來看，這裡的疊加是與 22 年 2 年疊加 40% 的增長進行比較。而且，23 年第二季度是一個艱難的比較。但是，是的，目前我們沒有看到任何進一步惡化。我們還這麼說。仍有一些去庫存工作需要進行，這將使我們能夠在第二季度清除庫存，並在第三季度開始看到一些恢復到正常收入水平的情況。

And from a margin perspective, sure, we've absolutely see that the first half is heavily weighted by the volume that we're seeing that decline in volume, but also that the year-over-year impact of the cost roll hitting in that first quarter. But, you take that out, and you're right, in the back half of the year, we would expect to see the low 20s to get to that teens level by end of year. So your math is correct.

當然，從利潤率的角度來看，我們絕對看到上半年的成交量很大程度上受到了成交量下降的影響，而且成本滾動的同比影響也很大。第一季度。但是，如果你把它去掉，你是對的，在今年下半年，我們預計到年底，20 多歲的人會達到十幾歲的水平。所以你的數學是正確的。

And then, a quick follow-on with the industrial business. So, I can stick it by absence in the slides. Where are we in that divestment process?

然後，快速跟進工業業務。因此，我可以將其缺席粘貼在幻燈片中。我們在撤資過程中處於什麼位置？

Yes. I don't think too conspicuous since it's really only 8% of our sales and 4% of our EBITDA. But right now, with regards to where we are with the strategic review, there's not much we're ready to say at this point. We're continuing the review and expect to be able to provide an update on the process relatively soon.

是的。我認為這並不太引人注目，因為它實際上只占我們銷售額的 8% 和 EBITDA 的 4%。但目前，關於我們的戰略審查進展情況，我們目前還沒有準備好透露太多。我們正在繼續審查，並期望能夠相對較快地提供流程的更新。

(Operator Instructions) The next question comes from Julian Mitchell with Barclays.

（操作員說明）下一個問題來自巴克萊銀行的朱利安·米切爾。

There's been a lot of sort of multilayer questions. Maybe one, hopefully simple one for me. Just, when I'm thinking about the orders and sales, so are we assuming the orders year-on-year in Q2 are down sort of 9% or 10%, similar to the first quarter. And then, a sort of flattish in Q4 and then organic sales down kind of low single digits second and third quarter and maybe sort of close to flat by Q4. Is that the way to think about the year-on-year for orders in the sales?

有很多多層問題。也許有一個，希望對我來說很簡單。只是，當我考慮訂單和銷售額時，我們是否假設第二季度的訂單同比下降 9% 或 10%，與第一季度類似。然後，第四季度的銷量持平，然後第二季度和第三季度的有機銷售額下降了低個位數，到第四季度可能接近持平。銷售訂單的同比情況是這樣考慮的嗎？

Yes. So certainly, it is the way to think about it for Q2 on orders. And we're thinking about orders in Q3 to maybe a little bit more than down that 9%, 10%, maybe low teens in Q2. And then, when you start building from there year-over-year, certainly sequential growth Q2 to Q3, Q3 to Q4.

是的。所以當然，這是考慮第二季度訂單的方式。我們正在考慮第三季度的訂單量可能會比第二季度下降 9%、10% 甚至更低一點。然後，當你開始同比增長時，第二季度到第三季度、第三季度到第四季度肯定會連續增長。

And then year-over-year, slightly down in Q3 and then up in Q4 on easier comps from a revenue perspective, yes, you profiled it maybe a little bit lighter than what we would expect. We do expect growth, year-over-year in Q4 in the mid-single digits.

然後與去年同期相比，從收入角度來看，第三季度略有下降，然後第四季度有所上升，是的，您描述的情況可能比我們預期的要輕一些。我們確實預計第四季度的同比增長將達到中個位數。

And then, just my second question, trying to look more, I guess, at a couple of markets. One is general industries, which I think is 21% of your sales and then warehouse, which I think is about 5%. So general industry sort of perspectives there, on when did you see the destocking start? When do you think it will -- and then on warehouse, you've got some very good sort of macro numbers on CapEx growth recently, but a lot of companies bottom-up sounding worse and worse. So maybe update us on what you're seeing there?

然後，這是我的第二個問題，我想，試圖更多地關注幾個市場。一是一般工業，我認為佔銷售額的 21%，然後是倉庫，我認為約為 5%。那麼一般行業的觀點是，你什麼時候看到去庫存的？你認為什麼時候會發生——然後在倉庫方面，你最近得到了一些關於資本支出增長的非常好的宏觀數據，但很多公司自​​下而上的情況聽起來越來越糟。那麼能否向我們介紹一下您在那裡看到的最新情況？

Yes. So I'll hit warehouse first. To your point, it's about 5% of our sales. We are forecasting it to be down low teens. And so, we do feel pressure coming from the warehouse markets in 2023. But what I love about the space is we have great differentiated product, and we're winning against our competitors because of our technology. But from a macro market perspective, we are expecting '23 to be down.

是的。所以我先去倉庫。就您而言，這大約占我們銷售額的 5%。我們預測它會下降到十幾歲。因此，我們確實感受到了 2023 年來自倉儲市場的壓力。但我喜歡這個領域的是，我們擁有差異化的產品，而且我們憑藉我們的技術戰勝了競爭對手。但從宏觀市場角度來看，我們預計'23將會下跌。

For general industrial, I'll tell you, you got to again remember that within that space, there's a lot of different markets, and there's short, mid and late cycle. Now from a distribution standpoint, we don't expect there's a lot of destocking left to do here. We definitely think, from that perspective that the inventory normalization will occur in Q2. So like I said, our distributors are seeing -- still seeing sales growth, so therefore, demand. They are lowering their inventory, but there's not a big adjustment that's needed. So, at least for our products. And so we would say if there's a slight decline, it's going to be Q2 with recovery going forward.

對於一般工業，我會告訴你，你必須再次記住，在那個空間內，有很多不同的市場，並且有短、中、後期週期。現在從分銷的角度來看，我們預計這裡不會有太多去庫存的事情要做。從這個角度來看，我們肯定認為庫存正常化將在第二季度發生。正如我所說，我們的經銷商仍然看到銷售增長，因此需求也增長。他們正在降低庫存，但不需要進行大的調整。所以，至少對於我們的產品來說是這樣。因此，我們會說，如果出現輕微下降，那麼第二季度將出現復甦。

This concludes our question-and-answer session. I would now like to turn the call back over to CEO, Louis Pinkham for any closing remarks.

我們的問答環節到此結束。現在我想將電話轉回給首席執行官路易斯·平卡姆 (Louis Pinkham)，讓其發表結束語。

Thank you, operator. And thanks to our investors and analysts for joining us today. I hope a key takeaway from today's presentation is that Regal Rexnord has transformed into an enterprise position to deliver faster growth, higher margins and greater cash flow.

謝謝你，接線員。感謝我們的投資者和分析師今天加入我們。我希望今天演講的一個關鍵要點是 Regal Rexnord 已經轉型為企業，能夠實現更快的增長、更高的利潤和更大的現金流。

With Ultra, we are clearly on a path to outgrow our markets, raised our gross margins to about 40%, our adjusted EBITDA margins to 25% and generate substantial free cash flow, allowing us to rapidly reduce our net leverage.

憑藉 Ultra，我們顯然走上了超越市場的道路，將毛利率提高到 40% 左右，調整後的 EBITDA 利潤率提高到 25%，並產生大量自由現金流，使我們能夠迅速降低淨槓桿率。

Thank you again for joining us today, and thank you for your interest in Regal Rexnord.

再次感謝您今天加入我們，並感謝您對 Regal Rexnord 的興趣。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。