Watts Water Technologies Inc (WTS) 2024 Q2 法說會逐字稿

Welcome to the Watts Water Technologies, Inc., second-quarter 2024 earnings call, hosted by Bob Pagano, President and CEO; Shashank Patel, CFO; and Diane McClintock, Senior Vice President, FP&A and Investor Relations.

歡迎參加 Watts Water Technologies, Inc. 2024 年第二季財報電話會議，由總裁兼執行長 Bob Pagano 主持；沙尚克‧帕特爾，財務長；以及 FP&A 和投資者關係高級副總裁 Diane McClintock。

At the end of the presentation, we will open the line for questions.

在演示結束時，我們將開放提問熱線。

I will now turn the call over to Diane McClintock.

我現在將把電話轉給黛安·麥克林托克。

Thank you, and good morning, everyone.

謝謝大家，大家早安。

Welcome to our second-quarter earnings conference call.

歡迎參加我們的第二季財報電話會議。

Joining me today are Bob Pagano, President and CEO; and Shashank Patel, our CFO.

今天加入我的是總裁兼執行長 Bob Pagano；以及我們的財務長 Shashank Patel。

During today's call, Bob will provide an overview of the second quarter and discuss the current state of our markets and operations.

在今天的電話會議中，鮑勃將概述第二季並討論我們市場和營運的現狀。

Shashank will discuss the details of our second-quarter performance and provide our outlook for the third quarter and for the full year.

Shashank 將討論我們第二季業績的細節，並提供我們對第三季和全年的展望。

Following our remarks, we will address questions related to the information covered during the call.

在我們的發言之後，我們將回答與電話會議期間涵蓋的資訊相關的問題。

Today's webcast is accompanied by a presentation, which can be found in the Investor Relations section of our website.

今天的網路廣播附有演示文稿，您可以在我們網站的投資者關係部分找到該演示文稿。

We will reference this presentation throughout our prepared remarks.

我們將在準備好的演講中引用該簡報。

Any reference to non-GAAP financial information is reconciled in the appendix to this presentation.

對非公認會計準則財務資訊的任何引用均在本簡報的附錄中進行了核對。

I'd like to remind everyone that during this call, we may be making certain comments that constitute forward-looking statements.

我想提醒大家，在這次電話會議中，我們可能會發表某些構成前瞻性陳述的評論。

These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially.

這些陳述面臨許多風險和不確定性，可能導致實際結果有重大差異。

For information concerning these risks, see Watts' publicly available filings with the SEC.

有關這些風險的信息，請參閱 Watts 向 SEC 公開提交的文件。

The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

本公司不承擔更新或修改任何前瞻性陳述的義務，無論是由於新資訊、未來事件或其他原因。

With that, I will turn the call over to Bob.

這樣，我會將電話轉給鮑伯。

Thank you, Diane, and good morning, everyone.

謝謝你，黛安，大家早安。

Please turn to slide 3, and I'll provide an overview of the second quarter.

請翻到投影片 3，我將概述第二季的情況。

Our second-quarter results were better than expected, including record sales, adjusted operating income and earnings per share.

我們第二季的業績優於預期，包括創紀錄的銷售額、調整後的營業收入和每股盈餘。

I'd like to extend my gratitude to the entire Watts team for their dedication to serving our customers worldwide and delivering another record quarter.

我要向整個 Watts 團隊表示感謝，感謝他們致力於為全球客戶提供服務，並創造了另一個創紀錄的季度業績。

Organic sales were flat in the quarter, which was ahead of our expectations, with solid growth in the Americas and APMEA, partly due to project timing, offset by weaker-than-expected sales in Europe.

本季有機銷售額持平，超出了我們的預期，美洲和 APMEA 實現穩健成長，部分原因是專案時機，但被歐洲銷售弱於預期所抵消。

The Americas region also benefited from incremental sales from our acquisitions of Bradley and Josam, which are both performing ahead of expectations and continue to help drive our long-term success.

美洲地區也受惠於我們收購 Bradley 和 Josam 帶來的銷售增量，這兩家公司的業績都超乎預期，並繼續幫助推動我們的長期成功。

Adjusted operating income and margin exceeded expectations primarily due to incremental volume in the Americas and APMEA, productivity in cost controls, which more than offset incremental investments in European volume deleverage.

調整後的營業收入和利潤率超出預期，主要是由於美洲和 APMEA 的銷售增量以及成本控制的生產力，這遠遠抵消了歐洲銷售去槓桿化的增量投資。

Free cash flow for the first half was solid, and we expect to be seasonally stronger in the second half.

上半年的自由現金流穩定，我們預計下半年將季節性強勁。

Our balance sheet remains robust, and along with our extended credit facility will allow for continued flexibility in our disciplined capital allocation strategy.

我們的資產負債表依然穩健，加上我們擴大的信貸額度，將使我們嚴格的資本配置策略保持持續的靈活性。

Moving to operations, the integrations of our Bradley, Josam and Enware acquisitions are progressing well.

在營運方面，我們收購的 Bradley、Josam 和 Enware 的整合進展順利。

Synergy identification and realization are ahead of schedules and are all on track to meet our financial criteria for acquisitions.

綜效的識別和實現提前於計劃，並且一切都有望滿足我們的收購財務標準。

Additionally, our teams have done a good job driving productivity and price to offset inflation in investments.

此外，我們的團隊在提高生產力和價格以抵消投資通膨方面做得很好。

As previously mentioned, we are in the process of implementing a new SAP ERP system across our Americas and APMEA regions.

如前所述，我們正在美洲和 APMEA 地區實施新的 SAP ERP 系統。

We have a highly capable team equipped with the best-in-class resources executing this implementation, and we are currently on schedule and budget.

我們擁有一支能力很強的團隊，配備了一流的資源來執行此實施，目前我們正在按計劃和預算進行。

The new SAP system will reduce our ERP instances, drive productivity and support our smart and connected strategy.

新的 SAP 系統將減少我們的 ERP 實例、提高生產力並支援我們的智慧互聯策略。

Next, I'd like to provide an update on our end markets.

接下來，我想介紹一下我們終端市場的最新情況。

Global GDP, which is considered a leading indicator for our repair and replacement activities, continues to be lower compared to 2023, but remains positive in our key markets.

全球 GDP 被認為是我們維修和更換活動的領先指標，與 2023 年相比繼續較低，但在我們的主要市場仍然保持樂觀。

Europe's residential and nonresidential new construction markets have further weakened.

歐洲住宅和非住宅新建市場進一步疲軟。

The reductions of energy incentive programs in Germany and Italy continue to unfavorably impact OEM volume and drive destocking activities, especially in the heat pump market.

德國和義大利能源激勵計劃的減少繼續對 OEM 銷售產生不利影響並推動去庫存活動，特別是在熱泵市場。

In the Americas, single-family new construction was down sequentially in June and is expected to remain soft at least until interest rates begin to ease.

在美洲，單戶新建築 6 月環比下降，預計至少在利率開始放鬆之前將保持疲軟。

Multifamily new construction indicators, including starts and permits, have been down double digits for the past several quarters and portend a decline in multifamily new construction for the second half of 2024.

過去幾個季度，包括開工率和許可證在內的多戶新建建築指標均出現兩位數下降，預示著 2024 年下半年多戶新建建築將出現下降。

On a positive note, Americas' institutional new construction is holding steady in light industrial, including data centers and mega projects continue to show strength.

從正面的方面來看，美洲的輕工業機構新建設保持穩定，包括資料中心和大型專案繼續展現實力。

These trends are expected to continue in the second half of the year.

預計這些趨勢將在今年下半年持續下去。

Americas' nonresidential new construction indicators are indicating softness for the second half of 2024.

美洲的非住宅新建指標顯示 2024 年下半年將疲軟。

The ABI has been down below 50 for several quarters and the second quarter ENR Construction Industry Confidence Index get back below 50%.

ABI 連續幾季低於 50，第二季 ENR 建築業信心指數回到 50% 以下。

Growth in certain subverticals, including retail, office and recreation, is expected to be challenged.

零售、辦公室和娛樂等某些垂直行業的成長預計將受到挑戰。

In the Asia-Pacific region, we continue to anticipate growth in China end markets driven by data centers and in the Middle East due to strong project activity.

在亞太地區，我們繼續預期資料中心推動的中國終端市場和中東地區由於專案活動強勁而成長。

We also expect growth in Australia and New Zealand with GDP expected to be positive in strength in institutional.

我們也預期澳洲和紐西蘭的經濟成長預計將在製度實力方面呈正值。

Now an update on our outlook for the remainder of the year.

現在更新我們對今年剩餘時間的展望。

We are maintaining our full-year outlook.

我們維持全年展望。

We believe our solid first-half performance will offset continued weakness in Europe new construction and lower OEM volume from the reductions in energy incentives and related heat pump destocking.

我們相信，我們上半年穩健的業績將抵消歐洲新建工程的持續疲軟以及能源激勵措施減少和相關熱泵去庫存導致的原始設備製造商銷售下降。

We continue to monitor the geopolitical uncertainty in the US, Europe and the Middle East, and we're positioned to proactively address any developments that may impact our operations.

我們將繼續關注美國、歐洲和中東的地緣政治不確定性，並準備積極應對任何可能影響我們營運的發展。

In addition, we're accelerating $2 million of the incremental investments into 2024, which will increase full-year investments to $22 million from the $20 million previously communicated.

此外，我們還計劃將 200 萬美元的增量投資加快到 2024 年，這將使全年投資從先前通報的 2,000 萬美元增加到 2,200 萬美元。

The additional investments will fund new product development, including smart and connected initiatives.

額外投資將資助新產品開發，包括智慧和互聯計劃。

On slide 4, I'd like to comment on our most recent sustainability report and the progress we have made.

在投影片 4 上，我想評論我們最新的永續發展報告以及我們所取得的進展。

In early July, we published our 2023 sustainability report, which highlights the accomplishments and progress we've made within our four sustainability pillars: footprint, handprint, social responsibility, and corporate governance.

7 月初，我們發布了 2023 年永續發展報告，重點介紹了我們在永續發展四大支柱方面取得的成就和進展：足跡、手印、社會責任和公司治理。

We have worked hard to exceed the goals we established back in 2018.

我們努力工作，超額完成 2018 年設定的目標。

We believe our triple play of solutions addressing safety and regulation, energy efficiency and water conservation enable our customers to achieve their sustainability goals and remain a top priority for Watts.

我們相信，我們解決安全和監管、能源效率和節水的三重解決方案能夠幫助我們的客戶實現其永續發展目標，並且仍然是瓦茨的首要任務。

Additionally, we established new long-term goals, including an absolute carbon emissions reduction commitment, which will help advance our sustainability mission while improving our operations.

此外，我們制定了新的長期目標，包括絕對減碳承諾，這將有助於推動我們的永續發展使命，同時改善我們的營運。

Sustainability is a core commitment at Watts that extends into all aspects of our business.

永續發展是瓦茨的核心承諾，它延伸到我們業務的各個方面。

I am proud of the progress our global team has made and invite you to read more about it in our sustainability report, which can be found on our Investor Relations website.

我為我們的全球團隊的進步感到自豪，並邀請您在我們的可持續發展報告中閱讀更多相關信息，該報告可以在我們的投資者關係網站上找到。

With that, I'll turn the call over to Shashank, who will address our second-quarter results and our third quarter and full year outlook.

接下來，我將把電話轉給 Shashank，他將介紹我們第二季的業績以及第三季和全年的展望。

Shashank?

沙尚克？

Thanks, Bob, and good morning, everyone.

謝謝鮑勃，大家早安。

Please turn to slide 5, and I will review the second quarter's consolidated results.

請翻到投影片 5，我將回顧第二季的綜合業績。

Sales of $597 million were up 12% on a reported basis and flat organically.

據報告，銷售額為 5.97 億美元，成長 12%，但有機銷售額持平。

Solid organic growth in the Americas and APMEA offset a challenging quarter in Europe.

美洲和 APMEA 的穩健有機成長抵消了歐洲季度的挑戰。

In Americas and APMEA, we did benefit from project timing into the second quarter from the third quarter.

在美洲和 APMEA，我們確實受益於專案時間表從第三季進入第二季。

The acquisitions of Bradley and Josam contributed approximately $65 million or 12%.

Bradley 和 Josam 的收購貢獻了約 6,500 萬美元或 12%。

And foreign exchange, primarily driven by a weaker euro decreased sales by approximately $2 million versus the second quarter of 2023.

主要受歐元疲軟影響的外匯匯率導致銷售額較 2023 年第二季減少約 200 萬美元。

Compared to the prior-year period, adjusted operating profit of $112 million increased 8% and adjusted operating margins of 18.8% was down 70 basis points.

與去年同期相比，調整後營業利潤為 1.12 億美元，成長 8%，調整後營業利益率為 18.8%，下降 70 個基點。

Adjusted EBITDA of $126 million increased 10% and adjusted EBITDA margin of 21% was down 50 basis points.

調整後 EBITDA 為 1.26 億美元，成長 10%，調整後 EBITDA 利潤率為 21%，下降 50 個基點。

Operating margin benefited from price mix and productivity, which was more than offset by inflation, volume deleverage, acquisition dilution of approximately 80 basis points, and incremental investments of $6 million.

營業利潤率受益於價格組合和生產力，但被通貨膨脹、數量去槓桿化、約 80 個基點的收購稀釋以及 600 萬美元的增量投資所抵消。

The decline in operating margin is also partially due to a very difficult comparison in the second quarter of 2023 when margins exceeded 19%.

營業利益率下降的部分原因是與 2023 年第二季的利潤率超過 19% 時的比較非常困難。

Adjusted earnings per share of $2.46 increased 5% versus last year, with growth driven by operational performance and solid contribution from our acquisitions.

調整後每股收益為 2.46 美元，比去年增長 5%，成長是由營運表現和收購帶來的強勁貢獻所推動的。

The adjusted effective tax rate was 25.2%, up 50 basis points compared to the prior-year period, primarily due to the reduction of foreign taxes associated with the repatriation of funds that occurred in the second quarter of 2023.

調整後的有效稅率為25.2%，較上年同期上升50個基點，主要是由於2023年第二季與資金匯回相關的外國稅收減少。

For GAAP purposes, we incurred approximately $4 million of restructuring and acquisition-related charges.

就 GAAP 而言，我們產生了約 400 萬美元的重組和收購相關費用。

These charges were partially offset by a $3 million nonrecurring gain on the sale of a building in the Americas.

這些費用被出售美洲一棟建築的 300 萬美元非經常性收益部分抵消。

Our free cash flow year to date was $120 million compared to $89 million in the comparable period last year.

今年迄今為止，我們的自由現金流為 1.2 億美元，去年同期為 8,900 萬美元。

The cash flow increase was primarily due to higher net income, lower working capital investment, and the contribution from our acquisitions.

現金流量的增加主要是由於淨利潤增加、營運資本投資減少、收購的貢獻。

We expect sequential improvement in our free cash flow and are on track to achieve our full-year free cash flow conversion goal of greater than or equal to 90% of net income as previously communicated.

我們預計我們的自由現金流將連續改善，並有望實現我們先前溝通的大於或等於淨利潤 90% 的全年自由現金流轉換目標。

The balance sheet remains robust and provides us with ample flexibility.

資產負債表依然穩健，為我們提供了充足的彈性。

Our net debt to capitalization ratio at quarter end was negative 1%, and our net leverage was negative 0.1%.

季末我們的淨負債與資本比率為負 1%，淨槓桿比率為負 0.1%。

Our strong cash flow, healthy balance sheet, and the recent extension of our credit facility through July 2029 continued to give us capital allocation optionality.

我們強勁的現金流、健康的資產負債表以及最近將信貸安排延長至 2029 年 7 月，繼續為我們提供資本配置選擇。

Please turn to slide 6, and I'll provide a few comments on the regional results.

請參閱投影片 6，我將對區域結果提供一些評論。

Americas organic sales were up 5% and reported sales were up 22% year over year.

美洲有機銷售額年增 5%，報告銷售額年增 22%。

Organic sales were ahead of our expectations as a result of higher volume, partly due to project shipping earlier than expected.

由於銷售量增加，有機銷售額超出了我們的預期，部分原因是專案出貨早於預期。

We saw solid growth in our core valve products and our heating and hot water solutions.

我們的核心閥門產品以及暖氣和熱水解決方案實現了穩健成長。

The acquisitions of Bradley and Josam added $65 million or 17% to Americas sales in the quarter.

Bradley 和 Josam 的收購使本季美洲銷售額增加了 6,500 萬美元，即 17%。

Adjusted operating income increased 19%, while adjusted operating margin decreased 60 basis points.

調整後營業收入成長 19%，調整後營業利益率下降 60 個基點。

The operating margin decline was primarily driven by acquisition dilution, inflation and incremental investments, which more than offset price, volume leverage, favorable mix, and productivity.

營業利潤率下降主要是由收購稀釋、通貨膨脹和增量投資推動的，這些因素遠遠抵消了價格、銷售槓桿、有利的組合和生產力。

Europe organic sales were down 15%, which was slightly worse than we expected.

歐洲有機銷售額下降 15%，略差於我們的預期。

Reported sales were down 16% and included a 1% unfavorable impact of foreign exchange movements.

報告銷售額下降 16%，其中包括 1% 的外匯變動不利影響。

Growth in our drains business was more than offset by declines in wholesale plumbing in France, Benelux, and Scandinavia as well as our OEM businesses in Germany and Italy, where heat pump destocking had a significant impact.

我們的排水業務的成長被法國、比荷盧經濟聯盟和斯堪的納維亞半島的批發管道業務以及德國和義大利的 OEM 業務的下降所抵消，其中熱泵去庫存產生了重大影響。

Operating income decreased 48% and operating margins decreased 620 basis points.

營業收入下降 48%，營業利益率下降 620 個基點。

Price, favorable mix, and productivity did not offset inflation and the significant impact of volume deleverage due to our high fixed cost base in Europe.

由於我們在歐洲的固定成本基礎較高，價格、有利的組合和生產力並沒有抵銷通貨膨脹和數量去槓桿化的重大影響。

APMEA organic sales were up 18% and reported sales growth of 16% was negatively impacted by 2% from unfavorable foreign exchange movements.

APMEA 有機銷售額成長了 18%，報告的 16% 銷售額成長受到不利匯率變動 2% 的負面影響。

We saw growth across China, Australia, New Zealand and the Middle East.

我們看到了中國、澳洲、紐西蘭和中東地區的成長。

Project timing contributed to the growth in China and the Middle East.

專案時機促進了中國和中東的成長。

Adjusted operating margins increased 70 basis points as volume and productivity more than offset inflation, incremental investments and the dilutive effect of the Enware acquisition.

調整後的營業利潤率增加了 70 個基點，產量和生產力足以抵消通貨膨脹、增量投資和 Enware 收購的稀釋效應。

Slide 7 provides our assumptions about our third-quarter and full-year outlook.

投影片 7 提供了我們對第三季和全年前景的假設。

First, let's cover the third quarter outlook.

首先，我們來回顧一下第三季的前景。

On a reported basis, we expect sales to increase between 5% and 8%.

根據報告，我們預計銷售額將成長 5% 至 8%。

Organically, we expect sales to decrease between 4% and 7%.

從有機角度來看，我們預計銷售額將下降 4% 至 7%。

Organic sales are expected to be down low single digits in the Americas and down low double digits in Europe, partially offset by APMEA, which is expected to be up low single digits.

美洲的有機銷售額預計將下降低個位數，歐洲的有機銷售額將下降低兩位數，但 APMEA 預計將成長低個位數，部分抵消了這一影響。

In the Americas, we anticipate weakening in multifamily and nonresidential new construction.

在美洲，我們預期多戶住宅和非住宅新建建築將會減弱。

In addition, our third-quarter guidance includes the unfavorable impact of project timing in the Americas and APMEA, where we saw projects deliver in the second quarter, which was earlier than anticipated.

此外，我們的第三季指引還包括美洲和 APMEA 專案時間安排的不利影響，我們看到專案在第二季交付，這比預期要早。

It also includes a soft start to the quarter, resulting from a reduction in safety stocks at some of our channel partners in the Americas due to our normalized lead times.

它還包括本季的軟啟動，這是由於我們的交貨時間正常化而導致我們在美洲的一些通路合作夥伴的安全庫存減少。

Europe markets are expected to remain soft, partly due to continued heat pump and related product destocking.

預計歐洲市場將保持疲軟，部分原因是熱泵和相關產品的庫存持續減少。

We expect incremental sales in the Americas from acquisitions to be between $60 million and $62 million.

我們預計美洲地區因收購而帶來的銷售額增量將在 6,000 萬至 6,200 萬美元之間。

Third-quarter adjusted EBITDA margins are expected to be in the range of 18.7% to 19.3%, or down 70 to down 130 basis points.

第三季調整後 EBITDA 利潤率預計在 18.7% 至 19.3% 之間，即下降 70 至 130 個基點。

Third-quarter adjusted operating margin should be in the range of 16.2% to 16.8% or down 120 basis points to down 180 basis points.

第三季調整後營業利益率應在16.2%至16.8%之間，即下降120個基點至180個基點。

Acquisition dilution of 90 basis points, incremental investments of $6 million and volume deleverage, particularly in Europe, will all have an unfavorable impact.

90個基點的收購稀釋、600萬美元的增量投資以及數量去槓桿化（尤其是在歐洲）都將產生不利影響。

A few other items related to the third quarter.

與第三季相關的其他一些項目。

Corporate costs should be approximately $14 million and net interest expense should be approximately $2 million.

公司成本應約為 1,400 萬美元，淨利息支出應約為 200 萬美元。

The adjusted effective tax rate should be approximately 25%.

調整後的有效稅率應約為25%。

We are estimating a 1.09 euro-US dollar exchange rate, which is flat compared to the third quarter of 2023.

我們預計歐元兌美元匯率為 1.09，與 2023 年第三季相比持平。

Now let's cover the full-year outlook.

現在讓我們來回顧一下全年展望。

For full year 2024, we are maintaining our outlook consistent with our previous guidance.

對於 2024 年全年，我們的展望與先前的指引保持一致。

Reported sales are expected to increase 7% to 12%, and organic sales are expected to range from down 4% to up 1%.

報告銷售額預計將成長 7% 至 12%，有機銷售額預計將下降 4% 至成長 1%。

Full-year incremental acquired sales from Bradley and Josam should be between $210 million and $215 million.

Bradley 和 Josam 的全年增量收購銷售額應在 2.1 億至 2.15 億美元之間。

Our full-year adjusted EBITDA margin should be between 19.6% and 20.2% or down 30 basis points to up 30 basis points.

我們全年調整後的 EBITDA 利潤率應在 19.6% 至 20.2% 之間，即下降 30 個基點至上升 30 個基點。

Our full-year adjusted operating margin should be between 17.1% to 17.7% or down 70 basis points to down 10 basis points.

我們全年調整後的營業利潤率應在 17.1% 至 17.7% 之間，即下降 70 個基點至 10 個基點。

Our better-than-expected second quarter, including acquisition performance, is expected to offset second-half weakening in Europe, as previously mentioned.

如前所述，我們第二季的好於預期（包括收購業績）預計將抵銷歐洲下半年的疲軟。

As a reminder, the operating and EBITDA margin guidance includes an increase in incremental investments of $2 million and acquisition dilution of 60 basis points.

需要提醒的是，營運和 EBITDA 利潤率指引包括增加 200 萬美元的增量投資和 60 個基點的收購稀釋。

Our free cash flow expectation remains in line with our previous outlook as we expect to deliver free cash flow conversion of greater than or equal to 90% of net income in 2024.

我們的自由現金流預期與先前的展望保持一致，因為我們預計 2024 年自由現金流轉換將大於或等於淨利潤的 90%。

For the full year, we are assuming a 1.09 average euro-US dollar FX rate versus the average rate of 1.08 in 2023.

對於全年，我們假設歐元兌美元平均匯率為 1.09，而 2023 年的平均匯率為 1.08。

This would imply an increase of 1% year over year and would equate to an increase of $5 million in sales and $0.02 per share in EPS for the full year versus the prior year.

這意味著年增 1%，相當於全年銷售額比上年增加 500 萬美元，每股收益增加 0.02 美元。

Other key inputs for the full year can be found in the appendix.

全年的其他關鍵投入可在附錄中找到。

Now let me turn the call back over to Bob before we begin Q&A.

現在，在我們開始問答之前，讓我將電話轉回給鮑伯。

Bob?

鮑伯？

Thanks, Shashank.

謝謝，沙尚克。

On slide 8, I'd like to summarize our discussion before we address your questions.

在投影片 8 上，我想在回答您的問題之前總結我們的討論。

Our second-quarter performance was better than we anticipated, with record sales, adjusted operating income, and earnings per share due to better-than-expected performance in our Americas and APMEA regions.

由於美洲和 APMEA 地區的業績優於預期，我們第二季的業績好於預期，銷售額、調整後營業收入和每股盈餘均創歷史新高。

We are maintaining our full-year outlook with a solid first-half performance expected to offset second half weakness, especially in Europe.

我們維持全年展望，上半年穩健的業績預計將抵銷下半年的疲軟，特別是在歐洲。

Our portfolio is agnostic to end markets, and we are well positioned to pivot to growing subverticals as needed.

我們的產品組合與終端市場無關，我們有能力根據需要轉向不斷增長的垂直市場。

Our business model includes a large repair and replacement component that provides a durable base and drive steady revenue and cash flow.

我們的業務模式包括大型維修和更換組件，可提供耐用的基礎並推動穩定的收入和現金流。

The integration efforts at Bradley, Josam, and Enware are going well.

Bradley、Josam 和 Enware 的整合工作進展順利。

We are pleased with the progress to date and excited about their growth potential.

我們對迄今為止的進展感到高興，並對它們的成長潛力感到興奮。

Our balance sheet remains robust, and with a proactive extension of our credit facility, provides ample flexibility to support our disciplined capital allocation priorities.

我們的資產負債表依然穩健，並且透過積極擴大信貸額度，提供了充足的靈活性來支持我們嚴格的資本配置優先事項。

We are well positioned financially, operationally, and commercially, but I'm confident in our team's ability to execute despite down certain environment, which will enable us to continue creating value for our shareholders.

我們在財務、營運和商業方面都處於有利地位，但我對我們團隊在特定環境下的執行能力充滿信心，這將使我們能夠繼續為股東創造價值。

With that, operator, please open the line for questions.

那麼，接線員，請開通提問線路。

(Operator Instructions) Ryan Connors, Northcoast Research.

（操作員說明）Ryan Connors，Northcoast Research。

So I wanted to talk about this issue.

所以我想談談這個問題。

You mentioned project timing as a driver behind the strength in the quarter in both Americas and APMEA.

您提到專案時機是本季美洲和 APMEA 業務強勁的驅動力。

And if I think back, I don't recall project timing being something you've mentioned much in the past, except maybe around data centers a little bit.

如果我回想起來，我不記得您過去多次提到專案時間安排，除了資料中心方面。

And generally, I don't think of Watts as a project-oriented company.

一般來說，我不認為 Watts 是一家以專案為導向的公司。

So can you just expand on exactly what that is, what types of projects those were that were pulled forward into the second quarter?

那麼，您能否詳細說明一下延後到第二季的專案到底是什麼？

Yes.

是的。

Ryan, so in APMEA -- and actually, the data center business, five, six years ago, it was virtually nothing and we've been growing from a small base, but we've been growing at double digits.

Ryan，所以在APMEA——實際上，資料中心業務，五、六年前，幾乎什麼都沒有，我們一直在從小基礎上發展，但我們一直在以兩位數的速度成長。

So it's significant.

所以這很重要。

It's a reasonable part of our business globally, quite significant in the APMEA region.

這是我們全球業務的合理組成部分，在 APMEA 地區非常重要。

So in the APMEA region, we had data centers in China, and those projects were scheduled for third quarter.

因此，在 APMEA 地區，我們在中國設有資料中心，這些專案計劃於第三季進行。

They got pulled into the second quarter.

他們被拖入第二節。

And in the Americas, it's primarily in the heating and hot water solutions business, the commercial water

在美洲，它主要從事供暖和熱水解決方案業務、商業用水

(inaudible).

（聽不清楚）。

There are some large projects that customers needed in the second quarter that we shipped in the second quarter.

第二季有一些客戶需要的大型專案我們在第二季度出貨了。

Combination of both of those is about $7 million to $8 million of sales that were pulled into the second quarter.

兩者相加，第二季的銷售額約為 700 萬至 800 萬美元。

Got it.

知道了。

Okay.

好的。

And in Americas, what types of nonresidential construction projects -- or those not really data center related, those are more general?

在美洲，哪些類型的非住宅建設項目——或者那些與資料中心無關的項目更為普遍？

Yeah.

是的。

We're starting to get into data centers in North America.

我們開始進入北美的資料中心。

So we're seeing a little bit of that but this was mainly in the heating and hot water, heat pump section of our business.

所以我們看到了一些這樣的情況，但這主要是在我們業務的暖氣和熱水、熱泵部分。

Heat pumps.

熱泵。

Okay.

好的。

And my other one was just around pricing.

我的另一件事就是關於定價。

It's been a hot topic, some companies out there talking about some deflation.

這是一個熱門話題，一些公司正在談論通貨緊縮。

Any update on pricing in your business there and any discounting going on some product lines or -- and also any shift to -- as price gets more of a discussion, any shift to the online sales platforms you have like Backflow Direct?

您的業務定價是否有任何更新，某些產品線是否有任何折扣，或者——以及任何轉變——隨著價格受到更多討論，您有向 Backflow Direct 等在線銷售平台的轉變嗎？

Yeah.

是的。

In general, so pricing was favorable about 1 point in the quarter.

整體而言，本季定價有利約 1 個百分點。

Certainly, on large projects, they are very competitive.

當然，在大型專案上，他們非常有競爭力。

So we see that.

所以我們看到了這一點。

And certainly, our online business with Backflow Direct is up.

當然，我們與 Backflow Direct 的線上業務也有所成長。

So we continue to drive e-commerce where our customers need it.

因此，我們將繼續在客戶需要的地方推動電子商務。

But pricing has been, like I said, up 1% in the quarter.

但正如我所說，本季定價上漲了 1%。

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc 資本市場。

Okay.

好的。

Appreciate the color on the pull forward and quantification.

欣賞前拉和量化的顏色。

I think you talked about a number of headwinds kind of 2Q to 3Q, some destock, nonres, multifamily.

我想你談到了第二季到第三季的一些不利因素，一些去庫存、非住宅、多戶住宅。

Maybe just rank order those headwinds and maybe a little more color on that destock impact.

也許只是對這些逆風進行排序，也許對去庫存的影響有更多的描述。

Yeah.

是的。

So Jeff, on the destocking, that's probably basically our -- in the wholesale channel, our customers --because we now have normalized lead times, they've been reducing their safety stock levels.

所以傑夫，在去庫存方面，這可能基本上是我們的——在批發渠道，我們的客戶——因為我們現在已經標準化了交貨時間，他們一直在降低安全庫存水平。

We saw that in the month of July.

我們在七月就看到了這一點。

That's approximately $7 million to $8 million.

這大約是 700 萬到 800 萬美元。

So far that's happened in the third quarter.

到目前為止，這發生在第三季。

The rest of it, on the multifamily, this is what we expect with all the double-digit declines we had in new starts on the construction side of it because there is a lag.

其餘的，在多戶住宅方面，這是我們所期望的，因為建築方面的新開工量出現了兩位數的下降，因為存在滯後。

We expect that to downturn in the second half, which we had factored in when we set the guidance early on and we still expect to see that.

我們預計下半年會出現下滑，我們在早期制定指導時就已經考慮到了這一點，並且我們仍然希望看到這種情況。

And what was the third part of the question again?

問題的第三部分又是什麼？

I guess just nonres in general.

我想一般來說只是無用的。

Yeah.

是的。

Nonres again, and that's the ABI indicator, right?

又是 Nonres，這就是 ABI 指標，對嗎？

They've been flashing red below 50 for over a year.

一年多來，它們一直在 50 以下閃爍紅色。

And on the nonresidential side, we've seen weaknesses in, again, office, retail, restaurants, all those -- sort of those subsegments but strength in the institutional side.

在非住宅方面，我們再次看到辦公室、零售、餐廳等所有領域的弱點——這些細分市場屬於這些細分市場，但機構方面的優勢。

So again, we factored that into the guide as well for the second half.

因此，我們也將這一點納入了下半年的指南中。

Okay.

好的。

And then Europe, I guess, one, if -- it sounds like you're going to continue to see weakness.

然後歐洲，我想，如果──聽起來你會繼續看到疲軟。

Can you hold double-digit margins into the second half?

下半場你能保持兩位數的領先優勢嗎？

What else is weakening in Europe besides the European heat pump?

除了歐洲熱泵之外，歐洲還有什麼正在疲軟？

And then finally, just any signs that were hitting bottom or stabilizing or any of this destock on the heat pump side?

最後，是否有任何跡象表明熱泵方面的庫存已觸底或穩定？

So on the heat pump side -- I'll take that first.

所以在熱泵方面——我首先考慮這一點。

I don't think you're going to get any clarity to the potentially end of the first quarter of next year related to heat pump.

我認為您不會對明年第一季末與熱泵相關的情況有任何了解。

But there's -- our channel check showing a bunch of heat stock or heat pump inventory in the channels, and they've got to bleed that off.

但是，我們的渠道檢查顯示渠道中有大量熱庫存或熱泵庫存，他們必須將其排出。

In general, when we look at Europe, just think about new construction is very limited there, given the uncertainties, the economic challenges, the geopolitical issues, et cetera.

總的來說，當我們審視歐洲時，考慮到不確定性、經濟挑戰、地緣政治問題等，那裡的新建築非常有限。

So that's something I've been concerned about for a while here, and we certainly saw it in Q3, and we're expecting to see it again in Q4.

所以這是我一段時間以來一直擔心的事情，我們當然在第三季度看到了它，我們預計在第四季度再次看到它。

But some of our channel checks and everybody else, once this heat pump goes through some of the easier comparison to next year, they believe they're starting to bottom out as we exit this year.

但是我們的一些渠道檢查和其他人，一旦這個熱泵經歷了一些與明年更容易的比較，他們相信隨著我們今年的退出，他們開始觸底反彈。

And just to note, there is one area of strength, right?

請注意，有一個優勢領域，對嗎？

In our drains business on the commercial marine side as well as food and beverage, drains actually had a good quarter in the second quarter.

在我們商業海運以及食品和飲料方面的排水業務中，排水業務實際上在第二季度表現良好。

So we do see pockets of opportunity, albeit small.

因此，我們確實看到了一些機會，儘管機會很小。

Okay.

好的。

And then final one, can you just -- you mentioned data center and how it's been growing.

最後一個問題，您提到了資料中心以及它是如何發展的。

Can you just size that business as a percentage of sales now?

現在您可以根據銷售額的百分比來衡量該業務嗎？

Can you speak to how you -- it looks -- it sounds like most of that's in Asia -- how you bring that product or how you enter the North America data center market?

您能談談您如何——看起來——聽起來大部分是在亞洲——您如何推出該產品或如何進入北美資料中心市場？

And then finally, there seems to be this big shift to liquid cooling, which requires water, et cetera, in a data center versus traditional air cooling.

最後，與傳統的空氣冷卻相比，資料中心似乎出現了向液體冷卻的重大轉變，液體冷卻需要水等。

And I'm wondering if we -- as we move there, if there's an incremental content opportunity for you?

我想知道當我們搬到那裡時，是否有為您提供增量內容的機會？

Yeah, Jeff.

是的，傑夫。

So certainly, our initiative of data centers did start in China several years ago, and we've been bringing that to North America and even Europe.

當然，我們的資料中心倡議確實在幾年前就在中國啟動，我們已經將其帶到了北美甚至歐洲。

So these are growing opportunities, I would say, in total.

所以我想說，總的來說，這些都是不斷成長的機會。

It's less than 2% of our overall Watts sales but it went from nothing three years ago to about 2% of our sales.

它只占我們總瓦特銷售額的不到 2%，但它從三年前的零增加到我們銷售額的 2% 左右。

And as you can imagine, it's lumpy business.

正如你可以想像的那樣，這是一個坎坷的行業。

As you get into liquid cooled versus air cooled, certainly, there's more content for our valves and our products.

當您進入液體冷卻與空氣冷卻時，當然，我們的閥門和產品的內容會更多。

And from our point of view, we're bundling our solutions.

從我們的角度來看，我們正在捆綁我們的解決方案。

It's not just -- it includes leak detection, backflow, the whole gamut of products.

這不僅僅是——它還包括洩漏檢測、回流、整個產品範圍。

So it's an opportunity to offset some of the softness we're seeing in the traditional markets that we've been in and something we've been flexing towards and growing very quickly on a small base.

因此，這是一個機會，可以抵消我們在傳統市場中看到的一些疲軟現象，也是我們一直在努力實現的目標，並在較小的基礎上快速成長。

And as you said, the market is shifting to liquid cooling.

正如您所說，市場正在轉向液體冷卻。

So we are developing the products for liquid cooling.

所以我們正在開發液冷產品。

We saw liquid cooling a little bit of the market and China's already there.

我們看到了市場的液體冷卻，而中國已經出現了。

So we're into that market.

所以我們進入了這個市場。

Nathan Jones, Stifel.

內森瓊斯，斯蒂菲爾。

I want to follow up on the destocking question.

我想跟進一下去庫存的問題。

I'm a little -- just a little surprised to hear that there's still a bunch of inventory in the channel for certain products at this point in the recovery.

聽到在復甦的這個階段某些產品的渠道中仍然有大量庫存，我有點驚訝。

I would have thought that your lead times would have already been back to normal.

我以為你們的交貨時間已經恢復正常了。

So maybe any more color on what those products are.

所以也許對這些產品有更多的了解。

And if there's anything in your portfolio that still has extended lead times that could lead to us seeing some destocking in the future?

您的投資組合中是否有任何產品的交貨時間仍然較長，可能導致我們未來看到一些庫存減少？

Nathan, I think it was just across the board.

內森，我認為這是全面的。

I think everybody is looking at reducing inventories, just like we are.

我認為每個人都在考慮減少庫存，就像我們一樣。

And I think it's just a natural thing.

我認為這是很自然的事。

It's quite interesting, though, is we saw it in July, and it spiked out.

不過，很有趣的是，我們在七月看到了它，而且它突然出現了。

So I think everybody looked at their June 30 balance sheet and said they need to start reducing inventory.

因此，我認為每個人都會查看 6 月 30 日的資產負債表，並表示他們需要開始減少庫存。

So we're watching it carefully.

所以我們正在仔細觀察。

Our lead times are probably the best they've ever been, even pre-COVID.

我們的交貨時間可能是有史以來最好的，即使在新冠疫情之前也是如此。

So no major things there, but we're watching this closely and adjusting accordingly.

所以沒有什麼重大的事情，但我們正在密切關注並做出相應調整。

So just something we wanted to call out because we had a softer-than-expected July.

我們之所以要指出這一點，是因為 7 月的情況比預期要疲軟。

And kind of a onetime reset working capital optimization.

以及一種一次性重置營運資本優化。

Follow-up question on the repair and replace side of the business.

關於維修和更換業務方面的後續問題。

I think the general expectation from the macro guys is that you're going to see a slowdown in GDP as we get towards the end of the year, the fourth quarter specifically.

我認為宏觀專家的普遍預期是，隨著年底，特別是第四季度，GDP 將會放緩。

Can you talk about kind of what you baked into the guidance from repair and replace?

您能談談您在維修和更換指南中融入了什麼內容嗎？

I know your business is correlated to GDP.

我知道你的業務與 GDP 有關。

So just any color you can give us on what you're thinking there?

那麼您可以為我們提供您的想法嗎？

Yeah.

是的。

It's a very low single-digit range, right?

這是一個非常低的個位數範圍，對吧？

You're right, Nathan, and that GDP will continue tracking softer, is probably the best way to put it.

內森，你是對的，國內生產毛額將繼續走軟，這可能是最好的說法。

And that's what we factored into our guide is lower numbers on GDP.

這就是我們在指南中考慮的因素是 GDP 的較低數字。

And remember, it's going from 2.5%, 3% to maybe 1%.

請記住，它會從 2.5%、3% 到 1%。

So it's a law of small numbers.

所以這是小數定律。

It's not a big number, right?

這不是一個大數字，對吧？

(Operator Instructions) Mike Halloran, Baird.

（操作員說明）Mike Halloran，Baird。

Just a question on how you're thinking about the back half of the year in terms of sequentials and then also where you previously had the guidance.

只是一個問題，關於您如何從順序角度考慮下半年的情況，以及您之前獲得的指導。

Certainly understand the weakening comments in Europe and the OE and then the -- how projects can swing things either way.

當然要理解歐洲和 OE 的疲軟評論，以及專案如何使事情向任何方向轉變。

If you look at the underlying dynamics -- let's focus on Americas here.

如果你看看潛在的動態——讓我們關注美洲。

Has there been a change in your thinking at all as you move to the back half of the year?

進入下半年，您的想法是否改變了？

I know you already had some concern embedded in that outlook going into the second quarter.

我知道您已經對第二季的前景感到擔憂。

Curious if that's changed.

好奇這是否改變了。

And then if you normalize for everything, are you just thinking kind of normal sequentials as you move to the back half?

然後，如果你對一切進行標準化，當你移動到後半部分時，你是否只是在思考正常的順序？

So, Mike, I think for the most part, Europe is a little softer than we were expecting.

所以，麥克，我認為在很大程度上，歐洲比我們預期的要軟一些。

Americas kind of in the same, maybe 1% softer based on this adjustment and destocking that happened in July.

美洲的情況也差不多，根據 7 月的調整和去庫存，可能會軟化 1%。

But when you look at overall, I just want to remind everybody, we had a days issue in the first quarter of the year, right?

但當你看整體時，我只是想提醒大家，我們今年第一季有幾天的問題，對嗎？

And that will negatively impact us in the fourth quarter.

這將對我們第四季產生負面影響。

So that's 6%, 6 points of growth in the fourth quarter.

也就是說，第四季成長了 6%，即 6 個百分點。

So just keep that in mind.

所以請記住這一點。

But in general, we expected the markets to slow based on the leading indicators, and we're adjusting accordingly.

但總的來說，我們根據領先指標預計市場將會放緩，並且我們正在相應地進行調整。

So it's not a major shift.

所以這不是一個重大轉變。

It's kind of seeing some of the things that we were anticipating all along in our previous guidance.

這是我們在之前的指導中一直期待的一些事情。

Yeah.

是的。

And at this point, Bob, when you think about some of the leading indicators, you guys have seen out there that we've all seen that point to some concern.

在這一點上，鮑勃，當你考慮到一些領先指標時，你們已經看到我們都看到了一些令人擔憂的問題。

Are those at the point where they would even impact this year?

這些是否會在今年產生影響？

Or are those things that are more relevant for next year?

還是那些與明年更相關的事情？

Well, the multifamily, we're seeing some of that, and I think that's some of the wholesale destocking that's happening.

嗯，在多戶住宅中，我們看到了其中的一些情況，我認為這就是正在發生的一些批發庫存減少。

We said we'd probably see that in the second half of this year.

我們說我們可能會在今年下半年看到這一點。

And I think we're -- that's holding true.

我認為我們是這樣的。

I think in the retail, which is a very low percentage of our business, OEMs or the retail big boxes are lowering their inventories.

我認為零售業占我們業務的比例非常低，原始設備製造商或零售巨頭正在降低庫存。

So in general, I think it's slowing.

所以總的來說，我認為它正在放緩。

And as we anticipated, I think in this market, in any commercial construction markets, new construction, uncertainty always leads people to slow down projects, right, and defined.

正如我們所預期的那樣，我認為在這個市場中，在任何商業建築市場中，新建築的不確定性總是會導致人們放慢專案的進度，這是正確的，也是明確的。

So I think until the elections are over, clarity on interest rates, maybe some of the geopolitical risk, I think some of this stuff is just being held at this point in time.

因此，我認為，在選舉結束、利率明確、也許還有一些地緣政治風險之前，我認為其中一些內容只是在此時舉行。

But there's a lot of shovel-ready projects out there to be released at some point in time.

但有很多已經準備就緒的項目將在某個時間點發布。

But we are hearing projects are on hold and being deferred until next year.

但我們聽說項目被擱置並推遲到明年。

So we're starting to hear that and see that versus, I think, the first half of the year, there was a solid backlog with everybody.

因此，我們開始聽到並看到，我認為與今年上半年相比，每個人都有大量的積壓。

I think some of this stuff is just starting to catch up.

我認為其中一些東西才剛開始迎頭趕上。

And last one on my side.

最後一個在我這邊。

Thanks for that.

謝謝你。

Just how -- what do you see in the M&A outlook?

您對併購前景有何看法？

Obviously, your balance sheet is in great shape.

顯然，您的資產負債表狀況良好。

How does that pipeline look?

該管道看起來如何？

And how actually would you think the pipeline is at this point?

您認為目前的管道狀況如何？

Yeah.

是的。

So we continue to work the pipeline.

所以我們繼續開發管道。

It's a strong pipeline.

這是一條強大的管道。

As you know, we -- you never can predict timing of acquisitions.

如您所知，您永遠無法預測收購的時機。

And also, I can assure you is we'll be disciplined like we always have been and -- but we're continuing to have discussions in the space.

而且，我可以向您保證，我們將像往常一樣受到紀律處分，但我們將繼續在該領域進行討論。

Joe Giordano, TD Cowen.

喬·佐丹奴，TD·考恩。

I mean, it's a small change, but I noticed the M&A dilution is being reduced here a little bit.

我的意思是，這是一個很小的變化，但我注意到併購稀釋度在這裡有所減少。

Can you tell us like what you're finding on the acquisitions here?

您能告訴我們您在這裡的收購中發現了什麼嗎？

Or is it just better execution, you're finding incremental synergies that you're able to take advantage of earlier?

或者只是更好的執行，您發現了可以更早利用的增量綜效？

Just like what's driving that?

就像是什麼在驅動它一樣？

Primarily better synergies, right?

主要是更好的協同效應，對嗎？

If you remember, for the Bradley acquisition, we had a synergy target of $12 million with about 40% realization in year one.

如果你還記得，對於 Bradley 收購，我們的協同目標為 1,200 萬美元，第一年實現約 40%。

It's running slightly ahead.

它稍微領先一點。

So we baked that into the guide.

所以我們將其納入指南中。

And a little bit more on the Josam acquisition as well.

還有更多關於 Josam 收購的資訊。

Better execution all around, I would say.

我想說的是，到處都有更好的執行力。

On the institutional side in the US, I mean, I noticed you mentioned like it's holding in pretty well.

我的意思是，在美國的機構方面，我注意到你提到它的效果很好。

Like if you look at some of the -- like the census that at least for construction put in place for institutional, it's definitely positive but trending down.

就像如果你看看一些——例如至少在機構建設方面進行的人口普查，它絕對是積極的，但呈下降趨勢。

Are you like incrementally seeing that shift, like even if we're in positive territories, like getting kind of progressively worse?

你是否喜歡逐漸看到這種轉變，就像即使我們處於正面的領域，例如變得越來越糟？

Is that consistent with what you're seeing on the ground?

這與您在實地看到的相符嗎？

We haven't seen that yet.

我們還沒有看到這一點。

We've seen institutional business has held up fairly well at this point in time.

我們已經看到機構業務目前表現相當不錯。

So -- but we're watching certainly with the leading indicators, just like you are and -- but that's a bright spot for us right now.

所以，我們肯定會關注領先指標，就像你們一樣，但這對我們來說是一個亮點。

(Operator Instructions) Walter Liptak, Seaport Research Partners.

（操作員說明）Walter Liptak，海港研究合作夥伴。

Wanted to ask about the Europe business.

想問一下歐洲業務。

You guys have been -- and we've been talking about Europe, the heat pump slowing for some time.

你們——我們一直在談論歐洲，熱泵速度放緩已經有一段時間了。

Was it below your expectations in the quarter?

本季是否低於您的預期？

Or is the destocking kind of going the way that you have been thinking that it would?

或者說去庫存正在按照你一直認為的方式進行？

So we have -- you're right, right?

所以我們——你是對的，對吧？

Early in the year, when we gave guidance, we expected the destocking to happen.

今年年初，當我們給予指導時，我們預計會發生去庫存。

Quite frankly, it now looks like it's going to be longer.

坦白說，現在看來它會更長。

As Bob said, Q1 2025 is the latest view we have.

正如鮑伯所說，2025 年第一季是我們的最新觀點。

And it is worse than we anticipated.

而且情況比我們預期的還要糟糕。

So that's why when you look at Europe, Europe did come in softer in the second quarter than we had anticipated.

這就是為什麼當你看歐洲時，歐洲第二季的表現確實比我們預期的要疲軟。

We recalibrated the third quarter and the balance of the year, but it is worse than we had anticipated.

我們重新調整了第三季和全年剩餘時間，但情況比我們預期的還要糟糕。

Okay.

好的。

Great.

偉大的。

And can you remind us the positives around -- the European heat pump, I think, was driven by incentives.

您能否提醒我們一些積極的方面——我認為歐洲熱泵是由激勵措施推動的。

Are those incentives -- is there another round of incentives coming through?

這些激勵措施是否會推出另一輪激勵措施？

Or is that -- are we back to like sort of a normal consumer market for those products?

或者說，我們是否回到了這些產品的正常消費市場？

No.

不。

So the incentives -- obviously, the incentive levels change, right?

所以激勵措施——顯然，激勵程度發生了變化，對嗎？

We had talked earlier Italy had incentives of 110%.

我們之前說過義大利有 110% 的激勵措施。

And then last March, they dropped them to 60%, but they weren't instant.

然後去年 3 月，他們將比例降至 60%，但並不是立竿見影的。

They were over a five-year tax period, et cetera.

他們的納稅期超過五年，等等。

So the incentives are there but they're different and less.

因此，激勵措施是存在的，但它們有所不同，而且較少。

Similarly with Germany and France, they've solidified their incentive program.

與德國和法國類似，他們也鞏固了激勵計畫。

But I think the situation was there was a huge buildup of heat pumps across Europe.

但我認為當時的情況是歐洲各地大量安裝熱泵。

And that's why we got in a situation where even today, there's about a 9-month inventory of heat pumps in the European market.

這就是為什麼我們會遇到這樣的情況：即使在今天，歐洲市場上的熱泵庫存也只有大約 9 個月的庫存。

So that's got to be bled through, and that's where that Q1 2025 number comes in.

因此，必須充分考慮這一點，這就是 2025 年第一季的數字的用武之地。

But the incentives are there.

但激勵措施是存在的。

They're less, but they're still there.

他們雖然少了，但仍然存在。

And there are no further questions at this time.

目前沒有其他問題。

Bob Pagano, I turn the call back over to you.

鮑伯·帕加諾，我把電話轉回給你。

Thank you for taking the time to join us today.

感謝您今天抽空加入我們。

We appreciate your continued interest in Watts and look forward to speaking with you again during our third-quarter earnings call.

我們感謝您對瓦茨的持續關注，並期待在我們的第三季財報電話會議上再次與您交談。

Have a good day, and stay safe.

祝你有美好的一天，並保持安全。

And this concludes today's conference call.

今天的電話會議到此結束。

You may now disconnect.

您現在可以斷開連線。