Watts Water Technologies Inc (WTS) 2024 Q3 法說會逐字稿

Welcome to the Watts Water Technologies Inc, third 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 年第三季財報電話會議，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，早安。

Welcome to our third quarter earnings conference call.

歡迎參加我們的第三季財報電話會議。

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

今天與我一起出席的有總裁兼執行長鮑勃·帕加諾 (Bob Pagano) 和沙尚克·帕特爾 (Shashank Patel)。

Our CFO during today's call, Bob will provide an overview of the third quarter, our markets and our operations.

我們的財務長鮑伯將在今天的電話會議上概述第三季、我們的市場和營運情況。

Shashank will discuss the details of our third quarter performance and provide our outlook for the fourth quarter and for the full year following our remarks, we will address questions related to the information covered during the call.

沙尚克將討論我們第三季業績的細節，並提供我們對第四季度和全年的展望。

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 the presentation.

對非公認會計準則財務資訊的任何引用均在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 for information concerning these risks.

這些陳述存在許多風險和不確定性，可能導致實際結果與有關這些風險的資訊有重大差異。

See watts publicly available filings with the sec.

請參閱瓦茨向美國證券交易委員會公開提交的文件。

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

本公司不承擔因新資訊、未來事件或其他原因而更新或修改任何前瞻性陳述的義務。

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.

謝謝黛安，大家早安。

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

請翻到投影片 3，我將提供本季的概述。

We're pleased with our third quarter results which exceeded expectations during the quarter.

我們對第三季的業績感到滿意，超出了本季的預期。

Organic sales were down 4%.

有機銷售額下降 4%。

Strong growth in APMEA was offset by declines in the Americas and Europe.

APMEA 的強勁成長被美洲和歐洲的下滑所抵消。

The decline in the Americas was partly due to project timing and inventory safety stock reductions within our wholesale channel.

美洲地區的下降部分是由於我們批發渠道內的項目時間表和庫存安全庫存減少。

Europe was weaker than expected as a result of continued heat pump to stocking in our OEM channel adjusted operating margin of 17.1% exceeded our expectations primarily driven by productivity and cost controls which more than offset European volume.

歐洲表現弱於預期，因為我們的OEM 管道中持續熱泵庫存調整後的營業利潤率為17.1%，超出了我們的預期，這主要是由於生產力和成本控制的推動，這遠遠抵消了歐洲的銷量。

Deleverage adjusted operating margin was down 90 basis points compared to last year.

去槓桿調整後的營業利益率比去年下降了 90 個基點。

Primarily due to acquisition dilution in Europe volume.

主要是由於歐洲銷售的收購稀釋。

Deleverage year-to-date, free cash flow continues to be solid and we expect to generate seasonally strong free cash flow through year end, the balance sheet remains healthy and we have ample flexibility in our disciplined capital allocation strategy.

今年迄今的去槓桿化、自由現金流繼續保持穩健，我們預計到年底將產生季節性強勁的自由現金流，資產負債表保持健康，我們在嚴格的資本配置策略上擁有足夠的靈活性。

Strategic M&A high ROI CapEx competitive dividends and steady share buybacks remain our top capital allocation priorities.

策略併購、高投資報酬率資本支出、有競爭力的股利和穩定的股票回購仍然是我們資本配置的首要任務。

Moving to operations.

轉向營運。

The integrations of our Bradley and Josam and [NRE] acquisitions remain ahead of schedule with solid synergy savings being realized largely due to the strong execution by our global operations and sourcing teams.

我們的 Bradley 和 Josam 以及 [NRE] 收購的整合仍然提前，並實現了堅實的協同節約，這主要歸功於我們的全球營運和採購團隊的強大執行力。

We recently announced a project regarding the closure of a manufacturing plant in France as we currently are consulting with the appropriate French works council and local government authorities.

我們最近宣布了一個關於關閉法國一家製造工廠的項目，目前我們正在與相應的法國勞資委員會和當地政府當局進行磋商。

The timing for making a final decision to close the plant and related costs have yet to be determined or approved.

關閉工廠的最終決定的時間和相關費用尚未確定或批准。

If the project is approved, our plan would be to move the production from this plant to existing plants in France and other locations.

如果該項目獲得批准，我們的計劃是將生產從該工廠轉移到法國和其他地點的現有工廠。

In addition, we have initiated other cost reduction actions to further optimize our cost structure.

此外，我們也啟動了其他成本削減行動，進一步優化成本結構。

We expect to begin realizing these savings toward the end of 2024.

我們預計到 2024 年底開始實現這些節省。

Now a few comments on our end markets, global GDP remains positive and will continue to support repair and replacement activity which represents approximately 60% of our business.

現在對我們的終端市場進行一些評論，全球 GDP 仍然為正，並將繼續支持維修和更換活動，該活動約占我們業務的 60%。

Europe's residential and non-residential new construction markets continue to weaken the reduced energy and center programs continue to unfavorably impact OEM volume and drive destocking activity especially in the heat pump market in the Americas.

歐洲的住宅和非住宅新建市場繼續削弱能源減少，而中心計劃繼續對 OEM 數量產生不利影響，並推動去庫存活動，尤其是在美洲的熱泵市場。

Single family new construction remains muted and multi family new construction indicators have been down double digits since the end of last year.

自去年底以來，單戶新建建築依然低迷，多戶新建建築指標已下降兩位數。

On a positive note, America's institutional and light industrial new construction continues to be solid.

從積極的方面來看，美國的製度和輕工業新建設繼續保持穩固。

Global mega projects including data centers continue to provide a tailwind and are growing at a double digit pace.

包括資料中心在內的全球大型專案繼續提供推動力，並以兩位數的速度成長。

We believe our strategic account teams in each region are well positioned to participate in this growing market.

我們相信，我們在每個地區的策略客戶團隊都處於有利地位，可以參與這個不斷成長的市場。

Now, an update on our outlook for the fourth quarter in the full year as a reminder due to our fiscal year calendarization in 2024 we had extra shipping days in the first quarter and we now have fewer shipping days in the fourth quarter compared to the prior year.

現在，我們對全年第四季度的展望進行更新，作為提醒，由於我們的2024 財年日曆安排，我們在第一季度有額外的運輸天數，與上一季度相比，我們現在第四季度的運輸天數更少年。

As a result, we expect organic sales to be down mid to high single digits in the fourth quarter with an estimated 5% of that decrease attributable to fewer shipping days.

因此，我們預計第四季度有機銷售額將下降中位數至高個位數，其中預計 5% 的下降歸因於發貨天數減少。

We also anticipate a sequential decline in operating margins due to normal seasonality, incremental investments, volume, deleverage and the dilutive impact of our Bradley acquisition.

我們也預計，由於正常的季節性、增量投資、數量、去槓桿化以及布拉德利收購的稀釋影響，營業利潤率將連續下降。

While we expect Q4 to be softer, we're increasing the midpoint of our full year adjusted operating and EBITDA margin outlook due to our solid year-to-date performance, improved acquisition, profitability and the benefit of cost actions initiated at the end of the third quarter, which we expect will more than offset further weakness in Europe new construction and lower OEM volume from the reduced energy incentives in heat pump, the stocking.

雖然我們預計第四季度將更加疲軟，但由於我們年初至今的穩健業績、收購、盈利能力的改善以及年底發起的成本行動的好處，我們正在提高全年調整後營運和EBITDA 利潤率前景的中點。

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

我們繼續關注美國、歐洲和中東的地緣政治不確定性，我們相信我們有能力積極應對任何可能影響我們營運的發展。

Moving on to slide 4.

繼續看投影片 4。

I'd like to talk about the next phase of our smart and connected journey.

我想談談我們智慧互聯之旅的下一階段。

Over the last five years, we have made the digitalization of our business and solutions a strategic priority.

在過去的五年裡，我們將業務和解決方案的數位化作為策略重點。

We have reached critical milestones including achieving our goal of 25% of total sales being comprised of smart and connected enabled products.

我們已經達到了重要的里程碑，包括實現了智慧互聯產品佔總銷售額 25% 的目標。

By 2023 we have continuously increased usage of our digital solutions and remain focused on growing user adoption across our entire customer base today.

到 2023 年，我們不斷增加數位解決方案的使用，並繼續專注於提高當今整個客戶群的用戶採用率。

I'm thrilled to talk about what's next in this journey and excited to share details about "Nexa" our intelligent water management solution.

我很高興談論這趟旅程的下一步，並很高興分享有關「Nexa」我們的智慧水管理解決方案的詳細資訊。

We have been field testing, Nexa for over a year and are very excited about its unique potential to address critical trends within our industry, including skilled talent shortages in the facilities and plumbing spaces, the rise of smart building technologies and concern around aging water infrastructure.

我們對Nexa 進行了一年多的現場測試，對其解決行業內關鍵趨勢的獨特潛力感到非常興奮，這些趨勢包括設施和管道空間的熟練人才短缺、智能建築技術的興起以及對老化水基礎設施的擔憂。

Additionally, Nexa's purpose is directly aligned with our long-term strategy which focuses on water conservation, energy efficiency and safety & regulation.

此外，Nexa 的目標與我們注重節水、能源效率以及安全和監管的長期策略直接一致。

Nexa uniquely integrates sensing hardware, smart and connected equipment, a legacy of plumbing and hydraulic systems expertise and cutting-edge software into a powerful offering for customers in the commercial building space.

Nexa 以獨特的方式將感測硬體、智慧連網設備、管道和液壓系統專業知識以及尖端軟體整合到為商業建築領域的客戶提供強大的產品中。

This new solution provides unprecedented insight into water systems and unlock significant value in on site operations and water risk management while supporting sustainability targets.

這項新解決方案提供了對水系統前所未有的洞察力，並在現場營運和水風險管理方面釋放了巨大價值，同時支持永續發展目標。

We're able to provide this solution while continuously improving what our industry professionals care about most the experience of the occupants in their buildings.

我們能夠提供此解決方案，同時不斷改進我們的行業專業人士最關心的建築物內居住者的體驗。

If we turn to slide 5, we can see what Nexa offers at its core.

如果我們翻到投影片 5，我們可以看到 Nexa 提供的核心功能。

Nexa helps protect properties against the costly impact of water damages, saves teams time and effort associated with managing water assets, facilitates addressing water related compliance needs and provides critical insight to meet our customer sustainability goals.

Nexa 幫助保護財產免受水損害造成的代價高昂的影響，節省團隊與管理水資產相關的時間和精力，促進解決與水相關的合規需求，並提供關鍵的見解來滿足我們客戶的可持續發展目標。

It is a modular solution that can be deployed in any commercial property and is already empowering customers to address a wide spectrum of operational challenges including water usage, measurement, leak risk management, and mechanical room performance tracking.

它是一種模組化解決方案，可以部署在任何商業房地產中，並且已經幫助客戶解決了廣泛的營運挑戰，包括用水、測量、洩漏風險管理和機械室性能追蹤。

Nexa can either be used on its own to optimize building water systems or as a complement to existing building management solutions.

Nexa 既可以單獨使用來優化建築供水系統，也可以作為現有建築管理解決方案的補充。

It is easy to deploy in new builds or as a retrofit, intuitive to use compatible with key water related equipment and comes with expert support that Watts is uniquely positioned to provide it unlocks actionable value for users, managers and owners of commercial properties and systems that have historically been complex and hard to monitor and automate.

它易於在新建或改造中部署，使用直觀，與關鍵的水相關設備兼容，並配有專家支持，Watts 具有獨特的優勢，可以為商業地產和系統的用戶、管理者和所有者釋放可操作的價值，歷史上一直很複雜且難以監控和自動化。

Nexa is a pivotal step in our goal to build new business models geared towards services and reoccurring revenue.

Nexa 是我們建立以服務和經常性收入為導向的新業務模式這一目標的關鍵一步。

It will be monetized through an ongoing subscription fee for active customers while its adoption will increasingly create value for Watts by reinforcing our core business of equipment in solution sales based on feedback from customers.

它將透過對活躍客戶的持續訂閱費用來貨幣化，而其採用將根據客戶的反饋加強我們在解決方案銷售中的設備核心業務，從而為 Watts 創造越來越多的價值。

Nexa is an undeniably a valuable tool yielding many powerful examples of value creation in commercial properties such as multinational hotel brands, educational campuses and franchise restaurant chains.

不可否認，Nexa 是一個有價值的工具，在商業房地產（例如跨國酒店品牌、教育校園和特許經營連鎖餐廳）中產生了許多強有力的價值創造範例。

From early detection of risk to solving complex system balancing issues.

從早期發現風險到解決複雜的系統平衡問題。

It has delivered immediate results for nearly every property deploying it.

它為幾乎所有部署它的酒店帶來了立竿見影的效果。

We encourage you to visit nexaplatform.com to find out more about the valuable water management solution we have created before I turn the call over to Shashank to discuss our financial results.

在我將電話轉給 Shashank 討論我們的財務表現之前，我們鼓勵您訪問 nexaplatform.com，以詳細了解我們創建的有價值的水管理解決方案。

I want to take a moment to comment on our CFO transition.

我想花點時間評論一下我們財務長的過渡。

We announced yesterday that Shashank will be retiring on March 15th, 2025.

我們昨天宣布 Shashank 將於 2025 年 3 月 15 日退休。

Although he will continue as CFO until a successor is named.

不過，在任命繼任者之前，他將繼續擔任財務長。

To ensure a smooth transition.

確保平穩過渡。

We have begun a comprehensive search to identify a successor which will include both internal and external candidates.

我們已經開始全面尋找繼任者，其中包括內部和外部候選人。

The board, the executive leadership team and I are incredibly grateful for Shashank leadership during his more than six years as the CFO of Watts, he's been an invaluable partner and has made significant contributions to our success with that.

董事會、執行領導團隊和我非常感謝 Shashank 在擔任 Watts 財務長六年多期間的領導，他是一位寶貴的合作夥伴，為我們的成功做出了重大貢獻。

I'll turn the call over to Shashank who will address your third quarter results and discuss our fourth quarter and full year outlook.

我會將電話轉給 Shashank，他將討論您的第三季業績並討論我們的第四季和全年展望。

Shashank.

沙申克。

Thanks Bob and good morning, everyone.

謝謝鮑勃，大家早安。

Please turn to slide 6 and I will review the third quarter's consolidated results.

請翻到投影片 6，我將回顧第三季的綜合業績。

Sales of $544 million were up 8% on a reported basis and down 4% organically solid organic growth in APMEA was offset by another challenging quarter in Europe and a decline in the Americas where we are unfavorably impacted by project timing and inventory safety stock reductions within our wholesale channel.

據報告，銷售額為5.44 億美元，成長8%，APMEA 的有機成長下降4%，但被歐洲另一個充滿挑戰的季度和美洲的下滑所抵消，在美洲，我們受到專案時間安排和庫存安全庫存減少的不利影響。

The acquisitions of Bradley and Josam contributed approximately $59 million or 12%.

Bradley 和 Josam 的收購貢獻了約 5,900 萬美元或 12%。

And foreign exchange increased sales by approximately $1 million versus the third quarter of 2023.

與 2023 年第三季相比，外匯銷售額增加了約 100 萬美元。

Compared to the prior year adjusted operating profit of $93 million increased 2% and adjusted operating margin of 17.1% was down 90 basis points.

與前一年相比，調整後營業利潤 9,300 萬美元成長 2%，調整後營業利益率 17.1% 下降 90 個基點。

Adjusted EBITDA of $106 million increased 5% and adjusted EBITDA margin of 20% was down, 50 basis points.

調整後 EBITDA 為 1.06 億美元，成長 5%，調整後 EBITDA 利潤率為 20%，下降 50 個基點。

Adjusted operating and EBITDA margin benefited from price productivity, favorable mix and cost controls which were more than offset by inflation volume, deleverage acquisition dilution of approximately 70 basis points and incremental investments of $6 million.

調整後的營業利潤率和 EBITDA 利潤率受益於價格生產力、有利的組合和成本控制，但這些因素被通膨量、約 70 個基點的去槓桿收購稀釋和 600 萬美元的增量投資所抵消。

Adjusted earnings per share of $2.03 were slightly down versus last year with benefits from acquisitions offset by a decline in operational contribution and incremental interest expense.

調整後每股收益為 2.03 美元，較去年略有下降，收購帶來的收益被營運貢獻和增量利息支出的下降所抵消。

The adjusted effective tax rate was 25.2% down 20 basis points compared to the prior year period.

調整後的有效稅率為25.2%，比去年同期下降20個基點。

For GAAP purposes, we incurred approximately $7.4 million in restructuring and acquisition related charges.

就 GAAP 而言，我們產生了約 740 萬美元的重組和收購相關費用。

These charges were more than offset by a $7.8 million non-recurring gain on the settlement of the terminated Bradley pension plan.

這些費用被終止的布拉德利退休金計畫結算所產生的 780 萬美元非經常性收益所抵銷。

Our year-to-date free cash flow was $204 million up from $182 million in the comparable period last year.

我們今年迄今的自由現金流為 2.04 億美元，高於去年同期的 1.82 億美元。

Primarily due to the contribution from our acquisitions, we expect the seasonally strong free cash flow to continue in the fourth quarter.

主要由於我們收購的貢獻，我們預計季節性強勁的自由現金流將在第四季度繼續。

And consequently, we are increasing our full year free cash flow conversion target to 100% or more of net income from the 90% conversion, previously communicated.

因此，我們將全年自由現金流轉換目標從先前溝通的 90% 轉換提高到淨利潤的 100% 或更高。

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

資產負債表依然穩健，為我們提供了充足的資本彈性。

Our net debt to capitalization ratio at quarter end was negative 6% and our net leverage was negative 0.2%.

季末我們的淨負債與資本比率為負 6%，淨槓桿比率為負 0.2%。

A strong cash flow healthy balance sheet and available credit continue to give us capital allocation optionality.

強勁的現金流、健康的資產負債表和可用信貸繼續為我們提供資本配置選擇。

Please turn to slide 7 and I'll provide a few comments on the regional results.

請參閱投影片 7，我將對區域結果提供一些評論。

America's organic sales were down 3% and reported sales were up 14% year-over-year.

美國的有機銷售額下降 3%，報告銷售額年增 14%。

Organic sales declined partly due to the previously communicated project timing between the second and third quarters and inventory safety stock reductions within our wholesale channel driven by our normalized lead times.

有機銷售額下降的部分原因是先前溝通的第二季和第三季之間的專案時間安排以及我們標準化交貨時間推動的批發通路內庫存安全庫存的減少。

The acquisitions of Bradley and Josam added $59 million or 17% to America's sales in the quarter.

Bradley 和 Josam 的收購使美國本季的銷售額增加了 5,900 萬美元，即 17%。

Adjusted operating income increased 2% while adjusted operating margins decreased 260 basis points.

調整後營業收入成長 2%，而調整後營業利益率下降 260 個基點。

The operating margin decline was probably driven by acquisition dilution, inflation, volume deleverage and incremental investments which more than offset price and productivity.

營業利潤率下降可能是由收購稀釋、通貨膨脹、數量去槓桿化和增量投資造成的，這些都抵消了價格和生產力的影響。

Europe organic sales were down 12% and reported sales were down 11% which included a 1% favorable impact from foreign exchange movements.

歐洲有機銷售額下降 12%，報告銷售額下降 11%，其中包括外匯變動帶來的 1% 有利影響。

Double digit growth in our drains business was more than offset by declines in our wholesale plumbing sales in France, Benelux and Scandinavia.

我們的排水業務的兩位數成長被我們在法國、比荷盧經濟聯盟和斯堪的納維亞半島批發管道銷售的下降所抵消。

As well as our only in business in Germany and Italy.

以及我們僅在德國和義大利開展業務。

Where heat pump, these stock had a significant negative impact.

在熱泵領域，這些庫存產生了顯著的負面影響。

Adjusted operating income decreased 10% while adjusted operating margins increased 20 basis points, price favorable mix and productivity offset inflation, volume deleverage and incremental investments.

調整後營業收入下降 10%，而調整後營業利潤率增加 20 個基點，有利的價格組合和生產力抵消了通貨膨脹、數量去槓桿化和增量投資。

APMEA organic sales were up 8% and reported sales grew 10% due to healthy demand and a 2% benefit from favorable foreign exchange movements.

APMEA 有機銷售額成長了 8%，報告銷售額因健康需求成長了 10%，並且受益於有利的外匯變動而成長了 2%。

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

我們看到中國、紐西蘭和中東地區的強勁成長。

Growth in China was driven by demand in data centers.

中國的成長是由資料中心的需求所推動的。

Adjusted operating income increased 18% and adjusted operating margin increased 130 basis points as volume and productivity more than offset inflation, incremental investments and the diluted effect of the annual acquisition.

調整後營業收入成長 18%，調整後營業利潤率成長 130 個基點，產量和生產力足以抵銷通貨膨脹、增量投資和年度收購的稀釋影響。

Slide 8, provides our assumptions about our fourth quarter and full year outlook.

投影片 8 提供了我們對第四季和全年前景的假設。

First, let's cover the fourth quarter outlook.

首先，我們來回顧一下第四季的前景。

On a reported basis, we expect sales to range between negative 4% to flat.

根據報告，我們預計銷售額將下降 4% 至持平。

We expect organic sales to decrease between 5% and 9%.

我們預計有機銷售額將下降 5% 至 9%。

As a reminder, we have fewer shipping days in the fourth quarter due to our fiscal year calendarization which will result in approximately 5% of decline versus last year.

提醒一下，由於我們的財政年度日曆化，我們第四季度的發貨天數較少，這將導致與去年相比下降約 5%。

Organic sales are expected to be down mid-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.

美洲有機銷售額預計將下降中個位數，歐洲將下降兩位數，但 APMEA 預計將成長低個位數，這部分抵消了有機銷售額的下降。

In addition to fewer shipping days, we anticipate continued softness in multi-family and non-residential new construction in the Americas and weaker European markets.

除了運輸天數減少外，我們預計美洲多戶住宅和非住宅新建建築以及疲軟的歐洲市場將持續疲軟。

Partly due to continued heat pump and related product de stocking.

部分原因是熱泵及相關產品持續去庫存。

We expect incremental sales in the Americas from acquisitions to be between $20 million and $25 million.

我們預計美洲地區因收購而帶來的銷售額增量將在 2,000 萬至 2,500 萬美元之間。

Fourth quarter adjusted EBITDA margins are expected to be in the range of 18.6% to 19.2% or up 70 basis points to 130 basis points.

第四季調整後 EBITDA 利潤率預計將在 18.6% 至 19.2% 之間，即上升 70 個基點至 130 個基點。

Fourth quarter adjusted operating margin should be in the range of 16% to 16.6% or up 20 basis points to 80 basis points.

第四季調整後營業利潤率應在 16% 至 16.6% 範圍內，即上升 20 個基點至 80 個基點。

The increase versus the prior year is due to price favorable mix and productivity that are more than offsetting the reduced volume incremental investments of approximately $4 million and approximately 30 basis points of dilution from the Bradley acquisition.

與前一年相比的成長是由於價格有利的組合和生產力，這足以抵消約 400 萬美元的增量投資減少和布拉德利收購帶來的約 30 個基點的稀釋。

The sequential decline in operating margin from Q3 is driven primarily by the impact of seasonal volume deleverage and incremental investments.

營業利潤率較第三季連續下降主要是受季節性去槓桿化和增量投資的影響。

We are estimating a [EUR1.08 US dollar] exchange rate for the fourth quarter versus the average rate of EUR1.07 in the fourth quarter of 2023.

我們預期第四季的匯率為 [1.08 美元]，而 2023 年第四季的平均匯率為 1.07 歐元。

This equates to an increase of approximately $1 million in sales and less than $0.01 in EPS versus the prior year.

這相當於銷售額比前一年增加了約 100 萬美元，每股收益比前一年增加了不到 0.01 美元。

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 narrowing our sales outlook range and expect reported sales to increase by 9% to 10%.

對於 2024 年全年，我們正在縮小銷售預期範圍，預計報告銷售額將成長 9% 至 10%。

We expect organic sales to decline between 1% and 2% with the midpoint, consistent with our previous guidance of minus 4% to plus 1%.

我們預計有機銷售額將下降 1% 到 2% 之間，與中點一致，與我們之前負 4% 到正 1% 的指導一致。

Full year incremental acquired sales for Bradley and Josam should be between $205 million to $210 million.

Bradley 和 Josam 的全年增量收購銷售額應在 2.05 億美元至 2.1 億美元之間。

We are increasing our full year adjusted EBITDA margin outlook to a range of up 10 basis points to up 30 basis points.

我們將全年調整後 EBITDA 利潤率預期上調至 10 個基點至 30 個基點。

We are also increasing our full year adjusted operating margin expansion to a range of down 10 basis points to down 30 basis points.

我們也將全年調整後營業利潤率擴大至下降 10 個基點至 30 個基點的範圍。

Both represent an increase of 20 basis points to the midpoint of our previous guidance.

兩者均比我們之前指導的中點增加了 20 個基點。

The solid results so far this year along with our fourth quarter, expectations are anticipated to more than offset weakening in Europe and acquisition dilution of 60 basis points.

今年迄今的穩健業績以及我們第四季度的預期預計將足以抵消歐洲疲軟和收購稀釋 60 個基點的影響。

We are also increasing our free cash flow conversion target to 100% or more of net income from the 90% conversion previously communicated.

我們也將自由現金流轉換目標從先前溝通的 90% 轉換提高到淨利潤的 100% 或更高。

For the full year, we are assuming a 1.09 average zero [SG fixed rate] versus the average rate of 1.08 in 2023.

對於全年，我們假設平均零利率為 1.09，而 2023 年的平均利率為 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 fourth quarter and the full year can be found in the appendix with regards to my announced retirement for the past six years.

第四季和全年的其他關鍵資訊可以在附錄中找到，其中涉及我過去六年宣布的退休。

It has been a privilege to be a part of the Watts leadership team while I'm looking forward to my retirement, I'm pleased to support the process to identify our next CFO and ensure a smooth transition.

我很榮幸能夠成為 Watts 領導團隊的一員，同時我也期待著退休，我很高興支持確定下一任財務長的流程並確保順利過渡。

I am confident that our global team will continue to fulfill our mission and successfully execute our long term strategy.

我相信我們的全球團隊將繼續履行我們的使命並成功執行我們的長期策略。

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

現在，在我們開始問答鮑伯之前，讓我將電話轉回給鮑伯。

Thanks Shashank on slide 9.

感謝幻燈片 9 上的 Shashank。

I'd like to summarize our discussion before we address your questions.

在回答您的問題之前，我想總結一下我們的討論。

Our third quarter performance exceeded expectations 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，我們第三季的業績超出了預期。

We're proud of the progress in our smart and connected journey and look forward to additional success with Nexa, the newest solution in our digital evolution.

我們對智慧互聯之旅所取得的進展感到自豪，並期待藉助我們數位發展中的最新解決方案 Nexa 取得更多成功。

Due to our strong year-to-date performance.

由於我們今年迄今的強勁表現。

We're increasing the midpoint of our full year adjusted operating in the EBITDA margin outlook.

我們正在提高全年調整後營運的 EBITDA 利潤率前景的中點。

We have taken proactive measures to optimize our cost structure through planned footprint reductions and other cost actions across our regions which will contribute to long term margin expansion.

我們已採取積極措施，透過計劃減少足跡和跨地區的其他成本行動來優化我們的成本結構，這將有助於長期利潤率的擴張。

Our strong free cash flow generation and balance sheet continue to provide flexibility to execute our disciplined capital allocation strategy.

我們強大的自由現金流產生和資產負債表繼續為執行我們嚴格的資本配置策略提供靈活性。

We continue to successfully navigate near term challenges in softening economic conditions by controlling costs and delivering customer excellence to capture demand.

我們透過控製成本和提供卓越的客戶服務來捕捉需求，並持續成功應對經濟形勢疲軟的近期挑戰。

Our long term strategy continues to be on investing for the future and positioning ourselves to capitalize on long term market opportunities from favorable secular trends including water conservation, safety, and regulation and energy efficiency.

我們的長期策略仍然是投資未來，並定位自己以利用有利的長期趨勢（包括節水、安全、監管和能源效率）帶來的長期市場機會。

With that operator, please open the lines for questions.

請透過該接線員開啟提問線路。

Thank you.

謝謝。

(Operator Instructions).

（操作員說明）。

And your first question comes from the line of Jeff Hammond with KeyBanc.

你的第一個問題來自 Jeff Hammond 與 KeyBanc 的對話。

Your line is open.

您的線路已開通。

Hey, good morning.Guys.

嘿，早上好，夥計們。

Good morning.

早安.

Just maybe an update on where do you think we are in the bottoming for heat pump, the stock and just inventory adjustments in the US and maybe just speak in the North America where you're, where specifically you're seeing the destocking.

也許只是更新您認為我們在美國的熱泵、庫存和庫存調整的觸底情況，也許只是談談您所在的北美地區，特別是您看到庫存減少的情況。

Yeah, so lets start off with the heat pump is mainly in Europe.

是的，讓我們從熱泵主要在歐洲開始。

And as we talked about on the last call, we believe that's going to continue through the first, at least the first quarter of next year because of the inventory build, etcetera.

正如我們在上次電話會議中談到的那樣，我們相信由於庫存增加等原因，這種情況將持續到明年第一季度，至少是明年第一季。

Back to the North America.

回到北美。

On the last call we talked about, we saw de Stocking in the wholesale channel at the beginning of Q3.

在我們談到的最後一次電話會議中，我們在第三季初在批發管道看到了去庫存。

We believe that for the most part that's over at this point in time.

我們相信，目前大部分情況已經結束。

And your final part of your question is in regard to construction, I mean, most of the most, all the markets are similar to Q2, except we were expecting a multi family to start seeing softness.

你問題的最後一部分是關於建築的，我的意思是，大多數市場都與第二季度相似，除了我們預計多戶家庭會開始出現疲軟。

And that's exactly what we started seeing in Q3.

這正是我們在第三季開始看到的情況。

So that's the only area I would say.

所以這是我要說的唯一領域。

It's different than Q2.

與Q2不同。

We started seeing that softness rolling through in Q3.

我們開始看到第三季出現疲軟。

Okay.

好的。

And then a lot of moving pieces to the demand environment, just any kind of early thoughts and where you might see positive, negative inflections as you look into into 25.

然後是需求環境的許多變化，任何類型的早期想法，以及當你研究 25 時你可能會看到正面、負面的變化。

Well, we haven't given guidance yet, but in general, I always go back to 60% of our business is repair, replace, that should follow GDP.

嗯，我們還沒有給出指導，但總的來說，我總是回到我們業務的 60% 是維修、更換，這應該遵循 GDP。

And certainly once we get the Presidential election, some of the uncertainty out there as well as the continued falling rates expectations.

當然，一旦我們舉行總統選舉，就會出現一些不確定性以及利率預期持續下降。

So I think there's just a lot of pause and new construction right now waiting for some of these uncertainties to unfold and played out.

因此，我認為現在有許多暫停和新的建設等待其中一些不確定性的展開和發揮。

So, and that's how we're looking at it.

所以，這就是我們的看法。

Okay.

好的。

Hey, Shashank, congrats on the retirement.

嘿，Shashank，恭喜你退休。

Best of luck.

祝你好運。

Thank you very much, Jeff.

非常感謝你，傑夫。

Your next question comes from the line of Ryan Connors with Northcoast Research, your line is open.

您的下一個問題來自 Northcoast Research 的 Ryan Connors 專線，您的專線已開通。

Yeah, thanks.

是的，謝謝。

Good morning.

早安.

And, it sounds like we'll have one more call with you, Shashank.

而且，聽起來我們還要再跟你通一次電話，Shashank。

But, yeah, congrats on the decision to retire.

但是，是的，恭喜你做出退休的決定。

Thank you.

謝謝。

Wanted to, actually just talk about Europe for a second, a couple of aspects first.

其實我想先談談歐洲，首先是幾個面向。

Just tactically, it seems like that drains business was strong there and that really seems to be bucking the trend and kind of preventing things from being a little worse.

從戰術上來說，那裡的排水業務似乎很強勁，這似乎確實逆勢而上，並在某種程度上防止事情變得更糟。

I mean, can you talk about what's exactly driving that particular product line to buck the trend like that and how sustainable that can be as we move, four quarter and beyond.

我的意思是，您能否談談到底是什麼推動了該特定產品線逆勢而上，以及隨著我們的發展（第四季度及以後），這種趨勢的可持續性如何。

Yeah, the, our drain business in Europe is really around stainless steel drains and they play a lot in the marine market, cruise ships, military as well as food processing and that has come back and I was just over in Denmark at that location a few weeks ago, meeting with the entire leadership team and sales team and they feel confident in those markets.

是的，我們在歐洲的排水管業務實際上是圍繞不銹鋼排水管展開的，它們在海洋市場、遊輪、軍事以及食品加工領域發揮著很大的作用，而且它已經回來了，我剛剛在丹麥的那個地方幾週前，與整個領導團隊和銷售團隊會面，他們對這些市場充滿信心。

So it's a nice offset to some of the softness in Europe, which really is around new construction, right?

因此，這很好地抵消了歐洲的一些疲軟，這實際上是圍繞新建築的，對嗎？

There's so much uncertainty right now, new construction and then the heat pump, and Overstock as well as the I would call the incentives that are out there of people are still waiting for them to be finalized.

現在有很多不確定性，新建築、熱泵、庫存積壓以及我稱之為人們的激勵措施仍在等待最終確定。

Got it.

知道了。

Okay.

好的。

And then staying on Europe for a second and then one more as well.

然後在歐洲停留一秒鐘，然後再停留一次。

But obviously, this wouldn't be your first significant restructuring action in Europe if this one does move ahead in France.

但顯然，如果法國確實取得了進展，這將不是你們在歐洲的第一個重大重組行動。

Can you just talk about the European footprint from a strategic perspective?

您能否從戰略角度談談歐洲的足跡？

I mean, do we still have kind of a structural issue there given the headwinds over the last few years or should we look at this as more of a surgical kind of a move?

我的意思是，考慮到過去幾年的不利因素，我們是否仍然存在某種結構性問題，或者我們是否應該將其視為更多的外科手術措施？

No, I think we're always looking to optimize our footprint there. we are always looking when we can to adjust our footprint and our cost structure based on market demand.

不，我認為我們一直在尋求優化我們在那裡的足跡。我們一直在尋找何時能夠根據市場需求調整我們的足跡和成本結構。

So, like you said, we're working through the Workers Council.

所以，就像你說的，我們正在透過工人委員會來開展工作。

No agreement has been set at this point in time.

目前尚未達成任何協議。

So we're working that process and we'll continue to always review our footprint, not only in Europe, but North America and all over the world.

因此，我們正在進行這項流程，並將繼續審查我們的足跡，不僅在歐洲，而且在北美和世界各地。

And then on this next Bob.

然後是下一個鮑伯。

Thanks for the great interesting update there.

感謝您提供的非常有趣的更新。

But can you talk about the go to market strategy for?

但您能談談進入市場的策略嗎？

That sounds really interesting.

聽起來真的很有趣。

I assume the distributors will play a central role in actually bringing that to market.

我認為分銷商將在實際將其推向市場的過程中發揮核心作用。

So you can you confirm that and talk about the training aspect of getting them up to speed and how long it will really take to get the channel partners ready to really move the needle with that.

因此，您可以確認這一點，並討論讓他們加快速度的培訓方面，以及讓通路合作夥伴準備好真正採取行動需要多長時間。

Yeah, we are using a multi facet approach.

是的，我們正在使用多方面的方法。

So we are using our channel partners, we are using our strategic accounts as well as we are using the direct sales for it.

因此，我們正在利用我們的通路合作夥伴、我們的策略客戶以及我們的直接銷售。

So, it's unique, it's different, but it really is a way of pulling all our smart and connected products into an overall ecosystem and tying it together to solve some of the most critical issues inside of a building.

所以，它是獨特的，它是不同的，但它確實是將我們所有的智慧和互聯產品納入一個整體生態系統並將其結合在一起以解決建築物內部一些最關鍵問題的一種方式。

So we're excited about it early innings.

所以我們對前幾局感到興奮。

But it's something we've been working on for a long time.

但這是我們長期以來一直在努力的事情。

Yeah, it sounds interesting.

是的，聽起來很有趣。

Good luck with that.

祝你好運。

Thanks guys.

謝謝你們。

Thank you.

謝謝。

Your next question comes from the line of Mike Halloran with Baird.

你的下一個問題來自 Mike Halloran 和 Baird 的對話。

The line is open.

線路已開通。

Hey, good morning, everybody.

嘿，大家早安。

This is Pez Im in for Mike.

我是佩茲，我是麥克的代表。

I wanted to ask on Nexa, seems like a very exciting announcement.

我想問 Nexa，這似乎是一個非常令人興奮的公告。

Can you maybe talk about the sales process for that?

能談談銷售流程嗎？

I would imagine that the sales process is pretty different than some of your existing products.

我想銷售流程與你們現有的一些產品有很大不同。

Just given that it's more of a platform and then maybe talk about how you think about customer adoption and receptivity.

只是考慮到它更像是一個平台，然後也許可以談談您如何看待客戶採用和接受度。

Yeah.

是的。

So you're right.

所以你是對的。

It is different than what we traditionally sold, but we have a lot of relationships with our strategic account and customers to solve issues.

它與我們傳統上銷售的產品不同，但我們與策略客戶和客戶建立了許多關係來解決問題。

And that's where really we're pinpointing it when customers have issues or problem locations, we're leveraging this capability and a lot of training along the way.

這就是當客戶遇到問題或問題位置時我們真正要找出答案的地方，我們正在利用這種功能並在過程中進行大量培訓。

So, this industry is slow to move to new technology as we all know.

因此，眾所周知，這個行業轉向新技術的速度很慢。

But as you're providing value like we have in our test pilots with this stuff, we've had this out for over a year now.

但是，當您提供像我們在測試飛行員中使用這些東西一樣的價值時，我們已經這樣做了一年多了。

So we've learned a lot and pretty much every single property has had less than one year payback on this thing.

因此，我們學到了很多東西，幾乎每個房產都在不到一年的時間內獲得了回報。

So the way we go to market is we sell the original equipment to connect it and then put a SAS model on top of that.

因此，我們進入市場的方式是銷售原始設備來連接它，然後在其上放置 SAS 模型。

That's super helpful.

這非常有幫助。

And then as you've been in the field testing and as you're learning more about the capabilities and that opened up maybe new areas of interest for future investment, whether that's internal organic investment or potential M&A is there anything that maybe has become more interesting as you've kind of gone down this path and gotten more insight into your customers and their problems?

然後，當您進行現場測試並了解更多有關功能的資訊時，這可能會為未來投資開闢新的興趣領域，無論是內部有機投資還是潛在的併購，是否有任何事情可能變得更加重要有趣的是，您已經沿著這條路走了下去，並對您的客戶及其問題有了更深入的了解？

Yeah, it really has.

是的，確實有。

I mean, we spend a lot of time getting voice of customer for our new product development.

我的意思是，我們花了很多時間為我們的新產品開發獲取客戶的聲音。

This just gives us another avenue.

這只是為我們提供了另一條途徑。

And what we're learning is we go to multiple locations, there's a lot of similar issues that we're learning and putting in our system in our database.

我們正在了解的是，我們去了多個地點，我們正在了解很多類似的問題，並將其放入我們的系統資料庫中。

So yes, it's helpful, not going to get any specifics, but teams are learning a lot as well as it helps sell our core products when they have issues inside of the facilities.

所以，是的，這很有幫助，不會得到任何細節，但團隊正在學習很多東西，並且當他們在設施內部遇到問題時，它有助於銷售我們的核心產品。

And we've been able to tie in the leak detection platforms we have in commercial buildings and residential, the learnings from that we've been able to tie into this product as well.

我們已經能夠將我們在商業建築和住宅中擁有的洩漏檢測平台結合起來，我們也能夠將從中學到的知識與該產品結合。

Great.

偉大的。

That's, super helpful.

那是，超有幫助。

I will pass it on.

我會把它傳遞下去。

Thank you.

謝謝。

The next question comes from Walter Liptak with Seaport Global.

下一個問題來自 Seaport Global 的 Walter Liptak。

Your line is open.

您的線路已開通。

Hi, thanks.

你好，謝謝。

Great quarter guys.

很棒的季度夥計們。

And Shashank, congratulations on your decision too.

Shashank，也恭喜你的決定。

Thank you.

謝謝。

I wanted to ask about two things.

我想問兩件事。

One, the European heat pump, one of your competitors talked about just how difficult that market has been.

其中之一是歐洲熱泵，您的一位競爭對手談到了該市場有多困難。

So I wonder if you could provide us with some more, details the size, how much it's declined and they were also calling for a bottoming, kind of right around now or maybe in the first quarter.

因此，我想知道您是否可以向我們提供更多信息，詳細說明其規模、下降了多少，他們還呼籲在現在或可能在第一季度觸底。

So I wonder if you could talk a little bit about 2025 and if you're thinking this market can recover off of the low base in 2025?

所以我想知道您是否可以談談 2025 年，您是否認為這個市場可以在 2025 年從低基數中恢復過來？

Yeah, I shared the comments you just said and we talked about that on an earlier question, but Yes.

是的，我分享了你剛才所說的評論，我們在之前的問題上討論過這一點，但是是的。

We do believe it's a tough market and a lot of it depends on the incentives that the local governments put in place to move that product.

我們確實相信這是一個艱難的市場，很大程度上取決於地方政府為轉移該產品所採取的激勵措施。

So we can't control that.

所以我們無法控制這一點。

We look at what we can control.

我們看看我們能控制什麼。

So we'll provide further guidance during our February call.

因此，我們將在二月的電話會議中提供進一步的指導。

As we'll see how much of that de stocking has happened, what's happened, some of the elections will impact that.

我們將看到去庫存的情況發生了多少，發生了什麼，一些選舉將對此產生影響。

Certainly.

當然。

So we're watching that closely and but things hopefully will begin bottoming out in the first half of next year.

因此，我們正在密切關注這一情況，但希望情況能在明年上半年開始觸底。

And then, well, on the incentives, right, Germany is in the process of finalizing their incentives on heat pumps.

然後，在激勵措施方面，德國正在最終確定對熱泵的激勵措施。

And obviously, Italy finalized at a lower rate about a year ago.

顯然，義大利大約一年前最終的利率較低。

And obviously, next year we will be [comping, we comps, so the week comps] do help, but we'll just have to see how it pans out as far as the

顯然，明年我們將[比賽，我們比賽，所以每週比賽]確實有幫助，但我們只需要看看它的效果如何

[beas talking].

[豌豆說話]。

Okay, great.

好的，太好了。

And then on the consolidation in France, I just wanted to get some clarity on the you made a comment that there's more consolidation moves that are coming out.

關於法國的整合，我只是想澄清一下您的評論，即將出現更多整合舉措。

Are you relating that to France specifically or are you thinking more globally about optimizing some of the footprints?

您是否特別將其與法國聯繫起來，或者您是否在全球範圍內考慮優化某些足跡？

No, we're not.

不，我們不是。

Maybe you misinterpreted what I said, we always look at driving productivity and all around.

也許你誤解了我所說的，我們總是著眼於提高生產力和其他方面。

So I'm not saying we're doing another plant consolidation at all.

所以我並不是說我們要進行另一次工廠整合。

We continue to always look at our footprint productivity everywhere at every one of our sites and drive productivity.

我們將繼續始終關注我們每個站點的足跡生產力並提高生產力。

So, this is the only one that's on the plate at this point in time.

所以，這是目前盤子上唯一的一個。

And we're working with the local Workers Council to bring this to fruition.

我們正在與當地工人委員會合作，以實現這一目標。

Okay.

好的。

Got that.

明白了。

Sorry about that.

對此感到抱歉。

Thank you.

謝謝。

Thanks.

謝謝。

Your next question comes from the line of Adam Farley with Stifel.

你的下一個問題來自 Adam Farley 和 Stifel 的對話。

Your line is open.

您的線路已開通。

Yeah, thanks that I'm probably on for Nathan Jones.

是的，謝謝，我可能會代表內森瓊斯。

Want to start on at Mia Good to see solid double digit growth there.

希望從 Mia Good 開始，看到那裡穩定的兩位數增長。

Strong demand in China with your data centers business.

中國的資料中心業務需求強勁。

Is that mostly being driven by the data centers business?

這主要是由資料中心業務驅動的嗎？

Yes. the large growth is both the data centers in China as well as our growth in the Middle East, which has been strong.

是的。巨大的成長既來自於中國的資料中心，也來自於我們在中東的強勁成長。

Okay.

好的。

And then looking at Americas, you highlighted strength in institutional light, industrial, new construction.

然後看看美洲，您強調了輕機構、工業、新建築的實力。

What's kind of driving that and you have expectations going forward on how that those markets will play out.

是什麼推動了這一趨勢，以及您對這些市場未來將如何發展的預期。

Well in institutional has usually been very steady for us over the many years we've been in it.

多年來，我們在機構中的表現通常非常穩定。

Their spending in schools and hospitals continues.

他們在學校和醫院的支出仍在繼續。

So we expect that to continue, it's not as volatile as the other parts of the market.

因此，我們預計這種情況會持續下去，不會像市場其他部分那樣波動。

So we'll continue to watch that but that's been a long standing trend.

所以我們將繼續關注這一點，但這是一個長期存在的趨勢。

Okay.

好的。

Thank you for taking my questions.

感謝您回答我的問題。

Thank you.

謝謝。

Your next question comes from the line of Joe Giordano with Cowen & Company.

您的下一個問題來自 Cowen & Company 的 Joe Giordano。

Your line is open.

您的線路已開通。

Hi, good morning.

嗨，早安。

This is Zane on for Joe. I just wanted to check how you guys have.

這是讚恩為喬代言的。我只是想看看你們怎麼樣。

Good morning.

早安.

How are you guys thinking about the institutional building cycle?

你們如何看待制度建設週期？

Do you think it maybe it's elongated more versus previous cycles?

您認為與先前的週期相比，它可能會延長更多嗎？

It was up for so long and now moving kind of in the wrong direction.

它已經存在了很長時間，現在卻朝著錯誤的方向發展。

Are you concerned about how long the dip can be given?

您是否擔心浸泡可以持續多久？

How far up we've come?

我們已經走了多遠？

When you say institutional, we just talked about it that in the last call, institutional is held steady and it's growing and it goes ups and downs based on projects, but in general, we feel institutional will continue to grow.

當你說到機構時，我們剛剛在上次電話會議中談到，機構保持穩定並且正在成長，並且根據專案而起伏，但總的來說，我們認為機構將繼續成長。

Over the next 12 months to 18 months.

未來12個月到18個月。

Okay.

好的。

Thank you.

謝謝。

Understood.

明白了。

But just, just generally more on the market side in terms of like the broader building cycle.

但就更廣泛的建築週期而言，一般來說更多的是在市場方面。

Do you guys envision that changing in any way, in terms of the cycle length?

你們認為這種情況會在周期長度方面發生任何改變嗎？

I think you're referring to the non-institutional, right?

我想你指的是非制度性的，對吧？

So all the non-residential new construction that is not institutional.

所以所有的非住宅新建工程都不是製度性的。

Is that what you're asking about?

你問的是這個嗎？

Yes, sorry.

是的，抱歉。

Yes.

是的。

Non institutional, sorry.

非機構性的，抱歉。

Right.

正確的。

And then that is, look at, when you look at the [ABI indicators] for the last 18 months, they've been below 50 right.

然後，當你查看過去 18 個月的 [ABI 指標] 時，它們一直低於 50。

So they certainly were challenged in the third quarter.

所以他們在第三季肯定受到了挑戰。

And we expect that to continue.

我們預計這種情況會持續下去。

Obviously, we'll give guide for next year.

顯然，我們將為明年提供指導。

But the leading indicators, pretend softness for some time.

但先行指標在一段時間內假裝疲軟。

Okay.

好的。

Thank you for that.

謝謝你。

I'll pass that along.

我會把它傳給你。

Thank you.

謝謝。

(Operator Instructions).

（操作員說明）。

I will turn it back over to Bob Pagano, President and CEO for closing remarks.

我將把它轉交給總裁兼執行長 Bob Pagano 致閉幕詞。

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 fourth quarter earnings call.

我們感謝您對瓦茨的持續關注，並期待在我們的第四季度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。

Thank you.

謝謝。

This does conclude today's conference.

今天的會議到此結束。

You may now disconnect.

您現在可以斷開連線。