Watts Water Technologies Inc (WTS) 2025 Q3 法說會逐字稿

Thank you for standing by. At this time, I would like to welcome everyone to today's third quarter 2025 Watts Water Technologies earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions)

感謝您的耐心等待。在此，我謹代表 Watts Water Technologies 公司，歡迎大家參加今天舉行的 2025 年第三季財報電話會議。所有線路均已靜音，以防止任何背景噪音。演講結束後，將進行問答環節。（操作說明）

Thank you. I'd now like to turn the call over to Diane McClintock, Senior Vice President of Investor Relations. Diane.

謝謝。現在我將把電話交給投資者關係高級副總裁黛安·麥克林托克。黛安。

Thank you and good morning, everyone. Welcome to our third quarter earnings conference call. Joining me today are Bob Pagano, President and CEO, and Ryan Lada, our CFO.

謝謝大家，大家早安。歡迎參加我們第三季財報電話會議。今天和我一起出席的有總裁兼執行長鮑伯·帕加諾，以及財務長瑞安·拉達。

During today's call, Bob will provide an overview of the third quarter, a business update, and an update on our outlook for 2025. Ryan will discuss the details of our third quarter performance and provide our outlook for the fourth quarter and for the full year.

在今天的電話會議上，鮑伯將概述第三季狀況、業務最新進展以及我們對 2025 年的展望。Ryan 將詳細討論我們第三季的業績，並展望第四季和全年的業績。

Following our remarks, we will address questions related to the information covered during the call. Today's webcast is accompanied by a presentation which can be found in the investor relations section of our website. We will reference this presentation throughout our prepared remarks. Any reference to non-GAAP financial information is reconciled in the appendix to the presentation.

發言結束後，我們將回答與本次通話內容相關的問題。今天的網路直播附帶一份演示文稿，您可以在我們網站的投資者關係部分找到該演示文稿。我們將在發言稿中多次提及這份簡報。本簡報附錄中對任何非公認會計準則財務資訊的說明進行了調整。

I'd like to remind everyone that during this call we may be making certain comments that constitute forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially. For information concerning these risks, see Watt's publicly available filings with the SEC.

我想提醒大家，在本次電話會議中，我們可能會發表一些構成前瞻性陳述的評論。這些聲明受諸多風險和不確定因素的影響，可能導致實際結果與聲明有重大差異。有關這些風險的信息，請參閱 Watt 向美國證券交易委員會提交的公開文件。

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聲明的義務。

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

接下來，我將把電話交給鮑伯。

Thank you, Diane, and good morning, everyone. Please turn to Slide 3 and I'll provide an overview of the quarter.

謝謝你，黛安，大家早安。請翻到投影片3，我將對本季進行概述。

We're pleased with our strong third quarter results, which exceeded expectations. Watts's multi-year track record of success would not be possible without the dedication, collaboration, and support of our team members and business partners, and I'd like to express my sincere gratitude.

我們對第三季強勁的業績感到滿意，該業績超出了預期。Watts 多年來取得的成功，離不開我們團隊成員和商業夥伴的奉獻、協作和支持，我謹表達我由衷的感謝。

Organic sales increased 9% in the quarter with favorable price in the Americas, volume and pull forward demand more than offsetting the decline in Europe. We also benefited from incremental sales from our I-CON and EasyWater acquisitions and favorable foreign exchange movements. Adjusted operating margin of 18.5% was better than anticipated due to favorable price, volume, leverage, productivity, and mix.

本季有機銷售額成長了 9%，美洲地區價格有利，銷量和提前需求的成長足以抵消歐洲地區的下滑。我們也受惠於收購 I-CON 和 EasyWater 帶來的增量銷售額以及有利的匯率波動。由於價格、銷售量、槓桿率、生產力和產品組合的有利因素，調整後的營業利潤率為 18.5%，比預期好。

Year-to-day 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 to support our disciplined capital allocation strategy.

今年以來，自由現金流持續穩健，我們預計到年底將產生季節性強勁的自由現金流。資產負債表依然健康，我們有充足的彈性來支持我們嚴謹的資本配置策略。

On that note, we're excited to have acquired Haws Corporation, a leading global brand providing emergency safety and hydration solutions for use in industrial, institutional, and nonresidential end markets for more than 120 years.

在此，我們很高興收購了 Haws Corporation，這是一個領先的全球品牌，120 多年來一直為工業、機構和非住宅終端市場提供緊急安全和補水解決方案。

The addition of Haw's innovative specified product portfolio enhances our value proposition and broadens our capabilities. Haws has annual sales of approximately $60 million and is expected to be modestly diluted to margins for the first year while we integrate and realize the benefits of synergies leveraging the one Watts performance system.

Haw 創新特定產品組合的加入，增強了我們的價值主張，並拓寬了我們的能力。Haws 的年銷售額約為 6000 萬美元，預計在第一年，隨著我們整合並利用 Watts 一體化性能係統實現協同效應，其利潤率將略有下降。

I'm also pleased with the integrations of Bradley, Josam, I-CON, and EasyWater, which are progressing well, and synergy realization is tracking ahead of our original estimates. We continue to proactively manage tariff-related challenges through strategic pricing and supply chain optimization.

我也對 Bradley、Josam、I-CON 和 EasyWater 的整合進展順利感到滿意，綜效的實現也超過了我們最初的預期。我們將繼續透過策略定價和供應鏈優化，積極應對關稅相關的挑戰。

The tariff environment remains uncertain, but based on tariffs in effect as of today, our global direct tariff impact in 2025 is estimated to be $40 million consistent with our guidance at the last earnings call. We have successfully handled the cost impact so far in 2025 and plan to continue doing so.

關稅環境仍不明朗，但根據目前生效的關稅，我們預計 2025 年全球直接關稅影響將達到 4,000 萬美元，這與我們上次財報電話會議的指導一致。到目前為止，我們已經成功應對了 2025 年的成本影響，並計劃繼續這樣做。

Now an update on our outlook for the remainder of the year. Due to our strong third quarter performance and our expectations for the fourth quarter, we're increasing our full year sales and margin outlook. Tariff-related price increases, foreign exchange movements, strong data center sales, and the acquisition of Haws are all favorable relative to the sales outlook we provided in August.

現在來更新我們對今年剩餘時間的展望。由於第三季業績強勁，且我們對第四季度充滿信心，因此我們提高了全年銷售額和利潤率預期。關稅相關的價格上漲、外匯波動、強勁的資料中心銷售以及對 Haws 的收購，都與我們 8 月提供的銷售前景相比是有利的。

However, there's ongoing uncertainty around the impact of supply chain disruptions and tariffs, including the effect on new construction and global GDP as well as around the impact of the US government shutdown, as a reminder, GDP is a proxy for our repair and replacement business, which represents approximately 60% of total revenue.

然而，供應鏈中斷和關稅的影響仍然存在不確定性，包括對新建築和全球 GDP 的影響，以及美國政府停擺的影響。需要提醒的是，GDP 是我們維修和更換業務的指標，該業務約佔總收入的 60%。

With that, let me turn the call over to Ryan, who will address our third quarter results and our fourth quarter in full year outlook in more detail. Ryan?

接下來，我將把電話交給 Ryan，他將更詳細地介紹我們第三季的業績以及我們對第四季和全年的展望。瑞恩？

Thank you, Bob, and good morning, everyone. Please turn to slide 4, which highlights our third quarter results. Sales reached $612 million, setting a third quarter record for Watts. This reflects growth of 13% on a reported basis and 9% on an organic basis.

謝謝你，鮑勃，大家早安。請翻到第 4 張投影片，其中重點介紹了我們第三季的業績。銷售額達到 6.12 億美元，創下 Watts 第三季紀錄。按報告數據計算，增長了 13%；以有機增長計算，增長了 9%。

Strong organic growth in the Americas more than offset a decline in Europe and a flat quarter in APMEA. In the Americas, reported sales were up 16% and organic sales were up 13%, exceeding expectations. Growth was driven by favorable price, volume, and approximately 11 million of pull forward demand.

美洲強勁的內生成長足以抵銷歐洲的下滑和亞太、中東及非洲地區季度持平的影響。在美洲，報告銷售額成長了 16%，有機銷售額成長了 13%，均超出預期。成長得益於有利的價格、銷量以及大約 1100 萬件的提前需求。

Sales from the I-CON and EasyWater acquisitions added another 11 million, or 3 points to America's reported growth. Europe reported sales were up 4% while organic sales were down 2% as market weakness more than offset price.

收購 I-CON 和 EasyWater 帶來的銷售額又增加了 1,100 萬美元，使美國報告的成長增加了 3 個百分點。歐洲市場報告稱，銷售額成長了 4%，而有機銷售額下降了 2%，因為市場疲軟抵消了價格上漲的影響。

Reported sales in Europe benefited from favorable foreign exchange. APMEA sales decreased 1% on a reported basis and were flat on an organic basis. Growth in Australia and the Middle East was offset by declines in China and New Zealand.

據報道，歐洲地區的銷售額受益於有利的匯率。亞太及中東地區銷售額依報告基準下降 1%，依有機增長基準則持平。澳洲和中東的成長被中國和紐西蘭的成長所抵消。

Compared to the prior year, adjusted EBITDA of $128 million increased 21%. An adjusted EBITDA margin of 20.9% increased 140 basis points. Adjusted operating income of $113 million increased 22% and adjusted operating margin of 18.5% was up 140 basis points.

與前一年相比，調整後的 EBITDA 為 1.28 億美元，成長了 21%。經調整後的 EBITDA 利潤率為 20.9%，提高了 140 個基點。調整後的營業收入為 1.13 億美元，成長 22%；經調整後的營業利益率為 18.5%，成長 140 個基點。

Adjusted EBITDA and offering income were supported by favorable price, leverage in the Americas, and productivity. These benefits more than offset inflation, volume deleverage in Europe, tariffs, and investments.

調整後的 EBITDA 和發行收入得益於有利的價格、美洲地區的槓桿作用和生產力。這些收益足以抵消通貨膨脹、歐洲銷售下降、關稅和投資的影響。

Our America segment margin increased 180 basis points to 23.7%. Europe's segment margin increased 160 basis points to 12.2%, and APMEA segment margin increased 90 basis points to 19.4%. Adjusted earnings per share of $2.50 were up 23% compared to the prior year with contributions from operations, acquisitions, foreign exchange, and reduced interest expense.

我們的美洲業務利潤率成長了 180 個基點，達到 23.7%。歐洲業務部門利潤率成長 160 個基點至 12.2%，亞太、中東和非洲業務部門利潤率成長 90 個基點至 19.4%。經調整後的每股收益為 2.50 美元，比上年增長 23%，主要得益於營運、收購、外匯和利息支出減少等方面的貢獻。

The adjusted effective tax rate in the quarter was 25.8%, an increase of 60 basis points relative to the third quarter of 2024. This increase was primarily due to the recent changes in US tax regulations related to the One Big Beautiful Bill Act.

本季調整後的實際稅率為 25.8%，比 2024 年第三季上升了 60 個基點。這一增長主要是由於近期美國稅收法規與《一項偉大的法案》相關的變化所致。

For GAAP purposes, we incurred 1.9 million of pre-tax restructuring charges related to the exit of a facility in France and other actions within Europe.

根據美國通用會計準則，我們因退出法國一家工廠以及在歐洲採取的其他行動而產生了 190 萬英鎊的稅前重組費用。

Our free cash flow year-to-date through the third quarter was $216 million compared to $204 million last year. The cash flow increase was driven by higher net income and lower tax payments resulting from the change in US tax regulations, which more than offset inventory investment and increased CapEx.

今年截至第三季末，我們的自由現金流為 2.16 億美元，去年同期為 2.04 億美元。現金流增加主要得益於淨收入增加和美國稅收法規變化帶來的稅收減少，足以抵消庫存投資和資本支出增加。

We expect seasonally strong free cash flow in the fourth quarter and are on track to achieve our full year goal of free cash flow conversion greater than or equal to 100% of net income.

我們預計第四季度自由現金流將出現季節性強勁成長，並有望實現全年自由現金流轉換率大於或等於淨利潤 100% 的目標。

The balance sheet remains strong. Our quarter end net debt to capitalization ratio was negative 15%, and our net leverage is 0.5x. Our solid cash flow and healthy balance sheet continue to give us capital allocation optionality.

資產負債表依然穩健。本季末，我們的淨負債資本比率為-15%，淨槓桿率為0.5倍。我們穩健的現金流量和健康的資產負債表繼續為我們提供資本配置方面的選擇。

Now on slide 5, let's review our assumptions about our fourth quarter and full year outlook.

現在請看第 5 張投影片，讓我們回顧一下我們對第四季和全年前景的假設。

As Bob mentioned, we are raising our full year sales and margin outlook. This is driven by a strong third quarter, incremental price, favorable foreign exchange, and strong sales and data centers.

正如鮑勃所提到的，我們提高了全年銷售額和利潤率預期。這主要得益於第三季的強勁成長、價格上漲、有利的匯率以及強勁的銷售和資料中心業務。

We are also benefiting from incremental sales of approximately $10 million related to the acquisition of Haws Corporation, which will be included in our America segment. We now anticipate organic sales growth of 4% to 5%, a 3 point increase to the midpoint from our previous outlook. Our reported sales growth is expected to be up 7% to 8%, a 4 point increase from our previous outlook.

我們也受惠於收購 Haws Corporation 帶來的約 1,000 萬美元的增量銷售額，該銷售額將計入我們的美洲業務板塊。我們現在預計有機銷售額將成長 4% 至 5%，比我們先前的預測中位數提高了 3 個百分點。我們報告的銷售成長預計將達到 7% 至 8%，比我們先前的預期高出 4 個百分點。

This reflects incremental revenue from the Haws acquisition and favorable foreign exchange impacts detailed by region in the appendix. Regionally, we anticipate stronger sales growth in the Americas and Europe, while APMEA is projected to be slightly below our previous outlook.

這反映了 Haws 收購帶來的增量收入以及附錄中按地區詳細列出的有利外匯影響。從區域來看，我們預期美洲和歐洲的銷售成長將更加強勁，而亞太、中東和非洲地區的銷售成長預計將略低於我們先前的預期。

We are raising our full year adjusted EBITA margin outlook to a range of about 140 basis points to 150 basis points, an increase of 55 basis points from the midpoint of our previous outlook. We are also raising our full year adjusted operating margin expansion to a range of about 140 basis points to 150 basis points, an increase of 65 basis points from the midpoint of our previous outlook.

我們將全年調整後 EBITA 利潤率預期上調至約 140 個基點至 150 個基點，比先前預期的中點提高了 55 個基點。我們同時將全年調整後營業利潤率擴張預期上調至約 140 至 150 個基點，比我們先前預期的中點高出 65 個基點。

Our updated outlook includes 10 basis points of dilution from the Haws acquisition. It also assumes $40 million in estimated direct tariff costs consistent with our previous guidance. This is based on tariffs in effect as of today.

我們更新後的展望包含了因收購 Haws 而導致的 10 個基點的稀釋。報告還假設直接關稅成本估計為 4000 萬美元，這與我們先前的預期一致。這是根據截至今日生效的關稅計算的。

Our free cash flow expectation remains in line with our previous outlook. We expect to deliver free cash flow conversion of greater than or equal to 100% of net income in 2025.

我們的自由現金流預期與先前的預期保持一致。我們預計到 2025 年，自由現金流轉換率將達到淨收入的 100% 或更高。

Next, a few items to consider for the fourth quarter. On an organic basis, we expect sales growth of 4% to 8%. Regionally, we expect high single-digit growth in the Americas, low single-digit growth in APMEA, and slight declines in Europe. The sequential slowdown in the Americas reflects the pull forward demand discussed earlier.

接下來，是第四季需要考慮的幾個事項。以有機成長計算，我們預計銷售額將成長 4% 至 8%。從區域來看，我們預計美洲將實現高個位數成長，亞太、中東和非洲地區將實現低個位數成長，而歐洲將略有下降。美洲地區的經濟成長放緩反映了先前討論過的提前需求。

We expect approximately $20 million in incremental sales in the Americas from the I-CON, EasyWater, and Haws acquisitions. Additionally, we estimate a foreign exchange tailwind of approximately $10 million in the quarter. Regional assumptions are detailed in the appendix.

我們預計透過收購 I-CON、EasyWater 和 Haws，將在美洲地區帶來約 2,000 萬美元的增量銷售額。此外，我們預計本季將有約 1,000 萬美元的外匯順風。區域假設詳見附錄。

Fourth quarter adjusted EBITDA margin is expected to be in the range of 19.6% to 20.1%, an increase of 30 basis points to 80 basis points. Adjusted operating margin is projected to be between 17% and 17.5% or up 20 basis points to 70 basis points.

預計第四季度調整後 EBITDA 利潤率將在 19.6% 至 20.1% 之間，成長 30 至 80 個基點。調整後的營業利潤率預計在 17% 至 17.5% 之間，或上調 20 個基點至 70 個基點。

Price and volume leverage in the Americas should more than offset volume deleverage in Europe and dilution from the Haws acquisition. The sequential margin decline reflects normal seasonality and the impact of the Haws acquisition. Other key inputs for the fourth quarter and full year can be found in the appendix.

美洲的價格和銷售槓桿作用應該足以抵消歐洲的銷售槓桿作用減弱以及 Haws 收購帶來的稀釋。環比利潤率下降反映了正常的季節性因素以及 Haws 收購的影響。第四季和全年的其他關鍵數據可在附錄中找到。

With that, I'll turn the call back over to Bob before we move to Q&A. Bob?

接下來，我將把電話轉回給鮑勃，然後進入問答環節。鮑伯？

Thanks, Ryan. On slide 6, I'd like to summarize our comments before we address your questions. Our third quarter performance was better than anticipated, with record third quarter sales, operating income, and earnings per share driven by strong performance in our Americas region and better than expected results in Europe.

謝謝你，瑞恩。在第 6 張投影片上，我想在回答你們的問題之前，先總結一下我們的評論。第三季業績好於預期，銷售額、營業收入和每股盈餘均創歷史新高，這主要得益於美洲地區的強勁表現以及歐洲地區好於預期的業績。

We continue to execute well amid an uncertain trade environment, and we expect that price and our global supply chain strategy will enable us to continue navigating effectively. As a result of our strong third quarter performance and fourth quarter expectations, we're increasing our full year sales and margin outlook.

在不確定的貿易環境下，我們繼續保持良好的運營，我們預計價格和我們的全球供應鏈策略將使我們能夠繼續有效應對挑戰。由於第三季業績強勁，且對第四季業績有所預期，我們提高了全年銷售額和利潤率預期。

We successfully closed on the acquisition of Haws Corporation earlier this week and look forward to welcoming them to the Watts family of brands. Our balance sheet remains strong and provides ample flexibility to support our capital allocation priorities.

本週早些時候，我們成功完成了對 Haws 公司的收購，期待歡迎他們加入 Watts 品牌家族。我們的資產負債表依然穩健，為支持我們的資本配置優先事項提供了充足的靈活性。

I'm confident in the resilience of our business and our team's ability to execute despite the uncertain environment as we continue to create durable long-term value for our shareholders.

我對公司業務的韌性以及團隊在不確定環境下的執行能力充滿信心，我們將繼續為股東創造持久的長期價值。

With that operator, please open the line for questions.

請與該接線員聯繫，開通提問通道。

Thanks, Bob. (Operator Instructions) Nathan Jones, Stifel.

謝謝你，鮑伯。（操作說明）Nathan Jones，Stifel。

Maybe just starting on the $11 million of demand pulled forward into the third quarter. I assume that's probably ahead of price increases related to the increase in copper tariffs, and so that would then lead me to the question of, can you talk about what the price contribution was in 3Q, and then I assume the price contribution in Americas in 4Q will be somewhat higher due to those tariffs.

或許只是從第三季提前產生的 1,100 萬美元需求開始。我估計這可能先於與銅關稅增加相關的價格上漲，因此，這就引出了我的問題，您能否談談第三季的價格貢獻是多少？然後我假設由於這些關稅，第四季度美洲的價格貢獻會更高一些。

Yeah, correct, it was $11 million as you said, as we talked about, and about 6% was our price.

是的，沒錯，正如你所說，正如我們之前討論過的，價格是 1100 萬美元，而我們的出價大約是 6%。

That's in 3Q. Do you have an expectation for 4Q? I assume there's been more price put through to cover those tariffs.

那是第三季的事。您對第四季有何預期？我估計價格上漲是為了彌補這些關稅。

Yeah, slightly higher than that.

是的，比那略高一些。

Okay, fair enough. I guess the second question I wanted to ask was on this Haws acquisition. Obviously the questions are going to be around the drinking water business. There's been pretty robust growth been seen by, one of your competitors in that business, but they do have very high market share in that and based on who's revenue, pretty low market share for them. How do you go about competing with the Elkay business in specifically in that drinking water business and look to grow the market share for that business?

好吧，這說得有道理。我想問的第二個問題是關於Haws的收購案。顯然，問題將圍繞著飲用水業務。你們的某個競爭對手在該行業取得了相當強勁的成長，但他們在該行業的市場份額非常高，而根據他們的收入來看，他們的市場份額卻相當低。您打算如何與 Elkay 公司在飲用水市場競爭，並努力擴大市場份額？

Well, Nathan, as we talked about it, Haws is a $60 million sales company. About 20% of its business is in the hydration market. Look at it, it's a company that's been around a long time, 120 years, great brand, known for their quality and customer service. So, they're nichey in their hydration area, mainly on the west coast. So we'll be evaluating that, but we primarily bought that business for their safety product which complements our Bradley business.

內森，正如我們剛才談到的，Haws 是一家年銷售額達 6,000 萬美元的公司。該公司約 20% 的業務來自補水市場。你看，這是一家歷史悠久的公司，已有120年的歷史，是一個偉大的品牌，以其品質和客戶服務而聞名。所以，它們的補水區域比較小眾，主要分佈在西岸。所以我們會對此進行評估，但我們收購這家公司主要是為了他們的安全產品，該產品與我們的 Bradley 業務互補。

Maybe then just as a final question you could talk about how it complements the Bradley business. I did notice that and whether or not you can kind of marry those two together to generate revenue synergies out of those businesses, and I'll leave it there thanks.

最後，您可以問一下它如何與布拉德利的業務形成互補。我確實注意到了這一點，以及是否可以將這兩者結合起來，從而從這些業務中產生收入協同效應，我就說到這裡吧，謝謝。

Yeah, so they make bigger sizes of safety showers and equipment and other -- some products that we don't have. So it's complementary with some of the gaps that we have and gives us the full portfolio to leverage in our portfolio. So we believe it's a nice growing market and something we can leverage going forward.

是的，所以他們生產更大尺寸的安全淋浴器、設備和其他一些我們沒有的產品。因此，它彌補了我們的一些不足，並為我們提供了完整的投資組合，以便我們在投資組合中加以利用。所以我們認為這是一個發展前景良好的市場，也是我們未來可以利用的優勢。

Thanks, Nathan. Mike Halloran, RW Baird.

謝謝你，內森。麥克霍洛蘭，RW Baird。

Could you just dig into how you're looking at the end markets here today and how you're thinking about the trajectory next year? I think primary focus for the question would be on the non-res pieces, and how you see those playing out going into next year in North America as well as maybe a generic comment on Europe as well.

您能否深入探討目前如何看待終端市場，以及您對明年發展軌蹟的想像？我認為這個問題的重點應該放在非住宅類商品上，以及您認為這些商品明年在北美會如何發展，或許也可以對歐洲的情況做一些概括性的評論。

Yeah, so, let's look at the Q3. We basically saw similar markets than we saw in Q2. So we'll be watching, I think, in general, multi-family residential, which single family, again, slow growth. We're seeing probably similar to that going into next year. It's too early to talk about next year at this point in time, but I think we're all looking at ABI, Dodge Momentum, all the leading indicators. So 2026 is probably going to be a slow growth market similar to 2025 at this point in time.

好的，那麼，我們來看看第三季。我們看到的市場情況與第二季基本相似。所以我認為，總的來說，我們將關注多戶住宅，而單戶住宅的成長速度再次放緩。我們預計明年情況也會類似。現在談論明年還為時過早，但我認為我們都在關注ABI、道奇動量以及所有領先指標。所以，目前來看，2026 年的市場成長速度可能會和 2025 年類似，較為緩慢。

On the question on Europe, it was nice to see Europe finally getting close to bottom like we were projecting. A minus 2% organically for us against easier compares, but something -- it's nice to see we're finally getting to the bottom of this.

關於歐洲的問題，很高興看到歐洲的情況終於像我們預測的那樣接近谷底。雖然與更容易比較的比較相比，我們的有機成長率下降了 2%，但這總比沒有好——很高興看到我們終於弄清楚了這件事的來龍去脈。

I don't think you'll see new construction growth, really grow significantly in Europe until this war -- the war in Ukraine subsides and each one of the governments understanding how much they have to fund that. So again, continued slow growth assumptions in Europe.

我認為，在烏克蘭戰爭平息，各國政府都意識到他們需要為戰爭投入多少資金之前，歐洲的新建築業不會真正顯著成長。所以，歐洲經濟成長持續緩慢的預期依然存在。

Thanks for that, Bob. And then secondary question, just maybe the puts and takes that drove the sequential margin improvement in Europe. But if you look at the guide for Europe margins up substantially, I guess the primary question though is, is that the right run rate to think about for going into next year, the EBITDA margin implied for the European segment for the fourth quarter? In other words, are you back at what the previous run rate now that you've gotten a chunk of that restructuring done and hopefully a little bit more normal mix?

謝謝你，鮑伯。其次，或許正是這些買賣交易推動了歐洲市場利潤率的環比改善。但如果你看一下歐洲利潤率大幅增長的指導方針，我想主要的問題是，這是否是明年應該考慮的正確運行速度，即歐洲業務第四季度隱含的 EBITDA 利潤率？換句話說，既然你們已經完成了一部分重組工作，並且希望產品組合能夠更加正常一些，那麼你們的營運速度是否已經恢復到之前的水平了呢？

Yeah, that's the goal, Mike. I mean, certainly the team has been doing a great job of getting through the restructuring, closing of the site. We're now complete, adjusting their cost structure to the current market environments, and the team is doubling down and relooking on an 80 to 20 basis the markets because they've shifted so much over the last couple of years. So teams really looking at that. We'll provide a little more guidance as we move into 2026.

是的，這就是我們的目標，麥克。我的意思是，團隊在重組和網站關閉方面確實做得非常出色。我們現在已經完成了調整他們的成本結構以適應當前市場環境的工作，團隊正在加倍投入，並以 80 比 20 的比例重新審視市場，因為市場在過去幾年中發生了巨大的變化。所以各支球隊都在密切關注這一點。進入2026年，我們將提供更多指導。

Thanks, Mike. And our next question comes from the line of Jeff Hammond with KeyBanc.

謝謝你，麥克。我們的下一個問題來自 KeyBanc 的 Jeff Hammond。

You talked about kind of pricing 3Q, 4Q. I'm just wondering, as we look forward into 26, what you think, carryover prices at least into the first half? And then, as you contemplate your normal course pricing for '26, is that a more normal kind of view or is it continuing to be elevated with inflation tariffs, et cetera?

你談到了第三季、第四季的定價策略。我只是想知道，展望2026年，您認為至少在上半年，價格會如何延續？那麼，當您考慮 2026 年的正常課程定價時，這是否是一種更正常的看法，還是會隨著通貨膨脹等因素而繼續上漲？

Well, Jeff, I mean, most of the price increases happened in the -- starting in April, et cetera. So there'll be some carryover because we've had multiple price increases during the year with the adjustments of tariffs. We're all -- tariffs is a fluid thing as we all know, so we'll be adjusting and looking at tariffs as we go forward into next year right now.

傑夫，我的意思是，大部分價格上漲都發生在——從四月開始等等。因此會有一些延續效應，因為今年由於關稅調整，我們已經多次漲價。我們都知道，關稅是一個不斷變化的問題，所以我們現在將根據情況調整和關註明年的關稅政策。

So again, we're watching it very closely. We should have some favorable price certainly in the first quarter as we continue to roll off of some of those. And as we had both pre-buy in Q2 and Q3 now of this year. So again, we'll be providing more information in 2026, but there'll be some carryover into next year.

所以，我們正在密切關注事態發展。第一季我們應該會有一些比較優惠的價格，因為我們會繼續逐步取消部分訂單。而且我們今年第二季和第三季都有預購。所以，我們將在 2026 年提供更多信息，但有些內容會延續到明年。

Okay. And then we talked more and more about data center obviously booming, I'm just wondering if you can --- I guess size that business for 2025 year, what you think for this year, what you think it can be in a few years? And I think most of your exposure historically was Asia. A lot of the demands happening in the US and I'm just wondering about your success, bringing that over to the North American market.

好的。然後我們越來越多地談到資料中心的蓬勃發展，我只是想知道您是否可以——我猜您能預測一下2025年這個行業的規模嗎？您認為今年會是什麼樣子？您認為幾年後會是什麼樣子？而且我認為你歷史上接觸的大部分領域都是亞洲。美國有很多需求，我很想知道你們是如何成功地將這些需求帶到北美市場的。

Yeah, Jeff, I would say our North America team is going to surpass Asia Pacific this year. We've been growing very quickly in North America. We'll size it at the end of this year, but I can say that it's growing high double-digits and it's one of our fastest growing markets in North America and in Asia Pacific, so we'll continue to double down on that. It's offsetting some of the softness in the residential side of our markets, and it's nice complementary to what we're doing and you're seeing it come through our results in Q3.

是的，傑夫，我認為我們北美團隊今年將會超越亞太隊。我們在北美發展非常迅速。我們將在今年年底公佈其規模，但我可以肯定地說，它的增長率高達兩位數，而且它是我們在北美和亞太地區增長最快的市場之一，因此我們將繼續加大對該市場的投入。它抵消了我們住宅市場的一些疲軟，並且與我們正在做的事情形成了很好的互補，您可以在我們第三季度的業績中看到這一點。

Okay. And then just last one, multi-family just update there it seems like maybe some bottoming and things getting better, and I guess it depends on where you are in the in the build process, but just an update there.

好的。最後，關於多戶住宅，情況似乎有所好轉，可能已經觸底。我想這取決於你的建設進度，但這裡只是更新一下情況。

Yeah, and the multi-families again, it's been a soft market like you said. There's various regions of the country that are still booming, but certainly, when you look at the single housing crisis where there's not enough homes and unaffordability, we're seeing projects in the multi-family, but it's not -- and there's shovel ready projects ready to go. People are finishing what they've started. I think they're waiting for some certainty on the tariff front. And making sure that calms down as well as waiting for some lower interest rates. So we think it's close to bottoming out and we'll watch carefully through there. But it's not been a robust market. But we're hopeful that it'll begin getting better as interest rates start coming down next year.

是的，還有多戶住宅市場，正如你所說，一直都很疲軟。全國各地仍有一些地區經濟蓬勃發展，但就住房危機而言，住房不足且價格昂貴，我們看到多戶住宅項目正在興建，但並非如此——而且還有一些隨時可以開工的項目。人們正在完成他們已經開始的事情。我認為他們是在等待關稅方面的確定性。同時確保局勢平靜下來，並等待更低的利率。所以我們認為它接近觸底反彈，我們會密切關注接下來的情況。但市場一直不太景氣。但我們希望隨著明年利率開始下降，情況會逐漸改善。

(Operator Instructions) Ryan Connors, Northcoast Research.

（操作說明）瑞安·康納斯，北海岸研究公司。

Good morning. Thank you. Most of my questions have been answered. You've been pretty comprehensive here, but I did pick up there, Bob, on -- through the phone on your tone around tariffs and the increased uncertainty there. I think you're kind of alluding to the SCOTUS case, which, I don't follow these things too closely, but apparently it didn't go all that well, and there's a chance that maybe the whole thing could be just disallowed.

早安.謝謝。我的大部分問題都已得到解答。你已經說得很清楚了，但是鮑勃，我確實從電話裡聽出了你對關稅以及由此帶來的不確定性增加的語氣。我想你大概是在暗示最高法院的那個案子，我不太關注這些事情，但顯然結果不太好，而且有可能整個案子都會被駁回。

So obviously that would be a very disruptive outcome given the -- all the price you've taken related to tariffs. So without getting too detailed, I mean just conceptually, if we were to hypothetically assume tariffs just go away and SCOTUS says, no go, what does that conceptually look like? Do you keep the price that you've gotten? Do you give that back? Just curious how conceptually -- how you would look at that kind of a scenario.

顯然，考慮到你們在關稅方面付出的所有代價，這將是一個非常破壞性的結果。所以，在不深入細節的情況下，我的意思是，從概念上講，如果我們假設關稅取消了，而最高法院說不行，那從概念上講會是什麼樣子？你會接受你得到的價格嗎？你會把錢還回去嗎？我只是好奇，從概念上講，你會如何看待這種情況。

Yeah, Ryan, that's a great question. Fundamentally, I have a hard time believing that the government's going to give anything back to any of us, and even if they lose the case, it'll be interesting to see the appeals and the potential adjustments. So we're watching it carefully. It would be very complicated, as you can imagine because our pricing has not just been because of tariffs, copper prices have been up double-digits, general inflation's been high, labor, et cetera. So it's a very complicated item, and we're watching this very closely and we'll adjust based on what the market does at this point in time. But it's a very complicated, as you said, and I think a lot of people are trying to figure this out, and we'll just have to wait and see how it plays out.

是的，瑞恩，這是一個很好的問題。從根本上說，我很難相信政府會給我們任何人任何補償，即使他們敗訴，看看上訴和可能的調整也會很有趣。所以我們正在密切關注。情況會非常複雜，正如你所想，因為我們的定價不僅僅是因為關稅，銅價也上漲了兩位數，整體通貨膨脹率很高，勞動成本等等。所以這是一個非常複雜的問題，我們正在密切關注，並將根據此時的市場情況進行調整。但正如你所說，這非常複雜，我認為很多人都在試圖弄清楚這一點，我們只能拭目以待，看看事情會如何發展。

Yeah I mean just as a follow-up to that, would it be crazy to think that the price you've put in the market's, been accepted in the market, it's been -- it's kind of there and you can sort of keep that and even if you don't get any retroactive credits that -- maybe that scenario could actually be a margin positive going forward. I mean is that way off base there?

是的，我的意思是，作為對上述問題的補充，如果認為你給出的價格已經被市場接受，並且——它已經存在，你可以保持這個價格，即使你沒有獲得任何追溯性補償，那麼——也許這種情況實際上可能會在未來帶來正利潤率，這種想法是不是很瘋狂？我的意思是，這說法是不是完全錯誤？

Yeah, it's such a difficult question, Ryan. It's just -- there's so many different variables from that point of view. I think we're all going to have to wait and see and have many different scenarios to understand what market pricing and what's happening on this. So again, stay tuned. I think we're all watching carefully.

是啊，瑞恩，這真是個難題。從這個角度來看，變數太多了。我認為我們都需要拭目以待，並設想多種不同的情景，才能了解市場定價以及這件事的來龍去脈。所以，敬請期待。我想我們都在密切關注。

Joe Giordano, TD Cowen.

喬喬丹諾，TD Cowen。

Hi, good morning. This is Chris on for Joe. You'd mentioned the uncertainty surrounding the government shutdown. Just wondering if you could elaborate on what parts of the business that you are seeing or expect to potentially see impact from that shutdown?

您好，早安。這裡是克里斯，替喬發言。您剛才提到了政府停擺帶來的不確定性。請問您能否詳細說明一下，您認為此次停工會對貴公司哪些業務環節造成影響，或預期會造成哪些影響？

It's primarily on the residential side, right? Anytime there's uncertainty, people withhold and slow down things. So I think it's just one of those things, just an added variable we're watching very carefully. Nothing big to report on at this point in time, but something that's certainly out there, and it's just normal process. People pull back when they're uncertain, and we'll see how that goes through. Hopefully, they'll get that resolved very soon.

主要集中在住宅方面，對吧？每當存在不確定性時，人們就會有所保留，放慢腳步。所以我覺得這只是其中一件事情，只是我們正在密切關注的額外變數。目前沒有什麼重大消息需要報告，但確實存在一些情況，這只是正常流程。人們在不確定時會退縮，我們將拭​​目以待。希望他們能盡快解決這個問題。

Great, thank you very much. And with Haws, is there any difference in how they go to market versus your predominant channels and any opportunity to sell through your existing channels?

太好了，非常感謝。對於 Haws 而言，他們的市場推廣方式與您主要管道有何不同？您是否有機會透過現有管道進行銷售？

It's very similar to our current process through wholesalers and distributions. And so yeah -- no, it's very similar. We can leverage our channels. The nice thing about Haws is they have more international exposure than we have, so that's an opportunity for us to leverage.

這與我們目前透過批發商和分銷商進行的流程非常相似。所以，是的——不，它們非常相似。我們可以利用我們的管道。Haws的優勢在於他們比我們擁有更多的國際知名度，所以這對我們來說是一個可以利用的機會。

(Operator Instructions) Andrew Krill, Deutsche Bank.

（操作員指示）安德魯·克里爾，德意志銀行。

Hi, thanks, good morning, everyone. But that's another one on Haws. Just can you provide like any sense of the historical growth rates there, what do you expect looking forward? And then on margins for the business, I think if we do the math on the dilution, is it correct it's around like 10% EBIT margins initially as you integrate the business? And then like over time, any reason this can't be a Watts average or better margin business? Thanks.

大家好，謝謝，早安。但這又是霍斯的另一個故事了。您能否提供該地區的歷史成長率數據，以及您對未來有何預期？至於業務利潤率，我認為如果我們計算一下稀釋情況，那麼在業務整合初期，EBIT 利潤率最初約為 10%，這個計算結果是否正確？隨著時間的推移，有什麼理由不能讓這家公司成為一家利潤率達到或超過沃茨平均的企業？謝謝。

Yeah, so in general, I would say, they're similar to the institutional growth, which is above, let's call it, our growth of our traditional portfolio that includes residential. I would say, their EBITDA is in the mid to high single-digits right now, and we certainly believe over the next several years we'll be able to get them to the Watts overall margins. So teams are on it, really early at this point -- team. We're mapping out, great brand, great quality, and great people. So we're excited to leverage that going forward.

是的，總的來說，我認為它們類似於機構成長，也就是高於我們傳統投資組合（包括住宅）的成長。我認為，他們目前的 EBITDA 處於個位數中高水平，我們當然相信，在未來幾年內，我們能夠使他們的整體利潤率達到 Watts 的水平。所以各隊都很早就開始行動了——團隊。我們正在規劃：打造卓越的品牌、卓越的品質和優秀的人才。所以我們很高興能夠利用這一點繼續發展。

Great. And then switching back to Europe, I know the margins improvement is encouraging, a pretty nice inflection. Just more medium term, I think the prior high water mark was about 16% even margin, so just like, do you -- can you get there? Do you think if volumes remain sluggish around where they are, just with the new initiatives you have in place, or I think -- or getting back to that like, one, is it possible and do you need volume leverage to get there? Thanks.

偉大的。然後，再看歐洲市場，我知道利潤率的改善令人鼓舞，這是一個相當不錯的轉捩點。就中期而言，我認為之前的最高點是 16% 的利潤率，所以，你能達到那個水平嗎？您認為如果交易量仍在目前的低迷水準附近波動，僅憑您目前實施的新舉措，是否有可能實現目標？或者說，回到最初的問題，一是交易量是否有可能成長，二是是否需要交易量槓桿才能達成目標？謝謝。

Well, certainly volume leverage would help and certainly we're taking cost structure. I think the team is relooking, as I said earlier, at the 80/20 because the markets have changed significantly since we did a very detailed 80/20 on that.

當然，銷售成長肯定會有幫助，而且我們也在考慮成本結構。正如我之前所說，我認為團隊正在重新審視 80/20 策略，因為自從我們對此進行了非常詳細的 80/20 分析以來，市場已經發生了重大變化。

We're reshuffling that and we'll provide more guidance, but that should help our margins going forward. But it takes a while to unravel some of the contracts we have with customers. But team's on it, we're looking at it, I would say.

我們正在重新調整，並將提供更多指導，但這應該有助於我們未來的利潤率。但是，要解除我們與客戶簽訂的一些合同，需要一段時間。但團隊正在著手處理，我們正在研究這個問題。

Our aspirations are to get back up to those levels, but as you know, I'm always cautious on Europe at this point in time, given the market dynamics and given the uncertainty with the conflict in Ukraine that's having an impact on local incentives, et cetera. So watching it very closely. The team's on it, but it's nice to see. I think we're starting to hit that bottoming out at this point in time.

我們的目標是恢復到那些水平，但如你所知，鑑於目前的市場動態以及烏克蘭衝突帶來的不確定性對當地激勵措施等的影響，我對歐洲市場始終持謹慎態度。所以要密切注意。團隊正在努力，很高興看到成果。我認為我們目前正開始觸底反彈。

And there are no further questions at this time, so I will now turn the call back over to Bob Pagano for closing remarks. Bob?

目前沒有其他問題了，現在我將把電話交還給鮑伯·帕加諾，請他做總結發言。鮑伯？

Thank you for taking the time to join us today. We appreciate your continued interest in Watts and look forward to speaking with you again during our fourth quarter earnings call in early February. Have a good day and stay safe.

感謝您今天抽出時間參加我們的活動。我們感謝您一直以來對 Watts 的關注，並期待在 2 月初的第四季度財報電話會議上再次與您交流。祝您今天過得愉快，注意安全。

Thank you. And this concludes today's conference call. You may now disconnect. Have a great day, everyone.

謝謝。今天的電話會議到此結束。您現在可以斷開連線了。祝大家今天過得愉快。