01—Abstract
Summary
Summary of the 10-K filed February 18, 2025. Cited figures are marked; the original filing is the authoritative source.
nVent Electric plc (NYSE: NVT) reported net sales of $3,006.1 milliona for 2024, up 12.6% from $2,668.9 million in 2023, with the increase driven by acquisitions (10.3 percentage points) and organic growth of 2.4%.
Operating income rose 13.9% to $527.1 million, but net income fell to $331.8 millionb from $567.1 million, largely because income from continuing operations dropped to $240.8 million from $459.7 million. The decline reflects a $92.8 million non-cash valuation allowance on Luxembourg deferred tax assets, which pushed the effective tax rate to 43.9%, along with higher net interest expense of $106.0 million. Diluted earnings per share were $1.97, compared with $3.37 in 2023.
The company is in the process of exiting its Thermal Management business, which it agreed to sell to an affiliate of Brookfield Asset Management for $1.7 billionc in cash. The sale closed on January 30, 2025, with cash proceeds of $1.65 billion, subject to customary adjustments, and the business is presented as discontinued operations. Acquisitions in 2024 included Trachte, LLC for approximately $687.5 million in cash.
Total debt was $2.2 billiond at year end, and the company was in compliance with its financial covenants. Free cash flow of continuing operations was $427.5 million in 2024, and total free cash flow including discontinued operations was $562.0 million. Order backlog rose to $749.3 million at December 31, 2024, from $462.8 million, mainly due to the Trachte acquisition.
Management expects inflationary cost increases, including the impact of tariffs, to continue into 2025. The company also plans to rename its Enclosures and Electrical & Fastening Solutions segments to Systems Protection and Electrical Connections in the first quarter of 2025.
02—Key points
Key Highlights
- Net sales rose 12.6% to $3,006.1 million in 2024, with acquisitions contributing 10.3 percentage points and organic growth 2.4%.
- Operating income increased 13.9% to $527.1 million, with operating margin of 17.5% of net sales.
- Net income fell to $331.8 million from $567.1 million, driven by a $92.8 million non-cash valuation allowance on Luxembourg deferred tax assets and an effective tax rate of 43.9%.
- Thermal Management business sold to a Brookfield-affiliated buyer for $1.7 billion in cash agreement; the sale closed January 30, 2025 with cash proceeds of $1.65 billion.
- Backlog increased to $749.3 million at December 31, 2024, from $462.8 million, primarily from the Trachte acquisition.
- Total debt of $2.2 billion at year end; the company stated it was in compliance with all financial covenants.
- Free cash flow of continuing operations was $427.5 million in 2024, and total free cash flow including discontinued operations was $562.0 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, nVent Electric kept $0.11.
- Revenue$3.01B100.0%
- Cost of revenue−$1.80B59.8%
- Gross profit$1.21B40.2%
- Operating costs−$682.0M22.7%
- Operating income$527.1M17.5%
- Interest, other & tax−$195.3M6.5%
- Net income$331.8M11.0%
Where FY2024 revenue went
$3.01B- Cost of revenue: $1.80B, 60% of revenue
- SG&A: $615.9M, 20% of revenue
- Net income: $331.8M, 11% of revenue
- R&D: $66.1M, 2.2% of revenue
- Interest, other & tax: $195.3M, 6.5% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 18, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $3.01B$2.67B | +12.6% |
| Cost of Revenue | $1.80B$1.59B | +12.8% |
| Gross Profit | $1.21B$1.08B | +12.5% |
| R&D Expenses | $66.10M$55.20M | +19.7% |
| SG&A Expenses | $615.90M$557.30M | +10.5% |
| Operating Income | $527.10M$462.70M | +13.9% |
| Net Income | $331.80M$567.10M | −41.5% |
| EPS (Basic) | $2.00$3.42 | −41.5% |
| EPS (Diluted) | $1.97$3.37 | −41.5% |
| Shares Outstanding (Basic) | 165.50M165.60M | −0.1% |
| Shares Outstanding (Diluted) | 168.20M168.20M | 0.0% |
05—Questions
Frequently Asked Questions
What drove the decline in net income in 2024?
Net income from continuing operations fell to $240.8 million from $459.7 million, mainly because of a $92.8 million non-cash expense for valuation allowances on deferred tax assets tied to Luxembourg tax-deductible statutory losses, which raised the effective tax rate to 43.9% from a negative 22.5% in 2023. Net interest expense also rose to $106.0 million from $79.4 million, reflecting debt used to fund the Trachte acquisition. The 2023 result had benefited from non-cash tax recognitions.
What is the status of the Thermal Management business sale?
nVent agreed on July 31, 2024 to sell the Thermal Management business to BCP VI Summit Holdings LP, an affiliate of funds managed by Brookfield Asset Management, for $1.7 billion in cash, subject to customary purchase price adjustments. The sale was completed on January 30, 2025, with cash proceeds of $1.65 billion. The business is reported as discontinued operations, and its results contributed $91.0 million of net income in 2024.
How did the Trachte acquisition affect the company?
nVent acquired Trachte, LLC on July 16, 2024 for approximately $687.5 million in cash, adding it to the Enclosures segment. Trachte contributed $124.2 million of net sales and $10.6 million of operating income from the acquisition date to December 31, 2024. The acquisition also increased goodwill and intangible assets and was a major driver of the rise in backlog to $749.3 million.
What are the company's main capital allocation actions?
In 2024, nVent paid dividends of $126.8 million, or $0.76 per share, and repurchased 1.5 million ordinary shares for $100.0 million. The Board declared a quarterly dividend of $0.20 per share on February 17, 2025. As of December 31, 2024, $400.0 million remained available under the 2024 share repurchase authorization, which expires July 22, 2027.
What risks does management highlight for 2025?
Management expects inflationary cost increases, including the impacts of tariffs, to continue into 2025 and could negatively affect results. The filing also highlights exposure to changes in U.S. trade policy, tariffs on products made in China, Canada and Mexico, and changes to international tax rules such as the Pillar II global minimum tax, which increased the effective tax rate in 2024. Sales outside the U.S. represented approximately 28% of net sales in 2024.
06—Continue