Vertiv Holdings Co Q4 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Management expressed strong disappointment with second-half 2021 performance and the outlook for first-half 2022, citing severe inflation shocks, pricing missteps, and supply chain challenges.
  • Despite short-term operational and profitability setbacks, Vertiv emphasized extremely strong demand fundamentals, record orders, and significant pricing actions that position the company for a sharp recovery beginning in the second half of 2022.
  • Leadership highlighted cultural and forecasting issues, particularly in the Americas, which led to substantial underestimation of inflation and delays in taking sufficient pricing actions. Corrective measures have now been implemented.

Financial Performance Highlights

  • Q4 2021 Sales: $1.4B, up 8% year-over-year; organic growth 4% after adjusting for FX and the E&I acquisition.
  • Q4 Adjusted Operating Profit: $94M, down from $152M in Q4 2020—a decline of $58M, driven by $60M negative price-cost impact and $90M in inflationary costs.
  • Full-Year 2021 Organic Sales: Up 11%; would have exceeded 15% absent supply shortages.
  • Full-Year Price-Cost: Negative $135M impact; only $53M of price realized versus nearly $190M of inflation.

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Operator: Good morning. My name is Matt and I will be your conference Operator today. At this time. I would like to welcome everyone to Vertiv's Fourth Quarter and Full-Year 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Please note that this call is being recorded. I would now like to turn the program over to your host for today's conference call, Lynne Maxeiner, Vice President of Investor Relations. Lynne Maxeiner: Great. Thank you, Matt. And good morning. And welcome to Vertiv’s fourth quarter and full-year 2021 earnings conference call. Joining me today are Burton Executive Chairman David Cote, Chief Executive Officer Rob Johnson, Chief Financial Officer, David Fallon, and Chief Strategy and Development Officer Gary Niederpruem. Before we begin, I'd point out that during the course of this call, we will make forward-looking statements regarding future events, including the future financial and operating performance of burdens. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. We refer you to the cautionary language included in today's earnings release, and you can learn more about these risks in our registration statement, our proxy statement, and other filings with the SEC. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this d

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