Vertiv Holdings Co Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q4 2022 marked the strongest quarter in Vertiv’s history, with organic sales up 22% year-over-year, driven by strong demand in the Americas and EMEA. APAC underperformed due to COVID disruptions, particularly in China.
  • Adjusted operating profit reached a record $211 million, up approximately 40% versus the prior record quarter, though slightly below guidance due to lower China volume and cost overruns at E&I.
  • Price realization remained robust: $135 million in Q4, contributing to $365 million for the year.
  • Adjusted free cash flow improved sequentially but fell short of expectations due to delayed China collections, inventory build, and delayed advance payments.

Full-Year 2022 Results & Transformation Progress

  • The year marked significant operational improvement after a weak 2021. Vertiv delivered a turnaround consistent with plans laid out earlier in 2022.
  • Full-year organic sales grew strongly in the second half (over 20% vs. 4% in H1).
  • Adjusted operating profit improved from $95 million in H1 to $345 million in H2.
  • Adjusted free cash flow burned $380 million in H1 but generated $120 million in H2.
  • Backlog hit a record $4.8 billion, up 49% from year-end 2021, covering over 70% of 2023 sales guidance.

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Operator: Good morning. My name is Brika, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vertiv's Fourth Quarter and Full Year 2022 Earnings Conference Call 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, Investor Relations. Lynne Maxeiner: Right. Thank you, Brika. Good morning, and welcome to Vertiv's Fourth Quarter and Full Year 2022 Earnings Conference Call. Joining me today are Vertiv's Executive Chairman, Dave Cote; Chief Executive Officer, Giordano Albertazzi; and Chief Financial Officer, David Fallon. Before we begin, I would like to 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 Vertiv. 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 annual and quarterly reports and other filings made with the SEC. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events. During this c

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