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>>> Vertiv Reports 25% Net Sales Growth and Record Backlog in Second Quarter; Raises Full Year Guidance for 2021


Business Wire

July 28, 2021


https://finance.yahoo.com/news/vertiv-reports-25-net-sales-100000775.html


Diluted earnings per share of $0.03 increased $0.20 and adjusted diluted earnings per share of $0.31(1) increased $0.15 from last year’s second quarter.

Customer demand remains robust with net sales growth of 25% and organic net sales growth of 20% from last year’s second quarter, with double-digit sales growth in all regions.

Record backlog of $2.3 billion at the end of June. Order growth of 24% compared to prior year’s second quarter.

Second quarter operating profit of $102 million increased $32 million, or 45%, and adjusted operating profit of $134 million increased $31 million, or 30%, from last year’s second quarter. Adjusted operating margin of 10.6%, up 40 basis points.

Strong June month-ending liquidity of $1.1 billion. Year-to-date net operating cash flow of $120 million increased $242 million, and year-to-date free cash flow of $84 million increased $225 million from the prior year first half.

Increasing full year guidance for sales, adjusted operating profit and adjusted diluted earnings per share.


COLUMBUS, Ohio, July 28, 2021--(BUSINESS WIRE)--Vertiv Holdings Co (NYSE: VRT), a global provider of critical digital infrastructure and continuity solutions, today reported strong financial results for its second quarter ended June 30, 2021.

Net sales were $1,260 million, an increase of $255 million, or 25.3%, from last year’s second quarter and a 20.4% organic sales increase excluding the impact of foreign currency. EMEA net sales increased 50.1% (41.5% organic) with recovery continuing from 2020 with strength in colocation data centers. APAC net sales increased 23.3% (15.2% organic), positively impacted by strong sales recovery from COVID-19 impacts in telecom, IT channel and services businesses. Americas net sales increased 16.5% (15.2% organic), led by growth in critical infrastructure and solutions. Orders in the second quarter were up 24.4% compared with the prior year quarter, led by growth in integrated rack solutions. Vertiv’s backlog continued to grow, reaching another record level of $2.3 billion at the end of June, an increase of approximately $525 million from the prior year quarter-end, and up approximately $430 million versus year-end 2020.

Second quarter operating profit of $102 million increased $32 million, and adjusted operating profit of $134 million increased $31 million from the prior year quarter. Higher adjusted operating profit was driven by an $80 million benefit from the profit flowthrough from higher organic volume offset primarily by an approximate $25 million headwind from net material and freight inflation and $20 million higher fixed costs in part due to discrete COVID-19 cost actions taken in last year’s second quarter. The $25 million of net material and freight inflation includes an approximate $10 million offset for year-over-year pricing. We expect pricing to ramp-up as we progress through 2021 and to completely offset gross material and freight inflation within the fourth quarter. Diluted earnings per share of $0.03 increased $0.20, and adjusted diluted earnings per share of $0.31 increased $0.15 from the prior year quarter. The $0.15 improvement in adjusted diluted earnings per share in the second quarter included the benefit of $0.07 from items outside adjusted operating profit, primarily lower tax and interest expense.

"Following a strong start to 2021, we are pleased to report that through the first half of the year, Vertiv performance remains on track," said Rob Johnson, Vertiv’s Chief Executive Officer. "On a quarterly basis, our headline results continue to highlight strong order growth and related sales, and our outlook remains very positive. While inflation is a challenge facing all companies, we are navigating this with additional pricing actions and fixed-cost reductions. We decided in the second quarter to increase spot buys of key electronic components and use expedited freight to best meet the customer requirements of an incredibly strong demand environment. We feel good about market activity levels and coupled with our growth programs, pricing programs and margin improvement initiatives already underway, we are well positioned for the second half of 2021, and we believe these items should provide tailwinds as we enter 2022. Every day we are pleased to be called upon by customers who invite Vertiv to build future-ready infrastructures to meet their ever-accelerating demands for data. Meeting their business needs, without interruption, fuels our passion to achieve."

Dave Cote, Vertiv’s Executive Chairman, added, "Having a great position in a good industry matters. We have reset the foundation of the business and continue to make robust investments in growth and process-related initiatives. We continue to perform well, on both the top and bottom line, and make meaningful progress, quarter over quarter. It’s that incremental achievement that will enable us to create near- and long-term value for our customers and consistently deliver favorable total shareholder returns. I am proud of the Vertiv team, which is working tirelessly to ensure that digital applications are always available and that those information pathways connect the world."

Free Cash Flow and Liquidity

Net cash provided by operating activities of $59 million in the second quarter was $14 million lower than last year’s second quarter, and free cash flow of $41 million was down $21 million in part due to incremental inventory investment in the second quarter in response to the challenging supply chain environment, the timing of cash tax payments and higher year-over-year investment in growth-related capital expenditures. Despite being lower than last year’s second quarter, net cash provided by operating activities was $242 million higher than 2020 on a year-to-date basis, and 2021 year-to-date free cash flow of $84 million was $225 million higher than the comparable prior year period. Liquidity at the end of the first quarter remained strong at $1.1 billion.

Full Year and Third Quarter 2021 Guidance

End-market demand remains robust, and we are increasing our full-year net sales guidance to 14% growth at the midpoint (12% organic growth). While material inflation and supply-chain challenges continue, we have implemented additional pricing actions and fixed cost reductions to help offset these challenges. We are raising the midpoint of our full year adjusted operating profit guidance to $600 million. This full year guidance includes the expected negative net impact in the remainder of the year of current commodity and freight costs as well as price recovery, which typically lags inflation.

Second Quarter 2021 Earnings Conference Call

Vertiv’s management team will discuss the company’s results during a conference call on Wednesday, July 28, starting at 11 a.m. Eastern Time. The call will contain forward-looking statements and other material information regarding Vertiv’s financial and operating results. A webcast of the live conference call will be available for interested parties to listen to by going to the Investor Relations section of the company’s website at investors.vertiv.com. A replay of the conference call will also be available for 30 days following the webcast.

About Vertiv Holdings Co

Vertiv (NYSE: VRT) brings together hardware, software, analytics and ongoing services to ensure its customers’ vital applications run continuously, perform optimally and grow with their business needs. Vertiv solves the most important challenges facing today’s data centers, communication networks and commercial and industrial facilities with a portfolio of power, cooling and IT infrastructure solutions and services that extends from the cloud to the edge of the network. Headquartered in Columbus, Ohio, USA, Vertiv employs approximately 20,000 people and does business in more than 130 countries. For more information, and for the latest news and content from Vertiv, visit Vertiv.com.

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