Vertiv Holdings has reported second quarter net sales of $1,734billion, an increase of $335-million, or 24%, compared with last year’s second quarter and a 25% organic net sales increase, which excludes the impact of foreign currency.
Foreign currency negatively impacted second quarter sales by approximately $18-million as compared to second quarter last year. Orders declined 3% (excluding foreign exchange), which was better than anticipated, signifying end-market strength which helped offset continuing impacts from order normalisation and lead time improvements. The book-to-bill ratio was 1.0x for second quarter 2023, with orders showing resiliency despite higher shipment volumes driven by operational efficiency and more favorable supply chain dynamics.
Second quarter operating profit of $206-million increased $180-million and adjusted operating profit of $251-million increased $169-million from the prior year second quarter. These increases were primarily driven by benefits from pricing and volume partially offset by material, freight and labour inflation and capacity and R&D growth investments. Second quarter 2023 adjusted operating profit was above the prior guidance range primarily due to additional price-cost favourability and higher volume from continued operational execution and supply chain improvements.
“These strong results reflect our relentless focus on operational execution, the strength of the ongoing rebound in the Americas and our continued progress in building a high-performance culture of excellence,” says Giordano Albertazzi, CEO of Vertiv. “The strength of our first half performance led us to raise our full-year financial guidance for 2023. A key focus for us this year has been cash flow, and I am particularly encouraged by the trajectory of this critical metric. While far from our full potential, we are seeing the tangible results of our operational improvement initiatives.”
He adds: “I am further encouraged by the growth acceleration potential, which has just begun in our industry, represented by data centre infrastructure necessary to meet the rapidly growing demand for compute capacity driven by AI. Vertiv is very well-positioned to benefit from this trend given our extensive data centre infrastructure portfolio, technology depth, global scale, market leadership and long-standing relationships across the eco-system.
“We are fully embracing a future data centre environment with incremental opportunities directly related to AI while maintaining our relentless focus and commitment to growth, operational execution, and delivering exceptional service and being the partner of choice for our customers.”
Dave Cote, Vertiv’s executive chairman, comments: “Momentum clearly accelerated in the second quarter as Vertiv continues to strengthen performance and make meaningful progress in improving profitability and – importantly – adjusted free cash flow. Based upon the foundation established in the first six months and our uniquely strong market position to benefit from extremely positive long-term trends, we are very optimistic about the remainder of 2023 and Vertiv’s ability to create long-term value for shareholders.”