Q3 2024 A O Smith Corp Earnings Call Transcript
Key Points
- A.O. Smith Corp (AOS) reported double-digit growth in North America's water treatment and boiler businesses, with sales increasing by 15% and 16% respectively.
- The company increased its dividend by 6% in October, marking the 32nd consecutive year of annual dividend increases.
- A.O. Smith Corp (AOS) is on track to close the acquisition of Pure from Unilever by the end of 2024, which aligns with its strategy to enhance its water treatment product portfolio in South Asia.
- The company celebrated the grand opening of a new facility in North America for manufacturing gas tankless water heaters, with production expected to begin in early 2025.
- A.O. Smith Corp (AOS) maintained a strong balance sheet with a net cash position of $136 million and a leverage ratio of 5.9%.
- Third-quarter sales and earnings decreased compared to the previous year, with a 17% decline in China and a 4% decrease in North American water heater sales.
- The company faced increased pricing and promotional pressure in China, particularly in the mid-price sector of the market.
- A.O. Smith Corp (AOS) experienced softer-than-expected orders in its North American water heater business, attributed to reduced lead times and softening end-market demand.
- The Rest of the World segment saw a 10% decrease in sales, driven by lower sales of core water heater and water treatment products in China.
- Free cash flow decreased to $283 million during the first nine months of 2024, primarily due to higher inventory balances and lower customer deposits in China.
We are so good day and thank you for standing by. Welcome to AO. Smith Corporation Third Quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be your question and answer session to ask a question. During this session. You will need to press star one on your telephone. You will then hear an automated message. Advising your hand is raised. To withdraw your question, please press star one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Helen, bigger Holt. Please go ahead.
Good morning and welcome to the A.O. Smith Third Quarter Conference Call. I'm Helen Gurholt, Vice President, Investor Relations and Financial Planning and Analysis. Joining me today are Kevin Wheeler, Chairman and Chief Executive Officer, and Chuck Lowber, Chief Financial Officer. In order to provide improved transparency
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