Pentair Spin-off nVent’s Growth Potential is ‘Electrifying’, Says New CEO Beth Wozniak
Pentair plc officially split into two on Tuesday as its electrical business, now known as nVent Electric plc, joined the New York Stock Exchange as an independent, publicly-traded company.
The spinoff arrangement leaves Pentair focused entirely on its water solutions business, which last year sold $2.8 billion worth of water filters and purification systems to commercial and residential customers. John Stauch, who since 2007 served as CFO of both Pentair’s water and electrical products businesses, became CEO of Pentair on Tuesday.
Meanwhile, Beth Wozniak is stepping into the role as CEO of nVent. Like Stauch, Wozniak is a Honeywell veteran with experience within Pentair’s top brass. (Previously, she was president of Pentair’s electrical business.)
After ringing the opening bell at the Stock Exchange in New York City on Tuesday, Wozniak spoke with TCB over the phone about her plans for nVent and the company’s immediate growth potential.
Note: This Q&A was edited for clarity and length.
Q: Coming in as the former president of Pentair’s electrical business — and now the CEO of nVent — what has the transition been like?
A: I joined the electrical business a year ago, so at that time the team started to shape the strategy for [nVent]. From that standpoint, my team and I have been working [on determining] what are the growth opportunities given everything is electrifying. I had to hire [new staff] — half of my leaders are new. Forming a new team was one of the key things. We had to separate all the tasks associated with separating the company, getting a new brand, doing all of the branding work around that, getting a new website that we launched today. There’s been a lot of things in getting up to today, and I think certainly going forward in the role of CEO, there are some other responsibilities ensuring I have a team that is more operational than what I have been perhaps in my previous role. So there are some different responsibilities, but I think over the course of the year, we’ve been moving down that path with everything we’ve had to do to prepare the company to spin.
Q: You spoke last month to TCB about being a goal- and results-driven leader. What big plans do you have to grow nVent?
A: The outlook we gave on our investor day is that we see our organic sales growing 2 to 4 percent for the year. So with that we’ve set in place some plans to grow in key verticals, to grow globally, to grow through our channels, to grow with new products… We put some things in motion at nVent where we came together as three different segments and have three different businesses. The last business [industrial control products group Erico] was one we acquired in the end of 2015. One of our growth objectives is to really scale what we do as a $2.1 billion electrical company, so we have some initiatives around driving nVent. In the past we might have sold our products through separate sales teams and by each segment. We’ve unified that to some extent and we’re looking at commercial strategies, say take data centers, where we have a commercial team in place now to drive all of our growth in that vertical selling our full portfolio. Those are some of the things that are different as we go forward to get to that 2 to 4 percent growth this year and, as we look at the out years, it’s GDP plus 1 or 2 percent.
Q: How does R&D investment play into your growth strategy?
A: Today we spend about 2 percent on R&D and we want to increase that over the next five years to be between 3 and 4 percent, which is where our electrical peer companies invest at.
Q: What markets specifically are you planning to target to grow nVent?
A: Everything gets electrified. If you think about not just cell phones and the Internet of Things, [but] think of electric transportation, whether it’s vehicles or electric charging stations, we provide all of those products that support all of that infrastructure. We see data centers as a significant opportunity for us because not only can we provide enclosures, but we also make cooling systems within enclosures. We see that as a big opportunity. Across the industrial space, we have a lot of opportunity from our enclosures business through to our thermal management capabilities. In commercial, we do all kinds of things in a building — we’re in the floors, the walls, the ceiling, on the roof. So we have opportunity as we see in commercial construction, [as well as] various applications in infrastructure. Whether it’s from railway systems that are getting electrified to providing electric charging stations, [there are] numerous areas for us where we see opportunity to grow as the macro trends are in our favor.
Q: How will you be splitting your time between nVent’s local and global operations?
A: We have manufacturing and office facilities around the world, many of them being located in the United States. So I expect I will be traveling around the country and internationally, but the majority of my time will still be in Minneapolis where our head office is.
Q: New Pentair CEO John Stauch has said the separation would create room for both companies to grow. What employee growth potential do you see for nVent?
A: We have our largest manufacturing facility and one of our segments, our enclosure segment, is headquartered in Anoka. Our Anoka facility is over 700,000-square-feet, we have over 1,600 employees, and over the last year because we’ve seen tremendous growth — we reported 9 percent organic growth in our enclosure segment — we’ve been adding resources and hiring since 2017. Between permanent and temporary roles, we’ve probably added just under a couple hundred [workers] in the last year… As we had to separate the companies, we ended up moving across the street from Pentair — we’re in the West End in St. Louis Park — we had to hire some folks to create our enterprise staff. We have a brand-new facility in St. Louis Park. We have two floors of an office building there… I think as the business grows we’ll continue to add talent into our organization.