Letter from Rob Johnson and David M. Cote



In 2021, despite a challenging operating environment, we continued to strengthen our competitive position by introducing new Vertiv critical digital infrastructure products and services and continued to invest in the development of game-changing innovative offerings through our Vertiv Product Development process.

Though demand for Vertiv’s hardware, software, analytics and ongoing services remained strong throughout 2021 and our backlog of orders reached record levels, our financial performance fell short of expectations. We underestimated inflation and were initially slow to adjust our pricing, which, combined with ongoing COVID-19 related supply chain constraints, meaningfully impacted our margins and profitability.

While disappointed with our financial performance for the second half of the year, we took aggressive pricing actions late in the year that we expect will improve profitability in 2022 and beyond. We have also taken important steps to better align our sales and operations in the Americas to further support our culture of accountability and communication.

Most importantly, we remained committed to our customers, continued to invest in R&D and our differentiated product offerings and took the necessary pricing and other actions that we believe will position us for the future, as described below.


Against a backdrop of robust market demand and competitive strength, we encountered significant challenges in the second half of the year that negatively impacted Vertiv’s operational and financial performance. We did not fully anticipate the impact or persistence of inflation and were initially too slow in aligning our pricing to the new inflationary reality. Continuing COVID-19 related supply chain strains drove the need to navigate complicated commodity spot markets, and logistics issues created production and delivery challenges that were exacerbated by the transition to a new Enterprise Resource Planning (ERP) system. A sales and operations culture in the Americas that was not fully in sync became a real stumbling block in recognizing and understanding the emerging challenges in a timely way.

We have taken decisive steps to address supply chain and inflationary challenges. While our aggressive pricing actions late in 2021 may take time to be fully realized due to our existing large backlog levels, we expect such actions to translate into improved financial performance in the second half of 2022 and into 2023. We have reoriented our sales process in the Americas to better drive pricing in an inflationary environment, improved coordination and communication within our Sales & Inventory Operations Planning process and put into place processes further reinforcing that our sales and operations teams are directly accountable to senior management for implementing and following through with these plans.

While we don’t expect the supply chain strains that are impacting not only our industry but many other sectors around the world to abate in 2022, we believe that the actions we are taking will set the stage for improving profitability going forward.


Demand for our products remained strong throughout 2021, reflecting the combination of strong overall market growth, the success of our go-to-market strategies and the results of our Vertiv product development efforts.

Orders were up 30% for the year and we ended 2021 with a record backlog of $3.2 billion.

Despite strong sales growth and a favorable demand environment, our bottom-line results in 2021 fell short of our expectations as supply chain constraints and inflationary headwinds impacted profitability in the second half of the year.

Net sales for the year rose 14.4% to $5.0 billion with currency-adjusted organic sales up 10.9% despite the continuing impact of COVID-19 on global markets, contributing to our record backlog at year-end.

Vertiv reported full year net income of $120 million, operating profit of $260 million and adjusted operating profit of $471 million.


During 2021, as we addressed the challenges of a difficult operating environment, we continued to build on the foundation that will support the company’s long-term growth, including:

  • Completion of our acquisition of E&I Engineering Ireland Limited and its affiliate, Powerbar Gulf LLC, which significantly expands Vertiv’s data center offering by adding a leading independent provider of switchgear, busway and modular power solutions, strengthens our competitive market position and provides attractive cost and revenue synergies;
  • Accelerated investment in people, tools, programs and partner relationship management systems to increase global channel growth;
  • Opening of our innovative new factory in Croatia to support growing demand for integrated modular solutions in EMEA;
  • Introduction of one of the industry’s most expansive digital IT management platform for enterprise, distributed, edge and hybrid networks – meeting the ever-changing needs of the data center; and
  • Announcement of a new facility in Monterrey, Mexico, that will include a manufacturing plant, state-of-the- art test lab and a global services business office to address the increasing demand for Vertiv products and services.


The ongoing global COVID-19 pandemic and its wide-ranging social, economic and political fallout underscore the importance of sustainability in everything we do. In 2021, we worked with customers to provide more sustainable solutions to meet the growing demand of the digital world, including:

  • Vertiv teamed with Norwegian colocation provider Green Mountain to deploy cutting-edge technologies at its Stavanger data center to further increase energy efficiency and sustainability in their data center.
  • As part of a consortium of seven organizations, Vertiv was chosen by the EcoEdge PrimePower Project to develop low-carbon fuel cells to power data centers with the goal of reducing carbon emissions from operations by up to 100%.
  • Vertiv is a member of the European Data Centre Association (EUDCA) and is one of a few select companies participating in the EUDCA’s Climate Neutral Data Centre Pact. This Pact is a major self- regulatory initiative setting guidelines to help meet the European Commission’s goal for climate-neutral data centers.


While 2021 served up a variety of challenges, we believe that our disciplined approach to creating value for all our stakeholders is sound. The Vertiv team plans to remain persistent and to:

  • Focus on sustaining and establishing a clear competitive advantage;
  • Use price as a value driver going forward as pricing actions taken in late 2021 are expected to be realized through 2022 and into 2023;
  • Leverage invention and innovation;
  • Pursue business success in current key markets and grow our presence in new markets in a proactive and timely way;
  • Benefit from a business culture that is nimble, cost- conscious, creative, efficient and focused on achievement;
  • Invest in new technology that advances our customers’ businesses; and
  • Grow organically in the marketplace, while remaining attentive to inorganic opportunities that complement our strategic and tactical approach to business and meeting the needs of the steadily growing marketplace.


We expect the strong demand for our products to continue as the global markets we serve continue to grow. That view is supported by objective, third-party research, which projects:

  • Global data center capex is on track to reach $350 billion by 2026, and the outlook for spending on data center infrastructure capex is optimistic, with a five- year projected growth of 10%. [Dell’Oro Group February 2022]
  • Global spending on the digital transformation of business practices, products and organizations is forecasted to reach $2.8 trillion in 2025, more than double the amount allocated in 2020, representing a compound annual growth rate of 16.4% over the 2021-2025 forecast period. [IDC Press Release, “New IDC Spending Guide Shows Continued Growth for Digital Transformation as Organizations Focus on Strategic Priorities”, November 9, 2021]

Despite the challenges of 2021 and with the actions we’ve taken to address those challenges, we remain more confident than ever in the future of Vertiv. We operate from a great position in a good industry. We believe we provide world-class products and service offerings and are more relevant than ever to our customers. We have a talented and dedicated team, and we are making strategic investment in our future.

To our customers, we extend our thanks for empowering us with your trust and confidence. You make the work we do possible. To our stockholders, we are committed to continuing to earn your confidence and trust as we navigate the challenges and opportunities ahead. To our employees, we are so very grateful for what you do. We value your candor; we ask for your insights; and we encourage you to hold us accountable to be your employer of choice, while helping us to understand what that means. To our Board of Directors, your insights, guidance, experience and governance sharpen our focus and are integral to our efforts to build long-term value for all our stakeholders.


Rob Johnson
Chief Executive Officer

David M. Cote
Executive Chairman

Forward-Looking Statements

This letter contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27 of the Securities Act, and Section 21E of the Securities Exchange Act. These statements are only predictions and actual events or results may differ materially from those in the forward-looking statements set forth herein. Readers are referred to Vertiv’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q for a discussion of these and other important risk factors concerning Vertiv and its operations. Vertiv is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

[1] This letter contains certain non-GAAP metrics. For reconciliations to the relevant GAAP measures and an explanation of the non-GAAP measures and reasons for their use, please refer to Annex A in the Company’s proxy statement, filed on April 28, 2022.