Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Inc. Q4 Earnings Conference Call. Just a reminder, this call is being recorded. At this time, you are in a listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your touch tone phone. If you are in the question queue and would like to withdraw your question, simply press star two. I would now like to turn the call over to Kevin Maczka. Please go ahead, sir.
Thank you, Rolando. Good morning, everyone, and thank you for joining us today for Belden's Q4 2021 Earnings Conference Call. My name is Kevin Maczka. I'm Belden's Vice President of Investor Relations and Treasurer. With me this morning are Belden's President and CEO, Roel Vestjens, and Senior Vice President and CFO, Jeremy Parks. Roel will provide a strategic overview of our business, and then Jeremy will provide a detailed review of our financial and operating results, followed by Q&A. We issued our earnings release earlier this morning, and we've prepared a slide presentation that we will reference on this call. The press release, presentation, and transcript of these prepared remarks are currently available online at investor.belden.com. Turning to slide 2 in the presentation, during this call, management will make certain forward-looking statements.
For more information, please review today's press release and our most recent quarterly report on Form 10-Q. Additionally, during today's call, management will reference adjusted or non-GAAP financial information. In accordance with Regulation G, the appendix to our presentation and the investor relations section of our website contain a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate. I will now turn the call over to our President and CEO, Roel Vestjens. Roel.
Thank you, Kevin, and good morning, everyone. As a reminder, I'll be referring to adjusted results today. Please turn to slide 3 for a summary of the takeaways of today's presentation. First, I'd like to recognize our global teams for their extraordinary work to deliver another outstanding quarter. The operating environment remains incredibly complex, and our teams showed great determination in navigating the challenges and executing our strategic plans. I'm very pleased to report another quarter of significant growth with total revenues, earnings, and free cash flow that exceeded expectations. Demand trends remained robust in the Q4 . Our revenues increased 21% on an organic basis, and record incoming order rates resulted in the highest book-to-bill ratio of the year at 1.2 times.
We continue to take actions to transition Belden from a product supplier to a value-added partner in the design and implementation of advanced networking solutions. We are very excited about our progress, which is reflected in our strong financial performance. Subsequent to quarter end, we entered into two transactions that further improved our portfolio of businesses. First, we recently signed a definitive agreement to divest our Tripwire cybersecurity business. I will provide additional details on this important transaction on the following slide. Second, we acquired macmon secure GmbH for $43 million. This is the second acquisition in our industrial solutions segment in the last year. We are excited about the value creation potential of this acquisition. We also reduced net leverage again this quarter.
Strong EBITDA growth and free cash flow generation throughout the year resulted in a reduction in net leverage from 4x at the end of 2020 to 2.1x at the end of 2021. Following the completion of the Tripwire divestiture, we will see another meaningful reduction in net leverage. Finally, today we are announcing our revenue and EPS guidance for 2022. We entered this year with momentum in our business. I am encouraged by our recent order rates and execution and optimistic about our ability to continue driving profitable growth. Specifically, our full year 2022 guidance calls for organic revenue growth of 6% and pro forma EPS growth of 13% at the high end. I'm proud of our achievements in the Q4 and throughout 2021, and I'm encouraged by our outlook for 2022 and beyond.
Now, before we review our Q4 performance, I would like to provide some additional details on the Tripwire divestiture and the macmon acquisition. Please turn to slide 4. We have signed a definitive agreement to divest Tripwire to HelpSystems, a cybersecurity and automation software company, for $350 million in cash. Tripwire's full year 2021 revenue and EPS contributions were $107 million and $0.03, respectively. Free cash flow generation was not material. Belden had $644 million in cash on hand and 2.1x net leverage at the end of 2021. Pro forma for this transaction, the year-end cash balance would be approximately $1 billion with net leverage of 1.2x. Strategically, this is an important transaction that will enable both Belden and Tripwire to more effectively execute their growth plans.
While Tripwire made progress in recent years advancing its product roadmap in both enterprise and industrial markets, we determined it is in our best interest to refocus our resources entirely on industrial solutions where we are best positioned to win. We believe that HelpSystems is better positioned to make the incremental investments necessary for Tripwire to be successful. Importantly, we are maintaining an exclusive commercial relationship with Tripwire under HelpSystems in industrial end markets. As we deliver our comprehensive networking solutions to industrial customers, this agreement will allow us to continue integrating Tripwire's cybersecurity functionality. As a result of this alignment, Tripwire customers will also benefit from the wide range of solutions that HelpSystems offers to address today's fast-changing cybersecurity environment. I would like to thank the Tripwire team for their significant contributions to Belden. I wish them every success going forward.
Please turn now to slide 5. You see two pie charts on this slide. The left represents our actual results for 2021, including Tripwire, and the right represents our pro forma results excluding Tripwire. Pro forma 2021 revenues excluding Tripwire were $2.3 billion. The divestiture has minimal impact on consolidated EPS and free cash flow. Following the divestiture, pro forma consolidated EBITDA margins for the full year 2021 would be 50 basis points higher at 16.1%. Further, pro forma net leverage declines to 1.2 times. This provides ample financial flexibility and opportunities for accretive capital deployment. Now please turn to slide 6 in our presentation for a review of the macmon acquisition. We are very pleased to add macmon's talent and team and its innovative technologies to our portfolio.
macmon is a recognized leader in advanced network access control software. Its products are complementary to Belden's leading industrial networking portfolio and will be integrated with our Hirschmann offering to expand our ability to provide complete end-to-end solutions. Key vertical markets include automotive manufacturing, food and beverage, utilities, and healthcare. We expect macmon to contribute incremental revenue of approximately $12 million in 2022. Longer term, we see numerous opportunities to leverage our global customer base and solution selling capabilities to drive growth. We are prioritizing organic growth, but we continue to pursue strategic acquisitions like macmon to further enhance our product offering and accelerate our profitable growth potential. Now please turn to slide 7. Moving on now to a review of the Q4 highlights. We delivered meaningful growth and margin expansion again this quarter with total revenues and EPS that exceeded expectations.
Q4 revenues increased 28% year-over-year to $638 million, exceeding our guidance range of $615 -630 million. Organic growth is a key priority, and revenues increased 21% year-over-year on an organic basis. Our strong performance was broad-based across both the Industrial Solutions and Enterprise Solutions segments. EBITDA increased 37% year-over-year to $101 million. EBITDA margins expanded 110 basis points from 14.8% in the year-ago period to 15.9%. EPS increased 47% year-over-year to $1.32 compared to $0.90 in the year-ago period in our guidance range of $1.21-1.31. Turning now to our key strategic markets. We had another great quarter in Industrial.
Industrial Solutions revenues increased 18% organically in the Q4. Market conditions remain very healthy, and we continue to see a number of compelling longer-term demand drivers for automation solutions as industrial customers respond to increasing labor costs, increasing capacity and productivity requirements, and other factors. Belden is highly differentiated in the marketplace, and we expect to deliver solid growth in this market going forward. Turning now to Enterprise. Enterprise Solutions revenues increased 23% year-over-year on an organic basis in the Q4, driven by improving end market trends and significant share capture in broadband and 5G and smart buildings. Within the segment, revenues in broadband and 5G increased 25% organically. We see strong secular trends in this market driven by the ever-increasing demand for high-speed broadband and a desire to provide greater access.
We have sustainable competitive advantages in this market, and we are ideally suited to support both MSO and telco customers as they continuously upgrade and expand their networks. Revenues in smart buildings increased 22% year-over-year on an organic basis. We are very encouraged by the improvement we are seeing in this market and the strong execution by our teams. We are also benefiting from our commercial focus on growth verticals such as data centers and healthcare facilities. In addition, we continue to capture market share as a result of our improved operational performance and superior lead times. Now, please turn to slide 8 in our presentation for a review of the full year 2021 highlights. 2021 was an exceptional year for Belden.
This year was highlighted by meaningful recovery in our end markets, significant progress on our organic growth strategies, and successful management of inflationary pressures and supply chain challenges. We delivered strong growth in revenues, earnings, and cash flow, which allowed us to significantly delever our balance sheet. Full year revenues increased 29% overall and 20% on an organic basis to $2.4 billion. EBITDA increased 51% to $376 million. Despite the inflationary pressures, EBITDA margins expanded 220 basis points from 13.4% in 2020 to 15.6% in 2021. EPS increased 74% from $2.75 in 2020 to $4.78 in 2021.
Free cash flow increased 145% from $86 million in 2020 to $211 million in 2021. We increased our cash balance to $644 million, and reduced net leverage from 4x at the end of 2020 to 2.1x at the end of 2021. We continued to transform and improve our portfolio with three notable transactions in our industrial solutions segment, including the agreement to divest Tripwire and the acquisitions of OTN Systems and macmon. To summarize, this was a strong finish to a strong year for Belden. Our substantially improved financial results demonstrate the progress we are making on our strategic growth initiatives. I will now ask Jeremy to provide additional insight into our Q4 financial performance. Jeremy?
Thank you, Roel. Please turn to slide nine for a detailed consolidated review. I will start my comments with results for the quarter, followed by a review of our segment results and a discussion of the balance sheet and cash flow performance. As a reminder, I will be referencing adjusted results today. Revenues were $638 million in the quarter, increasing $139 million or 28% from $499 million in the Q4 of 2020. Revenues increased 21% year- over- year on an organic basis. Incoming order rates remained strong during the quarter, increasing 39% year- over- year and 7% sequentially compared to the very strong orders in the Q3 .
This resulted in a book-to-bill ratio of 1.2 times, including 1.24 in Industrial Solutions and 1.15 in Enterprise Solutions. Gross profit margins in the quarter were 36.8%, increasing 140 basis points compared to 35.4% in the year-ago period. We continue to proactively address market inflationary pressures through price recovery and productivity measures to support our gross profit margins. EBITDA was $101 million, increasing $27 million or 37% compared to $74 million in the prior-year period. EBITDA margins were 15.9%, increasing 110 basis points compared to 14.8% in the year-ago period, demonstrating solid operating leverage on higher volumes.
For the full year 2021, we generated healthy incremental EBITDA margins of 30%, excluding the impact of higher copper passthrough pricing. Our teams continue to execute well in this challenging supply chain environment. Net interest expense was consistent with the year ago period. At current foreign exchange rates, we expect interest expense to be approximately $62 million in 2022, consistent with the prior year. Our effective tax rate was 18.1% in the Q4 and 18.6% for the full year 2021, as we benefited from incremental discrete tax planning items. We expect a normalized effective tax rate of approximately 20% throughout 2022. Net income in the quarter was $60 million compared to $41 million in the prior year period.
Earnings per share was $1.32, increasing 47% compared to $0.90 in the Q4 of 2020. We were very pleased to deliver such robust growth in margin expansion again this quarter. Turning now to slide 10 in the presentation for a review of our business segment results. I will begin with our Industrial Automation Solutions segment. As a reminder, our industrial solutions allow customers to transmit and secure audio, video, and data in harsh industrial environments. Our key markets include discrete manufacturing, process. Increasing 27% from $271 million in the Q4 of 2020. Segment revenues increased eighteen percent organically, with broad-based strength across most of our primary market verticals within industrial automation.
Industrial Solutions segment EBITDA margins were 17.6% in the quarter, increasing 30 basis points compared to the prior quarter and consistent with the prior or with the year-ago period. Turning now to our Enterprise segment. Our enterprise solutions allow customers to transmit and secure audio, video, and data across complex enterprise networks. Our key markets include broadband and 5G and smart buildings. The Enterprise Solutions segment generated revenues of $294 million during the quarter, increasing 29% from $228 million in the Q4 of 2020. Segment revenues increased 23% organically, with broad-based strength across both broadband and 5G and smart buildings. Revenues in broadband and 5G increased 25% year-over-year on an organic basis. Revenues in the smart buildings market increased 22% year-over-year on an organic basis.
Improving market conditions and strong operational performance resulted in further share capture during the quarter. Enterprise Solutions segment EBITDA margins were 13.5% in the quarter, increasing 200 basis points compared to 11.5% in the prior year period. If you will please turn to slide 11 for our balance sheet highlights. Our cash and cash equivalents balance at the end of the Q4 was $644 million, compared to $458 million in the Q3 and $502 million in the Q4 2020. We are very comfortable with our current liquidity position. Working capital turns were 11.2 compared to 7.8 in the prior quarter and 10.3 in the prior year period.
Days sales outstanding of 53 days compared to 56 in the prior quarter and 50 in the prior year period. Increased during the quarter as we proactively managed supply chain challenges and prepared to support robust expected growth in 2022. Our financial leverage improved significantly again this quarter, as Roel mentioned. Net leverage of 2.1 times net debt to EBITDA at the end of the Q4 compares to 2.8 times in the Q3 and 4 times a year ago. Pro forma for the Tripwire transaction, year-end net leverage would have been 1.2 times. Going forward, we intend to maintain a disciplined financial policy. Our capital allocation priorities will be balanced, emphasizing organic growth initiatives while also considering strategic M&A, share repurchases, and debt repayment. Please turn to slide 12 for a few cash flow highlights.
Total cash flow from operations in the Q4 was $170 million, increasing 26% compared to $135 million in the prior year period. Net capital expenditures were $35 million for the quarter, compared to $33 million in the prior year period. Free cash flows in the quarter were $162 million, increasing 60% compared to $101 million in the prior year period. We were pleased with the underlying cash flow performance of the business, which also benefited from two favorable one-time items in the quarter. The first involves the sale of a note receivable related to the Grass Valley divestiture. As a reminder, we completed the divestiture of Grass Valley in July 2020, and the transaction included upfront cash consideration plus deferred consideration in the form of a note.
The note was held on our balance sheet as a receivable with a carrying value of $35 million. During the Q4, we received $62 million in cash for the note and recognized $27 million, or the difference between the cash proceeds and the carrying value, as a gain on sale, which benefited our cash from operating activities. The second item is a sale leaseback transaction related to a facility in Germany. We received $27 million for the sale of this facility and recognized the full amount as free cash flow in the quarter. As a result, full year 2021 free cash flow generation was $211 million. To our President and CEO, Roel Vestjens for the outlook. Roel?
Thank you, Jeremy, and please turn to slide 13 for our outlook. The market environment is very dynamic, with considerable ongoing challenges and uncertainties. However, our demand trends are encouraging and our global teams are performing at a high level. We are executing our strategy to position the company for further growth and margin expansion in 2022 and beyond. Next quarter 2022 revenues of $558.73 million and EPS of 58 cents to $1.13. For the full year 2022, we expect revenues of $2.39 -2.4 billion and EPS of $5-5.35. Please turn to slide 14 for a bridge that walks from our 2021 results to the high end of our 2022 guidance.
Pro forma 2021 revenues and EPS excluding Tripwire were $2.3 billion and $4.75, respectively. We expect organic growth of 4%-6% or up to $142 million, with solid growth in both our Industrial Solutions and Enterprise Solutions segments. Incremental EBITDA margins on volume growth are expected to be in the 30%-35% range. We anticipate a $12 million revenue contribution from the macmon acquisition, which is largely offset by the impact of the Brazil oil and gas divestiture that we completed in 2021. We expect current copper prices and foreign exchange rates to have a modest, unfavorable impact on revenues of approximately $5 million in 2022, with a negligible impact on earnings.
Finally, a normalized effective tax rate of 20%, along with modestly higher share count, represent an EPS for the full year 2022. The high end of our guidance implies organic revenue growth and pro forma EPS growth excluding Tripwire of 6% and 13% respectively. Please turn to slide 15. Now, before we conclude, I would like to reiterate that I'm extremely optimistic about our future. We had an exceptional 2021, and we entered 2022 with significant momentum. Our strategic growth initiatives are gaining traction, and I'm encouraged by our recent order rates and execution of our teams across the company. Belden is well-positioned to benefit from the favorable secular trends in industrial automation, broadband, and 5G, and smart buildings. I'm confident that our team will continue to deliver robust organic growth and margin expansion, driving significant value for our shareholders. That concludes our prepared remarks.
Orlando, please open the call to questions.
would like to ask a question during the Q&A session here, please press star one on your touch tone phone. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. If you would like to withdraw a question, press star two. We ask that you please limit yourself to one question and one follow-up question to allow everyone an opportunity to ask a question. Roel Vestjens, your first question is from Reuben Garner with The Benchmark Company. Please go ahead.
Thank you. Good morning, everyone. Hey, so maybe, well, first off, congrats on the strong close to the year and congrats on both deals. Maybe to start, I guess it's a two-part question on Tripwire. If you could just kinda explain, I guess why the divestiture? Secondly, does this do anything really to change kinda your long-term targets for the business overall or by segment?
Thank you for your comments. Appreciate it. We've previously communicated that Tripwire is going through a transition, right? They're transitioning to a SaaS-based offering, and that requires significant investments, which we made in both R&D and commercial resources. In order to support that transition, these investments are required for multiple years. The fact is that we have additional and better investment opportunities within the company, and that's how we are prioritizing. It doesn't change the outlook. As you know, industrial automation is by far our biggest business in Belden. We, because of this exclusive relationship, are able to continue to offer and integrate cybersecurity solutions in our industrial solutions offerings that we offer to our customers. It doesn't change the positioning nor the ability to offer solutions to our industrial customers at all.
Great. Then my second question is, you guys have had a nice run here, in the world that we're living in, where supply chain is often a headwind for companies. I think Jeremy mentioned supply chain briefly in his remarks. In general, you guys have kind of gotten through this without, it seems to be, without much of a, you know, at least not a material impact on your business. Can you talk about, I guess, structurally, how you're able to do that and continue to perform in this environment?
Yeah. I appreciate you making that observation. We have made some strategic choices a few years back already, where we said we want to produce within region. I think our supply chains are typically a little bit shorter than the people we compete with, and I think that's bearing fruit right now. I think that's a very important element as to why we're able to overcome the supply chain challenges. On pricing, which is obviously related to it, the inflationary pressures that we're seeing, I think it's a testament to the value that we provide for our customers. Whether it's other material or whether it's increased labor costs onto our customers. I appreciate the observation, but I think it's because of some strategic-
Great. Congrats again and good luck going forward, guys.
Yeah. Thank you, Reuben.
All right. Up next, we will take a question from Noelle Dilts with Stifel. Please go ahead.
Hi, guys. Thanks and congrats on such a strong year. I was hoping that first you could just talk about how you're thinking about additional portfolio actions. I kind of hear that we're seeing the divestiture of Tripwire. You know, in the past you've talked about, you know, some of the less differentiated copper cable products still being kind of potentially on the table for divestiture. How are you thinking about that right now? Thanks.
Secondly, I think we're very happy with the portfolio as we have it now. We're constantly optimizing for two parameters. One is organic growth, and two is we still are in the process or kicked off this process, which we didn't formally end, on divesting a few small, non-strategic, low margin, low growth cable portfolios. As I think we've previously indicated, the market has in the meantime moved on, and people that would be of potential interest and where it would have been accretive to them have other priorities as they're fighting their supply chain challenges and dealing with capacity issues.
We like where we are now, and we are focusing in terms of capital deployment on internal investments to further increase our organic growth, paying down debt. To remind you, we have an authorization for the board to repurchase, and that's certainly one of the options that we're considering moving forward.
Okay. That makes a lot of sense. Thank you. Also, I was wondering if you could say one of the concerns we hear from investors kind of across the industrial space is that there may be, you know, certain customers may be just buying as much as they can because of the supply chain issues and maybe kind of pulling forward some demand. Any thoughts on, you know, how you guys are looking at that or if you're seeing that in any market? Thank you.
Well, let me answer the question twofold from our perspective and from our customer's perspective. First, from our perspective, our work and capital turns were extremely strong in the quarter. We are navigating those challenges as I've highlighted. Yes, we purchase material when we can or when we deem it's appropriate, but we're doing it while maintaining extremely good turns or at least improving the turns every year, just like we demonstrated in Q4. No excessive material there. When it comes to our customers, this phenomenon of double ordering and then seeing who supplies first and then cancels, and then canceling, we've not seen that. Our orders are non-cancelable. We reinforce that policy proactively, but we've not seen cancellations from our customers at all.
I'm not worried that our backlog is dramatically inflated or that we're gonna have times where we have to face large cancellations. We're simply not seeing that.
Thanks. Great data points. Appreciate it.
You're welcome.
All right. Our next question will come from William Stein with Truist Securities. Please go ahead.
Great. Thanks for taking my question. Congrats on the good results and especially the sale of Tripwire. I think it's a very positive change. I wanna ask about the revenue contribution from that business. I think you highlighted about $100 million, maybe a little north of that in 2021. I thought the majority of that revenue was indeed in the industrial end market. I think you're also retaining exclusive sales rights into that market. Maybe help me understand what revenue goes away from the sale versus what revenue stays, but just at a cost where you have to pay a supplier instead of develop the software internally and incur the OpEx?
Well, I'll defer to Jeremy for a little bit more detail. It's not the majority of the revenue. The majority by far is still in the traditional end markets that Tripwire plays. We have, because of our agreement, an exclusive relationship with HelpSystems that allows us to continue to sell within the industrial segment, as we've highlighted. We will further integrate that into our solutions that we offer to our industrial customers. The vast majority of the revenue is still within the traditional markets for that Tripwire plays in.
Yeah, yeah. As Roel said, the majority of the revenue was going into enterprise markets. The industrial business had been growing, so it was becoming more important every year, but it was still a small portion of the total revenue at Tripwire. We sold 100% of the business. We took all the revenue out of our guidance. In the future, we will act as a reseller of Tripwire products into certain industrial applications. We expect the revenue to be material relative to Belden's total revenue, but it's an important capability that we have going forward, and that we can offer.
Thank you.
to our customers. Yep.
Great. One more, if I can. We're good, especially if you X out Tripwire for 2021. Can you remind us margin targets? I think you build your targets based on EBITDA instead of PBIT. Maybe walk us today, let's say without Tripwire to your target level and especially like the Tripwire divestiture, maybe the targets should go up a bit, but maybe there are other things pressuring those.
Yeah, sure. From a margin standpoint, we had set out a margin. The starting point was 13.5% EBITDA. We're going from 13.5% to 20% with the divestitures of the copper cable and then volume and leverage on that volume several years. Since that time, I would say the major items that have occurred is that the copper cable businesses were not making those a priority wire. That's sort of a wash from both of those sections. Volume has increased dramatically, and then the one offset to that has been the increase in copper costs. When we issued that copper was at $2.80. Today, it's at $4.40, roughly. It's had a material impact.
To summarize what I would say, based upon our guidance at the high end for 2022, we're guiding 16.8% EBITDA margin roughly at the high end. If you adjust that for copper, that would put you roughly at 18%, which shows significant improvement versus where we were in 2020, and I think not too far off the longer-term target for the business.
Just to follow up, if I can, is it fair to think that you have another roughly 200 basis points of improvement in profitability? If so, is that, you know, something that you think you realize in 2023, or is it a longer-term process?
The way I would think about it is, as we go forward, we are attempting to deliver organic growth at 30%-35% incremental margins. The major lever will be how quickly we grow over the next couple of years. I think 3% or 4% organic growth with margin expansion. It depends on how you model the growth profile of the business. I think in the next maybe three or-
Thank you.
Sure.
Next, we will hear from Chris Dankert with Loop Capital. Please go ahead.
Hey, morning, everyone. I guess, you know, following the sale of internally, can you maybe kinda comment on, you know, where those investment opportunities are, kinda how R&D dollars shift here a bit?
The largest area of
area where we see the most opportunity also on a longer-term basis for organic growth space. That's the largest area of investment. R&D, there are some S, G, & A investments that we're making. We've publicly stated that we're building. I'll give you one example, Customer Innovation Centers, which benefit multiple business. These are 5 brick and mortar facilities that we're building. One of them already complete. 2 scheduled for this year in China, near Shanghai, and one, but first and foremost, it's in the industrial automation space. We feel that in the Industrial Automation space, which in the solution selling approach, the tighter we get with our customers and the more customized solutions for our customers. We see more opportunities for further product line expansion and other components that help deliver those solutions for our customers in the Industrial Automation space.
Area of reinvestment.
Got it. That's helpful. Maybe just kind of to follow up on that a little bit. When I think about, you know, the biggest growth opportunities in automation here, is it, you know, do you feel it's at the core, it's the connectivity, it's the networking? Or is it really, you know, as you kind of alluded to, expanding the offering a bit off of that strong base?
It's connectivity and networking solutions, even moving slowly into data management solutions on the machine or on the factory floor or any other industrial environment that we serve. That's the main area that we focus in. I'm not thinking in terms of, for example, either connectors or connectivity. I'm thinking offering, 'cause that's what we do, in our data management solutions for our industrial customers, whether that's on the machine or on the factory floor or on a wastewater facility or a power utility, you name it, all the industrial areas that we play in.
Got it. Just trying to make sure. Again, it sounds like, again, the growth is not going really far afield, I suppose. Thank you so much for the clarification, 22 here, guys.
No, I appreciate that. That's absolutely correct. Now, mind you that on the other side of the building, the Enterprise Solutions segment, we're also forecasting robust growth in 2022 and beyond. It's not that those areas are deprived of investment, but the Industrial Automation Solutions space we're most bullish about.
All right. Up next, we will hear from Steven Fox with Fox Advisors. Please go ahead.
Hi, good morning. A couple of questions from me too, please. First off, I'm a little confused on the quarterly guidance for Q1 on the sales going from $638-573 on the high end. I understand taking out the divestiture, but the orders you said had a lot of momentum into quarter end. It sounds like supply chains are still tight. What quarter-over-quarter decline in the top line too? And then I had a follow-up.
Yeah, that's typical seasonality. Year-over-year, our Q1 organic growth on the high end is 12% growth. We feel and it's still 9% organic growth, just as a data point. If that's-
Okay, you expect normal seasonality despite everything that's going on with supply chains. Like, there's no pull-in. It sort of has an implication for what, you know, customer inventory is, I guess, what I was getting at.
No, we don't. You know, again, 12% organic growth year-over-year.
Yeah.
Our inventory levels at our customers have been stable. Our inventory turns are extremely strong, and we've not seen any material build at all.
I was wondering if you could dive in a little bit on the broadband and 5G markets, where you're gaining share. It sounds like you mentioned it with fiber. I'm not sure if it was all fiber. Can you maybe give a little more color on how you performed on the fiber products in particular?
There's a few competitors that are public, so compare, as well as obviously conversations with our key customers. If we look at the split between fiber and copper, then that trend that favors or makes shifting towards fiber continued. In the Q4, revenue is 31%. For the year, that's 27%. You may be interested in, 'cause we report that previously as well as part of our strategic shift inside the home versus outside the home. Also there, that shift continued. It was outside the home. That's a record ever since we started making that shift and started making investments to further enhance the growth profile outside the home. We've never seen it that much.
Very pleased with the strategic direction of the business and the shift to more outside the home and more fiber.
Great. That's really helpful. Thank you.
You got it.
If there are additional questions, please press star one on your touch tone phone. Up next, we'll take a question from Mark Delaney with Goldman Sachs. Please go ahead.
Yes. Good morning. Thank you very much for taking the question, and let me add my congratulations on the strong orders and results. If we can start on smart buildings. I believe that was one of the markets that was most impacted by COVID, and you're now seeing some very good momentum. You talked about it being up over 20% year-on-year on an organic basis. Maybe you could help us better understand how far along smart buildings is in that recovery process. Is it shifting back more within typical ranges at this point, given the recoveries on the Q4, or is that a market that still is down from historical levels?
Yeah. I'll jump in here first, Mark. This is Jeremy. Smart buildings is, at this point, roughly 4% or 5% below where they were pre-COVID. It's a business that is recovering much more quickly than we had anticipated when we came into 2021. But they're still a little bit behind the other businesses with respect to smart buildings. At this point, the economic indicators seem to be pretty good. ABI has been over 50. Things are going, I think, just fine and recovering a bit more quickly than we anticipated. But we're not quite where we
You kinda talked about data center as one of the focus verticals during the prepared comments. I was hoping you could elaborate a bit more on what's driving the outlook in data center. Is it still mostly within traditional enterprise or are you making any progress becoming a bigger piece of that? Thank you.
Yeah, Mark. I appreciate the question. Our priority and where we allocate our resources within data centers is indeed either enterprise-owned, but more and more colo. Hyperscale is still not an area that we play in for strategic reasons, you know, mainly margin pressure. We avoid that segment. We don't believe that the value that we add is truly recognized within that concentrated customer base. Secondly, we feel strong. We feel we do very well within either municipalities or government-owned data centers. Our data center business was up 29% year-over-year. We feel good about where we play. The results are there. To answer the second part of your question, we get more and more involved in the design of the data centers.
We get more and more involved early on in the cycle, where we help our customers design their data centers and then are able to supply the solutions that we help design.
Thank you.
You're welcome.
Kevin Maczka, there are no further questions at this time. Please continue.
Okay. Thank you, Orlando, and thank you everyone for joining today's call. If you have any questions, please reach out to the IR team here at Belden. Our email address is investor.relations@belden.com. Thank you.
Thank you, ladies and gentlemen. This concludes our call for today. You may now disconnect from the call, and thank you for participating.