Welcome, everybody. This is Lisa Hartman, Vice President, Investor Relations and Corporate Communications at EnerSys. Thank you for joining us for our webcast. Joining us today is Chad Uplinger, President, Motive Power Global, to share his perspective on the motive power end markets, mega trends, and EnerSys maintenance-free solutions that are enabling customers to achieve their automation, electrification, and decarbonization goals. Andrea Funk, EnerSys Executive Vice President and Chief Financial Officer, will also join us for the Q&A portion of the webcast. Please note that we may be making forward-looking statements on today's call that are subject to uncertainties and changes in circumstances. Our actual results may differ materially from these forward-looking statements for a number of reasons. Our forward-looking statements are made as of the date of this presentation. For a list of forward-looking statements and factors which could affect our future results, please refer to our recent 10-K filed with the SEC. Following our prepared remarks, we will be opening the session for questions from the audience. At any time during the webcast, you may submit your questions by clicking Ask a Question in the top right corner of your screen. The slides for this presentation are currently available in the Events section of our website. We will not be taking questions related to the current quarter financial results during today's webcast, as they are outside the scope of this call. I'll now hand the mic over to Chad. Thank you, Lisa, for the introduction, and good afternoon, ladies and gentlemen. I'm excited to be taking on this role as a leader of our Motive Power business, and I thought I'd give you a quick summary on, of my background. I've been part of this organization for nearly 25 years. All of my tenure has been within Motive Power in various roles of marketing and sales management. It was about 10 years ago, in the Motive Power business, that we began making advancements to our TPPL, which is Thin Plate Pure Lead technology. And after some slight chemistry changes, enhancements to the product, and improving our charging algorithms, we were able to enhance the cycle life and durability of this product, making TPPL suited for the daily deep discharge applications within our Motive Power segment. We introduced this technology in the beginning in smaller Class Three markets, but gradually we adopted larger sizes that catered to more mainstream Class One and Two applications. Next slide please, Charlotte. To start off, I'd like to provide a quick overview of our Motive Power business for those of you who may not be 100% familiar with our business segment. As mentioned by my predecessor, Shawn O'Connell, during our Investor Day in June, our Motive Power business continues to consistently perform extremely well. It's important to note that we go beyond simply offering forklift batteries and chargers in a transactional manner to our customers. We provide a comprehensive end-to-end solution. This includes the software and analytics to measure our customers' power needs, the widest range of batteries and chargers in the industry, software that monitors 24-hour fleet monitoring of our customers' assets, and then also we combined all this with the largest service network in our industry. In fiscal 2023, Motive Power generated $1.5 billion in revenue and yielded close to $200 million in operating earnings. We span more than 120 countries, and we serve many of the largest global blue-chip customers. Our global blended market share is 22%. However, in specific regions, such as the Americas, our market share is even more significant, operating at approximately 50%. If you think about that, it means that one out of every two batteries sold in the Americas is an EnerSys product. Next slide, please. Let's take a quick moment, and I'd like to highlight what sets our Motive Power product lineup apart from the industry. Our approach is built on the following key products. We manufacture traditional lead-acid batteries, things that have been in the marketplace for decades. We also manufacture, as I mentioned before, Thin Plate Pure Lead products, lithium-ion, and a complete line of chargers. If I look back over my last 25 years, I've witnessed a significant transformation in our industry. Traditionally, our industry has been dominated by flooded lead-acid batteries, and these products have remained relatively unchanged. Customers would have to change batteries if they needed to operate their lift trucks multiple shifts, and they'd have to perform weekly maintenance cycles with the products. When we introduced TPPL into Motive Power, this marked our first step towards a maintenance-free solution for our customers. Over the past decade, TPPL has evolved into a widely accepted solution for all medium and light-duty applications. We're currently in the process of launching our ATP solution. That stands for Advanced Throughput. This is a design of TPPL that offers a significantly higher charge rate and active cooling that is actually integrated within the battery system. This ATP product is perfectly suited for us to expand our addressable market for TPPL into more demanding applications, like high energy-consuming Class 2 reach trucks. Recently, we've also begun to collaborate with lift truck OEMs to enable CAN connectivity back into the lift truck. This allows us to protect the battery from potential abuse and extend its service life. The desire from our OEM partners to integrate TPPL just reconfirms with us the market acceptance of this maintenance-free alternative to flooded lead-acid. Globally, TPPL is 22% of our sales mix. However, in some markets, like here in North America, we are over 30%. Remember, this is our strongest market, where we enjoy 50%+ market share. Our third product is our lithium-ion battery, specifically designed for heavy-duty applications. It's capable of being charged at extremely fast rates and allows customers to replace what would have traditionally been a three-battery application into one lithium-ion battery. Now, what sets EnerSys apart is our ability to offer both TPPL and lithium-ion solutions. This way, customers can experience maintenance-free, but they have the option of depending on what their application demands. We evaluate both solutions, and we recommend the most cost-effective option. This gives us a significant competitive advantage over other companies that solely offer flooded or lithium-ion batteries. EnerSys also stands out as we manufacture our own complete line of battery chargers. Like many of our competitors in this space, they rely on third-party companies to produce these chargers, but we offer a comprehensive charger line globally that allows us to be unique in the industry as a closed-loop power solution for our customers. We also recently launched our wireless charger, which is an exciting new product with a huge potential in the AGV market, where traditional chargers struggle because there's an absence of a human operator. Lastly, all these products that I mentioned, whether it's flooded, TPPL, lithium-ion, or any of our chargers, seamlessly connect back to our 24/7 data analytics software and are supported by our service network. All these unique offerings makes motive power business a force to be reckoned with in our industry, ensuring that we provide top-notch solutions and support for our customers worldwide. Next slide, please. I wanted to share with you some reasons why we're incredibly excited about the future of motive power and why we have full confidence in the bright road ahead for our business. One, I think we can all agree, we're seeing an ongoing push towards decarbonization in our society. A s we look at industries like the automotive industry, we can see trends towards electri- electrification greater than any time in our history. In just 2022, if you think about it, there are 26 million electric cars on the road. This represents a 60% increase from just the previous year. So just like the auto industry shifts towards electric vehicles, our lift truck OEMs are targeting applications like outdoor applications and other demanding applications that have traditionally relied on internal combustion engines to move towards electric vehicles. And this represents a great opportunity for us to expand our addressable market with products like our new 80-volt lithium battery and our upcoming launch of our outdoor-rated charging system. These products will perfectly complement the transition from internal combustion to electric lift trucks in harsh applications that, until now, were really not an addressable portion of our business. Another driving force behind our optimism is the global corporate initiatives of our large customers. It's estimated that 88% of all public companies and 2/3 of privately owned companies have implemented environmental, social, and governance initiatives, or in another term, ESG. Both our TPPL and lithium-ion products align perfectly with ESG goals. These products are energy efficient and provide water consumption savings. In a few slides, I'll provide you a real-life example of this in more detail. The automation of material handling is also a significant factor that will continue to drive demand for our unique product solutions. We're seeing a growing number of AGV suppliers, as well as traditional lift truck OEMs, introducing autonomous solutions based on their existing lift truck platforms. With labor shortages being a challenge in every industry, and specifically the warehousing industry, AGVs provide a reliable complement to a customer's lift truck fleet. Several OEMs have expressed interest in integrating our wireless charging solution directly into their vehicles. Since the launch of this product, we've received strong demand, testing, and evaluation programs with several OEMs on how they can explore to incorporate this technology onto their platforms. We firmly believe that the future of motive power is incredibly promising, and the global push towards things like decarbonization, corporate ESG initiatives, and the growing automation in material handling will all contribute to a growing demand for our unique products well into the future. Next slide, please. I'd like to share with you now a graph that illustrates our Americas sales and how we rank compared to gross domestic product. So traditionally, our motive power business has been tracked using gross domestic product, or GDP, within the markets we serve. The demand for goods and services within the markets, like in this example, the Americas, is typically a leading indicator for the need for material handling equipment. So let's look at GDP over a 16-year period, and we're gonna compare that to the U.S. basis of EnerSys sales. Now, although in this example, the example is using U.S. due to a significant portion of our motive power business, but we also observe that there's similar, similar macroeconomic trends in other regions when comparing to their local GDP. But a few things I'd like to note. First, let's look at the declining periods of GDP growth. Our business, like all businesses, are affected when our economy slows. However, we do not experience as severe a decline as the overall market. One of these contributing factors is, even as business contracts, sectors such as food service, consumer staple goods, these things don't see the similar declines that the, that the entire GDP would see. So this provides us a buffer during periods of economic contraction. Secondly, I'd like to point out how we've continued to trend at a rate that outpaces GDP. We believe there are several factors currently at play and in the future that will contribute to the sustained growth rate. As I mentioned earlier, our maintenance-free solutions offer distinct advantages to customers. We see this market trend only continuing. The sale of these products generate between 40% and 75% more revenue per unit compared to flooded batteries. Again, this is depending on the size and the chemistry that the customer selects. But this allows us to grow revenue within the motive power space at a pace that we've not seen in our traditional markets. Furthermore, the ongoing decarbonization effect and the conversion of electric power also expands the markets in which we target. As I mentioned, the outdoor or harsh environments, which are traditionally relied on internal combustion engines, now present revenue opportunities for us, even in the event of a contracting GDP period in our economy. Next slide, please. As this graph illustrates, the outlook for the next 10+ years remains strong within material handling. Two of our markets are expected to experience a compounded annual growth rate of at least 6%. The only exception for this trend is the European market, which you must understand, has undergone an electrification conversion for some time now. Consequently, their market already boasts a significantly higher rate of electric lift trucks. But this forecasted material handling trend points towards a strong and sustained growth trajectory for the next decade and beyond. This is one of these attributing factors as to why we're very confident in the continued growth of our business for the next several years. Next slide, please. To better demonstrate the distinction between each of these geographic regions, market segments, these three graphs provide you a clear picture. Americas and our APAC markets are both poised for significant growth. These two markets have a promising runway ahead as they reach the electric levels of our European market. If you see in the graph, the European market's already at 80% conversion rate, but over the next 10 years, we see both the Americas and APAC market reaching that level. Next slide, please. The next I'd like to touch on is AGVs, and certainly, AGVs will continue to play a meaningful role in our material handling. Currently, it's estimated only 1.5% of all forklifts sold each year are displaced by AGVs. This is expected to increase to 3% over the next few years. Although this is not significant from a volume perspective, AGVs are a perfect market for us to focus our maintenance-free technologies and certainly our wireless charger solutions. Next slide, please. So in conclusion, I'd like to share a real-world example that highlights the process and the value our product portfolio brings to our customers. This example is a national company with 600 locations across the U.S. Each location operates a small fleet, four to five lift trucks, and has been a long-time user of traditional flooded lead-acid batteries. This company has set aggressive ESG goals for their business, and all the projects have a level of evaluation based on these directives in their purchasing decision process. So our sales team worked closely with this customer to conduct an extensive power study on their operations. We just didn't focus on power going into the batteries, but also considered power from the meter. Throughout this process, we identified that by recommending a change in the batteries and chargers, the customer could achieve substantial savings in their operation. The energy savings alone amounted to over $12,000 per retail location, or $7.6 million across all of their locations annually. Not only did this save them money from an ROI perspective, but it also allowed them to reduce their CO2 emissions. In fact, they were able to save 2,700 metric tons of CO2 by not consuming this energy. This carbon savings equivalent is equivalent to removing 600 vehicles from the road annually. Through this consultative process, our sales teams were able to help the customer realize the benefits of their ESG initiatives beyond just a good operational return on investment. This example demonstrates how our product portfolio can provide substantial financial savings as we contribute to environmental sustainability. We're committed to helping our customers make smart decisions that benefit their bottom line and align with their environmental and community goals. At this point, I'd like to open up the call for any questions. Please hover over the bottom of your Zoom screen and click on the Raise Hand icon. When prompted to unmute, please unmute and ask your question. If you have dialed in, please select star nine to raise your hand and star six to unmute. Written questions can be submitted through the Ask a Question tab in the top right of the webcast player. Our first question comes from Noah Kaye from Oppenheimer. Noah, please unmute yourself and ask your question. Great. Thanks for taking questions and for the presentation. You know, Chad, I wanna start with a commentary around moving towards higher penetration in the harsher outdoor use cases. What are the lowest hanging fruit type applications where, you know, having better performance batteries makes that make sense? What are the sort of verticals, and what is the route to market that you see? So there's a few. In outdoor applications, like cross-docking, a lot of over-the-road trucking, ports, terminal ports, those are ones that don't. Those are typically running IC trucks, so that's certainly an application. We've also really started to get some interest in rental houses. Customers who do. You You know, there's a few big rental houses, and we've targeted nationally here in the U.S. We're actually starting to participate in some of those rental shows, where they'll go out, and they may own 15,000 to 20,000 IC trucks, and they're beginning to convert over to electric, really because of the drive in some of the states to eliminate propane and IC trucks in those markets. On the trucking side, you know, how you approach that market, obviously, you have a specialty business that is heavy on transportation with the trucking fleets. Is that a cross-selling opportunity? How are you approaching that market today? I would think in terms of that, we don't, because I think a lot of those trucking companies, they're buying the capital equipment, the trucking from another entity. We're talking to more of the operational side of the trucking outfit, whether that be J.B. Hunt or any of those large over-the-road trucking companies. Typically, those are more the operational side of the business. Maybe the last question. You know, we've seen some very encouraging projections on AMR, autonomous mobile robotics, growth. There's been a lot of investment in the space. Talk to us a little bit about, you know, your solutions and what you think your right to win is, when we think about providing batteries for AMR, our understanding is that's generally a lithium-ion configuration. C an you talk a little bit about how you're approaching the market and your right to win? Yeah, I think on the AMR side, when you're talking small robotics, and again, that some of the stats on that industry is that industry is supposed to, you know, in the next four years, see a 20% compounded CAGR rate, growth rate. So I think there is a big expansion on that. Our products today, we end up focusing more on AGVs, which are the larger, you know, where you're talking 10 to 15 kW battery sizes, a little bit larger size than more of the smaller AMRs, which typically are, you know, they are typically a low-cost lithium integrated solution. We do some of that with some of our TPPL solutions, but I wouldn't say it's the largest growth part of our business. Okay, and sorry, I'm gonna ask one last question before I turn it over. Yeah. This may be also partly a question for Andi. You know, we had some, some guidance come out on the battery production credit under the IRA. Just how much of motive is sort of covered by this credit? How does it potentially inform, you know, some of your thoughts around, you know, mix shift? And any thoughts in terms of latest view on IRA benefits? Hey, Noah, it's Andi. Thanks for calling in. It's good to hear you. We weren't planning on doing any update on the IRA for two reasons. First, we're still digesting that guidance, and we plan on giving an update publicly on that and specifically at a later time after we've fully digested what the impact could be. And second we've really as we've talked about before, we try to really keep the IRA credits outside of the individual markets. That's largely held, you know, this is a temporary period that these credits will be in effect for and we plan to use the credits as law intended to invest in domestic capacity. Yeah. Good question. Thanks, appreciate it. I'll turn it over. Thanks, Noah. Our next question comes from Brian Drab with William Blair. Please unmute your audio and ask your question. Hi, thanks for doing this presentation and taking the questions. Thanks. I was wondering, Hi, Chad. I was wondering if you could update us on, you know, in the market right now for a motive battery, what is the relative cost between lithium, TPPL, and flooded? Yeah, so, I would say that if in scale, if flooded was a dollar, TPPL would probably be $1.30 to $1.50, and lithium would be $2 to $2.50 per dollar of a comparable cost. That'd be the easiest way to kind of scale it for you. So you're probably, you know, 50% more for TPPL, and depending on the size, lithium. Because again, when you get into lithium sizing of batteries, you typically are not putting dollar for dollar of the same size battery, so they end up scaling it down. But if you were to have the same capacity, you'd probably be 2.5x. J ust to be clear, that's at the pack level, right? Not the cell level or? Yeah, that's the pack level. Yeah. Yeah. Because it's the easiest way to compare it when you're comparing it back to flooded batteries. Right. Just wanted to be clear on that. Thanks. And then, you said, I think that you said TPPL was what? 22% of the mix for the segment globally. Is that, first of all, correct? Yes. Yep. And then for the industry, how does that break down between TPPL, lithium, and flooded? I just think it's always interesting to see these market studies or, like, market forecasts for, like, the forklift battery industry, and they always just state lithium and lead acid, you know? No, not a lot i t seems like the TPPL is something that all the market research firms kind of just overlook, and they don't be cause it's just easier just to have two categories. But I'm wondering what you could tell us about what the current breakdown is, and then my next question is, how is that trending? Yeah, I think the reason the market research firms kind of overlook it is because in our business, we're the only ones that really offer TPPL. So we look at it as maintenance-free, whether the customer buys lithium-ion or TPPL. They tend to kind of bulk it into one category of maintenance-free versus flooded. You know, so as a company, globally, we are 22%. So, and then if I look at Interact and a few other of the reporting people within our industry, you know, they would say that lithium-ion is 10% to 15% globally of the business. You know, in Europe, it's probably a little bit higher. You're probably in the 20% range. But a blended rate would probably put you in about 15% of the global market. Again, we're a little higher if you were to take our TPPL and lithium into one category. For EnerSys today, what percent of motive revenue is lithium? Yeah, it's relatively small by far, TPPL outpaces it substantially. Okay. All right, thanks very much for taking the question. Yep. Thanks. Now we will take some questions from our audience. Hi, Chad, Andi, this is Lisa. I have a couple of questions that were submitted in the online Q&A. One question is: How do you see AGM batteries being adopted for maintenance-free solutions? Or maybe the opposite, how are you seeing maintenance-free solutions being adopted in the AGM market? In the AGM market? I think it. Yeah, it may be referring to AGV. Yeah, that's what I'm thinking. It's probably referring to AGV. So, yeah, we see a very high adoption rate for both TPPL and lithium-ion in the AGV market. Of most of our AGV customers, that's their first criteria is the product has to be maintenance free, and that's why things like wireless chargers are so attractive to the AGV market, is because if they don't, they can't charge the battery because there's not a person there. There's certainly not a person there to water the battery. So, we sell very few flooded batteries into that space. Almost all of them are some level of maintenance free. TPPL is probably a higher percentage now, just because we've had such a longer track record of TPPL in the AGV space, but we're getting a lot of demand for lithium-ion as well. Our next question comes from Greg Lewis with BTIG. Please unmute your audio and ask your question. Yeah, thank you, and good afternoon, everybody, and thanks for hosting the event. Chad, I did have a question. It's, it's around the customer and, and maybe the education process. You know, as, as we think about the shift from lead acid to either TPPL, PL, or lithium, a s we look at the customer, are there the larger forklift customer that maybe has 20 or 30 units, that is, you know, the maintenance process and the swapping of batteries is a lot of work. Have those customers been more interested in transitioning to the maintenance free than, say, that smaller customer that, you know, maybe has a few forklifts? As I think about it, really, I'm trying to get an understanding of, you know, how easy it is to communicate the value prop of shifting from shifting to a maintenance-free solution for, you know, the legacy lead-acid battery? Yeah, so, that's a good question, and surprisingly, I don't think we see a difference between a small customer that has maybe two or three lift trucks, or a customer that operates a fleet of 40 lift trucks. I think if the small customers with two or three lift trucks, they may stay flooded because in most cases, those customers, if they don't run a lot of hours, they may not even be buying a new lift truck, right? They, they're not always even the target for new lift trucks. A lot of times the dealers could sell them a, you know, four or five-year-old off-lease lift truck, and that typically would end up going with a flooded battery because the cost of acquiring the asset. However, we do have customers that if you're gonna buy a new lift truck, that's when we really see people drive to a maintenance-free solution. Because you're buying a new lift truck, you have the time that you're gonna own that asset to spread the cost of the battery out. And I think in both cases, customers don't wanna maintain batteries. Even if you have two lift trucks, there's been even shops that I've run within our own business, we don't do a very good job maintaining batteries, and we're in the battery business. So people typically don't do that, so, or they don't do that well, I should say. So but I think it really comes down to what they're in the market for. Are they in the market for a reconditioned reach lift truck or a new lift truck? And if it's a new lift truck, again, that's when we see a lot higher percentage of people going to some maintenance-free solution for that lift truck. Okay, great. And then I did have a question around, you know, you mentioned, you know, the increasing demand and the charging solutions you're providing. You know, I guess kind of as we think about this, is this say, "Hey, we're selling, you know, the new battery solutions to these customers, and, you know, it, it's kind of our right to provide the charging?" Or, you know, I'm trying to understand maybe how competitive that landscape is, or, you know, to deliver the charging, you know, as we're swapping in new batteries. Yeah, I would say that if it's an existing warehouse and the customer's not changing anything in their application, probably half the customers would change out their chargers. Because, again, most of these are wired into the building. And now, if they're gonna change chemistries, if they're gonna change to TPPL or lithium-ion, in most cases, they are gonna change out their chargers. But if they're gonna replace the trucks with the exact same truck, same capacity, same everything, in those cases, we probably see battery-only replacements. But as a point when we're selling to customers, they typically go with. W e have very few customers that buy our batteries but don't buy chargers from us, and they source chargers from some other supplier, if that was part of your question, too. Yeah, absolutely. So it sounds like if we have a customer that shifts chemistry, yeah, we're providing that new- Yes ... battery chemistry, we're gonna be also providing. We're providing. Super helpful. Thank you very much. Yeah. Have a great holiday. All right. Thanks, you too. Happy holidays to you. holidays to you. Thank you. There are no more questions at this time. Okay. This is Lisa again. There are a couple more questions that came into the chat. The first is: In five years, pick a time horizon you like, what percent of motive sales would you expect to be TPPL and lithium? How fast is the market moving to these applications? And, you know, and another investor had asked, is there a scenario where maintenance-free could be 100% of motive power? So, you know, fast-forward five years, I think if I look back five years, we were... Yeah, we were a small percentage of maintenance-free. I see the improvements that we've done in the cyclability of the product, and as a target for fiscal 2025, I think we had about a 45% range by fiscal 2027. So, would maintenance-free TPPL and lithium-ion be 100% of the market? I would say that it would take a fairly long time for that to happen, because you would still have a considerable amount of existing trucks that still would have low hours, that it would have a use for flooded lead-acid, and you probably would not replace that technology. So, those trucks, you know, some lift trucks have a service life of 15, 20, 25 years. So I think the glide path for flooded is fairly long. But I do think on new capital equipment, I could say that I could see that being a higher percentage of maintenance-free, even with, even within less than a five-year window. Because, again, one, if you're gonna acquire a totally new asset, you probably are not gonna put a flooded battery in that. You're probably gonna put some type, some type of maintenance-free, whether that be lithium or TPPL. Great. Another question that came in is asking: Who are EnerSys' largest two to three motive power competitors in the U.S. and Europe? And do you have an estimate of their approximate market share? Yeah, I mean, so in the U.S., I mean, obviously, for flooded, it would be East Penn. You know, I'd be guessing on a market share number. You know, with us having 50%, I would assume they'd be, you know, maybe 25% to 30%. Stryten would be another one. That would be the two big flooded competitors here in the U.S. And then in Europe, it would be Sunlight, would be probably our largest European competitor. Yeah, that's pretty much makes. There's a handful of large flooded suppliers, and then there's obviously a bunch of small lithium startup companies, but they represent a significantly less portion of the market. Another that came in, you mentioned wireless charging. Can you provide an update on the status of those chargers and what excites you most about that new technology entering the market? Yeah. So, we've officially launched the product, and, you know, so we have several customers that I mentioned who are in the demo process, right? So most AGV companies would test these. They would try to integrate them into their chassis, which is actually exciting for us because that's, you know, when a customer is going to integrate your product within their truck, they have a much greater intention of having that be a part of their sales process, if they've integrated it within their, within their truck. And, and then we have standalone wireless charging units that we have sold and we've deployed within customers. So but we're just starting to ramp up the supply chain of that. I would expect over the next several, several quarters, we'll start to see a lot higher demand for drop-in replacements of wireless chargers. Then also, as these OEMs get through their process of designing it into their chassis, that we'll start to see some, some additional sales from that segment as well. Okay. Well, that looks to be the last of the questions that have come in, and there are no more questions from those dialed in. So I will close with thanking everybody for participating in today's webcast. And, Chad, do you have any closing remarks? No. Thank you very much for putting this on. I hope everybody has a great holiday season over the next week. Thank you. Happy holidays, everybody.