Thanks, everybody, for joining us for day three of Laguna. I'm pleased to have on stage with me next the team from Hubbell. I have the CEO, Gerben Bakker, here. Gerben, thanks for joining us. Always a pleasure, and it's your first time out here, so- It is. Yeah, hopefully, we kept the seats warm for you. I understand you have a few things you wanna go through first, just some opening remarks. Obviously, we can get into some Q&A, but lots to talk about. I'll let you lead it off, and we'll take it from there. Awesome. Great. Thanks, Josh, and thanks, everybody, for joining and your interest in Hubbell. I just want to start off with a couple of comments, as I look at the business, and perhaps starting with 2023, and the good year that we're having this year. And if you look at the standing guidance that we've provided, earnings per share growth of over 40%, I would say, with six-ish months, a half year left, that I feel confident that we're gonna be able to deliver to that commitment that we made. Then take a look back. Last year, we grew over 30% earnings per share growth, so, you know, really two years of outperformance. And if you put that in the context of a 135-year history, where you've seen perhaps a much more stable and lower growth environment, it's clearly a breakout performance over the last couple of years. And as I look back at, you know, what were the drivers of that, three primary things come to mind. The first one being the megatrends that are affecting our end markets and our positions in those end markets. And if you think about electrification, and you think about a grid hardening and modernization, that's where we're very strongly positioned in. And then, if you look at our portfolio, and the relevance and the importance of the brands and the reputations that those brands have in those markets, we're extremely well-positioned. So, certainly have seen a GDP plus growth in the markets that we're focused on over the last couple of years. The second one, I would say, is the intensity of our operating system and operating rhythm. And as we talked a few years ago, we really transformed the company from more of a holding company to an operating company. And, you know, what that meant for us is, you know, an alignment around the strategy of our company and not individual businesses, processes that we were tackling together, functional expertise that we're adding to the business, and all of that has caused not just higher performance, but more consistent and predictable performance, which is really important for us. And I'd say the third part of that period has been the price-cost management. We went very aggressive, both in the magnitude and frequency of our pricing actions over the last few years, as we're seeing a very high inflationary environment. We've done this with, again, a disciplined process of our operating system to be able to implement it and have clearly now seeing the benefits from that. So as we look at the last couple of years of outperformance, the question that you may have is: Where do we go from here? You know, what was the future trajectory of the company looks like? And I would say we're very optimistic about 2024 and beyond. If you, you know, look at the market, the utility market, where we're very highly exposed, more than a half of our revenues and exposure is to that market. Grid hardening, grid modernization, renewables, this is a multiyear trend that we see that will drive mid-single-digit growth, clearly GDP plus growth for our business. On the Electrical side of our business, we've talked about the consolidation of that from the three groups into one segment to better compete collectively, to drive efficiencies in that business. I'm very happy that Mark Mikes, who's here with us today, he's the president of that segment. He was a strong partner of mine in the Utility components business, where we did a lot of this work to bring that together and better compete collectively. So I'd say, you know, expectations from that is not just for growth on the top line, but for growth on the bottom line. And you know, we expect to be able to achieve further margin expansion in that business as we drive forward. From the price-cost dynamic, it's gonna be more dynamic environment going forward. I think our pricing will become more surgical. I think there is areas where we still expect we will get a price in the, you know, in this environment. Going forward, there are probably also some areas where it's gonna be a little more dynamic. But you know, we don't just look at price alone. We look at that equation of price, cost, and productivity, and I would say we have a lot of levers to drive that, particularly productivity. We're making a lot of investments into our business right now to really accelerate that going forward. So as you think about, and as we think about our business going forward, we're thinking about you know this recent performance over the last couple of years as the base from which we are gonna drive profitable growth going forward. So with that, Josh, maybe we'll go to some Q&A. Excellent. Maybe just starting high level, because electrification has just been such a massive topic the last few years. Obviously, you guys touch it from multiple angles. I think people view it mostly as coming from the Utility side of the house. But maybe talk about a few of the areas where you do think as, you know, a broader trend, there is real torque to the business, and you see that uplift. And, you know, maybe give us some examples for today, if you could. Yeah. Excellent. Yeah, and so clearly, you start with that it's visible in the Utility business, that, as I talked, is, you know, a great part of the growth driver of that business. And as you see, electrification there, we're seeing load growth right now in the Utility business. We see renewables still coming on strongly on that, and those are all drivers of growth. Not only by just needing more infrastructure, but as those load centers come on, it's stressing an already very aged infrastructure. So it's not just about hardening, it's about modernizing these grids. And our portfolio today is really well set up with not just having the components, but having the communications and controls as well. So, you're right to point out that our Utility business is really set up well for electrification, but we see very strong opportunities in the Electrical business as well. And as you look about the verticals, the growth verticals that we focused on of renewables and data centers, those are two areas that are affected by electrification. And then take renewables, for example, we have, you know, a portfolio of grounding and connectors and devices that go into renewables. It's a business that we created a vertical around. We resourced it. Over the last three years, we've doubled that business to now over $100 million. We continue to look for acquisitions, we continue to look for innovations to drive it. So it's a really—it's a real example of where in the electrification in the Electrical segment, electrification matters. Data centers is another, but I'd say even in our, in our general portfolio, if you think about, you know, our connectors and our grounding and our wiring devices, those are all products that, that you need when, when you think about electrification. The good part of it, these are generally the higher end of the margin in our portfolio. So as that outgrows, it, it also helps, you know, certainly drive the profitability of that business. Excellent. Maybe just to double-click on Utility, I mean, a lot has changed over the past few years. You mentioned grid hardening as a driver, there's a few others as well. But I think maybe what's a little harder to perceive from the outside is that these aren't mega projects or, you know, big-ticket items, you know, something like a transformer, like, oh, you can just see that the industry is massively undersupplied. They sound more like small projects, you know, smaller pieces of equipment that you kind of hold in the palm of your hand, more ubiquitous. Is it just this, you know, thousand points of light that are all kind of lifting up? Or are there really sort of these bigger projects or, you know, spend items? Like, how, you know, how diverse is really that mix? Yeah. Yeah, I think... And maybe I'll start with describing a little bit the portfolio of our product. And, you know, as you think about transmission and distribution, our portfolio of products serves about, you know, 80%-90% of the materials that they need to put up the system. So we're highly relevant to building and maintaining that grid. But they're generally, I should point out, very small components, and so we see it as the cost of that overall system is still relatively small, but the cost of failure is huge on that, right? Because you have one of those connectors or one of those arresters or insulators fail, your system comes down. So critically important to those markets. And then if you look at some of the drivers, I would say it's a little bit of both. So on when you talk about large projects, if you look at the integration of renewables, so when you put up a solar farm or you put up a wind farm, you know, after they put up that farm, they need to get that power to the load center, so you get transmission infrastructure that's required. That's what we do, right? That's part of our portfolio, and we're actually seeing very, very strong elevated demand right now in that area. And as we look out, we continue to see that it's an area that we're investing in that business right now to serve that visible demand. So that's an example of where you see actually large projects that are being implemented in renewables affecting our portfolio. But if you look at all the components that we serve to put up that grid, and you think about what's happened, there's load growth on the system right now, there's renewables coming on the system. And even if you think about EV, and you think about data centers, these are big load centers that are coming onto the grid. This grid is very, very aged. I think we've talked for many years, even if when we're in a lower growth environment, about the need to harden that grid. Within recent times, with this phenomenon of load growth and these bigger, more intermittent sources of load coming on the system, it's stressing the system even more. So the need to harden it is bigger than it's ever been. If you look at some of the reliability stats, what we call the SAIDI and SAIFI, reliability stats on the grid. If you look at that over the last few years, that's going in the wrong direction. It's getting more outages, longer outages, and it's as a result of some of this grid that's really being stressed. So utility companies recognize that, PUCs recognize that. So there's a real need and interest and action to invest in upgrading and hardening and modernizing this grid, and that's where that broad portfolio of components for us really plays in. I stated earlier, the unique position that we have is not only be able to provide components to harden the grid, but really providing solutions to modernize the grid. When we made the acquisition of Aclara a number of years ago, that was the vision of that, to be able to help utilities provide insights into the grid, to help them control the grid better, and that's the big opportunity for us going forward. So I'd say it's a little bit of all, and it's we're very well positioned, and we're very optimistic about that part of the business. Understood. So I wanna kind of come back to something you made in your, your prepared remarks in terms of price maybe being more surgical from here, but it didn't really sound like surgical in the, in the aspect of excising price or customers taking that back. Clearly, you've gotten a lot of price in Utility, clearly for all the reasons that, that makes sense. Obviously, a lot of inflation, a lot of, you know, strong demand as well.... I thought it was interesting that last quarter, you did convert some backlog- Right. -which you would expect. It's a shorter cycle business. You wouldn't want to be ordering, you know, a $100 component six months in advance. But the price on those, those orders didn't really seem to, you know, give anything back. Right. You have really healthy margins. I guess, what should we think about as either the path to normalization there or catalysts as you're talking to customers to drive that lower? Because it seems more like we've settled into steady state rather than, you know, some kind of steeper normalization trend. What are you seeing out there? What are you watching? And, you know, what would be sort of a milestone or catalyst that would make that kind of revert back to more normal? So on pricing, we've taken very aggressive actions, and we're clearly seeing the benefits of... So, a portion of that margin increase has absolutely been driven by that price cost management. So it's fair to ask, can you maintain that? Our view, and this is why I stated in my opening remark, is that we see the business fundamentally as the base being what we've achieved over the last year from which we grow going forward. So, you know, as you think about that in the different elements, price certainly is one of them. And, you know, particular question is around Utility. If you look again at what I stated before, that we're a small percentage of the cost of that system, but we're absolutely critical in the quality, reliability, and the cost of failure. Generally, what our customers want to talk about first is about the quality of our product, the reputation of our product, the serviceability, can we get them the product when they need it before they talk about price. Because, you know, again, if you're a small percentage of the total cost of that system, that becomes less important. So, our view is that we want to hold on to price. That's traditionally what we've done. If you look at the history of when we go up with pricing, we generally don't give price back. Now, sometimes cost will come back into that again, and then you go up from there. So what we're trying to do from here on going forward is managing the price, cost, productivity equation, from here on forward to this net neutrality, what we've traditionally been trying as a mindset of how to manage that. And in that, you have a lot of levers, right? You have the cost lever, you have the productivity lever. Productivity, particularly, I would say, it's an area that we're investing in pretty aggressively. We've had a couple of tough years in productivity as we managed through very difficult supply chain environments. That's difficult on your factories. So there's an area of focus there for that to come back. There's a focus on our sourcing. We do a lot of sourcing of components to try and drive productivity there. So we're making a lot of investments to drive that. Maybe the long way to say is our view is to hold on to price, and when I say be now more surgical in price, there's probably areas where it will be more competitive. And you know, if you look, for example, at the communication side, the telecom side of our business tends to be a little more competitive, but there's still opportunities for us to take price as well as we go forward. There's still inflation that's out there, so you know, we see that as managing it more on both sides of that equation, and then having other levers to still drive profitable growth in that business. Understood. On the kind of legacy Utility piece of Hubbell, the power business, remind us of the competitive landscape, because I think for a lot of folks, electrification or electrical equipment is kind of this monolith of like, okay, we know the big folks out there, but there's an awful lot of fragmentation. I think in the Utility component side, it's fairly fragmented and small. You don't have the big houses that you're going up against. Is that generally the case? That's, that's absolutely the case. And I'd, I'd say that's one of our benefits, not only in having the scale, to serve, and if you, if you look at part of why that's fundamentally a higher profitability, higher margin part of that, portfolio, is that we're able to drive that scale. If you look at our SG&A cost, for example, as a percentage of that, it's, it's the lowest that we have in our business because we have, that scale. So, so it's a benefit on that side. But I'd say also the benefit there of where, where I started, that for, for our customers and the Utility customers are, are very conservative in, in nature and, and, you know, for the right reasons. This, this is a very precious commodity that they, that they serve us with. And to have a company that with the reputation of Hubbell, again, a focus of quality, reliability, and service in them. So for us, as we bring the next business into that portfolio, which we continue to do, they take a lot of comfort in that, that we're gonna serve them, that we're gonna be there for them. And even when it goes wrong, which at times it does, we stand fully behind it, and we help go through that. So I see that absolutely as a benefit in what is a more fragmented market. Understood. Maybe pivoting over to stimulus, and you guys are one of the few out there that have tried to ring fence some of the opportunities. I think around IIJA, you said, you know, this 1-2 point uplift. Anything that we should be thinking about maybe into 2024? You haven't really sized anything from IRA yet, but is there other pieces that have either gotten more clarity or, now that we're closer, you have a better, you know, sense of that we should be thinking about? Yeah. Yeah, and I think the two are a little bit different. If you think about the IRA, that's less about direct funding and more about tax incentives to drive that. We're actually seeing that in the renewable side, solar, there's a lot of investment going in there. That is actually impacting positively, both the Electrical side as well as the Utility side of the business. I'd say that part we're actually seeing in our business right now. I would say on the IIJA, it's perhaps a little bit further out. We do believe that that's gonna be incremental growth, that utilities are spending their- they're hardening, and then when that stimulus come in, it'll be growth on top of the base that they're contemplating. We have a lot of direct relationships with those utility companies. We're talking with them. You know, as those discussions happen, it's absolutely in their thought processes of how they're viewing, you know, what they need to put in place to be ready to drive those investments. That money is starting to flow to states right now. The next thing, it needs to flow then to the end user of that. So we see that more as perhaps a second half of 2024. Now, of course, if that money flows quicker, you know, that work will start quicker. But absolutely, we see that as upside to what's already a showing of 1-2 points that we've been talking about. We see that lift still being there. Understood. Maybe just shifting over to the other side of the segment with Aclara. Yeah, I think about kind of the, some of the cascading headwinds that they face between not being able to get out there in the field with COVID and lockdowns, and obviously, supply chain headwinds. So expecting sort of a, you know, resumption or normalization there over the next couple of years. How should we think about that, driving the mix- Yeah ... as that business starts to cycle up again? It was historically lower margin, but obviously, a lot of things have changed over the last several years- Yeah since you acquired it. Yeah. Yeah, I think you're still characterizing it right there, Josh. It, it's... It has been highly constrained over the last couple of years. Chips have, have been a big problem as, as everybody has dealt with that. So it's, it's been affected disproportionately to the rest of the Utility portfolio. You're right to point out that as we think about the average margin of Utility, that the components side is, is on the high side of that. It's above the average, and then Aclara is, is below that average. So, as that business is coming back, and it is coming back right now, the flow of material is starting to come. We're right now ramping up the manufacturing capacity to start delivery, and that, you're starting to see that even this year ramping up. You'll see that next year ramping up. And two dynamics will happen. Within Aclara, that margin should improve as that happen because, you know, as you get more volume, you can leverage that volume with the gross margin, and you should see that margin rebound. But it's still below the average of the entire portfolio, so that will have a mix impact as that comes back. So we're thinking about the business much more about profitable growth, and that's why I said that I was careful not to necessarily talk about margin expansion, but profitable growth on this base, and that's, that's one dynamic that will play out, that could actually affect your margin a little bit, but should still drive a profitable growth for the business. Makes sense. Shifting over to the Electrical side, I guess, you know, maybe what do you see as the drivers of that today? I mean, construction indicators have not been as good. Mm-hmm. Obviously, you can see things like higher interest rates and starts and all of those sorts of things that inform it. But the business, other than the stocking, which I also want to come back to, hasn't really reflected sort of construction. I mean, should what do we think about as the drivers here? It seems like it kind of toes the line between maybe the more secular pieces of electrification. Yeah ... but it's not all the way in construction, maybe somewhere in the middle. But how do you think about it? How would you advise, you know, folks like us who are maybe, a little slower on the uptake-... to think about it as well? Yeah, and I'd say if you compare the two segments, clearly the Utility, it's much more concentrated and easier to, you know, kind of understand than the different components that are in the Electrical. One thing that we have done is move this portfolio to higher growth, higher margin over the last couple of years. And, you know, if you look at what we've exited in the non-res side, I think there you're pointing out correctly, it's a more cyclical business. It's—I would call it, right now, more steady, but we've reduced our exposure to that side of the portfolio. Conversely, as I talk about the growth verticals, you know, data centers, renewable, we've actually added to that in the deals that we've done. So that portfolio is shifting a little bit, which perhaps makes it more difficult as well to think about. But as I think forward, right now, and I think, you know, certainly on the industrial, there's a good bit of industrial to that business, we think that's solid. There's you know certainly still a lot of manufacturing activity. Reshoring is helping that. And then if you think about non-res, as I said, it's more steady, but a smaller piece of the portfolio. We still have a resi part to that portfolio, and that's been down double digits. You know, I see that perhaps more at the bottom, right now. So could that come back a little bit into next year? Perhaps. And then really the focus around these high-growth verticals of data centers and electrification that we've focused on. But the other thing that I would say that aside from the markets, what's really our intentions and vision for the business, a big part of the reason that Mark went over to this side of the business, having done what he did at the Utility side, of really bringing that together, competing collectively better, and then driving efficiencies in the business. I see opportunity there for share growth going forward and for margin expansion by driving more cost efficiency going forward. So, we're pretty excited about this side of the business. I do wanna talk about the margin story there. I think there's some rich, rich detail to be had. Maybe just first on the destocking side, you guys have lived through that, you know, for the better part of the first half.... Where do you see us on that today? You know, maybe a baseball analogy, you know, could be helpful. And- Yeah. and maybe if you can size how much destocking you think has impacted you. You might be a little imprecise, but just to give us a sense for what the return to underlying demand might look like. Yeah. Yeah, so it as we think about, destocking, it's clearly it is, it is happening. It's, we see it as a, as a very natural and expected outcome- Sure -of supply chains, normalizing. And as our lead times come down and our, delivery service, restored, we see the impact on orders and inventory. And so we actually see it as a good thing happening. You know, I talked earlier about our value proposition being around the reliability, the quality, and the service. And as, you know, to the extent that we can do this better than anybody else to restore our service levels, to restore our lead times, to competitive levels again, we win in the marketplace. So we are seeing it. I would say we've seen that earlier in the Electrical segment, and, you know, we're probably in late innings there, to your baseball analogy. Some of the product lines, you know, that started towards the latter part of last year, you know, have gone through it this year. We're actually starting to see some lift again. So it's really encouraging to us that it's playing out exactly as we had anticipated there. I'd say in the Utility, we're probably mid-innings there. We're probably on the distribution side, where we've seen our lead times come down and our service restored, are seeing that earlier. And then we still have some areas that are very constrained, as we talked about transmission, for example, being very hard, we haven't seen it there. And so, you know, we continue to see it in the third quarter, particularly in the Utility business. You know, our expectation that this could play out over the balance of this year, and it's for us too, we view it as a good time. Our backlogs are still very elevated, so we have the backlog to work off as this is happening. You know, we're in a very good price-cost environment right now while we manage through this. So, you know, our view is trying to manage through this year, and that sets us actually up very nicely for next year. To your question of, you know, do you have visibility in it? You know, we do VMI with some of our partners. We get data on sell-through. So there is... It's not of our entire portfolio, so we're having to triangulate when we get data points, but that's helping us to confirm that, that indeed it's destocking, and we have a visibility of end demand still being intact. So, we feel good that it's playing out exactly as we'd hoped for. Our, our outlook for this year that we provided has contemplated this, and which is why I, I said at the very beginning of my comments that we're confident in our ability to deliver to, to what, what we've, you know, promised, to you. Understood. We do have time for one more question here on the margin front. I wanna make sure we get to it. So what do you view as the margin entitlement in Electrical? I sort of recall at past points in time, sort of this, "We're gonna restructure it X next year. The restructuring comes down, the savings go up." Hasn't been as much discussion of that lately, but I think within the electrical world, maybe it's hard to benchmark some of these assets. We can see different players, but they are different. Yeah. What do you think of the entitlement and sort of what are the levers that, you know, you view or market view as kind of the necessary pieces to get there? Yeah. So as you look at the margin, clearly we've expanded those margins in the last couple of years. If I think back at what we promised at Investor Day for 2025, we're achieving that right now. So on the one hand, you know, we've achieved that growth, but we're not taking comfort in that that we've done what we can there. You know, a good part of that has been driven by the dynamics of price cost. We view that as sustainable from here, as I said earlier. And then as we look forward, we still see plenty of opportunities with competing collectively, so with growth and with taking cost out. And if I take your baseball analogy there, I would say we're in pretty early innings still of integrating those businesses. So, you know, our expectations in the Electrical is not just profitable growth, but margin expansion still going forward over the next few years. Excellent. I see we're coming up on time. Gerben, always appreciate the time. Appreciate you having out here. Thanks for the conversation. Thank you, John. Appreciate it. Thank you all for your interest.