Thank you. Welcome to the 14th Annual Laguna Conference. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley representative. Pleased to have Hubbell here today with President and CEO Gerben Bakker, and Vice President of IR, Dan Innamorato. I am Toby Okwara. I am part of our Morgan Stanley multi-industry research team. Thank you guys for being here. Thank you, Toby. I guess starting off, just looking at the longer-term strategy, what is Hubbell's competitive advantage? Why do you win in your markets? Yeah. I would say, well, first of all, thank you for your interest here today with Hubbell. I would say in short, it is the specification that we have on our product. We generally are a spec product, and that is whether we are in the utility side or in the electrical side, a product that is critical to the function that they serve. Generally, a relatively small percent of the cost. So what we do matters, and certainly the specification that we hold. The other competitive advantage, I would say, is the breadth and depth of our portfolio is a differentiator for us. If you think about in today's environments, partners generally want to do business with lesser, more strategic relationships, and certainly we have those very strong relationships. We built those over many years of how we serve them. It is our position in the markets, the breadth of our portfolio, our prevalence of our scale around the customers that we service is what helps us in our position. I guess to that point, is there a difference in your competitive positioning or competitive strategy in electrical versus utility? Yeah, I would say there is a lot of similarities there in that value proposition that I stated that being critical to the function. If you think about some of the products that we serve in utility, a connector is relatively small. The average price of a component in our portfolio is $25. So it is quite small. But the function is very, very critical. So if one of those connectors is not available, you are not putting up your line, and if one of those connectors fails, your line comes down. So it is really hugely critical, and that applies on the electrical side as well. If you think about our bonding and grounding system, if you are not grounding a building, a data center probably will not function really well or is not well-protected. So again, a small cost piece in the overall scope, but very critical. I think on both sides of the portfolio, the specification is what really matters and holds strongly side. So I would say there is a lot of similarities truly on both sides of the portfolio. I guess looking at utility in particular, you've had a lot of themes that have driven more confidence in upcycle there, whether it be reshoring, electrification, and now data center just bringing more demand to the grid. What gives you confidence in the durability of an upcycle and opportunity for that market to accelerate? Yeah. It's some of the underlying demand drivers and maybe separating the pieces and data centers. It's a topic of every conversation that we're having, and certainly, we have an important presence in the data center with our balance of system, components on the electrical side with our power distribution skids that we serve. But I'd say equally on the utility side, with the demand that's needed to power all these data centers, a tremendous portfolio on that side as well. So while I'd say data centers is an important element of our portfolio, it's not the only thing that drives our business. If you look at the utility, there's an element of data centers there with the power load. But if you think about the age and the state of our grid, when I talk about this, I don't talk in years, but I talk in decades of the investment need that needs to happen here. We have a very prominent and very strong position in this both in distribution, transmission, and substation. I think the drivers beyond load growth there is just a hardened, modernized grid infrastructure that's required. Again, I love our position in that. Just maybe on the confidence and the sustainability, I think the biggest thing that we see is it starting to get reflected in utility capital budgets. It's been a healthy CapEx cycle over certainly the last several years, but we've seen that again picking up as certainly we exited last year. We've seen utility capital budgets start to reflect some of these investments as we think about longer duration projects in areas like substation and transmission. We see our utility customers planning out a little bit further than typical, and it's because they have the visibility into load growth coming into their service territories, hardening projects that they need to do. I think those conversations with customers have extended, and we've also seen it reflected in their budgeting process. I guess, yeah, kind of following on that point, you mentioned getting longer visibility from your customers. How would you compare conversations today versus where they were, I guess, the same time a year ago? Yeah. I'd say definitely more conversations around the planning of what they're trying to accomplish. If you think about the utility customers, you have a tremendous amount of demand right now to put load in. It's probably more demand than they have the capacity to do today. They rely on their whole supply chain to be able to do this as well. Not only are they limited and having to worry about their own capacities, and that's oftentimes labor, but can everybody supply? Utilities have a lot of interest to talk with their partners, especially strategic partners like Hubbell, that supply them with a lot of the materials that they need to do this with, about the visibility that they can give us so that we can make the needed investments in our business to service them. I'd say the visibility is further out for us. The products that we serve, though, are still relatively short lead time. Now, those are extending in some of the product lines where we're more constrained, and we're investing in that to bring those lead times back down and that capacity up. For us, the important part is to get the visibility to what they're trying to accomplish so that we can prepare our business and our capacities to serve that. We tend to be late in the cycle. Generally, our products are measured in lead times of weeks to a couple of months. I don't need to get the order until they're going to install that product. That's typically what they do. We're a trusted partner on that, and when we say we can do something, we generally can. They can rely on us to not need to do that that early. But the visibility to that demand, those conversations are definitely happening more frequently and earlier right now. You mentioned some of the limiting factors that potentially can temper the pace at which they can build out these projects. What are the main factors you see, and how can your solutions, how can Hubbell's solutions help solve those? Yeah. I think one, and maybe we can help less with that, is permitting that they need and PUC approvals. That's certainly part of the equation, and it's a tension point. It's just the reality of it. I would say regulators are supportive of the need to do this. There's a clear need of load necessity and even a clearer understanding of the age and the state of our grid, and that that needs to be invested. I would say even before data centers was a big thing. We've been in this business for a long time. We saw the investments ramp- up just to harden our grid. It's the heart of our economy is the power grid. So the need to invest and support to do that is there. But certainly, that can affect the timing a little bit of getting that permit and those right of ways that they require. I say the second part that utilities are dealing with is labor constraints, is can they put it all up now? I think they're doing a lot of things to help with that. I think you see utilities actually relying on third-party EPCs, for example, to help them with the build-out. Companies like Hubbell can help. So to the extent that we can make parts easier to install, it helps utility. A good example of that is in our transmission business where, and because we have the breadth of components that we can supply, if you think about what they do when they put up a transmission grid, is they put every so many miles a tower, and then they put all the hardware on it. So what we do is we actually bundle all that hardware together for each tower. So rather than them getting a whole bunch of insulators and connectors and hardware, and they have to sort it all out in their yard, we actually bundle it in crates, sometimes partially assembled, and they can put that right up when they build. It's a good example. The other one is in our substation control, where we're actually building this control house in our factory, and we ship it. So to the extent that we can take labor out of the utility stance and put it in the factory, it's helpful. We have a broad portfolio to be able to bring some of those solutions to them. And then kind of following on the point mentioned earlier about the utility budget. I think when I'm looking at transmission versus substation distribution, they were historically seen as kind of competing with each other for spend. Are we seeing that dynamic shift as you get a return to load growth and potentially getting rate cases start to rise? Yeah. We view them, truthfully, as not competing so much with each other. If you look at the utility budget, you see the spend going up in both of those areas, and they do separate that. So utilities have, for example, hardening programs that they put in, and they get those approved. I think utilities have gotten Looked at ways to get those to regulatory approval. In the past, it may have been more MRO type work, but now they bundle it as a hardening program. They can actually get returns from them and get them through the PUC. We've seen that play out over the last years as well. So we have visibility in both. It's not always perfect because you can have transmission products that serve both those needs. But we see the investment going on in both. Of course, it's higher in those areas that are supporting load growth right now. We see those investment levels higher. We see that in our business right now. But the other important part, I think, to understand with our portfolio, we broadly serve distribution, transmission, and substation equally. Now, distribution is larger just because there's more miles, there's more spend going on there. But if you look at it, at the content, at the on-the-grid that we supply, it's very evenly spread. If there is a decision to spend the additional dollar into transmission versus distribution or vice versa, we're kind of agnostic to that because as long as we have visibility to it, as long as we know that they're directing more one way or another, we can serve that demand equally well. We think our position is unique in that perspective, that it can, if they make those decisions. But we see them actually investing and increasing those investments in both areas. And speaking on those investments and potential changes in the market, earlier this year, you guys mentioned some of the investments in high voltage transmission. Are you starting to see any pickup there? And I guess, how do you kind of frame that longer-term opportunity? Yeah. And high voltage, it's a moving target, it seems like. Maybe I'll start with, this is in the core of what we do. If you think about our transmission and substation, we go today anywhere from 35 kV up to 500+ kV already. That's evolved. A number of years ago, 500 was new, and we developed those products, and we serve those today. We actually have a job going on right now that's in that voltage. In that voltage class, the more recent voltage class is a 765 kV. It's actually a technology that's probably 20 years old, but really never got adopted. That's a very efficient way to move bulk power. So it's what we do, I would say. Now, we're developing those products. We need to test those products. We need to specify those products. But that's what we're doing with our customers right now. We've actually gotten one award already that we'll start shipping next year. And the need for that, it's a very efficient way if you have more load growth, and especially if you think about some of the possibilities of load needed with the data center, it's a really efficient way to do it. So, we'll play in that. We'll play an important role in serving that. And I think that will take time because those have to go through regulatory processes. But we believe that, I think what we stated is that it's about a point of upside if you think about over the next decade what the plans are to invest in that we would benefit. But this is right down the fairway for what we do for a living. And staying on that technology aspect, looking at the meters and the AMI business, are you starting to see more progress with advanced metering and better adoption with customers? And how can we see that shifting from the headwind we've seen over the past few years to potentially a growth driver? Yeah. On that business, from just a volume standpoint, maybe I will start there, and then I will talk a little bit about the technology of that business. From the COVID days, it has been quite challenged in that we first couldn't supply, and then the chip shortage broke, and then we caught up, and it was really high. Then, as we got through that, then it came down again. One of the things that with that, and that business has improved. Our expectations for that business is higher than what it is today, particularly in the margin front of that business. We have taken a good bit of cost out of that. We were investing a lot in that business, particularly in the AMI side, to penetrate with the IOUs. But traditionally, this business on the AMI side had been very strong with the smaller utilities, the co-ops, the municipal utilities. Our investment ramp to break into that IOU space proved just more difficult, even for a company like Hubbell that has very strong relationships and a good reputation. Just very difficult. So we have kind of reassessed that strategy, and we are now focused more on where we are very strong traditionally with the public power market. This is an area where I believe where there is a lot of discussion of is spend being taken from one area to the other. Our view is that this is a little bit the case of, if you are a utility company right now, are you going to invest in your next generation AMI system? Are you going to upgrade that now, or are you going to slow that a little bit while you are investing in these other areas? I think the answer to that is yes. Now, the thing with this is, this is electronics. This isn't nuts and bolts that we normally do. So we are seeing more of this equipment starting to fail. It is getting to the end of its life. We are actually starting to see more MRO right now, where they are just replacing meters while they delay this a little bit. So I think this cycle will come. Our view of it is much more modest, I think, than the rest of the portfolio. So, as we look forward to specifically the Aclara business, and as we have stated before, we have seen several quarters of decline. We believe that when we get to the end of the year, we will start seeing that turn to modest growth again. But it is just part of that portfolio of grid automation. The other part of that, which is controls and. Protection devices? Protection devices. Thank you. It's actually going really nicely, more in line with the other side of portfolio. As far as technology, it's certainly an area that we'll continue to add to, if you think about our meters and what the meter can do, not just as a cash register, but as a sensing device. I would say that's just what you have to do to stay relevant in this market. So those are clearly investments we are making to make sure that that hardware is capable of providing more insights into the grid behind the meter to the grid. We're making those investments. I guess now shifting gears to the electrical side of the business. Data center clearly has been a stronger growth driver, 50% in the first half of this year. When we're looking outside data center, light industrial really has been another strong vertical. What's been driving the strength there and in the other areas that have been outperforming? How do you think about the trajectory for the businesses that have been so much softer? You take that? Yeah, sure. I think light industrial's been really healthy for us for the last at least year or two. I'd say as we've progressed through this year, we have seen a little bit of a broadening of beyond just data center. I think the light industrial side of the business has picked up. The non-residential side of the business, which has been soft for a while, has picked up as we've progressed through the year. A little bit early to say what's driving that, right? Is there general short-cycle recovery or not? I think when we look at least internally on a regional basis of where that activity's going in, it tends to map very closely to where data centers are going in. So I think there's obviously some halo effects there. But we have seen it improve as the years progressed. Again, I think it's a little early to say exactly what that means. But I think as we've been talking about throughout the year, I'd say we've continued to see just that improvement on the non-data center pieces. The heavy industrial side of the portfolio is still a little bit softer. But I'd say that's kind of progressing as we have anticipated. I guess looking at data center in particular, why does Hubbell win with data centers? Why does your portfolio resonate so well with those customers? Yeah, I'd say it ties to our general competitive advantage. The first question that you ask is, these are products that serve critical needs. They're highly specified. Our brands are almost synonymous with the product and the application. If you think about brands like Burndy, like our pin and sleeve wiring device, including the new acquisition that we just did with NSI Industries, and if you think about Bridgeport fittings and Polaris, which also serve data centers, these are anchor brands that serve these customers. So I think that's the first reason why we win in that. Then we've been very proactive in investing in these businesses, in capacity to serve the need. And again, it's one of our primary value propositions is the reputation that we have to provide products that are of high quality, and there's almost nothing we won't do to service our customers and to provide them with the products that they need. I'd say that's another area of why we've been able to win in that, is to be ahead of investing it. Then in product innovation as well. It's an area where we're doing quite a bit of work right now, and for example, our Pin and Sleeve connectors is a good example. This is a product that traditionally served heavy industrial applications of really tough industrial environments. The amperages and the heavy dutiness of that product became applicable to data centers, but the form factor wasn't perhaps the most efficient. As data centers are starting to take up less footprints, you're trying to get more into a data center. Not only are we increasing the amperages of these products that take on more power, but the form factor so that they fit better in the racks. Again, having the reputation of our brand and then being able to innovate products is what's helping us drive growth in that area. Yeah, maybe one thing I'd add on both that question and the last one is just the work we've done on the electrical segment unification over time. Again, there's some things on the cost side that are a big part of that story. But on just the commercial side, too, last year we consolidated the sales force and realigned it around, and again, a part of the broader segment strategy of historically we've competed as kind of individual brands on the electrical side, and our strategy is now to compete collectively, and we reorganized the sales force instead of selling individual brands to have a regional focus where we have our sales force selling the full package of the electrical product set. Then around that, we've also invested in vertical market sales teams where data center is a great example. We've got dedicated teams who are calling on EPCs and contractors and speccing in our broad product portfolio, and that's examples of we've had a really good leading position in Burndy connectors, for instance, in data centers. But then when you drive those relationships and specs at the contractor level, you can start to pull in more products to some of those projects. I'd say more broadly, even outside of data center, you see that with our channel strategy, too, right? Of being easy to do business with to our channel partners also enables us to get more shelf space of our existing product set, and that's also helping with some of the broader growth that we see across electrical. I think NSI, as Gerben said, is another opportunity to just keep running that playbook. Right. And kind of staying on that innovation theme, there's a lot of discussion around this move to 800 Volt data center. How does your portfolio prepare you for that transition, and how does it support data centers as they move towards that infrastructure? Yeah. I'd say, part of the products that we serve truthfully won't change a lot. If you think about our Burndy grounding, that probably hasn't. It may change the form factor a little bit, but still very much needed. Some products will evolve. Our Pin and Sleeve product line, as a matter of fact, and some of the developments that we're doing there is very much to adapt to this new, not only higher amperages, which we're seeing right now, but eventually the 800 volts infrastructure. Then if you look at our power skid business, we're assembling the different gear on that to then bring that as a package to the data center for the power needs. I would say there, the equipment that goes on it will probably go through a lot of change, but you're still needing to package that also. We're working with our customers there and with the manufacturers there of some of that gear to prepare for that. I think the space is moving really fast. 800 volts is one element, but even between where we have been and where we are now, there's just a lot of development, and they're constantly trying to get more through the footprints that they have, and you just need to adapt to that. And kind of following on the space moving fast, I mean, you did 50% in the first half, guiding to 50% in the full- year. We've heard some others at the conference that are speaking to acceleration in the second half. When you think about your target for data center growth this year, is there room for upside there, and how can we think about the durability into 2027? Yeah. I mean, we certainly believe that there is durability to data center. The rate of which that happens is, I think, the question that's debated a lot. Can it all be put in place? Can utilities support all the need for the load that's required? I think what our success, and perhaps, it's our nature to not be over our skis when we promise things. Hindsight, as we look back to where we were at the beginning of the year, we're probably a little bit conservative in what the projection, we've clearly done better. I would say part of that driving to do better is what we've added in capacity, and we're constantly adding here capacity to be able to do more, where we're bringing new products into this basket of balance of system to serve more. I think the function of having done better is more in our ability to ramp- up to serve the demand that's actually there. Yeah, we believe that we feel good about the future of data centers. I'd say importantly for us, though, it's not our only driver for our business. If you think about our utility business, yes, there is a piece of that that's clearly tied to load growth and data center, but there's an equally attractive piece of that portfolio of just the hardening of the grid, the modernization of the grid. We like data center. It's an important part of our business. But we believe we have very attractive other parts of our portfolio, particularly in the utility business. To the point on some of the outperformance year- to- date, do you see that as timelines moving up with projects you already had expected in your pipeline, or were there incremental projects kind of flowing through? Yeah. I'd say, again, at the beginning of the year, the shorter cycle part of that business where we're booking and shipping components in four to six weeks, it's just hard to commit to 50% growth at the beginning of the year with nothing in backlog. I think part of it is we just saw the order book continue to accelerate, and then again, we're planning our capacity for more growth than that, certainly. I think our experience throughout the year, particularly again on the Burndy side, is every time we added more capacity and were able to ship more product, the orders kept going up. And so, again, that part of the business, you're less focused on individual projects, I guess, other than you're getting those natural orders of as your big customers, your distributor partners, your EPCs, and your contractors are doing the install work. They're just pulling copper lugs as they need them, right? Grounding systems as they need them. And so I think it's just been more of that. That's been the experience throughout the year, is seeing the order book continue to go up. We add capacity, and then the order book keeps going up. Around that, we've been able to add some of these newer products and get more penetration. I guess that's the way I'd summarize it. Then you mentioned some of the work you've done on the electrical side of the business in unifying that portfolio. As you think of the room to run on margins, you already passed the 22.5 target for 2027. Just what are the levers going forward? Is that restructuring just part of the normal operation, and what can drive expansion beyond that? Yeah, I'd say it's not one singular thing that's driven us to kind of exceed the targets that we set a couple of years ago. Clearly, restructuring is one part of that. The unification of the electrical segment volume is helping in that equation as well. Pieces of our portfolio that are growing at a higher rate are very attractive, margin as well. So that helps. I'd say it's not any one thing, but it's really what we call our strategic playbook that we set. We did a lot of portfolio work as well a couple of years ago to push that to higher margin. The acquisitions that we're doing, DMC last year, NSI this year to profile that margin. So it's multilevel playbook that we're applying, and there's still room in that, I would say, in all those fronts, right? As we look at the strength of the markets, I mean, those markets have been stronger than we initially anticipated this year. That benefited, I'd say, the segment unification is still in the middle innings, and I think you'll see an electrical continued expansion there. Managing the whole price cost productivity dynamic, we've managed that well over the last couple of years to at least neutral or better. I think the history is that that's turned out to be better. Now, of course, over a shorter period, if you're managing price cost neutrally, that could actually be detrimental a little bit to margin on the short- term. But our view is that there's still room for margin improvement going forward through managing this playbook with different leverage. To that point, what is your sense on the appetite for pricing in the environment right now? I know it may shift depending on how different end markets are doing, but how have those conversations progressed with your customers? Yeah. I would say we have managed that well, over the last five years from the COVID eras when inflation really shot up, where we had to take just a very different approach from what we had traditionally taken with the annual price increases, where you are doing this every couple of months. You are having to go up, and I think the numbers would prove out, if you look at Hubbell over that period, that in an inflationary period, we have actually done quite well. It is, again, when we see inflation happening, and we are certainly seeing that this year, where we price for it, and again, we are seeing those prices stick. I remember a few years back, a lot of the conversation was when actually commodities were coming down and our margins expanded. The big question that we were getting then is, "Is that sustainable? Can we hold on to that?" I said there are reasons why we can, which is our value proposition. We are a small part of the total cost of what we do, but critical, and this is what we have been talking about, critical in function. So generally, price is not the primary discussion that we are having. Of course, we are in a competitive environment, but it is more our reputation, our quality, our service, our spec position, is what matters. So, at the time, I said, "The best proof of this is the next price increase that we need to put in place, and can we get that?" We have done many price increases since that time. So, that is our view, is when there are costs that come into the business, certainly, we do a lot to try to combat that with can we source it elsewhere? Can we drive productivity? Price is a lever that we are using to offset, and I think it has proven too that Hubbell can do well in an inflationary environment. And then, I guess, kind of tying it up here, as we get closer to the 2027 Investor Day, what key question do you think you are working to, without preempting any of those? Yeah. We are a little bit away from that. Yeah, but it is coming up. It is certainly, we are absolutely looking at this as part of our strategic plan that we always look and when we set the last target that we. Longer- term targets that we probably set was in 2024. And I think as we look back now at how that is progressed, I think one thing that is clear to us is that the underlying demand of our markets is stronger than what we had anticipated when we set those targets with. We see that come through this year already. Of course, there is still a lot going on in all of our markets. I mean, interest rates went up yesterday, and whether the effect on the commercial side of that. But I think net, our view is incrementally positive on what the targets are going to be going forward. I do not know if you. Yeah, sure. More to come, I'd say. But it's definitely something we're thinking about, and we're really excited about what's ahead for Hubbell. I think that's time. We can wrap it up there. Awesome. Thank you for being here. Really appreciate it. Thank you. Thank you all.