Morning, everyone. Thank you for joining us today. I'm Matt Summerville with D.A. Davidson, here to host a fireside chat with leadership from ITT. Here with us today, we have Luca Savi, CEO and President, and Emmanuel Caprais, SVP and CFO. With that brief introduction, I'm gonna turn it over to Emmanuel for a few prepared remarks. Yeah. Thank you. Thank you, Matt. Before we get started, I wanted to note that our presentation and comments may contain forward-looking statements, which are based on our best view of the world and our businesses as we see them today. These assumptions and expectations can change, and we ask that you view them in that light. We encourage you to review the latest risks and uncertainties in our Form 10-K and other SEC filings available on our website. Thank you. Okay, perfect. So I'm gonna spend a couple of minutes to tell a little bit about ITT, and then we jump into Q&A. Perfect. Is that okay, Matt? When you look at ITT, ITT is an engineering and technology company. We make components, components that work in harsh environments in the energy sector, in general industrial, in transportation, aero, and defense. What we're making is that, if you drove here this morning with your car and you had to use your brake, suddenly, you know, what kept you safe? Chances are, are ITT brake pads. We have almost 30% of the market share worldwide, different in different regions. We might go deeper in that later. Or if you came by train, the shock absorbers that keep the train in the track and not derail, chances are, are KONI ITT shock absorbers. The connectors, the connectors that are used in, you know, in defense or in aerospace, or some of our pumps, you know, the twin-screw pumps, our multi-phase pumping technology, that are helping to decarbonize the oil and gas industry, eliminating the flaring or putting the CO2 that we capture down the ground. It's a $3 billion company, and we've been in a journey of creating value for quite a long time. In the last four and a half years, we created more than $4.5 billion of value for our shareholders. If you look at our Q2 results, very good results in terms of, you know, growth, good results in terms of margin expansion, great results in terms of EPS growth, and last but not least, in terms of cash. Probably more important is maybe some remarks on the Q3. Emmanuel- Yeah. Over to you. Thank you, Luca. When you look at our top line, we expect to be in the mid-single digit. We're gonna have a good growth in IP, low double digits. CCT also will be in the mid-single digits, and then we'll have MT, which will be approximately flat. From a margin standpoint, we continue to see progress. Important to note the sequential progress we expect for Motion Technologies. We had a good performance in Q2, a nice recovery, sequential as well as year-over-year recovery. We're gonna continue to do that in Q3. Keep in mind that we talked about the 18% target that we have for next year on our way to the 20% long-term target. Then from an EPS standpoint, we expect a mid-single-digit growth versus prior year. And then from a cash standpoint, line of sight on our $400 million free cash flow target, we're having a good Q3, driven by good performance in terms of inventory reduction at Motion Technologies, but also a lot of work on collections. We have a couple... a few, few days now to finalize and to make sure that we have a good Q3 from a collection standpoint. And then just a quick update on the strike, the UAW strike. So based on the latest figures, we actually think that the less than $5 million of top-line impact that you see here on the slide is actually gonna be not only for September, but for September and Q4. So we revised our view, and then, so the risk is really minimal, less than $5 million of the top-line revenue for the rest of the year. Perfect. Thank you, guys. So maybe, Luca, we'll start with MT. You know, this business was most impacted by the inflationary pressures over the last few years. Has this structurally changed the profitability potential of the business? And over what timeframe do you think ITT can restore margins to pre-COVID levels and start setting new records? Yeah. The short answer, Matt, is no. I think that, as Emmanuel was sharing, we're already in the recovery. I think that we will hit the 18% EBIT in 2024, and our long-term target of 20% margin for Motion Technologies is really there to be taken by probably 2025, 2026. Understood. Sticking with MT for the time being, share capture has been a hallmark to the friction story for the many years I've covered ITT, probably going on 20. Mm-hmm. Where's your current market position by region today to the point in your prepared remarks? And talk about what you're targeting with respect to EVs and how win rates have been trending relative to your current market position on ICE. And then I have a follow-up. Okay. So the market share is different in different regions. You know, roughly 10 years ago, this was mainly a European business, and we didn't really have business in China or in North America, where market share was low single digit. Today, our market share in Europe is higher than 50%—our market share in China in 2022 was approximately 27%-28%, and in North America, 25%-26%. So, which is an incredible achievement if you think that only 10 years ago, we were roughly zero or low single digit. When it comes to the goal in terms of market share, there is no reason we think to achieve the 40%-45% market share also in China and in North America, to the point that when we built our plant in Silao, Mexico, for the North American plant, we did that in 2018, we size it really to achieve that market share. Now, going to the second part of your question that comes to EV, when you look at our awards, the EV platforms that we're winning, our win rate is incredibly healthy, is very high, and is notably much higher than our market share today. Which means that the electrification, which is gonna be actually good for us, for ITT, because if you look at the compounding effect, you have the market, which is growing in the next few years, electrification, the electric and hybrid vehicles will grow much more. It's probably 30% this year, 30% next year, so that's compounding. And on top of that, our win rate on that specific segment is substantially higher. So, we're planning to have a higher market share in EV than ICE. Very good. And just as a follow-up, just so people understand, over the years, what's defined your ability to capture share? And with the supply chain crisis that you've been through, the logistical challenges, the COVID impacts, how have some of the KPIs in this business fared relative to prior periods? Okay. So, I think that there is no one single bullet that can explain why we kept on outperforming the market for the last, for the last 10 years. Take into consideration is an average of 800 basis points better than the market. And just to give you some color, whilst the market will probably be at a pre-COVID level in 2027, maybe in 90 million vehicles produced, we already beat the pre-COVID level in 2021, so six years ahead of the ahead of the market. The reason are multiple. First of all, a cost advantage. If you compare us with the competition, to make the same number of pads, we have five plants worldwide. Our competition have got more than 15. So think about the cost structure. Think about keeping 15 plants running efficiently versus five bigger plants. That's one differentiation. We have one process. It's the same across all these different five plants and highly automated. The competition has different processes, dry and wet, not highly automated. What this translates to is efficiency, but also translates in better quality. When you look at our quality scorecards, it's less than 1 PPM. So which means that less than one brake pad per million brake pads produced is actually has got a quality issue. And it's not because it's defective, but maybe the barcode cannot be read by that automatic machine. We have a plant in Italy that is at 0.3 PPM, so it means that, you know, three parts every 10 million. So that is another differentiation. And then the superior R&D, which enables us to solve, you know, a specific requirement by the customer faster than anybody else, and this is why we're winning more on the EV. All of these have differentiated ourselves. When you specifically talk about COVID, if you look, and we share with the market every single quarter, this business, through all COVID and the supply chain mess that came after that, it deliver at 99.5, 99.9 on-time delivery, which is quite unique in the market and compared to the competition. And so that has helped us, differentiating us even more. Perfect. And then maybe just one more on MT before we cut over to the other segments. More broadly speaking, you know, talk about where we're at with the global and regional automotive cycle. Dealer inventories are at least partially replenished, interest rates have moved higher, the China reopening post-COVID Zero was maybe a little bit of a disappointment. Aftermarket customers paring back inventories. What does this all mean heading into 2024 for MT Friction? Okay. I think that the cards are good for Friction coming into 2024 and in the years to come. If you listen to our prepared remarks during our earnings calls, we share how many electrified platforms we won, how many awards. The number is very high, is staggering. All of these higher market win rate in electrified vehicles will allow us to continue to outperform the market. When it comes specifically to China, you know, what we're forecasting, if you think about it, China in 2023, we're forecasting a market which is flat, but we're growing tremendously in China. Why? Again, it's market share gain. When you look at the... People might say, "Well, but, you know, you guys are an American company in China, you know, may the Chinese win?" Well, 62% of the brake pads that we are producing in China are sold to the Chinese OEMs: to the BYD, to the NIO, to the XPENG, to Great Wall, as well as to the Western OEMs. So the fact that the Chinese OEMs are actually winning is actually good for us because we are making 62% of our production for them. So I don't know if you want to add something? No, if I can add something, just on a macro level, I think the inventory, I agree with your comment, Matt. I think in the U.S., what we're seeing is that the inventory, they're not back to where they used to be. And probably, there's gonna be some more tension in terms of building inventory with the UAW strike. So I think from the inventory standpoint, we see further opportunity to boost production from the North American automakers. And then from an aftermarket standpoint, so it's clear that this year has been a year of destocking for our main customer, Continental, mainly in Europe, independent aftermarket. And we expect that in 2024, aftermarket will recover. So, base demand will go back up, the destocking will be done, and so as a result, we'll see a 2024 with growth. Perfect. Maybe let's kick it over to IP. Can you maybe provide an update as to what you're seeing from an overall demand standpoint across your key end markets, such as chemical, general industrial, oil and gas, mining, and maybe add a little bit of geographical overlay to that? Okay. So, I start, and please pick up, Emmanuel. So when you look at IP, you have two businesses in IP. You have the short cycle, and you have the long cycle with the big projects. So the short cycle has been incredibly healthy for many, many quarters now. And what we have seen, and we have seen that growth softening for the last couple of quarters, is still at a very high level, but, you know, definitely the growth has been softening. So this is what we see on the short cycle. When we look at the project side, the projects has grown tremendously. What is interesting that we have seen in the last few quarters is that you have revenue growing incredibly, I mean, more than 20% when it comes to IP, but then the book-to-bill is higher than one because of all these projects coming in. Practically, you have your backlog that goes up and is at record level. On top of that, what you see is that what comes before is the funnel of opportunities in terms of the things that you're bidding, and that funnel of opportunities is actually the highest it's ever been. This is across all the different businesses and is across all the different region. When you come to the specifically, for, for example, on chemicals, mining, oil and gas, in the oil and gas is interesting. You have the dynamic that you have both the investment of the traditional oil and gas because it was not invested for a very long time, and therefore, you have projects like that. Then you have project of decarbonization, is the carbon capture. With a major, you know, oil producer, American oil producer, we are standardizing our technical solution with those twin screw pumps that we make in Germany for stopping the flaring, which is something that many oil companies are signing for by 2030, 2035. Then also with the same oil producer, we are standardizing a solution for carbon capture and sending the CO2 kilometers down the ground. The outlook for IP, I would say, is, is very positive in 2023, and we expect that in 2024, based on that backlog that we've been able to build, we expect our IP to continue to grow from a revenue standpoint also. Very good. We talked about the top line. Let's talk about IP operating margins, which have kind of basically entered a new zip code of sorts on a trailing 12-month basis, with profitability sustained in the range of 21%-23% at the segment level. What are realistic go-forward expectations for the business, given some of the mixed dynamic you've just sort of referred to? And then I have a quick follow-up as well. So for IP, you're right. We are extremely happy with the level of margin that we've had this year, and it has been a constant progression. A lot of it is driven by productivity, a lot of it is driven by price. And we expect for the future, that despite the fact that there's gonna be an unfavorable mix with project ramping up faster than the short cycle, we still expect that we will be able to overcome that, and we still expect that we'll continue to expand margin. Now, we haven't really given the next long-term target, but I think that it's fair to say that the 20%, the 20% long-term target that we had a couple, a year and a half ago, is, is secured for sure, and now we're moving on to the next target. Understood. Some changes you've made to the business over the last few years, again, sticking with IP, what are maybe the three or four key differentiators that have allowed the company to generate this level of top and bottom line performance? Sure. Let me make a broad description, and then let's give some specific example. It is running the business in a much more granular way and to be in the business. I don't know if you realize, but I have a little bit of an accent. I'm Italian, and like 99% of Italian, I'm Catholic, and you know, our pope these days tells that the shepherd must smell like the sheep. We like to smell. This is exactly the way that we run, we run the business. You are in there, you are in their house, so what are the things that you do? You start running the projects in a different way. Projects was a business where we were losing money six years ago. So we get in there, we start running the projects in a much more rigorous way, with the proper project review, reviewing technically, reviewing the change orders, review the technical, the T's and C's, reviewing the timing with the project manager on a monthly basis, and if the project is larger than $10 million, it's every two weeks. That has changed substantially the profitability of the project business to the point that today is very profitable, and that the backlog of project that we have is the highest profitability that we had. Lean in the factory, and I can tell you, despite all this hard work for the last five years, I don't think is that we are even halfway there. Every single time that, I mean, Emmanuel or I or the team goes into the shop floor, I mean, you end up being 50% angry and 50% smiling, because if these are the results with all those opportunities, that's great. VAVE, value analysis, value engineering. We took all the products, and family by family, we are reengineering them. You take metal out of a pump so that they're lighter, they're cheaper, their hydraulic performance is better, as well as, of course, pricing. Volume is also giving a benefit because performing better, being better on time with the customer, they are more loyal and giving us more business, and this is what allows us also to win market share. Got it. Sticking with IP again, what do you see as the biggest macro risk factors to order trends and backlog? And while maybe not being called as such, does ITT sort of deploy an 80/20 process across this business? I would say, yes, I mean, we are 80/20, but probably not in a rigorous way like you have other companies doing, which is really their philosophy, right? So, we approach it in a way, but probably not in that rigor. And I would say in terms of the macro scenario, I would say usually, you know, the things, the recession is something that obviously we keep an eye. You know, I don't know what is gonna happen, but for sure, I know that tomorrow, I'm gonna be one day closer. So, that is something that we keep an eye, and for that one, we pay a lot of attention to run our ship really lean in terms of, in terms of our cost. I just wanted to add a little bit more specifics on what drives really our performance. We're really focused on performance drivers. For all our businesses, all our teams, they know what works and what doesn't work, what makes, what makes a business perform and what really doesn't. And across the board, we're focused on SQDC. So safety in the way we operate, quality for our customers, not scrap, not customer poor quality, quality in the eyes of the customer. Delivery, and we're- and that's why you have friction bus- a friction business like, like ours, that has 99% on-time delivery, and we're progressing the other businesses as well. And then after that, cost. So how are we operating in a way that is productive? Are we boosting efficiencies? Are we reducing our working capital as well? So really, this is the mantra, and for us, what's really important is that our team know exactly what makes the difference in their business, so they spend their day reinforcing those competitive advantages compared to the peers. Perfect. That's it. Maybe over to CCT. Sure. Talk about how ITT is positioned relative to the commercial aerospace cycle we're seeing from an OEM standpoint. Has your business eclipsed pre-COVID peaks as of yet, and, do you see much cycle risk at present? Okay. When you look at the CCT performance today, it's a record performance in terms of profitability, et cetera. When you look at aerospace, we are not at the pre-COVID level. As a matter of fact, we are behind the recovery of aerospace compared to some of our competition, mainly because we are more exposed to the wide bodies. The wide bodies have recovered later. They recovered, they recovered more with international flights. I think that we will be probably at pre-COVID level sometime towards the end of 2024 and 2025, exactly because of that exposure. In terms of the... We see a very nice recovery, though. Our growth is really helping CCT keep on growing today in aero and in defense as well. I do not necessarily see a lot of risk to this, to this recovery in the foreseeable future. Let's talk about the other side of the CCT business, the short cycle slowing you've noted, on the electronic side of the business, both from an end market standpoint, geographic standpoint. Has that been further exacerbated by excess channel inventories as well? Sure. We're talking about the connector side of the business. The connector side of the business, you know, the distribution went through overstocking, so we start seeing the destocking towards the end of last year, Q1 of this year. This has continued. Now, what is interesting is that, in... And this is true across all the different regions: North America, Europe, as well as Asia Pacific. Now, what is interesting is that our team in North America has been very successful in practically, you know, getting more shelf space, and therefore, what, they want market share on the shelf, and we didn't see, particularly in Q2, the impact of this destocking in North America, but it's happening. Europe has been probably the region that has been penalized the most from a destocking point of view. Got it. Maybe just talk, a little bit more strategically here. From a portfolio standpoint, do you think ITT's valuation gets penalized for having sort of an outsized, at least relative to other industrial tech names, exposure to the global automotive market, despite the fact that you have best-in-class profitability therein? And how do you think about that business in the context of the broader portfolio? So, so I'll say that, you know, people ascribe valuation to the auto, to auto businesses, but our auto business, with all due respect, is not the same as others. Our auto business is a premium business. This is a business with aerospace-like margin and automotive working capital, so a cash machine. And so, for us, we are really focused on making sure that we continue to differentiate our auto business, and that people that are interested in ITT, investors and others, and also prospective employees, understand that this business is really special. It's it grows really fast, it has higher margins, and so it's not the same as the majority of the automotive, automotive businesses. Yeah. So if I, if I can build on what Emmanuel said, is that, in, in the portfolio, you know, our friction, our friction business is, is there to stay. And, we like it not just because we have an, a return on invested capital, which is higher than 30% in the business, is that, look, when you have this kind of business, is the visibility that we do have. You win an award today, but the SOP, the start of production, is in two years from now, and then that platform will last for the next seven years. I tell you, we won the largest platform ever in, in Q2 for a premium German OEMs, and is from 2025 to 2035 when it comes to first equipment, and then till 2045 when you look at the replacement. Think about the visibility that you have. We like that. In addition, the visibility that we have is that we know the awards that we won, and how many—when they're starting production in the next two, three years. When we are sharing with the market that, you know, we think that we will continue to outperform the market, it's because we know what we won. We know when they're gonna start and the ramp up, and therefore, it's not being arrogant, it's that we have the visibility of that outperformance. In the context of the portfolio, that cash machine, that wonderful ROIC is there, is there to stay. Excellent. Let's talk a little bit about M&A and share repurchase. Can you talk about the actionability and depth of ITT's current M&A funnel? Post-divesting asbestos liabilities a couple of years ago, seemed to be a view that ITT would get a little bit more aggressive from a deal standpoint. You've done a couple of deals, Habonim and Micro-Mode Products, Inc. Can you talk about the right way to think about M&A and share- Sure ... repo kinda going forward? Sure. When you look at capital deployment, where the money goes first is organic. This is what we know best, this is where there is the least risk, and this is where they got the best ROIC. So this is where the money goes first. Second is on the inorganic. And when you look at where it goes, we have, you know, three main focus areas today, which are pumps, valves, and connectors. This is what we have cultivated. We got a good funnel of opportunities, and this is also where we made the last couple of acquisitions. Now, the thing is that, you know, we also want to ensure that, when it comes to acquisition, we are creating value for our shareholders. So we have a very rigorous process when it comes to strategic value creation and financial value creation. So it has to be a very rigorous process. And this is what has enabled us for Habonim. For example, we bought Habonim at a 12 EBITDA multiple. When you look at the actual, they outperform the others, the revenue, the cash, the margin, is the actual multiple is seven point something. So that rigor is what creates value. Now, M&A, you're not in control 100% of the M&A. So when you know, the deal doesn't come up, you know, I'm not getting desperate, we repurchase shares. This is what Emmanuel and us as a team have done in 2022, and we also repurchase share in 2023, $60 million in the first six months. That's the way that we think about it. Perfect. And then maybe just one final question, as we're almost near the end of time. Since you brought up organic investments, can you talk about some of the more exciting organic opportunities and the investments you're making in the business today, including sizable expansion of your footprint in Italy, as you're targeting the high-performance segment of the friction market? How does this increase the size of the friction TAM for you guys? And then we'll wrap up. As Luca was saying, we've focused on organic investment as the way to really grow our business. And every year, more or less, we invest $100 million-$110 million of CapEx. If you look at the project that we have internally with the high performance, this is an amazing opportunity. This is an underserved market. We have basically one supplier today who is supplying to those premium automakers. And the feedback that we have is that they want better service, they want better products. And so for us, it's a sizable opportunity, because obviously, the premium products comes with premium price and premium margin. So we expect the margin level to be much higher than what we have on our traditional OE business. And so for us, it's not so much, let's say, it's not a major business like the business that Luca was talking about with the German premium OEM. You don't see major volumes, but what you do see is high prices, high profitability, and great returns. So we expect this to be very transformative from a profitability standpoint for our friction business. Perfect. And with that, I think we'll go ahead and conclude. Thank you, Luca. Thank you, Emmanuel. Thank you. Thank you, Matt. Thank you.