Welcome to ITT's 2023 third quarter conference call. Today is Thursday, November 2, 2023. Today's call is being recorded and will be available for replay beginning at 12:00 P.M. Eastern Time. At this time, all participants are placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one one on your touch-tone phone. If at any point your question isn't answered, you may remove yourself from the queue by pressing star one one again. We ask that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the floor over to Mark Macaluso, Vice President, Investor Relations and Global Communications. You may begin. Thank you, Lisa, and good morning. Joining me in Stamford this morning are Luca Savi, ITT's Chief Executive Officer and President, and Emmanuel Caprais, Chief Financial Officer. Today's call will cover ITT's financial results for the three-month period ending September 30, 2023, which we announced this morning. Before we begin, please refer to slide 2 of the presentation available on our website, where we note that today's comments will include forward-looking statements that are based on our current expectations. Actual results may differ materially due to several risks and uncertainties, including those described in our 2022 annual report on Form 10-K and other recent SEC filings. Except where otherwise noted, the third quarter results we present this morning will be compared to the third quarter of 2022 and include certain non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures are detailed in our press release and in the appendix of our presentation, both of which are available on our website. With that, it's now my pleasure to turn the call over to Luca, who will begin on slide 3. Thank you, Mark, and good morning. Before we begin, I would like to share how shocked we all are at ITT about the terrorist attacks in Israel on October 7. We strongly condemn these terrorist attacks. Israel is a special place to us, given the presence of our colleagues working at our Habonim Valves business, headquartered in the northeast part of the country. I was fortunate to spend time with Ilan and the team in August, and I was humbled by their capabilities, their strong work ethic, and their commitment to ITT and their customers. Obviously, all their lives were impacted by these tragic events. We're staying in close contact with our Israeli colleagues there, as the safety of our people and their families is always our primary concern. It is our hope that peace is restored in the region. Now to our latest results. The main theme of this call is a step up in performance, a step up in execution, and a step up in capital deployment. We are converting ITT's $1.2 billion backlog. At 19.4%, we are making significant progress towards our 20% long-term segment margin target. We are delivering new levels of earnings with a record EPS this quarter and expected for the full year. Last but not least, we expect over $400 million of free cash flow. On capital deployment, we are accelerating. Yesterday, we announced the signing of a $400 million strategic acquisition in Flow with the addition of Svanehøj. Now let's get into the details. On execution, in Industrial Process, we continue to see strength in projects and aftermarket. Our Pump projects, Parts, and Service businesses all grew revenue double digits organically in the third quarter, demonstrating our prowess in gaining share and emerging as a leader in profitability in Flow. Still, there are many more opportunities for growth. For example, this quarter, together with IP's President, Fernando, I went to Brazil and Peru. He's intimately familiar with the region coming from Brazil. There, we spent time with our local teams to review our outstanding performance in the region and the new growth initiatives. The talented local ITT team gave us a greater understanding about the growth actions they are working on to capture share in mining, process, and energy. In Connect and Control Technologies, our aerospace and defense components business grew revenue nearly 30% and 6% sequentially, which drove 8% organic growth in CCT. The growth in our connector OE business more than offset the continued distribution destocking impact in Europe. Just to step back for a moment, as you have heard us talk about, we've been managing through the destocking in connector distribution in Europe for the past 3-4 quarters. While we still see weakness in Europe, our North American team has been able to offset the European weakness with actions in OEM and distribution. Well done, Art and team. Finally, in Motion Technologies, we again won share in the electrified vehicle market with 30 new platform wins this quarter and over 130 awards year to date at a win rate that is well above our current market share. Friction OE outperformance continued to improve sequentially in Q3, thanks in particular to our China business, which grew sales roughly 25%, driving 20% growth year to date. Also in MT, the Friction team won new awards in the high-performance vehicle market ahead of the recently announced Termoli plant expansion, where the new lines will be up and running in Q4 2024. The progress did not stop here. Both Koni and Axtone grew double digits on the strength of share gains, new product innovations, and pricing actions in rail. In Axtone specifically, we have won many new orders this year, and as a result, we expect our orders to be up nearly 10% for the full year versus a record year in 2019, when we were still operating in Russia. Continuing with execution. At 19.4% this quarter, we again made considerable progress towards our 20% long-term segment margin target. Industrial Process eclipsed 21% for the fifth straight quarter, up 220 basis points year-over-year and 40 basis points sequentially, with an incremental margin above 40% as our operational drive continues. Motion Technologies reached 17% margin in Q3, improving 100 basis points sequentially as we anticipated, with incrementals of 40%. Notably, we saw a strong improvement in both Wolverine and Axtone, due largely to pricing actions, and we expect both businesses to be back to double-digit profitability in Q4. This is quite an accomplishment, considering the challenges our teams confronted from high cost steel inflation and the war in Ukraine. Moving to capital deployment, we are accelerating. In October, we announced a new $1 billion share repurchase program with an indefinite term that we will strategically implement at the completion of the current $500 million plan. But more importantly, yesterday, we entered into a definitive agreement to acquire Svanehøj, a Denmark-based supplier of cryogenic marine pumps and aftermarket services for liquefied gas. The company operates in attractive industries tied to long-term trends, including decarbonization, Energy Transition, and growth in marine transportation. I will share more about this exciting acquisition momentarily. Coming back to our full year results, we are raising our 2023 outlook once again across all metrics. At the midpoint, we now expect nearly 8% organic revenue growth, 140 basis points of margin expansion, nearly 17% earnings growth, and over $400 million of free cash flow generation. This sets us up for a record year, and I'm really proud of what our teams all over the world are accomplishing. Now, let's turn to slide 4 to talk about our pending acquisition, Svanehøj. Yesterday, we announced our intent to acquire Svanehøj, a leading cryogenic marine pump supplier, for approximately $400 million. The purchase price multiple equates to less than 12x estimated 2023 EBITDA, and the deal is expected to close in the first quarter of 2024. Svanehøj has leading positions in cryogenic applications for the marine sector, including deepwell gas, cargo, fuel, and energy pumps, which have the technology to process all future Energy Transition fuels. Like IP, the company has a large installed base of pumps and a sticky, profitable aftermarket business, thanks to its differentiated service model with global reach. The regulatory nature of vessels service allows Svanehøj to benefit from recurring aftermarket revenue with sole sourced positions. Its products and services are also widely regarded as the highest quality in the industry, which drives customer loyalty. Stepping back, there is a lot to love about this business, which adds cryogenic pumps to our flow portfolio. First, the company is a strong management team that has a deep knowledge of their markets and a clear focus on driving performance. Next, we have good line of sight to future revenue growth coming from decarbonization and Energy Transition, where Svanehøj has leading positions in three out of four verticals in which it operates. Ship owners are required to service and upgrade their fleets, which we expect will drive recurring demand for Svanehøj's products and aftermarket services. The shift to more environmentally friendly propulsion technology, coupled with growing ocean cargo activity, will increase demand for new marine vessel builds. With all of this, we expect Svanehøj to lead in the global Energy Transition across most verticals, with a multi-year outgrowth supported by their backlog, by their differentiated technology, and predictable aftermarket revenue. I would like to welcome Søren and the entire Svanehøj team to ITT. I also want to tell you that our M&A pipeline remains active. In Q3, the business, Emmanuel and I, continued to invest significant amount of time visiting potential target operations as we work further to further enhance our acquisitions pipeline. Let me now turn the call over to Emmanuel for more details on the quarter. Thank you, Luca, and good morning. Starting with revenue, Industrial Process once again led the way this quarter with 11% growth on the strength of the aftermarket, driven by both volume and price and project shipment. IP is also growing its backlog, which is up 18% year to date, with project orders up 29%. Including green projects, which are already up 160% versus all of 2022. CCT growth was primarily driven by a more than 20% increase in aerospace components and defense, underpinned by macro trends in these markets. Notably, we also generated 9% sequential growth in connectors due to share gains in OE and SKU expansion with distributors in the U.S., more than offsetting weaker European distribution. Motion Technologies growth was driven by friction OE at 7% and higher pricing in Koni, Axtone, and Wolverine. This was mostly offset by timing in the friction aftermarket, driven by distribution inventory reduction. Looking ahead, we expect our Auto Aftermarket business to be flat in Q4 and to start growing again in 2024. Rounding out the ITT top line, core volume growth contributed 300 basis points, while pricing actions contributed 200 basis points. The pricing was most prominent in the IP aftermarket and Aero in CCT. Aero OE contracts is an area where we are dedicating more energy as more long-term agreements are coming up for renewal in 2024. Moving to margin. We improved in Q3 due to a combination of profitable growth and pricing actions. Volume and price contributed over 200 basis points, while our net productivity actions drove over 150 basis points of expansion, more than offsetting the impact of foreign exchange and investments. Specifically, we continue to invest in sales and operations planning to augment the lean improvements in IP and CCT. The impact of stronger organic growth and improved margins drove 14% earnings per share growth, which includes the benefits of a 1% share count reduction. Last, but certainly not least, our teams delivered another impressive cash performance with nearly $150 million of free cash flow, or roughly $300 million for the year to date. This amounted to over 7x more free cash flow compared to the same period in 2022. Our free cash flow margin this quarter was 18%, driven by stronger collections and higher net income. Cash is improving, but working capital was still a use of cash year to date, mainly due to inventory. We expect this dynamic to reverse in 2024 with improved inventory management. On slide six, you can see we delivered a 14% EPS increase this quarter to $1.37, a new record for ITT. We also continue to invest in new product development, including for IP's embedded motor drive, which is currently deployed in customer field trials and undergoing reliability and certification testing. As you can see on slide seven, today we're raising our full year outlook, given the year-to-date growth in orders and robust backlog and higher revenue growth, segment margin expansion, and strong free cash flow generation. This is a testament to the execution our teams have delivered throughout 2023. We're moving our revenue guide to the upper end of the range at 7%-8% organic growth, which implies the following for Q4: We expect low single-digit organic revenue growth led by motion technologies. CCT Aero should continue its growth trajectory, coinciding with increasing air traffic, and we also foresee a pickup in defense demand near and midterm. We also expect continued strength in the IP aftermarket based on strong daily order rates exiting Q3, as well as in October, offset by lower baseline and project shipments. On segment margin, we are increasing the midpoint of our margin range by 50 basis points to 18.6% and approaching 19% at the high end. Segment margin in Q4 should be roughly flat sequentially. These dynamics should drive low single-digit EPS-adjusted growth year-over-year. Finally, cash performance is outstanding. More than a year ago, we made a conscious decision to invest in inventory to support our customer amidst significant supply chain challenges at the expense of our free cash flow. As a result, we won new business, built a robust backlog, and gained market share. Fast-forward to today, we have a record backlog up 13% versus the end of last year. Profit is way up, and our collections and cash flow are improving every quarter. As a result, we are increasing our guidance to more than $400 million, and our free cash flow margin is already at 12%, double from last year. Before I turn the call back to Luca, I'd like to share some highlights from ITT's 2023 sustainability update, released last Friday. Last year, we made considerable progress on our sustainability journey, including a 32% reduction in recordable safety incidents, a 7% reduction in greenhouse emissions and in water consumption, and a $25 million commitment to solar energy projects. This year, we connected solar installations in Barge, Lancaster, Oud-Beijerland, and Nogales. These installations, along with other pending projects, are expected to reduce our CO2 emissions by approximately 6%....Last year was a significant step on our sustainability journey, and we look forward to sharing more good news in the future. You can read more about our sustainability highlights in the appendix. Now back to Luca. Thanks, Emmanuel. Before we move to Q&A, I'd like to share a few closing thoughts about our execution and accelerated capital deployment. First, we continue to outperform in some of the world's fastest-growing end markets, and we're finding new avenues to differentiate, whether with groundbreaking innovations or new areas for growth. Second, we are well on our way to reaching the 20% long-term segment margin target that we set just last year. Industrial Process led the charge beginning at the end of last year, and eclipsed their long-term target for five straight quarters. Third, because of the momentum we've built, we raised our outlook for revenue, margin, earnings, and free cash flow. And with a double-digit increase in our backlog expected by the end of this year, we are confident that ITT will continue to grow in 2024. This is our third straight quarter of raising EPS guidance, and our progress towards our long-term margin target is accelerating. Finally, we are also accelerating capital deployment. We're acquiring Svanehøj to grow our flow portfolio, and we continue to evaluate other high-quality targets in flow and connectors to put our strong balance sheet to use. Additionally, our new $1 billion share repurchase program gives us flexibility in allocating capital effectively. We have reached another new stepped-up level of performance for ITT. Thank you for joining us today and for your continued interest in ITT. Lisa, please open the line for questions. Thank you. The floor is now open for questions at this time. If you've a question or a comment, please press star one one on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star one one again. We do ask that while you pose your question, you pick up your headset to provide optimal sound quality. Please limit your questions to one question and one follow-up. Thank you. At this time, we'll be ready for our first question. Our first question will be coming from Michael Halloran of Baird. Your line is open. Hi, morning, everyone. Thanks for taking the questions. Morning, Mike. So first, can we talk about the IP side of things, what you're seeing from a fundamental order trajectory perspective? And maybe you could parse that out a little bit by, you know, the end market applications here, energy, you know, the short cycle, General Industrial Chem businesses, M ining, and any of the other, or any other end markets you think I missed there? Sure. Let me start, and then, Emmanuel, you can build on that one. So when we look at the orders, the orders in Q3 declined 2%. You have short cycle that was flat year-over-year, and the project was declined. Now, having said that, you know, there was a lot of timing that shifted from the quarter to October. And what I can tell you is that looking at the orders in October, they are considerably strong year-over-year. The short cycle orders in October are up, and our rate is higher than what has been in Q3, and the projects in October are more than 40% higher year-over-year because some of the projects shifted. So that is the picture on the orders, and the funnel is still very, very healthy. Yeah, by end market, just to add a little bit more color, we see a slowdown in chemical, but our General Industrial markets are really strong. We continue to gain share there. And then if you look at the funnel, I would say the funnel is also very strong, as Luca was mentioning. Year-over-year, our project funnel is up 16%, versus the beginning of the year, it's up almost 10%, and this is driven by really energy, chemical, G eneral Industrial. So pretty good picture from a project standpoint also. Great. Really appreciate that. And then follow-up is, you know, maybe, Luca, you could, you could give some thoughts on how you see the auto market tracking and any thoughts on the 2024 build rates on a global basis. You always give really good color there. Certainly appreciate Emmanuel's comments on, you know, the sequential improvement on the Aftermarket side going into the next, going into next year, but any other color would be great. Sure. Thank you, Mike. When we look at the market, the market was up in Q3, a good 3.8%. The production was up in Europe, was up in North America, despite the strike, whereas in Q3 was flat in China. But then when you look. And this was after a first half, which was already very good. So when you look at the full year for 2023, we expect the market to be up roughly 7%, so mid-single digit. Europe, up low double digit, North America, mid single digit, and also China, mid single digit. So China was able to surprise us in 2023, as you know, we forecasted to be flat for the year. So, and on top of this market, as you know, we continue to outperform. The outperformance was very good, was roughly 800 basis points in Q3 and accelerating. So year to date, roughly 400 basis points of outperformance. When you look at 2023, you are probably thinking about roughly 88 million vehicle produced, when 88, 89. When you look at 2024, it's still a little bit too early to tell, but probably it's gonna be a low single digit growth, what we are considering right now. The aftermarket, which was the second part of your question, is gonna be flat in Q4, year-over-year. Q3 was a tough quarter in terms of comparison versus 2022, and we expect it to grow again based on what the customer are telling us in Europe in 2024. Great. Thanks. Great call, as always. Really appreciate it, guys. Thanks, Mike. Thank you. One moment, while we prepare for the next question. Our next question today will be coming from Damian Karas of UBS. Your line is open. Hey, good morning, everyone. Congrats on the deal! Good morning, Damian. Hi, Damian. So, maybe higher level question on, on MT and Friction. You know, there, 'cause there has been a lot of noise out there in the automotive world. Obviously, the strikes in the U.S., pushing back of a lot of these EV production schedules, you know, OEM price wars, in, in China. I'm just curious, Luca, how are you seeing all of this affecting your business? And just on the MT margin front, you know, is that past the 19+, 19%+, you know, do you kinda see that sooner or later? Okay. So, let me address the last part of the question first. The long-term target for Motion Technologies is 20%. This has not changed, and we have a clear path to get there. You can see, you know, our margin already up sequentially year-over-year to 17%. This will keep on improving, and we will be able to hit 18% in sometime in 2024. Now, going back to some of the dynamics that you shared, the strike. The strike, it was really immaterial for us. Probably what was the hit was $2 million in terms of revenue, so really immaterial. When you look at the EV production, sure, when you're listening, particularly in the North American market, you may see some slowing down in terms of the adoption and maybe investment from the OEMs, but this is really, I would say, a North American dynamic. The electrification is really going full speed when you look at Europe, North America, and China. And by the way, Damian, we are really targeting all electrified vehicles. You're talking about E V, you're talking about hybrid, you're talking about IC, and we are winning across the board. So we are also very successful in defending all our platforms that we are in the internal combustion engine. That is on the EV. When it comes to China, I'm glad that you are mentioning China, because China is a great story for us. When you look at our China business, $300 billion, 80% of that is friction. We are winning. It's a great, good operation, good financially. Let me give you a couple of examples. When you talk about financially, this is a plant that is only producing OE, no aftermarket. Still, is the most profitable plant for Friction in the world. When you look at operations, in Q3, we had roughly 40 PV, 40 process validations every month. This is when you run your PPAP for the SOP, for the start of production. When you do that, you do have, you have a lot of interruption, you have a lot of disruption in production. Despite all of that, the fantastic Chinese team deliver 99.93% of on-time delivery, and this is why the Chinese keep on awarding us the platforms. Today, at the end of September, they've already reached 90% of their full year award target, and we are winning with the winners. More than 60% of what we are producing is for the Chinese OEMs, so it's a great story there, too. Great! Thanks for all that. And I know I'm gonna box the name of this, but on the, Svanehøj, deal, any color you can give on EPS accretion? And, and if my math is correct, looks like it's maybe slightly dilutive to IP margins. Just curious if there's any synergies, with, you know, Habonim or the rest of the Pumps business. Thanks. Yes. Thanks, Damian. So yeah, so we're very happy with our ability to secure that deal with to buy Svanehøj. It's a great business, gives us entry into cryogenic technology. We're very excited. If you think about accretion from an EPS accretion standpoint, Svanehøj will be accretive in 2024. Keep in mind that this is a business that's there's a lot of long-term backlog, so there will be a negative impact on in terms of intangible depreciation in 2024. But overall, a very strong business, as Luca mentioned, a very strong management team, so we're excited about that. In terms of margin, you're right. It's gonna be from an EBITDA margin standpoint, it's gonna be slightly dilutive to IP, but there are many opportunities. As we mentioned, this is a business with end markets that are in growth for multi-year, for multi-years... and so, and so we expect that to be reflected in the growth rate of this business in the years to come. And then the team has identified significant opportunities from a from a cost synergy standpoint. We visited in August, their facilities. They're in great shape, but we think that we can help them become even more efficient. Much appreciated. Best of luck, guys. Thanks, Damien. Thanks, Damien. Thank you. One moment while we prepare for the next question. Our next question will be coming from Andrew Obin of Bank of America. Your line is open. Hey, good morning. You have Sabrina Abrams on for Andrew Obin. Morning, Sabrina. Morning, Sabrina. Yeah, the gross margin expansion in the quarter is really impressive, and I think some of your peer—as is the price cost spread. I think some of your peers have been talking about price cost peaking here or in 3Q or in 4Q, and the spread narrowing in 4Q. Just wanted to ask, like, how sustainable are these levels, and any thoughts around whether it can hold? Yeah, thank you. Thank you, Sabrina. And I think you pointed out a really good stat. Our gross margin indeed have been on a path of increase year after year and also within the year 2023. We started the year with a little bit more than 33%. We're now at 34%, and we expecting Q4 to continuously improve on top of that. So, what's really good about our operating margin improvement, both segment and EBIT, is that it's underpinned by a strong growth margin improvement as well. From a pricing standpoint, I think 2023 has been really strong from a pricing. I mean, we're gonna probably finish the year at ITT level with a little less than $100 million of pricing, pricing that we recovered. This is less than what we recovered in 2022. But keep in mind that it's all obviously incremental. But I would say with commodity cost as a tailwind, we created an even bigger spread from a price cost standpoint. And then on a quarterly standpoint, so thinking about Q3, Q4, maybe 2024, for sure it's gonna step down in the second half, and that's logical, right? So the third and fourth quarter will have less price benefits year over year, but on an absolute basis, this is a really large contributor to our margin expansion story in 2023 and in 2024. And then going forward, we expect IP and CCT to be price takers as we differentiate even more on our value proposition. Great. Thank you both for the color. And then looking at the backlog commentary, it sort of suggests having somewhere around 35% backlog coverage next year based on 2024 consensus, versus maybe somewhere around 30% last year. Could you guys provide some color on that, coverage relative to history and, any timing on when you expect backlog to return to historical levels, or do you think we remain elevated, going forward? Yeah. So, the backlog has kept on growing. And as we mentioned, in IP, for instance, year-over-year, the backlog is up 11%, so more than double digits. And we expect to finish the year with also a backlog increasing versus 2022. So I think in IP, today we are at a little higher level of coverage than we have usually, which is very, very positive. The backlog story is also very good in CCT, where we're growing backlog, and since the beginning of the year, we added almost $30 million of backlog in CCT, obviously driven by aerospace and defense. The coverage here, there is much higher than it is typically for our Aerospace component business. Also, what's really good is that it's, there's a lot of long-term backlogs, so into 2025 and 2026. If I can, if I can add, a point there, Sabrina, is that particularly when you look at IP, both the projects and the short cycle backlog are up year-over-year versus the beginning of the year. At the end of the year, we will be up 16%, which will feed the growth in 2024. And last but not least, is the profitability of the backlog. That when we look at the profitability that the backlog has, is roughly 200 basis points better than what it was at the beginning of the year. Great. Thank you guys so much. I'll pass it on. Thanks, Sabrina. Thank you. Our next question will come from Vlad Bystricky of Citigroup. Your line is open. Morning, Vlad. Hi, Vlad. Good morning, guys. Thanks for taking my call. And congratulations on a nice quarter and the deal announcement there. So maybe just following up on that commentary around IP and the orders sort of re-acceleration you're seeing into early October, we're into October here. Can you talk about you know, how you're thinking about the potential for that business to continue maintaining positive organic growth overall over the next couple of quarters as comps get you know, notably more difficult? Sure. I think that, you know, that all of that is linked to the performance and the continuous improvement that we're pushing through lean and the reduction of lead times when it comes to the short cycle. So it's very important to continue to execute on the project side of the business. And because we are executing in a rigorous and a good manner, this improve the customer loyalty and the customer giving us more opportunities and more win when we're bidding. So that is on one side. When you look at the projects and the green projects in particular, we are also using, you know, some differentiation from a technical point of view. If you look at our multi-phase pumping technology with our Bornemann pumps, this is something that enabled us to win with Chevron, with some of our customers, for the green projects, be in carbon capture, be in eliminating, you know, flaring. So all of those will continue to feed organic growth. And also, we are working with some customer where our market share is not so high, to improve in the, let's say, call it MT style. Great. That's helpful color, Luca, and just really nice performance from IP. Maybe just shifting to CCT. You know, the connectors weakness obviously isn't new, on the channel destock, but can you just give us more color on whether the weakness you're seeing there is still really mainly channel destock driven, or whether you're seeing, you know, signs of incremental end market or sellout weakening? Yeah. Okay. No, the weakness is mainly distribution and is mainly European, is linked. A little bit of a weakness probably in Asia Pacific, on the connector side of the business, but this is very localized. As a matter of fact, when you look at our connector business in North America, have been very successful with great orders on the OEM, and those are nice long-term orders that will keep on feeding the revenue. But also with the SKU expansion that Emmanuel was talking in the prepared remarks, we were able also to have a very good distribution orders when it comes to North America. And all of that has been able to offset some of the weakness that we had in Europe. Yeah, and so if we look at our connectors orders, they were up 3%, this quarter, and for the full year, we expect them to be roughly flat. And a lot of the strength is coming obviously from Aerospace & Defense, that are way up in the double digits. And Energy also. Energy has been a good story for us. So I think that it's true that we are seeing weakness in European distribution, but I think the strength of our portfolio and the commercial actions we're taking are able to nicely offset that weakness and still in Q3, come out with growth in terms of orders. That's, that's really helpful, guys. Thanks. Appreciate it. Thank you. Thanks, Vlad. Thanks, Vlad. Thank you. Our next question will come from Joe Ritchie of Goldman Sachs. Your line is open. Morning, Joe. Hi, Joe. Hey, good morning, guys. Hey, maybe just hitting on that last point that Vlad brought up on the connectors business. So how much is the European connectors business down? How much was it down this quarter? Because obviously, that's probably gonna create a pretty easy comp for you guys as we head into 2024. This quarter, connectors was down in the low double digits. This is mostly driven by industrial. So we expect that probably in terms of the destocking, we're gonna be nearing the end of that destocking, and then sometime in 2024, we'll see, we'll see an improvement. A nd Emmanuel, is that better than where you were last quarter on the connector side, specifically in Europe or the industrial connector side? I'm not so sure, because also you have to think about in Europe some seasonality in Q3 with August. So, it might not be the case. Okay. All right. No, that's, that's, that's helpful. And then I guess just a longer-term question. Just the Industrial Process margins continue to surprise to the upside. You know, I know that you guys are continually focused on continuous improvement as you kinda think through 2024 and margin expansion potentially for this business. Can you maybe just talk about some of the levers and then how you're thinking about this business longer term? Sure. I think that, you know, of course, when it comes to IP, we will have to share with, with you guys our new long-term, long-term target, which we will do sometime next year. When we look at this business, there is investment that needs to be made, some that we are making it. Right now, we are investing both in S&OP process, so that we really have stronger fundamentals in the, in the long term. But some of the levers that you have on the other side is, for instance, the closing of the foundry. We're making progress on the closing of the foundry. We've closed already one line. We will finish the closing by Q1 2024, and this will allow us to be more cost competitive in our products, as well as reduce some of our lead times. Leverage on the purchasing side, on the supply chain. This is one of the other levers. The VAVE, we continue our value analysis, value engineering of all the family of products. And then I would say the continuous reduction in terms of our cost structure. I would say these are the levers that we have in our hands today, Joe. Great. Thank you, Luca. Appreciate the time, both of you. Thanks, Joe. Thank you. Our next question will be coming from Jeff Hammond of KeyBanc Capital Markets. Your line is open. Hi, Jeff. Hi, Jeff. Morning, Jeff, can you hear us? Okay. I think, Lisa, probably you can move to the next question. Okay, I'll go on to the next question. Our next question will be coming from Bryan Blair of Oppenheimer. Your line is open. Thank you. Morning, everyone. Hey, Bryan. Hi, Bryan. Morning, Bryan. You've highlighted, you know, Green Energy, Energy Transition momentum in IP seems to be quite strong. You know, Bornemann wins some Habonim applications now, Svanehøj, hopefully, I'm pronouncing that correctly. What is the current scale of that, I guess, aggregated revenue stream for Green Energy or Energy Transition for IP? And where should we expect that to go over time? Yeah. So, we are really excited by this because we really were able to create a new leg for IP that is really disassociated with, from, any consideration on the price, on the actual price of energy, because it's really driven by regulation. Today, our green projects year to date is a little bit more than $80 million. And then, so if you think about the way this has, this number has evolved, in 2022, it was around $20 million. So really strong growth that is really driven by the technology differentiation we have in our Bornemann product line, but also, as you were mentioning, Habonim with their play in, in hydrogen. So very happy with that growth and that market potential that it represents. I appreciate the detail. Just to level set on Auto Aftermarket, you mentioned, you know, flattish Q4, so that stabilization is encouraging. Where do you expect, with that outlook, full year organic sales decline to shake out? If we were to just kind of snap the line on, you know, destocking impact and have that, you know, lapped year-on-year, what kind of growth would that imply for 2024? So when you look at 2023, the Total Aftermarket will be probably down for the full year, 6%. Five percent would be the OES, and roughly 10% Independent Aftermarket. That is for the full year of 2023. And, I think that that out of that base, we will start growing again in 2024. When it comes to exactly the growth for 2024, now is a little bit too early to tell, I would say. Okay, that's fair. Appreciate the color, as always. Thanks, Bryan. Thanks, Bryan. Thank you. Our next question will be coming from Nathan Jones of Stifel. Your line is open. Morning, Nathan. Morning, everyone. Hi, Nathan. I'll just, I'll follow up on Bryan's question there on the Aftermarket. You said 5% down OES and 10% down Independent Aftermarket. Do you have a view on what of that is inventory destocking versus what of that is actual softer end market demand? It's mostly inventory destocking. The Aftermarket is pretty stable in Europe. I think it's up 2%-3%, and so it's mostly our specific customer, which had been ordering a lot last year, and that is working through that excess inventory they have. Got it. That's helpful. You guys had previously talked about wanting to expand the Pump business into Europe and the, you know, the two acquisitions that you've done there have done that. Does that continue to be a priority for you? What are the other areas of priority strategically for capital deployment into M&A? ... When, when you look at the categories for the M&A, it's really you're talking about the flow, and you're talking about the connectors business. And you have a little bit of a railing. If you look at it, the acquisition, the 2 acquisition we made this year is really Micro-Mode on the connector side, and now is Svanehøj in flow. But I wouldn't say, like, the European region, I wouldn't say this is a cut that we look at specifically when we look at M&A. We really look at companies that are, that are high quality, that have an ability to differentiate from the competition, and that's what we saw with Habonim. And coincidentally, that's what we saw also with Svanehøj. It's also easier for us to, being European to get to know the business there and to see and to connect with the people. So we use that for sure, but I wouldn't say that Europe is a priority for our M&A target. No, that's, that's right. I would have thought this Svanehøj business would be definitely more focused on growth and probably less focused on cost synergies. Can you talk about the cost synergies that are there and whether this is more of a, you know, don't break what's going on there already in terms of taking cost out and focus more on growth? You're spot on, Nathan. And, I think that when, one of the thing that, we really liked about Svanehøj is, the team, is Søren and Johnny, the management team. Very competent. They know their market. They know their customers very well. They got a differentiated service, a differentiated products, a leadership position. So it's a growth play more than a cost synergies. So definitely that's the case. In industry, in attractive markets, so it's cryogenic pumps, which is adding to our portfolio, and that probably would be another lever for growth for our Goulds Pumps and our Pumps business traditionally over here, is Marine, where there's gonna be investment in terms of green in the future. While you talk about the Energy Transition and alternative fuels being ammonia, Svanehøj will be a great player in that. So, this is really what we like, the growth opportunities and the team. For sure, they know what they do. And we are very happy with that. Just any color on what you expect the growth rate to be over the next few years for them? So we expect that for the next several years. So at least for the first 4-5 years, it's gonna be low double digits, and then after that, high single digits. Great. Thank you. Thanks for taking my questions. Thank you. Thanks, Nate. Thank you. Our last question will be coming from Jeff Hammond of KeyBanc Capital Markets. Your line is open. Morning, Jeff. Hi, Jeff. Jeff, can you hear us? We can't hear you. Okay, okay, so it doesn't sound like we can talk to Jeff, so I think we can close the call. Thank you. This does conclude today's teleconference. Please disconnect your lines at this time, and have a wonderful day!