Welcome to the afternoon session. I'm Andrew Obin. I'm BofA 's Multi-Industry Analyst. With us this afternoon, we have ITT. We have Luca Savi, the company's CEO. And we have Alex Sherk, a member of the IR team. Thank you so much for making the trip. It's an absolute pleasure to have you here. I think Alex will have some remarks. Then I think Luca has some slides. And then we'll go to a fireside chat. Thanks so much. Wonderful. Thank you, Andrew. Thanks, Andrew. Thanks, everyone. Just before we begin, I just want to share that our presentation and comments today 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. We ask that you view them in that light. We encourage you to review the latest risks and uncertainties on our Form 10-K and other SEC filings available on our website. Thank you. Okay. Perfect. Excellent. Okay. So good afternoon, everybody. I... Oh. Good timing. Sorry. It's the clock. Yeah. They know I'm Italian. So they're giving more time. Yeah. I'll start. Okay. So good afternoon, everybody. Spend a few minutes just to tell you a little bit about ITT. And then we're going to Q&A. ITT is a manufacturing and engineering company making components for our environment across different sectors. So we are working in energy, in transportation - you're talking about automotive, rail, or aerospace - general industrial, and defense. We are a global company geographically spread quite evenly across all the different regions. And you see there are $3.3 billion in terms of revenue, $10 billion in terms of market cap. Now, when you look at 2023, it was a strong year for ITT with good growth, 8% organic growth, good improvement in terms of margin as well, more than 100 basis points of margin expansion. And this growth came from market share gains. Market share gains that were in MT business, motion technologies business you're talking about automotive and rail but also applying the MT playbook to the other businesses and starting seeing very good market share gains also in the IP, in our flow business, pumps and valves, with the largest award with ExxonMobil where we won $80 million of business that are going to be spread in three years for all their investment in brownfields in their existing plants. We continue to win, of course, in automotive as well. Good outperformance of the market across all the different regions and a good win in China. Where this growth comes from is, of course, these market share gains from differentiation from the competition, differentiation through performance. And we might talk a little bit more about it in detail later. But also differentiation through innovation. And then good capital deployment and acceleration of capital deployment in 2023. If we talk about capital deployment, you see here some stats. Where the money goes first is organic investment. This is where we got our best return. This is the least risky. So this is where the money goes first. Second on the M&A front, this is accelerating. We made three acquisitions in the last couple of years, acquisitions that are mainly in the flow business, pumps and valves, and in the connectors. And last year, we made a couple of acquisitions: Micro-Mode, RF connectors, a small one, and then Svanehøj, which is a cryogenic pump manufacturer based out of Denmark for the marine industry, which is the largest acquisition that we ever made, roughly $400 million. And then, of course, return to the shareholders, roughly $150 million of money returned to the shareholders in 2023. So when it comes to 2024, good momentum in 2024. We get into 2024 with the largest backlog that we ever had. So we are expecting a total growth of 9%-12%. And when you look at Q1, we were expecting Q1 to start strong. But the signs are even a little bit better, particularly when you talk about the connector side of the business. We were expecting the destocking that we saw in 2023 to continue for the first couple of quarters. As a matter of fact, the orders in January and February have been much better than expected in distribution, both in North America as well as in Europe. And as I said, M&A activity accelerating with a rich pipeline and funnel of opportunities. With that, we can move to Q&A. Yeah. And before I just sort of ask the question. The connector business, I think you've remarked before that you sort of look at this business as canary in the coal mine. And internally, it's a business you pay a lot of attention to. Can you just describe why it's so important? Because I do think you look at it internally, if I'm not mistaken, as a fairly decent leading indicator internally at ITT. Yeah. Sure. So we really like the connector business. Listen, if you look at in the past, in the connector business, we were not performing very well. So this is when actually I had the opportunity to get more involved into this business. In 2017, we started the journey of turning this business around. It's a small business. You're talking about roughly probably $400-$450 million of business but very highly profitable. Even if we are small, our profitability has got nothing to envy from one of the competition. So that's good. There is fragmentation in the market. So there are opportunities for us to make acquisition. We like the fragmentation. We like the way we play. We have differentiation that we can play with, particularly in the aero and defense industry. So we continue to grow organically, invest in new product development, and also on the M&A front. Excellent. So let's just sort of talk about and I'll start out from a big picture. So over the next three to five years, what do you think are the platforms that will drive market outgrowth for ITT? And you've highlighted the two that have driven the outgrowth so far. And just maybe if you can talk about sort of structural trends that are positives for ITT's and markets. Sure. So just to recap, where we see us outperforming the market, we are talking about auto in general, in terms of auto production. We outperformed the market in the last 10 years as an average of 800 basis points. Our focus is to outperform the market 400-500 basis points in the next two, three years. And when I'm saying that, I don't want to sound arrogant. It's just that we won the awards that will start production in two, three years from now. So we know which kind of platform we're going to be in. Then rail. Rail, we are outperforming the market. And And it's another great business to be in with all the investment and the tailwinds that we'll have, both in Asia-Pac, in Europe, and in North America. We've outperformed in 2023. And we see that performance to continue. Then, of course, in terms of IP, we were talking about ExxonMobil. But the outperformance in AP is across the region. You're talking about the Middle East, Latin America. And that outperformance of the market comes from a consistent performance for our customer, delivering good product, good quality product on time in a consistent manner, and also on the connector side, particularly in the defense. So these are where we are planning to outperform the market. When you look at the. Where are you not planning to outperform the market? Well, if you think about on the aerospace, for example, on the aerospace, if we look at where we are in the platform that we are in, we are more exposed to Boeing than to Airbus. These days, it's more of a challenge. Then when you think about it, we have been lagging the recovery aerospace so far because we are more exposed to the wide bodies than the narrow bodies. The wide bodies are going to recover more towards 2025, 2026. So this is an area where I don't think we will be able to outperform. Then when you're talking about the trends that are going to be tailwinds, what are the good aspects? Rail, of course, with all the investment is happening. Then a big one will be defense, of course, for unfortunate reasons. That will be an opportunity for ITT. And then last but not least is the decarbonization of the oil and gas industry. If we look at the project that we won in IP last year, 27% of all the projects orders that we won were green projects from recycling of the battery, carbon capture, and stop flaring. Decarbonization of oil and gas is another one. So do you feel that you are what would you estimate? Just to latch onto that, what would you estimate? Because we've heard different numbers from different people, share of CapEx for decarbonization projects for your customers. And do you think what you're getting represents fair share of their budgets? Or do you think you're outperforming in terms of you're better positioned to sort of grow your share on these decarbonization projects? I would say it depends on the customer and the application, I would say. With some customer, with a specific customer that I can think of, I think that we are the only one that is talking to them when it comes to stop flaring and carbon capture. And we are working very closely with their engineering department to really tailor-made and make a unique solution for them. There are others. Let's think about ExxonMobil, for instance. ExxonMobil was a great market share gain for us. Of ExxonMobil, only the 5% of the pumps they have installed worldwide are IP, are ITT. So this is where we need to do more work. And we'll start talking to them when it comes to all these green projects. But we are at a very early stage with them. So in that case, we just can only win. So you highlighted strong start to the year. I'm not going to ask. I'm not going to go beyond that. But at the same time, if you look at the EPS forecast, right, I think the midpoint is a little bit below 9%. Your long-term framework is 10%+. So how does this EPS guide for 2024 as it is fits within sort of longer-term macro framework? What are the specific headwinds that it's incorporating? Okay. Sure. So when you look at when we gave these long-term targets, these are long-term targets. So you're talking about 10% EPS growth +. If you think about 2023, it was 17%. And then when you look at 8.8%, which is the midpoint, that is the midpoint. So that is one thing to bear in mind. Now, of course, when we started the year, we had some assumption in terms of the short cycle, particularly on the destocking of the connector side of the business. Now, January and February, as I said in the prepared remarks, are better than expected. But granted, it's only January and February, only two months of the year. So it's still very early to say. Gotcha. Let me ask you questions. Just, it does seem you are sort of in this growth outperformance mode, right? So, how do you? It's interesting. I had a dinner recently with a company. They were sort of talking about adding capacity. It's an industry that's capacity-constrained. They said, "Look, we haven't grown for so long that we were late adding capacity," right? So, internally, right, Luca, how do you think? Because you're clearly one of the best operators in my coverage. So, how do you guys think about changing your view on internal capital allocation, right, to support the growth that's coming? Are you thinking about it? Do you need to do things differently to be ready for what's coming? Or it's just, or do you just have a flexible model that can accommodate? Does it make sense what I'm saying? Because effectively, what the CEO has told me, "Look, I mean, we have not been in a growth environment." And we have multiple companies, actually, in coverage that are sort of struggling with getting into the growth mode. So how do you guys think about A, clearly, you're saying outperformance. It seems maybe macro turning a bit. So how do you think about sort of positioning for this growth with your internal capital allocation? Okay. So listen, in terms of the growth, we have outperformed the markets in many markets. And in some others, we had our own challenges as well, right? So now, each business has got a different challenge, a different way of approaching it. So if you don't mind, let's take one at a time. And if you look at Motion Technologies and the automotive market, this is where we have been used to outgrow the market. And when you look about CapEx in here, I really love the way that it works because, listen, when you don't add capacity unless you know you want the job and you need it. Let me give you an example. You have the capacity today. And you win an award today. The award will have an SOP, a startup production, in two to three years from now. So when you win the award today, you realize, "Okay, I need capacity. Then I'm going to buy the extra line, which has got a lead time of 12 months, so that you install it. And you've got time for the SOP. And you have this visibility. This is the way it's worked. This is the beauty of this business. You never overinvest. You've got this visibility, which is perfect, which we love." So that is in Motion Technologies. And we have been used to outgrow the market. We have been in this growth mode now for the last eight to 10 years. We put a plant in China. And we went from a single-digit market share in China to 29% market share last year. And by the way, more than 60% of the parts that we are making, we are making for the Chinese OEMs. So we are winning with the winners. Similar in the U.S. We opened a plant in Silao, Mexico, in 2018 from single-digit market share. Last year, it was 27% market share. So that works in its own way. When you look at IP, I don't think that we have any capacity constraint at all. As a matter of fact, when you look at our plants, most of them are working 1 to 1.5 shifts. So I don't think that when it comes to growth, I need huge investment in terms of machinery, etc. Now, what it is, and you will see probably I mean, the news will come probably in the next couple of days. We are making investment in terms of different in India, in Saudi, and in Germany with our twin screw pumps in terms of better test, more space, just to keep on feeding the growth ahead of all the projects that we're going to win. So we are planning ahead of the game. Now, on the other side, on the aerospace, we had some issue in the recovery, some of the challenges in the growth of the aerospace in the last couple of years, which were more related to constraint in terms of labor that we face. One of our sites is in California. We have some constraint in finding the right labor, like many people in aerospace had in the last couple of years. Did I answer your question? Yeah, yeah, yeah. No, this is great. Thank you. And just a couple of sort of big picture questions before we dive into the segments. So I think you highlighted Motion Tech, very strong in Asia, specifically in China. What are the plans to sort of scale the IP and CCA connect and control businesses there to sort of match the record of Motion Tech? Yeah. So So one thing is that when we're running Asia-Pacific, we have a value center president, a president that is running Asia-Pacific, and who makes decisions specific for all the three different businesses. So when you look at Asia-Pacific business, 65% of the Asia-Pacific business is Motion Technologies. When you look at China, 80% is Motion Technology in China. So we have a very good plant in South Korea for the IP, for the pumps. And this is one of our best-performing plants, making vertical pumps, centrifugal pumps, and is expanding, is growing, is supplying both the Middle East as well as North America and Asia-Pacific. So there is good growth opportunities there. And I think in CCT, in the connector side of the business, we do have a plant based in Shenzhen. And that has been not used strategically as we should. We're investing more in engineering resources and R&D to ensure that we are also developing product in the region for the region. That will help growing in that market faster. Another question that I sort of, we're fans. But there is one pushback as cash flow generation. You had 100% conversion in 2023. Now, historically, I mean, part of it is the payments. But what do you think to sort of become this more consistent cash flow generator going forward? Yeah, sure. So our long-term target is 12-13 free cash flow margin. I think it was 13% last year. I think that we are planning to be 12%-13% in 2024. And I would say there are opportunities there. And when you look at opportunities, they mainly are on the working capital side and specifically on inventory. So inventory has been an area where we invested, I would say, in the last two to three years because of the state of the supply chain. Now, in 2023, we had a very good improvement and reduction of inventory in Motion Technologies. But when it comes to IP and CCT, there is still a lot of room for improvement. So that will be an opportunity from a cash flow on that side. I'll just add one thing for the long-term targets, 11%-13% free cash flow margin. Yeah. Right. Thank you. Yep. Don't want people's covering. On inventory, do you feel that you're going to carry sort of a permanently higher level of inventory relative to pre-COVID? Or what do you think inventory settles over the next couple of years relative to pre-COVID levels? No, I would say Motion Technologies already had a pre-COVID level, I would say. Motion Technologies already at that level. IP and CCT, no. So I have work to do. But there is no reason why we should not get there in one or two years. Interesting. Okay. But Motion Technologies is already there. So maybe talk about an industrial process. Can you talk about the self-help opportunities in IP, particularly in the SFO facility? What sort of productivity investments have you been making recently to get to the 20% long-term margin targets? Sure. So IP has actually been a very great story, both in terms of growth for the last five years because despite COVID, despite all the challenges, the last five years has been able to continue to grow. But also is the EBIT performance, right? We went from a 7% EBIT, which was in 2017, to 22% that was last year, whereas the competition is staying at the level that we were roughly five or six years ago. So how did we get there? It's It's a lot of productivity on the shop floor in terms of changing the production from a messy state to a one-piece flow. So actually, today, you can go on the shop floor. And actually, even if you are not a pump guy, I'm not a pump guy. Now, I can really understand how the pump is made and assembled, which is good. Then another investment has been the VAVE, value analysis, value engineering. So what this means is that you take all your products, well, one family of pumps at a time. And then you re-engineer them in terms of, "Okay, how can I improve the hydraulic performance of the pump, try to make them cheaper, so with less metal, for example, or getting the casting machine out of India," as an example, so that you come out with a product better performing at a lower cost, lower price, and better margin for ITT and for our shareholders. All of these activities and leaning the factories have enabled us to get to the 22% EBIT that was in 2023. Now, there are still plenty of opportunities when you work the shop floor. You visit the shop floor. You end of the visit halfway angry because you still see the ways and halfway smiling because you say, "Well, if we are making 22% with all these opportunities, think about what we can do when all of this is sorted out." Give you an example. You go to Seneca Falls. You go to the painting line where you're painting all the different components of the pumps. Believe it or not, in 2024, it's still a manual painting line. So you've got four operators with their own paint gun and manually paint all these components. Each of these operators thinks that they are Picasso. They want their own gun specifically for that. Okay, now, what you can envision is that these will all go away. You will automate a painting line like we have done it with the buffers, like we have done it with the shock absorbers in Koni and in Axtone. And the quality will be better. You will be more productive. And the velocity will be higher. So plenty of opportunities still there. How should we think about sort of closing the foundry of the SFO? Does it move the needle on profitability? Can we sort of size the margin impact? We haven't communicated the size margin impact. But I think that if you look at IP, excluding the Svanehøj acquisition, the margin on a like-for-like basis will move from 22.1%- 23.1%. So it's 100 basis points improvement on a like-for-like basis. So part of that 100 basis points improvement is lean. Part is the closing of the foundry. The closing of the foundry was a process, listen, it lasted two years. So it's definitely going to improve our productivity, our quality, and our margin. It's embedded in your outlook. Yeah. Okay. Thank you. So you have sort of plus mid-single-digit target for energy and market and industrial process. Given the recent trends of energy independence, LNG coming back, how do you think about sort of the growth rates there? And what are the opportunities to outperform the target? Yeah. Yeah, I'm not so sure that we are giving specific targets for the different markets within IP. But I would say I think that we will be able to outperform both on the traditional oil and gas. Think about what we've been able to do with Exxon, our demand facility in Saudi Arabia, just to give you a couple of stats. In 2023, our on-time delivery was 95%. In 2022, it was 100%. If you are in the flow market making pumps, these stats are unique. And here, you're dealing with customers like Saudi Aramco, ADNOC, etc., which are not necessarily easy customers to deal with. So the performance is there. The quality is there. The technology is there to continue to outperform in the traditional oil and gas as well as in the decarbonization. And yeah. Nope. Nope. Okay. Nope. Just a question maybe on the mining and market. I think we've heard some concerns about mining into 2024 and 2025. What are your customers saying? What are you guys saying? So listen, I mean, we like mining because, of course, of the spare parts and the aftermarket that generates. But if you think about mining, it's roughly 10%-11% of the IP business. So I think that we are not a big player in mining, which means that it's unfortunate because you're not a big player. But not being a big player, you still have plenty of opportunity anyhow. But as an end market, do you have any concerns about mining? Well, we have seen that there are some investments that probably didn't take off in the way that they were supposed to. But for us, as I said, it's only 10%, 11%. So it doesn't affect our outlook for 2024 or in the near-medium term. Gotcha. So maybe switching to Motion Tech. I believe you have a very robust, over 50% market share in Europe. How do you continue to grow that? And yeah, I mean, A, what drives it, how sustainable it is, and other opportunities to continue to expand it. Yeah. So listen, let me give you. I shared with some of you during the previous meetings. In 2014 or in 2015, my boss asked a famous consulting company to come to Motion Technologies and analyze and study MT. And this consulting company came in and said, "Well, listen, you are already at 35%, 37% market share in Europe. There is no way that you can grow this market share in automotive. Your profitability is already too high. So the profitability can go only down." nine years later, eight years later, we are more than 50% market share. And the profitability is up. So now, the past is not necessarily what is going to happen in the future. It's true. But let me tell you that also in Europe, in the next couple of years, we will be able to increase our market share. I'm saying that because we know the SOP that we will start in the next couple of years. One other opportunity to increase our market share in Europe is the high-performance investment that we are making. When I'm talking about high-performance, I'm talking about high-performance cars. In the Motion Technologies, our model in friction has always been we supply all the cars. We stayed away from the high-performance cars, the top range of the Porsche, of the BMW, of the Daimler, on all these vehicles. Why? Because we were going for the high-volume, low mix. Now, talking to our customers, we saw that now, in this sector where we have 0% market share, there was an opportunity, an opening for us to get in and to capture and to conquer market share from the competition that is not performing very well. So we are investing in a new plant close by to an existing one in the southern part of Italy. The equipment is going to be exactly the same that we're using. We have a technical solution that is able to use even in a low-volume, high-mix, same level of efficiency. And we are building the plant. The plant has been built. It's going to be finished in August. The line will be installed in September. And it will be running in October. And we already have the orders that are filled in the plant. So the customer has already given us the awards with the SOP for Q4 and for 2025. That is an example, specific example is going to happen in Q4 and 2025 of market share gain in Europe. Okay. That seems to be a good message. What about your target for, I think, $500 million in EV revenue by 2025? How is that tracking? Okay. So when we're talking about electrified platforms, in ITT, if you go back the last three to four years, we always talk about electrified vehicles. Yeah? So we're talking about EV and hybrid. All of those together because we saw that as the transition, right? So when you look to answer directly the question, we are tracking very well. And we are ahead of the target here today because the win rate of electric and hybrid that we had so far has been much higher than what we expected. So this is good. Now, let me take also the opportunity to tell a little bit about electrification because you read a lot in the newspaper. Electrification is slowing down and all this kind of stuff, which, by the way, is true, that a lot of OEMs are slowing down the investment, by the way, is true. Now, I just want to give a couple of numbers. If you look at electrified vehicles, you're talking about roughly 24-25 million vehicles produced in 2023. This is twice the amount, almost twice the amount of vehicles produced in North America. So it's something that should not be underestimated. And by the way, even if the growth is slowing down, the growth is still going to be there for hybrid as well as for EVs. And we are going to win in that one. We are agnostic. So also, the internal combustion engine is good for us. Give you a couple of stats. In 2023, the internal combustion engine production, vehicle internal combustion engine production, went down between 1%-2%. Our production of pads for internal combustion engine went up by 7% and our performance of 800 basis points for IC. So we love IC, too. I would imagine your exposure in China would help. The exposure in China, I mean, in China, we are winning. China is the biggest automotive market, is the biggest electric vehicle market. So we are winning there on the EV side. We're winning with the BYD, with the SAIC, with the Great Wall, with the NIO, with the Li Auto. All of those are customers of ours. Excellent. Maybe the playbook to reach, I think, roughly 20% market share in Motion Tech. Can we walk through what are the key levers? Sure. So Motion Technologies is going to hit 18% EBIT probably sometime in the first half of this year. So we have a long-term target of 20% to be hit by 2026. So we are good on a target there. The levers or levers? Levers, yeah. Levers are: you got pricing. You got productivity on the shop floor. And then, you also have other businesses in Motion Technologies that can improve the profitability like Koni,Axtone, and Wolverine. And so we are on track to hit 20% by 2026. Excellent. And is there any sort of restructuring or footprint? No. Establishing? No. Okay. Excellent. Can we just talk about. No material. I mean, you might have a. Yeah, yeah, yeah. Of Of course. Yeah. What's the attachment rate for aftermarket? Are you in line with the industry? And how should we think about aftermarket and OE in Motion Tech? Sure. So when you look at Motion Technologies, when the friction business, you have 70% is OE and 30% is aftermarket. And when you look at the aftermarkets, we tend to play mainly in Europe. Strategically, we decided not to play in North America. It's a decision that we review every year. We look strategically. And we decided not to. And then, we are playing a little bit. We're trying a few things in China. So the 30% is only Europe. And when you look at 30%, it's split half and half. Half is OES, original equipment replacement, the brake pads that you buy at the dealers of your vehicle manufacturer. And 50% of that is independent aftermarket. So when you look at the OES, the attachment rate is very high. So let me give you an example. The largest award ever, the friction one, is with the German OEM last year. So we will provide the brake pads for 80% of all of their vehicles from 2025 - 2035 and all of the OES of that vehicle until 2045. So this is just to give you an example of very good visibility, very good attachment rate on the OES side. The independent aftermarket, we just play on the. It's segmented in very parts. And we play only at the very top with Continental with their own brand, ATE. And they are positioning ATE as equivalent to the OES. And this is the only place where we play. We don't play in the medium value or in the value base. Gotcha. So maybe just in remaining time, just focus on connection control. I think it's one of the areas that you have sort of telegraphed. So I guess we've updated that. But what does it mean? Well, I guess I can't ask that. So I will not ask that. Thank you. Good. So if we talk about sort of electrification business, right, and you have Schaeffler there, sort of 20% from 2021 through 2025, how is this trending two years in? Have expectations been pushed to the right? What are you seeing there? I would say it's fair to say that the expectation has been put a little bit to the right. And also, when we look at the electrification in there, we are playing only in some parts where there is differentiation and where there are some specific requirements. If you think about the electrification, the connectors that will be in the market that will be almost like your pump at the gas station, those will be commoditized. So we are not going to play in that one. So I would say we're going to stick to our model, which is really where you really work closely with the customer, the customer-specific requirements, the customer-specific specs. And therefore, we're able to design and therefore to be specced in. In that case, we will play. And therefore, the growth has been slowing down in terms of expectation for that specific segment. Gotcha. Maybe just in remaining couple of minutes, just sort of go back to capital allocation. What are you guys seeing in the market as you're getting bigger? How are you thinking about pivoting your M&A strategy? Sure. So as I said in the prepared remarks, it's accelerating. So why is that? When you look at the last five years, the first thing that we had to do is to ensure that our balance sheet was pristine. So what we did in 2020, we eliminated our U.S. pension liability. In 2021, we eliminated our Damocles sword, which was all the ITT legacy asbestos liability, which was sold to Warburg Pincus, to Delticus, part of Warburg Pincus. And then, after that, we were free to go. And so we structured a new M&A and business development department. Bartek Makowiecki, who's the head of M&A and business development, is an experienced M&A leader. And therefore, we started cultivating in the area of flow, pumps, and valves, and connectors. So you've seen the acquisition of Habonim. It's a valves business working on hydrogen and also new energy. This is a business that was bought at 12x EBITDA multiple. You look at the actual, it's seven point something. It's outperforming in terms they outperform in terms of orders, revenue, OI, operating margin, cash, very good performance. Then in 2022, and that was 2022, 2023, we made a small acquisition on the connector side. These are RF connectors. These are connectors that we don't have, that we buy from the competition. So it was a nice synergy. They had good exposure to defense customers that we do not have and vice versa. So a lot of commercial synergies. So good acquisition there. And then Svanehøj, which are cryogenic pumps in marine for LNG, LPG. So once again, energy transition and cryogenic pumps, pumps that we do not have the experience of. So all of this is good happening the last year, year and a half, couple of years. Now, if you look at the funnel, once again, rich and active where connectors, pumps, and valves. This is where you will expect the acquisition to be made. Now, I want to talk about M&A. You're not in control completely. You need to ensure that your strategic process is rigorous. You need to understand that the financials are rigorous and that it makes sense strategically and financially. So if that doesn't work, we still have one the board gave us the approval for $1 billion of share repurchases that give us the flexibility in the future if M&A doesn't materialize. How is the sort of environment with private equity? How is that changing? Because for a while, these folks have been out. Are they back in? What are you hearing? Yeah. I think that they've been out. You can see a little bit more of activity. They can see more interest from them in the recent months. That's fair. I think with that, we started a little bit late. I think we're just right on time? Thanks so much. It's a pleasure. Thank you, Andrew. Thank you for having ITT here. Thank you.