Wolfe. We'll continue this morning with ITT. Very pleased to have with us today CFO, Emmanuel Caprais, and Phil Tourigny, Director of Financial and External Communications. With that, I'll turn it over to Phil. He has some legal disclaimers to make before we get started. Thanks, Brad. Good morning. Our 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. Great. Thanks, Phil. So Emmanuel, since this is our first meeting with you at ITT, maybe just start by giving us a little bit of background about yourself and kind of your path. Sure. Thank you for having us, and good morning, everyone. So I'm Emmanuel Caprais, CFO at ITT. I've been with ITT for now 12 years. I joined in, I joined in June 2012, and I started as in the Motion Technologies segment. Under the leadership of Luca, who at the time was the President, we implemented a playbook that we like to call the MT Playbook, that focused on operational excellence, understanding the performance drivers in this business, which is a very capital-intensive business. So driving machine efficiency was key, and then so that's what we worked on. We worked on reducing variable costs as well, and so we really saw a real increase in expansion of the margin as we were putting more volume through the facilities and maintaining the fixed costs fixed. And then so as a result of that, all the work that we did, the margin expansion, obviously, I moved to corporate, where I headed FP&A. I added investor relations, and then at the start of the pandemic, I was thrown into the CFO role. And so I navigated through ITT. You know, there were times we were calculating how many months with zero sales we were gonna be able to live through. So those were tough times, but it helped us really big build a strong team. And then, so here we are, a few years later, with a significant success story in terms of margin expansion, significant growth, and a drastic improvement in our cash flow profile. Okay, great. Appreciate that. I guess any opening remarks regarding kind of the Q1 performance, and then since we're kind of midway through Q2, any update on the two? Yeah. So as you saw, Q1 was very strong. We had strong growth from an order standpoint in all our businesses. IP was down as we were navigating a tough compare. We had a really significant decarbonization order in the first quarter of 2023, and so that impacted our numbers. That is gonna be the same in Q2. We added another significant decarbonization order in Q2, so we expect IP's order to be down year-over-year. But still very strong in projects and also very strong in short cycle. Parts baseline are pretty much in line with what we saw in Q1, so that's pretty good. From a connector standpoint, distribution orders are doing well. In April, we were in the teens above prior year. Prior year is a low compare, so that's helping us, obviously. But distribution is doing relatively well. Their book-to-bill was above 1, so that's encouraging. Means the markets are holding up, their end markets are holding up. And then from an MT standpoint, we continue to outperform our markets globally. We continue to see good growth in rail as well. And we are about to come out in the market with a new product for our shock absorbers for aftermarket. By the end of this quarter, we'll come out with a new product that we expect will drive future growth. So I would say in line with our expectations. From a cash standpoint, IP is doing better. In April, they generated more cash than what they generated in the first quarter. That's a good sign. There's still a lot to do in terms of inventory reduction, collection of past dues, but I would say we are heading in the right direction. Great, and then in terms, maybe update us in terms of kind of where you stand in the overall transformation. You guys have done really good on the MT side with what you've called the MT Playbook. Maybe update us on kind of what inning you're in, and also in terms of the application of that MT Playbook. Yeah To IP and yeah. So definitely a lot of work has been done. You know, I remember when I joined ITT Motion Technologies, this was a 12% margin business. We're now above 18%. And we had peaks at around 19%. So good progress here. Nevertheless, we see significant opportunities for further improvement. We have a few businesses in our Motion Technologies business, our Koni, Axtone, which are improving from a margin standpoint. Koni is now accretive to MT, and Axtone is heading towards the mid-teens. So things are improving, but we consider that the potential for improvement is much larger than that in those two businesses. And we expect that productivity is going to be the main driver of the margin improvement. Motion Tech usually is able to generate 100 to 150-200 basis points of productivity every year. Obviously, growth, profitable growth is also really important. We've been growing a lot. We've been outperforming our market. So I would say, you know, for Motion Technologies, we have a 20% margin target. We're now for the first time in a while above 18%. We expect to every quarter sequentially improve based on that. And then in a couple of years, by 2026, largely be at the 20% target. So things are going well. Despite all the progress we've done, we see continuous opportunity everywhere. And then as we really apply the playbook that you were talking about to IP and CCT, we expect to see further expansion also in those businesses. So CCT today is also around 18%. We see a potential for us being at 22%. And this is really mainly driven by productivity, lean, specifically. And the great thing about lean is that not only it allows you to run more volume through your facility, so a lot of efficiencies, but also it allows you to reduce costs, or at least to redeploy the costs that you have. Because by really leaning out those processes, you simplify a lot your business at the same time as you run through more volume. Then you can choose either to redeploy those resources or reduce those resources as you see fit. So, lean automation is gonna be a big driver of margin expansion at CCT. It has already started. By the end of Q3, we'll be implementing two major automation in our Valencia site, and that should help unlock a lot of volume. Then finally, IP. We are already above our long-term target at more than 20%. But yet there's still many things to go after. From a supply chain standpoint, the situation is still very difficult. We still have a very inefficient supply chain, a supplier base. We gotta streamline it, so we're doing it. We're consolidating it. We're focusing on on-time performance for those suppliers, as well as quality performance. So I would say in IP and CCT, we are really early in the transformation phase. Okay, great. And then maybe digging in deeper to the MT segment. Mm-hmm. I believe over the last 10 years, you guys have outgrown auto builds on average by about 800 basis points per year. Yeah. Guidance for this year implies about 500 basis points of outgrowth. You guys have had a very strong win rate on the EV side of it, so maybe how should we think about that and, you know, maybe the potential for that outgrowth versus builds to kind of reaccelerate closer to that 800? So we are outperforming on all different segments, on all different verticals of the auto market. EV, of course, we have a win rate that is fantastic, much higher than the market share we have. And so that bodes well for the future. And on the rest of the powertrains, hybrid or ICE, we're outperforming really strongly. So in Q1, our outperformance was higher than our average that you just cited, and that was in line with what we saw in Q3 and Q4. In 2023, that outperformance accelerated during the year, and then so Q1 confirms the gains that we made in Q3 and Q4. I would say that, for the moment, we're comfortable with that, that outlook in terms of outperformance for 2024. The reason for this is because we don't really control, which platform or platforms are successful, what situation of, stocking or destocking, some of our customers are in. So we're very confident that we can achieve, $500. And, I mean, some of you already know us, if we have the opportunity to outperform that number, we, we will do it. Okay, great. And then in terms of the margin target, the 20% target by 2026, you talked about productivity earlier, but how should we think about the different components of that bridge from the 18% to the 20? Right. So as I mentioned, 150-200 basis points per year of productivity, which is a big driver. I think when you think about all the commercial actions we've deployed, we've really been focusing on improving the profitability of existing platforms and recover the cost inflation that we faced over the last few years. And we've gotten some good success about that. So driving profitable growth for us, since we are really a grower from a top-line standpoint, driving profitable growth is really, really important. That's what we're focusing on, both on the new platforms that we're quoting and that will enter in production in a couple of years, as well as the existing platform, where we want to recover the cost inflation, as well as fix some of the lower margin situation that we've had with some of our customers. Okay. And then in terms of the high-performance car market, I think this is a market that you guys have historically not participated in. You announced the $50 million initial investment in the Termoli plant based on kind of your early awards. Maybe just talk about what you see as sort of the opportunity set. Yeah, so this is a really interesting segment for us. As you mentioned, this is something that we have not played in at all. So we start with 0% market share, which is kind of surprising when you know our background as being really per-performance driven from a product standpoint. So this fits naturally with our DNA. This is a market that is a little bit more than 10 million brake pads per year. But what's really interesting about this is that the ASP is so much higher than the regular, the conventional brake pad ASP. So we get a big boost from a growth standpoint based on this. And obviously, the margin goes with it, so the margin is also a multiple of the current margin. So it's gonna be really interesting. Our customers are already giving us orders ahead of the plant being finished, so that's really good. We expect to be able to produce the first pieces in Q4 of this year and then start ramping up in 2025. We probably expect to be full capacity with that $50 million of investment probably in a couple of years. Okay. Have you guys talked about from kind of a longer-term perspective, what kind of share you think you can capture in the market? Yeah. So today, on our regular business, we are around 30% market share. On the high performance, we start at 0%, and I would say there's no reason why we wouldn't be able to have a similar type of market share. Just as a side note, in Europe, and this is mainly, I would say, a European opportunity, the high-performance one, we have a really large market share, more than 50%. And so, you know, it would be logical to aspire to, over the long term, to be a dominant player in the high-performance market. Okay, great. Maybe switching over to the IP segment. So you guys grew 13% organically in Q1. Projects were up over 60% year-over-year, and then, short cycle, you were up 9% sequentially. Maybe if you could just talk about kind of the outlook for the year between the projects and the short cycle. Yeah. So we continue to see strong growth from both those segments from an order standpoint. On projects, we see our pipeline is growing. Our pipeline is up high single digits year-over-year for new projects, so this is very positive. It's driven a lot by the Middle East, as well as a little bit by North America and Europe, but to a lesser extent. We continue to see a way for us to really differentiate from a profitability standpoint also on those projects. And so if you see our numbers in Q1, we were able to, as you mentioned, increase the top line significantly, but that was really profitable growth, hence the margin improvement that we saw in IP outside of the acquisition of Svanehøj. So, so we continue to see good, especially because we have a really large funnel. Our funnel is up double-digit year-over-year. Sorry, our backlog. And so we expect that we're gonna be able to see a continued improvement from a growth standpoint, and so our shipments of projects during the year, 'cause we have to convert the backlog, as well as a significant improvement from a productivity standpoint. The margin, the project margin in our backlog keeps on improving. And then from a short cycle standpoint, we really focus on shortening those lead times, really improving our on-time delivery so we can continue, b ecause this is a market that is super, super sensitive to those type of metrics, and so, so that we can continue to gain share. Great. And then on, maybe on the margin side, noted project margins were up about 200 basis points year-over-year. Maybe just help us understand, you know, how much room there is for further margin improvement on the project side of the business. And then maybe kind of higher level, how do you think about the phasing of IP margins through the year and kind of maybe whether- Yeah. So, you're right on projects. The project shipped, the margin really grew significantly. And what's interesting also is that the projects that are in the backlog, if you compare the margin versus the prior year, they're up even more than that, a little bit more than 300 basis points. So the margin expansion is gonna continue to come in the next few quarters. And so really, what the teams are focused on is really making sure that the project progress really well, making sure that customer is being served as best as possible, so that we can really execute on this project. Because the improvement in execution has been the key for us to expand margin. We've been really focused on delivering the a pump that really fits the customer's expectations so that we don't generate extra cost. And as we've been able to do this and improve also the on-time delivery, customer keep coming back to us with new orders. And so, that's why you see those big, large decarbonization orders, because up until very recently, we didn't have an offering for decarbonization. But because we've been performing so well on the conventional projects, those customers are coming to us to see if we can help them on the decarbonization. And by looking a little bit at our product portfolio, there are a lot of opportunities for us to go in carbon capture or elimination of flaring, for instance. Okay. And then in terms of emerging markets, so that's a big opportunity for you guys. That's about 35% of your segment revenue. You talked about kind of expanding testing capabilities in India, Saudi Arabia. Maybe just kind of high level, how do you think about emerging markets and sort of that growth opportunity than IP? So we expect significant growth coming from Saudi Arabia on energy-related projects, but also on other projects in chemical or even in decarbonization. India is also a really super, super attractive market. We have to always pick where we play because we are a quality provider. We focus on being super, super competitive, but we are very mindful of not taking on too many projects or projects that are not fitting our capabilities in order to keep on delivering that good performance we've been able to do. So Saudi Arabia, India, are definitely growth markets for us, and that's why we're investing in those capabilities to be able to support our customers in those geographies. Okay. And then maybe switching over to CCT. So you guys grew 6% organically in 2023, and that's including a little bit of a destock headwind that you guys had, as well as kind of some supply chain constraints. What are you assuming for the rest of the year in terms of destock? And then I guess for the segment overall, how do you see underlying demand levels trending today relative to kind of the, the 9%-11% long-term growth target that you have for that segment? So, we are very happy with what we're seeing today in CCT. From a market standpoint, demand for our connectors in Q1 was strong, both on the OE and the distribution. April orders were mostly in line with what we saw in Q1, so that is also positive. As I mentioned, book-to-bill at our distribution partners was higher than one, so it seems that end market demand is holding up. But we're cautious because we see that the inventory levels are still very high, and they haven't really come down. So what we expect is we expect this destocking to play out for the next few months. So probably, there's still a risk in Q2, a little bit of a risk in Q3. But we hope that by the second half, we should be largely done with destocking. From a margin standpoint, we continue to make some good progress in CCT. Our margin target is 22%. There's still a lot of work to do, a lot of opportunities from a productivity standpoint from deploying lean fully, as well as automating. We have a few opportunities that we've. You know, I've been reviewing investment requests for CCT to automate, and I have a couple every month, and pretty large ones that are really setting us, positioning us to really handle increased volume, especially coming from aerospace. So we are working on the fundamentals, really improving the performance so that we can support the expected growth that's gonna continue from an aerospace standpoint and hopefully from a connector standpoint. Defense, both in connectors and components, has been really, really strong, both from an order standpoint as well as a revenue standpoint. Okay. I guess, in terms of on the A&D side, have you guys seen any indication of a slowdown in orders from Boeing? Any change there? We have not. We have not, and we've investigated because some of it seems a little bit counterintuitive. If, you know, Boeing's production is going to be constrained, it has to impact our, the supplier base. We are not seeing it, so we continue to monitor. We have had a verbal confirmation from Boeing that they will continue to order from us. So, you know, we stand ready to deliver, but we are watching the situation and try to be ready if there's a change in demand. Okay, great. And then in terms of the M&A environment, just curious to hear what you guys are seeing on the M&A side, kind of what the priority areas are, sort of what the key hurdles are that you have to meet in M&A. So we have a funnel that is, very full, very healthy, and we're methodically going after the opportunities. We're progressing through the gates. We're progressing them through the gates. So we make sure that we cultivate, target, the targets, thoroughly, in order to, to be able to make a quick decision, in the event that, that, that we, we, we are, able to bid. And so we're confident that really we're gonna be able to execute on that plan. We continue to be very focused on, returns, making sure that not only we buy good companies, but they return also. So obviously, the c, the first aspect is the price, and on the price, we're very attentive to making sure that we get a good deal. There's still very high expectations from the seller's standpoint, from a price, in the price they want. And then so it's up to us to really make sure that we identify all the opportunities, all the synergies, in order to make sure that those returns come. We're looking to be accretive to our WACC in 3-5 years from an ROIC standpoint. Right now, to be completely honest, given the interest rate environment, we're probably towards more the five years than the three years. But that's the hurdle that we set for ourselves. And so, you know, M&A is a very humbling experience because you, you're not in, you're in control of, you know, just 50% of the entire transaction. So, we do our best to be positioned in the best way possible in order to offer to the sellers an attractive transaction prospect. But it requires a lot of time and a lot of involvement. I can tell you that both Luca and myself are personally involved in making sure that we mature those opportunities through the funnel. Okay. We have a few minutes left. I want to make sure we get questions from the audience. Looks like we have one over there. There's some win rate between ICE and... Sorry. I guess the CPV differences between an ICE vehicle for your brake system, a hybrid and an EV, and then sort of the win rate differential between ICE and EV. So if you look, if you look at from a product standpoint, it's exactly the same configuration. So we usually have between six and eight brake pads per, per car, and so that's the same for an electric vehicle. Interestingly, because an electric vehicle is, so much, heavier, the brake pads are larger, especially on the front, on the front axle. And so because those, those brake pads are higher, we get, roughly a 15%-20% uplift in terms of price from a front, front axle standpoint. The rear axle is pretty much the same price. From a win rate standpoint, so we haven't really given numbers, but, you know, our win rate first is much higher than our current market share, and our current market share is around, for EVs, around 32%. And it is also much higher than the ICE win rate, which is already very high. Any other questions from the audience? All right, I guess we'll keep going. In terms of free cash flow, so you guys have guided to 12%-13% free cash flow margin this year. Your long-term guidance is 11%-13%, but I believe you still have an opportunity to kind of work down inventory, especially on IP and CCT. How do you think about that in the context of the long-term free cash flow margin? So you're right. We made good progress in our cash flow generation. In the first quarter, we were above low single digits versus the prior year. We're not where we need to be from an inventory standpoint. Over the past, over 2022 and also 2023, we've increased inventory by more than $100 million, and so we got to go after that. And the main issue is in, or let's say the main opportunity is in IP and CCT. In CCT, we're starting to see some improvements from an inventory standpoint. We're not at a point where we can show reduction from an inventory standpoint overall, but on the key main sites, we're showing inventory declines. So that is, that is very good. Unfortunately, it's offset by other sites that are still suffering from a supply chain situation that is still very difficult, especially in theirs. So inventory, there's a lot more work to be done. And then, so when you look at our, when you think about our long-term prospects from a free cash flow standpoint, they're lower than the current prospect that we have, because we expect to be working down that inventory, and then as a result, improve our free cash flow margin. So I think it's gonna take us a couple of years to really get our house in order from an inventory standpoint. And then after that, because of the lean and because of all the productivity that we have implemented, we'll be able to run things so much faster within our factories, and as a result, we won't need as much inventory on the shop floor. Looks like we have one more question from the audience. You mentioned in MT, you try to get 150-200 basis points of your productivity. That segment is 80% automotive, and most automotive companies, suppliers can't do that, you know, they try to offset price downs. So what's the secret sauce? Well, the secret sauce, you know, that we talked about over the years is the fact that this is a business that is set up to generate that productivity because it is so automated. And so as a result, when you think about this, we have five plants, and those five plants, they look and feel exactly the same. We have the same production processes, and we're running exactly the same everywhere. So every time we do an innovation in one of our plants, we replicate that, and we're able to deploy it very efficiently. And so, because we're winning so much in terms of new business and our growth over market and our growth, and absolute growth is really strong, we're able to run more volume through that, through that fixed cost base. And as a result, this is where we create, in addition to the variable cost reductions that we're doing, we're able to generate a significant portion of absorption also. And because we have been growing and we've been outperforming our markets over time, you don't really see a dip. We continue to build on prior successes. And I would say this is pretty unique in the industry. If you look at our peers, they don't have such an automated set of assets. They don't have the standardization that we have. They don't have the good transition or the, let's say, the very efficient transition between the prototype phase and the series phase. So they incur a lot of extra costs that we don't. And so because we are an efficient well-oiled machine, we really are able to differentiate ourselves compared to the competition. I think we're at time, so we'll probably draw the line there. Thank you guys so much for the time. Thank you, Brad.