All right, good morning, everybody. We're going to keep it rolling here with Rockwell Automation. I'm joined on stage by Blake Moret, Chairman and CEO. Blake, pleasure to have you, as always. Thanks for for joining us out here once again in Laguna. I know you have a few opening comments just to sort of level set, you know, maybe give people the overview on Rockwell, and then we'll dive into some Q&A. Sounds good. Perfect. Thank you. Great. So, it's a pleasure to be here this morning, and I'm going to start with a few ad-lib comments about Rockwell, especially for those of you who are new to the name. Rockwell, the world's largest company devoted to industrial automation and digital transformation. That's all we do. We'll be about $9 billion in revenue this year. We set out to grow profitably at a faster pace than we had traditionally, really taking manufacturing to a whole new level, and I'm happy to say that the recent announcement of our acquisition in the robotic space, the mobile robotic space, I think is going to be a great catalyst for that, and certainly be talking a little bit more about that in a few minutes. Rockwell enjoys great market access across the production space. So, we have good market access and penetration into discrete applications like automobile and warehouse automation, semiconductor, the hybrid space, like food and beverage, which is actually our largest single served vertical, life sciences, home and personal care, and in continuous process applications. We have that market access today with a great portfolio of technology and services to be able to produce the outcomes in those industries that the customers are looking for. We take an approach to bringing the Connected Enterprise to life that's pretty simple. We first seek to understand our customers' problems and to be able to describe how we can help them in their language based on our domain expertise. We combine our technology with that expertise to produce outcomes, and above all, we seek to simplify, because I think that complexity has been the obstacle to faster growth in the automation space, and through the combination of the hardware and the software and the services, we can really simplify the whole business of commissioning automation projects, operating and maintaining them in a complete life cycle. We have moved faster than we traditionally have in the past. While we remain fundamentally an organic growth story, we've added acquisitions to move faster in a well-defined set of priorities. First, we added process expertise to complement our growing technical capabilities in those applications with Maverick and with the joint venture with Schlumberger. We have continued to add assets and information solutions and connected services, things like Plex and Fiix, along with high-value services, cybersecurity services, such as we've acquired through Avnet and Oylo, and built with our own organic capabilities as well. We've increased our presence in Asia and in Europe, the ASEM acquisition, an Italian industrial PC, a company that also has some pretty good software, has been particularly successful. More recently, we've talked about advanced material handling, complementing our differentiated Independent Cart Technology for motion control. The recent Clearpath acquisition is a great example of that. They're known for their OTTO Motors line of autonomous mobile robots. When you think about the production space, increasingly manufacturers are looking not just at the make line, the business of making whatever it is they make, but it's bringing material to that line when it's needed, and it's taking away the finished product to the truck or the warehouse. That's what Clearpath and their OTTO Motors divisions do. So we're very excited about that. They're located in Kitchener, Ontario, just a few minutes away from the plant that actually I was at for several years. So we already have a sizable presence in the region, and I think this just adds to our opportunities to create more ways to win, and be happy to talk about that for the next few minutes. Great. Thanks, thanks, Blake. So maybe just to start off, clearly, I'll call it a rich macro environment out there right now. I think some of your competitors are maybe a little bit more overweight. China have been seeing a slowdown there. Clearly, U.S. has been a bit stronger, but we have a lot of supply chain nuance and, lead time impacts. Maybe just, kind of start us off with what are you seeing out there in the macro space? Continued strong underlying demand. So we've talked a lot about the way that orders have, let's say, normalized as customers are no longer needing to place the very large, unusual orders because of super long lead times. And this is playing out like we have thought it was going to play out. We have said for some time now that as lead times improve, which they are, we're going to see orders reduce. And it's a little scary when you're in that reducing side of things, but we continue to see broad indications from our distributors, our customers, our salespeople, that orders will rebound, that inventory is flushed out and as we get back to a less volatile pattern. And then, how would you characterize supply chain today? I think, you know, last quarter, obviously, you had something outside of your control with... with that distributor issue. I apologize on behalf of the state of Indiana for that. But where, you know, where would you guys, kind of put it, either, baseball analogy or otherwise, on status of supply chain improvement and kind of proximity to normal? Yeah. So we're at the tail end of the type of supply chain bottlenecks that we've been dealing with for some time. Obviously, you know, this all started with COVID shutdowns. We saw shortages of materials, and actually, if you remember, at the very beginning, it was actually not semiconductors, it was freight lanes, you know, big ships getting stuck in the Suez Canal and things like that, resins because of storms in Texas, soon overshadowed by broad-based semiconductor shortages. While we still, you know, have a lot of management in place to make sure that we continue to get that firm supply, it's far better than it was, and we're really dealing with that last bit of the tail. For those, we're also putting in additional capacity, and what we have said, you know, very specifically, is that by the end of the calendar year, our lead times for all our products will be back to pre-pandemic lead times, which is to say they'll either be on our distributor shelf or we'll be able to make it within a period of days or a few weeks. And so... and that's important. It's important, first and foremost, to return to the kind of customer service that we need to be able to provide. But second, it helps us flush out those remaining constrained parts so that distributors can ship complete those bills of material to customers, they reduce their inventory levels, and they get back to purchasing from us at more representative levels, at levels that are more representative of the underlying demand. So clearly, semiconductors were a challenge for everybody over the last couple of years. I think, given the nature of Rockwell, you know, maybe more of a critical part to be short, but how do you think about maybe more structural changes that you've made in response to that? In the end, these crises are making us stronger. So whether it's going to a more nimble pricing approach, looking at the fixed discount, so we don't have to wait for pricing agreements to lapse, so that when we see input cost increasing, we can immediately offset those with price increases of our own, things that we never had to worry about before, but that we now have in place. The direct relationships at the highest levels of our key semiconductor suppliers, taking all of our products, existing and new, through a set of resiliency tests to make sure that we're as resilient as possible towards, you know, we're not dependent on any one supplier to the extent possible. All of those things are new. Adding the capacity and the redundancy in our manufacturing environments. You know, I think of some of our most valuable servo amplifiers, which were really affected by component constraints, and we're building those now in three places, not one, with an output that's somewhere around four times what it was pre-pandemic. So you have that additional capacity to address what we expect to be continued growth, but it's also the redundancy if you have one region of the world or one plant that gets hit by something unexpected. And the Indianapolis distribution center, that was a part of the miss in the third quarter, really, really the main piece of that, was part of the tail end of this capacity review and investment. It gives us the change in suppliers there gives us over 20% additional capacity in our largest distribution center. We had the disruption in May. We got back online and at normal levels in June, and July and August have been fine. Is there sort of a past due backlog or activity on their side that is still kind of pulling forward anything? No, it's flushed. It's flushed that out. Got it. It flushed that out. Then I wanna spend some time talking through this order and backlog phenomenon that's built up for a company like Rockwell, who historically didn't work off a lot of backlog. So- Mm-hmm. I think we're all trying to figure out what does normal look like, and there's a lot of new phenomena going on in North America, like nearshoring and some of these mega projects. But you mentioned that lead times should be pretty close to normal by the end of the year. Mm-hmm. I would imagine then that backlog then should really be flushed out for what was just ordering early, that those customers will maybe not be ordering so early because they can, you know, they can get back to, to normal lead times. But without trying to lead you too much on the question, how much of backlog do you think is really more of a, "Hey, we want to get in line first," versus, "These are just longer projects and, and demand is higher? Yeah. I think it's a mix. There's obviously a lot more greenfield investment that's going on, and in particular, in the U.S. And so when Ford, for instance, purchases for Blue Oval, there's so much material with that, and they're not gonna necessarily need that all at once. And so there's a bit of backlog that comes from those big projects. The majority of it is continuing to flush out what built up over the last couple of years based on material constraints, based on machinery builders ordering, and for example, if they were typically ordering three months of material to cover those machines that they would ship in those three months, in some cases, they were ordering two years of material because the lead times were so long and they were, quite frankly, panicking a little bit in that respect. I think that's still the largest part of the backlog, but to your point, as lead times rapidly move back to pre-pandemic levels, you see that past due backlog reducing quickly. It's not gonna be exactly the same time, but, you know, that figure of getting back to normal lead times by the end of the year is an important one. And then I think in your last earnings presentation, you showed sort of this arcing back up order phenomenon, as lead times adjust and maybe some of the restocking that distributors have talked about plays out. I guess, what are you seeing in the business today that gives you that confidence? Because there are a lot of different layers there. You guys have more, certainly more insight into some of the pieces than we do. But what drives that uptick? And, what are you seeing today that gives you that confidence? Well, two fundamental dynamics. So take away the current volatility of the up and the down as based on lead times. But one is, look at the verticals that are at historic high levels of investment. So automobile, including electric vehicle, build-out, and battery, for instance. Look at semiconductor as we're trying to reduce geopolitical risk, you know, by bringing more of that ecosystem, starting with the fabs, to the U.S. I won't say back to the U.S. These are multiyear investment cycles, just to take those. You think about how many electric vehicles are on the road today, it's still, single digits as a percentage of the total vehicle count. It's gonna take years and years to be able to build out that capacity, to be able to get to meet the demand that's expected, which is that electric vehicles, at some point in the next decade or so, will eclipse internal combustion engine. From a semiconductor standpoint, people continue to wanna make all their products smart. But beyond that, you know, the government very concerned, as a matter of national security, being able to diversify where we get the, the chips from. And I think all of us learned how pervasive chip shortages have an impact on the economy. There's so many things, and we're directly involved with those. If you can't provide the technology for this automated equipment, you can't package food, you can't bottle medicine, transportation, energy. You simply can't do those things, completely by hand. And so it's semiconductor-based technology, such as we offer, and in many cases are providing to the semiconductor industry. So it's an interesting kind of cycle there. But these are multiyear trends, along with energy transition and decarbonization, along with modular medicines, as people, I think, are gonna continue to wanna live longer, more, you know, healthier lives. And then you have, in the industries I haven't mentioned, things like food and beverage, home and personal care, the need to automate because of workforce shortages. You have those present in the previously mentioned industries, but that's kind of an umbrella need, that it's hard to find technicians for these plants, and so you have to make the most of the labor you have, and that's typically augmenting that with the technology like we provide. I guess, what trends are you seeing beyond some of those marquee industries? I think really since the start of COVID, you know, this handful of industries, certainly, EV, battery, pharma, semiconductor, have been very prominent, and not just for you, but I think for a lot of folks who participate there. There's a pretty long tail beyond that. I think food and bev is your largest end market, and maybe- Right. consumer packaged goods, you know, on top of that is maybe a third of the business. How has that, you know, sort of demand profile or, you know, anything on backlog that you would point to there that gives you the confidence that there's, there's breadth to, to this type of demand cycle? I think we're seeing... let me start with kind of the newer areas of offering that we have. As we talk about more ways to win, even in existing facilities, so brownfields, the adoption curve for some of the new things that we've added to our portfolio in the last few years is really ramping up. So you think about adoption of MES, like we have with Plex, asset management, SaaS software like Fiix. We're seeing the continued strong double-digit growth in those areas, as we are with cybersecurity services. So even in an area that doesn't have as much of the impact of shoring, you know, of making food or making beer or soda pop or whatever, you're seeing that investment as they want to be more resilient against cyberattacks. You see that they want to add additional software to be able to debottleneck existing operations, compare OEEs across their fleet, around the world. Just out there, that size, a funnel that they look at- Mm-hmm. is sort of a precursor to backlog. When would Rockwell normally get involved with these things? We see these huge funnels. Obviously, manufacturing starts are up significantly, something more than 100%. I would imagine that, you know, you're not placing the PLC order, you know, when you're pouring concrete, but when do we sort of lag into that? You know, is that something that we should start to see hit in 2024, or does that take a few more years to ramp up? Yeah. You know, we talked a little bit about this last night and some of the opportunities to talk about the typical lead times for purchasing different areas that we supply for different industries. So for instance, in the semiconductor industry, we do a lot of work in the facilities management and control systems, and that does have a lot to do with, you know, the building envelope and, you know, is an earlier part of the project... not only because of when it's needed to be able to provide that clean room environment as you're putting equipment in, but also because it's an engineered solution, and the lead times are typically longer for those than if you're just buying products, and, you know, it's an easier process to integrate it. Conversely, if you're gonna do the cybersecurity assessment and remediation of that facility, you're probably gonna have most of the assets in place, or it might even be for an existing fab that you're gonna contract with us for that type of activity. And then Independent Cart Technology, which is a growing application in semiconductor for wafer transport, again, lead times are longer than standard products for that technology, but it's probably not gonna let at the same time as the facilities management system. So I think what we have some opportunity to do by vertical is to kinda explain when you would typically see the orders there. To what I think is your general question, you know, how much have we already seen reflected in our order book from these projects? It's still early innings. Some of the announced projects, we have not seen the orders yet, but there's many more projects that are gonna be announced. We continue to track on a regular basis by industry, the amount of CapEx that's being put out there, being invested in industries important to us, and we think it's still early innings for that. For the reasons that I said, that it's gonna take a long time to build out those EV fleets. Semiconductor, even after you get the fabs going, you have to do the back-end packaging, you have to have the lead frames, all the other pieces that make up the ecosystem for semiconductor production. And so that's gonna take a lot of stamina, let's say, to truly build it up to where that increased presence in the U.S. is gonna make a difference. So because these are larger projects and presumably more eyeballs on them competitively, is that something that you see, you know, more competition on something like price? Obviously, big network in the U.S. sort of hard to come in as an outsider. You guys have benefited from that immensely. But when you have these, you know, multi-million-dollar, billion-dollar projects, do you see more folks show up? Is it harder to win? Yeah, greenfields are an installed base opportunity, and so they're always gonna be more competitive. The margins are typically gonna be tighter on these greenfields, and even if you have a customer that loves us just as much as they can, there's still gonna be competition as there is for our competitors in their own installed bases. But we have a lot of experiences in these applications. Even though we haven't talked about semiconductor production as much traditionally, that has always been one of our biggest industries in Asia. We've been doing facilities management and control systems in Asia where the semiconductor industry has been, you know, centered for many, many years. And obviously, with electric vehicles, these applications have a large amount of commonality with the production of an internal combustion engine vehicle. Then the battery process, which is largely an assembly process, is a very good one for us, as opposed to the traditional process of boring out cylinders and finishing metal surfaces in a traditional powertrain application, which is more done by CNC, which we don't have. So the EV applications are strongly a net positive to us than a you know a comparable traditional ICE application. So yes, there's competition for these greenfields. Our European competitors look at the U.S. as an attractive opportunity, just like they did when I started in the mid-1980s, and just like they will be you know 10 years from now. But we have the highest share, the best relationships, and by far the largest installed base, and we continue to expand that moat, as well as take the battle to our competitors on their home turf. So you mentioned the value of the installed base, a couple of times. I think it's certainly, you know, part of, of the attraction to Rockwell over time. For these big greenfield projects, when do they start to convert into MRO? Does that take a number of years, or does that show up in the first year or two? Well, one that w e've talked about publicly in the past, Rivian in Normal, we did the original automation for that, and they're already, there's already some MRO. But more importantly, as they're looking to reconfigure their facility to increase the number of jobs per hour, that's already happening in that same facility. It's not an old facility by any means, in terms of Rivian's ownership, but they're already reconfiguring it to get more efficiency and get more jobs per hour out. So I think you're gonna see that because in the case of EV, this is a new space. You have a lot of new equipment suppliers, and it's gonna be iterative as people find better ways to increase the batteries and the battery production and debottleneck those facilities. You're putting major processes together, and today there's some, what I'd call impedance mismatches in terms of what can be done faster than other areas. There's a huge opportunity in being able to smooth those things out for all of these manufacturers, and that's gonna involve additional automation technology, additional software for scheduling. Think about what MES does. MES does the production, the scheduling control, and we make a great MES package for the automotives. For Plex the newest addition to that MES Portfolio, its strongest single vertical is the tier suppliers for automotive. So we have a lot of ways to win there. Excellent. So we've talked a lot about kind of the various angles of trying to get forward visibility, both through things like orders and backlog, as well as some of these mega projects. Clearly, over the next 12 months, yeah, you guys expect backlog to start to normalize. Mm-hmm. What would be sort of your a comfortable level exiting next year, exiting 2024 to say, "Okay, yes, we've normalized, but we still have enough, you know, kind of in our back pocket to feel good going forward"? Any way to kind of ring-fence, what would be good versus bad outcome there? Yeah, well, it's still a fairly large range, but I think $2billion to $3 billion worth of backlog, gets you in the ballpark. It's not gonna go down to the, let's say, $1.5 billion that we traditionally talked about when we talked about backlog because we're a bigger company. And lifecycle services, which we've always talked about, a book-to-bill ratio, and we've always talked about having a larger amount of backlog, is a bigger business. It'll be over $2 billion on its own. You add to that the software, the increasing amount of annual recurring revenue, you add the configure-to-order offerings like motor control centers, the Clearpath acquisition, Independent Cart, which sits somewhere between a fully engineered system and a product that just, flies off our distributor shelf. There's some structural things that increase that backlog. But I do think even though we will be bigger in terms of a product supplier as well, we are gonna get back to a business where the orders we get in a quarter are pretty much the same as the shipments you see in a quarter for those basic products. For Logix, for PowerFlex, for Kinetix, I don't see something fundamental there. You get a little bit of extra for the major greenfields, but I don't think it's gonna be so big that we're now talking about backlog, you know, as a regular part of our financial framework for products. Understood. I wanna take the rest of our time here to talk a little bit about portfolio and M&A. Mm-hmm. You've certainly been more acquisitive than some of your predecessors at Rockwell and across a wide range of areas I think all make sense. Clearpath, getting more into robotics, maybe not traditional robotics, but robotics all the same, stands out a little bit more. Maybe just walk us through what you think is unique about that opportunity and any other gaps that you still see out there, you know, just given the breadth of activity. Yeah. I'm personally very excited about this one.I f you look at what we do, it's all centered around being really great at production, at production technology, at production expertise. And so many of our customers are telling us that they've done a lot of automation in their basic make processes, so the make line, if they're making shampoo or beer or whatever, making cars, there's a high amount of, let's say, ambient automation intensity that's already there, 'cause you can't be competitive doing those things without automation. There's just no amount of labor, no matter what the cost, that's gonna allow you to be really great at that without a certain amount of automation. But the business of bringing the products, the components, the subassemblies to the line right when it's needed, and being able to do that with flexibility to balance loads across multiple production lines in a given plant, to be able to take the finished product away, the pallet, as soon as it's, you know, packed up and get it to the truck right away or into the warehouse or whatever, that's an area that's still intensely. It's still very labor-intensive, whether it's people physically carrying stuff, pushing trolleys, driving forklifts, and that's the area that Clearpath offers some great solutions. That in itself is exciting, but the opportunity to be the only full-line automation supplier that can bring that together under the umbrella of MES software, asset management software, like Plex and Fiix, to be able to configure it with FactoryTalk Design Studio in the same way that you're configuring the Logix controllers on your production line, that's gonna be unique. And those are real, I mean, that's not a fantasy, and in fact, at Automation Fair in November, you'll see some concepts of that already, being displayed on the show in Boston. Excellent. Looking forward to it. I see we're out of time. Blake, always appreciate the time. Thanks for joining us. Thanks, Mike.