ITT - Earnings call 3 2023

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Operator

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 p.m. Eastern Time. [Operator Instructions] It is now my pleasure to turn the floor over to Mark Macaluso, Vice President, Investor Relations and Global Communications.

begin. may You

Mark Macaluso

and Lisa, Thank good you, morning.

results in Savi, Luca me Financial XXXX, Today's ITT's which morning September this period Emmanuel are Chief Executive Officer. financial cover will this we ITT's call the Officer XX, Chief X-month ending Joining Caprais, Stamford for morning. and announced and President;

of may expectations. our include begin, XXXX Form note quarter current that detailed and we filings. Except of in please X be results other differ forward-looking Before third on who where that Actual to and we will pleasure based press several Slide of such including of will uncertainties, the risks and call Luca, to compared XXXX non-GAAP measures. comparable to our third SEC most the materially my due in annual to quarter are in comments over will the the those X. to described present website, GAAP results Slide presentation, turn now The of available financial for recent morning figures XX-K our refer the which our on measures presentation reconciliation otherwise noted, statements are certain begin include available website. With it's on both appendix this on we the that, release today's our report and to our are on

Luca Savi

Mark, and you, Thank good morning.

stay shocked events. at their impacted in to a our I part concern. and to all we these contact in the is these families time Before August, with the about safety tragic business of lives humbled are work attacks. Habonim colleagues that our our and were I their with close condemn Elan to X. working there was is terrorist how all region. was strong the on headquartered primary terrorist by commitment fortunate we presence begin, our peace their special October ITT spend in eithic to in strongly restored place their We the would country. share us colleagues We'll in like northeast It hope their the the given valves I and their of the ITT of by Israel capabilities, at as and and customers. Obviously, always people our our team Israeli is is Israel

XX.X%, main significant Now a theme $X.X and performance, deployment. ITT's segment is The progress of making step call capital At converting in to step our a latest our are up step target. XX% towards this results. We're up we in up a long-term in backlog. billion execution margin

for with but are on over $XXX this flow new are capital of we we full We addition not signing quarter with million EPS a cash Last earnings and flow. strategic of delivering acquisition levels Svanehøj. least, in we expected the Yesterday, deployment, $XXX announced record free accelerating. of the And expect a of year. the million

let's projects get Industrial to execution, details. Process, in continue into strength see in we and Now On the aftermarket.

demonstrating quarter, parts for third double in and organically growth. leader as progress gaining emerging businesses flow. Still, our a projects, revenue in pump grew are in service and all digits Our opportunities more there in many the share profitability

to spent understanding us intimately the continued with Peru. business quarter, the X% new revenue initiatives. the to time components and impact in IP's in The we in performance a OE drove distribution about XX% CCT. they local share actions The region nearly team to our growth Brazil. in Fernando, greater mining, growth and gave Connect growth talented and than familiar sequentially, I Technologies, energy. In process from our are defense business Brazil President There, the offset aerospace Europe. on our review our together coming and the in with Control X% working this example, and ITT went He's region connector destocking teams outstanding For with growth which capture grew organic and more local

Just to step back a moment. for

As the in to Europe past we weakness in in been been X distribution through done, you quarters. the and And destocking us offset about, for in OEM Europe, North the talk American managing connector see we team. actions have Well to have distribution. whilst able our with team still Art has weakness X heard European and

thanks teams new platform KONI again vehicle and and a growth be particular year-to-date. Also up stop market win to improve in as Motion which result, of XXX quarter rail. XX%, won in announced we awards the new gains, margin with actions in in our electrified operational awards margin points segment business, and innovations on high-performance grew fifth product the from straight recently an over Technologies. steel for both our be China XX the XXX in target. nearly the this grew year-to-date Process Ukraine. of the continued that with operating the basis full our sequentially will QX. the the to sales quarter, actions, a running confronted sequentially orders incremental our inflation progress expansion, Technologies this considerable we XX% market XXXX. And share new XXXX, won XX% specifically, accomplishment high-cost plant due in XX%. where Both a a quite again This largely We Wolverine many new challenges ahead quarter, And digits points eclipsed points in we versus rate share Termoli continues. Motion to to is basis of the businesses as both with for an roughly drive in long-term and At year Russia. Continuing XX% margin XX% above year friction XXX up in in progress to MT, XX.X% expect and outperformance basis year. Axtone expect not anticipated towards we lines back did our here. our Frictional record won pricing to were Axtone made we share. in XX% QX, in Finally, pricing orders double profitability up QX, be improving XX% incrementals market and strength we double-digit above the execution. new improvement we In in strong current when QX have war in wins driving reached vehicle XX is at Industrial this well team and considering sequentially the with still year-over-year as and saw Notably, Axtone

to Moving deployment. capital

accelerating. attractive of we But industries we more the acquisition entered of to services into and are yesterday, In share million completion repurchase new $X indefinite back energy an marine a current Svanehøj, $XXX cryogenic definitive to supplier long-term operates strategically this and importantly, a results. to plan. company more momentarily. Coming acquire October, implement our announced aftermarket Denmark-based program will transition at that The about including growth We gas. billion decarbonization, term share marine agreement full we exciting with a liquefied tied year pumps in transportation. will for trends, I in the

all margin our flow really XX% a over are growth, for midpoint, points up are nearly We XXX XXXX of $XXX again once I'm growth nearly generation. all outlook teams revenue year, record the over the raising accomplishing. free million of and basis across metrics. proud organic world what cash expect we and of set expansion, X% now These earnings our us At

drives marine X Svanehøj. future in to less we the close to expected a gas the cryogenic pending is highest Slide is to loyalty. Stepping all and to in $XXX deal love including turn technology a lot large Now to aftermarket IP, the also energy transition service business, regarded sole-sourced fuels. customer positions. sector, positions from The acquire our products which to sticky announced there a the million. to Yesterday, differentiated cargo, back, has of the XXXX Like marine leading flow recurring has with first and for service supplier, the talk the profitable intent leading and to with applications Its fuel about about XXx base as process revenue in pumps multiple its a for cryogenic add vessels business, model reach. are installed thanks estimated benefit industry, portfolio. regulatory EBITDA, services acquisition, The quality pumps, which purchase and than to allows Svanehøj our of pump well nature price which XXXX. Svanehøj aftermarket company Svanehøj, our approximately widely energy of global let's equates pumps deep quarter this have cryogenic to

focus First, driving on deep their the clear that company performance. has team has and a strong markets a knowledge a management of

ocean their team verticals line are acquisitions lead aftermarket across a transition, and Svanehøj further where we entire the enhance time we leading to multiyear from of required operations and coupled build. all tell fleet, of would a active. for the positions products and Svanehøj's environmental-friendly and X we outgrowth recurring you I pipeline. out transition increase want continued the visiting with pipeline upgrade revenue. I that business, target activity, cargo it to service expect to M&A sight energy to and to demand in most will potential supported Emmanuel global decarbonization also work their coming technology, verticals With this, In backlog, growth Soren QX, services. of drive ITT. technology which good for which their welcome to the and differentiated Svanehøj have in growing more revenue in energy significant vessel our marine like remains propulsion future shift has further demand by operates. Shipowners expect will amount I aftermarket Svanehøj to X we And invest our as Next, with by predictable to of new to

on Let to details me Emmanuel over the turn more quarter. now for call the

Emmanuel Caprais

mostly friction quarter with aftermarket growth XXXX. CCT XX% which defense, with is on also Wolverine. is the trends distributors Luca, weaker aerospace Technologies by with shipments. year-to-date, green XX% growth friction inventory on X% and generated price reduction. by distribution. Motion versus up Notably, orders growth good gains was already XXX% the sequential the due driven growing Starting offset U.S., share pricing in are distribution up Axtone both was by driven higher and backlog, macro IP KONI, including projects than way expansion volume Thank of its with SKU by driven we by this once underpinned morning. of to again in increase primarily and in in and Process Industrial and in also XX%, a markets. in all led growth This aftermarket timing at which XX% these revenue. and strength offsetting more the Connectors by up components in driven more was and X% the project you, OE European than OE project

contributed coming XXX in points. Looking flat as out to aftermarket dedicating aero Core most long-term aftermarket business in the be ahead, XXX prominent points, growing start Aero line. growth QX is pricing an IP The basis we for to auto XXXX. Rounding top in more was OE expect we in more and pricing again basis while agreements volume ITT area energy contributed are the up actions contracts and in are where renewal XXXX. CCT. our

to and basis than points of in of price improved net productivity We contributed and of XXX investments. actions our Volume while impact margin. actions. profitable to expansion, QX points, more Moving the and pricing due a basis XXX exchange offsetting growth foreign combination over drove

reduction. Last period count but to roughly nearly of invest free cash in stronger sales earnings $XXX compared margins a CCT. certainly growth, cash improved IP in impressive per flow Specifically, least, impact to share year-to-date. for million $XXX share improvements which planning and in delivered or to Xx benefit the XX% the with and of same cash our of growth flow The X% we continue amounted not million operations lean drove over more includes augment XXXX. free to organic the the teams another This performance and

and Cash this was was use mainly income. to by cash improving, capital working is of collections inventory. free driven Our but flow XX% due year-to-date cash quarter still stronger a margin net higher

ITT. We expect XX% to you this new reverse EPS dynamic a a inventory see quarter this to can X, increase record we improved delivered management. On $X.XX, Slide in with for XXXX

for in field and customer invest deployed drive, IP's testing. currently to development, continue new in which is product also reliability and We embedded including motor certification undergoing trials,

strong given testament the a As could outlook execution our see in margin expansion have year growth is and on This X, free throughout flow you today, backlog cash orders and growth, the XXXX. raising segment generation. robust Slide we're higher delivered to teams year-to-date revenue and our full

revenue to our guide end of moving X% X% upper the following for We growth, are to at organic implies which QX. the the range

also coinciding should growth We and a with foresee increasing trajectory and demand expect Technologies. revenue near midterm. growth by its air low traffic, single-digit led we Motion CCT defense pickup organic aero continue in

aftermarket exiting by the order should drive We offset October, EPS strong of on Segment as growth IP daily strength segment lower high project margin XX.X% range by as margin, XX% rates also and the continued midpoint in in our roughly flat shipments. On end. QX and margin be to baseline These dynamics we well increasing expect the should based are XX QX basis approaching low points year-over-year. single-digit adjusted sequentially. in at

is Finally, the free to ago, year than challenges cash to cash customer decision invest our we significant of expense More a outstanding. in flow. chain amidst a our performance inventory supply made support at conscious

are up, we versus we and every As backlog robust business, the to new result, won and improving backlog of year, cash share. forward our flow a and up a end last a Fast way market profit XX% today, built gained collections is quarter. have record

our As is XX%, than already are year. a increasing to cash last and $XXX flow we double margin at million, more free guidance result, from our

and back Luca, incidents, we a our a in our sustainability solar the consumption, $XX journey, from other Before Nogales. in projects. pending I greenhouse highlights I'd considerable ITT's X% connected our -- including good look progress emissions Last reduction like -- safety was solar sustainability water reduction step year reduce our made share Friday. turn and year, in XX% in journey, the and released Barge, sharing call on by along to our to to last we Last are Lancaster, year, emissions recordable a some COX expected in forward a future. more installations sustainability to on and energy update Oud-Beijerland commitment from X%. XXXX These significant projects news to million approximately we installations, in with This

You our appendix. can highlights read more the about sustainability in

Luca. Now back to

Luca Savi

Emmanuel. Thanks,

thoughts to Before capital about closing execution to we Q&A, and a like I'd deployment. few accelerated move our share

or and of growth. world's end for groundbreaking some First, whether fastest-growing we in continue new are differentiate, to with the new innovations to outperform finding markets, we avenues areas

we way are beginning long-term of last target X the Process year. well target just last to for eclipsed year segment that reaching straight on and margin Second, said our at charge the quarters. XX% the we Industrial long-term end their led

revenue, we've of EPS built, third margin, free momentum and in raised with our This margin And the of will grow and backlog the because end Third, this double-digit for earnings by a cash we increase our outlook our flow. long-term quarter continue progress accelerating. straight in towards year, confident we ITT are that target to is our XXXX. is our raising of expected guidance,

accelerating also deployment. are we capital Finally,

and other are our and acquiring portfolio, continue in put to to target We Svanehøj to grow sheet strong balance evaluate use. high-quality flow our to flow we connectors

allocating Additionally, billion our effectively. us flexibility capital program $X repurchase in gives share new

questions. in for of have open ITT. us for We reached interest for line new performance Thank another and today level you joining your continued ITT. Lisa, stepped-up please for the

Operator

Baird. [Operator Halloran Instructions] And of our Michael coming first question from will be

Michael Halloran

perspective? the parse end general mining And that energy, out here, other any there? or markets order from first, So little think talk by what we of I missed IP end-market you can short-cycle any maybe the bit applications seeing businesses, trajectory a the industrial, fundamental -- chem you're things, about you a and side other could

Luca Savi

Sure.

start Let Emmanuel, you then, that build me one. on can and

when look X%. we in QX the So the at orders, orders declined

decline. cycle You was and have the that flat project a was short year-over-year,

October shifted. more And because in year-over-year in our is than to some XX% from QX. than October. orders of And strong of the tell and considerably having they lot that that, October, Now the it the can project higher looking short-cycle at you are there year-over-year. The said projects I quarter October orders that in rate shifted are timing are the a what up, was what was higher in

healthy. the the the that and So very, funnel picture is orders, very still is on

Emmanuel Caprais

Yes. little markets And market, add in industrial strong. just by end a really a see more chemical, slowdown to but bit color, general we are our

strong. to at continue And very funnel, gain We if is the share then say look also you funnel would there. the I

funnel the project is mentioning, up energy, it's driven was beginning XX% year-over-year, is the chemical, XX%. by And versus this almost general Luca As industrial. our year, up of really

good from also. standpoint a pretty picture project So

Michael Halloran

is, rates Luca, the global could on some basis. and then And Great. Really maybe, tracking you that. how thoughts auto a any give see thoughts on appreciate on market the build you follow-up XXXX

give but aftermarket the comments improvement the good Emmanuel's appreciate next always Certainly would on any sequential other You great. really year, be side into there. on color going color

Luca Savi

strike, Europe, first good. a you Sure. Thank market you, Mike. despite X.X%. was was North which -- QX America the was QX whereas production a China. When already we and in But look then up at very in when the this in up was was market, was after half flat look in in good The up

So at also to we the digit; expect roughly China, up when year digit; for digits. mid-single and mid-single low XXXX, up Europe, double the mid-single full America, be so you digit; look market X%,

to So to year. the as China it XXXX us was in for surprise able we forecast be flat

you and was market, -- QX top points in we continue outperformance It and roughly good. basis So to accelerating. outperform. XXX on very The was this of know, as

So year-to-date, going part growth, of And you roughly terms year-over-year. in roughly we you tough you Europe of in low based QX a us in to are When now. The early we look to your it's it's XX about vehicles again produced QX going XXXX. million. probably are to XXXX. which telling look to tell, it little outperformance. When what grow flat the aftermarket, expect what comparison are quarter on right the a considering was question, was of second be in versus customers be it's XXX million basis so thinking but single-digit a when bit -- points at too -- XX still XXXX, probably XX at XXXX, million,

Operator

be Damian And of question next UBS. our from coming Karas today will

Damian Karas

deal. the on Congrats

this in the price in strikes you lot because been business? wars higher-level I'm on OEM And the automotive Do just world. question front, sooner just Obviously, friction a that on these noise see later? out how and U.S., there kind that has of the to XX-plus path margin of of seeing So of are is your back XX%-plus? schedules, or in China. -- you all there affecting maybe curious, lot EV pushing of Luca, a the MT a production MT

Luca Savi

Okay.

The path changed, last Motion the clear a of question So This not address the let for me has first. Technologies target XX%. there. and have we get part is to long-term

This XX%. improving. margin year-over-year You our on keep can already see to sequentially up will

to able be in will We XXXX. eat in some -- time XX%

dynamics going some strike was way, production, down to shared, market, the look maybe back slowing may this for sure, look electrified full The immaterial is particularly was that and The terms dynamic. American speed a really when North of adoption all of Probably would American But you from a see at and EV so the is investment the the by I really Damian, going vehicles. was targeting Now OEMs. dollars really, listening, some of revenue, the strike. hit in When you of you're really in you the electrification really the immaterial. us. are when -- what million in we and couple China. And say, North terms at Europe you the North

You're talking talking board. IC, about winning across talking you're hybrid, about about AV, we the are you're and

in, business, our our China $XXX story So China engine. in is defending very for is we is glad a XX% mentioning look the million, successful because that you are When we to are also you internal I'm platforms the China, of all on at friction. comes That us. China great combustion that it in EV. When are that

It's operation, a financially. are good winning. good We great,

examples. you couple Let a of me give

that PPA operations, is aftermarket, is most plant a for world. the When every XX is is in So you're of month. This QX, in still When validations roughly look a only that, plant SOP you financially, interruption. we at your run lot process PV, have talking friction profitable this no the when start OE, for had the for you producing production. you do of the XX about you

are And of production. that, lot the Despite in the Chinese XX.XX% fantastic Chinese at disruption why us this of keep You on all platforms. Today, delivery. the of on-time have team a awarding reached is delivered than of already Chinese award XX% producing they've the September, of XX% of year winning is More are full with And winners. we end the the we what the for target. OEM.

great So there, it's story too. a

Damian Karas

looks I'm to this, it my on the the going is math botch And any but Great. deal, be know of EPS you dilutive Svanehøj like margins. name to slightly give if accretion? correct, color may I IP can And on it

there's the of if curious or rest any synergies Habonim business. Just the with pumps

Emmanuel Caprais

Thanks, Damian.

with yes, we're Svanehøj. So entry ability with buy our excited. It's very very, us great into a deal so happy -- cryogenic very to We're to technology. that gives business, secure

EPS in a accretive from about If a standpoint, that long-term business Svanehøj is Keep an you accretion will XXXX. has of backlog. think that -- in accretion lot mind be this

overall, a very be intangible XXXX. depreciation -- will there business. terms So negative in very, on impact strong of But in

strong Luca team. As mentioned, very a management

So we're excited that. about

of margin, dilutive It's be IP, many opportunities. to be slightly EBITDA to right. margin In terms from to going it's -- standpoint, you're are an going there but

we As markets for in that are end business is this multiyears. growth mentioned, with

in And the has rate significant this help so shape, that team business in standpoint. we efficient. we of visited in be even them in They're come. then can And We think great cost more from opportunities a their that but expect become identified the synergy facilities. the August we to reflected years to growth

Operator

coming will be of of Andrew Obin America. Bank question Our next from

Sabrina Abrams

have have in talking think price/cost And the margin of some really in the quarter expansion XQ been your -- spread or Abrams on think And about the You some The in of narrowing Sabrina as for is peaking your impressive. in gross peer spread. XQ XQ. here peers price/cost Obin. is I I Andrew and

these on Just wanted any levels? sustainable are how to around And hold? thoughts can ask, whether it like

Emmanuel Caprais

And Yes. a good Thank you, pointed you Sabrina. really out stat. think I

improve We're of in path than more We at little to within XX%. year a expect now year we with year a XXXX. the and on continuously been after year started has that. also the increase and XX%, indeed, margin, QX gross Our top on bit of

then going bigger a So standpoint. And than we're a it's and with pricing improvement of with QX, will underpinned say an XXXX, been we is really year-over-year, a margin standpoint, less even cost and thinking to I in XXXX for what this ITT it's QX, incremental. price differentiate gross commodity is operating mind down have very logical, to But third CCT proposition. stepping in a from less then recovered benefits pricing that's But margin and spread quarter tailwind, standpoint, margin we so quarterly fourth I XXXX. it's $XXX strong has step than segment -- right? price/cost as mean but recovered. IP on we sure, about by even maybe the well. From our second EBIT, and XXXX. on is a would improvement, a half, really as from less absolute So forward, that in we basis, think on probably contributor our about at it's that pricing. what's both going to a good And the created to price-takers million finish more as in story year strong This keep XXXX obviously value level be in large expansion I little expect an that going our we and the

Sabrina Abrams

expect coverage historical on think some you backlog color history? forward? any provide guys when timing And do levels? to relative Or looking it to you And you on Could 'XX maybe we having return backlog remain coverage elevated somewhere commentary, XX% the last year of around backlog Great. around on somewhere at consensus suggests versus based XX% next then sort that to year. going

Emmanuel Caprais

Yes.

in digits. is year-over-year, backlog we we more up expect growing. backlog for So And And has XXXX. the a the as XX%, mentioned, instance, the with backlog than finish to IP, increasing year also on double versus kept so

So -- also than very The of which at have I in almost $XX that is year, And good we in is aerospace by business. 'XX. growing higher we're we beginning and good is really typically lot higher are there and added the think than is very, And of what's a a level CCT, backlog. very our story positive. is it's long-term in for the backlog obviously million coverage IP, usually, 'XX today, where lot backlog, defense. it components of so backlog The CCT, coverage driven since aerospace also there's much into of we

Luca Savi

you add year. can Sabrina, at up If when least short-cycle not IP, but feed and projects the in year, XXXX. the XX%, I a which the will the growth up year-over-year the are particularly that, look beginning of the point we And of end both of the profitability will is last is the backlog the backlog. At versus there, be

Now when backlog we year. roughly points basis at the what look has, the the the than profitability better at of that was XXX it beginning it's

Operator

Our Vlad will from Bystricky next of Citigroup. question come

Vladimir Bystricky

deal nice the on Congratulations and announcement quarter a there.

growth following notably quarters Can talk commentary up or sort next So the about -- maybe that potential you're comps organic overall October couple just and that on IP of thinking to the seeing you're around about get into the as here. positive orders early over difficult? more into reacceleration of for October how you business continue maintaining

Luca Savi

Sure.

short when is of performance pushing cycle. comes lead improvement that the to we're continuous and that think through of I it Lean the all and the times linked the reduction that to

the are us business. to and So because more these in on the we rigorous it's very important of more and executing win loyalty giving side when improve customer manner, the a project good customer the execute we're And to opportunities continue bidding. and

So look green a from particular, that the we technical of project point some one the projects, differentiation also using is and at are on side. When in you view.

for green some technology with at our customers capture, be us of to look carbon win be enables with with our it our eliminating something pumping their flaring. you pumps, Bornemann projects, it that multiphase Chevron, is this If

let's with MT those customers our improve to say, some not of market all will are So is continue where index, to style. we feed And growth. also, share so high call organic it working

Vladimir Bystricky

can just But weakening? shifting That's isn't really incremental on seeing of market performance to nice Maybe just weakness seeing or channel from whether Great. destock. whether sell-out new the more Connectors color on you're is Luca, channel CCT. or IP. you're The you helpful us weakness obviously mainly the give and color, end just signs destock-driven really there still

Luca Savi

mainly of business, it's very the It's bit this and of No, is mainly Asia linked. Connector on Pacific Okay. in distribution side the European. weakness but a probably the weakness A little is localized.

some of at look when long-term great North But that have OEM, a Europe. are business able we been Connector As the with remarks, very also in talk have keep have had the comes expansion able And in of SKU matter good with prepared offset been to all very we on of America when orders to successful feeding will orders were revenue. Emmanuel fact, also and nice that North that distribution it to in America. was our the you a those on the orders that weakness the

Emmanuel Caprais

Yes.

at so our flat. And a and were strength to are look up year, is lot we that Energy obviously orders, they has we quarter. double Connectors And them for energy also. aerospace, for been coming roughly X% from good be story And a the us. of this the defense full in expect up digits, way if the

we're of that I we able and of still with to in are come actions the weakness the that I think are portfolio strength So it's commercial distribution. out orders. and true nicely taking think QX terms that growth in seeing offset But European our weakness in

Operator

Sachs. next Joe Our Goldman will Ritchie from question come of

Joseph Ritchie

brought hitting just up Vlad Connectors that on Maybe the point that business. on last

how So you as create much a is European head obviously, -- easy down to we how that's the it into down this Because guys business going Connectors for much pretty comp XXXX. probably quarter? was

Emmanuel Caprais

double low and mostly was by this digits, is industrial. in Connectors the quarter, driven down This

then So nearing of destocking, in we're the of that an we sometime in to improvement. end XXXX, the going probably terms see be we'll expect destocking. And that

Joseph Ritchie

side, last the connector And Emmanuel, in better Connector quarter for were that than where side? the Europe is specifically you industrial on

Luca Savi

think you also I'm because with seasonality in not to in Europe QX about sure have August. some so

So be the it case. may not

Joseph Ritchie

the and think No, that's term? how continue and expansion for you Okay. just upside. And margins you on a then thinking continuous kind guys focused The question. guess the I the about talk margin improvement All levers -- just maybe you about are this this as helpful. Industrial just Can of business. know continually potentially longer business through that surprise you're right. longer-term Process of XXXX some to I to

Luca Savi

Sure.

will it year. is long-term comes you our when we some course, of to now. making target, there which to that we do -- be new that will guys comes the IP, sometime made, to we at are we needs it right when that have think look investment When share I next business, with

We we the in closing S&OP line. stronger the process the the We closed are fundamentals of the on progress for the really on already one that investing long that foundry. have the We're closing making some of have instance, term. But levers in of so side is, both foundry. other you

continue our levers. cost-competitive levers QX I allow then to finish the of continuous cost would the value The terms well have in And analysis, products I the we reduce on engineering Joe. hands structure. say, value would are VA/VE, the reduction the today, in We is lead supply products. of of we our the in side, all that XXXX, say closing of family our our these more of this will other by purchasing this will one as our and the some as be us chain, on times. Leverage

Operator

next from Hammond will KeyBank coming Jeff Our question Markets. Capital of be

Our Bryan will next be of question Blair Oppenheimer. from coming

Bryan Blair

wins in expect I of to that IP? Bornemann is should green to revenue aggregated time? transition guess, be that IP strong. go applications energy for stream hopefully, for current now What quite You've I'm transition green seems Habonim energy the And or over some highlighted scale that, pronouncing Svanehøj, energy where momentum correctly. we

Emmanuel Caprais

Yes.

bit really price $XX is the then price the you so regulation. Today, it's excited think -- in really evolved, around -- leg million. And on really XXXX, by are green from because were more we our is because $XX it we able with way new was to actual this disassociated a So of really has million. on any about the for IP. energy create by That little if this than number a year-to-date driven projects consideration

really play we have in that strong mentioning, really also, Habonim as product with hydrogen. their So you differentiation driven growth by our Bornemann were line, the but is technology in

with and it represents. happy growth, very So potential that that a that's market

Bryan Blair

on set you QX. I auto flattish the level appreciate mentioned just And aftermarket, detail. to

shake you XXXX? line what stabilization for just out? outlook, organic with decline that destocking that would and So lap to have that that encouraging. were imply sales to of we is kind And full kind snap of growth if do impact on Where expect, year year-on-year, the

Luca Savi

growing it the I think to of tell, would start X%, will full XXXX. the is the it's look year independent When XXXX. OES at XXXX, that And for will base, down the the be I exactly aftermarket So for be when aftermarket. comes XX% we a say. full XXXX X% now, out early that you year again in That the growth roughly probably total for would to of and little bit

Operator

be Stifel. coming will Our of Jones Nathan next from question

Nathan Jones

I'll just question on aftermarket. the on Brian's follow I'll -- there up

is on X% demand? a inventory XX% of you said You view and of Do down OES destocking softer that aftermarket. what what versus independent down that is have actual end-market

Emmanuel Caprais

mostly Europe. is stable inventory destocking. in It's pretty The aftermarket

X%. I X% to it's think up

which a and last working that And inventory excess mostly ordering they customer, through lot so it's have. specific had is that been our year,

Nathan Jones

helpful. Got it. That's

previously be you've to priority business for Does guys capital done, into acquisitions areas and have for that. You X a strategically you? continue priority pump the into of M&A? had they the the done talked expand are that to other Europe about wanting What deployment that

Luca Savi

When you the now -- of for if little look really you're flow is and the the at the -- on a talking you year have about side you're Micro-Mode M&A, flows. this And really acquisitions bit the and talking categories business. we it's acquisitions And rail. about in you the Connector the look X made Connectors Svanehøj at

Emmanuel Caprais

with We that look quality, are wouldn't I a to with at business European that cut with But -- It's look Habonim. differentiate I what really have see this for from at we get the say the to and the like we And that's saw we the to is connect high look to coincidently, say specifically European and to ability we there know also companies competition. -- us also saw people. Svanehøj. to And being that's M&A. wouldn't what at when that an region, easier

is use we wouldn't I a for our that for But that Europe say priority target. sure. M&A So

Luca Savi

that's right. No,

Nathan Jones

terms definitely growth? focused and less focused and probably more about what's going growth cost talk have would there on on be this there Svanehøj thought this on in synergies out taking of more I are break that more a focus would and the is cost business of you already don't on cost whether Can synergies.

Luca Savi

management Nathan. really the the got we their things team, think on, well. is that know when that I is and a spot very one differentiated team, the position. They differentiated products market, Soren, And Svanehøj customers leadership They Johnny, You're service, competent. they very liked of about know their

it's more than So cost growth a synergies. play

in the industry markets. in attractive that's definitely, So case

would in is that talk while transition to going for for be portfolio. lever investment So energy be over in our a to where being adding about another traditionally and goods, would Svanehøj our ammonia, there's parts terms here be you it's marine, which player alternative the And cryogenic pumps growth probably the our pumps, and business in of fuels that. green future. And great is

really they happy and So we we what like, And growth they are very sure, opportunities this the for the with team. is know that. what And do.

Nathan Jones

any you rate on them? what few for years the color growth to Just expect over the be next

Emmanuel Caprais

years, that, double the X single X it's at least digits that be we the high going next to expect for digits. then for first after years so -- to low So and several

Operator

of KeyBanc question Hammond Markets. from last will Jeff Capital Our be coming

Emmanuel Caprais

get -- like So sound can talk it we to can Jeff. doesn't we

call. think we I the can So close

Operator

Please your you. wonderful a and Thank lines day. disconnect at teleconference. today's does have This conclude this time,

Luca Savi

you. Thank

ITT (ITT) 2 Nov 232023 Q3 Earnings call transcript