ITT (ITT) 3 Nov 222022 Q3 Earnings call transcript

Good morning or good afternoon, and welcome to ITT’s 2022 Third Quarter Conference Call. Today is Thursday, November 3, 2022. Today’s call is being recorded and will be available for replay beginning at 12:00 p.m. ET. [Operator Instructions]

pleasure President, the Investor my Mark over now Vice Macaluso, Relations. is to floor turn to It

You may begin.

Thank you, Earnings XXXX ITT’s Third and good morning. Conference Welcome Call. to Quarter

and Savi, Joining Today’s strategic Officer. announced ending related certain cover for Chief here October may business are results will performance, Emmanuel Luca this financial X-month this statements to Executive uncertainties forward-looking Chief conditions morning call Officer the remarks President; ITT’s Financial market X, and on Caprais, we the ITT’s priorities, period subject contain of risks morning. to including and comments Today’s are that and COVID-XX company mix, effects ITT. which

otherwise tax exclude and charges financial Except including, results of results of compared and certain charges. certain report ITT vary filings. not based acquisition-related among in or nonoperating obligation quarter suspension but other and XXXX, materially we as events XXXX a are future in on nonrecurring future new of recent to, XX-K to items the related for restructuring, and items, disclaims and is update the statements information, not items, charges Form factors a morning forward-looking adjusted will otherwise. third on annual performance the other be expectations. the are any current described and present statements, or to not limited based whether expressly may are of XXXX due to These measures. and management’s third SEC on our to, result noted, under These guarantee operations events non-GAAP this Russia, results asbestos-related quarter Actual in

GAAP our of and along on detailed All are to most adjustments of press release reconciliation quarter our the in website. the in such available figures which the measures presentation, both with are comparable

on now number will is over Luca, the to X. call turn pleasure begin to Slide my It who

customers do, would shareholders, by Mark, you, always in their continued to I as our and and thanking for Thank like our support investment begin, our good ITTers and morning. I ITT.

challenging to this ITTers. day voluntarily tireless out, increase customers. efforts continue for earnings record deliver off this stepping rising up efforts reminded the As around on CCT our world, our also continued in with I’m we all of ITT. to teams highest XX,XXX is by the with were about the margins how exemplified And and EPS, quarterly the site and beginning a day to environment, Wuxi team record in in challenge the XX% These our deliver and manage sealing continue to IP through the at the QX to of quarter all for

QX of demand, our remained our growth orders. the We over with drove all double-digit services organic generating growth most products in in On strong XX% and orders businesses markets. end for X demand

total for driven organic XX% And both CCT by and highlights, some orders pump year-to-date, now in nearly all doubling defense. Industrial share MT, XX% and me XX vehicle platforms, Process X growth in XX% new XXXX projects reaching short-cycle. Let just by growth driven growth the electrified commercial wins months. XX orders aerospace in through organic in of organic orders

strength, order we pricing recent across businesses. our volumes revenue of because by higher and Leveraging step-up sales grew organic all XX%

points organization this over can XXX be with On continuing quarter Technologies this in IP across and are CCT. value-based accelerate of of benefits results basis strategies our sequentially in expect success. We up and continue to and pricing points. sequentially. CCT early we expand the The good expanded grew and ramp margin XXX basis to profitability, seen well to margins signs year-over-year in by this Motion IP’s

sequentially. flow once versus at points basis prior XXX year XXX was IP, points quarter But business. the and team our highlight basis margin The IP again the of expanded

performance margin encouraged expectations and are and of continued to second our acquisition We by exceed Industrial execution. just part by to top quarter was its margin IP’s the price accretive Habonim this, at ITT. project continues of recovery, productivity the was again Process. On as driven segment progress in

on drive seen IP. the line, in be and Falls most QX the prominently high-volume flow approach time ANSI a spent were in to the the the generate of really one-piece category. approach continue energized improvements we past. began to operational in pumps And ideas. fundamentals We progress this in new mentioned The Seneca smaller with teams I can in I Falls, which expanded larger in When Seneca to see pump and expansion the Emmanuel

IP, efforts up safety, and we in quality, As throughout lean on-time ramp delivery we improvements further anticipate our competitiveness.

quarter, Again, closure Seneca structure will progress new the successfully cost bargaining Falls we agreement the further in with at for And the of IP. improve in made we which our union the a on labor announced facility. foundry this long-term negotiated IP QX, future collective

drove time We CCT. QX. to revenue revenue management quarter expansion at improved recovery. was this price Moving cost At to second XX.X%, margin levels this and and the of growth, aftermarket similar sequential consecutive

see In we Motion Technologies, easing. commodity pressures are signs that

inventory, fourth still continue impact higher MT’s to quarter. negatively which are margin price we through However, working will in the

vehicle performance gold vehicle provide the safer to in [ The the Picasso with announce racing Smart ], equipped lower-priced Pad commodities be seeing a expect to pads will X proud benefits by XXXX. data. first prototypes. real-time launch the MT, I’m inspired that true market from of smart Supercar on braking and We Still performance start in our the will

for this market and incredibly more the announcements experienced sat It commercialization car clear the is superfast. as continues. of engineering a God unique I the machine, I in this makes to future to break me beyond. forward that When that was light look and and the partner

working spent lot together on This of a quarter, every with quarter, time like road globe. the other teams the the around I

share me Let a few takeaways.

our the designed handling KONI’s in of be Day, it is advantages and and [indiscernible] plant the improved business defense investments KONI our the trusted have at certainly of I should defense like firsthand And a delivering developed customers. this as and are Defense Hydroride in compact selecting XXXX product. absorber, and a and leader in why MT. Hydroride. shock the At at growth to value case ride capable innovation automation saw Oud-Beijerland, driving our Netherlands, This capability for We the many partner. engineering the contractors Road for this Patria been you is of KONI’s smooth KONI Investor lightweight

runoff KONI, reduces our the patented SSD XXXX, launched Still are and MKX in wheel caused first The we make industry. by expanding technology Frequency Damping, and in rail track which Selective friction. wear a to

operations are do to having just not these well. demonstrating and are operators making We investments our rail as we to now pertain It’s advantages about sustainable The across Europe. OEMs products.

Barge solar In fossil we’re our approximately to the Italy, support fuels. in expanding that will of use I the energy needs centers the completed going and forward. Termoli in month, and reducing XX% of see Barge lake fortunate both Last energy was solar reliance on innovation

read investments sustainability forthcoming report. in these about can CapEx our green You

very to was Board of to bring October. in I Lastly, plant MT happy the Silao this Directors Mexico

investments back Our friction truly and directors showcase to their saw team Thank knowledge a ITT we the local whole. team. and [indiscernible], thank Coming their you, you, plant track makes and exceptional. of made our in Silao the safety depth capacity record quality Silao firsthand as that and

delivered XX%, growth to EPS more share and that sequential recovery, volume pricing thanks increase strong productivity. a exceeded from these gains of and coming All year-over-year in and

quickly Ukraine, to of we manage lockdown. the auto we materials in of on energy in have so agile cost Because supply chain to stronger and taking all in the not crisis the as see, especially China effectively included overcome, and the smartly above structure downstream Europe they’re effects the inflation customers, spend. labor, we challenges outstanding our forget results, While XXXX, the must we adjust and our to our cost continued today and of the high uncertainty we impacts war remain delivered had USD, steps a disruptions did teams OEMs, across the the

discuss to move last we our tomorrow. will us at to which in priority ITT progress is proud Sustainability the I’m Report, we Let made to Sustainability publish now report publication everyone have the XXXX since Slide XXXX. for a and X

products; a, and development our we the to of a innovative more more ESG in you workforce. investments in build As advancing commitment our are inclusive engineer report, c, will and future; strategy the to see b, sustainable talented social through: diverse, a technologies

capital by XXXX. targets, long-term and are we emerging and XX% drive demonstrated XX% targets diversity, continue reduction we as in our stakeholders. XXXX long-term reduction ITT’s gas with issuing pre-pandemic greenhouse inclusion such XXXX, all emissions for creation that are Habonim, and incremental for announcing credible inspirational equity goals reduction. a strategy and through differentiation deployment stepped-up versus after will in sustained a measurable near-term levels we and the value of than our sound acquisition Rather our to growth emissions sustainability an execution targeting On profile,

to more over call results the detail. the turn to now me QX Let Emmanuel in discuss

good morning. Luca, you, Thank and

our for businesses. We in continue demand to products all see our strong

This XX% the growth organic organically components businesses. and XX%. America This in where over and and quarter, grew in pricing in CCT, in and continue Industrial in this with XX% backlog friction pump North segments. quarter, short actions was an all of share project Connectors we cycle by across projects especially drove share growth XX% second gains, increase nearly we contributing In share aerospace in growth in XX% growth revenue broad-based Process, across after gains driven all in orders gain Europe to recovery quarter, to IP,

was Parts up XX% Services and XX%. were driven up XX% MT, in by with Orders revenue organically, growth pricing for OE pumps up XX% nearly friction organically, recovery. including In

long-term new In strengthening others, XXXX we electrification awards accelerates. by USD. addition, are drive the profitable in impacted platform will the Like as of the electrified XX growth

XXX to $X.XX sales headwind to was EPS This impact. basis quarter, equated to the points, close which a

in points we over sequential operating margin from despite was income points expansion. the a year-over-year drove XX.X% improvements headwind XXX basis margin cost significant inflation. Operating profitability, basis to in On XXX and improvement addition

improvement, sourcing of place, Further, Within shop hedging cash of capital through productivity FX of generation. team flow we in floor continue combination put XX free mitigated to heavily points the our the and impact strategic the stronger negative on the requirements our a partially margin basis roughly Working drove weigh dollar. actions.

our our investing a be this continued cash generation are well. a the drag difficult for minute. continues as on expectation We of which in are below these timing to discuss flow year, free AR delivery purposefully cash time. will in to flow ensure to our in inventory for I collection factors, free more customers we Because

Slide on performance earnings the X. at further look now Let’s

see, of can you pricing first agreements ramped inflation. MT the quarter impacts a the secured notable the Further, with in the step-up mitigate months in significantly X cost IP. will through up high OE at As recovery

year, indirect approximately continue an $X.XX original cost EPS help to versus us expect of of and from our overcome war impacts be $X.XX we also of impacts. inflation X-year prior impact We the direct to The earnings drive this lingering guidance. productivity and in to Ukraine will compared

technologies interest groundbreaking effective value redesigns. and as fund rate Finally, to share repurchases, as analysis, well engineering million Embedded value Motor Pad such roughly over as Drive $XXX $X.XX. expense tax ramp of and higher we higher impact a further to continue to benefit netted a of growth investments Smart of product The

Let’s turn to Slide results. X segment review the to

Motion me performance, on-time Friction and to quality production supply Technologies. auto organic the managing XX% Let disruptions maintained begin its OE growth. and outstanding with volatility global chain generate effectively

performance growth raw margin with to Inflation Process to Nevertheless, partially revenue pricing this margin profitability, MT’s with material XXX points growth a improved X% was faced the segment basis lost most offset the product decline points XXX slowed outstanding, productivity Ukraine. year-over-year. of Aftermarket were benefits. we On in short-cycle basis drove which at distributor due quarter of and basis XXX high war Europe sequentially. categories. due points to MT recovery inventory over Industrial inflation, across and in

projects we and On short-cycle orders, a in on basis. strength year-over-year see

$XXX sequential contributed margin there of approximately Our one-time XXX basis points. XX% backlog book-to-bill to basis of both was an and X.XX, the which year-over-year by since points on over quarter, year. an In million, a prior favorable items. basis impressive ending IP’s up XXX was improved

to Excluding XX% grew IP’s these improved still execution. approximately amounts, grew operational to margin -- due

This resulted in a QX. margin in XX% incremental

distribution. connected up by which XX%. revenue margin X.XX, we in the in was and stemming as driven CCT organic the sales with of revenue was as an given volume XX% recovery, strong of quarters. sales aerospace strong drove pricing quarter & another especially was continued margin continued higher growth orders order book-to-bill in and Lastly, Control, growth recovery Distribution impressive well from floor quarter. XX% previous commercial organically this productivity were and shop incremental in CCT’s expansion Connect

in performance So all in all, strong really a QX.

We’re gaining is in against and executing. while our share effectively costs are IP, We believe managing moving our our we long-term especially towards targets. performance competitors,

to backlog of Because the of we guidance previous to organic tightening financial our date, guidance. now over upper Let’s of performance end range. discuss a to to executing, recovery turn our Slide sales the pricing our $X updated solid the and X we’re are billion

However, of established and will Friction, I is range recovery This due mainly range mentioned By prior earlier. aftermarket the at flow margin be end in we the pace are The inventory MT close few persistent $X.XX volumes. to customer in in drivers unfavorable February higher demand margin we we factors: expect and volumes and expect that anticipated, of segment inflation, original which mentioned had cash Luca of within the levels at to and will price the On CCT MT’s the offset the low previous required we abating XX%. in combination collections. by our lower $X.XX. expand cash a of given free midpoint should in IP, the mix in and of for $XXX segment, revised CCT full that given consideration to increased number close margin cash, the Industrial margin lower aftermarket and to of to to XX%, at meet timing end our approximately not is outlook to Process year, results headwinds a EPS million now that

in up and to customer taking We not where cash deep weekly collection steps shipments. calls, are address performing inventory, necessary, including and to and dive clearly payments expectations, of supplier progress review stopping further we’re this

growth revenues organic MT growth sequentially a the in the despite our Total QX and X growth will to year flat given approximately of well be friction CCT declined teens, dynamics inflation growth organically me both exit of and degree, where XX%. high approximately be IP spend to standout MT, lower revenue to offset lesser volumes in above aftermarket XX%. with grow in the and margin an the quarter. but firming CCT Organic in minute lower and FX points. expected IP and thanks will Let will in the again a quarter the IP headwind the persistent above pricing XX% sales benefits, be fourth sequentially is QX to roughly while by be aftermarket. discussing of to will expand to will

today. growth EPS year-over-year, of the drive others QX roughly midpoint will at This in uncertainty given strong XX% the performance the we and face

headwind over it quarter, will that, an overcome With me from let we $X.XX the FX. For pass approximate to Luca.

Emmanuel. Thanks,

that me let points our XXXX, on the eventually XXXX approach a will we markets help outlook. inform As few end highlight

of We fourth economic and of there a potential process. are evolve completing year. to name the over to uncertainty our a annual quarter rates planning higher certainly and cost items few. due And energy, chain, the time will impact impact is still of will and a interest slowdown, lot next supply These the

volatile disruptions. due supply chain production Auto been very to has continued

However, demand. low inventory drive in North levels, should continue especially America, to

by Europe China be might COVID impacted further Our current demand thought still show production and current low levels is in improvement, that while will remain could North American at lockdowns.

outperform have market industrial in seeing an In activity, we especially America, seen in all continue slowing sequential we We while baseline to of in pumps improvement our are industrial expect geographies. markets, signs North connectors. to project in and the

We should stay industry. evidenced monitor demand will for remain continue potential aerospace modernization. orders challenges and soldier’s recovery of supply we Furthermore, that the the to KONI by connectors some are drive in notwithstanding shock inventory absorbers chain for to slowdown. is the robust CCT. continued of in ahead defense rates order support generating strong distributor which levels any continues, This CCT lingering The

loss the XXXX. hit revenues was business Russia by rail the of hardest our Lastly, in

hedge as the given of Emmanuel Reduction headwind year-end. will a rail stronger in spur Act be in should dollar foreign expiration spending. including year, at noted, and likely as investments the next currency more the Inflation and to global U.S. earnings part the infrastructure, revenue Also, However, U.S. the protection of

Now recap. let’s turn Slide XX to to

QX, As proud be a about of. lot I think there is to

which, step-up IP’s XX%. Industrial contributed coupled in Our in above a pricing notable with QX are recovery Process, exceptional execution with ramping margin actions to

with execute. in that teams advancing strategy environmental dedicated XXXX in announcing and and to are our sustainability place action social specific are plans We projects and grounded targets

We to while are the our portfolio across all encouraged our for gaining deliver businesses. ability our customers strong team’s the in demand by and share by

However, certain daily slowing we markets, signs we’re are on seeing of in watching a which shorter-cycle basis.

slowdown of in to and cautious for stay we generating hard can the stakeholders prolonged will work control in target ready process. financial We act the and and a long-term and achieving value continue event on to what we on our all

it pleasure happily my ever, questions you been we Adam, now. please open and for speaking take As this line with has the Q&A. your morning, will

from today first comes Giordano Cowen. Our Instructions] question Joe from [Operator

connectors wanted deterioration as just How the and there’s industrial much to out or that is like around and real and the of I too that. do people there? previously see start it a like of maybe versus buildup okay, over-ordering was you were inventory the commentary on just much market market but

Okay.

So the of you our me But actually start industry a grew we electrification connectors, EV, talking including, at industrial saw about let softening. connectors for is points, look the then the also purely the It industrial peel QX. connectors, why Joe. instance, When saying in couple grew when and onion, we’re connectors, we the this up.

Now still distributors, we a inventory level not see of see to our inventory And look in the good talking when levels, on we we do orders huge that our at distribution. front.

of that bit that in believe the that, a And softening more that little the a on call economy. tells are those coal we So canary mine kind the side. is we what about

-- they as were of just it price are broadly. challenging? take willing things now? increases people a Is -- bit little still price like that people kind were more on of judicious Perfect. a of that still a are was -- customers follow-up Or months kind becoming price Are everything with more taking And ago accepting more to clearly then when spiraling? as couple

comes I a long particularly from when ITT Motion price, to say very would Technologies for Joe, journey, has been a Well, of view. it it point

think has because level, time what always neutral. I of we’ve a achieve that look there been first proud to the in been QX price QX, that say we’ve ever the I lagging. when incredibly must So been in it’s at ITT I’m And able you cost

some start negotiation Obviously, expect and little start that talk in that are the QX. and to commodity on a side there some seeing customers lagging are bit side the a but lagging we into, XXXX, Did a particularly getting actually question, was So in is you improve there are easing going getting other as that looking on, therefore, in also when your of answer there also on at this. we negotiating out Joe?

you much, Thank Yes. very Luca.

question Hammond next Jeff from KeyBanc comes Markets. The Capital from

Just slower? through mix on think kind should Is I’m into flattish kind less into margin wondering, had dynamic? coming said and MT, a margin of you of ‘XX? know I is more hoped just how of it -- progression more that maybe And the sequentially seems it is you progression than we the pricing just of like little bit it kind about XQ. kind

Yes.

Jeff. So,

not protect a And seeing of secured expect our in see and XXXX. materials ahead, from significant And pressure from seeing had impact pricing the -- booked We had pressure So a that we’re commodity the would little commodities. in lot pressure to half. benefit bit because we yet. improved yes, pricing we to continued expected commodity a abate that an second we’re customers

was negative the also the said in see on a on negative in mix QX, in in hit we of impact QX, terms prepared impact will the also the And mix remarks. and the you there Emmanuel the as nail on head

And think And on one-timers. some just IP, said then there were margins Great. just exceptional. I Okay. you

then accelerating to kind talk I the of Should you IP? expect lines sustainability in think we maybe same Just CCT follow. more momentum as mentioned along of And CCT about that.

is IP of I definitely outstanding. about and Yes. you [indiscernible] think XX%, highlight. by the growth XX% mean if growth of

Now one-offs.

I’m pricing, today is because and XX% So Germany. really execution, that XX%, margin, that on probably IP throughput, or of margin, between the say the project plant okay? the at based This the around discipline being of plants of extremely in you sustainability around if result velocity look the at being other strong you when It’s solid. the the projects, I pricing -- the is in XX%. delivering is out something Seneca pillars it’s would proud But the look Falls

the then, XXXX we So when if no Jeff, year-after-year, are were COVID, And matter. think COVID, in that posting since since mid-single-digit didn’t journey, XX% you about had margins. we we growing IP

that It guys now in target has our and of of an journey long-term been XX% achieve have operating margin. confidence incredible our it’s many and I ability hope solid. you to more even you

been a story follow. great it’s Yes, to

from Halloran Next question Mike Baird. from is

just of So for a we the Luca, on yellow? on remains is And on the bit things, I just pump seeing side getting color side question of concerns nice other here. Is side like why the it little side don’t getting things And maybe would kind with pump base? the piece energy of bit. kind why more you any pump a point? at One, the order talk things. then sequential a really I start -- just you’re little are about guess, twofold this market little the of pushed a on why literally share pushed story on a the they’re

Okay.

the is story. short-cycle the look we a So pumps, would great when definitely say I at

at orders. more $XXX than the look we quarter you QX, If of million another have of

And half year-over-year and said, -- of as Emmanuel was in the half XX%, So price. Parts is volume Service the growth and growth at terms roughly growth sequentially. which

you good. business, project When at incredibly look that’s the the I’ve side projects of So recovered. the

geography actually year-to-date, the projects where look XX%. at more the are projects, The geographies getting like the we Middle in America, stronger see funnel East. like you up If our North we on And only than projects roughly we know, you some start the to this the the is don’t as and down Europe, that? I to anything well weakness. if add sign-offs where orders Emmanuel, actually and want seeing both going as see is orders

taking that phase. come the customers energy, and are to I budgetary we’re were to of is that discussed think specifically, longer And some to terms projects then what materialize in with seeing

capture lot finalize engineering-only are we to waiting we’re with while so orders is their positioned a that projects. including business, ready the for well LNG we’re to budget getting the very of fact and customer their So the

that So is longer, the going it’s project strong. secular the we help acquisition us general, There’s market. take But to on project energy, comes growth little especially the project to but a with side. in the should believe, when there,

And then your you side talking point, on on probably short-cycle. is pump were the Mike, concern that the something about

baseline. we have also This If you are at said softening what quarter look the it at baseline is QX The last in QX. -- softening. we and also seen what in

there. you’re great. are remarks kind on detail in? underlying prepared next demand those the And the XQ more That initial those into I seeing trajectory things Friction thoughts then obviously things, side Or regionally. of was your the year? of Were and the Motion the Appreciate side oriented appreciate on of

as any you good And -- kind Luca, deviation perspective. color out like an any be And there what -- from your environment on that some you always production look view really numbers gave great see the versus well. of consensus look would

Thanks, Sure. Mike.

what So look at because XXXX, double-digit. grow thought beginning. from at was thought you when quite that Look We an year pan Europe out it going to be at the Europe. different interesting has to we been

minus half at ended XX%. It the first

then XXXX. low-single going to So But to with or flat overall, going is worse. probably we the is was going And even negative was to we China, in be lockdown Shanghai, in thought QX, be recovering in up HX. that. thought it digit for will negative to X%, something recover end like Europe

year X% fact, strong was reality, that Overall, their the the America for prediction matter of have closest recovered single-digit. finished million half produced a positive was probably positive will mid-single to the one China finish a strong QX, the strongly, double XXXX. and year XXXX end plus will QX, North XX that will in and digits. to the As vehicles a probably

mid we right tell, North Europe. and single-digit Now probably low single-digit low what looking we though is to stays growth. thinking for America growth what even Mike, too early China XXXX, at now, it’s are flat single-digit think, to

full worldwide, growth. the overall, for So a low single-digit XXXX

And on be then right? of your share will top that, gains

Absolutely, Mike. Well said.

it. Awesome. Really appreciate everyone. Thanks,

from comes UBS. question The next from Karas Damian

follow-up this normally, already curious I fourth of a quarter Just you’ve so in on appreciate the -- ramp-up have Friction. color But investment. provided. capital kind question you’ll

I that’s year? kind of you’re winning of that investment you ramp still these what we into baked you And previously EV guidance. the a on boatload think Are as exit expecting them. had the wars,

any that platforms you there’s these risk curious could even some of get dropped? see ultimately new or delayed Just if

Yes.

on balanced we -- a that to awards, the we’ve drive far. the Friction certainly we’ve of support to QX we especially that would say yes, to the there we CapEx, be so relatively at we growth So need expect seen stronger trying than that fact I with productivity, recession what so need is same we time, future. in all the know that But won. the looming a in are

of the higher And it comes when so we to due want recession. to fixed really to moment volumes with the make lower sure that ourselves we don’t costs set

productivity. So we’re on going to focus

a on maybe we mindful We’re fact of business the year where of -- going the a XXXX that driving the start have could worldwide recession. really capacity staying won to focus while recession

has we look on delay delays do let Damian, little the SOP a zero on lower And has for -- basis. EV. share -- me analysis all, regions. up SOP in Picture XXXX, And because part the the in the question, bit worldwide. different what a When of we Well, been first of different quarterly there particularly happened we second the following or on XXXX.

start production. of look where has larger. terms the more this So volume in Europe. been than been lower accelerated actually the compensated were in at in we they of China, SOP. There been and But has SOP delays There at SOP has the

it’s we Last if America, the When quarter. was you it you North And happens, don’t So get the believe, at going look in EV, high. the QX at how we look EV exceptionally in at many produced look that overall because or neutral. happening. we immaterial. to bought see Also adoption, be,

So see happening. that we don’t

for And us electrification will be good.

that in EV And is which the the significant BYD Damian, new that thing is one was notable with we quarter manufacturer China. really platforms this leading fact won also,

have we a really So as position and BYD. and Tesla the the in with strong with is happening growing past, we discussed same position

The Jones next from Nathan Stifel. comes from question

question. Matt Jones. on for is This up Follow Nathan

I incremental think in remarks, the on I might earlier the cost margins impact have of what price MT? missed it but the in was

So I level would say this we’ve high the XXXX. since first And been cost we’ve quarter that that, seen for was inflation price is neutral. as ITT Luca quarter mid mentioned, facing the at the this since cost

For so -- bit are a MT by results, and the business different. obviously, -- little

is we’re MT, the the impact -- at point not cost a For neutral. cost yet price where

negative And margin so QX -- a impact for cost and points it like from was standpoint. price MT. impact, than something for a has obviously, from a lot less -- in XXX The negative basis a dollars margin XXX price impact negative

Okay. do when when you when Any guys to color again, Is -- dollar margin -- it -- XXXX? And then expect there? on late a sometime to on basis? you reach MT neutrality could does back provide

correct? MT, mean for you And specifically,

Correct.

Yes.

QX a from So for we well I standpoint think really price will sequential as as could price commodity that little we to are MT, benefit in close bit as neutrality basis. slowdown be incremental of customers a a having of the recovery we our -- from be from

question Vlad from comes Citi. next The from Bystricky

side nice Process, order Industrial in of now orders project growth longer-cycle the you’ve there. the had really at looking quarters several Just on

project So can type a these little ‘XX expected about longer-cycle talk into demand? deliveries orders And IP how this much on you the just you visibility orders? give

Yes.

$XXX think, from XX% backlog, that something a really than less in -- project. a lot strong like we XX%. up, as backlog close I is -- discussed, XXX IP, that -- So million we have of to Of

can between a project So we share XX have we time lot and this take time project had order months. is the between the deliver for a really standpoint. us, of XX Typically, from months gains to be the the result of we

we’ve right are than we that also year that given years. chain X that the facing be of probably and the think supply our are -- -- I but now, a on longer customers issues a I been think the side conversion little be more to remains facing, between facing that I that could -- timing that think we could bit

because margin color to backlog color discipline some the that that growth that to in kind we really And project some pricing really you don’t profitable are able that. on margin the I Vlad, projects. if will you And the And to know at may this I have you these if be addition the would like is start high. not of timing, add on historic margins deliver and give the to on

Okay?

that’s red great market versus And look [indiscernible]. color. just yellow slide then maybe more No, green. outlook and I If great, on Page at there’s X, your

in how various So like ‘XX seeing -- macro you more talk sort you’re growth can potential what scenarios and just for year? for the given what range in significant in end of just thinking planning a about your of next about you’re the seems balancing, slowdown how a into or a wide you’re markets, potentially

Yes.

end the markets. through So walk me let different

million already growth of XXXX in in talked So done automotive, to past. XX like what versus XX between to terms expect for We million, we’ve the vehicles, Luca low about obviously outperform expect single-digit we XXXX. continue

able be outperform we so And to that I that expect to the to continue before XXXX, level XXXX, and while pre-pandemic we’ll think market. recover grow won’t auto

-- continuum And expect of end aerospace a from those the from standpoint, commercial by customers and so before XXXX, the needs we from an should of -- further the would be and be pre-pandemic renewable the capacity the ready to framers I and still below to we an very given and lead be aerospace availability. that from to oil was we feel not that -- that is production gas standpoint, And production would energy that. energy happen transition because around to of I there’s a to level what pre-pandemic think that lot still that that security at support of of energy say much going investment And -- there’s concern it we’ll air given say we then into for production XXXX. enough there’s production in increase aerospace pre-pandemic. moment,

general the industrial general, on going rail, As in concern I positive there’s would for energy I say, with and be And still I then say, project for growth. in would some market about GDP But timing. is rail steady a mentioned, line overall, to track.

in bit the U.S. I little in a Europe. upside think more than

color. Emmanuel. That’s great Thanks

comes question Blair of next Bryan The Oppenheimer. from

guess a outlook I in more on bit little the your set Friction. level

the through market growth walked You’ve expectations.

outperformance You historical in line be experience. with should said that

about that any through China, wins, regions outgrowth North if Europe, across on be there’s thinking the trailing based to curious ramping that Just platforms should EV America nuance ‘XX?

Okay.

would is let do key the that exceptional platforms. So you One, No across would the front. me substantial electrified course, give outperformance but Europe, when are dynamic Bryan. because you is And say in would last we say, year, board, I say continuous a have awards, I we won electrification outperformance many behind on had conquer and on I we front say, the would I couple the that that examples of an about difference. talk awards it, of

-- is are winning electrified today. platforms year, We our this which share considerably market win our many higher and than rate

color Luca give the Head that will Head that Friction, Friction X where on is an R&D feeding and In last really and won happened example that Martinotto, outperformance. an more lost of we So years I’ll of the ago. has award other, you month [indiscernible] keep the

award, product. ago, years on but working of out this At we an the knowing that problem, nothing have cost on just came kept performing what that. own perfectly they might product X on investment our the and So did, lost the been well developing they kept team

The As how here is another Luca, is current OEM the judgment our we [indiscernible] the this customer, came they’re outperform from and month, supplier go, a you won and qualification conquer market. accelerate to matter and some fact, and and and X issues Tier we of facing call last very good looking award, win, back.

us always. through walk as if color for helpful year. cost Emmanuel, price progression wondering in Very Motion could you the Tech

that neutrality should toward QX, be basis expansion top said the there toward impact the points Why that in quarter? be back little you You relatively with QX, along hit next think I the And this was improvements mentioned QX. moving sequential progression line margin the similar. not moving or neutrality QX, QX quarter cost in would lines price of a What XXX half? into under

Yes.

price/cost This dollar a improvement. not but going massive So QX, this in is improving to from we’re a as QX where and in neutral be QX that’s standpoint. I Bryan, versus is equation mentioned, the is more improvement, incremental

the have compared a in significant half the We seen first half. second improvement to

made had a progress were -- fact, still -- but we you But negative largely a cost -- we versus in still of price and lot from XXXX. QX standpoint. In

or So same from less amount in customers, entire and we was got more our got year the that that the $XX XXXX. we for million

So the significant in in progress, we price progress were to but close incremental up compared went QX, around to our in recovery. cost of where -- $XX inflation, it. And QX of made -- ‘XX to QX nowhere sorry, way $XX near all to we million ‘XX cover We million.

We’re build continue going and then to up QX impact have a positive to in commodities. that the little bit of

the standpoint. from is cost this So price line time a of kind

expecting you why When MT, couple not there’s in QX, look of a are and standpoint. have a progression is from a margin significant happening things we’re that this at to sequential

is The volume. first one

because that to to is the have less what than volume impact, QX we’re have coming than we in we reason in a is fixed obviously, And in double less for in one volume has So we fact had mostly less have QX absorb aftermarket. we The costs. we what volume had lower first -- going aftermarket volume, from our the QX. have this

demand one OE. this a we that expansion. Obviously, Europe. better -- think is is margin mainly has aftermarket as that’s is and we this I of recession, as second headwind than XXXX, And the higher inventory. a in business. the And also incoming especially a demand margin lower that The The you aftermarket a really improve. mainly expect aftermarket due will result, Russia our aftermarket is due MT’s in to that look to function And know to Europe the to lower is

exporting Russia indirectly this were and customers our business to disappeared. So has

America. from of Andrew question next The comes Bank from Obin

operators of there. the think I So you guys are out smartest some like

to going know the or answer think want that. probably just people other that questions answer you one for I’m make I sorry answer, So

the sort So And A your see rates about or interest strategy working in what guys what working financing suppliers first are your finance you right? going you the lot interest rate ecosystem? up, their this of does they use capital. and was do do high to do if environment? it for channel floor your thinking companies question capital? of What And

Yes.

terms impact it issue real expense pointing on you’re a out cash has free of think I for of interest us lot in as other generation companies our and for a well. our So the and flow

So cash we’re are recovery really driving performance. what is a in we the doing

cash performance the year-to-date. with disappointed are We

in. so we’re cash really And focusing on that getting

bit XX% X months. more less or of is with $XXX We our have than of million past XX% AR the first more due paid customers. a it little roughly within

end. a generation not long-term is just issue. is customers adjusting quarter their for this This So cash

to we’re pay so time. need fact And us they really the on to drive going that

from lower There’s XXXX, to mentioned inventory. on benefit that. to is need doing not ready We making the inventory as going standpoint in reviews a to need we But material effectiveness. that planning -- I -- as And to And lot sure that time. excess is get so we’re in that bring to in order reality action on that this work XXXX. we where and a much we to an also of are paid take work mentioned before, from needs inventory happen stop-ship on standpoint, work

have and paying pricing us. had, is actual then the agreements agreement, between that we’ve customer agreement in the fact the that we a And the terms formal the also of delay timing

So we’re recovery million roughly going need pricing that of to we after to $XX go collect. that

focused So to getting I so really us, cash we don’t have would that on doing the say like have for in financing really we’re we use are to today.

a great Wow, that’s it. I appreciate answer.

what how is the How days, it sheet have likely balance M&A has in don’t in nice less a does sort seeing you availability? still ITT as much but are terms months? do equity? next you in -- competition the does you of do from question What you’re because you cash maybe to cash. generate these also more like you M&A a Second see environment? see and make on would XX M&A. What generating you as see But the environment -- see to of terms you do or XX in What likely from private deal of it to

environment. of like, Thanks, challenges ] I competition Andrew. because wouldn’t let’s more -- from the has probably the today more deal is The [ say, say PE likely

might -- front. know see is we really capital. do need the strategic, what on ours deployment you the M&A of more for competition But for that we strategic that So to

at will investing you deployment, terms on But if in balance. will would thing prudent we of the space you continue -- that this you say with So organically capital at keep really maybe environment, more say, I look the when on and we productivity approach. in the look we But the focusing the looking on a more than we in maybe only at of flow. probably are will M&A, business, is

CCT opportunities and of are opportunities our business. fit of that in IP the on rich And side We looking our that CCT. and for strategy both the of is the funnel at connector space

Summerville final from D.A. today Davidson. question Matt comes Our from

X Just quick ones.

on of in at the Just to a was million put price what realization figure put you organic percentage XX%. what in was you across provide CCT, And What each the one in IP? in a MT manual segment? based can organically price a back was game. you follow-up. is then But realization X% When quick price finer have I realization on about terms in grew the pricing. segments, point each come into We $XX look X XX%

Yes.

thanks, Matt. So

we out you the realization XX% That’s is of easy at if know, to across the pricing remember. look board. XX%, So as

strongest in that that the IP was XX% was and So the priced, was volume, I MT XX% followed overall. of recovery And CCT. would by say pricing

just of the industrial then that momentum sense for slowdown slowdown behind a trying worse? you’re you Is order saw guess building? cadence a what could the October? quarter get inform sort third there’s little things, that I of it you seeing that in not some is of And to the comment of incoming maybe side Got it on it. the whether in in real or I’m general you getting flattish? sort does maybe and And if bit you experienced

Matt. Sure,

QX. look So when no at look we seasonality big there the was when at -- really you

didn’t in you the within at a the is there really that, see quarter, that, I It we really so when see August, you QX, from say, that got QX the Of seasonality you would big in bit look dynamic of course, month but deteriorate. trend another. will continues. no little Europe, different

Service and in quarter softening. Parts was the baseline and the IP stays strong across

and when ITT at a has look orders that are really you Not really been we saw And growth are I would a So change, the any October for regularly in but October, not same. of nice in trends deterioration that year-over-year confirming QX. and more say, happening the QX.

have concludes day. and this This this teleconference. time, session, and Please wonderful you. today’s Thank disconnect at a concludes Q&A today’s lines your