Hubbell Inc

Good day, and thank you for standing by. Welcome to the Q3 2022 Hubbell Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. Please be advised that today's conference call is being recorded. I would now like to turn the conference over to Dan and Amaro, please go ahead.

Thanks, Lisa. Good morning, everyone, and thank you for joining us. Earlier this morning, we issued a press release announcing our third quarter 2022 results. The press release and slides are posted to the investor section of our website at hubble.com. I'm joined today by our chairman, president, and CEO, Gerben Bakker, and our executive vice president and CFO, Bill Sperry. Please note our comments this morning may include statements related to the expected future results of our company. and are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Therefore, please note the discussion of forward-looking statements in our press release and consider it incorporated by reference in this call. Additionally, comments may also include non-GAAP financial measures. Those measures are reconciled to the comparable GAAP measures and are included in the press release and slides. And with that, I'll turn the call over to Gerben.

Great. Thanks, Dan. And good morning, everyone. And thank you for joining us to discuss Hubble's third quarter results. Consistent with the first half of 2022, our third quarter result was solid. Our markets are healthy, our positions in those markets are strong, and we continue to execute effectively from an operational standpoint. Our third quarter results exceeded our initial expectations, and we are raising our full year outlook to reflect a continuation of those positive trends throughout 2022. We are well positioned in attractive markets that are supported by long-term trends in grid modernization and electrification, which continue to drive strong demand for our products. Utility customers are proactively replacing aging infrastructure while investing significantly to upgrade, harden, and modernize the grid, driving another quarter of strong orders growth and backlog build. The work that we have done to streamline our portfolio and the investments we are making in strategic growth verticals are positioning Hubble for sustainable GDP plus growth as our economy becomes more electrified. From an operational standpoint, margin expansion in the quarter was driven by volume growth and favorable price cost. We have been active in pricing to address significant material and non-material inflation over the last 18 to 24 months. While general inflation persists throughout our supply chain, we have now started to benefit from easing in the portion of our cost base that is tied directly to certain raw materials. While the operating environment remains dynamic, we are proud of the way our employees have continued to effectively navigate through supply chain uncertainty to deliver on our commitments to customers. As we look to drive continued success on this front, I'm also excited to welcome Akshay Mittal to the senior leadership team as Hubbell's new operations leader. Akshay comes to Hubbell with an extensive operation and supply chain background across various industrial manufacturing industries, and we look forward to build on the strong foundation we have established while accelerating our efforts in footprint optimization, factory automation, and supply chain resilience. Turning to page four, I would like to highlight a few of the key financial outputs of the teams we just talked about before letting Bill walk you through the results in more detail. In the third quarter, we achieved organic growth of 20%, adjusted operating profit growth of 37%, adjusted operating margin expansion of 190 basis points, adjusted earnings per share growth of 45%, and free cash flow of 194 million. These results were driven by strong price realization and volumes combined with easing material cost and effective operational execution. Overall, a very strong quarter for Hubbell and attractive results for our shareholders. I also want to turn to page five and take a few minutes on two recent achievements which really highlight the strength of our franchise in the electric T&D market and the work we are doing to support critical infrastructure needs of our customers. The first is our storm restoration efforts through Hurricane Ian and Fiona with our 24-7 Hubble Emergency Action Team. Storms like these are unfortunate due to the impact on lives and community, and they also put a lot of strain on utility customers to restore, service, and repair damaged lines. We are proud to support our customers in these efforts through a dedicated team that prioritizes these requirements and gets our customers the needed expedited materials to enable successful and timely restoration of service. This is a unique differentiator for Hubbell, as we can fully utilize our industry-leading sales force, depth and breadth of the product offering, and operational capabilities to effectively serve our customers when they need it most. Our people truly distinguish themselves during these events which helps us forge long-lasting customer partnerships based on quality, reliability, and service. And on the topic of long-term customer relationship, we are also pleased to have been recently awarded the Annual Supplier of Choice Award by one of the largest investor-owned utilities in the U.S. This award was given to Hubbell for our strong service not only over the last decades, but through the more recent challenging supply chain environment as our industry-leading scale and the investment we've been able to make in our business have enabled us to effectively deliver on our commitments. While strong electric T&D market growth continues to be a key driver of our success, we also feel confident that we will continue to outperform these markets as we reinvest to first bolster our position. With that, let me now turn it over to Bill.