ITT Inc.

that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the floor over to Mark Macaluso, Vice President, Investor Relations and Global Communications. You may begin.

Thank you, Amy, and good morning. Joining me this morning in Sanford are Lucas Ali, Chief Executive Officer and President, and Emmanuel Cabret, Chief Financial Officer. Today's call will provide the financial results for the three-month period ending June 29, 2024. which we announced this morning. Before we begin, please refer to slide two of today's presentation, where we note that today's comments will put forward-looking statements that are based on our current expectations. Actual results may differ materially due to several risks and uncertainties, including those described in our 2023 annual report on Form 10-K and other recent SEC filings. Except for otherwise noted, the second quarter results we present this morning will be compared to the second quarter of 2023 and include certain non-GAAP financial measures. The reconciliation of such measures, the most comparable gap figures, are detailed in our press release and the appendix to our presentation, both of which are available on our website. With that, it's now my pleasure to turn it over to Luca, who will begin on slide three.

Thank you, Mark, and good morning. I would like to begin by thanking all ITTers for an exceptional performance again in the second quarter, and our stakeholders for their ongoing support of ITT. The second quarter was a milestone for ITT, aligned with our strategic priorities of operational and financial performance and effective capital deployment. This quarter, we won significant commercial awards, continued to deliver margin expansion, utilized a strong balance sheet to return capital to shareholders, and took steps to reshape the ITT portfolio towards higher growth and higher margin businesses. Let's start with a few highlights on Q2. We continue to grow and expand margin in our core businesses with several record achievements. We won significant new awards in friction, coni, industrial connectors, and in Svanehoi, our latest acquisition, we expanded our backlog and further solidified our long-term growth trajectory. We generated above-market top-line growth with strong performances in aerospace and defense, friction, and short-cycle flow. We drove significant margin expansion at Motion Technologies and CCT, as both reached margin levels close to 19% this quarter. Collectively, we drove 12% adjusted EPS growth to a new quarterly EPS record of $1.49, whilst driving a significant acceleration in free cash flow. Before we get into the details, I want to pause and acknowledge that at the ITT level, on a like-for-like basis, we have now surpassed a long-term margin target in aggregate two years ahead of the 2026 target date. Now, let's get into the details. On revenue, we grew 9% driven by higher volumes across all segments and helped by the acquisition of Svaneor, which contributed four points of growth. CCT grew double digits organically, driven by industrial connectors and aero and defense components. Connectors grew 14% and 5% sequentially to a new record quarterly revenue, another strong quarter for connectors. Well done, Art and team. Motion technologies grew 6% organically. Triction OE outperformed by over 600 basis points, and in China, the outperformance was nearly 900 basis points. We expect this will continue in the future as we executed 40 starts of production this quarter in China and nearly 100 SOPs in just the first half. On margin, we delivered a 100 basis point expansion to 18%. IP was again above its long-term target of 20% and it was up 20 basis points sequentially. MT expanded margin to 180 basis points and 60 basis points sequentially. This year, we continue to drive an exceptional recovery MT margin led by Friction and KONI, which will put us above the 18% threshold for 2024. This is a testament to the relentless drive to generate productivity and value for our products and services. And finally, CCT is also rapidly approaching 19% margin driven by volume and price. Included in this was a 300 basis point improvement in connector margin with 42% incrementals. Moving to capital deployment and the ITT portfolio. Today, we announced the signing of an agreement to acquire interconnect solutions provider, Kesaria, for approximately $475 million. while also having completed the divestiture of automotive supplier Wolverine, which closed in July. These transactions are the foundation of our portfolio reshaping strategy. With Kesaria, ITT acquired a leading provider of customized mission-critical connectivity solutions for defense and aerospace. Kesaria will expand ITT's exposure to defense interconnect products with sole source position on leading platforms high customer intimacy and expertise in harsh environment applications. I'll discuss this acquisition more in a moment. The Wolverine transaction follows two other non-core divestitures executed last year. This will allow us to structurally shift ITT's portfolio to higher growth, higher margin businesses, inflow and connectors. As a result of this reshaping, Automotive will only represent 30% of the total ICT portfolio, and this is friction, our highly differentiated, unique, and high margin breaking business. Back to our results. Given the strong performance in Q2, we are sticking to our full year guidance commitment despite the loss of roughly 15 cents of income from the watering divestiture. I continue to be humble by the dedication our teams show each day to deliver these results for our customers and for our shareholders. This quarter, our teams also secured several exciting commercial awards, demonstrating once again ITT's differentiation. In CCT, connector distribution orders were up 13%, a second consecutive quarter of profitable growth. On the OE side, we are in the final stages of DOD approval for NetWarrior, a critical soldier war communications system. We already secured connector content for this application to provide critical situational awareness in combat operations. This is one more example of the growing defense modernization macro-train we're exposed to, reinforced by the acquisition of Quesaria. Moving to MT. Friction has already won nearly 60% of our full-year expected awards, and also in China, the team surpassed 60% of its full-year target. Well done, Zulai and Team China. We're also taking steps to penetrate India, where we have no manufacturing presence, but recently won a third platform with a leading local OEM. In IP, Oders were up slightly due to Svaneoi, despite a tough compare from large decarbonization awards in Q2 2023. Legacy pump project orders continue at elevated levels and are up 9% sequentially. Our project funnel was up again in Q2, driven in part by green projects, which continue to be strong. In June, I was fortunate to be in Bornemann, Germany with the team, and together we reviewed our progress on green market penetration. Decarbonization is a large opportunity for Bornemann as we deploy our multi-phase pump technology, building on previous wins with major energy customers. To summarize, at the ITT level, this quarter we won over $900 million of orders and we delivered a book-to-bill of 1.03. This is thanks in part to Svanaheim. So let's move to slide four to talk more about Svanehoi and two exciting commercial awards that further support our long-term growth trajectory. As we shared previously, the Svanehoi acquisition bolsters our leadership in the green energy transition. This quarter, Svanehoi delivers strong growth once again, with orders up nearly 40%. Svanehoi cryogenic deep-well fuel pumps were selected for eight bulk carriers for a major European shipping company. These are the first commercial merchant vessels designed to use ammonia. Today, this type of vessel is powered by a crude oil mixture. However, Svanehoy's pump will future-proof the vessels in anticipation of transitioning to lower carbon fuels. Svanehoy is leading the way for ammonia pumps on commercial vessels like this. Additionally, Svanehøi will provide cargo pump systems for four liquefied CO2 carriers serving the Northern Lights Carbon Capture Project in Norway. This project is a major element of Europe's climate solution and decarbonization efforts. The carriers will transport carbon capture from industrial emitters to a terminal before the CO2 is pumped more than one mile beneath the North Sea. Svaneoi has also won awards on liquefied CO2 carriers elsewhere in the world, including in China. In May, I spent time with Soren and team in Aalborg, Denmark. After reviewing these projects together, it is exciting to see how we have built such deep trust with customers through technical expertise, flawless execution, and rapid response. The team has an incredible command of the business's growth drivers, and the analytics around predicting aftermarket. Svaneo is poised to become the platform for growth we envisioned at the onset of the deal. Now let's turn to page five to discuss ITT's strategic portfolio reshaping and capital allocation. On the M&A front, we have been working to shift our business to higher growth and higher margin segments where we can deliver more value. This began in 2022 with the acquisition of Habonim, which grew our vast portfolio by nearly 50%. The results from the acquisition exceeded our expectations from day one. In 2023, we acquired Micromod to expand our portfolio of hermetics and RS connectors while investing to non-core businesses in CCT to hone our focus on the core connector business. Finally, we acquired cryogenic pump manufacturer Svaneho at the beginning of 2024, which added a complementary portfolio of highly engineered marine flow products for the clean energy transition. And today, we announced an agreement to acquire Kesaria. Kesaria's interconnect solutions support applications for avionics, sensors, communications, and networking on marquee platforms with defense prime contractors and aerospace OEMs. The company's capabilities in customized interconnect solutions have led to content on key platforms and long-standing relationships with blue-chip defense customers. There is a lot to like about this business. First, Tesaria's growth outlook is supported by leading positions on a wide range of sought-after AMD programs, of which roughly 70% are sole or primary source positions. The company operates primarily in nearly $7 billion North American cable assembly defense market that is expected to grow at a high single-digit CAGR through 2028. Second, Kesaria is also a leader in harsh environment cabling application and will benefit from the shift to fiber. In addition, macro tailwinds related to the rising global defense budget and rapid modernization of defense systems are expected to drive demand for Caesarea's solutions. Third, the company has grown revenue over 20% on average over the past seven years at attractive EBITDA margins, which we believe you can enhance further as part of ITT. Finally, we anticipate realizing commercial synergies from a combined ITT Canon and Caesarea go-to-market solution that will drive further market share gains. Beyond Kesaria, we continue to cultivate a rich, actionable pipeline of targets, inflow, and connectors, while also putting the balance sheet to work on other capital deployment priorities. In fact, in Q2, we repurchased $79 million of ITT shares and paid down nearly $40 million of debt, thanks to the strong cash generation. In summary, the organic growth and margin expansion generated in Q2 and the portfolio shift we executed will continue to enhance value for our shareholders. Now, let me turn the call over to Emmanuel to discuss the results in more detail.