Eaton Morgan Stanley's 14th Annual Laguna Conference

I would say our strategy is really working, and it's gathering pace. Execution, we have execution momentum. You just pointed out we are ahead of our own committed numbers this year. We initiated guidance with 8% organic growth. In the first review, we turned to 10%, and now in the second review, we said we can do 12%. We want to keep operating that way, proving that we can do more and actually increasing our own numbers. That's the spirit. That's how the whole team is working on. We feel really good about the traction and the momentum we have. If you take a step back and look at historically what the company has achieved, it took us 100-plus years to get to $20 billion, right? It only happened when we made the acquisition of Cooper in 2013.

After that, it was a decade of making the portfolio better. We reshaped the portfolio. We didn't grow much. The top line was only $1 billion in 10 years, but we improved margins significantly. That was a decade of improving margins. If you fast-forward the last three years, including the guidance I just gave you for this year, we're going to be adding $10 billion to the top line in just three years. Just think about that momentum of $1 billion in 10 versus $10 billion in three. Looking forward, that will inflect even faster right now, looking towards 2030. We feel really good about that. If you think about this in the construct of what the company is doing as an overall strategy, we see that the best years for this business are still ahead of us.

I'm really confident there's a new Eaton taking place because the strategy we have in place today is designed to do both top-line growth and margin expansion at once. We have all the measures in place to achieve exactly that. I would say out of the construct we are today as a company, you should see a new Eaton coming up, a new inflection point in terms of growth. I'm certain that all the things we did in the past and we did recently are going to pay good dividends looking forward.

We feel really good about Q3. We had a very strong July, also very strong August. We are aiming at the high end of the guidance for everything we tracked. We also look the same way towards full year. It's very strong end of the year. We are looking at the high end of the guidance for where we were. Once again, the spirit, no one is taking a victory lap here in the company. We're aiming for the upside, and we want to be able to surprise for the good side as we move on. All the measures in place. Why we feel good about this? First of all, we were ramping 24 facilities, as you guys know. Three quarters, so 16 if you think about six. So 16 of the 24 actually are in ramping phase and producing much better rates every day.

That turns to be a tailwind for us moving forward. Price cost, we took pricing actions in April, we took pricing actions in August, and we did selective repricing of the backlogs as well. That construct, together with strong end markets and record backlogs, make us really confident about not only Q3 and Q4, but also looking forward to 2027.

Any commentary around it? You do not expect me to guide today.

I know that, but it is fine. The setup is a strong one. As I said before with the ramp, most of the disruption of that ramp behind us that happened Q1 this year and Q4 last year. We start to bring much better revenue per day numbers. To be precise, in Electrical Americas, we are actually in Q2, we are showing already 25% revenue per day increase to January last year. So we grew around 16% in five quarters. It was a heavy lift. In just a quarter from Q1 to Q2, we grew 8% sequentially. It is a tremendous work by the team. So I feel really good about that. Once again, pricing is going to be a tailwind versus a headwind in price cost.

The markets are strong, and we are sitting on very strong backlogs, record backlogs as we speak. That is a very strong construct for 2027. On top of that, we took action on our portfolio, being on the acquisitive side, making the right acquisitions. Boyd is then going to start counting as organic growth starting Q2 next year. So it is going to be a huge tailwind for us. The announced Reverse Morris Trust deal with Dana is on track. When you look at Q2 next year, we are going to have Boyd counting on organic. We are going to have the separation of the Mobility business, which helps both top line and margins. So it is a very strong setup.