Hubbell Incorporated Morgan Stanley's 14th Annual Laguna Conference

Yeah. I would say, well, first of all, thank you for your interest here today with Hubbell. I would say in short, it is the specification that we have on our product. We generally are a spec product, and that is whether we are in the utility side or in the electrical side, a product that is critical to the function that they serve. Generally, a relatively small percent of the cost. So what we do matters, and certainly the specification that we hold. The other competitive advantage, I would say, is the breadth and depth of our portfolio is a differentiator for us. If you think about in today's environments, partners generally want to do business with lesser, more strategic relationships, and certainly we have those very strong relationships. We built those over many years of how we serve them.

It is our position in the markets, the breadth of our portfolio, our prevalence of our scale around the customers that we service is what helps us in our position.

Yeah, I would say there is a lot of similarities there in that value proposition that I stated that being critical to the function. If you think about some of the products that we serve in utility, a connector is relatively small. The average price of a component in our portfolio is $25. So it is quite small. But the function is very, very critical. So if one of those connectors is not available, you are not putting up your line, and if one of those connectors fails, your line comes down. So it is really hugely critical, and that applies on the electrical side as well. If you think about our bonding and grounding system, if you are not grounding a building, a data center probably will not function really well or is not well-protected. So again, a small cost piece in the overall scope, but very critical.

I think on both sides of the portfolio, the specification is what really matters and holds strongly side. So I would say there is a lot of similarities truly on both sides of the portfolio.

Yeah. It's some of the underlying demand drivers and maybe separating the pieces and data centers. It's a topic of every conversation that we're having, and certainly, we have an important presence in the data center with our balance of system, components on the electrical side with our power distribution skids that we serve. But I'd say equally on the utility side, with the demand that's needed to power all these data centers, a tremendous portfolio on that side as well. So while I'd say data centers is an important element of our portfolio, it's not the only thing that drives our business. If you look at the utility, there's an element of data centers there with the power load.

But if you think about the age and the state of our grid, when I talk about this, I don't talk in years, but I talk in decades of the investment need that needs to happen here. We have a very prominent and very strong position in this both in distribution, transmission, and substation. I think the drivers beyond load growth there is just a hardened, modernized grid infrastructure that's required. Again, I love our position in that.

Just maybe on the confidence and the sustainability, I think the biggest thing that we see is it starting to get reflected in utility capital budgets. It's been a healthy CapEx cycle over certainly the last several years, but we've seen that again picking up as certainly we exited last year. We've seen utility capital budgets start to reflect some of these investments as we think about longer duration projects in areas like substation and transmission. We see our utility customers planning out a little bit further than typical, and it's because they have the visibility into load growth coming into their service territories, hardening projects that they need to do. I think those conversations with customers have extended, and we've also seen it reflected in their budgeting process.

Yeah. I'd say definitely more conversations around the planning of what they're trying to accomplish. If you think about the utility customers, you have a tremendous amount of demand right now to put load in. It's probably more demand than they have the capacity to do today. They rely on their whole supply chain to be able to do this as well. Not only are they limited and having to worry about their own capacities, and that's oftentimes labor, but can everybody supply? Utilities have a lot of interest to talk with their partners, especially strategic partners like Hubbell, that supply them with a lot of the materials that they need to do this with, about the visibility that they can give us so that we can make the needed investments in our business to service them.