Hubbell (HUBB) 16th Annual Wells Fargo Industrials & Materials Conference summary

Grid infrastructure trends and growth

• Transmission and substation segments are experiencing strong, multi-year growth, driven by load growth, interconnect needs, and ongoing grid hardening initiatives.

• Growth rates in transmission and substation are currently exceeding high single digits, with aggressive investments planned to sustain this momentum.

• Distribution saw a lengthy destocking period but is now recovering, with orders returning and growth expected at mid-single digits, slightly below transmission and substation.

• Incremental CapEx is increasingly directed toward transmission and substation, but the company benefits regardless of whether utilities prioritize distribution or transmission.

• Gas distribution and telecom segments are growing at GDP-plus rates, with telecom rebounding after a previous decline and gas infrastructure upgrades ongoing.

Grid automation and technology

• Grid automation, including meters and AMI, is returning to slight growth after several quarters of decline, with expectations for margin improvement following cost reductions.

• Grid protection and controls, half of the automation segment, is growing at high single digits with attractive margins, supported by both organic growth and acquisitions.

• New products like Line Defender and power quality measurement solutions are driving growth and serving both utilities and data centers.

Data center and electrical segment dynamics

• Data centers account for about 10% of electrical revenues, with strong positions in both balance of systems and power skid products, and continued innovation to meet rising power demands.

• Transmission and substation work for data centers is a significant growth area, with recent acquisitions further expanding offerings to this market.

• Behind-the-meter power solutions for data centers are emerging, but the company expects most data centers will seek grid interconnection, making the content opportunity similar.