Hubbell (HUBB) Morgan Stanley‘s 12th Annual Laguna Conference 2024 summary

Strategic transformation and portfolio management

• Shifted from a holding to an operating company model, improving consistency and results.

• Exited volatile lighting businesses and focused on higher-margin, growth-oriented verticals.

• Added strategic acquisitions, notably Systems Control, to strengthen utility offerings.

• Integration of acquisitions has gone smoothly, enhancing value and operational fit.

• Ongoing focus on expanding presence in utility and high-growth sectors.

Financial performance and outlook

• Achieved double-digit compounded sales growth, over five points of margin expansion, and 30% EPS CAGR over three years.

• Confident in sustaining and growing from the new performance base, targeting double-digit operating profit expansion.

• Projects mid-single-digit organic growth and double-digit EPS growth over the next three years.

• Investments in capacity and productivity are expected to provide operating leverage.

Market trends and growth drivers

• Positioned to benefit from megatrends: grid hardening, modernization, electrification, renewables, and data centers.

• Utility business supported by long-term grid investment needs, renewables integration, and rising data center demand.

• Data center and AI growth expected to drive significant long-term load growth for utilities.

• Transmission, substation, and grid automation businesses currently growing at mid- to high-double digits.