Valmont Industries, Inc. (VMI) Earnings Call Transcript & Summary

To Valmont Industries 2023 Investor Day live from the New York Stock Exchange. I'm Renee Campbell, Senior Vice President of Investor Relations and Treasurer. And on behalf of the entire Valmont management team, I'd like to thank everyone for joining us this morning, and we look forward to spending the next few hours with you. Special thank you to those of you who traveled to be with us here in person, it's really nice to see everybody. Before we begin, a reminder that today's presentation is subject to our disclosure on forward-looking statements, which can be found on the slide in front of you. So please take a moment to review. Okay. So turning to the agenda. We have an exciting day planned for you today. First, you'll hear from our President and Chief Executive Officer, Steve Kaniewski, who will share how we are building on a strong foundation of outperformance, innovation and operational excellence that uniquely positions us to accelerate growth across our businesses and serve the expanding global markets of infrastructure and agriculture. Steve will introduce our new strategic framework called Run/ Grow/Transform, which will serve as our guide as we deliver greater value to our customers through new products and services, digital innovation and technology as we evolve into being a less cyclical company with more resilient, high-value revenue. Steve will also introduce our new 5-year financial growth targets. Next, you'll hear from 4 members of our senior leadership team, starting with Josh Dixon, President of Global Irrigation; Daniel Koppel, President of Ag Technology; Aaron Schapper, Group President of Infrastructure; and Diane Larkin, Executive Vice President of Global Operations. Each of them will share the ways that they are driving growth and transformation across their businesses through market expansion and new products as well as strategic investments that support capacity growth. They'll also share how we are differentiating ourselves in our markets with a focus on disruption, technology and innovation, while furthering our ESG initiatives through our products and solutions, all in support of our long-standing tagline conserving resources, improving life. And finally, you'll hear from our Chief Financial Officer, Avner Applbaum, who will share his vision to accelerate Run/ Grow/Transform with a disciplined financial framework, building on our strong track record of historical performance and balanced capital allocation strategy. Avner will talk about how we aim to deliver a higher quality of earnings through a more resilient business that supports achieving our 5-year financial targets. And then we'll finish today's formal agenda with a few closing remarks from Steve. So just a couple of notes about logistics. First, I would ask that all of you in the room, please mute your phones and your notifications. We are webcasting live, and the presentation can be found on our Investors page at valmont.com. So Steve is going to kick us off, followed by Josh and Daniel, and then we'll do about a 30-minute Q&A primarily focused on the topics from the first half of this morning. And then we're going to take a quick break, come back and you'll hear from Aaron, Diane and Avner, followed by a second Q&A session. We'll have microphones that we can pass around for those of you that are here in the audience to ask a question. And if you're joining us virtually, there is an Ask a Question tab in the upper right corner of the video player that you can use to submit a question, and we'll try to get to as many of those as possible this morning that come in online. Before we begin, I'd like to share a brief video that I feel captures the essence of how Valmont is improving lives around the world, both today and into the future. You're going to see the many ways that we're adopting technology to solve real-world problems by advancing agricultural productivity and providing vital infrastructure. But keep in mind, this is only the start, the opportunities that lie ahead for Valmont and our stakeholders are nearly endless. [Presentation]

I'd now like to introduce our President and Chief Executive Officer, Steve Kaniewski.

Thank you very much, Renee. And I'm excited to be here this morning. It's good to see a lot of familiar faces as well as some new faces to the Valmont story. I'm really excited for our team, who has worked tirelessly to put together this Investor Day for everyone here as well as on the web. This is a culmination really of what we do and how we do it and where we're taking the company and the strategies that will be behind it. So just for a quick reference. Steve Kaniewski, President and CEO. I started out in Valmont as our IT leaders, the CIO, I then went in and ran the operations and our irrigation at the time segment, then moved into our utility segment to run that, moved up to be COO and then CEO since 2018. And so really proud of what we've been able to accomplish. And there are some key takeaways that I'd like you to take away from today's presentations. First, we've built a really solid enduring business that has a strong foundation that's been able to outperform through volatility, through cycles and through just recently inflation and other kinds of macroeconomic shocks that have taken place. It's this team right here that's been able to do that. I also want to introduce our Run/Grow/Transform framework and tell you a little bit about what that means and how it would be deployed throughout the company. We're also going to show you how we leverage technology and digitization, how does that translate not just into how do we run better, which for sure we'll do, but also how we can generate revenue coming from these types of digital efforts. We will show that we'll continue to embed ESG and sustainability into everything that we do. It is our tagline, conserving resources, improving life and therefore, this is something that we find to be very natural for us. And ultimately, it's a way to be more productive. And lastly, we'll show you that we're going to deliver reliable growth while expanding our operating margins and more importantly, our return on invested capital, which we still believe is the number one proxy for shareholder value. A little bit about Valmont as of the end of 2022. We had $4.3 billion in sales. As of just a couple of days ago, we were a $6 billion market cap. We operate in over 100 countries. We have 84 manufacturing locations and 11,000 employees and that's a statistic. But what it should show you is that we have global presence. We're able to take our products and our services through our channels everywhere around the world that will allow us -- that the U.S. State Department will allow us to do. So really, other than 3 countries, there's not a country or an operation that we're afraid to go into as long as we can provide leverage by going into those areas. Something new on this chart that you'll see, too, is our technology innovation centers. There's 4 of them. This is also a sign that we're changing the way we go about doing our work, creating our products and services and frankly, something we're looking really forward to and there we go. Okay. So I want to take a moment to kind of play back since 2018 where we were and to where we're going. So in 2018, we still were operating in 4 segments. We were still a little more siloed in orientation than we are today. And as a result, oftentimes, our resources and our capital were concentrated in those silos. We were just at the early stages of really figuring out what this thing called ESG was. And we had moved some operations over to be centralized. So I had started that in the utility segment where we could operate all of our factories centrally. Now ultimately, we know that we get better capital utilization, better resource allocation, when we can take things and put them together. Obviously, our steel purchasing and other raw material purchasing, it truly makes sense to do that. So we embarked on that journey. And I will say, as of last year, we now are down to 2 operating segments because we look at strategy in agriculture and infrastructure really is together. The technology offerings that you see in infrastructure carry across all the product lines, the way we produce carries across all the product lines. The resource allocation of our best and brightest is done by those 2 segments. And what it allowed us to do was to take away operations from the commercial organizations, to allow the commercial organizations to focus. To focus on new products, new services, research and development and to just go after that with a complete focus on moving to value-added pricing. So in 2018, I'd say we were still a little more cost plus. Over time, we've quickly moved into value-based pricing. What do we do for our customers that our competitors don't do? What else can we do from a capabilities perspective that our competitors can't do? And let's make sure we're charging an appropriate amount. In hindsight, and hindsight always being 2020, thank God, we did. Because then COVID hit, then supply chains were way out of whack, then we had hyperinflation on steel and other metals. And then at the beginning of last year, we couldn't get labor. So the fact is, our ability to handle that volatility was because of our organization. It helped us through it. It helped us make money and to continue to grow about $2 billion over 3 years during that same time period. So an incredible feat by the team and one that really the organizational structure allowed us to do. Now where we're going in the future, is that we're going to be able to take this organization and that relentless focus on value-based pricing and new product orientation to really excel our revenue and return on invested capital coming from much higher margin, types of products and services. So I'm looking forward to sharing more about that. Okay. So we have a differentiated business model. Many people say they have a differentiated business model. What is ours? Ours is really 5 main focus areas resting on our 4 core values as a company that have been in the company since its inception. We talk about sustainability, allocating capital towards growth as opposed to just running the business. We are going into technology niches where our channel and our ability to access that market is unique and also puts us in a position to help the customer overcome issues. As an example, when we bought Prospera, we bought it because the agronomy niche within the agricultural tech area was not really being paid attention to. Most people were paying attention to planting, harvesting, yes, they could give images, but how many images could you get? How often could you get them? And was the science behind it really unique and value adding? And what you'll hear from Daniel later today, is that we are now doing things on that big middle piece called during the growing season that no one else can do. We've built a data set that is by far superior and larger than any data set that exists in the world. And we're bringing the science of machine learning to it so that we can point out issues that nobody else can see. Over time, we will also work on ways to remediate that. And this doesn't just mean under our pivot, right? This is what we talk about as far as a differentiated niche. It's -- we are known on the farm by every grower. We're trusted because we've been in for 78 years. They understand we have 700-plus dealers around the world, we will be there to help them through that technology shift. It brings credibility to the technology sale. You could be a startup and not have a channel or it will be inordinately expensive to do so. So our core values is, what I said, shapes everything that we do. So first off, passion. And I think you will see that today in the team that is presenting. We have a passion for what we do is to feed the world and to make the world a better place. Integrity, we operate way above board. How we treat not just ourselves but our customers, our shareholders, our stakeholders, the communities that we live in. Continuous improvement is embedded into our DNA. And over time, that has become to be more synonymous with lean or lean manufacturing, but it's in every area that we work in. How can we get better? Because ultimately, delivering results, which is what many of you are here to hear about is what has to come out of all of that. And we have a delivering results mindset. Okay. Let's talk a little bit about the markets we are in. So we are based in agriculture and infrastructure. These are markets that tend to run very different than the general economy. They have different degrees of stimulus around the world, and they have multi-factors as to what drives demand, okay? Why us in these markets? Well, we've become the biggest in the markets that we serve because we have an unmatched ability to go anywhere in the world to pursue opportunities, not just as an exporter, not just going from a central supply chain perspective, but these are markets where local for local is often valued and/or required. That flexible global footprint is what brings that into focus for us. We also are able to -- as we become more global and across these markets, I think you'll hear throughout the day, we're really working on reducing cyclicality. And even if you take an example of a cycle down in one nation, it could be the same exact product in a different nation that is moving up. Brazil comes to mind in agriculture as an area with explosive growth and nothing really in the way of that growth because of just the ability to convert land, to move quicker to technology. And because they have 2 or 3 grow seasons, they can do this all much faster than as a place here in the U.S. Okay. So first off, we're in these niche markets, these different markets and different drivers, and the markets are good, right? When you think about the portfolio growth that we are experiencing broad-based in the product lines we serve is kind of an enviable position to be in right now. As we know, agriculture has seen a sharp spike over the last 2 years, much of it coming from the Russia-Ukraine crisis and coming out of COVID, used to supply stocks ratios were in favor of those who had supply, and we saw prices move up pretty significantly. In North America, last year was record net farm income, driven off a lot of this food and security and supply chain volatility. That's continuing as evidenced by our recent order in Egypt for over $85 million and project pipeline behind that, that is absolutely strong. In addition, I mentioned Brazil, we've been able to double the business each of the last 3 years. So for those of you who follow things like soy, soy now is used for fuel just like corn. And that's providing also a nice basement on the floor of prices. It really has become, as it should be, food is political. And to stay in power, you need to be able to feed your people. ESG is driving advanced agronomy services in our markets that we serve because we have to do more with less. In infrastructure, we are on a once-in-a-lifetime move energy transition. If you think about even the city right here that we're sitting in, there was a time when there was coal burning, and we moved to electricity and prior to that wood. These transitions happen if at all, once in a lifetime. And as we move to renewables, that will shift over the energy production into a very fragmented way, a very distributed way as opposed to a central nuclear plant or a coal plant at 1 gig of production, you now will have 10 production lines. All of that takes thousands and thousands of miles of transmission and a 5 to 10x increase in substations. The mandates that are out there alone just for 2035, outstrip the market capacity significantly. In addition, we know that our other parts of our infrastructure market like Telecom and the 5G rollout is just in the early innings. Coverage was key upfront. And now we're working on densification. That's just in the U.S. Europe, just starting down the road, Australia and New Zealand, just starting down the road. And because we have presence in these markets and with our relationships, as an example with Ericsson, we are going to go and continue to expand those offerings and products and services. Roads, transportation, highway spend, also now has a 10-year bill in addition to what the states have been able to put forth themselves just here in the U.S. All of that takes our products. And we're just beginning now to see the effects of the IIJA that was passed over 2 years ago in our quoting activity. And as we get into 2024 and beyond, that will be of significant help to us. Now I'm excited to talk about Run/Grow/Transform. We think of this as our internal framework around our resource allocation, our capital allocation and, frankly, our time and effort. We're building now on a solid run platform and foundation of the business. The business is operating well. It's being managed well. We're pricing well to the market. And we're now using that foundation to help spin off capital and the best people to move into our Grow and Transform. We have the ability to grow outside the U.S. We have the ability to add more in our offerings across the Board. There are natural adjacencies like OEM parts in our irrigation product line that we can build upon and that you'll hear more about. Transform is really making sure that we're being great stewards of the company long term. What can we do long term to transform the nature of our revenue, the nature of our services that we offer to our customer, ultimately, so that we are the disruptor in our markets, not the disruptee. And we have really good starts in this area, but you'll see more and more focus on transforming the business beyond poles and pivots as you may have be accustomed to. So some ways that we are growing and transforming are found on this slide. And I won't go into them too much because I don't want to steal my colleague's thunder, when it comes to their presentations. But you can see there are a number of factors that are out there in the markets beyond our traditional drivers that will help us grow and transform our revenue and operating income. We have a unique right to win in these markets. We have the product and service expertise, we have the ability to bring things to market wherever they need to be brought, and we have the proper resource allocation methodology to not just look at today but also well into the future. Okay. We talked a little bit about digital transformation, and I'm sure you've heard this from other companies as well. And so what does it mean at Valmont as compared to those other companies? For us, first and foremost, it's about technology sales. You've heard the expression, you can't save your way to prosperity. It has to drive our top line and bottom line. And whether it was prosperous acquisition or other small technology acquisitions that we've done, R&D money that we've increased, we are focused on the future of technology sales. You've heard us say that we doubled recurring revenue last year. All of that comes around technology. So these are real efforts that we're trying to put our best and brightest on using data science, right, leveraging the data that we generate ourselves or that's come from the markets that we serve to give us better predictive and insightful readings, opportunities. Whether that's for pricing purposes, whether that's for operating leverage purposes or whether it actually comes to what we offer to the market in terms of new products. People process culture. In today's day and age, people work differently than they did just 10 years ago. So we have to continually adapt and embed better technology in our organization because the worker of not just today, but in the future, will demand this. So to keep the best and brightest and to keep our talent, we have to make it more technology-oriented. That also translates into new ways of working. And if we've shown nothing else, it's that we're adaptable. And we're quickly adopting the new technologies, not just in the office but in our production floors. And you'll hear more from Diane about that as well. Okay. So now I just want to take a moment to describe our ESG journey. As you know, this is not something that we decided to do to check a box. It's something that we've done all along. Every product that we offer is 100% recyclable. Everything that we do helps conserve the natural resources that are out there, whether it's water, it helps save lives on our roads and highways and bridges or it improves our life in terms of the electricity and the telecommunications connectivity that we offer. We have nothing in our portfolio that we need to be ashamed of. In addition, this is something that I took on personally to lead the charge because I also know that it would focus our marketing message. It would make it clear to the organization what we do and what we are and frankly, at the end of the day, it saves us money because it's a relentless focus on waste, no different than our lean manufacturing. So we find areas of opportunity every day, our green teams that are out in the production areas or whether it's in the design of new products. Again, we do things correctly right from the start. Speaking of that, a big part of how we are grounded is the quality of our Board, and we have an excellent one. As you can see, we have a group that has a quite a diverse set of backgrounds and skills that we count on as we develop our strategies to go forward. Every member of this Board contributes meaningfully to our strategy to the way that we look at markets, the way we look at new products, and as you can see with the way that -- now things like cybersecurity and other environmental issues are a big issue, this team here and pull it together for us. We have a combination of Board members who have been around that really know us as well as new Board members that bring fresh perspective. I can tell you myself, I love working with this Board because of the perspective that they give to the organization. They're not afraid to speak their minds and it really helps us in developing our strategies. In addition, this is my team. They are excellent, and they do a fantastic job in all circumstances. And all we have to do is say, go take the hill. Again, you can see a nice mix of people across the Board, either in new roles within the company that they're able to move around, myself, Josh, Aaron have all moved around in the company through different product lines and segments as well as bringing in new talent. You'll hear from Diane and Daniel today, who are relatively new to the company as well as Avner. Both Diane and Avner joined 3 years ago in the height of COVID and Daniel with the acquisition of Prospera. All right. Now the money slide. So these are our new financial targets. And we're proud to put these fourth because what they show is that we will grow 5% to 8% organically through the cycle. So not just depending on ag markets and other things to stay up, we will generate 14% operating margin while continuing to invest in our Grow and Transform activities. By really making our run business hum, we will be able to continue to grow and gain leverage which will ultimately translate into 12% to 15% earnings growth per year. More importantly, and a big part of our incentive is we will target 18% return on invested capital through many different methodologies and forms that you'll hear from both the team and also with Avner kind of summating that up. This does not include any acquisitions. But obviously, if we were to do an acquisition, we may not be as linear in getting to our 18% return on invested capital, but we will get to those targets. So with that, I would like to introduce Josh Dixon, who will talk about the irrigation.

Thanks, Steve. Good morning. My name is Josh Dixon. I've been with Valmont for 8 years. I joined the company as the Global Vice President of Operations for the Irrigation Group. Then I took over the International Irrigation business. And then last year, in February, I was asked to take over as President of the Irrigation business. Today, I really want to talk about driving growth and transformation in our Agriculture segment. That growth is built around executing our strategic framework of Run, Grow and Transform. With Run, as you know, we have great macros with a strong base growth driven by growing, global populations, food security needs and resource conservation. Our growth framework is about accelerating on top of that strong base, expanding our international business, delivering innovative products and solutions to higher growth market segments. And finally, our Transform segment is about putting the icing on the cake, adding innovative technologies and services to drive agricultural productivity, and Daniel is going to talk about that in a minute. All right. Let's talk about '22 last year. It was another good year for our business with results reflecting continued adoption of our solutions around the world. Specifically, I want to focus on product mix. Our technology sales are approaching 10% of our global revenue. We've just started to unlock the synergies from our acquisition of Prospera Technologies. Also I want to focus on the geographic mix. Currently, 43% of our revenue is now coming from outside of North America. We're also intensely focused on further diversifying that geographic mix while respecting our North American legacy. Let's talk a little bit about where we were in 2013. For those of you that were watching, we had record revenues for the entire irrigation industry, driven by increased commodity prices. And just a reminder, why do we have those increased commodity prices? We had significant drought in North America, storm seasons, corn for ethanol, increased soybean production. And that net farm income really led to an increased investment in capital equipment and land by growers in the U.S. In 2013, it was primarily a North America business based mostly on equipment sales with little to no OEM aftermarket presence. Fast forward to '22 last year. We're a very different and more resilient business. International expansion is an economic driver for our business. And as we diversify our mix in a more global, higher-growth markets. We have the largest installed base of equipment amongst our peers, and that allows us to leverage a robust aftermarket parts business, which now includes parts for all brands. We also have the largest global dealer footprint in our business, so an example is Brazil. In 2013, we had 12 dealers. Currently, we have 42 with over 100 points of sale in the country of Brazil. Fast forward into '27, there's many more growth and transformation opportunities ahead. We're excited to rebrand our Valley Irrigation business as Valley Agriculture and that will be coming out later this year. This better reflects the evolution of our business and the baskets of products and solutions focused on holistic agriculture productivity. By 2027, our presence in equatorial markets will be a bigger piece of that mix. Why are equatorial markets important? Two words, run time. Compared to North America irrigation, machines that run 800 to 1,500 hours per year, those equatorial markets have run times that average 5,000 to 7,000 hours per year, which leads to more parts in a much faster time frame. So just the math shows you, in North America, to hit 10,000 hours, which is sort of our magic number on when a machine starts needing more parts, it would take 10 years. Where is it an equatorial market, it's 2 years. So we're really laser being focused on those equatorial markets. We will be selling a broader solution set in those expanded markets with the nonequipment sales expected to exceed 50% of the total sales in the business. We're going to continue to expand our large turnkey project business, which fueled a lot of our growth last year. And we're going to actively leverage our funnel of sales opportunities with our experienced local team. As Steve mentioned, we've got a fantastic global team around the world in each of our major markets. So what does that mean? Well, really, we want to be the partner of choice for growers as they strive to maximize that productivity of their fixed land assets. Just as a reminder, what does land productivity mean for us as we define it? Well, it's doing more with less, less water, labor, power, seeds, chemicals, all that matters to our growers. Also, we're in a unique position with our Prospera partners to monitor those crops 24 by 7. Those cameras that are on those pivots, they work at night. And it doesn't matter. So we're driving plant insights to growers' hands faster than other methods to make those decisions faster. And we think speed and time matter. As I mentioned, we have local support in every country, that's a short drive away from those growers. When you think about it, we have a unique ability to serve these customers with our global differentiated assets. We have 770 global dealer locations, more than half of those are outside of the U.S, which is approximately 2 to 3x our closest competitor, depending on the region of the world that we're in. We have a fantastic dealer performance program, which holds those dealers accountable to our high standards. We have a fully localized business in each region that cuts lead times to those growers and provides local support on the ground. And Diane is going to talk about that in a minute. And we have an aftermarket parts business and service depots in each of those major regions. Using our remote machine diagnostics technology, we're able to proactively identify field needs before they become catastrophic, and we think that's important. As I mentioned a second ago, we made a change a couple of years ago to offer parts for all brands of equipment, which is driving volume and allowing us to win. The other aspect is our proprietary capabilities. We have the largest IP portfolio in the mechanized irrigation industry. We have the largest base of installed running machines driving those parts sales, more hours internationally, especially equatorially matter. We also have the largest number of connected devices, which helps us drive ARR. Last year, with the help of Prospera, we launched a satellite connectivity service. So in areas of the world where they don't have good cellular technology, this satellite technology, we feel is a game changer because it allows those pivots to connect. We also have turnkey design capabilities, which is a change we made a couple of years ago, which allows us to see those large projects before they go out to auction, before they go out to bid. We're actually being invited upfront on a lot of these large projects before they hit the auction market. I want to take a deeper dive into our market drivers. As I said a second ago, land productivity is necessary to reduce those input costs. For growers, basic productivity matters always. Growing populations around the world, getting to that 8 [ billion ] people. The other thing is evolution of global middle class's dietary demands. So research shows that as people go up to the economic scale, they want more protein and better sources of protein. And much of that protein in the world that's supplied is actually fed by yields from irrigation. As Steve mentioned, Food Security is now equal to National Security. Governments are deploying their budgets to enable self-sufficiency and stability. Because we have that largest installed base, it's driving significant aftermarket parts opportunities and a replacement cycle in equatorial regions. Just to call it out, we define equatorial Sub-Saharan Africa, Middle East, Brazil, other parts of Latin America. Labor availability. It continues to be a constraint for our growers all over the world, digital farming and digital farming management will unlock the next wave of agricultural productivity. Every single grower that I talk to around the world has an issue with finding people, retaining people, training people. Labor continues to be an issue and will continue to be a big issue going forward, and we think our products and services really dovetail nicely into that. Also, as Steve mentioned, our customers globally are asking us to support their sustainability initiatives. And those are really being driven by constrained natural resources around the world. Okay. Let's take a look again at the machine, our pivot here. It's important to keep in mind how powerfully additive the productivity our core pivot irrigation technology can be. These are some proven benefits of center-pivot irrigation over basic dryland farming practices. These are average increases based upon our 77 years of experience. And the yields are significant and continue through the life of the equipment, which is something that not a lot of industries can say. So the life of those pivots, those yields are going to continue. And these are USDA data from North America. So let's talk about our significant ability to continue growing above and beyond our strong foundations with international expansion, our growth in our aftermarket parts business and deeper solution selling. We're not just a North America business depending on commodity prices and weather anymore. Our international expansion has allowed us to participate in markets that are growing much faster. As you know, we won some significant projects in Equatorial Africa that have allowed us to deploy a large number of machines that are being run for over 5,000 hours a year. So really, our focus is on turnkey selling solutions. Key accounts selling where we add value, especially with multinationals who operate in multiple regions and then machine uptime, digital machine uptime and health via aftermarket parts and the diagnostics and best-in-class dealer service. This chart really outlines our progression of our geographic mix from '13 to '27. So if you look at it in '13, 67% of our total revenues came from North America. Now as we transform our portfolio, international sales will gain parity with North America and eventually exceed it. It's a big world out there. Our growth benefits from penetrating those new markets as well as the higher organic demand in those markets. Additionally, we have a robust pipeline of large-scale projects in those emerging markets that will fuel growth going forward. An interesting example that I'd like to use is based on our customer demand and accelerated growth of Brazil, we invested in a center of excellence. We localize most of the parts needed for production, we hired or developed subject matter experts to energize our growth. We went from less than 100 employees to now -- in '13 to now over 400. We're now the employer of choice at our locations in Brazil, for agribusiness, the best people want to come work for us. Also, we went from 12 dealers to 42, as I mentioned earlier. So let's talk about growth. Our growth initiatives, one of our big ones is our aftermarket parts is a significant driver for growth. The 2022 revenue was USD 240 million. we're projecting that more than double that run rate by expanding to $540 million by '27 and a couple of years ago, we did open up our catalog and our parts offering to include items compatible with competitor equipment, which expanded our served market by 2x. We really have an industry-leading geographic footprint with 13 distribution centers around the globe. We're adding additional centers in Alabama and Spain this year, and that really allows us to be a trusted partner of choice when a machine needs service or solution. As our installed base grows in ages, we estimate that the average machine with 10,000 hours requires USD 2,000 in parts per year. So as I said before, that equatorial market where those machines are running 5,000 to 7,000 hours, they're going to hit that 10,000-hour number in 2 years. Let's talk about Transform. We're digitizing this aftermarkets business, which helps us fuel a highly recurring revenue stream by eliminating the friction to customers and dealers, lowering the cost per transaction and leveraging our inventory investment. It's worth noting that we're also looking at inorganic opportunities in strategic geographies. Next, we'll move on to a case study, how we're succeeding with those new product offerings. So last year, we deployed an ag solar 30,000-acre farm in Mato Grosso, Brazil. This is a year-round farming operation growing corn, soybeans and edible beans. The grower was able to reduce their annual power bill by 52%, along with reducing service disruptions from that unreliable local grid. This grower is also an early adopter of our new Ag solar monitoring solution. It allows them to see in real time the return on investment, how much power they're generating and the plant efficiency via their cell phone. This product was launched in less than a year. We're very proud of it. and relied heavily on the advanced technology synergy and development speed from our acquisition of Prospera Technologies. Now I'm excited to share the '27 goals. Global sales revenue growing to $2 billion through the agricultural cycle, sales outside of irrigation equipment to account for more than 50%, geographic mix to achieve parity between North America and international and then eventually, international pass. We're going to grow our dealer points of sale to 1,000 locations around the world, and we're going to more than double our parts business to $540 million. So we'll end up growing our business by more than 50% while building a more resistant -- a more resilient and competitively advantaged business with a growing stream of highly recurring revenues. Let's break down the revenue bridge. $1.3 billion in '22, adding $550 million in equipment and parts, $150 million in technology gets us to that $2 billion. This growth does represent a significant replacement, service and upgrade opportunity from our installed base. It also includes those Grow and Transform framework items that allow us to continue to expand in the equatorial international markets. This is an exciting business for global growth, achieving $700 million of incremental sales revenue by '27 through the Run/Grow/and Transform frameworks. 770 global dealer locations in every major market growing to 1,000. We have that skilled global team of solution selling professionals, turnkey selling allows us to see those projects before they're opened up to the market. We have this unique aftermarket parts positioning to support the global deployed fleet. Our ag solar business, which supports growers' needs to reduce those input costs. And as I said, we're going to continue to go deeper into those equatorial markets like Brazil that harvest 2.5 crops per year versus North America's one crop per year. All in all, I feel we're going from strength to strength as we grow and transform ourselves, deepening our competitive moat and building a smarter and steadier agriculture business. Next up, you're going to hear from Daniel Koppel, President of Agriculture Technologies, who'll discuss technology as the transformative force for our collective business.

Thank you, Josh. Hi, everyone. Good morning. My name is Daniel Koppel, and I am the President of the AgTech business at Valmont. I joined Valmont in 2021 through the acquisition of Prospera, a company I founded in 2014. So when Prospera joined Valmont, we decided to combine all the different tech initiatives in the company. There was different acquisitions that Valmont has done in 2020, 2021 that you see up here. And there was also different internal initiatives in the company. And we decided in order to do some of these things that were -- that you've heard this morning to create these disruptive technologies we needed a strong team together, not only by headcount by -- but also by mode of operation and culture. We really wanted to have a tech unit in the company. And so we brought everyone together and since we've been growing to about 250 people with a mode of operation of tech and a culture of a tech company within this big organization or bigger organization. We work very closely with our partners. And we think this combination is a very healthy one that combines one of the strongest dealer network and strongest channels in the agriculture business that you've heard about this morning, but also with a strong tech group. And that's something that we think is going to provide a big change to the industry. Agriculture, as you know, is a sort of trust-based industry because there is 1 to 2 cycles a year, it is more difficult to bring in technologies without sort of the history and without the brand recognition that a company like Valley and Valmont have. And we think that this combination is the one that's going to be able to bring these disruptive technologies into the industry. The team is very much mission focused. So we're very -- everyone is very passionate about making a big change to the world. And together with that, we're also passionate about creating a healthy business. And so one of our main goals as AgTech business is to transform the business from a hardware sales business to a subscription annual recurring revenue, higher-margin business. And that's really what we've done and what we're planning to do going forward. To do this, we think about it in 2 ways. On the one hand, we're taking the technologies that are already out there. We think about them as foundational technologies, the ones that help us connect the pivots and the field to the Internet and be sort of the base for the more advanced technologies. And so we take these -- Josh mentioned before, one example is how we connect pivots with satellite technologies. This enables us to connect every single pivot on the planet and not just pivots, other devices on the field. That is a very important piece of the puzzle, and we're pushing forward for this growth with the foundational piece of the business we call grow. Beyond that, we're thinking about disruptive technologies. I'll share some of these this morning. But this is really taking it beyond just the connectivity level and thinking about value add, thinking about how we create more yields with less loss, not only on the pivot market, but also beyond that. A lot of the technologies we're building are very unique in a sense that their data sets are unique. And so the models we're building here and the technologies we're building are going to be relevant not only to pivot, but beyond the pivot. So we're already looking at other markets whether they're flood, drip or even dry land. So that's a new sort of area for Valmont and Valley to get into, and we're very excited that technology can be the enabler to get there. We believe that the world or we envision a world that is much more influenced by robots and artificial intelligence. And we think going forward, these technologies are going to have to be implemented in agriculture to achieve the yields we need to get in order to feed a growing population. As I mentioned, the foundation is one of the areas we're focused on. And that's what you see here, remote monitor and control. These are foundational technologies that we need to have in the world in order to be able to have the more advanced technologies. But 2 other components that I wanted to mention this morning. One is irrigation optimization. Irrigation today in 2023 is still mostly done, growers still mostly make decisions by what their next door neighbor is deciding to do or by basic climate measures or by feeling the soil. There's not really an implementation of models and data science in this world today. And so we believe that as the one of the largest irrigation companies in the world and now one of the largest irrigation technology companies in the world, we need to lead that path. And so we've been building models and algorithms, helping growers achieve higher yields with less water. And that's a big area of focus for us. Another area is a new area for Valley environment, which is the agronomy area. You've heard Steve talk about that before. The area of how do you spray in a more optimized way, how do you fertilize in a more optimized way, how do you even count something called headcount to know if you need to go and replant at the beginning of the season. These are very impactful and important areas. And because of the technologies we're building, we think we have an advantage, and it's important for us to get into these businesses. And so we're doing that as well, and I'll give one example of that today as well. While we're looking into the future and we're trying to realize the vision and mission that we have, we're also very down to earth. We think about grow our ROI and grow our value proposition from day 1. And so you see some numbers on the screen here, but I'll also provide a few use cases for intuition. Base case, as I mentioned, foundational technologies, these are even cases that are important for growers in order to turn that pivot on and off. So instead of driving 3 hours to the field, doing that remotely. That is sort of the base case. But knowing how to irrigate in a smarter way, in some areas, it's important in order to save money. In some areas, there's just not enough water to irrigate. So knowing how to do that in a smart way is very, very important, and it's a very difficult task. In general, knowing how to optimize the pieces of the in-season decision-making is difficult. Think of it as a function where you're making lots of decisions throughout the season, but you only have one target and you only have one sort of measure of success, which is the yield. So knowing how you've optimized that throughout the way is complex. And I think it's almost impossible to do without data science tools and without a broad data acquisition mechanism like the one we built. One more use case is just around spraying and detecting pest and disease. You're going to see in a moment in [ testamonial ] where it's important to find or it shows the value of finding a pest earlier on in the season rather than later. That can save a lot of -- that can save a lot of yield. But even just knowing when everything is okay, knowing that you don't need to spray in the season, then you can spread out your spring. And so as an example, instead of spraying 5 or 6 times a season, you can spray 3 or 4 times a season. That's also very important in terms of the foods we eat or produce, but also in terms of the ROI for the grower, every spring round is very expensive. In terms of TAM, so the numbers you see here reflect and they're referring to the recurring revenue TAM. So this is not hardware sales. This is annual subscriptions, higher margin sales. So we think that $1 billion market is a very interesting and healthy market for us to try and go after. And we see growth in that, not only with new markets and global markets, but as I mentioned, agronomy and other sections that we haven't played in before. So we not only think it's a very healthy and strong market today, but going forward, we think there's a lot of potential for growth. I wanted to give one example of these technologies that I've mentioned before. So this is a concrete product that we have called Plant Insights. It was mentioned earlier before as well. This product is quite intuitive. We deploy cameras on the pivot. And as the pivot goes around, we're capturing thousands and sometimes tens of thousands of images. And using computer vision or today, broadly known as AI, we're able to detect different pest, disease, nutrient deficiencies and things like that. On the right-hand side here, you see a pest that we detect. We can detect the tiniest pest, really the thumb rule is anything you can see with your human eye, you can see with our system in the future even more. And then the red dots over there are where we detected the issue, and the green ones are where everything is okay. And so already here, you can see that you should probably get the intuition of how this can provide value if, for example, you would have this pest only on part of the field, you may not decide to spray it in all of the field or if everything would be green and you'd only have a little bit of pest, you might decide not to spray on that week. And so while I think the initial value proposition of this type of product is intuitive because you can see here very clearly where there's an issue and where there isn't, we think this is the foundation of bigger technologies that we can't even think about today. This in AI is called perception, the understanding of the field. And so far, really, if you think about growing there hasn't been really a good understanding of what's going in the field on a day-to-day basis. We were really just dependent on scouts. These are people that go and walk the fields and will look at a few areas in the field. That is -- it's provided a lot of value to date. But we never really knew what's going on, on a [ sand plant ] or even leaf level on the field. And so we think this is going to have a lot of potential and unlock a lot of value in the future as well. And probably change the way we grow in general. The last thing I want to say here is that -- and I mentioned this before, is that these technologies are the base of newer technologies, and we think the pivot is a great place to start. If you think about the data sets we're building here and the models we're building here, it's really as good as it gets. We're looking at the same area of the field constantly building an optimal data set and models that later can be used in other areas as well, even with reduced data sets. We can envision the fact that because we have strong models, we can go into dry land and have even -- have sparse data collection and be able to do a really good job. So this is a really interesting technology, one of many that we're building to move this industry forward. I wanted to give an example of a testimonial. So we're going to play it right now to see a grower that has been using this for the last couple of years. [Presentation]

Yes. So hopefully, that emphasizes a bit of what I described just in the slides earlier on. And so just to summarize and bring everything back. So to create this change, a lot of foundational work is needed. And so we're focused on really connecting every pivot on the planet and building the foundation, whether it's on the hardware side and connectivity side or the software side to build these technologies and building the right team in order to create these disruptive technologies. We have ambitious goals. We're aiming for approximately 10% of total top line to be coming from annual recurring revenue, which I think is going to be very healthy for the business, and we're very excited to do so. Thank you very much.

Okay. We're going to go ahead and start our first Q&A session with this morning's speakers thus far. So as I mentioned earlier, we have some mics in the room. We'll just go around and pass, we'll start with Rob.

Just 2 questions on AgTech. I guess the first is, as you look at Plant Insights, can you talk about how that's being sold to the farmer who may or not be using your pivots, maybe it's a different way of being sold for someone who has your equipment in the field versus somebody who doesn't, if it's equipment, software as a service, however, we can understand it? And then the second question is, when we listen to what the equipment manufacturers like Deere and CNH you're talking about, they seem to be offering similar-type monitoring solutions that look at crop inputs, pest, weeds, other things that are impacting yields. Can you talk about how this either competes or complements it? And are these farmers that are buying technology on their farm equipment either choosing to put it on that equipment or a pivot. I think you kind of understand where I'm going?

Yes. Okay. So first of all, the first question Today, we're doing a combination of hardware sales and subscription sales. So when a grower buys Plant insights, they're going to pay upfront for the for the hardware, the cameras. We try to create a really economical model, a cost-effective one. So it's sort of almost a no-brainer. And then there's the annual recurring revenue. And that's where we're focused much more. We're aiming to bring that up. And sort of when we started out, we had that extremely high just to be able to prove that the value is there. So we kept the numbers really high, just to test the market. And now we're sort of bringing them to an area we're comfortable. But again, the focus is mainly to create this subscription model. We also see this complementing agronomy services today. And so agronomy service today are one of the most recession-resilient businesses you have. You need to go on this today every single year. And so we see this as something very complementary. So that's sort of how pricing works. In terms of how we work with other OEMs, first of all, to be clear, this technology, we put just on pivots. We think it's a foundation for new data acquisition methods as we call them, whether it's robots in the future or drones or other devices in the field. But today, it's just on pivots. And we think that it's actually complementary to what some of the OEMs are doing. If you see sort of the cutting edge of what OEMs have, technologies like see and spray that detect different issues. That is very ad hoc. That's when the system is in the field. And because these technologies are very complicated, there -- hopefully, they look easy to build, but they're multidisciplinary. You have hardware, software, it's really the worst environment you can build hardware devices in. You have computer vision on the back end, you have to know how to work with growers and to make usage very, very easy. So these companies are focused mostly around weeds within the season. This is much more comprehensive. So if you think about an OEM manufacturer that has a sprayer in the field, the sprayer is already there. We're there all the time. The pivot is there all the time. So we know in advance when to send the sprayer, why, where the sprayer should focus. We want to work on things like weed maps that we provide to the sprayer in advance. And other areas like you heard the grower talk about nutrient deficiencies. You don't have tools for that. So I think our solution is much more comprehensive throughout the season. In the future, I think it's going to complement. I don't think it's going to be one or the other. I really think both of them will be there. I just think we have a real competitive advantage and an interesting area, both for the business -- sorry, pivot business and beyond.

All right. Ryan Connors.

Yes. So congratulations on a great presentation. I thought it was very well done. One of the things I thought was pretty striking having sat through a number of analyst days for Valmont and even your peers over many years, is I don't think I've ever seen dry land conversion and sort of adoption from flood. I think it was hardly mentioned, if at all, not very prominently as a growth driver and over the years, I was often seen as kind of [ V ] growth driver was adoption of mechanized irrigation. Should we interpret that as a sign that you think the market is a little more mature now and the next phase of growth is to add technology -- or is that still part of the story? And just you didn't want to highlight it here today.

Yes, I'll take this one. It's really -- it's always a part of the story. And oftentimes, we're asked the question as to where do we sell pivots and it's new land development, conversion and expansion and -- or replacement. And those ratios over time really haven't changed for us. kind of 1/3, 1/3, 1/3 in North America. I think the reason that we -- maybe it doesn't show as prominently is because we know that growth is coming from other places in a much more pronounced way. So on our last call, we talked about Brazil really converting new land over to pivots at almost 45% in addition to just the amount of land development going on. So those are much more significant drivers for our sales and profits going forward than just being solely focused on North America and flooded conversion. It's there, no doubt. But as Josh pointed out, we're going to quickly pass 50% of our sales coming from international. And so really, the focus around parts and then new pivots in areas that are being developed is really the strength of the business at this point.

Steve, in your commentary about the utility business, you mentioned that the renewal mandates will probably outstrip the industry capacity to meet those mandates. What does that mean for pricing as you go forward?

Good question, being that I was around the utility business at one point. I think what you've seen the industry do is we're very cognizant that stated goals and then what actually comes through in the market are tend to be 2 different things because of permitting, right of way, there's a lot of projects that tend to get delayed and moved along. But generally, we've seen positive momentum on pricing across the board in utility. Whether that's our concrete products, our steel products or substation products, our PyraMax structures. Aaron will talk a little bit more about the dynamics in the market, upcoming here shortly, but pricing is very strong. When we're -- we're like at 40 weeks lead time pretty much across not just ourselves but our competitive base. I think the competitors are also adding capacity in a smart way as are we. Most of the people in the industry were here back in 13, 14, 15. And so the industry has been very rational. And I think the biggest reason for that is utilities don't just bring on supply willy nilly. It is very hard even for ourselves to get a new factory approved. If you have an existing factory, and you can expand it, you're much better just because we're Valmont and we say we have a new plant, they may or may not approve the plan. And so that also, I think, has kept a competitive edge, just right where we need to be in terms of supply demand. We probably need lead times down a little bit. We have some things that Diane will talk about to address some of that. But generally, pricing is really moving in a positive direction, and I think we'll even more so because of the critical nature of delivery for our products, when you have union labor and 90% of the cost out in the field is so important.

Brian Drab, maybe next, while we -- and while we're waiting for Brian. He's up here in the corner here, Christine. [Operator Instructions]

Okay. I just wanted to make sure that I got a couple of these numbers correct. First, I think Renee has been asking for what percentage of irrigation is the parts business for a while. And this is a first -- I always thought it might be about 15 because Lindsay's 15-ish. So I guess it's 18% of sales. And in the projection, it looks like it's going to 25% to 27%. So that's a much bigger piece of the business going forward, I guess. Can you talk about what -- a little bit more about what's driving that and how important that's going to be to the business? And then what are the margins that you get in the parts business relative to the core business?

Sure. Brian, thanks for the question. Yes, the real big growth drivers is what I was saying in my presentation is runtime. As we get deeper into these equatorial markets with a lot of hours on these machines, they're requiring more parts because growers want those machines well maintained. So they're applying water and even fashion, they use them for fertigation. They want to make sure that they're at their maximum operating efficiency. So that's driving a big part of it. The other thing is just being present in markets having that footprint, the 13 distribution centers, making sure that we're close by because when a pivot goes down or has a catastrophic failure in the middle of growing season, it's vitally important to get that back up and running as fast as possible. As far as margins, we do see typical to any OEM manufacturer in the world, our OEM parts are always going to command better premiums just because they're highly engineered, and we control the specs. But we do sell, as I said, we sell now aftermarket parts that fit on competitors' machines and some of those are a little bit more competitive in nature. But yes, I think the -- it will continue to be good growth and good expansion for us as we go forward.

And then the technology sales in irrigation, I think last year, 115 million and the projection in that waterfall yield out, it was 150?

250 in total.

250 total. Okay. And there might have something..

Josh's growth versus Daniel's growth.

Right. Josh versus Daniel's growth.

And the 250 million includes the ARR component as well.

250 is what I thought it would be. I just missed that. And then just the last question just on margins in general within irrigation, I understand what you said on the parts business, but for the technology piece of that, how do those margins compare with the core? And is that 1 of the reasons that you're able to project for the team, for the company?

The gross margin on tax is substantially higher. In newer products, obviously, it takes a bit longer to get to the sort of -- just because you spend a lot on R&D and the initial products when you're not at full capacity, a bit more expensive. But ultimately, these are going to sort of 85% gross margin, so extremely high margin, closer to sort of a SaaS software-based company. So -- and also because these are out there for quite a while, we can assume sort of longer time with the grower, so we can increase margins that way as well. So extremely healthy margins on the tech side.

Daniel, you talked about an addressable market of [ $1 billion to $1.6 billion. ] What makes up that $1 billion at the moment? I mean, your share of that relatively small at this point. What assumptions you're making for it to go to [ $1.6 billion ] And then when it comes to the adoption of Vistek, what are your assumptions behind the adoption of this technology. I've learned one thing from this job over the years is probably that adoption generally goes slower than you anticipate. So just what you're assuming in adoption rates of this stuff?

So in terms of the current market, it's mostly around pivot. So there's -- not just value pivots, but in pivots in general. So the hundreds of thousands of pivots and then you can do the math to how you get to $1 billion. We've taken our different products and services. And it's for a couple of thousand dollars overall, the pivot to very easily get to $1 billion. So that's mostly around pivots and devices within the pivots world thinking about subscriptions, right?

Generally, we think about 0.5 million globally installed.

Yeah, 0.5 million, so yeah. In the areas that we can service Yes, yes. yes. And yes. And so today, basic subscriptions could go from $300 all the way to $1,500. So it depends on the service. And that's exactly sort of the approach we're taking. We're thinking about this much more in subscription-oriented way and thinking much more about pricing things based on value. And that goes back to the value side, the ROI slide for the grower, right? If you save every spring cycle could save thousands of dollars, you save a few of those to grow, we'll very easily pay $1,000 or $1,500 a season for that. So that's how you get to the to the billion market. And then the $1.6 billion, it's adding both new features, but then going into the agronomic areas as well. So that's how we grow that business. And also we're trying to be conservative there because agronomy business is huge, right? If we look at companies like Nutrien and other sort of ag retailers, that business is probably $100 billion, but we're not looking at all that. We're looking at a specific segment of where technologies could complement, and that's where we get the extra 0.6. But Personally, I think it's going to be higher than that. It's more of a conservative number that we came up with. To your second question about customer adoption, then yes, you're totally right. This is one of the hardest areas to get grower adoption. I also think sort of if you look at technology in general, right, over the last, like 20 years, where technology has been sort of fast adopters were easier market, like enterprise market or software markets or what everyone here has on their laptops. Agriculture is way more fragmented and they're just more difficult to get into. And that's exactly why we think this is going to work with a brand like Valley. I was in an event a couple of months ago where some growers passed by all the tech booths that were out there offering different technologies and they stopped at Valley and didn't ask questions and just signed up. And I asked them, why didn't you look at any of the other booths there. And I was one of those booths 3 years ago, I was standing there. And today, it's very easy. They just said, we trust Valley. It's a company being out there for 75 years. And so I think there hasn't been a lot of brands -- new brands in agriculture in the last century, especially [ Ovintech. ] I'm not even sure there's one. And so we think this combination between bringing the brand recognition of Valley together with proven technology, and I talk about the foundational technology, I talk about how we leverage AgSense and the fact that that's just been working, so growers trusted and having a team that's very hands on, we like to call ourselves the data wizards and muddy boots. And the reason is we just spent a lot of time in the field and a lot of time with Josh's team, and that's how we think we're going to get grow adoption. And so far, by the way, it's I think it's actually exceeding our expectation, not the other way around. So we come very humble to the field, but it's but it's going quite well.

John from D.A. Davidson, you had a question, right?

So you mentioned soybeans being used in oil -- in fuel. Can you talk about what sort of opportunities this brings to Valmont? And then just generally looking forward, do you see this as a succession to corn ethanol? Or is this more of a different opportunity or a different [ segue?]

Yes. It tends -- soy is being used for more biodiesel. So think of heavy trucks and transportation, and so that is where most of that capacity has gone. Europe started this. It is really blossoming out from there. And what it does anytime you have kind of baseline demand for a crop. It keeps prices and keeps growers kind of anticipating a range that is less volatile than it used to be. And so then when they forward project equipment purchases and other things like that, they kind of they can put a worst-case scenario that is better than it used to be. For Valmont, it's important because of our Brazil business, specifically, Brazil is the largest producer of soybeans in the world. They are benefiting from much of the geopolitical issues with the U.S. So North American growers are not exporting as much to China. Brazil has picked up the slack for much of that. And because we have now 42 dealers in that area and growing and areas that are opening up for that kind of production with our machines with the technology because in Brazil, they adopt technology very quickly when you offer it to them. So it's just a good driver for the business overall. It's one of those things that will give multiyear kinds of farmer sentiment increases when they're in their planting decisions and equipment purchases.

To continue on the theme of lower volatility, the CAGR profile assumes through the cycle, given what you're talking about Brazil, the ARR, should we think about the downside of the cycle being less the amplitude being smaller than what it has been in the past?

Yes. That was true before for us that each low was higher than the last low. With the efforts we have now with aftermarket parts, with technology, with the geographic expansion, the next low will be much higher than the last low. And then it will be a great business on the next big up cycle, which I know a lot of people think we're over the top already on Ag, but I'm not so sure. We have an El Nino setting up, with the North American dry conditions. So there's a lot, particularly in North America that is still left to be had. But elsewhere in the world, the cycle is still very strong. So it's a good way to look at it. But we are trying to build more and more opportunities for green shoots during these times because in our minds, we want to not be as cyclical. We can't avoid it completely, but we want to be much less so.

And just a follow-up. I heard you talk a little bit about Drip technology, and that's not something you played in historically. So just kind of what your thoughts are around that opportunity? Yes. So Dr.

Yes. So we're not actively going into drip at least on Josh's business. And our business, the technologies we're building today are applicable to most of these markets. And so if we decide to go into drip, we have a strong foundation with everything we built, and we're actively looking at not just the drip, but flood, dry land. These are more like proof-of-concept areas, but it's areas that we have the capability based on what we've built.

I was surprised -- I was doing some reading on Brazil since we're talking about Brazil so much the last couple of months here, especially and this governor from Mato Grasso is kind of taking a tour of the U.S., I guess, the third largest seat in Brazil. And I was surprised that he said 1.5% of his cultivated land is irrigated. Brazil has been -- I mean I've covered the company Valmont since 2010, I think, I've been talking about Brazil as a growth area for a long time. I didn't realize that the third largest state would only have 1.5% penetration. Why is that? And why is this -- has that been growing from 0.1% to 1.5% for the last 10 years or something and why is it accelerating? All of a sudden, you say we're going to 1/3, like you just discovered irrigation. I thought it was a huge growth market for a long time?

Yes. Brian, great question. Brazil is, as I said, is a fantastic market. We've invested heavily in that. It's 1.5% just in Mato Grosso state. The entire country is only just hit 10% irrigated, whereas in the U.S., we're 54% and Nebraska alone, our home state is almost 20% of that irrigation capacity. So why has the adoption lagged? Well, historically, and if you saw the governor's pitch, which we set -- or his speech, we sat through it, he was talking about weather patterns. And he was saying that in these equatorial markets, they have relied on a lot of rainfall because of the rain forest and some of the other cycles. So they were actually able to get 2 crops in Mato Grosso without supplemental irrigation. Well, now because of the way the weather patterns are changing, their second crop is now at significant risk. And forget about that third crop. There's no way you can grow it without -- because it's so dry during that season. So people think about rain, forest and equatorial markets as they think about, oh, it's a rainy season. It's a wet climate, it's so -- but that's for a short period of time. Even areas like in Southeast Asia, they get a lot of rain in a short period of time, and then it's very dry. And when you think about, like I said earlier, the protein that we eat it's all fed by really irrigation because animals don't care if it's a dry season or a wet season, they need to eat all the time. So -- that's a big part of it. I think as the weather changes. Also, Brazil is obviously going through a lot of discussions about land and land use and they're changing. They have a grazing cattle industry. They're changing. They're going to be adopting or they started to adopt more North America style feedlots with different genetic strains, so that's a big part of that land use being turned into cropping land now. So they're moving passengers into cropping land, which also helps them utilize that land productivity significantly.

The pitch by the governor also was around that their corn yields are not close to North America because of the lack of rainfall. So they are 53% of the land in Mato Grosso is federally controlled Amazon land that they don't touch as a state. And so they need to make the land that they already have in production, more productive. And when they look at those corn yields specifically, they know that, that's all about water and water at the right time. And so the recent uptick has been around corn primarily. They have obviously a replenishing aqua ford. Water is not the problem. It's getting it at the right time to support both ethanol and the cattle industry that Josh mentioned. But it's very early innings. And the growth that we've seen, like we've doubled the business each in the last 3 years. That's why we are so bullish on the market, and then the market will give a lot. They are adopting quicker. If you want to hit those 3 crops, you need to pivot. And then the payback on the pivot is superior to even any other piece of farm equipment at that point because it gives you 3 crops.

Maybe just one more point on that topic specifically about the Brazil and technology adoption, why we're also excited about that is during the pandemic, many of the sons and daughters that we're living in the large cities in technology actually relocated the farm and we're working remotely. Well, now they decided that, "Hey, I can do my help my father or my mother or family out on the farm." And now the average age of the farmer has dropped to 42 years, whereas in the U.S., it's over 60 years old. So we're seeing -- as Daniel said, Brazil is hungry for a lot of things, and one of them is technology and in irrigation equipment.

I've got an online question. I'm going to get to you first, Brian. So -- so Steve, I'm going to direct this 1 to you. So you've been very disciplined stewards of shareholder capital with a lot of care applied to investment, dividends and stock buybacks. At what point would you consider helping to finance your products or services?

Good question. We aren't a bank. We don't have a balance sheet to go after that kind of business per se. We would like to work with capital partners in that endeavor. We believe it would fundamentally change how you buy our equipment, particularly on the irrigation side. If that kind of credit could be made available, it is something that we are working on, but not yet at a point where we could offer it to the market. But we know that there's a used pivot market. We know that pivot market is generally pretty predictable overall. And therefore, the residual values are pretty well known, and it's just lining it up with the right capital partner in the right areas, right? And so we will look obviously at the big markets first. before potentially looking at that elsewhere.

Maybe we have time for 1 or 2 more questions if it's quick. Ryan? No, Ryan -- sorry.

Just a quick question on kind of the dealer network aspect of this. I mean, obviously, rolling all this stuff out sounds great from the big picture, but it has to be done at the ground level by the dealer network. And -- do you believe that might be a gating factor? And what kind of investment would you have to make potentially in training and/or upgrading of dealers to actually accomplish some of the things you're talking about in tech?.

Okay. Yes. So the dealer network, first of all, I can't emphasize how strong the network is, especially for sort of breaking in tech. I think we're looking for areas where we provide them a lot of value. I'll give you one example to create intuition, which is every issue they had with technology device that they'd call the call center, right? And we'd have like thousands, if not more, of phone calls every single day. We have a call center in South Dakota here on. And we just built an initiative called self-service, where we created these sort of videos over YouTube and just like quick tips for how to do that. And suddenly, the dealers got way less phone calls or if they did get one, they were able to refer the grower to the YouTube channel or to the tutorials we had. That's very, very simple, but it sort of shows there's lots of value to give to the dealers as well. Now clearly, the most difficult one, if you want to sort of pinpoint where it hurts the most is like how does a dealer now say and because his word is worth more than anything, right, like a good salesperson. So how do you get convinced the dealer to say, yes, take this, Mr. So and so. And so we had to prove to them, right? This is not the first year of technology. I wouldn't argue that a new technology that hasn't been tested at all to get out there to the market. But we spent a lot of time on our -- and we still do and any technology we have, we spend a lot of time to get the dealer on board. We use it -- Josh has a dealer council for them, and we're partnering on that. And we use everything we can to make sure the dealers get the experience so they can bolt for the technologies. And today, we have that, right? And if we have any issues, we'll go out there and we work very closely. So just where I started from the dealer network is a super powerful network, and we do a lot to make sure they're on board. We are also creating more things like online channels and different things that will complement and help them. But in general, we work very closely with them, and we make sure they're comfortable with the technologies.

Yes. And it's perfect to be with you today because actually this week, we launched our AgTech tour. So formally, it's kicking off in New Jersey this week. And it's a partnership between Prospera and Valley. We outfitted a van. And literally, our salespeople are driving that van through all the regions and showing growers and dealers this new technology and what's being offered with Plant Insights and irrigation insights. And we ask -- we actually put out a survey to ask dealers would you be interested in sponsoring us for a day or having us there, having to launch, we're oversubscribed. There's like 90-some stops. And you all can follow the van as it goes across at agtechtour.com. And it's -- that's a site we own. So it's very interesting to see where they're at. There'll be testimonial videos, There'll be diary updates and tech updates. So very good adoption by those dealers of embracing this technology.

And Ryan, I would just add, growers are looking for persistence. They want to know that you're not going to back away from a solution that they're going to invest in. And I think buying Prospera for $300 million and then the money we've put towards it and the AgTech tour and the testimonials by Ryan, all of that feeds into the psyche [ of they're ] serious. They're going to keep playing. It's not vaporware. It's a model that I can understand. I have other growers that can tell me what it means to save money with the solution. And that's how adoption, again, persistently over time because all of our markets have been that way, but persistently over time, that's how we'll win.

All right. That is all we have at least for this first Q&A. So thank you for your questions. We're going to do about a 10-minute break. So for those of you online, we'll be back in about 10 minutes. Thank you.

Welcome, everyone, back from the break. So our next presenter is Aaron Schapper, who is our Group President of Infrastructure.

Thank you, Renee, and good morning. My name is Aaron Schapper. I've been with Valmont for 12 years. I'm one of the employees that had the experience of starting in a few of our different segments. I started as the Vice President and General Manager of International Irrigation on that side of the business, ran the engineering department for irrigation for 3 years, then moved over was the President of the Utility division at the time. And then for the last -- did that job for 3 years. In the last 3 years, I've been in charge of our whole infrastructure division, which is the product lines I'll talk to you about today. So kind of really been around the different parts and pieces of Valmont and parts of the. business. So what I want to talk about today is Steve introduced the ideas of the framework of run, grow, transform. So when we take that framework of [run, grow, transform, ] we'll talk about what that means for infrastructure. So first of all, if we look at the run side of our business, Really, what we're looking at is optimize and actively manage the portfolio. The infrastructure business is a portfolio business. We have a lot of different product lines in there. And so actively optimizing managing that portfolio is a big part of running our business. The second one is really reducing complexity. So as we put all those different segments together into the one infrastructure segment. Why did we do that? We did it to reduce complexity, simplification, leveraging resources, it doesn't matter whether you're on the operations side or the business side, it really is about pushing productivity. So when we remade that segment into a single infrastructure segment, it was really about productivity and pushing and productivity, and we continue to do that today. The grow part of the business. When we look at growth part of the business, I'm really excited to talk to you a lot more about energy transition. It's a big, big deal. It is a big change. We talk about infrastructure and the words dynamic and infrastructure rarely go together. But today, with the changes in energy transition, it is absolutely dynamic business and infrastructure will change dramatically in the coming years. And I'm excited to talk to you guys about that. Aging infrastructure, storm proofing, all of these things continue to happen. Growth is a great opportunity for us also internationally. So when we look at our business. And then transform, when we talk about transformation, it is always driven by technology. Technology-driven solutions for our customer. Infrastructure, we always work to make our dumb infrastructure products smart. In the future, this is going to be a more critical driver for making the right kind of infrastructure for our customers and bringing that value. So moving forward, kind of an overview of where we are with the business. You can see that we are just shy of about $3 billion in the last year. You can see our 5-year compounded growth rate expectations for each of our product lines in the way we group those product lines. If you're looking at operating margin, operating margin expectations, obviously, we're on a good run a great trend. And if you looked at our Q1 results, that trend continues and we're looking forward to continued growth on the margin side. So let's talk a little bit about the markets that we're playing in. First of all, we're in a once-in-a-lifetime transition. The energy transitions that we're in is real. And the energy transitions will push this market the human rates, we've been in energy transitions for a long time, right? We used to burn wood. We moved from wood to cold, cold the oil and oil to renewables. These transitions don't happen that often, but they do happen once in a lifetime, right? So as we've gone from a coal economy in the early 1900s, to really fossil fuel economy, natural gas, Valmont is an extremely unique situation to take advantage of this transition. And this transition will be pushing major trends in that transition piece. Through -- this is -- these are just numbers through 2030. And I'll go in deeper on each of these. That's one part of our business. Second part of the business, vehicle electrification is real, continues to happen. You have 500,000 new EV charging stations by 2030. Our telecom business, 60% data increase by 2028. A 60% data increase in everything we do. The communications, everything is going mobile. The infrastructure to support those data increases are critical, and they're a great driver for Valmont's business. And finally, we have that footprint. When you're on the road or you're driving down the road, you're walking on the streets of New York, you see our infrastructure is everywhere. That infrastructure is getting smarter, that infrastructure needs to have more and more equipment on it and integrate it to it. And this is a great opportunity for Valmont on the infrastructure side. So going forward, not only do we have these great market drivers, but we also have a lot of incentives to push our business forward. $550 billion, the Infrastructure Investment Jobs Act. This is new spending for core transportation infrastructure products, all right? So this is a great driver here in the U.S. $370 billion in Inflation Reduction Act. This is for that green renewable product driver that's pushing it forward. $53 billion at CHIPS and Science Act. The CHIPS and Science Act has been interesting because that's really been a great short-term driver for Valmont. And because what's that -- what that is doing and is bringing manufacturing of high energy assets back in the U.S. So as they're building these factories, the first problem they're running into is the electrical infrastructure -- to grow that electrical infrastructure. So been a great driver. A lot of regions that hadn't had big load growth, all of a sudden are having tremendous load growth and the power that's needed to support that. And finally, this isn't just a North American phenomenon. This is a global phenomenon, all right? So EUR 135 billion EU fund for sustainable developments going out, that is for renewable and green development in Europe as well. So when we look at it, not only do we have these great built-in drivers, we also have additional support reinforcing that demand. So let's talk about this energy transition super cycle. We'll talk about circuit line miles. It's interesting to me because it took 150 years to build out our current grid, all right? And you have structures on that grid that are 50 years old, right? So not only do you have a lot of old structures, but you have structures that need to be built out. I mean, 150 years, that's using Edison's and Tesla's, original inventions that have been pushed across the U.S. What needs to be built by 2050, and this is just based on the mandates that are there alone, right, is 75,000 at least new line miles, right? So to give you an idea of how much high-voltage lines that is, that's enough to run the distance from here, New York to Los Angeles and back 15 times. That's how much transmission needs to be built, high-voltage transmission, right? And on top of that, if you're more internationally inclined, that's circling the Earth 3 times by the way. That is a lot of high-voltage transmission that has to be built by 2050 to put this in. And remember, 150 years on our current grid. So there's a lot of work to do. There's great fundamentals underlying the business. In real terms, we will have to be building faster than ever in order to make this happen. The other really important trend is that power usage is becoming more renewable, so you can see solar generation is pushed up, and we'll hit solar generation a little bit, our tracker business. But the power is going to be more electric. So that is one of the critical pieces of it. And that's why it's pushing both energy demand and circuit line miles. A lot of what we do will be electric. And when you're putting electric vehicles, whether it be industrial or commercial, massive charging infrastructure needs to be done for those pieces of business. So really good fundamentals on that side. So we're looking at all Valmont infrastructure products where we play, we're right in the backbone of this energy transition. Once again, this is a once-in-a-lifetime transition. This is a very dynamic place to be. There will be a lot of changes in growth and money pushed into this business. We're excited to be right here in the action on the backbone of this energy transition. You can see our lighting and transportation and telecom also play major roles in the transition as we go forward. So the great thing about this business is there's different countries in different stages of this transition. And no matter where that country is, whether it's beginning a green transition, it's already there, whether it still just needs to build out basic infrastructure like places -- some places in South America and Africa. Valmont can meet you where you are in that journey. It is -- it's a fascinating business and a lot of fun to be in right now. So let's talk a little bit about each of our product lines, so I can give you a little bit more background. So first of all, we look at the large transmission, these things -- I mean, I talked about the drivers. We believe that business in 5 years will be about $1.6 billion. Remember, I talked about all the line miles that has to be put in. That's what's going to drive this business. The transmission capacity has to increase by 60%. That's just going to happen by 2030. So there is a lot of increases that will be happening in this side of the business. Steve mentioned a little bit early -- earlier about the capacity for this side of the business will be constrained. It's -- that's a benefit for us on pricing. So the pricing has been good. Demand is good. I think we'll continue to progress along in this business in particular. The one thing we're not -- we're not looking just for the market to push us forward. One of the critical pieces for us is to bring in the new products into this market. Okay. The layering on that new product is important. And so this picture right here is of a PyraMax structure. PyraMax structure, that particular structure is 475 feet tall. To give you an idea, the Statue of Liberty, which I think is over that way, is about 305 feet tall. So this structure is a big structure across the St. Charles River there in Louisiana, built this one for Entergy. That structure is built to withstand wind loading about 175 miles an hour. Climate changing, storms are becoming a lot stronger. So storm and storm hardening is a big deal. Valmont is using our unique engineering and unique structures that PyraMax does and no one else does in the industry. So these structures have become more and more popular, especially as storm and storm hardening is there. CEC substations and monitoring structures is another thing that you're going to see as far as new products coming out. CEC substations, we talked about those before. These are preassembled substations. So labor gets difficult and more constrained on the field, so substations, which is a major growth driver for our business. Every single transmission line that you put in needs a substation at either end. You need to step the voltage up from generation, you need to step the voltage down, to distribute. Those substations are on other either end of those. Valmont has a unique solution with a CEC substation it's preassembled and ships on the back of the truck so that it's assembled in the field. Another unique innovative structure that Valmont is offering. And then finally, we talked about making the dumb infrastructure smart. If your infrastructure is stressed, if you're -- there's never enough money for infrastructure that everyone needs. If that's the case, it's more important to understand what's going on with that infrastructure. Valmont is in a unique position to -- we've engineered a lot of these structures. So to -- as we bring telecommunications as 5G as IoT goes, the monitoring of these structures becomes more important. So that if you're a utility, you're replacing the infrastructure that needs to be replaced, you're not going through and replacing large swaps just because the truck or the assets are in place, right? So smarter maintenance spends, smarter building of those grids. So very excited. A lot of new products. Valmont is not just about that. It's about bringing new products. It's not just about those market growth, it's about bringing the products to that growth. And let me highlight one of these. This is our hybrid distribution poles. Our business is set by [indiscernible] large transmission poles. There's about a $3 billion market in distribution, Valmont hasn't played a big part of. That market mostly goes to wood, right? Wood has a problem, wood catches on fire, right? And that's problem number one. Problem number two, it requires a lot of chemicals, pretty harsh chemicals in order to preserve the wood for the long run. So we feel there's a great market in this distribution, and we've really put a lot of effort into bringing new products into distribution. Our concrete and concrete hybrid distributions. The -- making a product that's 6 times the strength of wood in a storm hardened environment, a fireproofed environment is critically important, and we see great leverage with this product. Just really a newer product for Valmont, but we believe this is a fantastic future. Our manufacturing facility in Fort Meade, Florida is manufacturing this today. We're very happy about the progress we've made. But this is an idea of bringing a new product into a market that was traditionally underserved by Valmont and really growing it with the new product demand. Fantastic product. Moving forward, looking at the lighting and traffic. You looked -- you saw the video at the beginning, kind of highlighted pieces and parts of this. But when you are driving down the highway, you are driving either next to or under a Valmont structure, right? And it presents unique opportunities for us in the IoT field and autonomous driving in all of these technology enablement pieces because we are there in the field, we are powered and we are present. And that's kind of a beachhead where Valmont sits today. A lot of labor issues and assembly issues, a lot of labor issues in the field are prevalent for a lot of our customers. So anything we can do to pre-assemble, anything we can do to put technologies in it in our factory is a great value add for Valmont. And then finally, I'd like to -- when we talk about the lighting and transportation growth, I'd like to highlight a little bit about our EV charging side. We expect this business to grow to $1.3 billion. Part of that is our industrial vehicle charging. So this is a newer product for Valmont, industrial vehicle charging is a reality. I talked about the EVs going from that 1% to 31%. It's not only for commercial vehicles, it's also for industrial vehicles. For people that are following the industrial vehicle space, the electrification of the space is also quickly moving. The critical part will be that there will be a need for $12 billion in capital spent in the next 7 years to build these structures. Now Valmont brings an interesting angle to these structures. We have an agricultural heritage that you just heard about today from my colleagues. That agricultural heritage allows us to do something unique in the industry. And that is really looking at the next generation of electric vehicles and bringing those electric vehicles -- that electric vehicle infrastructure onto the farm to help people understand and evolve there. So working with partners now using our already deployed pantograph technology on the -- in structures on the electric bus vehicle stations to look into the future and bring them into the new electrified space. So electrified on the farm will be a future theme that we like to call your attention to. So we're happy with the growth in this. I think it will be a quickly growing space as industrial EVs come to market. And Valmont once again, brings a unique opportunity there to our customers. Moving forward. Let me talk a bit about Coatings. We -- Coatings will -- last year was a $360 million segment for us -- or sorry, a product line for us. We'll move to $530 million. Why do we like Coatings? Coating is pretty simple, but as infrastructure grows, Coatings grows. And once again, I talked about bringing technology to the customer -- this is one of the things that our coatings group really excels at. They're looking at the basic service. They are offering what we call VCC Max. A customer service that essentially when you drop your industrial loads off, you can track it through the processes of coatings and no one to pick it up, really working on kind of that just-in-time idea for our customers. And also working at lightning service. Anyone who's ever dealt with outside coatings and everything else, having a same-day turnaround service is unique. And it's a unique opportunity for them to get the price to value that they're looking for. Our Coatings product line is really pushing that forward. And remember, as those infrastructure needs increase, it doesn't matter if it's Valmont product that we're Coating or outside other industrials, we take all of those customers bring together. So that business is doing quite nicely. So let's talk about telecom. Telecom, obviously, when we look at accompanying growth rate, this is one of our outsized growers. We like the telecom business. We like about the telecom business is that we have great opportunities, not only here in North America. We also have great opportunities internationally. So when we look at international carriers, we look at international opportunity, it's important. And I'd like to speak a little bit about 5G. So 5G, so our carriers just in the U.S. alone has spent $120 billion on 5G spectrum. That is a massive investment in spectrum. What that means is they have reserved that spectrum. They have yet to have brought forward all of the infrastructure it takes to use that spectrum, right? It's like buying the beach [punt] property, but you still don't have the resort that you're looking for, right? So the carriers are absolutely have invested in that first piece of it, which is a spectrum. The second piece is really bringing that together. Then if you've ever used your 5G phone, right, and you get it and you say 5G and it's 2 or 3 bars and then somehow it's worse than LTE, does anyone experience that, right? I know I have. That's what we're talking about densification. That is the next step in what's going to be happening here. So the carriers will be spending, right? And the CapEx, it runs and stops, but the carriers will be spending on that densification. This is just in the U.S. alone. 5G is also a global business. We're very excited about opportunities in Europe, Australia, New Zealand and Asia-Pacific on what we're doing here. Finally, I would just take a brief moment to talk about our Ericsson Global partnership. Ericsson is a great partner. They don't want to do what we do. We don't want to do what they do. We bring the best together. So Ericsson with their new 5G radios, they're manufacturing in the U.S. and Valmont to actually help the structures and bring those to market. So we're very happy with that partnership with Ericsson and our ConcealFab acquisition, which Avner will go a little bit more into detail on in a moment. Looking at small innovative pieces that make a huge difference. If you're in the telecom business, a lot of people never heard of PIM. PIM is passive intermodulation, so what it does is that spectrum that they spent $120 billion on, it makes sure that, that spectrum is clean, that there's no noise in the towers, right? So one of the great pieces that we're growing out not only here in the U.S. but globally is what we're calling PIM Shield solutions. If you're in the telecom business, it's a big deal. It's a big, big deal. So there's a lot going on with that side. So drones, I don't know how many of you were in our Investor Day. I think it was -- well, COVID, it was 5 years ago. At our Investor Day, when you walked in the last Investor Day, we had a drone sitting in the middle of the room. The drone was our very first movement in disrupting the inspection market. Drones will disrupt the inspection market as you see it today. So already, long-range drone inspections are 86% less expensive. But let me tell you what we're doing in that last 5 years. So there's more structures out there, right? They're aging infrastructure, it's more important to understand what's going on, right? So Valmont used that drone early on to fly into energized lines. So one of the critical things when your infrastructure, especially electrical utility infrastructure is under stress, you can't shut that infrastructure down, right? Because if you shut that infrastructure down, that's where brownouts and all the rest of that stuff come from, especially in the summertime. So Valmont was the very first to start flying drones into energized lines -- into an area of energized lines to look at what's going on with that structure. So they used to send people up in a bucket truck, I can tell you, watching guys at a bucket truck of 200 feet, I mean, I'm on the ground watching it. It's terrifying. It is an ESG issue. Guys try driving -- climbing telecom towers. It is an issue. It's scary up there. And this critical infrastructure is going to change by using more and more drones, all right? Valmont is first one to fly to energize line. Also, we were granted a national FAA BVLOS waiver. What does that mean? BVLOS means Beyond Visual Line of Sight. We can fly our drones sitting in this room. I can fly that drone in Nebraska without any issues. The FAA has granted us the license to do that. One of the very few in the U.S. that has a national multi-drone a license to do it. How did we get that? How that happened? Well, our team set up the very first inspections. We wrote the protocols. We've been working with the FAA, and we're working with a lot of educational institutions. And in fact, in 2 weeks, June 2, the NATE Expo, which is in North America Telecom, they'll be flying drones on Valmont -- demoing all the new drones and drone technology. So that BVLOS waiver allowed us to just fly a 77-mile line in Texas, where we just -- and you'll see a video that we'll post online about a 77-mile flight where they flew in Texas just to do an inspection. And that is a massive change, and it will disrupt that inspection market. So when we look at what this means for Valmont and what it means for our utility and infrastructure customers, not only is it a cost savings. But if we look at life cycle extension, Valmont's unique right to win in this space is not that it would be a great inspection company. There'll be lots of inspection companies, but we will be able to couple our inspection with our product in the field and offer lifetime -- not lifetime or life extension of the product. So when we look at warranty, we look at life cycle management, and you add these services and products in, that's what the future is going to look like here. It's a tremendous opportunity. Finally, AI. We've talked a lot about AI, AI and specifics to flying a line. So when I'm doing a 77-mile inspection over a line. AI plays a critical part of it because it brings my cost per mile down. AI gets smart, it will tell me when I have vegetation encroachment. You guys remember California, the fire is there. The fires in California were from this, right? And that's where it starts. So now you're looking at these things adding real value real growth. Life cycle management will be a future here, so critically important to Valmont. Solar, so solar, a fun fact about solar, I was reading an article that mentioned that in order to meet the mandates that are out there, the total land coverage of solar field will need to be Massachusetts, Connecticut and not to be left out, Rhode Island. All 3 of those states would have to be covered in solar fields, okay? So when you start talking about dual use of fields, you start talking about understanding what agriculture you can use with the fields, that will be important. And Valmont is once again right in this area. I can tell you just really quickly about trackers. Trackers cost of goods, it adds about 10% more. Trackers follow sun as it goes across sky. 10% increase in cost of goods at 25% increase in production of energy. That's the future, not fixed, trackers, 25% pickup. So when you're talking about land and land mass and properly utilizing that land mass, this is a critical technology for that in the future. And today, that's where most of the growth comes from. So real quick on the outlook and goals. We talk about the projected sales to grow $1.5 billion digital and tech revenue sales of 5% of that. So when I talk about the drone business, making dumb infrastructure smart and the monitoring side, we -- our goal is to get 5% of sales in that category, which again, which is high quality of earnings. When we look at the growth, this is broad-based across the business. So once again, not only do we have great tailwinds on the infrastructure side, Valmont bringing new products, new infrastructure products to bear is an important part of that as well. And just real quick on the international markets. What I love about our international markets, every geography is different. The need for every geography is different. And so having the breadth of infrastructure portfolio that Valmont has, our local leadership gets to pick and choose the products that work for that region. We follow the market with the product. And so that's the fun part about our international and international growth is that we'll be picking in and pushing different products around the globe. And we're fortunate to have such a breadth of portfolio on this side. So finally, I'll close to saying, look, this is an exciting business. I'm happy to be here. No one has seen the level of infrastructure build-outs and the pieces that we're talking about since the new deal. It's been a long time since there's been this kind of infrastructure tailwinds pushing the market forward. It's been a long time since we've had a meaningful energy transition. And we're right in the middle. We're in the early innings of this transition. We're in the early innings of this new energy super cycle. We're happy to be here. We have a fantastic team. Our infrastructure team is energized. They're excited to be a part of it. And I think it's just a lot of fun to be in this business. So I appreciate your time. I'll now turn it over to Diane where she's going to talk about building and manufacturing all of these pieces and parts.

Hi. I'm Diane Larkin, the Executive Vice President of Global Operations. And as Steve mentioned earlier, I've been with Valmont for 3 years. I spent my earlier career as a Commissioned Officer in the United States Army for 10 years, followed by over 25 years in ever-increasing roles of responsibility in Global Operations. I am excited to talk to you today about our strategy to accelerate growth and optimize our operations through operational excellence. But before I do that, I'd like to take a moment and thank our entire operations team for their strong performance over the last 3 years. They did this in the face of extreme volatility, COVID, supply chain disruptions, Ukraine war and more. All while, supporting a growth of $2 billion and not adding any significant brick-and-mortar. So after all of that, we are confident that we can overcome any of the challenges that we may face in the coming years. What the team has presented today is that we are planning for significant growth, and we are already experiencing the significant growth. What you'll hear today is that we are well positioned to support that growth by leveraging operational excellence to accelerate through our capacity levers. We've enabled sustainable outcomes through our strategic priorities and cultivated a culture of continuous improvement, which drives optimization and efficiencies. Further, we're leveraging a centralized organization structure to accelerate scalability as well as foster cross-site collaboration and global best practices. These provide for a growth advantage. And then lastly, we're driving operations transformation through innovation and technology, expanding capacity and improving productivity. This transformation aids in our ability to attract and retain the highest caliber of talent, skilled both in lean leadership and digital acumen. We are doing all of these things while ensuring we are good global citizens and enhancing our customers' experience. We are building capacity to ensure volume growth. We understand that to consider -- to increase capacity, we must consider each of the capacity levers that can constrain growth and manage solutions that not only address those constraints, but also creatively leapfrog us to solution sets that posture us for a future that includes grid electrification, grid hardening, green generation, food and water insecurities, ever-increasing climate events and more. We acknowledge that labor and talent are at a premium. And we know that addressing shortages in the traditional manner no longer sufficient. We must become the most desirable employer and shift our manufacturing to cutting-edge technologies, not only to lessen our dependency on labor, but also to attract newer generations to our factory floors. We're investing in additional machinery and innovation in Industry 4.0 digitization to optimize our existing assets, and we use lean techniques to create material flow and pull throughout our entire value chain. We realize that we need to be in the right geographies to service our markets. We have a flexible global footprint that enables us to get more out of that footprint while allowing us to pivot when faced with big changes like volume fluctuations, FX, geopolitical volatility and other yet unknown challenges. We optimize our systems in conjunction with that flexible footprint, to get the most out of that footprint, like rationalization to mitigate complexities, like the use of a universal EHS and quality systems as well as streamlined logistics systems. We are implementing digitization to better manage our supply chain. We can't grow if our supply chain is not growing with us. So we are investing in the systems and tools that provide early risk detection, spend analytics to leverage volume and identify strategic priorities. We focus on these operational pillars to ensure growth, but this focused approach also ensures continuity of services and supply for our customers. Our products are mission-critical and we are uniquely positioned so that our customers can always rely on us as the supplier of choice. Our strategic priorities focus on solving customer challenges and ensuring that our businesses can go to market. We use technology and innovation to solve for machine repeatability and uptime as well as labor scarcity via robotics and ultimately providing additional throughput and capacity. All of this effort and investment directly ties to shorter lead times for our customers, as well as superior quality products. We're driving optimization to also create capacity as we review our strategic footprint to ensure scale and agility. We optimize our supply chain also to ensure product availability. Using our assets in a most efficient way also allows us to continuously reduce our carbon footprint. Enabling our ability to succeed on all these priorities is our centralized organization design, which allows for speed, communication and scale, and developing and attracting talent skilled and lean and data acumen. We also focus on creating a culture of excellence, which elevates our thinking and vision to world-class levels and also fosters a continuous improvement environment through grassroots empowerment, education and resources. In short, sustained outcomes of shorter lead times for our customers and superior quality, enables our commercial partners to garner value-based pricing. Also, the fact that we're using our existing assets increases our return on invested capital. Centralizing operations enable standardized processes, which enables us to share talent, supplier inputs and best practices. This combination drives scalability across the globe. An example of this is our more recent integration of our solar businesses. By unifying the shared services of our agriculture business and utility businesses, it allows us to consolidate warehouses in Brazil, share suppliers -- steel suppliers and galvanizers across Europe, as well as absorb specialty talent within our global sourcing team. So these enhancements drive improved service and profitability for both of those businesses that we serve. We aim to be the most desirable employer in each of our functions and markets. This starts with attracting, retaining and inspiring our employees. This is essential to our corporate goals as respect for the individual as a core tenet of our core values as defined in integrity. An example of respect for the individual is listening to our employees and acting upon their input in a tangible way. Therefore, we're continuing to invest in upgrading our facilities to enhance the work environment but also in innovation in Industry 4.0 to enhance the work experience. We strengthened our connection with our employees through our employee resource groups. We provide this vehicle to ensure diversity and inclusion, but also to aspire -- inspire a Valmont affinity, a sense of belonging and of being valued. By modernizing our facilities and transforming with Industry 4.0, we are attracting individuals from newer generations. Staying current with demographic shifts, has allowed us to target new technologies like in computer programming, and as Daniel spoke of, AI and not just focus on traditional welding. This also allows us to rely on less manual labor, which continues to remain scarce. As an organization mature from a strong foundation of lean, and use its deeply rooted core value of continuous improvement to springboard to the next level. How do we achieve that culture completely embedded in this mindset? And why does it matter? Strong leadership plus solid processes equates to successful results, but strong leadership plus solid processes, steeped in a lean culture equates to sustained successful results. The foundation of a lean culture starts with results, but not just good ones, but the goal of achieving world-class levels, therefore, a focus on continuous improvement is essential. The systems and processes created and improved upon are rooted in systematic data science as well as data analytics, engineering, technology as needed. So educating our workforce in these tools and skills is critical. In addition to setting world-class goals and training and systematic problem solving, we are also measuring ourselves on cultural enablers. An example of a cultural enabler is engaged leadership. How often are our leaders walking the floor, communicating with our employees and ensuring that we are providing them that opportunity in a voice, showing respect for the individual by sharing information. We are teaching our leaders what engaged leadership looks like and developing them with the tools required. In addition to engaged leaders, we strive to empower our employees. Give them a voice and a vehicle to use it, have more grassroots-driven initiatives, provide a means to connect with the community to enhance their personal satisfaction. Empower the employee to actually stop a production line when there is a safety or quality issue, that is true empowerment. Measuring ourselves in these areas is powerful and lets us know that we are progressing on our lean journey. Again, sustained successful results, grounded in our core values, which starts with passion for our products and customers is our goal. As Steve mentioned, earning customer approvals to produce at a new facility is not guaranteed and is also a recognized barrier to entry. So we are expanding existing sites to not only fast track additional capacity, but also increase return on invested capital. An example of this capital investment is an expansion of one of our U.S. locations by adding an entire large pole production line, which includes a large press brake, 3 seamers, a robotic base welder and 34 feet weld stations. This supports both the transmission markets as well as the large lighting and transportation pool market, and supports $110 million in additional revenue. We are investing in factory of the future technology that involves robotics and digitally connected machinery as well as exploring newer opportunities in the areas of projection technology and autonomous welding. All this is really exciting. This is the fun stuff we do in operations. But the real reason we are transforming manufacturing is to equip us to better respond to our customer needs. We also improved our ESG posture by reducing energy and waste while enhancing safety features. And this -- all of this improves cost and productivity as well as reducing inventory, which I think that might get Avner a little excited, but ultimately provide superior quality products in less time to our customers. As mentioned earlier, we need to support an additional 25% to 30% volume growth. We're doing this by leveraging lean and technology to provide targeted process improvements, increase productivity, optimize lead times and improved sourcing. We do this to deliver sustainable outcomes and enhance customer experience. An example of this is a series of lean events that we conducted to improve our shipping performance in one of our irrigation sites. When we were experiencing significant demand increase, and we needed to increase our output. So this series of events allowed us to streamline our processes by eliminating waste as well as redesign an entire crate line and reflow our entire parts picking process. The outcome of that was a 30% approval -- improvement of our output rates. It also reduced over time and improved our employees' quality of life. An example of increased productivity is our deployment of co-bots. These are basically collaborative robots that are designed to work side-by-side with people. They are faster and also address ergonomic challenges that we have. They are perfect to use in repetitive processes, that don't require specialty skills, and it also allows us to redeploy our highly skilled employees to more complex and highly value-added processes. Connected Factory of the Future activities optimize lead times by connecting our machine information. The long-term vision as we can scan and order and upstream process or machine that begins producing and then continuously monitors all the key parameters and alerts our operators, support staff and leadership, whenever there is a key issue, and this alert happens in real time, allowing us to decrease machine downtime as well as decrease any production interruptions. This is all cloud-based and compatible with all of our main systems, and we're piloting this in 2 locations today. Improving sourcing is critical as supply chain has become more volatile and has been disrupted. Therefore, we are digitizing our supplier relationship management which enables risk mitigation, profitability and data to quickly orchestrate supplier development, strategic sourcing projects, auctions and consolidate suppliers to better leverage our volume and specialty products. Conserving resources and improving life is at the heart of our sustainability initiatives. As we design new facilities, we are purposeful about ensuring we are designing in both environmental and safety enhancements. One example is our new spun concrete facility in Bristol, Indiana. This site produces low-carbon transmission poles and is 100% electricity self-sufficient, via a 500-kilowatt solar array field installed for this specific purpose. Additionally, we're adding silos to incorporate a proprietary blend of Eco-concrete that has proven to reduce CO2 emissions by 50%. This is just one example of how we continue to be leaders in sustainability across our communities. Corporations often declare world-class operations as their vision, but it's not often that there's an understanding of what that means and what world class looks like. At Valmont, we are working on our journey from good to great. That starts with setting the right vision and ensuring we are aligning our goals with greatness. We are proud of our results, and we have opportunities to improve. In general, we are performing in the top quartiles of the majority of our metrics, and we continue to understand what our opportunities are across the board as we continue to transform into a world-class operations. In conclusion, we are well postured to support significant growth via operational excellence and our strategic investments. As we've demonstrated over the last 3 years in a much more volatile environment, we can drive results. And so now in more stable times, we can actually focus on optimization. We use enhanced operational excellence and lean manufacturing to enable optimization and efficiencies. We are focused on attracting, retaining and developing talent that specifically enhances our grow and transform strategies. And advanced manufacturing, engineering and technology, drive sustainable results and continuously evolves our innovative culture. Thank you for your time today. I'm going to pass over the presentation to Avner, who is going to highlight additional investments and continue on our theme of return on invested capital.

Thank you, Diane. Good morning, everyone. For those who I've not met yet, I'm Avner Applbaum, I serve as a CFO for Valmont. I joined roughly 3 years ago in the onset of the pandemic, almost all the events were virtual, excited about the opportunity to be here with you in person, share with you some of our past successes, our financial framework and our strategy for the future. As I mentioned, I joined Valmont during a very volatile environment. And in spite of all the uncertainty and the headwinds caused by the COVID pandemic, we've been able to successfully navigate through all the macro challenges. In fact, we thrived. We achieved record results, and we drove significant shareholder value. As we look forward, I'm confident in our ability to continue to drive financial success for the company. So you heard throughout the morning, the ambitious growth and transformation plans from our business leaders. What I want you to take away from today's presentation is the deeper understanding of our focus on a more resilient business model with higher quality of earnings that creates shareholder value. Our disciplined and balanced financial framework supports these strategic goals of generating sustainable long-term profitable growth. Our strong balance sheet and cash generation are key foundational elements allowing us to meet and exceed our 5-year financial targets. We're also committed on bringing disruptive technologies and products to a growing range of geographic markets through thoughtful organic reinvestment and strategic M&A. Our growth, which is increasingly driven by stream of high-value resilient revenue, generate strong cash flow, which allows us to execute on our balanced capital allocation framework of investing in high growth and transform initiatives while steadily returning capital to our shareholders. We have a proven ability to grow in all economic scenarios and we're poised to continue this sustainable profitable growth. Since 2019, we increased our sales by more than 50%. We enhanced our margin, and we doubled our earnings per share. And we've done this through many macro challenges such as COVID lockdowns, supply chain disruption, hyperinflation, labor scarcity and more. And we've been able to achieve these results through many areas such as organizational structure, our disciplined business model, portfolio rationalization, our decisive actions around pricing, operational excellence and our deep commitment to our core values and intense focus on areas that create value. Going forward, we'll rely on these guiding principles and our decision-making framework to drive consistent performance enabling us to sustain profitable growth in years to come. Here's a quick summary of our stock performance over the last 15 years, demonstrating long-term track record of shareholder value. Our shareholders have been rewarded with superior returns in nearly all historical period, especially in the last 3 years through our shareholder value creation model and the decisive execution of our strategy. We have consistently delivered our financial results in line or ahead of expectations through our resilient business model that sustains performance through macro challenges and the ups and downs of industry cycles. Most importantly, we're not resting on our laurels. We're strengthening our competitive advantages, and we're confident more than ever in our future prospects. Turning to our balance sheet and liquidity. We're in solid financial foundation, and our balance sheet demonstrates the resiliency and the execution of our strategy. Total debt to adjusted EBITDA is around 1.7x, which is at the lower end of our desired range of 1.5 to 2.5x. We have no significant long-term debt maturities until 2044 and the long duration of their debt actually provides us with near-term flexibility. We're highly focused on our investment-grade credit rating. Our strong balance sheet and ample liquidity supports our strategic goals and provides us with flexibility and resiliency to withstand future challenges. Our robust cash flow generation is a key fueling element of our long-term strategy. Our goal is to achieve free cash flow conversion of 1x net earnings. Through this cycle, which will fund all the growing transform initiatives you heard throughout the day and will drive long-term shareholder value. We have a proven track record of generating strong cash flow over a multiyear period. And over the last 4 years, we generated more than $650 million of free cash flow despite the disruptive impacts of COVID-19, especially in 2021, through many of our initiatives such as inventory management, supply chain, optimization, our digital business platform, automation solutions, all those drove working capital improvement despite all the impact we've seen from COVID, such as hyperinflation and significant supply chain disruptions. Also, our digital solution are inherently less working capital intensive. As we continue to execute on our strategic initiatives, we're confident in our ability to drive sustainable, long-term cash flow growth and drive consistent value for our shareholders. Our capital allocation policy is our strength. Our disciplined capital allocation deployment framework underlies our growth strategy. We aim to create a balance between investing for growth, preserving our balance sheet and liquidity position and returning capital to shareholders through growing dividend and opportunistic share repurchases. Since 2020, we deployed roughly $1.1 billion of capital with approximately 2/3 reinvested in the business and 1/3 return to our shareholders. Our highest priority is to reinvest in the business, followed by acquisitions, which drives the greatest value creation and the highest returns for our shareholders. I'll provide additional insight into our investment approach in the upcoming slides. We'll continue to reward our shareholders through share repurchases and dividends. On dividends, we're committed on increasing our dividends over time as a function of earning growth. Which aligns with our strategy of steadily increasing our returns for our shareholders. On share repurchases, we will maintain an opportunistic approach based on cash flow generation, and the assessment of the intrinsic valuation versus other investments to maximize the risk-adjusted returns. In summary, while maintaining a disciplined and balanced capital allocation policy driven by ROIC with the ultimate objective of value creation. As I just mentioned, our highest priority is to reinvest in the business to drive organic growth and we balance those investments across our grow and transform initiatives. Over the next several years, as you can see here, we're planning to increase our investments in technology, which will support the high-growth markets that you heard throughout today, that will accelerate our innovation, will drive improved productivity and address labor scarcity. We have a rigorous budgeting process in order to optimize investment to support our growth priorities. We had several meaningful investments over the last several years, and we have a really strong pipeline to support the growth transform strategy. Some examples include our recent investments in Brazil and Dubai, where we actually doubled our capacity and it supported the robust agriculture growth we've seen in previous years. Diane mentioned to you about our U.S. pole operation, and we have an exciting opportunity there to increase our capacity by roughly 10%. On the digital side, Aaron mentioned to you, our Valmont Coatings Connector, our VCC Max, which is a customer communication solution. That solution provides real-time insight into our coatings process and actually an individual order status. That solution was the main contributor, increasing our Net Promoter Score from 16 in previous years to an excellent 58, which is significantly better than industry benchmark. And finally, on the aftermarket strategy that Josh shared with you earlier, we're planning on investing in an e-commerce solution, which will support that growth, it will improve our customer experience and will drive efficiencies. In summary, we have a strong pipeline of future opportunities, future reinvestment opportunities, which will expand our capabilities, our capacity with high return on invested capital and would ultimately will drive -- will deliver against our growth plans. While we'll continue our growth and transformation journey through one strategic focus area, augment growth by accelerating innovation and growth in strategic adjacencies through acquisitions. We have a very good pipeline of acquisitions, and we assess these future acquisitions with clear strategic filters and financial criteria. We employ a rigorous due diligence and integration process to ensure that our return on invested capital will exceed our cost of capital by year 3. Then our goal strategically is to enhance our portfolio, expand our addressable market through technology and capability expansion and to invest in global and high-growth businesses. All of these acquisitions must align with our growing transform framework to support the long-term growth. Now we balance these strategic filters with a very strict financial criteria to ensure that we will achieve bottom line profitable growth and returns. We also have proven ability to integrate these companies, which will typically drive synergies, both on sales and on the operation side, which maximize our financial returns and improve our resiliency. Let's take a deeper look here at some of the acquisitions we completed over the last 5 years, which supported our outstanding value creation and our strategic objective. And we have a strong history of acquiring quality companies in both agriculture and infrastructure segments. As you can see, most of them here to meet multiple strategic filters. Some specific examples of our deliberate focus on high growth, portfolio enhancement and capability expansion include Larson Connected Wireless and ConcealFab, which are supporting our telecom market. Solbras and Convert Italia, which supported our advancement in solar. These acquisitions had meaningful contributions to our sales and earning growth. And finally, the Prospera that Daniel shared earlier today, it is perfectly aligned with our transformation journey. It strengthens our addressable market and it provides future growth with less cyclical recurring revenue. The integration of the company has gone very well and really excited about the future growth. Here's an example of the ConcealFab acquisitions that Aaron mentioned earlier today, which has a complete alignment with all of our strategic filters. It's a technology leader, it supports the telecom market, which has experienced high growth due to the -- by driven by the technology inflection with the rollout of 5G. It enhances our portfolio of telecom solutions, it provides access to markets and carriers around the world and expands our partnership with industry leader. It also leverages the unique place that Valmont has in the communication industry, our engineering expertise and our global manufacturing footprint. We're also reaffirming our 2023 outlook, which we provided during our Q1 call on April 21. In summary, we're forecasting sales growth of 4% to 7%, which accounts for the divestiture of the offshore wind business, mid- to high single-digit volume growth about 1% of price growth with no material impact from foreign currency. We are also expecting operating margin expansion based on our strong market demand, our pricing strategy and continuous improvement initiatives. Expecting adjusted EPS growth of 12% to 16% or $15.45 to $16. We're confident on the outlook based on the strength of our portfolio, favorable end markets and the strong competitive position in the marketplace. As Steve mentioned, we're announcing our new 5-year financial targets based on the positive outlook of the end markets and our ability to execute on the run, grow transform framework. Our strategy is working, and we're focused on execution, and we're confident in our ability that we can achieve these goals. So we're expecting 5% to 8% of organic growth, which is demonstrating the strength and resiliency of our core business and our grown transform initiatives. We do acknowledge, as we mentioned earlier today, we do acknowledge the influence of the ag cycle and our sales growth. Our diversified portfolio mitigates the impact compared to previous cycles. Our growth trajectory remains resilient and less susceptible to fluctuations we experienced in the past. And our Josh and Steve, and then I'll cover that through much of the Q&A. Our acquisitions do remain an essential part of our growth strategy with the potential to contribute to our overall growth over time, but we did not model them since the timing and the overall contribution is hard to predict. So our team is focused on taking that sales growth, converting it to EPS growth of 12% to 15% and operating margin of greater than 14%. The strategic working capital initiative I shared earlier today, will enhance our cash flow, allow us to achieve our goal of 1x net earnings and to achieve return on invested capital of greater than 18%. And I will provide additional insight into the ROIC and operating margin targets in the next few slides. We're focused, we're confident, we're prepared to achieve these goals. Okay. So as I just mentioned, we're planning to deliver profit margin greater than 14%. So how do we achieve that through 2 main areas: volume growth and the Valmont actions. So on volume growth, we're getting significant portfolio momentum from the underlying market growth that we shared with you throughout the day. We're also getting the high-growth and high-margin businesses are growing as a percentage of the overall mix. Both of those will contribute to a significant part of our operating margin improvement. But then all the actions that we are taking, the grown transform initiatives, they will contribute to higher margins as we add these higher margins and product services into our overall portfolio. We are gaining over the last several years, we're getting significant momentum from operational excellence digital transformation. We've all seen that in our Q1 results with a significant improvement already in our operating margin. We're working on our shared service structure optimization, we continue to take a strategic emphasis on our pricing leadership, and we will accomplish all these goals while we continue to invest in R&D and innovation, and we continue to plan seats for future growth. We are confident in achieving this goal based on the initiatives we already have in place and the initiatives were going to come in the future. Okay. So you heard throughout the day, of our clear strategy to capture high-growth opportunities and to drive higher ROIC. So the ROIC, the growth in ROIC is underpinned by 3 main drivers: operating margin expansion we just covered in the prior slide; our high-value customer solutions; and improved capital efficiency. So in the operating margin expansion, we'll benefit from scaling our business, we'll leverage our central function, operational excellence. And one of the key drivers is our pricing power, which drives significant ROIC. Our growing transform initiative, so as we covered, we're focusing on high-value and technology-driven solution, they will have lower working capital intensity. And finally, we're focused on improving our capital efficiency, which includes the working capital management, our asset utilization and portfolio optimization. We have a clear line of sight, and we're well positioned to deliver greater than 18% ROIC by 2027. Throughout the day, we emphasized our focus on a resilient and profitable business model that creates long-term value for our shareholders. Our disciplined financial framework supports our run growth transform framework and enables the profitable growth in line with the overall strategic objective. We'll continue to bring disruptive products and technology to our markets, through organic reinvestment and strategic M&A. And our strong balance sheet and capital allocation framework are key enablers to achieve our 5-year targets. And we have a clear path to achieve our financial targets by executing our strategy, which remains focused on delivering ROIC and improved -- and margin improvements. So to sum it up, our intense focus on resilient and profitable business model sets the stage for compounding long-term value for our shareholders. Thank you. Look forward to many more discussions with you. With that, I'll turn it over to Steve for his closing remarks and before we go into Q&A. Thank you.

Thank you, Avner. Again, I want to thank you for participating in our Investor Day today. And I hope you came away with these 5 key takeaways. Now first and foremost, we have an enduring business foundation, model and strategies for the future that will help us to continue to compound and outperform the market. We hope you got a sense of what run, grow and transform means for us and the way we allocate resources and capital across the organization and that we are doing so in a very disciplined manner, that we're leveraging technology and innovation and bringing it forth to generate revenue as well as to help us to operate and increase margins internally. We're continuing to focus on ESG and sustainability across the organization. And lastly, that we're delivering growth, significant growth with high returns on capital as well as operating margins that will help us continue to drive EPS ultimately. I want to thank, especially today, Renee Campbell and Jordan Hansen from our team who did a lot of the leg work to create this event as well as corporate advisers who helped us with the material generation and preparation. So again, with that, I'll ask the team to come back up, and we'll answer your questions and then break for lunch.

All right. We'll give the team just a moment to assemble and get a microphone up here. And also just another reminder, if you join the webcast a little bit later. If you want to ask a question online, there's an ask a question tab in the upper right hand corner of the video player. Okay. So let's go ahead and open it up. We'll start, Nathan, with you, and then we'll go to Brian and then we'll go to Jon.