ITT (ITT) 25th Annual Diversified Industrials & Services Conference summary

Business Overview and Recent Performance

• Diversified engineering company with exposure to rail, auto, air, defense, oil & gas, energy transition, and industrial sectors; revenue now exceeds $5.3 billion post-SPX FLOW acquisition.

• Achieved 7% organic revenue CAGR and 16% EPS CAGR over the past three years, primarily through market share gains despite limited market tailwinds.

• 2025 operating margin reached 19.4%, with further opportunities identified for underperforming sites.

• Free cash flow margin for FY 2025 was 14.1%, with operating cash flow margin at 17.0%.

• Approximately 40% of sites underperform the company average, presenting further improvement potential.

Market Trends and Segment Outlook

• Chemical markets in North America show positive trends, while Europe remains weak; oil & gas growth is strong in the Middle East and Latin America, especially Venezuela.

• Energy transition and marine cryogenic pumps (Svanehøj) are experiencing 30% growth with a book-to-bill of 1.3.

• Flow Technologies delivered 21% organic growth in Q2, with continued year-over-year growth expected, though not at Q2's exceptional rate.

• Backlog and book-to-bill ratios support strong growth into 2026, with further outperformance targeted through volume and market share gains.

• Revenue diversified across motion technologies, flow technologies, and connect & control, with significant exposure to general industrial, automotive, and energy markets.

M&A and Integration Strategy

• Recent acquisitions (Svanehøj, kSARIA, KSARIA, SPX FLOW) are driving both organic and inorganic growth, with ongoing integration and margin expansion opportunities.

• Integration emphasizes decentralization, empowering local teams, and rapid execution of cost synergies, especially in G&A and purchasing.

• SPX FLOW integration is ahead of plan on cost synergies, with $80 million run-rate targeted by year three and additional revenue synergies expected from cross-selling and localization.

• Recent deals focus on acquiring well-managed, high-quality businesses with strong brands and management retention.

• SPX FLOW integration and cost synergies are ahead of plan, contributing to high single-digit growth in orders and revenue.