ITT 25th Annual Diversified Industrials & Services Conference

Our presentation and comments may contain forward-looking statements which are based on our best view of the world and our businesses as we see them today. These assumptions and expectations can change, and we ask that you view them in that light. We encourage you to review the latest risks and uncertainties in our Form 10-K and other SEC filings available on our website. With that, I will turn it over to Luca.

Okay. Good afternoon, everybody. In Italian, we say the dessert is at the end. So here we are. Okay? Only a couple of minutes to tell you a little bit about ITT. We are a diversified engineering company. What we do, we engineer, design, and manufacture components for harsher environment across different industry, across different sectors being rail and auto, air and defense, oil and gas, energy transition, chemical, petrochemical, mining, general industrial. After the acquisition of SPX FLOW, our revenue is above $5 billion. You see the geographic spread. A lot is in North America. You see the markets we are exposed there on the chart. In the last few years, we deliver quite a considerable amount of value for our customers and for our shareholders.

Those are the numbers in terms of organic revenue growth, of 7% in the last three years, EPS of 16% in terms of CAGR. What I would like to stress is that revenue growth has been mainly market share gains, because if you look at the markets we are exposed to, we did not really have a lot of tailwinds in the last few years. When we look at the future value creation, the future value creation will come from organically and inorganically. We have a couple of slides to talk about the organic value creation, revenue growth, margin expansion. Revenue growth, finally, we have tailwinds. Margin expansion. We did a lot of margin expansion in the last few years, but there is still a lot to come.

In this chart, what you see are mainly most of the ITT sites around the world, and you see that many are still underperforming our average. That underperforming piece represents roughly 40% of the revenue. There is still a lot of work to do. I can tell you there is also a good opportunity on the overperforming side when you go granular and you split it, we still have opportunity to improve there. Organic value creation is here to stay. When it comes to the M&A, we are developing the muscle of M&A. These are three acquisitions that we went through. Svanehøj acquired in January 2024. These are cryogenic pumps for marine, energy transition from dirty fuels to LNG, and in the future, ammonia. EBITDA multiple, the purchase was a little bit above 13%, and when you look at the actual, is actually 6.

kSARIA, cable harnesses in air and defense, mainly defense, 80% of defense, multiple as well, between 13 and 14, is if you look at the actual 11, and then when you look at the focus for 2027, probably it's going to be a single-digit number as well. SPX FLOW is early to tell, but the integration is doing well. Really what we want to share with you is that there is a lot that we are doing in terms of market share gain, and that market share gains are coming from differentiation in execution and in innovation. The strategy is clear, is grounded, good common sense, and it enables us to deliver value, and there is a bunch of ITTers that are working hard to deliver this value. With that, over to Q&A.

Sure. As I was saying before, the last 6, 7 years across all the markets, we didn't have a lot of tailwinds. What we are seeing today are some positive trends. If you start on the chemical side, chemical was difficult for the last few years as a market. We kept on growing orders in the last 5 years in chemical, but that was mainly in ITT and market share gains. What we have seen in the last couple of quarters is actually positive trends in the market, specifically in the North American market. We're not talking about the European chemical, which is not great at all. When you look at the oil and gas, of course, there is a situation in the Middle East, which everybody knows.

Now, if you look at our business in the Middle East in the first 6, 9 months of this year, has actually grown tremendously from a revenue point of view. The reason for that is that we won a lot of orders in the past because we were executing very well. Therefore, the huge backlog that we had at the beginning of the year, we delivered on the backlog and we grew revenue substantially. On the orders front, the orders have shifted to the right. What we see, though, is that Saudi Aramco has start moving. So they started giving orders, for example, Jafurah 4 to L&T and EPC, and we are negotiating to get our orders for pumps with this EPC. So we are seeing things moving, even though not as fast as was going last year.

Now, if this is a specific situation in the Middle East, has generated probably investment in other parts of the world. So if it is in North America, if it is in Latin America, and of course, we have a very positive situation in Venezuela, where we have our Bornemann pumps, huge install base. What is going on is generating a lot of orders for refurbishment, spare parts, and we started seeing these orders since the end of last year. So not necessarily a positive trend related to the situation in the Middle East, but more positive when it comes to other parts of the world. Energy transition, Svanehøj, we play in marine, with cryogenic pumps. Now, great growth, 30% growth, book-to-bill of 1.3.

Obviously, there is a positive market there, but there is a lot of market share gain based on the execution and the good and differentiated product that we do have. There are good opportunities also when it comes to Latin America, particularly in the mining as well as in the oil and gas.

Sure. It was for sure an exceptional performance. Now, I would say we will keep on growing. We will keep on having a nice growth when it comes to Flow Technologies. Probably not at this level that we posted in Q2, but for sure, we will continue to grow year-over-year. Now, bear in mind that we have, for sure, some tailwind when it comes to Latin America, when it comes to Venezuela, when it comes to North America. There is a headwind which is the Middle East, exactly because the orders have shifted to the right.

But for 2027, it's a little bit too early to tell, but I can tell you is that we're going to post a good growth for 2026 with the book-to-bill above one and the backlog at the end of the year that is going to be higher than the backlog that we had at the end of December 2025. Now, in terms of the ability to continue to outperform, this is very much who we are. At ITT, if you are growing like the market, you don't get any pat on the shoulder, right? It's the outgrowing of the market where we can really say, "Okay, you did something good." If you're growing because of price, great, good. You get the pat on the shoulder. But price is really not real growth.