ITT Inc at Bank of America Global Industrials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Sure. Maybe just for first quarter, you're not making any changes to the first-quarter outlook, right? Okay. So maybe I will jump because we're here, and I've been asked this question. So just maybe -- you started talking about overview of demand trends that -- maybe expand where are you seeing particularly -- just give us an overview because that's at the top of everybody's mind. Where are you seeing structural tailwinds and where you're seeing structural headwinds?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : And maybe just a little bit more detail on short-cycle trends across pump and short cycle industrial. And specifically, if you look at the latest PMI data and lots of debate about it, people didn't like the order number. But if you sort of look at it, right, you can see construction is a headwind, maybe consumer-driven business is a headwind, as you've alluded, auto is a headwind. But within industrials, there's a number of fairly broad-based positive activity. How would you characterize what you're seeing versus the latest PMI data? Does it surprise you? What trends have you seen in the first quarter? Just maybe unpack the industrial verticals a little bit more. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 18, 2025 / 8:50AM, ITT.N - ITT Inc at Bank of America Global Industrials Conference

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Got you. And do you think just -- you've asked my question already, but in terms of your distributor business, any sense that there was a pre-buy, because it's another big debate, pre-buy ahead of the tariffs? What's your view of what your channel has done?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Yeah. No, that's -- and maybe, obviously, you're going to get this question, but just to maybe size your exposure to the announced tariffs. Is there a tariff impact embedded '25 guide? The usual stuff, how much of it is covered by USMCA, and what's the action plan? I know you and I have this debate.

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Thank you. I think capital allocation is an important skill for multi-industrials. You have been ramping your M&A in recent years, Svaneh°j and kSARIA. So a couple of things. A, what are the big lessons learned from getting more active in M&A? And then the follow-up, should we expect the company to continue doing more M&A? Or do you just need to take a pause to integrate the announced acquisitions?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : And who integrates the deal? Is it the business unit team? Or is it the corporate team that sort of goes in --

Question: Andrew Burris Obin - Bank of America Securities - Analyst : And maybe as you've pointed out, I think you're really good at bringing your capabilities to your customers, and clearly, a terrific track record of organic growth. Can you maybe talk about the key R&D projects that ITT is excited about to keep driving this organic outperformance?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : I remember sort of you explaining to me the importance of material science within your sort of product strategy. I think it was one of the first things you taught me when you started. And actually, I really appreciate it. Maybe Asia Pacific previously didn't highlight as a platform for growth back in '22. Can you describe what the formula is here for growth, I think? Where are you expanding? Now it's a little bit tricky because 80% of your Asia business is in Motion Tech. And it's just been a machine, part of my pun. But I think one of the topics that we're supposed to highlight at this conference, A, potential for China exposure; and maybe explain to investors why you have been able to deliver what you have been able to deliver in Motion Tech in China, but also what are the plans to scale up IP and CC&T there. So I guess three questions. What's happening in China macro, what has enabled you to outperform in Motion Tech, and what happens to the rest of the company in China?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : And maybe what is happening? I mean, I think automotive market in China, but maybe comment what are you seeing about this recovery in China and the ability to scale up your other platforms in China outside of Motion Tech. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 18, 2025 / 8:50AM, ITT.N - ITT Inc at Bank of America Global Industrials Conference

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Good. And I know you're going to host your '25 Investor Day in May. And Mark is not here. So maybe you could give us a little bit of preview of what you're going to talk going into the event?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : So maybe in the remaining time, talk a little bit more about the businesses. So in the Industrial Process business, right, your core margins ex-Svaneh°j have showed material expansion exiting '24 with legacy margins north of 24%. So what sort of productivity investments have you made? What's been driving the strong performance? And how much opportunity is there in the core business?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : I know you sort of commented on it, but what are you seeing in terms of IP orders and specifically breakout projects and short-cycle activity?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : And maybe just a little bit more market detail. Any markets that are accelerating and any markets that are slowing?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Excellent. And then maybe on Motion Tech in more detail, starting to ramp up high-performance facility in thermally. And it's an entirely new market. So when does production start to accelerate? And when does it start to become margin accretive? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 18, 2025 / 8:50AM, ITT.N - ITT Inc at Bank of America Global Industrials Conference

Question: Andrew Burris Obin - Bank of America Securities - Analyst : And just going a little bit more. You have over 50% market share in Europe. China and North American business have been scaled up very nicely. I think over 30% global market share in [friction] at the end of '24. So what's the plan to continue taking market share globally? You've been relentless?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Excellent. What's the attach rate for aftermarket? And do you have any plans to accelerate growth in the aftermarket business?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Maybe going to CCT. I think European defense is a big topic, particularly today. Do you have enough European defense exposure to move the needle over the next 24 months? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 18, 2025 / 8:50AM, ITT.N - ITT Inc at Bank of America Global Industrials Conference

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Got you. And maybe in the remaining minute, maybe a little bit talk about kSARIA acquisition. What kind of revenue synergies are there?

Question: Andrew Burris Obin - Bank of America Securities - Analyst : Excellent. Well, we are out of time. This has been fantastic. Thanks so much.