Regal Rexnord (RRX) investor relations material

Strategic priorities

• CEO Aamir Paul cited supply-chain visibility, reshoring, robotics, aerospace and defense, AI infrastructure, and critical minerals as long-term demand themes for the portfolio.

• Near-term agenda: improve operations, sharpen portfolio focus, and build a customer-centric growth mindset across businesses with distinct legacy cultures.

• Paul said organic growth had lagged potential for several years; recent orders accelerated across multiple businesses, but conversion to revenue remains a priority.

• Growth mindset means improving commercial reach and customer acquisition, scaling proven applications, and grounding R&D roadmaps in customer needs and global competition.

Operational improvement

• Immediate work on material flow, material planning, and SIOP at AMC and IPS is expected to take a couple of quarters; ERP/data improvements are the next phase, expected to take at least a year.

• Longer-term work, described as a years-long effort, includes footprint consolidation, modernizing equipment, and upgrading data structures.

• Aerospace supply constraints affect the broader certified supply chain; teams are working with major customers to certify more smaller suppliers for precision parts.

• Management is prioritizing predictable execution and a stronger say-do ratio, taking time before laying out 2027 plans.

Portfolio review and financial framework

• Portfolio review weighs strategic fit, Rule of 30, market share, free cash flow, capital intensity, ROIC, and process synergies; Rule of 30 is a heuristic, not a pass/fail test.

• Portfolio-wide Rule of 30 performance was roughly 22 in recent years and is progressing to 25 this year; management aims to reach 30 and then build from there.

• The AMS business is being put up for sale; further portfolio decisions will be shared as made, with an update expected at the next call.

• Deleveraging remains the near-term capital priority after leverage fell below 3x; later priorities may include shareholder returns and bolt-on acquisitions.