Standex International (SXI) investor relations material

Strategic transformation and business focus

• Shifted from a diversified portfolio of 16 businesses to a focused engineered components strategy, with 70% of sales now from electronics and aerospace/defense segments and a $10B serviceable available market, aiming to expand into a $50B global market.

• Portfolio transformation completed by 2020, emphasizing high-growth end markets and engineered components, with recent M&A activity increasing margins by approximately 1100 basis points and delivering $350M+ in acquired sales.

• Operating income margin improved from 9.3% to 19.7% through portfolio optimization, productivity, and management practices.

• Acquisitions and divestitures have reshaped the business, with $350 million acquired and $465 million divested, prioritizing acquisitions (65%) in capital allocation.

• Leadership and board now feature high-caliber talent from leading industrial firms, supporting scalable growth.

Growth drivers and market opportunities

• Fast growth vectors include grid, aerospace, defense, and space, with 30% of sales in markets growing 20% annually and fast growth market sales projected to exceed 35% of total sales by FY27.

• Instrument transformer business is the largest near-term growth driver, targeting $340–$440 million annual sales within four years, with the market expected to grow 13–22% long-term.

• New product sales have ramped from $40 million to $64 million and are projected to exceed $90 million next year, with 15+ new product launches expected in FY26 and new products contributing up to 10% of sales.

• Expansion into Europe and capacity increases in India, Texas, Croatia, and Mexico are underway to meet demand, with grid capacity planned to more than double by 2030.

• Defense and space sales are expected to grow from $9 million to $40 million over five years, with multi-year contracts and new program wins totaling $250M+ potential.

Innovation, R&D, and product development

• Organic growth engine established through increased R&D investment and new product development since 2021, with continued investment in customer-driven innovation.

• New products, such as bushing and voltage transformers, target fast-growing applications like Indian Railways and data centers, opening over $500M in new addressable markets.

• Customization and early engagement with OEMs provide visibility and opportunities for sensor and electronics solutions.

• Innovation extends to recent acquisitions, with new processes and products introduced to expand market reach.

• Product development cycle averages three years from release to mature sales, supporting sustained growth.