TransDigm Group (TDG) investor relations material

Business model and strategy

• Focuses on highly engineered, proprietary aerospace components with significant aftermarket content and high free cash flow.

• Pro forma revenue mix: defense 43%, commercial aftermarket 32%, commercial OEM 25%; aftermarket represents 55% of revenue and OEM 45%.

• Operating priorities include value-based pricing, profitable new business, productivity and cost improvements, disciplined acquisitions, and an efficient capital structure.

• Organization combines corporate control and shared resources with operating-unit autonomy and local execution.

Financial performance and markets

• FY26E midpoint: revenue $10.510B, EBITDA as defined $5.520B, 52.5% margin, and adjusted EPS $41.04.

• Pro forma Q3 revenue growth: commercial OEM 17%, commercial aftermarket 17%, and defense 11%; YTD growth was 15%, 13%, and 10%, respectively.

• Q3 commercial transport revenue rose 25% in OEM and 18% in aftermarket; business jet/helicopter revenue increased 3% and 13%, respectively.

• Commercial aftermarket forecasts indicate HSD unit growth and LDD+ total growth; forecasts are built bottom-up by operating unit and customer.

• Commercial aftermarket drivers include a 3% CAGR in worldwide installed base and 4% CAGR in worldwide available seat kilometers from 2025-2030E.

Acquisition strategy

• More than 150 aerospace and defense component business and product-line acquisitions provide sourcing experience; the stated minimum deal threshold is 20% IRR under a consistent five-year model.

• FY23-FY25 acquisitions were tracking to aggregate IRR of 30%++; EBITDA was well ahead of model, with further improvement expected as integrations progress.

• Acquisition criteria remain proprietary products, highly engineered components, significant aftermarket content, recurring revenue over long platform lives, and returns meeting the same threshold.

• Margins of acquired non-aerospace and defense businesses improved meaningfully after acquisition.