AMETEK (AME) Gabelli Funds 35th Annual Pump, Valve & Water Symposium summary

Growth strategy and M&A focus

• Targets high single-digit sales CAGR, balanced between organic growth and acquisitions, with a 9% target split roughly 4% organic and 5% M&A.

• Pursues both traditional bolt-on and larger strategic acquisitions, as seen with Kern Microtechnik and Paragon Medical.

• Acquisitions are chosen for strategic fit, market position, and potential for margin improvement, regardless of initial profitability.

• Maintains consistent high returns on capital, avoiding overpayment and ensuring value creation.

• Regulatory changes have not significantly impacted deal strategy; less regulation could stimulate more M&A activity.

End markets and business performance

• Largest end markets are medtech (20-21% of sales) and aerospace/defense (18%), followed by power, research, and discrete automation (each ~10%).

• Aerospace and defense have shown the strongest growth recently; medtech is strong except for inventory destocking in some segments.

• Oil and gas, power, and other markets remain solid, with destocking being the main challenge in the last 18 months.

• Government funding delays in life sciences have led to project delays, but not significant lost business.

Orders, backlog, and market dynamics

• Backlog stands at $3.4 billion, with much of it in long-cycle businesses; ongoing order growth is needed for short-term organic growth.

• Two consecutive quarters of positive organic order growth signal stabilization in previously challenged markets.

• Project delays are driven by macro uncertainties, tariffs, and election cycles; improvement depends on increased visibility rather than a single event.