Ampco-Pittsburgh (AP) Small-Cap Virtual Conference summary

Business overview and market dynamics

• Operates four distinct businesses with two main segments: Forged and Cast Engineered Products (2/3 of revenue) and Air & Liquid Processing (1/3 of revenue).

• 2025 revenue exceeded $430 million, with adjusted EBITDA margins at 6.7% and a backlog of $385 million as of June.

• Benefiting from Section 232 tariffs in North America and similar new protections in Europe, driving steel and aluminum production growth.

• Strategic focus on asset utilization, portfolio optimization, and capturing growth opportunities in strong end markets.

• Recent restructuring included exiting underperforming businesses, notably the U.K. cast roll facility and a U.S. distribution business, improving profitability.

Segment performance and growth drivers

• Forged and Cast Engineered Products is the top supplier in North America and a key player in Europe, with 95% of products serving replacement demand.

• European industry protections (tariffs, quotas, melt and pour requirements) expected to raise mill utilization from 65% to over 80% within a year, boosting demand.

• Non-roll Forged Engineered Products segment is set to grow from 6% to nearly 10% of segment revenue due to favorable tariffs.

• Air & Liquid Processing segment launched growth plans in 2022, targeting 10–12% annual growth, with strong positions in nuclear, healthcare, and Navy markets.

• Demand in Air & Liquid is robust, with capacity expansion underway to meet bookings and shipment growth.

Financial strategy and outlook

• Margin expansion driven by portfolio simplification, asset utilization, and profitable growth; targeting double-digit EBITDA margins above 10%.

• Net debt to EBITDA targeted to fall to 3x or below, aided by CapEx normalization, EBITDA growth, and declining asbestos liability.

• U.S. pension is now fully funded, with a shift to conservative investment to maintain funding.

• Positive free cash flow will be used to further reduce debt and strengthen the balance sheet.

• Management is bullish on Q4 2026 and beyond, expecting strong performance after seasonal Q3 slowdowns.