Atmus Filtration Technologies (ATMU) 16th Annual Wells Fargo Industrials & Materials Conference summary

Growth strategy progress

• Focused on growing first-fit share by leveraging strong partnerships with leading commercial vehicle OEMs and expanding share of wallet with existing customers.

• Targeting new customers previously inaccessible due to ownership structure, leveraging technology leadership to open new opportunities.

• Pursuing additional first-fit opportunities with various OEMs, highlighting significant room for further market share gains.

• Aftermarket growth driven by expanding into independent distributors and increasing product availability beyond OE dealer networks.

• Supply chain transformation included separating distribution centers and IT systems, improving delivery capabilities and inventory management.

Industrial filtration and M&A

• Acquired Koch business in January, adding $156 million in revenue and targeting $4 million in annualized synergies by year three.

• Integration progressing smoothly due to cultural alignment, with cross-selling and collaboration opportunities identified.

• Koch’s HVAC filtration business has 8% exposure to data centers, with plans to increase presence in this high-growth sector.

• Actively exploring further M&A, focusing on industrial air, water, and liquid sectors, with a healthy pipeline and manageable leverage.

Market and operational dynamics

• Aftermarket demand remains steady despite tepid market conditions, with normal maintenance driving filtration sales even as some trucks are sidelined.

• Q2 sales tracking in line with expectations, with 1%-2% market share gains anticipated.

• China’s EV transition is robust, but aftermarket business remains strong due to the large installed base of traditional vehicles.

• Tariff management relies on exemptions, supply chain adjustments, and pricing strategies, with USMCA renewal being closely monitored.

• Ongoing supply chain transformation aims to further improve efficiency and conversion costs.