Curtiss-Wright (CW) Baird 2024 Global Industrials Conference summary

Strategic growth initiatives and financial targets

• Pivot to Growth strategy emphasizes expanding operating margins and accelerating organic revenue growth, with new targets of over 5% organic growth set in May 2024, up from 3%-5% previously.

• R&D investment increased by $20 million in both 2023 and 2024, outpacing sales growth and supporting long-term innovation.

• Organizational maturity enhanced through new management systems, data tools, and a unified CRM to improve oversight and execution.

• Restructuring efforts focus on optimizing underperforming businesses and rationalizing production footprints, targeting $10 million in annualized savings from a $15 million spend.

• Margin expansion remains a priority, with operational and commercial excellence ingrained in the culture.

Commercial nuclear market opportunities

• Nuclear portfolio expected to grow at a low double-digit rate through 2026, with a goal to double the business by 2028 and reach $1.5 billion in annual revenue by mid-next decade.

• Aftermarket business benefits from plant life extensions in the U.S., Canada, and South Korea, with 80% of U.S. plants planning to extend operations.

• The addressable aftermarket market is estimated at $7 billion through 2050, with steady, multi-year revenue streams from plant upgrades.

• New build opportunities in Eastern Europe could yield $1.5 billion in revenue if Westinghouse secures half of the projected 20-25 AP1000 reactor projects.

• Strategic partnerships with X-energy and other SMR developers position the company for $20-$120 million in content per reactor, with recent tech sector investments accelerating timelines.

Defense and other growth segments

• Defense segment projects double-digit revenue growth in 2024, driven by naval shipbuilding, tactical communications, and international expansion.

• Advanced product offerings in defense electronics, including MOSA and SOSA compliant systems, support growth across NATO and allied countries.

• Backlog has grown in the high teens, with no immediate capacity constraints; capital expenditures remain at 2% of sales, and talent acquisition is a focus.