Donaldson Company (DCI) The 44th Annual William Blair Growth Stock Conference summary

Key messages and strategic direction

• Emphasizes technology leadership and complex problem-solving in filtration, with a shift from geographic to vertical segment orientation for faster growth.

• Focus on sustainability, enabling the green economy, and a balanced approach to organic and inorganic growth.

• Life Sciences identified as a new vertical, with significant recent acquisitions and disruptive technologies.

• Company has a global presence, with 75% of volume built within regional markets to offset supply chain risks.

• Record financial performance, including record sales, operating margin, and EPS, with a 10% CAGR over three years.

Technology, innovation, and competitive advantages

• Over 2,700 patents released from 2019 to 2023, highlighting a strong commitment to R&D and innovation.

• Proprietary technologies enable solutions like 99% acetonitrile reclamation, supporting customer sustainability goals.

• Deep customer relationships and diversified product applications, from medical devices to industrial engines.

• High aftermarket retention, with 65% of business from replacement parts and 60 manufacturing plants worldwide.

• Leadership in alternative power solutions and fuel cell programs, leveraging cross-segment technology expertise.

Segment growth and market opportunities

• Mobile Solutions segment focuses on non-passenger vehicle markets, with confidence in long-term growth despite slow alternative power adoption.

• Industrial segment strategy includes connected solutions, driving double-digit aftermarket growth and data-driven innovation.

• Life Sciences segment expanded by $21 billion in addressable market through four recent acquisitions, including Medica for hollow fiber membranes.

• Food and beverage business growing, with bioreactors enabling cultivated meat partnerships and medical device filter leadership.

• Ongoing R&D in implantable medical devices and advanced filtration materials like expanded Teflon.