Enerpac Tool Group (EPAC) Baird 2026 Global Industrial Conference summary

Strategy and growth opportunity

• PROPEL centers on growth in attractive end markets, product-first application-led innovation, lifecycle service, and operational excellence enabled by PEP and disciplined capital allocation.

• The serviceable addressable market is ~$5.5B, including ~$1B added through SFE; the industrial tools market is >$100B, with projected 2%–3% growth from 2026–2030.

• Above-market growth target is 200–300 bps, supported by infrastructure investment, energy transition and U.S. nuclear buildout, data centers, asset integrity, defense spending, and industrial reshoring.

• FY26 pro forma end-market exposure: Industrial & MRO 30%, Refinery & Petrochemical 19%, Specialized Applications 17%, Power Generation 14%, Infrastructure 12%, and Other 8%.

Execution and financial performance

• FY22–FY26, excluding SFE: net sales CAGR 3.4%, adjusted EBITDA CAGR 16.8%, adjusted EBITDA margin expansion 920 bps, adjusted diluted EPS up 131%, ROIC up 700 bps, and free cash flow CAGR 29%.

• FY26, excluding SFE: net sales $652M, gross profit margin 49.2%, adjusted EBITDA $154M at a 23.7% margin, adjusted diluted EPS $1.87, ROIC 12.6%, and free cash flow $120M.

• Margin levers include targeted-market share gains, pricing, platform standardization, faster product launches, sourcing and footprint optimization, SKU discipline, shared services, and AI-enabled processes.

• Free cash flow conversion was 119% cumulatively over FY22–FY26; a capital-light model and working-capital efficiencies support investment and cash generation.

Portfolio and SFE acquisition

• Pro forma FY26 net sales are $822M; the portfolio includes legacy tools and services, SFE, and Cortland Biomedical, with products representing 85% and services 15% of sales.

• SFE acquisition closed October 28, 2026, for ~$472M; TTM FY26 sales were ~$170M and adjusted EBITDA ~$44M, at 10.6x adjusted EBITDA or 9.5x including synergies expected within three years.

• Integration work is underway across PEP, sourcing, ECX, and commercial initiatives; targeted adjusted EBITDA synergies are $4M–$6M by year three, from revenue growth and cost and sourcing opportunities.

• The October 16, 2026 credit facility matures October 16, 2031, with $850M capacity: a $300M term loan and $550M revolver, plus a $425M accordion option for potential M&A.