ITT (ITT) Gabelli Funds 35th Annual Pump, Valve & Water Symposium summary

Business overview and recent performance

• Achieved 7% organic revenue growth and 11% total growth in 2024, with revenue reaching $3.63B and adjusted EPS up 12% to $5.86, including acquisitions and divestiture.

• Operating margin improved by 80 basis points to 17.7% in 2024, with 2025 guidance of 18.1–19.0%.

• Free cash flow margin reached 12.1% in 2024, driven by working capital efficiencies and inventory reduction, with a 2025 target of 12–13%.

• Outperformed financial targets set in 2022, meeting or exceeding them two years early.

• 2025 outlook projects 3–5% organic growth, 80 basis points margin expansion, 4–11% adjusted EPS growth, and $450M–$500M free cash flow.

M&A strategy and portfolio evolution

• Deployed nearly $900 million in 2024 for acquisitions of Svanehøj and kSARIA, both leaders in their markets, expected to contribute over $0.20 EPS in 2025.

• Svanehøj and kSARIA expected to deliver strong double-digit and high single-digit growth over five years.

• Divested Wolverine, shifting focus to high-growth, high-margin segments and reducing automotive exposure.

• Maintains a disciplined, active M&A pipeline, prioritizing strategic fit and risk-adjusted returns, with focus on flow and connectors.

• Targeting automotive business to fall below 20% of portfolio as pumps, valves, and connectors expand.

Segment highlights and operational initiatives

• Industrial Process segment closed 2024 with $1.4 billion revenue and over 20% margin, up from mid-single digits in 2017.

• Gained significant market share in North America and the Middle East, with a strong installed base supporting recurring aftermarket revenue.

• Aftermarket now 40–45% of business, with price increases and improved lead times driving growth.

• Lead time improvements achieved through inventory management rather than AI or automation.

• Motion Technologies friction business is powertrain-agnostic, with strong positions in ICE, EV, and hybrids, and global market share surpassing 30%.