Moog (MOG) Morgan Stanley‘s 12th Annual Laguna Conference 2024 summary

Margin expansion and pricing strategy

• Achieved significant margin expansion through pricing and business simplification since Investor Day, targeting 100 basis points of annual improvement through FY2026.

• Early gains driven by top-down pricing resets with largest customers, now expanding to tier-two customers and site-level actions.

• Pricing power leveraged due to high-value, sole-source positions and sticky, IP-driven products across markets.

• Ongoing, granular profitability analysis at site level enables timely adjustments in pricing, terms, or product discontinuation.

• Pricing initiatives are now institutionalized, with continued potential for further gains.

Business simplification and portfolio management

• Ongoing portfolio shaping includes divesting non-core or underperforming businesses, with recent and pending sales in Europe.

• Manufacturing footprint rationalization underway, consolidating plants to align with regional demand and improve efficiency.

• Simplification efforts, including divestitures and plant consolidations, are progressing according to roadmap, with execution typically taking about 12 months per action.

• Continuous evaluation of the portfolio ensures ongoing alignment with strategic goals.

80/20 deployment and operational improvement

• 80/20 methodology increasingly central, prioritizing high-profit customers and products while addressing margin drags.

• Deployed at 20 of 40+ sites, with full global rollout targeted by end of 2026.

• Segmented P&L analysis reveals hidden cost drivers and informs decisions on pricing, process changes, or product exits.

• Institutionalized with a playbook, driving continuous improvement and strong internal buy-in.