Parker-Hannifin (PH) Barclays 42nd Annual Industrial Select Conference summary

Portfolio Transformation and Market Positioning

• Revenue expected to reach $20 billion this year, with over 30% now in aerospace end markets, balancing industrial exposure globally.

• Holds a leading position in the motion and control industry, serving diversified industrial and aerospace markets with a global distribution network.

• Over 90% of sales are concentrated in six key market verticals, with aerospace & defense and transportation as major contributors.

• Two-thirds of revenue comes from customers using four or more technologies, highlighting portfolio interconnectedness.

• Focus on long-term growth trends like electrification, clean tech, and capital projects.

Operational Strategy and Competitive Advantages

• Operates under a decentralized model with the Win Strategy, emphasizing customer proximity, innovation, and P&L ownership.

• Maintains a 50/50 OEM and aftermarket sales mix, with a strong independent distribution network.

• Leverages deep customer partnerships and technical expertise to deliver comprehensive solutions.

• Growth Triangle initiative combines account management, engineering, and product management to target key trends and customers.

• Alignment and focus on achieving FY29 targets, with performance tied to compensation.

Financial Performance and Transformation

• Revenue projected to grow from $15.9B in FY22 to ~$19.8B in FY25, with an 8% CAGR.

• Adjusted operating margin expected to expand by 350 basis points to ~25.8% by FY25.

• Adjusted EPS forecasted to rise from $18.72 in FY22 to ~$26.70 in FY25, a 13% CAGR.

• Free cash flow anticipated to increase from $2.2B in FY22 to ~$3.2B in FY25, also a 13% CAGR.

• EPS and cash flow have grown faster than sales, supporting new long-term targets.