Ralliant (RAL) Barclays 43rd Annual Industrial Select Conference summary

Strategic milestones and company evolution

• Transitioned from a planned 2026 spin to a standalone public company in June 2025, with two quarters of public company operations completed.

• Leadership prioritized customer focus and innovation during the transition, shielding operators from public company setup distractions.

• Achieved Q3 and Q4 results at or above guidance, with a 5%-8% Q1 2026 growth outlook.

• Executed a $39 million share buyback, signaling confidence in long-term value.

• Test and Measurement segment returned to growth for 2026, contributing to balanced end-market performance.

Financial performance and guidance

• 2026 guidance includes 2%-6% revenue growth and 18%-20% profit margin, below prior Investor Day targets.

• Adjusted EBITDA incrementals targeted at 40%-45% for 2026, higher than historical 30%-35% due to cyclical recovery.

• Free cash flow remains strong, with a 117% operating rigor metric.

• Cost savings program of $9-$11 million underway, with ongoing productivity initiatives and dynamic resource allocation.

• Capital allocation remains balanced between repurchases and tuck-in M&A, with current focus on buybacks.

Market trends and segment insights

• Industrial manufacturing and Sensors & Safety Systems saw 4% growth in Q4, driven by pent-up demand and improved optimism in North America.

• Diversified electronics within Test and Measurement shows improving indicators, with increased CapEx and R&D activity among customers.

• Defense and space programs experienced an uptick in replenishment, with some programs extended beyond initial sunset timelines.

• Communications segment includes significant aerospace and defense exposure, with research programs expected to move into production in 3-5 years.

• Defense revenue is estimated in the teens to 20% range of total company revenue.