Worthington Enterprises (WOR) Baird 2026 Global Industrial Conference summary

Business positioning and demand

• 80% of EBITDA comes from markets with leading positions; 80% is tied to contractor-used products, 60% to non-residential markets, and 57% to repair, maintenance and remodel.

• Building repair and replacement needs create recurring demand; innovation aims to deliver stickier solutions and improve contractors’ productivity.

• Performance improved through a mediocre market cycle; a recovery could add upside, alongside innovation and purpose-built solutions such as liquid cooling for data centers.

Targets and margin initiatives

• Long-term EBITDA margin target raised from 24% to 25%; trailing 12-month free cash flow conversion was 116%.

• Over the next 3–5 years, the path to 25% EBITDA margin includes 400 bps or more of improvement, split roughly evenly between organic innovation and transformation initiatives.

• Gross margin target is 30%, with SG&A targeted at 20% of sales; segment EBITDA margin targets are 15% for Building Performance Solutions and 21% for Trade & Specialty Solutions.

• Transformation includes cost reduction, value-based pricing and 80/20 processes, launched at three facilities with more planned.

Data-center opportunity

• Data-center cooling tanks are customized derivatives of ASME tank expertise; integrators are the buyers, and products can serve both cooling loops.

• Data-center revenue was ~$13 million in FY2026 and $13 million in fiscal Q1; sequential growth is expected through the balance of FY2027.

• The traditional ASME tank market is estimated at ~$200 million; the data-center market could reach 10x that size in the next few years.

• Resources, facility capabilities and outsourced partners have been expanded; additional capital, equipment or M&A remain options as exposure grows.