Welcome to ITT Inc.'s 2025 Fourth Quarter Conference Call. Today is Thursday, February 5, 2026. Today's call is being recorded and will be available for replay beginning at 12 PM Eastern Time. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If at any point your question has been answered, you may remove yourself from the queue by pressing star 11. We ask that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the floor over to Carleen Salvage, Vice President, Investor Relations and FP&A. You may begin.

Thank you, Gigi, and good morning. Joining me in Stanford today are Luca Savi, ITT Inc.'s Chief Executive and President, and Emmanuel Caprais, Chief Financial Officer. Today's call will cover ITT Inc.'s financial results for the three and twelve months periods ended December 31, 2025, which we announced this morning. Please refer to slide two of the presentation available on our website where we note that today's comments will include forward-looking statements that are based on our current expectations. Actual results may differ materially due to several risks and uncertainties, including those described in our 2024 annual report on Form 10-Ks and other recent SEC filings. Except where otherwise noted, the fourth quarter and full year results we present this morning will be compared to the fourth quarter and full year 2024 and include certain non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures are detailed in our press release and in the appendix of our presentation, both of which are available on our website. With that, it is now my pleasure to turn the call over to Luca, who will begin on Slide three.

Thank you, Carleen, and good morning. Before we begin, I want to introduce Carleen Salvage, our new Vice President of Investor Relations and Financial Planning and Analysis. Carleen brings extensive experience in financial and operational leadership and is returning to ITT Inc., where she spent over nine years in roles of increasing responsibility, culminating in the position of Vice President and CFO of Industrial Process. In her new expanded role at ITT Inc., Carleen will lead our global IR and FP&A organization, driving ITT Inc.'s performance and continuing to provide compelling communication of our long-term value proposition. Welcome, Carleen. We are very happy to have you back. I would like to thank both our existing and new shareholders for participating in the equity raise we completed in December to fund the pending SPX Flow acquisition. We are grateful for your support, and we will work hard to make this acquisition a success. Finally, I am also deeply grateful to our ITT Inc. team for their contributions in 2025, a year that marked a milestone in the execution of our long-term strategy. I am humbled by what you have accomplished. Now to the results. The dominant theme of the year was growth, and we delivered growth across every metric at Linear Capital Markets Day: revenue, margin, cash, orders, and all these compounded with M&A. Let's get into 2025 financial highlights. We grew revenue 8% in total and 5% organically. We grew EPS 14% or 18% excluding the $0.16 impact from the Wolverine divestiture and the $0.03 dilutive impact from the equity offering related to the pending SPX Flow acquisition. We grew operating income 11% and expanded margin by 40 basis points to 18.2%. In addition, our recent acquisitions, Svanehøj and Kessler, both expanded margins compared to the prior year. The fourth quarter was equally strong. ITT Inc. hit a milestone with orders and revenue both exceeding $1 billion for the very first time. Orders grew 15% or 9% organic, specifically CCT grew an outstanding 40% organic with equal contribution from our legacy business and from Kessler. Revenue grew 13% or 9% organic. Of note, both IP and CCT grew more than 11% organically. Operating margin grew 90 basis points to 18.4% with all segments expanding versus prior year. EPS of $1.85 grew 23% excluding the dilutive impact of the equity raise to fund the pending SPX Flow acquisition. I would also like to take a moment to underscore our cash performance in 2025. We grew free cash flow to over $550 million, up 27%. Free cash flow margin of 14% was up 200 basis points. Cash conversion was well over 100%, and during the year, we put this cash to work, investing in productivity, growth, and innovation, as well as deploying $500 million to repurchase shares early in 2025. Now turning to drivers of future growth. We grew orders 10% to $4 billion, up 5% organically. Backlog ended at $1.9 billion, up 18% year over year. We continue to look for ways to elevate our commercial performance and win market share in all our businesses. Earlier this year, we held our first sales conference as WIN, where the ITT Inc. sales team spent two days together in the Middle East to review our performance, hear from our customers, learn from various speakers, and strategize to win and conquer in 2026 and beyond. Looking at our investments in new products, wider inflow and high performance in Friction will continue to feed the growth in previously unaddressed markets. And the pending acquisition of SPX Flow, the largest in recent ITT Inc. history, will be a significant accelerator as we focus on a higher growth, higher margin flow business. On SPX Flow, we still expect to close the transaction in March. Let me share a few highlights on their performance for 2025. Total orders grew in the mid-teens for the full year, driven by strength in the Nutrition and Health segment and in mixers. Backlog was up in the high teens with a book-to-bill comfortably above one. EBITDA margin was in line with our expectations, with significant runway for expansion driven by volume growth, pricing, operational efficiencies, and synergies. On the integration front, our teams are preparing for day one readiness. We are identifying best practices to deploy and defining priorities and integration must-haves. We are currently defining the future organizational structure and aligning on performance measures to ensure clear and effective accountability and delivery. We are also very happy to have secured many key leaders from SPX Flow ahead of closing, who are fully engaged for the long-term success of this new platform. And from a synergy standpoint, expected savings related to G&A are on track. We continue to identify further procurement synergies, and we are evaluating footprint and best-cost country opportunities to plan for seamless execution, leveraging SPX Flow's size in Poland and China. Let's return to ITT Inc. on Slide four. I would like to talk about the incredible work our sales and engineering teams have done this past year to win in the marketplace and ensure we sustain the high single-digit growth ITT Inc. delivered over the past five years. As we discussed during Capital Markets Day, we are focused on delivering growth organically and through M&A. On the organic front, I want to highlight three specific platforms for growth. Flow, what honestly starts as an opportunistic award in the decarbonization of Australia, has grown into an approximately $50 million win for our Bornemann multiphase pumps. Bornemann's technological superiority convinced the customer to source from us for the entire project, consisting of three expansion phases. We shipped the first system in 2025, and we will deliver the follow-on systems in 2026 and 2027. Great job, Yaron and Bornemann team. In Latin America, we are supporting Argentina's oil production ramp, and our BB3 pumps were chosen for one of the largest unconventional oil reserves outside of North America. This was thanks to the perseverance of Gabriela and Fernando, who executed the perfect commercial strategy for a project where we started as the underdog. Finally, we are well on our way to supply 100% of the biopharma diaphragm valves for a leading GLP-1 drug maker for their U.S. and European expansion phases. Our patented Envision technology and the intimacy we developed with both the EPC and the end user made it happen. Moving to defense, Enidine, a leading brand of rotorcraft energy absorption, is benefiting from defense modernization. Specifically, in the U.S., we have been selected for the development of a FLARA energy absorption system by Bell. This is a platform that could be worth more than $60 million over ten years, starting in 2028. Connectivity is another growing trend in defense that continues to benefit our connector business. In 2025, we grew orders by 27%, as we secured several high-profile soldier-worn and drone applications. In land defense applications, KONI Hydride is rapidly gaining shares in the U.S. and Europe as our marquee platforms' spending ramps up. KONI's defense business is approaching $15 million in orders after growing more than 70% in 2025. Finally, on transportation, in Q4, we renewed a multiyear contract that will ensure aerospace controls support Boeing's growth plans. Great job, Yelena and aerospace team. In rail, KONI keeps on gaining market share as the only validated source of the CR450 high-speed train platform, thanks to the incredible work of Tim and Charles. And I could not talk about platforms for growth without mentioning our Friction business, which has outperformed global OE production again for the thirteenth year in a row. While our team in Barge continues to make progress on the Geopad, our breakthrough friction material that is now in trials with a major European OEM for a start of production in 2028. Amazing job for Humberto and Alessandra. As you can see, we have a long organic growth runway ahead of us at ITT Inc. We are compounding it with M&A, as you have seen with Svanehøj in marine energy transition, with Kessler in defense, and now with the SPX Flow acquisition that we expect to close in March. Let me now turn the call over to Emmanuel to discuss Q4 results in detail.

Thank you, Luca. Good morning. We ended the year with another strong quarter. In Q4, we delivered strong performance across the board in orders, revenue, margin, EPS, and cash. Our teams delivered over $1 billion in revenue, up 13% in total and 9% organically, from higher volumes and price realization. Within IP, Svanehøj grew over 50% while legacy pump projects were up 30% organically. CCT grew 11% organically thanks to strong aerospace and defense, up 27% and 17%, respectively, while Kessler grew 11%. In MT, KONI Defense grew 13% as we continue to penetrate the ground vehicle market in Europe. Friction OE outperformed global automotive production by 400 basis points while aftermarket was up 9% from an easy 2024 compare. On profitability, operating income grew 19% driven primarily by strong operational performance and contributions from our acquisitions. MT operating income grew 13% and margin reached 19.7%. The team at IP drove 100 basis points of margin expansion including Svanehøj EBITDA improvement of 350 basis points. Moreover, 240 basis points excluding M&A dilution. With the Boeing contract negotiation now closed, we are confident that our teams can focus on supporting the accelerated aerospace growth expected in the next few years. EPS of $1.85 was up 23% or 26% excluding the dilutive impact of the equity offering related to the SPX Flow acquisition. Lastly, on free cash flow, our performance accelerated sequentially to deliver 27% growth for the full year and 14% free cash flow margin. We are already at the level we targeted for 2030 at Capital Markets Day. Here, I want to point out the significant progress regarding customer advances. Following the example of Svanehøj, the team in IP collected 20% more cash advances compared to the prior year, which represents 300 basis points improvement as a percentage of the inventory brought in-house. Great momentum with more opportunities to drive further improvement in working capital. Let's turn to the full year EPS bridge on slide six. For the full year, EPS grew 14% compared to the prior year, and 15% excluding the dilutive impact of the December equity raise related to the SPX Flow acquisition. The $0.62 from operational performance including volume growth, pricing actions, and productivity, were compounded by $0.25 contribution from our acquisitions. The $0.16 headwind from the loss of income from the Wolverine divestiture, the impact from the higher tax rate, and interest expense, was offset by a lower weighted average share count. Here, I would like to spend a moment describing the foundational progress we have made particularly in IP and CCT, as we are driving towards the MT benchmark. SQDC or safety, quality, delivery, and cost is the framework we use to measure our operational performance. On safety, both IP and CCT are below the injury frequency rate benchmark of 0.4. Specifically, IP delivered a 50% recordable incident reduction in 2025 compared to the prior year. Quality performance also improved, with 20% fewer claims in IP and a 60% TPM reduction in CCT in 2025. On delivery, overall IP improved on-time performance by 600 basis points, and our NC pump product line improved by 2,700 basis points in December compared to the prior year. Both businesses significantly improved their cost position during the year, which led to the margin expansion performance we presented earlier. This positions us very well to grow profitably in the future. With that setup, let's now move to slide seven, to discuss our 2026 outlook. Let's review the assumptions underpinning our revenue growth outlook by segment. Beginning with Connect and Control Technologies. Accelerating commercial aero production, supported by a wide-body recovery ramp, is expected to drive meaningful growth across our aerospace portfolio. Repricing of long-term aero contracts is poised to deliver multiyear benefits enhancing visibility and profitability over the cycle. In defense, expanding demand for advanced electronics and the introduction of product innovations will continue to drive incremental share gains. At the same time, Kessler backlog conversion provides an additional tailwind further strengthening CCT's outlook for sustained above-market growth. Industrial Process is positioned for strong growth as we convert our $1 billion backlog and continue gaining share in pump projects. Svanehøj continues to benefit from the accelerating marine energy transition while our execution differentiation further drives short cycle demand. As mentioned previously, the expansion of GLP-1 production will support valves growth thanks to our patented Envision technology. In Motion Technologies, continued friction OE outperformance positions the business well despite flat vehicle production and softness in North America. Share gains in high-speed trains in China and Europe are fueling strong growth in our rail portfolio. Finally, high teens growth in KONI Defense driven by product differentiation and expanding military ground vehicle programs in the U.S. and Europe provide an additional impetus for the segment. Let's move to Slide eight to continue our outlook discussion. Because of the planned SPX Flow closing in March, we will focus today on Q1 guidance. This does not include any of the accretion we expect from the acquisition. For Q1, we expect total revenue growth of approximately 115% organically. This is driven by mid-single-digit growth in IP and CCT, due to share gains in pump projects in aerospace and defense. MT will continue to outperform global auto and rail production to deliver low single-digit growth. In addition, Q1 2026 will have four more days than the prior year. All segments are expected to expand margin versus the prior year to deliver over 100 basis points of EBIT margin growth, driven by higher volume, positive price costs, and fixed cost controls. We expect both Svanehøj and Kessler to improve profitability year over year as revenue ramps up and productivity accelerates. All of this will translate into 17% EPS at the midpoint in Q1. On slide nine, we can see the different components of the Q1 EPS outlook. We expect EPS to land at $1.70 for Q1, at the midpoint up 29% when excluding the impact of the December equity offer. This is primarily driven by operational improvements. We expect a flat tax rate, higher corporate expenses, and a share count of 86 million shares given the December public offering. This does not include the impact related to the Lone Star equity consideration to be issued at the closing of the SPX Flow acquisition. For the full year, we expect ITT Inc. to grow organic revenue mid-single digits. This top-line momentum combined with favorable price cost, fixed cost discipline, and productivity gains across our recent acquisitions, position us to deliver at least 50 basis points of margin expansion for the full year. We look forward to providing updated guidance inclusive of the acquisition impact of SPX Flow at our next earnings call. As previously mentioned, we expect the SPX Flow acquisition to close in March, and we continue to estimate it will generate a net single-digit EPS accretion in the full year 2026. As a reminder, following the close of the transaction, ITT Inc. will revise the definitions of adjusted operating income and adjusted income from continuing operations to exclude all acquisition-related intangible amortization reflecting ITT Inc.'s ongoing M&A activity.

Thanks, Emmanuel. A few points before Q&A. 2025 was a milestone. We executed on all fronts, delivering strong growth, higher profitability, and making strategic use of our capital. We delivered on all our commitments, and we have started the next chapter of strong. Our execution and innovation will continue to drive future growth as you have seen in 2025. We are accelerating our 2030 vision as we compound our organic performance with the announced SPX Flow acquisition. We are well-positioned for continued value creation. Thank you for joining us today. As always, it's been my pleasure to speak with you. Gigi, please open the line for Q&A.

The floor is now open for questions. At this time, if you have a question or comment, please press 11 on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing 11. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Please limit your question to one question and one follow-up. Our first question comes from the line of Jeffrey Hammond from KeyBanc.

Yes. Hi, good morning.

Hi, Jeff. A lot of moving pieces. Please appreciate all the color.

Maybe just to start with IP, I know those orders can be lumpy and the backlog sounds great and gives you visibility. But just wanted to get an update on the funnel and just how you see orders flowing through the year, based on that funnel visibility.

Sure. When you look at the funnel, in terms of the orders, the funnel is slightly down versus the prior year. If you look at the quarter, Q4 funnel actually is stable versus Q3 and still very, very healthy. And within that funnel, we actually see that the funnel in the Middle East and in Asia Pacific actually grew nicely. So we are feeling pretty good on the funnel. Just to give a little bit more color, when we were in the Middle East at the expansion of our facilities in Saudi Arabia, and I was able to talk to Saudi Aramco, our customer, they were quite positive about the future investment in 2026 being better than 2025.

And, Jeff, if you look at our 2026 orders, we expect to deliver growth with really all end markets contributing to roughly probably low to mid-single-digit growth.

Okay. Great. And then on CCT, you talked specifically about, I think, a Kessler order. But just unpack that 40% organic growth in the orders and if there's any kind of one-time or lumpiness in there. And then just separately, like, just wanted to clarify the Q1 guide still includes amortization. And then once you close SPX Flow, you'll exclude it. Thanks.

Okay. Let me take the orders and, of course, Emmanuel, you would tackle the second one. So when you look at that incredible performance in terms of the orders in Q4, I would say that everything was nicely up. Connectors were up more than 20%. Controls were up 70%. Aftermarket was up 35%. Kessler was up 33%. So all the orders were nicely up in the quarter. And this is very true also for the full year. I think that there is probably just one item, which probably is a few million dollars, which is a price adjustment because of the contract renegotiation with Boeing. That's the only thing. But I would say, very nice across the board.

Yeah. And regarding our Q1 guidance, so we're very happy to deliver a 17% expected growth from an EPS standpoint. This does not include any change to the accounting we have on the intangible amortization. So we'll do that when the acquisition closes sometime in Q1. And so, but it includes the dilution from the equity raise that we did in December.

Okay. Great. Appreciate it, guys.

Thank you, Jeff.

Thank you. One moment for our next question. Our next question comes from the line of Michael Halloran from Baird.

Hey, good morning, everyone.

Hi, Mike.

Hey, can we start on some of the SPX Flow comments you made there, Luca? Obviously, really good momentum exiting the year with order trajectory, backlog commentary, etc. Maybe just dig into a little bit how sustainable that trajectory looks and what the core drivers from your perspective are that should allow that momentum to continue?

Sure. So we are working very closely with the SPX Flow team. So, you know, we still haven't closed the deal yet. So more color will come later. But I can tell you that when you look at the nutrition and health, I think that when you look at many of the customers that they're working with, they are in a good CapEx cycle. And SPX Flow is in a very good position with several of them. As a matter of fact, I participated in a call together with the SPX leadership team with one of their major customers, and it was really good to see the intimacy that they have and how they work with the customer in building the CapEx and building the execution for the years to come. I think that this is confirming a little bit our visibility into what we said at the beginning when we communicated the acquisition that we see this SPX Flow as really a growth opportunity. And when it comes to mixers, I would say, we have some good opportunities there as well. Granted, probably that was coming from an easy compare when it comes to 2024.

Thank you for that. And then maybe just a generic question and then a specific one associated with it. If you think about your outlook for '26, how much has changed over the last three, six months in terms of how you're thinking about next year or at least versus the 3Q earnings release? And more specifically, within the motion piece, is there anything changed on how you're thinking about the end market outlook for auto?

Sure. I would say that some of the trends continue. Some of the trends probably reinforced. So if you look at the aerospace recovery, we've been talking about the aerospace recovery now for a few quarters. And now you see some good results in there in terms of the orders and in terms of the revenue as well. And the aftermarket is strong. We see the production ramp-up. We see also the wide bodies. So those were something that were happening, and now they're getting a little bit stronger. Defense that was good is getting a little bit stronger. And that is what's happening. So a confirmation. Now when you look specifically at Motion Technologies, I would say in terms of the auto market, if you look at 2025, it was a positive year in terms of growth of production. But it was mainly because of China. Both Europe and North America were down. Less than what we expected at the beginning of the year. When you look at 2026, expect the production, the global production to be flat, slightly down. And once again, it will be, you know, across the board. You know? Probably Europe being flattish, and North America and China flat to low single-digit down.

Thank you. Really appreciate it, Luca.

Thank you, Mike.

Thank you. Our next question comes from the line of Joe Giordano from TD Cowen.

Good morning. Hey. Good morning, guys.

Hi, Joe.

So for businesses like Svanehøj, Kessler, it's great to see them scaling and getting orders to this magnitude. But like, I guess the other side of that mountain is sometimes challenging. Right? So how do you kind of prepare these companies? Like, are these stable run rate orders, or are we going to have to kind of find new ways to keep the level of business to that magnitude? Like, how do we prevent a plus 40 becoming an impossible comp in out years?

Sure. So when you look at that, I would say there are slightly differences between Kessler and Svanehøj. I think that when you look at the Kessler incredible order performance, I would say that is quite sustainable if you think that more and more expenditure will happen in defense and Kessler plays 80% of the Kessler business is actually in defense. So I think that that is sustainable in the short and medium term, from our perspective. The comment in terms of Svanehøj, I think it would be difficult to repeat the level of performance of orders in 2026 versus 2025. I mean, 2025 orders grew 44%. So, obviously, that will not be repeated. Having said that, you know, we are working to expand the opportunity in Svanehøj with the new product introduction and also from small additions from an organic perspective, like the acquisition of Coho that we did at the end of last year, which introduces compressors into the mix. So working on that from an innovation and product point of view.

Perfect. And, Luca, you touched on this in your prepared remarks. But, as you get ready for SPX to come in, like, it's a much larger deal than anything you guys have done. So how do you like, what can you do ahead of time before you can really dig in? Like, before you get your hands on it, what can you do to prep internally to make the early-stage integration as fast and efficient as possible?

I can tell you that the teams are working very closely together. Actually, it was really good to see the team working together over here in Stanford. We had it a few weeks ago. Both the SPX team and the ITT Inc. team working to really hit the ground running on day one. And know exactly how the organization is going to look like. And working on those synergies that we expect to deliver in year one and also working commercially as I said before as well, you know, both Bartek and myself participated in a call with one of our major customers that we will meet in person after closing next week. I will be in London. I will be able to spend one day with the nutrition and health leadership team, altogether, looking at the projects and the opportunities. So we are all in it already.

Thanks, guys.

Thank you, Joe.

Thank you. One moment for our next question. Our next question comes from the line of Nathan Jones from Stifel.

Good morning, Nathan. Good morning, everyone.

Hi, Nathan.

I guess just following up on some of the SPX stuff. Interested in hearing a little bit more about the organizational structure, you know, post getting the deal closed here. There's some parts that, you know, where there's overlap. There's, you know, some completely different customer bases between your industrial process business and some of their flow businesses. So just any commentary on how you'll structurally go about integrating those? What will run separately? What gets integrated into IP, just how you're thinking about running those businesses once you get them in the door, please.

Sure. First of all, SPX is well run. We saw, you know, the margin that they were delivering. Right? So we have a good, well-run company with a good management team in the businesses. So when we are approaching this, it's really to ensure that the businesses are performing well with strong management teams, you know, staying stable, they're delivering the base case. And on top of that, we're going to deliver the synergies. But most of the synergies, particularly in year one, are coming from the G&A. From, you know, the fact that we are not going to have a duplication from, you know, the from a corporate point of view. So we are using the best athlete, and we got very good athletes and very good management team in SPX. So, we will integrate some parts and those are the must-have conversations that we’re having today. But, you know, the parts that are running well, you know, you want to keep on running well and ensure that you do not disturb them.

Thanks for that. I guess, a question on the finalization of the contract negotiations with Boeing. I'm sure you're glad to finally have that behind you. You talk about the potential margin improvement that CCT sees from those contract negotiations. I know that, you know, some of that benefit is coming over the last few years and some of it will come out, you know, over the next few years. Just, you know, where we get to or what the contribution is from that and you know, how quickly that rolls in and over what time period? Thanks.

Yeah. Thanks, Nathan. So, we're very happy, as you said, about the conclusion of the Boeing contract. And here, really, we want to applaud the work of the CCT aerospace team that really worked really hard to deliver that contract. So this is a high double-digit price adjustment before a five-year contract. So, most of the price adjustment or the price increase is going to come in the first and the second year. With additional price increases to offset expected inflation in year three, four, and five. This is obviously compensating for the absence of price adjustment we have had since 2015 and 2017 and the cost inflation that we have experienced. So as a result, as you can imagine, this will be a large improvement of our profitability, our aerospace profitability, specifically with Boeing. And we're very happy because it allows us to focus on supporting the growth at Boeing that we've seen both on the narrow body and the wide body platforms.

Thanks for taking the questions.

Thanks, Nathan.

Thank you. One moment for our next question. Our next question comes from the line of Amit Mehrotra from UBS.

Thank you. Good morning, everybody.

Good morning.

Luca, you know, we're just currently, I guess, in an environment where folks are getting maybe a bit more positive on some cyclical tempo improving. You kind of just look at the more cyclical parts of your business, are you seeing any evidence of that? Because, obviously, there are certain large parts of your business that sell into cyclical markets, but you've been able to outperform that, obviously, with autos, for example. But if we were to just sort of isolate the cyclicality of the market, I'd just be curious. Does it feel better to you, or is it really no change?

I would say that, you know, there are some small signs of improvement, I would say. If you look, you know, the last, I would say, probably six weeks, if we look at some of the parts in the short cycle in IP. The order book in terms of automotive in Europe, I would say, is stable. The aftermarket in Q4 was growing nicely, even granted it was from an easy compare. So there are some signs, I mean, that would imply that maybe the situation is a little bit better, but it's probably too early to tell.

And I would add to that that our short cycle performance really is standing out. We are focusing on improving our on-time delivery, which really brings a lot of opportunities forward for us to gain market share. And when you look at the short cycle in IP, we had pretty strong spares orders in Q4, and we started the year also super strong. And so we're very encouraged by this.

Okay. That's great. And just as a follow-up, on SPX Flow, I think the market obviously sort of understands and knows this asset as it used to exist. But it's gone through a lot of change. And, Luca, I know you've, I think, you and Bartek have probably visited every single facility of the company over the last couple of years is my guess. And so I guess, like, you know, there are some people that are skeptical of the asset, but you guys are excellent executors. And they're just trying to reconcile that. And so I'd love it for you, Luca, to just talk about what SPX was, what it is now, and what you think you can make it. Just given sort of applying some of your track record and execution to that business?

So when you look at the SPX, it's true. I would say but let's not forget that the acquisition that we're bringing in has already got a very good profitability. And a very good EBITDA margin. Right? So they've already done a good job in terms of that cost containment. Now on top of that, you need to lay the synergies that we have, which are roughly $80 million to be executed over the last three years. A lot of that will be from the G&A. One third from their procurement, and then there's going to be a 10% that is coming also from the footprint rationalization. I think that this is the area where we are pretty good, and I believe that they also are good, and we're working together on executing. I think that what we are going to add as well is the impetus on growth, on the growth momentum. And there are a lot of revenue synergies that are not in the model that we're already working on. You're talking about Latin America, where we have a very strong base. We're talking about the Middle East, where we have a very strong base. So that is an area where we will be able to grow. There are some product gaps that we'll be able to cover with our twin screw Bornemann twin screw pumps. And then I would say probably a little bit more focused on growth that is in our DNA and probably be less religious when it comes to 80/20. Market size and customer size.

And just to confirm that, the high single-digit accretion in this year pro forma for the closing, does not include any revenues. Have you talked about maybe the magnitude? I mean, we're talking about a few hundred million dollars of revenue synergies. As an opportunity. Any thoughts there?

Yeah. So I think that when you think about revenue synergies, I think we expect them beyond 2026. Right now, we're going to focus on understanding the business. Obviously, there's a short-term opportunity. We will take it, but I think it's fair to say that the cross-selling and the commercial synergies are going to happen most likely starting 2027. So we haven't really quantified how much those commercial synergies are, but we expect that they're going to be meaningful as we're really able to leverage the portfolio of both companies.

Right. Got it. Thank you very much, guys. Appreciate it.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Vladimir Bystricky from Citi.

Good morning, Vlad.

Hey, good morning.

Good morning, guys. Impressive pronunciation of my last name there. I like it. Anyhow, thanks for taking my questions. So just following up on IP and your ability to continue to outperform the market there, can you just talk about whether you've seen any change in competitive behavior in that business? Or are you thinking about potential risks for more aggressive competition on pricing or on terms and conditions?

Thanks, Vlad. No. We don't see any change in terms of behavior in the competitive landscape. That has not changed. I've never seen any change in the last six years as a matter of fact. I can tell you. But the thing that is changing is really the performance that keeps on improving. Let's take the project example, the project business. Vlad. You know, this was a business that was losing money, that was making a bit of money. A little bit, then we give a target of 15% plus, then twenty. Today, those execution projects deliver margin in the high 20s. And they are perfectly on time, and when you have this level of performance in the market, your customers tend to be loyal. And as I said, some of the best intimacy and loyalty, I've seen it actually when I was in Saudi, and I met with the customers over there. This is what really is happening in the market.

That's helpful and great to hear, Luca. And then maybe just sticking with IP and digging into the biopharma valves wins that you've mentioned. We've heard from some others about pretty positive commentary around the capital investment cycle in pharma and biopharma. So can you just talk about sort of incremental opportunities that you see in the pipeline specifically in that market segment and how you're thinking about potential for incremental wins over the course of '26? In the biopharma space?

Yeah. Thanks for that, Vlad. So, yeah, the one business opportunity that we have has been growing really fast. So this was a roughly $20 million opportunity that we got awarded a couple of years ago, and then that has grown into more than $50 million. As this customer is expanding production sites in the U.S. and also in Europe. What's really interesting about this as well is that those are diaphragm valves, and so, there's a meaningful recurring aftermarket when you have to replace diaphragms every time you change the composition of the formula that you are developing. So this is really interesting for us. I think that when you look at our biopharma valves business, it has been expanding. I think it's up 10% this year from an order standpoint, and we continue to see other opportunities. Especially because in Europe, we have penetrated Europe much less than in the U.S. So we have many opportunities. And then the last point I wanted to make is that Habonim is doing really well as well. More on the new energy, but this is a significant platform for growth for our valves business. You know, Habonim now is a little bit more than a $60 million business. When we bought it, it was barely $30 million. And the margin is still very good. And we are finding new ways to grow and gain market share, especially in the U.S.

Great. That's helpful, Emmanuel. Thanks. I'll get back in queue.

Thank you. One moment for our next question. Our next question comes from the line of Matt Summerville from D.A. Davidson.

Good morning, Matt. Thanks. Just a couple of quick ones.

Morning.

Can you talk about how much relative price capture you're expecting across the three reportable business segments that's embedded in your full year '26 organic outlook? And then I have a quick follow-up.

Yeah. So let me start by saying that 2025 was a really successful year in terms of price capture. We were able to capture a lot of price in IP and CCT, above our cost inflation. And we were able to limit as well the price decrease in motion tech and friction compensated by the raw material disinflation that we've seen during the year. In 2026, we expect our price capture to be as strong. Obviously, it's incremental. We expect IP and CCT to lead the way, overcoming the cost inflation. So being price-cost positive from a dollar and a margin standpoint. And in terms of MT, we expect to be neutral.

Got it. And then you've mentioned aftermarket and friction a couple of times being up 9% against an easy compare. How should we be thinking about kind of what's embedded in your guidance for Friction Aftermarket in '26 relative to how it performed over the course of the full year '25? Thank you.

Yeah. So in terms of the friction independent aftermarket, we expect this to be roughly flat in 2026. You know, this is mainly a European business. And as we described, you know, Europe is really flatlining from a growth standpoint. So that's why we don't expect much of an uptick. And then in terms of the original equipment spares, we expect also to be flat. Here, there's a lot of market share gains that are at play. And we're working with our customers to provide low-cost quality solutions.

Thank you.

Our last question comes from the line of Sabrina Abrams from Bank of America.

Hey, good morning, everyone. You have Sabrina on for Andrew.

Morning, Sabrina.

Hi, Sabrina. You guys have had a really impressive trend of accelerating organic growth this year. I think we went from flat to 4% to 6% to 10%. And you're ending the year on such a strong note, and I think above the commentary from where we sat a quarter ago. Any comment on, I guess, what went better than expectations? And then as a follow-up, other than guiding with some conservatism, any reason why things would decelerate to mid-single digits next quarter? Thank you.

Yeah. Thank you, Sabrina. So, yes, we are very happy we were able to grow organically 5% in 2025 and almost 9% total. Large contribution from industrial process and connecting control technologies. So when you think about what has driven that growth, in Connect and Control Technologies, obviously, aerospace and defense is helping a lot. And in that, we have a significant contribution from a sales standpoint from aftermarket. Aftermarket aero, especially from a sales standpoint, was up more than 20%. Kessler is doing also really well. We talked about the orders that they were able to get and convert some of them. So CCT a lot of really good activity from an aerospace standpoint, as well as some price capture as I mentioned a little earlier. In IP, I think here, what you see is all the pump projects that we've been able to deliver. When you think about the pump projects for the year, they were up 30%. And I would say that a large majority of those pumps were delivered in quarter three and quarter four both at legacy IP and Svanehøj.

Thank you. And as a follow-up sort of to the last comment, I know the project mix in IP is dilutive to margins, but I think we had the best, I think we had the highest margins you guys have seen since you closed Svanehøj. So anything in particular you want to call out, like, given the mix headwinds, anything in particular you want to call out that's gone super well in the execution for this segment?

Nothing in particular. It's really broad in terms of the execution of the project. When you look at these projects, when we close and ship the projects, the margin is always higher than what we those projects at, which is a testament to the good project execution, good project management, management of the changes, and also the cost management. So that and also, good project order acquisitions. So this is general. We have seen that trend, and the trend keeps on improving. So go to the next improvement.

Thank you.

Thank you, Sabrina.

Thank you. This does conclude today's teleconference. Please disconnect your lines at this time, and have a wonderful day.