Angel Castillo's questions to DONALDSON Co (DCI) leadership • Q4 2025
Question
Angel Castillo from Morgan Stanley requested more detail on the first-half versus second-half cadence for sub-segments like off-road, on-road, and Aerospace & Defense. He also asked for an update on capital allocation, including the M&A pipeline, appetite for buybacks beyond the guidance, and the reason for a decline in the CapEx forecast.
Answer
CFO Brad Pogalz advised using the total company's typical 48/52 first-half/second-half sales split as the best guide for cadence, noting the on-road recovery is modest in dollar terms and A&D comps are lumpy. On capital allocation, he explained the 2-3% share repurchase target is a 'normal' level, balancing returns with M&A flexibility, and the lower CapEx reflects sharper project prioritization. Chairman, CEO & President Tod Carpenter reiterated that the M&A pipeline remains active and is a key strategic priority.