Christian Zulliger

Christian Zulliger from KeyBanc asked how Wabtec's strong orders and backlog, with the 12-month backlog nearing annual sales and total backlog at two years' worth of sales, impact near-term and long-term visibility, specifically into 2027, and if customers are providing longer roadmaps for modernization efforts.

Answer

Wabtec President and CEO Rafael Santana indicated that coverage for 2026 is consistent with the prior year, excluding acquisitions with shorter lead times. He noted that coverage for 2027 and beyond is stronger, supported by a very robust pipeline, providing good opportunities to convert more orders. Regarding overall freight improvement indicators, Santana differentiated between strong international demand (5% fleet growth) and North America, where combined modernizations and new units are expected to be down in 2026, impacting service business growth despite a strong core.

Christian Zulliger asked how Wabtec's strong orders and backlog impact its near-term and long-term visibility, specifically for 2027 and beyond, and if customers are providing longer roadmaps for modernization efforts. He also questioned if the pickup in new locomotive builds, mod activity, and road freight inflection signals overall freight market improvement.

Answer

President and CEO Rafael Santana confirmed that 2026 coverage is consistent with the prior year, while coverage for 2027 and beyond is stronger, supported by a robust pipeline. He differentiated between international markets, which show strong demand and fleet growth, and North America, where modernization and new unit dynamics are expected to be down in 2026. Mr. Santana emphasized the underlying strength of the core service business, which is expected to outperform company growth averages.