Question · Q3 2025
Kyle David Menges asked for more details on what drove the 2% growth in EMEA, marking its first growth in over two years, and expressed interest in the level of confidence in sustaining this regional growth. He also inquired about the expected fourth-quarter exit rate on margins and whether a larger-than-normal sequential step-up in margins from Q4 to Q1 2026 is anticipated, given pricing momentum and potential auto OE actions.
Answer
CFO Mike DiSenza attributed EMEA's return to growth to easier year-over-year comparisons, suggesting the region might be reaching a bottom, combined with a strong European presence in some industrial motion businesses. He highlighted growth in off-highway, rail (particularly new platforms), and heavy industries as key drivers. Regarding margins, Mr. DiSenza confirmed that Q4 is typically the seasonally lowest quarter, and a significant sequential step-up in both top and bottom line is expected from Q4 to Q1. He noted that positive pricing momentum (exiting the year at a higher run rate) and second-half weighted cost savings tactics would contribute to margin uplift in the first half of 2026.