Sabrina Adams

Sabrina Adams inquired about CCT margins, specifically the incremental margins over the past two years versus the implied Q4 incrementals, and the outlook for 2026 incrementals. She also asked about the evolving pricing environment, customer acceptance, and any idiosyncratic pricing dynamics, particularly on the aero side.

Answer

Emmanuel Caprais, CFO, stated that ITT's incremental margins in Q3, excluding acquisitions, were around 40%, with Motion Technologies being the strongest. He expects similar incrementals in Q4 (excluding acquisitions) and suggested 30-35% as a good range for 2026. Luca Savi, CEO and President, explained that pricing dynamics vary by business: CCT retains more pricing power, IP pricing will be more strategic and value-based, and automotive has a 'completely different dynamic.'

Sabrina Adams asked about ITT's incremental margins, specifically the implied 33% in Q4, and how to project incrementals into next year compared to the past couple of years, which historically approached 40%. She also inquired about the evolving pricing environment, customer acceptance, and the impact of idiosyncratic pricing on the aerospace side.

Answer

CFO Emmanuel Caprais stated that ITT's incremental margins, excluding acquisitions, were around 40% in Q3 and are expected to be similar in Q4, suggesting a 30-35% range for 2026. CEO Luca Savi explained that pricing dynamics vary by business: CCT retains more pricing power, IP pricing is strategic and analytical, while automotive operates under a different dynamic.