GAAP EPS

FY 2025

$10.15 to $10.55 " "

$10.35 to $10.55 " " "

raised

Organic Growth

FY 2025

0% to 2% " "

0% to 2% " " "

no change

Total Revenue Growth

FY 2025

no prior guidance

1% to 3% " " "

no prior guidance

Operating Margin

FY 2025

100+ basis points "

100+ basis points " "

no change

Free Cash Flow Conversion

FY 2025

no prior guidance

100%+ conversion " "

no prior guidance

Construction Products Segment Revenue Decline

FY 2025

no prior guidance

Revenue expected to face challenges due to global demand issues "

no prior guidance

Consistent Margin Performance

Q1 margins were at 24.8% with enterprise initiatives contributing 120 basis points, and management expected sequential margin improvement " " "

Q2 margins reached a record 26.3% with enterprise initiatives adding 130 basis points, reflecting strong execution despite modest tariff cost dilation " " " "

Improved margin performance with consistent execution and stronger enterprise contributions " " " "

Enterprise Initiatives

In Q1, initiatives contributed 120 basis points to margins and were highlighted as key drivers for future margin improvement " " " "

In Q2, initiatives contributed 130 basis points with expectations to add 100+ basis points over the full year, reinforcing their role in profitability " " " "

Consistent and slightly strengthened impact across periods " " " "

Resilient Pricing Measures

Q1 discussions focused on surcharges, list price increases, and strong pricing power to offset tariffs, with confidence in achieving EPS neutrality or better " " " "

In Q2, pricing measures continue to offset tariffs but are described as modestly margin dilutive with CFO noting a timing issue for full recovery " " " "

Shift toward a mixed sentiment as pricing actions balance EPS benefits against short-term margin dilution " " "

Ongoing Tariff Pressure

Q1 commentary emphasized a “produce where we sell” strategy, proactive pricing actions, and overall management that kept tariff costs EPS neutral " " " " "

Q2 discussion reiterated that over 90% localized production and pricing actions managed tariffs, though temporary disruptions (e.g., China shipments) were noted, with continued EPS neutrality " " "

Management remains consistent; slight additional challenges (temporary disruptions) noted, but overall strategy is effective " " " "

Emerging FX Uncertainty

In Q1, FX uncertainty was acknowledged with a cautious approach that did not incorporate a $0.30 EPS upside into guidance, reflecting global demand concerns " " "

In Q2, FX factors turned modestly favorable (adding about $0.03 EPS) and have been incorporated into updated guidance, though volatility remains a concern " " "

Slight improvement in FX impact, though the cautious sentiment persists due to ongoing volatility " " "

Regional and Automotive Segment Growth Dynamics

Q1 showed organic revenue declines in North America and Europe, with Asia Pacific (and China in particular) delivering stronger growth; automotive organic revenue declined overall with mixed regional performances and lower auto builds in North America "

Q2 data indicate a modest recovery with North America declining by 2%, Europe by 3%, and Asia Pacific increasing by 9% (with China showing 22% automotive growth and overall automotive revenue increasing by 4%) "

Improved overall performance in regional and automotive segments, especially driven by stronger Asian/Chinese growth and a recovery in automotive revenue " "

Recurring Demand Uncertainty and Volume Sensitivity Risks

Q1 commentary highlighted a “pretty uncertain” global environment, potential demand weakening (notably in auto builds), and proactive volume management including restructuring measures " " " " "

Q2 remarks continued to stress the volatile environment but noted strong incremental margins (49% year-over-year) despite some volume challenges, with guidance based on current demand levels " " " "

Persistent uncertainty with enhanced operational resilience; improved margin performance despite volume sensitivity risks " " "

Emerging Capital Expenditure

N/A

Q2 discussions revealed emerging positive signals with sequential revenue growth, encouraging order activity in sectors such as semiconductors, welding, and test and measurement equipment orders " " " "

New topic in Q2 showing positive order momentum and potential long-term impact on growth " " " "

Order Momentum Signals

N/A

Q2 earnings highlighted significant increases in large orders and improved order activity, particularly in the welding and China segments, reinforcing positive customer engagement " " "

New topic emerging in Q2, with positive order momentum indicating favorable near-term trends " " "

Customer-Back Innovation

Q1 emphasis on CBI as a strategic priority with a target contribution of 2.3%-2.5% to growth and a robust product pipeline across all segments " "

Q2 reaffirmed CBI as a key driver with an increased yield target of 3%+; detailed successes in segments like automotive (especially in China) and welding underscored its strategic role " " " "

Strengthened across periods with higher performance targets and expanded segment-specific contributions, reinforcing long-term differentiation " " " "

De-emphasis on Flexible Cost Structure

Q1 discussions prominently featured the flexible cost structure as a competitive advantage, with an emphasis on outsourcing lower-value parts to build resilience during downturns "

Q2 material does not specifically discuss a flexible cost structure, with focus shifting to other operational drivers and margin initiatives " "

Reduced emphasis in Q2 suggests the topic was deprioritized relative to emerging growth and margin initiatives " " "

Food Equipment

In Q1, Food Equipment was highlighted for its high differentiation, steady organic growth (with equipment flat and service growing by 3%), and an innovation-rich environment focused on energy and water savings " "

In Q2, Food Equipment recorded modest overall growth (2% revenue increase with 1% organic growth), with regional performance varying (North America up, international down), indicating steady but less emphasized progress compared to earlier discussions "

Consistent performance with continued innovation; however, the focus and growth momentum appear slightly moderated in Q2 compared to Q1 " " "