Welcome to ITT's 2026 third quarter conference call. Today is Thursday, November 5th, 2026. Today's call is being recorded and will be available for replay beginning at 12 p.m. Eastern time. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you wish to ask a question at that time, please press star 1-1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star 1-1. We ask that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the floor over to Carleen Salvage, Vice President, Investor Relations and FP&A. You may begin.

Thank you, Liz, and good morning. Joining me in Stanford today are Luca Savi, ITT's Chief Executive Officer and President, and Mike Savinelli, Interim Chief Financial Officer. Today's call will cover ITT's financial results for the three-month period ended October 3, 2026, which we announced yesterday evening. Please refer to slide two of the presentation available on our website, where we note that today's comments will include forward-looking statements that are based on our current expectations. Actual results may differ materially due to several risks and uncertainties, including those described in our 2025 Annual Report on Form 10-K and other recent SEC filings. Except where otherwise noted, the third quarter results we present this morning will be compared to the third quarter of 2025 and include certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures are detailed in our press release and in the appendix of our presentation, both of which are available on our website. Today's earnings call includes year-over-year commentary on the performance of SPX Flow that reflects financial information before the acquisition date of March 2nd, 2026. With that, it is now my pleasure to turn the call over to Luca, who will begin on slide three.

Thank you, Carleen, and good morning. Let me begin by thanking our employees around the world who have delivered another outstanding quarter. Our results are a direct reflection of the hard work we do at ITT each and every day for our customers and our shareholders. I couldn't be more proud, and I can assure you there is more to come. I would also like to extend a special thank you to our colleagues at Habonim in Israel and Goods Pumps in Saudi, who continue to excel in extremely challenging environments. Ilan, Kaleem, and their teams have demonstrated remarkable resilience whilst continuing to deliver quarter after quarter. Their unwavering commitment to serve our customers is second to none. This is the very best of ITT. Now let's turn the highlights to our third quarter. We grew orders 58% or 20% organically. We grew revenue 44% or 8% organically, reflecting a book-to-bill of 1.08 for the quarter. We expanded operating margin 140 basis points, reaching 21% for the very first time. We delivered EPS of $2.26, up 20% year-over-year. And finally, we generated $464 million of free cash flow year-to-date. up 26% from the prior year. A truly outstanding quarter. Let's step now into the details. On orders. Orders are, once again, the highlight of the quarter. We continued aerospace recovery, defense content expansion, healthy project activity, and ongoing market share gains across the portfolio. CCT continued its strong momentum from Q2, growing organic orders 55%, driven by aerospace tailwinds and defense share gains. In defense, Caesarea keeps on winning market share and achieved 146% growth in orders, driven by awards in submarine, tactical radio platforms, and the F-35. With a very healthy backlog for the short and medium term, and our growing participation across key defense programs that provide multi-year visibility, Kesaria will be a significant platform for growth in the years to come. Connectors also grew 37% in the quarter, driven by broad-based strength across all regions, all channels, and all end markets. In Mocio Technologies, we continue to strengthen our position through a combination of platform rewins and CONCAT awards that will fuel future market share gains in friction. In CONI, orders were strong again this quarter, growing 24%, driven by strength in rail and European defense, including a significant order for PATRIA. And finally, Flow Technologies delivered 108% orders growth, with organic orders up 11% driven by key project wins in oil and gas, including Venezuela, and in marine energy transition alongside continued strength in biopharma for Arval's business. In SPX Flow, Mixers delivered 6% growth from large project orders in North America and China, while Waukesha Cherry Boral grew 10% driven by strong original equipment run rate through North America distribution. On revenue. Organic growth across all segments contributed to another quarter of strong performance, underscoring once again the power of ITT's differentiation. In CCT, organic revenue grew 19%. Commercial aerospace continued to benefit from increasing production rates and pricing actions, while defense growth was bolstered by European defense wins coupled with Casari's expanding presence on marquee programs. Connectors also grew its industrial segment 31% globally, mainly through distribution. MT once again outperformed global vehicle production across all regions, resulting in a year-to-date outperformance of 560 basis points. Flow technologies grew revenue 99% or 6% organically, led by sustained momentum in pump projects and strength in our short cycle VOWS businesses. VOWS revenue increased 20% and we still generated a healthy 1.2 book-to-bill. Finally, SPX Flow revenue grew 6% in Q3 and 8% year-to-date, keeping the business on track to deliver high single-digit growth for the full year, supported by strength in nutrition and health, Wakasha Cherry Burrell and mixers. On operating margin, CCT margins expanded 100 basis points year-over-year to a record 22% as volume and pricing actions more than offset inflationary pressures. We continue to invest in resources, in automation, and capacity to deliver today's backlog and capture tomorrow's share gains. Quesare also contributed to CCT's performance, expanding margin to over 19%, Benefiting from Pricing and Operating Leverage. Well done, Mike and team, for Quesaria's margin expansion as well as revenue growth and orders. Moesho Technologies expanded margin 70 basis points to 21% as net productivity more than offset customer pricing pressures in friction. Flow Technologies delivered margin of 22.4%, improving 100 basis points sequentially as integration synergies accelerate. All of this contributed to EPS growth of 20% to $2.26. Now to cash and capital deployment. In Q3, we generated $288 million of free cash flow, bringing our year-to-date total to $464 million. With this strong cash performance, we paid down over $200 million of debt and reduce our leverage ratio to 2.3 times. We now expect the year-end ratio to be approximately 2.1. We also continue to repurchase shares, $50 million in Q3 and over $150 million year-to-date. In the quarter, we also acquire aerospace contacts, strengthening our supply chain and improving our ability to support future growth in CCT. Well, on the topic of M&A, it has been eight months since we completed our largest acquisition SPX flow. Let me now share our progress on the two biggest drivers of value creation, growth and cost synergies. On the growth front, year-to-date revenue growth of 8% was driven by strength in nutrition and health, which has grown 16% year-to-date as a result of our healthy backlog. This performance, coupled with strength in Waukesha Cherry Burrell and Mixers, more than offset the challenges in the former industrial pumps segment. Given this performance and the backlog for Q4, we are confident SPX Pro will achieve high single-digit growth in 2026. Also, Odes momentum continues to be strong, resulting in a book-to-bill of 1.04 times year-to-date and the backlog growing 7% versus the prior year. As we look ahead, our focus is on unlocking SPX Flow's growth potential by deploying the IT playbook of driving market share gains and relentless execution, both operationally and commercially. In nutrition and health, we are simplifying the organization to increase accountability, eliminate bureaucracy, and Accelerate Decision Making whilst driving more innovation and leveraging an already strong customer intimacy. I was able to experience this intimacy first hand when I met with Danone's leadership team in Paris. This partnership is exceptional. Our teams are working side by side to develop capital plans and design specialized equipment to improve productivity, increase throughput, and Reduce Energy Consumption to help Danone win. This level of partnership is a powerful competitive advantage that helps us secure long-term growth opportunities. In Mixers, we are utilizing our technical leadership to expand aftermarket penetration and we are driving productivity and VAV initiatives to improve cost competitiveness. For the future, We are also now laying the groundwork to deliver on the revenue synergies through localization in Latin America and the Middle East, leveraging the goods footprint and network. At Waukesha Cherry Burrell, we are expanding our TAM by growing our presence in China and India, and by entering the attractive industrial process market. And we are already leveraging our in-store base and customer relationships to drive share gains in North America for our Bournemouth Hygienic Twin Screw Pump platform. In industrial pumps, the picture is mixed. Brand Louvre pumps, on one hand, need to get closer to our customers in Asia and the Middle East by localizing assembly as well as engineering, whilst resizing our European operations. On the other hand, our Johnson pumps, engineered and manufactured in India, have successfully conquered the Indian market. We can leverage this competitive product to expand sales globally. I was fortunate to spend time with Sergey and his team in our plant in India. It's a good plant, a good team, and we will invest and grow this business. On cost synergies, we are ahead. The team has built a robust pipeline of synergies well surpassing our original $80 million target. For 2026, we targeted $15 million of savings, and since closing in just eight months, we are projecting savings of over $20 million by year-end. This translates to an annual run rate greater than $30 million. Corporate and business unit G&A synergies are executed, and supply chain and procurement actions are well underway and will deliver savings in year two. while it is still early innings were performing well ahead of plan. Thank you Lori, Bartek, the entire team and the EYP team for your hard work and for delivering these amazing results. With that, let me turn the call over to Mike to discuss Q3 results in more detail.

Thank you Luca and good morning. As Luca highlighted, Q3 marked another quarter of strong execution. We once again delivered growth across key financial metrics, including revenue, adjusted operating margin, earnings per share, and free cash flow. Our teams delivered over $1.4 billion in revenue, growing 44% and 8% organically. SPX flow contributed 35 points of total revenue growth in the quarter. CCT grew 19% organically, fueled by strength in industrial connectors and aerospace and defense. As Luca highlighted, Casario continues to be a key contributor to the segment's growth. Motion technologies grew 2% organically, driven by continued friction, outperformance, and aftermarket strength. And finally, flow technologies grew 6% organically, reflecting continued strength in projects and valves. Strong execution across ITT, combined with SPX flow, drove 55% adjusted operating income growth and 140 basis points of margin expansion. CCT grew operating income 27% and expanded margin 100 basis points to 22% as the team converted higher volume into strong earnings growth with disciplined pricing and productivity initiatives that more than offset inflation. Flow Technologies delivered a 22.4% margin in the quarter, up 100 basis points sequentially, driven by cost synergies. and MT expanded 70 basis points to 21%, overcoming commercial pricing pressures by driving net productivity of 140 basis points. Although inflation remains present across the macro environment, we continue to effectively manage price costs and invest in initiatives that support margin expansion and long-term value creation. Year-to-date free cash flow totaled $464 million, reflecting a margin of 11%. Excluding acquisition related expenses highlighted in Q1, free cash flow increased 46%. Lastly, strong revenue growth and robust margin expansion drove adjusted EPS to $2.26 for the quarter, increasing 20% versus the prior year. This marks yet another quarter of exceptional earnings growth. Now let's turn to the Q3 EPS bridge on slide six. EPS growth was primarily driven by strong operational performance across all legacy businesses, which contributed 31 cents of growth through operating leverage, pricing, and net productivity savings. The operational contribution from SPX flow added 80 cents of growth, partially offset by the impacts of the incremental interest, share count, and tax rate. What makes these results even more compelling is that we achieve them while making significant investments in engineering resources, in R&D, in Vidar, and in production capacity to support future growth. Now let's move to slide seven to discuss our updated 2026 Outlooking Guide. We are raising our full-year organic revenue guidance range to 7% to 9% growth, reflecting stronger bookings in CCT, continued strength across both project and short cycle businesses in FT, and strong operational performance across all businesses. On adjusted operating margin, we expect to deliver over 100 basis points of expansion to approximately 20.6% in the midpoint, fueled by top line growth, favorable price to cost ratio, productivity gains, and accelerated synergy savings. Our tax projects have reduced the effective tax rate to 23.75% as of Q3, and this is considered in the full year guide. Because of the year-to-date results and the momentum we've generated in the first three quarters, we are raising our adjusted EPS outlook for 2026 to $8.58 at the midpoint. This represents a $0.36 increase and a 19% growth year-over-year fueled by volume, pricing, productivity initiatives, and Accelerated Realization of Cost Synergies. We now expect SPX Flow's net contribution to be over 20 cents. Notably, the low end of our new guidance range now exceeds the high end of our prior range. Finally, turning to cash and capital structure, we are raising the midpoint of our free cash flow guidance to $610 million, representing a free cash flow margin of approximately 11%. Strong Cash Generation continues to support our deleveraging efforts, and we remain ahead of plan as we drive towards approximately 2.1 times by year end. Now, let me turn the call back over to Luca to wrap up on slide eight.

Thanks, Mike. Before closing the call with key takeaways, I would like to share an organizational change within the ITT leadership team. Davide Barbon, currently Senior Vice President and President of Mocho Technologies, will expand these responsibilities and take the leadership role of connect and control technologies in addition to MT. I would like to thank Michael Guhde for his contribution in improving CCT over the last few years. CCT is the business in our portfolio with the highest growth potential, the largest margin expansion potential, and the richest opportunity for continuous improvement. is the perfect court for Davide to excel and run his playbook, where he can exercise once more his commercial acumen, his relentless drive for continuous improvement, and his 100 over 100 approach, capturing the 20 others leave behind. Davide's incredible track record in APAC and in MT makes him the ideal fit to transform CCT. Congratulations Davide and thanks for all you have done and above all for what you will do and the value you will create for our customers, our shareholders and our people. Now, before we move to our favorite part of the call, the Q&A, let me drive home a few points. The message is the same. ITT differentiation is driving share gains which continue to fuel growth across our platforms. Our relentless execution continues to deliver margin expansion and accelerate earnings. And trust me, there is more to come. And our acquisitions are turbocharged in value creation and increase our growth opportunities. Guys, the strategy is sound and executed rigorously. Q3 was strong and our backlog is healthy and growing. This momentum gives us confidence for Q4 and entering 2027. As always, I appreciate your time and continued interest in ITT. Liz, please open the line for Q&A.

The floor is now open for questions. At this time, if you have a question or comment, please press star 11 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star 11. Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Please limit your questions to one question and one follow-up. Our first question comes from Scott Davis with Milius Research.

Hi, Scott.

Good morning. It's actually a Jaycon. Surprise. We've got a busy morning, so I figured I would humor you folks. I just had a quick question for you as you've got leverage coming down here pretty quickly. I think you peaked almost three times and will probably be well under two next year. Is the organization in a place where you actually have the capacity to go out and do something? I don't know if it's of the size of SPX, but certainly something on the larger side.

Hi, Jake. I would say the focus right now continues in generating the cash, delivering on the synergies, paying down the debt, and being ready for... something larger in 12-15 months. Now this doesn't exclude bolt-on acquisitions so I would say in the next 12 months you shouldn't be surprised if we are able to add some bolt-ons but when it comes to larger acquisitions I think that we still need to deliver for our shareholders and prove the values of SPX flow. It's still early innings as I said.

Okay, that makes sense. And just on a different topic, I didn't hear much of a mention of the Middle East. I know there's obviously still a lot of disruption there, but have those project discussions, are they starting to move forward at this point and the region sort of settling into a new normal, or is that still getting pushed to the right?

Sure, thanks, Jack. So when you look at the Middle East, we really have two operations there, Jake. We have Abonim making valves, hydrogen LNG in Israel, and Goose Pumps in the Man Saudi. So when you look at the former, it's performing exceptionally well. So we are growing orders, we are growing revenue. We are suffering a little bit on the operating margin because of the cost. You know, you can imagine the operations are not as efficient as they could be, the cost of transportation, but you're talking about high teens versus in the 20s. So that is going incredibly well. So well done to Ilan and the team. The latter, which is the goods pumps in Saudi, first of all, this business has been growing and on a look at the full year basis, probably these businesses here will be growing More than 20%. This is because we're delivering a very healthy and very good backlog that we had at the beginning of the year. When it comes to the orders, the order shifted to the right, as you said, but I'm pleased to share that in Q3, some very good orders start materializing, but of course, not to the level that it was in the past. But the things are moving and we booked some good orders for some very good investment with Saudi Aramco.

Okay, that makes sense. Thank you, Luca. I appreciate it. Pass it on.

Thank you, Jake.

Our next question comes from Jeff Hammond with KeyBank Capital Markets.

Hi, Seth. Hey, good morning. Hey, just on flow margins, they were a little light versus my expectations. I don't know if that's mix or some of the Middle East noise, just kind of Maybe talk about margin progression. I know the synergies are running ahead, but margin progression on the core.

Sure. If you look at the flow technologies, the margin at 22.4% is, if you look at the legacy, the legacy was approximately 23%, and so you have 60 basis points of dilution in the margin of flow technologies. Sequentially, it improved 100 basis points, Q2 over Q3. Volume and price were positive, but you rightly said, Jeff, the mix was negative. So there was a negative mix as well as 60 basis points of acquisition dilution.

Okay, great. And then just... On flow, can you just speak to pipeline? I think you covered Middle East pretty well, but there seemed to be some concerns about orders, which turned out pretty good, but just pipeline and flow. And then just as you think about revenue synergies on SPX flow, you listed a lot of opportunities. Just how do you think that's coming along versus expectation where that starts to deliver differentiation in 27. Thanks.

Sure. So when you look at the pipeline, the funnel is healthy and it continues to grow. You know, it was up in Q1, it was up in Q2, it's up again in Q3, roughly 6% year over year. So you have to think about it. I mean, this is really a powerful flywheel, the way that I see it, Jeff, because you have a good... Revenue growth when you look at the business, right? On top of this good revenue growth, you have a book to bill, which is above one. So orders are coming in faster than your revenue growth. And the funnel of opportunities is actually increasing, 6% in the quarter year over year. So the funnel gets replenished even at a faster rate than you're booking the order. So it's a power to fly with. It's fair to say that when you look at geography, the most powerful region is North America. And this is really the best growth engine that we have within flow technology. Latin America is good as well, but North America is definitely where the growth is. Going to the second part of your question, revenue synergies, it takes time in terms of revenue synergies. This is really why we didn't put them in the model. Now, having said that, Waukesha has done an outstanding job, you know, Rudy and the team, to move super fast, to localize the inventory, to start selling these Bournemouth pumps. We are proceeding quite fast on the localization also of the assembly and the venture of the machining, so I'm feeling very positive about that. And as a matter of fact, we had just recently a touch base with Wendy on the localization of mixers, both in the Middle East and in Latin America. I think it's progressing quite well, I would say. But it takes time to get the revenue synergies in the books.

Okay. Thanks so much. We'll be patient.

Thank you, Seth.

Our next question comes from Mike Halloran with Baird.

Hi, Mike. Good morning, everyone.

How are you doing? Good.

How are you? Oh, I'm lovely. So CCT, just another quarter of dynamic trends here. So maybe you could talk about maybe more context on durability, I suppose. What does this mean for forward visibility, all else equal? How do these contracts that you're winning right now cadence out? What's the line of sight to continue to see the strength, maybe not at this level, but still strong win rates? and customer penetration on a forward basis.

Sure. So let me address this in two ways. First of all, when you look at the strength of the order in CCT, it's broad, it's across the board. You have it in controls up 34% in orders. You have it in connectors up 37% after already a Q2 of 38% up and Qsaria 136%. Now, and this broad across different segments is aero, defense is industrial. Now, so if I think about some of these market aerospace, the recovery will keep on going. Defense, the spending will keep on happening. So I think that from a market point of view, we will continue to have these tailwinds for a while. And the team is doing a great job in winning market share on the world side. In terms of the ability to translate these into revenue, we've got a very good situation here because we look at the backlog in the short, medium, and the long term. Our backlog for Q4 and for 2027 is up more than 30% versus what we had last year at this point in time. The one for the long term, the big platform, is up more than 100%, which gives you extreme visibility. So this is really a good platform for growth for the future, Mike.

Thank you for that. And then prepared remarks you alluded to the CCT having the most margin upside. Not really a surprise, but maybe just give some context on why you feel that way and what those aspirations look like.

Sure. For the aspiration, you will have to wait our next capital markets day that is going to happen next year, right? So you need to be patient on that one. But let me tell you why we see that way. First of all, is this segment, is the market where you've got the best pricing leverage. And therefore, this is an area where we have done a good job But believe me, we can do much, much more. And that is a big lever. Second, when I look at the continuous improvement and the lean and the factory and the operations, this is probably the value center of the business that is still behind compared for sure to MT, but also compared to Flow Technologies. And therefore, there is plenty of opportunity there and not to talk also in terms of the purchasing. So because of these levers and the level of maturity that we have there compared to MTO for technologies, this is why we think we have this great opportunity.

Thanks, Luca.

Appreciate it. Thanks, Mike.

Our next question comes from Joe Ritchie with Goldman Sachs.

Hi, Joe.

Hey, Luca. Hey, Carleen. This is Anvi on for Joe. Good morning and congrats on the quarter.

Thank you.

I just wanted to touch upon the 2026 guide and the puts and takes around it. So I recognize you took up the organic growth guide, but you've had a really strong order growth as well as organic here to date. Q4 kind of implies a low to mid single digit growth in the quarter. And I know you've spoken about the four extra days coming out of Q4. So I just wanted to understand the puts and takes on what we should keep in mind and how you're thinking about it versus your initial guide.

Okay. I think that when we look at the Q4, I think that our guidance is having a Q4 which is pretty much aligned with our Q3. I think that what we need to pay attention here, as you rightly said, is in Q4 we're going to have four days less on a year-over-year basis. and then also probably some headwind when it comes to the automotive market. And what we see is that because of the dynamic in the market, there is the potential that several OEMs might decide to shut down earlier in December than originally forecasted. and for that reason, specifically when you look at motion technologies, it will be on a year-over-year more of a challenging compare, even though they're growing on a yearly basis, but Q4 will be a little bit more challenging for them.

Got it. That's helpful. And just as my follow-up, since you mentioned motion technology as well, you know, the margins in that segment have really been a standout and have now sustained for 21% at the 21% for the last three quarters. I just wanted to understand how repeatable that productivity performance is and what kind of volume assumptions you're baking in to achieve your 2030 margin targets given some of the softness that we're seeing in the auto OEM space and also the price-cost environment.

Sure. You're spot on. 21% now is the new floor. And really the team is doing an exceptional job in really consolidating this 21%. and then to continue to improve. I would say that when you think about we are targeting our long term target by 2030, we're up 23% independently from the growth in the market. And the reason for that is because we still have several opportunities to improve in our cost, in our plan. Let me give you a couple of examples. If you think about our high performance plan, which we started in 2025, Now, we are making money this year, but Q3 was just double-digit profitability and much dilutive to the profitability of several of the plants in friction. And as we are ramping up, that margin will go up. There are plenty of opportunities still to improve productivity in the plant, the eliminative waste. and then the introduction of new formulation like the GeoPAD which will start production for a European OEM in Q1 2028 that will give us some room as it's going to be a much more cost-competitive product.

Got it. Thanks for that detail, Luca.

I'll get back in queue.

Thank you.

Our next question comes from Daniel DiCicco with BMO Capital Markets.

Hi, Dan. Good morning, everyone. One more on CCT. Obviously, impressive growth again. Another really strong orders quarter. I know you acquired aerospace contracts to help the supply base there, but maybe you could talk through some of the investments you're making to help sustain that growth and if there's any other areas that you're kind of focused on. Thanks.

Thank you, Dan. Spot on. We acquired aerospace contacts in July and actually spent a couple of days with Art and the team in Phoenix with them the other week. It's a good plant. We've got good machines for the high-mix, low-volume contacts. Ed and Melissa are doing a fantastic job, the management over there, and we are talking about to Ed and Melissa to invest in new machines also to address the high volume low mix contacts which completely different type of machine and therefore setting up a different shop floor close by. We also invested in new machines and this has been a process that started more than 12 months ago in Weinstadt, Germany. for our molding, for our machining, and also in Nogales, Mexico. And this is really to be able to supply this level of growth. And these analyses continue on a monthly basis, I would say.

Great, thank you. And just Well, the Casaria numbers are huge. And so I know you mentioned the F-35, but just what are some of the other platforms you're seeing there? And then what is really driving those wins for you all? Thanks.

Sure. Mike Stravos, Mike, the team in Casaria team are doing a fantastic job in execution. They're really well known in the market for doing a consistent good job and for delivering on time. This was a feedback that we got loud and clear also during the due diligence. And therefore, because of this consistent execution, they are able to win market share. And I know it might not sound particularly sexy. There are not cool words saying it, but it's just, you know, Great at execution and they're differentiating in executing. So they're able to win in the submarines, the Virginia and Columbia class, the fighters, the F-35, and they're also on the missile programs. So it's broad-based, I would say.

Great. Thank you so much.

Thank you, Dan.

Our next question comes from Joe Giordano with TD Cowan.

Hey, good morning, everyone. Good morning. Luca, I felt for a long time that Davide did not have enough work to do, so I'm glad to see him doing this now. I just am curious, like, MT playbook, how applicable is it to CCC, right? Like, MT, you think about friction in particular, very consolidated, big plants that serve a global Global Footprint, High Volume, CCT, smaller businesses, more plants, a lot of higher mix type stuff. So how does he take what he's done so well at MT and apply it to CCT?

Sure. Okay, so when you talk about the drive for continuous improvement, that can apply at whatever manufacturing setup that you have, right? And then those differences are absolutely true. You're absolutely true, Joe. and those tend to be used by people as excuse to justify numbers that they're not the way that should be. This is how I honestly say. But let me give you a specific example. In Shenzhen, Shenzhen is our plant in connectors in China. Sergio has taken over that plant and the business of our connector business in Asia Pacific and in China. That plant is performing in terms of on-time delivery at the 99%, exactly like MT, has got the best quality track record of all the plants in connectors, and is really using the playbook of friction and motion technologies, like for like. So it has been done, right? You really need to have the drive, the willingness, and the stamina to make it happen. And Davide has that.

Well, you mentioned earlier the industrial pump piece of SPX needs to be closer to customers. Talk about opening up in China and India and probably reducing exposure in Europe. That all makes sense, but it's My first thought is that could take a ton of time to do. Of all the qualities you have, patience maybe isn't one of the primary virtues I think about. So can you maybe talk to us about how realistic it is to do that quickly?

Sure, sure. So if you think about it, when I was in Shidu, A couple of months ago, the team was already setting up the assembly operation for the Brian Lube pumps in China. And let's not forget, Brian Lube is a very well-known brand. He's really well-known in the market. We do not need to sell or spend time in selling the brand. It's just that we need to localize it so that we can reduce the lead time so that we can make it more cost competitive. It doesn't make any sense this day to make these pumps in Germany and thinking that you're cost competitive and the lead time and price and sell it in China. Those times are gone. So setting the assembly in China is, I wouldn't say it's easy peasy, but it's not that complicated. The same thing is in the Middle East. So we are setting up the assemble of Brian Lube also in the Middle East. And the resizing in Europe is happening and it's happening right now. So now it's a good plant in Europe, don't get me wrong, but obviously the chemical market in Europe has been declining and therefore we need to just adjust the supply to the demand for that region. Did I answer your question, John?

You did, thank you.

Thank you, John.

Our next question comes from Andrew Obin with Bank of America.

Hi, Andrew. Hi, how are you? Yeah, as I said, more questions related to Davide because clearly he's underutilized. So maybe on MotionTech, you're sort of highlighting in terms of technology, right, and you have consistent history of market share gain. Maybe, you know, can you just talk to us if and when we're going to see the impact of electronic brakes and actual products with geopolymers, you know, sort of impacting organic growth in this business? I know you've made the investments. I know you're sort of at the cutting edge of technology. Is it a 27 event? Is it a 28 event? When do we start seeing that? Thank you.

Sure. Thank you, Andrew. And it's a very pertinent question because when you look historically, every single time there is a technological change, being the copper-free brake pad, being the electric vehicles, or the European, the Euro 7 regulation, and eventually will be the new brakes, this is where we leapfrog and when we gain a sizable amount of market share. because our R&D is how we differentiate. You have seen it, Andrew, in Italy when you went to Barge. It's a powerhouse. So that is going to play in our playground. It's really good for us. Now, I think that when you look at those breaks, you start seeing those breaks in China, and I would say you will start seeing more and more, but I will expect China to be probably the most, the region that will see them faster and with faster adoption. And when you look at the GeoPAD, we will start seeing the GeoPAD entering the market in Q1 of 2028, and after that, many of the new platforms that we will either try to conquer or that we will re-win will be based on a formulation that might be in the GeoPAD family.

Thank you. And maybe a follow-up question on Joe Giordano's question on sort of learnings from MotionTech. You know, it seems you guys firmly are a very unique facility. You're sort of doing cutting-edge stuff there. What's the opportunity to take manufacturing processes that you use internally? And look, as I said, Joe sort of talked about the fact that it's, you know, what the nature of the process is. But what's the nature? Can you take what you take internally and take it to, you know, maybe Caesarea, take it to your other businesses? Because, you know, what you're doing there is very unique in my understanding. You guys have been quite successful.

Yeah. Yeah, what you saw internally, Andrew, and that level of automation, I think that similar, you need to adapt it, it could be probably adapted to some of the controls and some of the connector business. So automation is definitely an area where we can improve in those two areas. Different, I would say, for Quesaria. Can we improve the automation in Caesarea? Sure, but that would be a little bit more tricky. But controls... Yeah, this is an example, sorry Luca, yeah. No, no, no, no, no, no. But connectors and controls, absolutely. And now with Davide being in charge of CCT, I think that it would be also easier to expand the responsibility and doublehead some more people in motion technologies too.

Thank you very much.

Thank you, Andrea.

Our next question comes from Robert Davies with Wolf Research.

Hi, Robert.

Morning. Thanks for taking my question. This was just if you could cover some price-cost dynamics across the different segments. Just be kind of curious where you're pushing through prices most aggressively, where kind of costs are rising most quickly. Just a bit more color by segment would be helpful. And then the other one was just around M&A and the comment you made earlier on the bolt-ons. I'd just be curious now, sort of post the SBI flow deal, where will you look across the portfolio? Is there any sort of regional gaps? Is it sort of product kind of holes you need to fill in the portfolio? Where would be your sort of primary place to look? Thank you.

Okay. Thanks, Robert. When you look at the price-cost, I think that the dynamic is consistent. It's not changed, and it's still very much the same. So what you have is a price-cost positive in flow technologies, so the team is acting very quickly, and we are ahead of the game here, and therefore that dynamic is positive. On CCT, it's even more positive, I would say, in terms of price and cost. And this is also the comment I made earlier. This is the segment where we got more pricing leverage. And this dynamic is happening. And that would be price-cost positive for the full year. Obviously, when you look at pricing, the dynamic is different in most technologies. This is where you have to give price and efficiency to the customer. Now, having said that, you know three four years ago we were able to work with our customers to ensure that the major commodities and energies get indexed in the contract so what you have is that if the commodities goes up copper tin steel or energy cost goes up you are getting some price or some compensation you only have a time lag on that one but don't forget you always need to give efficiency in this market having said that If you look at between those changes in the contract, the move of the commodities as well, the efficiency that we are delivering in the business, you see that the margin keeps on improving in motion technologies and was 70 basis points in the quarter. And we are really flooring at 21 today. Thank you. And then the M&A. Sorry, I was forgetting, Robert. Sorry. On the M&A front, I would say, yes, we are active on the M&A front. I mean, we are cultivating. Bartek, myself, and the business leader, and I mean, we are spending time cultivating. Now, the area, the sectors that we are spending time are really on CCT, on the connectors, particularly on aero and defense, and on the flow technologies. These are really the areas where we are spending time and cultivating. Now, we're also looking, but this probably is a little bit still early, on the SPX flow business unit. If you think about mixer, if you think about the nutrition and health, there might be areas where there are technology gaps or product gaps where we might need to add and make some acquisitions. but those acquisitions will not be today large. It will be just to cover a product gap also because we want to ensure that we consolidate the performance of SPX flow.

Once again, if you do have a question, you may press star one one on your touch tone phone at this time. Our next question comes from Vlad Bystryky with Citigroup.

Hi, Vlad.

Hey, guys. Morning. Thanks for getting me in here. I guess maybe just first question from me, Luca, just following up on the price-cost question that you just answered and sort of the different dynamics in motion tech in the friction business in particular. Have you seen any... Do you see changes or incremental pressure on commercial terms from the OEMs just given the competitive dynamics that are out there for them globally?

I would say it has always been tough and it gets tougher and tougher, I would say. So that's the dynamic of that business. And this is... and this is the game in the market. Having said that Vlad, this is helping in building super resilient team and team that are really driving continuous improvement with the hunger that you see in MT that now we're going to spread also in CCT.

Got it. That's helpful Luca. And then I guess

Just stepping back, if I think about the bigger picture here, obviously very strong organic growth on the revenue side this year, strong organic orders growth. But there's still obviously some macro cross currents out there in the broader economy. So can you just talk about how you're thinking about some of the puts and takes heading into next year and how that could influence or impact your ability to continue to grow organic top line sort of at an accelerated pace versus the longer term 5% plus target you have out there?

Sure. So thanks, Vlad. So I would say we need to talk about the market in all the different segments, right? If you look at motion technologies, listen, the automotive market is what it is. Can we change the market? No, we can't. What we can do is continue to outperform. So I can tell you that we think that we will be able to outperform the market for the next two, three years because we saw the award. We won the awards last year and this year, and therefore we know what is going to start and the one that we conquer. So that is, you should expect, you know, an outperformance in the in 27 and the next couple of years, similar to what you had here in 2026. The rail will be growing, and I think that trend is continuing. And when you look at KONI, you've got also the tailwind of defense. So that is a positive tailwind in that business when it comes to MT. Now, if you look at flow technologies, we look at flow technologies, oil and gas, chemical, general industrial, North America, Middle East. I mean, it's an interesting dynamic there. First of all, Our backlog at the end of the year will be higher than what it was last year. I'm not talking just about the SPX flow. I'm talking about our own backlog, right, in the legacy backlog. So that is a positive trend. If you think about the Middle East, it's a headwind because the backlog in the Middle East will be lower, but we already covered that and surpassed with, for example, Venezuela or other investment in North America. So that is good. And North America keeps on being an engine growth. Latin America is positive as well with investment on the mining. And Svano will end back the year with a higher backlog. So good trend there and definitely a good starting point. Higher backlog beginning with 2027. And then when you look at CCT, listen, I mean, The backlog for Q4 and 27 is 30% or more higher than it was last year at this point in time. And the one for 28 and above is even higher. So when you look at air and defense, there is a tailwind. This is really the first time, to be honest with you, this year where we've been able to have some tailwinds and we take it.

Understood. Thanks Luca.

Thanks Vlad.

Thank you. This does conclude today's teleconference. Please disconnect your lines at this time and have a wonderful day.