Flow, Motion & Power Technologies TakeawaysRecap from Baird’s 2023 Global Industrial Conference
Baird recently hosted its 53rd annual Global Industrial Conference in Chicago with record levels of attendance. The conference featured a high C-Suite mix and investors spanning from private equity to strategics.
Baird's Flow, Motion & Power Technologies team identified a number of takeaways from the conference as we head into a highly anticipated 2024.
Conviction remains strong around long-term secular themes
Despite near-term end-market volatility, long-term secular drivers remain very attractive. Playing the energy transition is top of mind for the sector – momentum and opportunity continue to build with public/private investment. Benefits from reshoring activity and regulatory investment are also beginning to materialize and will provide some long-term stability to the market.
Aftermarket and recurring revenue models in favor
Recurring demand and aftermarket exposure remain crucial to near-term performance amid an uncertain near-term economic backdrop, including variable conditions across end markets and a less favorable price/cost environment. An ability to harvest sales from an established installed base and capitalize on non-discretionary spend dynamics will continue to drive stability through capex cycles.
Pricing and margin discipline is in focus
Most companies expect modest price increases in 2024, and price/cost spreads remain positive though subdued from peak 2023 levels. As inflation eases, the ability to continue to strategically push pricing and maintain price/cost spread will be a key feature of differentiated businesses. The pervasive margin expansion of the last several years will face headwinds, especially in more cyclical markets – not all companies will be able to grow revenue and simultaneously expand margins.
Strategics focused on tactical M&A strategies
Balance sheets remain conducive to acquisitions, and strategics recognize their advantage versus private equity buyers in today’s rate and market environment (though the window won’t last forever). Adding scale within specialized or targeted areas (versus building more diversified platforms) remains the primary strategic focus for growth via M&A.
2023 Global Industrial Conference Highlights
Private Equity Attendees
Public Company 1x1 Meetings
Private Company Presenters
Private Company 1x1 Meetings
Flow, Motion and Power Private Company Conference Presenters
Flow, Motion and Power Companies in Attendance at Public Company Conference
Interested in learning more about these trends? Connect with Baird's Flow, Motion & Power Technologies team.
Baird is a leading advisor of global flow, motion and power technology companies.
Read about key themes discussed at Baird's 2023 Global Industrial Conference.