Flow, Motion & Power Technologies Takeaways

Recap from Baird’s 2023 Global Industrial Conference
Large blue industrial machine

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


Total Attendees

2,640+

Private Equity Attendees

860+

Management Attendees

825+

Public Company 1x1 Meetings

7,892

Private Company Presenters

37

Private Company 1x1 Meetings

919

 

Flow, Motion and Power Private Company Conference Presenters


 

Company logos for those in presenting at the Flow, Motion and Power Technologies event: Aspen Pumps, Celeros and Sundyne

 

Flow, Motion and Power Companies in Attendance at Public Company Conference


Company logos for those in attendance at the Flow, Motion and Power Technologies event

 

Interested in learning more about these trends? Connect with Baird's Flow, Motion & Power Technologies team.

Joe Packee
+1-414-298-7644
jpackee@rwbaird.com

Nick Sealy
+44-20-7667-8370
nsealy@rwbaird.com

Dale Rudow
+1-414-298-7495
drudow@rwbaird.com

Jen Roeper
+1-414-298-1921
jroeper@rwbaird.com

Jack Bazal
+1-414-298-7782
jbazal@rwbaird.com