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| Statement |
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| And also for the full year, they were up something between 7% and 8%, so it's been the strongest year ever when it comes, not just the orders of IP, their highest ever, but also the highest ever for the short cycle |
| On the components side of CCT, what we have is aero and defense has been a good tailwind |
| This is a very strong business with very competent management team |
| And so, we expect to see, as the year progresses, an improvement in our ability to deliver to our customers |
| Here are the highlights: 8% organic revenue growth; nearly 17% operating margin, up 100 basis points; 17% adjusted EPS growth to a new record level of earnings at $5.21; free cash flow of $430 million, up more than $250 million; and on the M&A front, we announced two strategic acquisitions in flow and connectors, while divesting two non-core businesses |
| So, that is positive -- is going to be positive for us in 2024, the rail |
| The projects growth was due to significant share gains driven by flawless execution |
| We had a very good backlog and good awards, and these across all the geography, China, Europe and North America |
| So, when we look at the rail market, I think we are expecting the rail market to be stronger for ITT next year |
| On profitability, our productivity and pricing actions drove a 100-basis-point improvement in margin expansion for the full year, bolstered by the performance in Industrial Process |
| I know that we are a small player on the connector, but we have a very good service with our customers |
| And when it comes, particularly in aero and defense, connectors is a great opportunity |
| And despite these orders that grew tremendously, 10% for IP, 20% for the projects in IP, our funnel today is still the highest ever |
| For the full year, MT delivered 16.2% operating margin, improving sequentially every quarter in 2023 and exiting Q4 with a run rate above 17% |
| The performance at Wolverine also significantly improved to a high-teens operating margin in December |
| With this performance and a more favorable price-cost dynamic, we remain confident in MT's ability to reach 18% during 2024 |
| We are proud of what our team accomplished all over the world, and we entered 2024 with a record backlog and our M&A pipeline remains rich and active |
| Friction continued to outperform, whilst IP won considerable share, including its largest single award ever |
| We executed in 2023 across all businesses with strong orders, strong revenue growth, 100 basis points of margin expansion and 17% EPS growth |
| So, as you can see, we are in a good position to execute and outperform again in 2024 |
| Finally, on cash, after a record year, where we increased free cash flow by $250 million compared to the prior year and more than doubled our free cash flow margin, we expect to grow our free cash flow again to more than $450 million |
| This revenue growth and operating margin expansion is expected to drive adjusted EPS growth of 9% at the midpoint |
| We recognized some of their exceptional achievements at the Annual ITT Awards in December |
| So, we're also in a good position here as we continue to gain market share |
| At the segment level, Motion Technologies margin should expand over 100 basis points and hit 18% at some point in 2024 |
| We are proud and grateful for the efforts of all ITTers, which drove the results we are announcing today |
| We are in a strong position to continue the progress we made last year |
| We expect that volume, productivity and pricing will drive margin expansion of 80 to 140 basis points, excluding the dilutive impact at Svanehøj |
| So, that is a great award that is going to feed us growth in the next three years |
| Higher volumes and pricing actions will continue to aid our growth in 2024 |
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| On industrial connectors, we expect that surplus in inventory will carry over into the first half, which will weigh on CCT's growth |
| Connectors declined in the high single-digit range, driven by continued destocking in Europe, in European distribution, despite a strong December |
| Beginning with Motion Technologies, we expect global auto production to be slightly down to prior year, in line with the latest IHS forecast due to weaker demand in Europe, particularly in the first half, and a flattish market in China |
| There are some lingering headwinds related to destocking and muted growth in some markets, mostly in Europe |
| Finally, we expect Industrial Process will be slightly below 21% due to year one dilutive impact of the Svanehøj acquisition |
| In the prepared remarks, you mentioned some supply chain constraints in the baseline pump business |
| So, to put some numbers on that, so industrial connectors orders in 2023 were down 6% |
| So, our IP margin will be down next year in Q1 and for the full year |
| We believe distribution destocking will most likely persist through the first half of 2024, as inventory levels remain elevated |
| We expect them to be down high-teens in 2024 for industrial connectors |
| It has been a difficult few years, given all the macro challenges put in front of us, and our teams have risen to the occasion time and time again |
| And so, those are coming from constraining the supply chain that are still there persisting, slowly improving, and a little bit on our operations where we have to work and invest |
| When we look at the CCT and you look at the two businesses, of course, we are facing some destocking on the connectors side that Emmanuel was talking about |
| I mean, you gave some commentary about orders in industrial connectors down high-teens in 2024 |
| So, I think this is the year one difficulties that we have to get over with, specifically with the backlog amortization |
| It sounded like there were still some kind of supply chain issues that you're seeing in that business |
| Overall connectors will be down -- will be roughly flat, a little down in 2024 in terms of orders |
| Now, aero has still not recovered, when we talk about OE, to the level of the pre-pandemic level, we are still probably 20% down when it comes to orders, but the aftermarket is higher than the pre-pandemic |
| And those are clearly impacting our ability to ship, as expected, but we're working through those issues |
| You said no income, you've got $0.20 of headwind from interest expense |
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