ENERPAC TOOL GROUP CORP Q2 FY2025 earnings call

• Organic sales grew 5% year-over-year. EBITDA margins were 23.2% but down due to mix. • Maintained full-year fiscal 2025 guidance. • IT&S business had 4% organic revenue growth, with product and services both up. • ECX program rolled out in EMEA, leveraging talent from the US. • HLT business strong, especially in Americas. • DTA integration progressing well, with cross-selling and presence at trade shows. • End-market insights: nuclear, refinery/petrochemical, defense, rail, wind, infrastructure have various trends. • SyncHoist used in Chile for bridge work. • New product rollouts ongoing, with focus on innovation lab and future launches. • ECX program systematizing sales processes for better sales funnel management.

Enerpac's revenue increased 5.1% in the second quarter of 2025 on a reported basis. Organically, adjusting for foreign exchange and the DTA acquisition, growth was 5%. The IT&S business had 4% organic year-over-year revenue growth, with product sales up 4% and services up 3%. The heavy-lifting technology business drove product growth. Cortland Biomedical in the other segment posted 33% growth. Geographically, the Americas had high single-digit growth due to share gains from ECX, HLT strength, and targeted growth strategy; EMEA had a low single-digit decline but outperformed macro pressures; APAC had solid performance with industrial/construction growth in some countries.

• Maintained full-year fiscal 2025 guidance. • Second-half of the year expected to have higher profitability due to volume leverage from increased revenue and productivity initiatives like PEP. • Confident in future reflecting global brand leadership, targeted growth strategy, innovation, and PEP execution.

• Macro uncertainty and the prospect that tariffs could bring higher inflation and lower growth, as noted in latest SEC filings.

Q: Can you provide more color regarding the mix shift toward HLT and where are you seeing strength from a geographic and end-market perspective and what are your expectations for the back-half of the year from a mix and gross margin perspective?

A: HLT had strength in US and Europe. Mix shift impacted gross margins. Second-half expected to have higher profitability due to volume leverage and productivity initiatives.

Q: How is the DTA integration going relative to your expectations? Any surprises so far either positively or anything more challenging than expected?

A: DTA integration is going well, strategic fit with Enerpac is strong, customer response and order activity are positive.

Q: On the geographic breakdown, in Q1 Americas was down mid-single-digits, now up high-single-digits in second quarter. Provide more detail on commercial excellence program and end-markets helping Americas forward?

A: Americas growth was broad-based, HLT strong, ECX (Enerpac Commercial Excellence) starting to take hold, systematizing sales processes.

Q: Thoughts on tariffs, whether they're coming from Mexico, Canada and how positioned?

A: Direct impact of tariffs on imports is relatively small, indirect impact from suppliers, and pricing actions taken to offset inflation.

Q: Update on new product rollouts pace?

A: Innovation program is robust, first-half focused on commercializing 2024 launches, second-half and 2026 to see more innovation launches.

Q: Progress on ECX implementation in Europe and comparison to Americas?

A: ECX rolled out in Europe, leveraged Americas experience, progress made, driving similar impact as in Americas.

Q: Update on direct business and e-commerce initiatives?

A: E-commerce up 43% in Q2 2025, 36% in first-half, rolled out in other markets with digital advertising driving traffic.

Q: How should we think about the cadence of revenue, margins and profitability from Q3 to Q4 embedded in FY ‘25 guidance?

A: Second-half has more revenue, volume leverage, and expected strongest margins in Q4.

Q: Incremental updates on the M&A pipeline and focused portfolio parts?

A: M&A pipeline is robust with active conversations, focused on high-quality, complementary businesses with strategic fit, DTA as example, healthy balance sheet to support M&A.