Helios Technologies, Inc. ($HLIO)

[Presentation] Good morning, and welcome, everyone. Thank you for joining us for the Helios Technologies 2026 Investor Day. My name is Tania Almond, Vice President of Investor Relations and Corporate Communications. We are very excited to have you here with us today. Our last event was in 2021. So this has been a long time coming. We've done a lot of planning for this event. We've got teams here with us from our operating companies for everyone who was able to join us in person with equipment on hand and customer applications. They're super excited to engage with you as well. I want to give you a couple of backgrounds of how the day will unfold. Obviously, we will be covering forward-looking statements, and we've got non-GAAP metrics as well that we've reconciled in the back with our supplemental materials. You can also review our risk statements in our 10-K filing that's on our website as well as the SEC's website. Just want to say a little bit about this beautiful venue that we're in today. So we put out a press release earlier this week about our new partnership and sponsorship of the Mote Science Education Aquarium. And this is really near and dear to our hearts, and we've got a lot of shared values between the 2 organizations. We're both learning organizations. They have a lab here. We've sponsored their technology hub. So they've got a lot of students that come through on an annual basis, hundreds of thousands of people come through this facility. And so we think we're really excited with the research they're doing around environmental sustainability. Here, there's so many animals and obviously, the health of the ocean on the Gulf side of Florida. So we're very excited to partner with them, and we've got a beautiful room here to be in as well. You're going to hear -- I just want you to let you know that our entire leadership team is here with us today. You'll hear directly from the top row of this slide in terms of prepared presentations. But the whole team is here, so please do engage with them during the networking lunch as well. I know many of you joined us for the reception last night, and you got to meet the team there, too. I'm very proud to announce as well the majority of our Board is also with us today. We've had Board meetings here locally in Sarasota the last couple of days, and we worked it out timing-wise so that our Investor Day would be corresponding with the Board meetings. And so we're very pleased to have the Board here to engage with you. We've had, from a corporate governance standpoint, some really strong refreshment in the Board over the last 5 years. Over 70% of the Board has been refreshed. And last year, we named a new Chair in Laura Dempsey Brown. And so she's here as well. Ian Walsh is our newest member, and he joined within the last 12 months. So please do connect with our Board while they're here, too. From an agenda standpoint, I will be handing it over shortly to our President and Chief Executive Officer, Sean Bagan. And he's really going to talk about how we are igniting the momentum and what is our The CORE 2030 Strategy. He will then shift to the Electronics segment, and we'll have Billy Aldridge, our President of Electronics, come up and talk about how we are powering connected solutions. Then we'll shift over to the Hydraulics segment and Rick Martich, our President of Hydraulics with Motion Control Technologies will come up and talk about precision at the core. And this is really where the founding company, Sun Hydraulics sits as well as some of the sister operating companies that supports that business. Then Matteo Arduini, our President of Hydraulics on the fluid conveyance technology side will come up and talk about the connection platform. We'll actually have a little break right after Matteo's speaks. And then after we come back from break, Jeremy Evans, our Executive Vice President and Chief Financial Officer, will really talk about the financial path to 2030 targets and how everything you heard in the morning rolls up financially. Sean will close it out and talk about where Momentum meets opportunity and why we think you should invest in Helios Technologies. Then the whole team will be on the stage, and we'll have a group panel Q&A session. So please collect your questions as we go through the presentations. We also have the capability to take questions over the webcast. So we'll mix it up between the room and the questions coming in from the webcast. We will end at 12 noon in terms of the webcast portion of the event. And then everyone that's here will have the opportunity for the networking lunch. And those who have signed up for the facility plant tour will meet at 1:30 right out front at the circle drive. I know some of you may be driving yourself. We gave the instructions with the address, but we'll take the shuttle bus over and have the plant tour from 2 to 3. And from there, we'll -- the shuttle will take you on to the airport. So just to give a little snapshot of who Helios Technologies is today. We reported 2025 results recently at $839 million. And we completed a divestiture last year, which if you pro forma for that, it's really $792 million. And the rest of the pie charts on this slide, we have adjusted for the pro forma view, so you can really see from a go-forward perspective, how the mix shakes out. So electronics is almost 40% of the total revenues today. From a channel perspective, OEMs about 57% with distributors and integrators at the balance. And you see we're very diversified from an end market perspective. And you're also going to hear from the teams about not only the core end markets today, but a lot of new opportunities that we see with new and adjacent markets. And before Sean comes up, I just want to give a little background about how we got here today. So if we rewind the tape back to 2022. We had really benefited because of our diversified mix with a lot of consumer-facing applications in health and wellness and recreation. When we went through the pandemic and saw a lot of folks weren't traveling and investing in their backyard and buying hot tubs and side-by-sides and boats, we really benefited from that cycle. But then as we got into '22, that cycle started to come down, and we were seeing year-over-year organic sales declines, margin compression started to happen. Sean joined the business in August of '23, and that was definitely a spark for the business because Sean really brought with him some deep understanding, joining his former firm and was there for 23 years. He had joined them when they were about $1 billion in revenue, and they grew to nearly $10 billion. And so he's seen kind of that trajectory before helping an organization scale. And he came in and really started to help us put in more discipline around financial forecasting and looking at metrics in a deeper way, bringing in system upgrades to really have the teams have a stronger discipline around our business system. He was here for about a year, and we had an unexpected CEO transition. The Board responded very quickly, named Sean as the Interim CEO as well as CFO. And with that's really when we started this, we call it 1.0 deep strategic planning process. So Sean brought a much deeper kind of rhythm for the businesses to really dig deep. And I think you'll see that if you compare our deck from 2021 at last Investor Day to this. I think you're going to see a lot deeper information that the teams have brought together from this planning process. Now we also had some interesting challenges locally. We had 3 hurricanes that came through the Sarasota area back to back to back. And it's counterintuitive, but this was actually a spark for our organization because our people not only had to come together to brace for those storms, but after the storm went through, it was amazing. The last one was a Category 3 Hurricane Milton. And thankfully, our facilities did not sustain much damage, but our people and their families and their homes, in some cases, it was extremely critical with some of the damages that they had. Our operating companies from around the country instantly started packing ups emergency supplies, water, food, cleaning supplies, got it on trucks had it shipped here. So we had power outages for over a week in many areas, and the gas stations were not open and the grocery stores were not open. And it was so amazing to have the company pulled together in that way, and we had these care packages to give to our employees to take home to their families when they came back to work. It was extremely heartfelt, and it really pulled the organization together unintendedly. But I know as our General Counsel, Marc Greenberg likes to say, there's no crisis that there's always an opportunity in every crisis. And I think we, as an organization, have gotten very good at finding the opportunities. So Sean was appointed as President and CEO on the beginning of January 2025. And you've really seen some of the results of all of this work the teams have done with the deep strategic planning process, the results we've reported at the end of '25, we returned to growth after 12 quarters of consecutive declines. And so with that, I'd love to turn it over to our President and Chief Executive Officer, Sean Bagan.

Well, good morning, and welcome. It is delightful to see so many of you that joined us here today in beautiful Sarasota, Florida, and we appreciate so many joining the webcast as well. So today is a defining day for Helios Technologies. It's a story of progress of momentum, ignited and discipline restored and ambition clarified. More importantly, today, we're going to talk about the next chapter of growth for Helios Technologies with our CORE 2030 Strategy. The theme, powering progress at the heart of motion and control really captures the essence of Helios. Essential technologies, trusted brands and a team that makes the world operate more efficiently, more safely and reliably. And my promise today is that you will leave with clarity about the future of Helios Technologies and the confidence and conviction of our plans. Tania did a nice job to kind of highlight some of the developments since I've joined the company, which has been an interesting experience since the middle of 2023. And when I was appointed as the interim CEO, one of the first things we did was institute that strategic 1.0 strategic planning process that Tania alluded to. But for me, we really needed to step back and define who we wanted to be. And this tree illustrates it's well with our stable of really strong brands as the roots and harnessing all the unique cultures and the greatness in those to define our purpose and our shared values and what was important to us for our employees to emulate. And you can see the acronym of Helios, and we're going to bring this to life a little bit later today in a video. But at the end of the day, it's our people and our products and our culture that is the foundation of this company. So the takeaway here is we didn't have a culture to fix. We have a very strong culture. We just needed to instill belief because belief is what fuels great companies. So today, I'd like to say Helios is a differentiated industrial technology company with a unique blend of heritage and a very modern growth mindset built over 5 decades of experience. We celebrated Sun Hydraulics' 55th anniversary last year. And we've built a robust set of competitive advantages and carved out market-leading positions in those markets we participate. With a backdrop that's underpinned by some very strong secular trends that you will hear about today and some constructive existing market conditions that are starting to show signs of recovery after many depressed years in a row, we feel very good about our growth prospects. Tania talks about our refined operating model. And today, we're defining with clarity our strategy of where we're headed and the commitments we're making with our proven go-to-market structure that was instilled in 2025, supported by a very strong product launch cycle that will be a theme throughout today as well. We made tremendous progress on our balance sheet in terms of our adjusted net leverage ratio in addition to paying down a significant amount of debt over the last couple of years, which opens the aperture for many different ways to grow and gives us much more flexibility that you'll hear Jeremy talk about further. But most importantly, we now have a purposeful organization with structures and values aligned across the organization. So this, as I will tell you today, is not a collaboration and a collection of businesses. It's a deliberate system designed to grow. So let's look at those businesses. What's depicted here is the corporate headquarters of each of the businesses that make up Helios Technologies. As you can see, it's a very global footprint. When you look at the callouts at the bottom, the representation of our employee base aligns very closely to our geographic sales, meaning we truly are in the region for the region. Our global footprint spans 2,300 employees. And the takeaway here is that our global presence provides us more scale. It provides us proximity to our customers, enables our speed to market and those deep customer connections that are so important. Many of these portfolio companies are older than Sun Hydraulics, as you can see, 75 years, 80 years and even 87 years. So harnessing that collective strategy of our existing businesses along with those cultures was what came together in that shared value tree that, again, you will hear more about later. So Helios Technologies goes to market, as you know, through 2 segments, our Hydraulics segment and our Electronics segment. Similar to the distribution of our employees to the geographies, you can see the same is emulated within the segments. You'll note that the employees add up to 99%. The 1% is that Helios Technologies office that is the corporate office, mainly support type functions as well. When you look at our flagship brands, Sun Hydraulics being the founding company, faster on the hydraulics side and then moving to the electronics side with Enovation Controls and Balboa. And in addition, there's 8 other brands that we will talk about throughout the day with many leading products that have driven the longevity of this organization and the success between manifolds and cartridge valves, MultiFaster, couplings, quick disconnects on the hydraulic side. On the electronics side, we service many different electronic components led by what you see in the display, but behind that, the power distribution modules, the controllers, the wire harnesses. And it's humbling to see the names of those customers that are very recognizable brands that we serve on a daily basis and are proud to partner with them. From an end market perspective, Tania showed the total company, and this, again, highlights one of our competitive advantages of being very diverse. We're never overly reliant on any one end market or any one single customer. And we'll continue to pursue that diversification as we step through towards our 2030 plan. So Helios Technologies has transformed significantly. As we've established, it was founded in 1970 by Bob Koski and John Allen and the garage of the Koski family. And in 1997, did an initial public offering. Up until 2016, it was Sun Hydraulics, paying homage to that name, the company was renamed Helios Technologies, the Greek God of the Sun and Inspire growth. And at that time, the business had been pretty stagnant, $200 million roughly in sales for 6 consecutive years, and the decision was made to grow through diversification. Sun had a beautiful financial statements with very strong margins, approaching and in some years above 30% EBITDA margins. No debt, $100 million of cash in the bank. So it made sense to start deploying and diversifying. And that first acquisition was Enovation Controls in December of 2016. And of those first 4, 3 of them were defined as transformational, large acquisitions, including Faster and Balboa. And then up until 2023, other flywheel and smaller tuck-in acquisitions were deployed through $1.3 billion of capital and cash and debt to truly transform the company and then come 2025, that's when a more marked shift occurred and a specific look at the overall portfolio and not just a transformation, but a realignment. Our first divestiture happened of Custom Fluidpower. That was an earlier acquisition and an outstanding business, just not core to what Helios technology does. As a reminder, Custom Fluidpower is our distribution partner in Australia now. So they will distribute our Sun Hydraulic valves, and we have maintained that relationship, but they're part of a larger umbrella of the Questas Group. And when we own Custom Fluidpower, 10% of their sales were Sun Hydraulic valves and manifolds. The other 90% was noncore, things that we don't do. And so effectively, we're going after that Australian market, just like we do with the rest of the world with Sun Hydraulics through independent distribution. And this now sets the foundation, a very strong foundation for our CORE 2030. When I was appointed permanent CEO, I made one commitment, and that was our momentum was going to be engineered. And that was going to be engineered through an aggressive go-to-market strategy. And the playbook we followed was very structured and disciplined. We started with the strategy. That led to the structure of the company, which then led to the people. We embarked on that 1.0 strategy when I was interim CEO. And then last year, in the middle part of the year, we did 2.0. And the culmination of that led to us launching that internally to our organization in the fourth quarter last year. And now we're here with our Investor Day to talk with all of you about the future of the business. But as I step back and talk about strategy, the things we first put into motion was our share repurchase program. The company had never done that. Historically, there were some special dividends paid with all that cash that was built up, but it was a signal that we're thinking about capital allocation and shareholder returns in a more sophisticated manner. Obviously, we already talked about the 2.0 strategic planning and the CFP divestiture as well. And certainly finalizing to crystallize our CORE 2030 Strategy. When I moved to the structure, immediately in January, we moved away from the regional structure of how we were organized back to the brands. And you'll hear from the presidents today and how our plans have come together from the bottom up, and they now have global responsibility. The other structural move was to take our engineering organization and embed them deep into those businesses. You heard about HCEE, the Helios Center of Engineering Excellence and i3PD that are now embedded into those organizations, driving discipline and accountability and better hit rates with our new product development. And finally, from a leadership perspective, Billy Aldridge was appointed President of our Electronics segment, a long-term leader and a voice at the executive level that was much needed. The executive level was administrative, engineering, financial driven. We needed that voice, that go-to-market voice, and I'm positive you will catch that energy when Billy is up here that has helped ignite our momentum across all of Helios. And we have very strong long-term leaders of our Hydraulics segment between Matteo Arduini in Italy at our fastener business and Rick Martich here in Sarasota for our Sun Hydraulics business and beyond. So very tenured long-term leaders at Polaris with great experience and refined discipline on how we're going to move those businesses into the great growth that we've started to see and sustain. And then finally, Tania talked about the Board refresh. We're very proud to have our first woman Chair, Laura Dempsey Brown, is with us today, along with other members of our Board of Directors and an outside Independent Director, Ian Walsh, also joined, who's also with us today. And thank you to the entire Board for joining us to support today. So I want to move because this is important. Our Helios business system is really the engine that is driving our operations. Tania talked about the discipline and the rigor and the data we've brought to it. But I want to point your eye to the dark blue circle. And if you go to 11:00, you see that 5-year planning. That's that strategic planning we've embarked upon twice now. That's the start. What that leads into is goal deployment process. I'm sure many of you are familiar with goal deployment on the right side. For me, in my experience, it's the single best way to bring strategic execution to life. It's grounded in lean principles, Hoshin X-matrix tools. It's about driving breakthrough objectives that are needed to deliver that 5-year plan and ensuring they're resourced effectively and action plans built down to that point of impact with those goals cascaded. We've deployed that this year on 2 key projects, and you'll hear about it throughout the day. One, we call Project Polar. That's our entry in hydraulics into the data center market. And the other is Project Orion, and that's the turnaround of our Balboa business that I will remind everyone was the highest margin business at the peak during COVID that was unsustainable when everybody was buying outdoor equipment and hot tubs, the similar dynamic that happened to our Electronics segment, but we know the power of that business, and we are focused on growing it significantly to get it back to those strong margin profile. If you keep walking your way through the dark blue circle, that leads to our annual operating plan and our budget. And then we have a very disciplined process throughout the year, quarterly business reviews that are deep dive into every part of the operation, monthly business reviews that help us inform a quarterly look. And also monthly go-to-market that is very important. And I want to highlight that every salesperson that's a hunter that's driving revenue that we've added and indexed more resources to has a report out to the presidents and myself every month to really drive that accountability, and I'm pleased to share some of the progress here later on those initiatives. Along the outside really highlights that data-driven mindset to help us make better decisions, drives deeper understanding of the business, drives that accountability, higher transparency that ultimately results in improved execution, and you've seen that from us on a quarterly basis in achieving our guidance. But it is truly from the bottoms-up planning and from a tops down and finding where those drivers of the business are. So the takeaway is this. Discipline is being made visible, and it's how we take this business and scale it. So I do want to reflect on 2025 quickly. Just to highlight, as part of that strategic planning process of 1.0, we identified these 6 key initiatives that were going to be the needle movers for 2025. And we talked about these throughout the year, and we provided progress updates at our earnings calls as well, and it started with our go-to-market structure. As we entered 2025, we had 10 consecutive quarters of declining sales. We had a top line problem, and that's why our go-to-market was so important in order to be able to drive organic growth. But you can't just expect to drive organic growth doing the same things. And so we truly overhauled our systems that I will talk about next. But also key to that is having the right products to sell and having better hit rates, and that was partially why we moved those engineering resources deeply into the businesses, and we'll show the proof points of that as well. In order to get our P&L moving in the right direction, the #1 opportunity is volume, driving more volume. But in the same respect, being much more disciplined with our investments, having that ROIC mindset, having that ROI mindset on every investment we're making, CapEx and having that disciplined cost mindset, really trying to drive our sales faster than our SEA costs. That will afford the opportunity as we step through the year to take our debt down, to take our leverage ratio down and start thinking about capital allocation on a more sophisticated basis, like with our shareholder -- returning capital to shareholders with our share repurchase program. But all of that doesn't matter. I'm a firm believer, Peter Drucker, culture eats strategy for breakfast every day. And our people are our most important asset, and that's why we put a ton of time and resource into our talent development. And I'll talk about that as well as we have a number of measurable improvements to share. So first, go-to-market. I'm pleased to say we generated $60 million of new business wins in 2025. Some very recognizable customers that we're proud to serve. Some of them existing customers going deeper with them, selling more of our great product portfolio, many new customers on there as well. And this $60 million is the projected annual run rate when that starts. Many of these projects have already started. Many will be long-term recurring revenue. Once you're spec-ed in, you continue to enhance that. And this is core to our strategy of go-to-market. When we entered the year, we knew we had the top line problem. So we redefined our processes our systems, even our people. We self-funded and significantly increased the amount of front-end folks. And instead of taking the shotgun approach of being everything for everybody, we have a very targeted and disciplined markets and customers we're going after with the opportunity to sell a lot more of what we have, many of those products for you here in the room that you will see afterwards, whether that's outside or on the tables. So the takeaway here, momentum is real, and we've carried that. The exciting part is we've carried that into 2026 with some very sizable opportunities. And let's look at our products, another proof point of our focus on bringing impactful products to market in a more consistent and faster pace. Throughout all of 2025, we launched 11 very meaningful products. All of these are incremental revenue streams. They are things that are not cannibalizing other products within our portfolio. They're helping us be more valuable and more sticky with those customers and bring more value. And this is an outcome of 300 very talented engineers. My background comes from a very cyclical environment. And if there was one lesson I learned from those 23 years at my prior company, it is invest in those downturns. So when those markets recover and come out, we're ready to capitalize, and we feel very good with our product portfolio to do just that. Let's talk about our people with some supporting employee statistics. The very telling number here is 30 boomerang employees. What's a boomerang employee? These are people that chose to leave our organization, but in 2025, chose to come back, a clear signal of our improved culture. Our average tenure is 9 years. That compares to an industry benchmark that ranges from 5 to 7. People enjoy working for Helios Technologies. But maybe the most impressive number is our employee Net Promoter Score, up 13 points. That's a massive 1-year increase. Every measure that we compared from our 2024 to our 2025 employee survey improved. The ones that were lowest measure of improvement is where we're targeting our focus. Employee recognition is at the top of the list and proud with our human resource leader that has been elevated to the ELT, Shaun Polasky, driving that initiative for us across all of our businesses. And again, it ties back to those shared values to ensure we're rewarding and calling out all of those unique qualities that we want our employees to embody and we celebrate that longevity. One of our longest tenured employees will celebrate his 50th anniversary this year that was with Sun Hydraulics from nearly the start, very exciting. So the photos that you see here are also a sign of putting effort, resource, money into developing our talent. So the top was our first cohort of a 6-month immersive Helios Leadership Academy, taking experienced leaders with high potential that will be the next generation of leaders at Helios. And putting them through an immersive training program and exposure to the businesses. And these folks are cross-functional across all the businesses, across all of the geographies, and that's the strength of this, building those relationships and that connectivity and showing that we can provide very meaningful opportunities for these folks and now working to continue to reward them with bigger roles as we play out our CORE 2030 strategy. And then the bottom was when we brought together our top 80 leaders for the company here in Sarasota to launch The CORE 2030 Strategy. All of them had to say in that strategy. When we talk about truly bottoms up, that's how that plan was built. And so we rallied the team around it, and we couldn't be more excited to share this with you today as well. So here's the results of those key initiatives. We talked about the $60 million of wins. Our confidence right now is instilled in our say-do ratio and our numbers. We exited last year in the third quarter, delivering 13% sales growth. In the fourth quarter, that increased to 17% sales growth. That would have been 29% if you strip out CFP from the prior year compare. Our guidance as we entered into 2026 at a minimum to be up 20%. So we're continuing to accelerate. And that is so key as we talked about in order to drive that organic growth engine and capitalize on all that investment from a new product development perspective, which is only going to accelerate in 2026 as well. That allows us to drive our gross margin. Despite only being up 6% organically, we drove 100 basis points of gross margin in our business and allowed us to grow our earnings per share 22% and that's our recipe, grow earnings faster than our sales. From a capital allocation perspective, we did pay down a lot of debt, $82 million more, $153 million over the 2-year time span of 2024 and 2025, exiting the year with a leverage ratio below 2x and a significant improvement year-over-year that positions us in a much different spot. In addition, we started to act upon our share repurchase program, thereby doubling the amount of capital returned to shareholders in the forms of dividends and share repurchases. And those shares were bought at an average share price of $55, so a very strong return, and we continue to see that as a good mechanism, particularly we are such a strong cash flow generating company. And if there are not outside investments, outside M&A opportunities, we have a very sophisticated way of looking at our intrinsic value in many different models and seeing that as another opportunity to drive shareholder returns. And then as I said, talent is our #1 asset, and we will continue to develop our team over time. So takeaway here, Helios just isn't recovering. We are performing, and the system works. The culture is aligned and the momentum is real. So now you've heard about the past. Let's move to the heart of today, The CORE 2030 Strategy. As Juliet said, in William Shakespeare's, Romeo and Juliet, What's in a name? Powering progress at the heart of Motion and Controls really brings that to life. Motion, obviously, for hydraulics, control, obviously, for electronics. But when we bring this together, that's the power. The CORE 2030 Strategy is our ambition. It's our path, and it's what will be demanded of us. And our goal is bold and very simple. We are going to double the size of our sales in 5 years by 2030. So let's move on to how that's going to happen. You heard about our shared values. That's the foundation of our culture. It's our people and our products as well. And that's why these guiding principles here are very clear. It goes back to our founder, Bob Koski. His unique approach to organizational structure, horizontal management, everybody has a voice. We will be people-powered but team-driven. When I talk about safety and ethics always, what do I mean? Safety is our promise, ethics is our compass, and there will be no compromise. Finally, delighting our customers. We're in business because of our customers. We go beyond meeting their expectations. We anticipate and we solve their most complex problems. These are our North Stars. Moving to our vision, mission and strategy. I will tell you that Helios is absolutely a trusted technology solution company that keeps our company running. But that is truly what aligns with our vision, mission and strategy. When we set out to do this, if you count the words and the vision and the mission, I purposely with the executive team, contain this to 25 words. It's not as easy as you would think, but every one of those words is very meaningful. And it comes down to inferring premium technologies and trusted performance. Our strategy reveals how we will look in the future and those competitive advantages that we will capitalize upon and how we will get there and how they get brought to life is through our performance priorities. First, protecting and grow the business. We're going to commit to 5% organic growth over this 5-year time span. We can do this by outpacing the market, and we're entering this year with that momentum. At the top end of our guidance, we've guided to 9% sales growth. We also know we would have a gap of about $500 million to go pursue to get to that doubling of our sales. To put the $500 million in perspective, we've done that. That is the amount of revenue that was acquired from 2016 to 2023. We know we can do that. We know our balance sheet supports it, and Jeremy is going to show you the financial model that supports that as well. From a product and quality perspective, we're striving for superiority just as we have today. It's using voice of customer to drive our innovation. In addition, we want to set the benchmark for NPS for all of our products. By driving our operating leverage through our productivity, that's how we get the margin expansion. We'll leverage our centers of excellence, which are very important to be close to our customers and meet and anticipate their needs. We leverage safety, quality, delivery and cost as rate of change mindset, all of them tied to driving productivity and cost improvement across our businesses. And finally, committing to sustainable profitable sales growth. We expect to generate 100 basis points plus of EBITDA margins annually while having and maintaining our best-in-class cash flow engine. What that results in from a financial targets perspective is the outcome of doubling our sales to $1.6 billion by 2030 with adjusted EBITDA margins to exceed 25% and an operating income margin on an adjusted basis of 20%. This is our aspiration and it's grounded in our guiding principles and progress we've made to date. So that chart, I'd like to call the what. Now let's talk about the how, introduced in the Helios momentum model. There's 4 key tenets. We have customer-driven innovation. That's all about voice of customer, listening to our customer, ensuring it's informing all of our product development decisions and prioritization and embedding that deeply into our organization with a strong NPI process that's consistent and very ROI mindset, ensuring we're putting our investment dollars to those largest opportunities and attacking these new markets. And that's with our global and market expansion presence will help ensure we're meeting those customer needs from an on-time delivery perspective and also being closer to ensure our supply chains are localized and truly in the region for the region, as you saw with the split of our employee base. As we've talked about, our operational Centers of Excellence will help drive our efficiencies on a rate of change mindset, a continuous improvement, lean type processes. And many of you that are here with us will have the opportunity to see that come to life today as we tour Sun Hydraulics facility. And finally, those items will help provide the means for those strategic acquisitions that will help us accelerate that growth profile for Helios Technologies. When we bring together all of our companies, that is where the multiplier effect happens. Now you will see on the right side, a series of steps that effectively is our strategic execution of how we will execute against our momentum model, how we will prioritize our -- and how we will allocate our capital, how we'll innovate, how we'll serve our customers, how we'll develop our team and most importantly, how we will win. We'll now hear from our presidents. And so before that, we're going to start with our Electronics segment and share a video with you before Billy Aldridge comes up to show you how our 2 years of strategic planning is coming to life in our segments. [Presentation]

Okay. I have a quick question. How important are electronics in your daily life? If you think about it, we probably touched 10 to 15 electronics before we got on site today from your alarm clock to your phone to the buttons and an elevator to your cars coming over here. The point is electronics are critical in today's world. Electronics bridge the gap between human and the machine. They enable understanding, the control and intelligence. This connection is critical. This is why Helios Technologies is in electronics. We bring in rugged hardware, intelligent software and real-world application to our most rugged environments. So with that, let's get started. So our Electronics segments bring together a powerful portfolio of brands, products and end markets. We connect people to the machine. And as you see upfront, a lot of rugged environments, we connect that in that world. Enovation Controls, Balboa Water Group, i3 product development, deliver intelligence across all the markets that we serve. Our customers demand our reliability, and that's what we bring to the market. What differentiates our Electronics segment is a combination of scale, domain expertise, application expertise and our in-house product development. We're not just supplying components. We are supplying solutions and systems for our customers. Our segment has definitely driven in the North America market, as you can see here, about 80%. We recognize that we are underserved in the EMEA and APAC regions. You're going to see some slides here later on, how we're going to go attack and grow in those spaces. So our segment evolution, it's been a journey over the last 5 years. But I want to step back to the CORE when the -- when Sun actually purchased Enovation Controls at the end of 2016 is actually when you start talking about electrohydraulics coming together, that was really critical for that moment in time, and it was great for the Board and the leadership at the time like, hey, there's this movement that's happening, right? And so putting hydraulics, electronics together, we've actually developed -- codeveloped some cool products that we've launched over the last several years. You'll see some of those upfront. We'll talk a little bit later about those. And then we get into 2020 and the acquisition of Balboa Water Group when we were on our M&A journey at the end of '20, really critical. I mean, it's actually -- I would say, it entered us into a new market. Don't think about it as from a Balboa, but entered in a new market in health and wellness. Then we all know what happened. We had this crazy explosion with COVID, and we talked -- Tania talked about everybody investing in their backyards in the recreational market. So market shot up. And then really at the time when we -- when the market started pulling back, what we did is we didn't just set and wait the market. We did a lot of things after 2021. We started investing in our people and our products actually from innovation control, we built electronics in Tulsa. We actually started taking some of those production lines and moving them down to Tijuana in a low-cost area. We're actually capitalizing on the low-cost region. They have a state-of-the-art facility. Also during the downturn and the pullback, Sean and the team here, let us invest. Our customers were demanding connected technology, right? So that's part of bringing i3 in the portfolio. Connected technology. They were forefront of AI technology, bringing it into our product because our customers started demanding some of those things. So instead of us doing ground-up development work, it was good to add the investment in with i3 and doing some of the things in our core markets that we weren't ready to do. So it's a really good addition. And then what we call the kind of this recovery phase. As you end of '25, the market started to come back, onboarded new customers, our go-to-market strategy that Sean mentioned, really starting to come together. In the electronics group, we're passionate about go-to-market. It's like in our DNA. If you go back and look at the history of Innovation Controls, we love this interaction with our customers. And so Sean really instilling that in across all the segments was awesome to watch, and we're capitalizing on those today. So our core markets for electronics. At the end of the day, 70% of our end markets are consumer marketplace, driven by Balboa Water Group. They are the market leader in health and wellness when it comes to spa and hot dove walking bath. Great to be a market leader. And I think most of you guys saw a press release, even though you're the market leader, there's always room to grow. And we did a press release with Jacuzzi, adding more content there. So we're still growing even though we're the market leader. Switching over to innovation, the rest of the 4 categories here, the core markets, recreation for innovation controls when we talk about the boats, the side-by-side, on-road motorcycle, really core to innovation, and that's, I would say, the sexy part. And we have a lot of -- we've had a lot of growth over the years. A lot of people see innovation is like that's all you do. We actually play in other markets, right, in industrial and mobile and some of our other markets that we're in. We know that we're underserved in those markets, and we have a strategy in place to go grow in industrial and mobile and other. The other markets include the aerospace, food service, military, they actually demand some of the same product that we're launching across all the other markets. So it's really cool to watch what's happening in our core markets. Current products and portfolio, you guys know us, you see the displays and controllers out front. We have a connected technology aftermarket, we have blowers. You'll see those in the spa outside up front. I encourage everyone to spend some time with the team out here. And so when we talk about looking at an application and we don't just want to go sell one piece. We want to try to solve our customers' problem. When you go out and you look at an application, Oh, of course, you can just sell a display, but customers are demanding more than that. And that's where I believe our Electronics segment lives. Customers come to us and go, yes, yes, we do a display, but we want to help us dream what could be? And I think as you see upfront, you're going to see some of that like the energy that we have with some of our customer base. And it's really cool to watch it as we start -- I'll get a little bit later in our new product development, which is really building on those foundations. Once again, -- we don't just look at selling components. We look at selling solutions to our end customers. So talking about our core markets, very wide range of core markets. Our channel to market is mainly to OEM. We do have a distribution piece that's about 22%, 23% of our market. But mainly, our target is going directly to the OEM. It's a little bit different than the hydraulics segment on the Sun market, but we go really mainly direct to OEMs. What I would say on this slide is, as you can see, there is a lot of runway in our core market. There's places here that we are underserved, and we have plans in place, taking current product, new product development, really honing in on our application expertise going after and growing in these core markets. There is a ton of market share for Helios to gain in our core markets. We are going to play in these, and we're going to grow in these. Actually, I'm a little bit jealous to be honest, when I see how much we're 38% of the Helios revenue, and I'm a competitive guy. And I want to go out -- I want to be bigger than the hydraulic side. And that's what my team looks at. We want to go be as big as those guys. And if you look at our core markets, guys, we can get there. And that's what has us so optimistic about where we can go with our product and our new products, I'll show you in a minute. The other exciting part is our new adjacent markets. If you look about where our products could fit in these adjacent markets, whether it be excavation or in the pool side, pool side, once again, we do really good electronics. We may not want to go pool into all the pool stuff, but what we do, what we can offer to that market segment, is electronic because that's our core, electronics and controls. Looking over in some of the other aerial work platforms, we're actually playing in some of those. I would say more on the fringe of some of those markets, but how do we go out and grow into some of these large, large some markets that we can go and win. We know we can go win in those markets. How are we going to get there? How are we going to win? So it's interesting at the dinner last night and somebody come up to me and said, you guys still swarm customers. And swarming in the past for us, we would take a ton of engineers and commercial guys and we see a big customer out in the market. We just would go and this all energy and effort on that one customer, developing that one product for that customer, and it's a lot of work when you do this. And so the leadership team over the last, I would say, 24, 36 months, we had to step back and challenge ourselves. Absolutely, we want to go swarm the customer. But from a product standpoint, it was killing us. We had to step back, put more time upfront so we can develop a platform of products so I can go attack all of the core markets and adjacent markets, which is really key for us. And some of the things that you'll see upfront is us actually making that transition. So what we want to do is like Sun and fashion, we want to make it once and sell it lots. That is really key as we want to go out and grow in all of our different markets. So following up on The CORE 2030 Strategy that Sean laid out, what does it mean to the Electronics segment? We want to protect and grow our core markets. There's a lot of work when we say protect and grow. Customers are always looking different technology, different things that they want to go do with their product line. We want to go protect that business. We want to go grow in our core markets. As you can see, there's a lot of runway. Gaining wallet share, as Sean mentioned, the different things we're doing from controllers to harnessing, connected technology, AI, some of the things that we're working on with our customers, that's how we start gaining that wallet share. How are we going to go after -- capture new share with new customers? You saw the adjacent markets. They're large. We want to go out and go capture some of those new opportunities. And in adjacent markets, whether we do it internally or whether there could be M&A, we'll talk about a little bit of M&A strategy for us here later on. The great thing is with Helios and the trajectory we're on, we're always going to continue to invest in R&D. It's critical, especially in electronics. Things are changing so fast with cars, your phones. Our end markets are chasing those markets. Definitely recreation. I would say years ago, the recreation market was probably behind 7 years behind auto. I would say now recreation business wants to follow more like 2 years behind. So what we got to do as a segment, we got to be able to position ourselves to give those products to our end customers. Interesting though, on the construction ag piece, they were probably 10 years behind what automotive is doing. Sorry about that. They were probably 10 years behind on what the markets are doing. What's going in the wrong direction? I'll catch up. So yes, so now you're watching as we get this clock out of ConExpo. There are -- we saw this transition people coming in and like we recognize innovation or the Helios Electronics segment is delivering really cool technology, and we want to start bringing that up. They're getting closer to automotive, and it's happening real time in front of us. For us to capitalize on that, we have to deliver the product now. And so that's some of the things you'll see upfront. I didn't go backwards. Here we go. So yes, and then operational excellence, we'll talk about that in a minute. And then M&A, we'll also talk about M&A. It's critical because we can't do everything for everybody. So strategically, what do we got to do from a Helios standpoint to go out and fill some of those gaps. Okay. So the footprint for electronics. We have a really big footprint. Actually, I would say when we purchased Balboa, they have a really good facility in Tijuana, Mexico. And we -- at the time when we purchased them, the market was going crazy. We didn't do ourselves justice. We didn't capitalize immediately when we did that. We were too late in the curve. But I would say in '22, '23, we really accelerated moving more production lines out of Tijuana, leveraging the low-cost area. On top of that, though, it's not just about moving pieces around operation. Things have got to come together, definitely operations, but then you have supply chain. You've got to push on suppliers. I will tell you what's exciting to watch right now with Helios technology, suppliers want to be part of this. I've been with the CES and a couple of other shows, and you see this energy and our supply base is like we want to be part of this. You guys got something really special going. So what are we going to do to be part? And it's really helping us getting some of our costs down. There's a lot of different customers that are competitors that are coming after our market. So what are we going to do? We can't just step back and let others take market share. We want to go out and win. So that -- and then how we design product. It's changed over the years. So we got to make sure that we get our design right and capitalize on the footprint that we have in front of us. M&A criteria. We look at 4 key pillars here with product gaps and wallet share expansion, geographic regions and the new adjacent markets. But what are we going to focus on from the Electronics segment? Product and technology. Things are coming at us really fast. Where are the gaps that we have in our portfolio. So that -- as we look at M&A, those are the things that we will go look at. Wallet share as a customer comes to us like, Helios Electronics segment, what can you bring to us? We -- is it audio? Is it other things, things that they're asking us? And would it make sense for us to invest in different things to gain wallet share. Geographic expansion, once again, jealous of my hydraulic friends because they are way more global than our Electronics segment. And it does it make sense to look at M&A and to grow our global expansion. I would say, as Sean talked about our culture is really key. Going out and finding somebody that doesn't fit culture would be detrimental. So we want to make sure that it fits our culture. Do they generate cash flow like that we do? Is the synergy there? Can we work together and really grow our Electronics segment through M&A? So really cool slide, and it kind of depicts on when we talk about not just selling a component, going to a system sale. I remember starting this relationship back with -- not take [ Dover ] in Orlando 15 years ago, went to them and basically, it was like, I want to go sell you a display. And over the years, as we started working with a key customer like this, and so I talked about what you can dream, what can you dream of? How can we do things different? And over the years, we've -- I mean, our SKUs have grown with them. The relationship has grown. We started with a 7-inch display. On the boat you'll see up front, it's a 15-inch display. You may see some other displays out here in the lobby where maybe the direction that they're going. The point is, is we continue to expand wallet share in our customers and continue to push the envelope. I believe doing what we did in this [indiscernible] space, Helios Technology and Electronics segment really set that market up, driving -- definitely driving the cost up, but their end customers were demanding some of that technology from bigger display, connected technology, audio in the display, and that's what we're really good at. So switching over to the Balboa solution. Once again, they don't look at just selling an end product. They look at a whole solution, and they're really good at being a market leader, market is really demanding what they can offer. They -- if you'll see upfront in the scripts off of the spa, you'll see some of the things that they're offering. Being the market leader, sometimes you get to step back on your heels and like, "Oh, what am I doing? I'm just going to go this rest". We're actually launching more product in this year than we have in the last 10 years with Balboa Water Group to go out there and really capitalize our position in the market. And also pushing technology further forward. We talked about Purezone and as Sean talked about it. It's a really key market because if you watch and being new to the space here with Balboa, their customers were like, it is about time that you guys entered in the water care business. It's so good to watch the market leader get in water care and give a solution that really matters and that works. So building on the water care, what does it mean? So yes, it's a sensing device, but it's taking some of the shifting water care from a manual maintenance over to more an intelligence. It's built on a flexible platform. It makes us really, really sticky. But when you start sensing, that's only part of it. And you can imagine what we have planned next if you have all the data, how can you start potentially treating water and things like that because the customers are demanding that technology. So switching over to the data center market opportunity, and we have one of these devices out in the lobby, and I'll let the team talk to that. But what I want to highlight is how we got to that market. So when we talk about building platforms to go support all of our end markets, this product display that's on this -- on the product is actually -- you can actually see the product on spas. We have it on zero-turn mowers. We have it in skid steer application. We didn't just go build it one off for this. This is taking off-the-shelf product and putting it in different markets, which is really when you start getting these multiples for our product, we talked about building at once, selling at lots. That is where our passion, our growth is going to come from and going across all these different markets that we want to play in. So with that, I am going to turn it over to our hydraulic group with Rick Martich. [Presentation]

Trust -- that's a thread. I'm going to weave through my presentation for Sun Hydraulics and Motion Controls. And it was a characteristic that was fundamental to the founder of Sun Hydraulics, Bob Koski. You've heard that name a few times today. Bob was a great character in the hydraulics industry. And it's a name today when you go around the world, you'll still hear. And that's because of that fundamental trust that he instilled. And that fundamental of trust as weave through all of our presentations today. It's not just trust in our products, it's trust in our people. And when you go around the world, you hear that. You hear that across the businesses, whether it's innovation, Faster, Sun, Balboa, they trust our products, but they trust our people. And you heard it too in Sean's presentation, it's reflected in our shared value of honesty. I mean, really, that reflects the trust because people know that we're going to be genuine in who we are, that authentic leadership. And you're going to hear that, too, as I introduce the Hydraulics segment on behalf of Matteo Arduini and myself, a segment that at its core is comprised of 2 brands, Sun Hydraulics and cartridge valve technology and faster and quick release coupling technology. And the affiliated brands that we've acquired over the last few years that I'll talk about a little bit more on the next slide. Those 2 brands, you go around the world, you work with our customers, they are trusted in the applications. They bring deep technology, reliability, whether it's in coupling technology, whether it's in motion controls technology around cartridge valves and manifold integrated solutions. When you need to rely on a product that's critical for the application, you can rely on the brands of Sun, Faster and those other brands that are part of the Hydraulics segment. In 2018, Sun acquired Faster. That created the foundation for Hydraulics and the Hydraulics segment within Helios. In 2021, we started acquiring businesses. We went through a few years of acquisition. We acquired NEM Hydraulics, Daman Products, Schultes Precision Manufacturing as well as Taimi. Through those acquisitions, we were growing. There were some learning curves. And over the period of time from '23 to '24, then we took some time to integrate those businesses, needed to drive some operational improvements as we brought those businesses together and really sharpen our focus with this broader portfolio while still maintaining a focus on the core of Sun Hydraulics and Faster. In 2025, Sean alluded to the fact that we made a strategic decision in the Hydraulics portfolio to divest Custom Fluidpower, a fantastic business, a long-term distributor for us in the Australian market that we acquired. And then we realized really didn't fit our portfolio. So we divested it. That allowed us to invest into the core, into the businesses that will really drive our long-term growth in the Hydraulics segment. When you look at that focus on our CORE Strategy in terms of commercial go-to-market, in terms of our brands and leveraging the trust and the strength of those brands globally, you could see the benefit that brought in 2025, where we returned to growth in the Hydraulics segment. And that's in what is still a down hydraulics market. If you talk to competitors across the landscape, if you study the market and the indices, the hydraulics market has been down for a few years since the post-COVID peak and around 2022, early '23. And even in that down market, we were able to drive growth with that disciplined focus in 2025. And we have a tremendous amount of runway in front of us that we'll highlight in our slides. The hydraulics market and segment for us, there are 3 principal end markets that we play in. Mobile really heavy with Sun Hydraulics and also Faster has a strong presence in construction and mobile. agriculture, heavily for Faster, a little bit for Sun and then industrial as well. There are adjacent markets that we're going to talk to more in our slides that present an opportunity for growth across our businesses within the Hydraulics segment. Last year, the total segment was $541 million. If you take out Custom Fluidpower on a pro forma basis, it was $494 million. I want to talk about Motion Controls. And Motion Controls at the heart is Sun Hydraulics. And then we also have the affiliated brands of NEM Hydraulics, Daman Products and Schultes Precision Manufacturing. Our products fundamentally are driven by our cartridge valve technology that you see in the upper left of this slide, both hydromechanical -- traditional hydromechanical cartridge valves, but also electrohydraulic valves. We've continued to innovate and push the envelope on the electrohydraulic side into the sensing technology. I'm going to talk to that more on my very last slide for the portion of motion controls that I talked to. We're able to take those components and configure them into complete subsolutions through our manifold integrated package solutions that we develop. We manufacture our own manifolds. We can bring those cartridge valves and manifolds together into complete circuits. And the applications that you see shown on the slide are a great example of how our brand is trusted in critical load holding applications. If you have a load in the air, if safety and reliability are paramount, you want Sun Hydraulics. That's the reputation we established in the market over 50 years ago. We have defined that space. We're renowned for that globally, and we continue to advance that. And whether that load is a static load, could be cargo in a maritime application on a loading dock or whether it's a dynamic load, whether it's person in the air, you're going to see out on the displays out front, a scissor lift that takes people in the air. If you have people in the air, safety and the wellness of those people is paramount, you want Sun Hydraulics. That's where we excel. For Sun and motion controls, mobile and industrial are our 2 largest markets. We also play strong in marine and offshore. And while we're strong and have great brand recognition globally across those markets, we still have tremendous runway in front of us to grow in those markets. And all those markets are still projected to grow at low to mid-single digits as we look out. So we really are -- have a tremendous amount of opportunity to take share in markets that are still growing. We also see the defense in aerospace, while we have a little bit of market that we actually serve in that segment, there's a tremendous amount of opportunity to grow for us and really grow in an outsized way to the traditional markets we serve. So across all those markets, it's over $2.5 billion of obtainable market, and we believe that there's a lot more with our focused commercial strategy, we can go win within those specific markets. In the Defense and Aerospace segment, we have wins through our distribution channel, but it's still an underserved market for us. We have been allocating resources to go focus more heavily on those markets, dedicated sales resources, specific engineering projects driving around those resources supporting opportunities that can arise and also two, pursuing the certifications that help us penetrate further that market like ITAR certification and CMMC for cybersecurity. And that's going to help us drive growth in those markets, which both we can serve better, but then two, those markets are growing faster than our core. So we really see these as complementary growth opportunities to our core business where we continue to focus to drive organic growth. You heard through the threads of the presentation so far today about people and talent, reflected heavily in Sean's presentation, but also in Billy's. And that's core to our strategy. Bob Koski, when he founded Sun, it was all about people. It was about the relationships with the employees and the respect for the employees, but also the same relationships with our customers and suppliers, this deep trust and that is something we continue to focus on, and it's fundamental and also focused on the brand. The strength of that brand and the trust people have in that brand of Sun Hydraulics, we can leverage that to actually open doors for the other affiliated brands that we've acquired over the last few years. We're focused on gaining more wallet share in our core markets, also focused on expanding into markets that are underserved, geographic white spaces. Places where we sell today like Latin America and South America, India are several examples, but we still have limited penetration into those geographic markets that are largely underserved. And so we see tremendous growth opportunities. We have allocated specific resources focused on those markets to build up the teams to reach deeper into them. And then also adjacent markets. I touched on defense and aerospace. We are continuously investing in R&D and engineering. We have always been an engineering-driven company, and that will continue to be core to our growth going forward. And really, it's about expanding the technology that we can use to actually reach deeper into the obtainable markets. And I'll touch on that in the slide that follows. Operational excellence for us is about more than just the traditional focus on quality and lead time and on-time delivery. That is definitely part of the equation. But operational excellence for us is just as much about the people that support the customer, whether it's on the front end, application engineering, engineering that designs the solution or whether it's on the back end after the sale. And then sometimes that's the most critical because that's when an issue occurs or there's a deeper understanding of application that's needed after the product is in the field. If you pick up the phone, we will be there. And I'll highlight how we have resources around the world to support our customers after the sale. And M&A, I'm going to touch on that specifically in a slide that follows. So our focus is on asserting our brand and our strong position to grow in our core markets that we already serve, but it's also on driving accretive growth through technology and in time, M&A. There are 3 distinct work streams in our new product development or engineering processes. The first is what you consider a traditional new product development work stream. It starts with product proceeding technology, innovative ideas that then work their way into NPD or new product development projects. And those are brand-new platforms like cartridge valves that we release. Those projects take typically 3 years from inception to market release to revenue generation. The next work stream is new product ideas. Those are existing product platforms, cartridge valves that already exist, where a customer has an idea that, hey, can you change the flow rate a little bit, a different spring rate that allows it to adapt as I needed the customer for a specific application. And we do that regularly. We will customize that product for that specific application to help that customer win that business. And those projects typically take less than 6 months, sometimes less than even 3 months. But it's a pretty quick turn cycle in revenue for our business. And then the last work stream is what we call manifold integrated package solutions. That's taking a hydraulic circuit on an existing platform and optimizing it, reconfiguring it through circuit design with application engineering to help a customer optimize that application and also win new applications, and we're able to do that in very short cycles. We have special tools that help us accelerate that cycle. We have the deep application knowledge. And we can take a circuit design sometimes initially from a customer and convert it into an actual manifold integrated package solution in less than a couple of months, sometimes less than a couple of weeks, helping our customers win with speed. When you look at our product set, they have a long life cycle. Sun products are regularly in the market for 20-plus years. That graph highlights that. It shows that from 2000 to 2016 for all the products we launched, after 15 years, those products are still growing in the market on average. And when we look at 2016 to 2026, which isn't mature data yet because our products have a market adoption cycle that is slower, but that it continues as those graphs represent. And we look at the data from 2016 to 2026, it follows the same slope of curve that you see on that graph, which highlights that our products are the closest thing you could find a recurring revenue in an industrial setting. And it highlights too how much trust people place in our products and Sun and our people because once they design it in, they don't want to take it out. And so we have this long life cycle, both of product life that we can then continue to mine value from after the initial engineering investment, but we also have this long life cycle of customer relationship. And it shows how our engineering investment yields this steady and long return and curve. We have a global footprint and manufacturing in every region of the world and a strong manufacturing presence that puts us close to our customers. We have application engineers and sales personnel around the world. And so we can engage culturally in the language, in the time zone to provide high levels of service, both before and after the sale. We've driven key initiatives for Operational Excellence over the last few years in the region manufacturing, leveraging that global footprint. We've moved a lot more of our assembly into APAC over the last year, managing and mitigating the effect of tariffs. We've been driving operations integration to take out overhead cost in the Americas with our acquisitions. We've also been leveraging low-cost capabilities in India, both for manifold production, but also for engineering and data analytics talent. We have scaled a team there that's part of our Sun Hydraulics organization of engineers that supports our engineering team globally here in Sarasota, but also in Europe as well as in the broader Asia region, really leveraging a low-cost pool of incredible talent in India. And then we touched on the selling of custom fluid power and how that helped us optimize our portfolio. It raised our overall profitability for the Motion Controls business and allowed us to invest in the core to accelerate future growth. For M&A, we're looking at the dimensions that you see here, but our real focus is on product and technology gaps while we're always keeping an eye on the balance. And sensors and monitoring technology are really where we're focused, how we augment our technology portfolio in those particular technologies, but also then how that allows us to bring greater precision controls into the market. With that, -- we are continuing to win business. These are 3 examples of how we've won business in the market over the last year. Wind turbines, $2.5 million of OEM business we've won through and in Europe in a trusted application for pitch control and also braking and hydraulic turbines. $1.2 million [ win back ] of business on excavators here in the U.S. in a manifold integrated package, which really highlights to how we've rebuilt trust in the market, some of which was a little bit unsteady after some of our acquisitions caused some operational performance delivery issues. We've built back that confidence, won back business. And then lastly, mining equipment in Asia and China with a big OEM. We won $200,000 of business, which doesn't sound like a lot, but we do that regularly through our distribution channel over and over again and have this broad-based sticky portfolio of revenue. So a great example of how we continue to win. And excited to highlight how we're driving that innovation in our strategy, that focused commercial go-to-market approach with our next launch of product, which is a flow control cartridge valve, the QMEH, which brings sensing technology, digital control into a cartridge valve. It still operates in the high-pressure applications that Sun is known for up to 5,000 psi, where demand -- where reliability or Paramount are paramount. And it really allows us to bring the next generation of digital and configurable control and sensing into hydraulics, which really is what's going to drive our growth for the next 15 to 20 years. Like you saw in that previous curve, it will continue to ensure that we maintain our market-leading position in the industry. And so with that, I would like to now introduce Matteo Arduini, who's going to come up and talk about fluid conveyance.

So first of all, I'm Italian. So hopefully, my English is clear enough for you. Today, I'm going to take you into the Faster world. So what do we do at Faster? At Faster, we connect any implement or attachment to a main machine, which could be a tractor, and harvesting machine or an excavator, for example. How do we do that? We do that through multiple solutions that you can see here in this slide where I have summarized the main products family and the main application. We have, for example, the casting solution, which are both for agriculture and for construction and our hydraulic integrated interface that improve the operator experience by reducing the downtime and maximizing the utilization rate of the machine. This is a trend that we have seen growing significantly in the last few years in the market. Then we have our Faster flagship, the MultiFaster which is a multi-connection that combines multiple fluid and electrical lines into one action. The multifactor is mainly used in the agriculture, but thanks to the fact that we had -- we have recently added some new products in our catalog such as the New MultiFaster, the MultiSlide, the MultiQTC that I will share more about later on in the presentation. This is also growing in construction. I want to share with you the fact that the name MultiFaster became over the years a standard in the market. Our competitors, when they offer their multiconnection solution, they refer to their MultiFaster. This is obviously great for us. How do you say in U.S., imitation is a sincere form of flattery, right? There you go. So then we have basic couplings such as flat phase couplings, thanks to their reliability and quality can be used in any condition and in any environment. From a business perspective, we are mainly exposed in the agriculture, which represents for us indicatively 60% of our business, and we have a dominant position historically. Mobile and construction equipment market is our second market, which is higher in terms of addressable value, but that's mainly because of the higher number of the application that we have in this market. If we pick specific applications such as the compact truck loader, in this case, we have an even more dominant position than in the agriculture market. Then we have the industrial market, which is a small market for us, but thanks to some specific initiatives that we are launching and that I will share more later in a couple of slides, we think we can grow significantly also here in the next few years. From a market channel perspective, 80% of our business go through the OEMs and 20% to the distribution. Besides the traditional market, we think that we can play a role also in the adjacent and new market. Take, for example, the oil and gas market. Oil and gas is a closed market, limited market with different rule of engagement. It's less volume-driven, more project-based. And we have the product. But on top of that, we are developing a specific product that can be used in the offshore oil and gas platform that can be disruptive for us. And that's the way through which we think we can enter into the oil and gas market. Then we have the mobile automatic connection, which is a small market with a clear leader. We have the product also here, we can grow. But then there's an interesting one, hydrogen. Hydrogen is not quantifiable in terms of addressable value. There are no market standards. But if we consider the 2 main challenges of these technologies, which are the very low temperature when it's about liquid hydrogen and the very high pressure when it's about gas hydrogen, we think that with our product, we can play a role. In fact, we are collaborating with some European start-ups that are working on developing specific solutions for hydrogen application. So we are monitoring very closely this market. But then the real news, the thermal management market. So we all know how quickly the data center market is growing. So we decided with our Board and with support of Sean to develop our own product for the liquid cooling system of the data center. So the product has been developed. The product has been successfully tested. We have capacity in place. We have developed a dedicated supply chain. We are under NDA with some important OEMs and hyperscalers. So we are there, and I'm very happy to share this important milestone of faster history with you today. If we think about the data center addressable market for us today is already bigger than the traditional addressable market for us. And if we think how quickly this market is growing, that gives you the idea of the opportunity that we have here. So based on what I just shared, you understand why in the previous slide, I said that we think that we can grow significantly also in the industrial market. From a strategy standpoint, we think that we can hit our goals by doing 2 things: one, doing what we've always done, meaning leading the market, mainly through technology and making sure that the next important platform from our main customer are secured. And this is actually happening because if you -- if we look at the next 5 to 10 years, new platform, we are there. On the other side, we need to diversify and diversify means to enter into new market, and that's where the data center opportunity stays or enter into a new application, and that's where the new product that we're adding to our catalog stay. So clear strategy, really a matter of execution. That's also why from a new product development process standpoint, we have 2 different approach. The first one is the traditional one, which means co-designing, co-developing with our customer Hydraulic Solution. In this case, our engineering team really become an extension of the customer engineering team to work together in developing the solution. On the other hand, we need to diversify, adding new product to our catalog with the idea of entering into new application in the existing market, always with the overall idea to make the end user life simpler to quality and performance. Let me share you a secret. If you think about the many components that are part of an hydraulic system of a tractor, for example. The only one component that is physically touched by the end user is the coupling. So that gives you the idea why for the machine manufacturer, this component is so important because the feedback that they receive from the end user, it also goes through the efficiency through which the end user connect the attachment, very important. From a global footprint standpoint, we think we can cover all regions. Our main production site is in Italy, close to Milan. And by the way, let me take the opportunity to invite you in case you plan a trip to Italy to visit us. I'll be glad to host you in our offices. Our second production site is in India in Pune. We are leveraging a lot on this location, especially in order to get opportunity from a product cost perspective. Then we have sales offices and service center in Shanghai, China, Sao Paulo, Brazil, Toledo, Ohio. This footprint is currently under optimization since we are consolidating the Faster business in U.S. into one location. We are shutting down our Canadian location, and we are also considering to move some light production in some countries like Brazil or China for the benefit of the local market. When it's about M&A, obviously, for us, it means to be consistent with our strategy, which means to find a potential player that would allow us to enter into new market or enter into new application in the existing market by keeping in mind the 3 key drivers of a potential M&A operation, which are niche technology, niche market, top technology, premium profitability. So getting close to the end of my presentation, I want to share with you some business wins. And it could have been easier for me to share with you important business wins with our traditional historical customers such as John Deere, CNH, et cetera. But instead, I decided to pick some business wins that really represents the fact that our strategy is working. For example, in Europe, we won a couple of million dollar business with SDF Group, which is a German, Italian OEM in the agriculture. They decided to adopt our casting solution that we call [ GenYus ] that thanks to its versatility and flexibility can be adopted without having the customer making big investment in tooling and equipment. This is very important for them. On the other side, on the construction equipment market, the MultiQTC. We just launched this product a couple of weeks ago at the ConExpo show, and we are already receiving important feedback. We have already agreed in equipping 2 to 4 important European fleets and also a Caterpillar 340 in Chicago that will become our trendsetter for the market. And that's really where I want to end my presentation with the MultiQTC, which is the product through which we are entering into the heavy equipment application in the construction equipment market. And we are doing that not only offering this product to the new machine, but also thanks to its versatility and flexibility to the existing fleets around the globe, becoming a huge opportunity for the aftermarket and the distribution sector. So as you can see, exciting time for us. There's never been a better time to be at faster. There's never been a better time to believe on what you are doing in Helios, and it's also time for a break.

Thank you. And just we're going to come back. We're going to take about a 20-or-so minute break. So please come back by 10:35 Eastern Time. We'll see you shortly. [Break]

So we've introduced our shared values and the Core 2030 strategy. You've heard from our business unit leaders about our operating segments, and you've had an opportunity to see some of our products and their applications out front. I'm not going to dig deeper into the 2030 financial targets that we intend to achieve. But to achieve those targets, it's going to be founded in our shared value of excellence. And to have excellence, you got to be disciplined, and you got to be structured. And the discipline and structure that led us to consolidate our central engineering teams and put those resources back in the business to divest our CFP operation, to reinvigorate our go-to-market strategy, return to growth in 2025 and to deliver on our forward quarter guidance for 9 consecutive quarters. That's the discipline and structure that we're going to leverage as we journey down the path to 2030. And we're focused on 4 things that are going to deliver financial results. One, outpacing market growth by strengthening our sales engine and expanding in these large end markets that our business unit leaders talked about. Two, restoring margins. We're going to optimize our global footprint. We have the capacity, and we're going to manage our portfolio performance. You heard Sean mentioned about Project Orion. We've got specific targets in our electronics business. We've got initiatives that are going to improve that profitability. Third, it's about enhancing shareholder returns. It's all about disciplined capital allocation. And four, phasing back into M&A through a very structured framework to pursue accretive acquisitions. And there's no home run for any one of these things. It's just about doing the next right thing for the company and our people and about compounding sound financial decisions into long-term value. If we go back to 2016 when the company was just Sun Hydraulics, it was a very stable $200 million business, very profitable. Gross margins, high 30%, even in the 40%, adjusted EBITDA, high 20s, in the 30%, but they weren't growing. In 2016, the company went down a path to grow and diversify through acquisitions. The company acquired about $500 million in sales, acquired good companies. They were all profitable. They all generated cash, but everyone was dilutive to the legacy Sun profile. And that's why you see those margins drop, those adjusted EBITDA margins down into the mid-20s. Sales peaked at $885 million in 2022. Part of that was through the acquisitions, but part of it was through demand generated through the COVID pandemic. The COVID pandemic was actually very beneficial to the Helios portfolio of companies. Challenge was just as fast as that demand kind of skyrocketed, it shut off just as fast. We start to see those declines in 2023. What you don't see, though, are the operational issues that were created as we started to integrate some of those acquisitions and stand up our centers of excellence. So our lead times got extended. Our on-time delivery went down, and we lost market share. We've put a lot of effort in addressing some of those operational challenges in the last 1.5 years. Our lead times are back down. Our on-time deliveries are up. We know we're winning back share. We returned to growth in 2025 in what we believe was a flat-to-down market. As we look forward, we see an opportunity to grow in the end markets that we serve today as well as expand out into adjacent markets, as you heard from our presidents. The slide that is on the screen. Now each one of those photos depicts a different end market. In the middle, you'll see some pictures, got a dotted line around them, kind of some blue shading in the back. Those are end markets that cross both segments. We have customers that buy both electronics and hydraulics. And it's why you hear us say we want to be a preferred supplier. We want to offer everything that is needed by our customers on that piece of equipment through that whole electronic hydraulic system, and you'll see some of those applications out there. Great example is Vermeer. We have a lot of hydraulic and electronic on the Vermeer equipment. We've got a Ditch Witch outside that's got both products. I encourage you guys talk to our engineers, figure out how these components are working together. Those end markets that I showed are benefiting from some very large secular trends. The first is the electrification and digitization. There are advanced electronic controls coming out, haptic controls, right? We all live in a digital space. People that are driving to work, leaving their connected homes and their connected vehicles, touchscreens, they want that same experience, whether that's through mobile equipment or construction equipment, industrialized environments, recreation. We've got a lot of that on display outside as well. There's a trend around productivity, energy savings. Energy demands are only going to keep going up. Companies are dealing with labor shortages, trying to find qualified people. It's all about driving productivity. And then lastly, automation, AI robotics. I think we're all aware, really big hyperscalers playing in the data center space, announcing hundreds of billions of dollars in CapEx spend. And that directly and indirectly benefits a lot of our end markets. And we have products already that can serve those end markets and capitalize on the opportunities that those secular trends create. We believe we have the engineering expertise and capabilities that uniquely positions Helios to capitalize on the opportunities that those secular trends are going to drive. And our products currently along with our future road map address some of these. So some examples I want to put out. We're launching our next-generation displays and controllers comes with inherent connectivity and expanded functionality. We continue to expand our line of multi-connect couplings that make it safer and faster to exchange out equipment on -- attachments on really large equipment at a job site. We launched an ENERGEN valve, it's actually up front. It's super cool. It's a valve that's got a little turbine inside. As the hydraulic fluid goes through the valve, it spins the turbine. We're able to capture that otherwise wasted energy, take it back to a control source. Think of a warehouse full of electronic forklifts. Maybe that forklift has a 4-hour battery life, after which you got to go plug it in. These products can potentially extend the life that battery charge and keep those forklifts running for longer. We have our Cygnus platform that enables over-the-air software updates, remote monitoring, remote support, enables our customers to troubleshoot end-user problems without having to send out a field technician. So you take our products in these large and growing end markets that are getting a boost from these large secular trends. It's what gives us the confidence that we can grow our organic revenue at 5% or more. So our goal is to double our sales by 2030. And the drivers come down to our core growth, which we define as general market growth, both through the cycle as well as additional market share wins that we can gain with our existing products and existing end markets. We have pricing. We don't look at pricing as a strategic way to drive revenue, rather, it's just a way to offset cost inflation. We have revenue from our new products. We launched several new products in '25. We've got a really good strong product road map. And then revenue going into adjacent markets that our business units talked about. On top of that, we have revenue from acquisitions. The starting point is $792 million. We reported $839 million in sales in 2025, but that included roughly $47 million in sales from our divested CFP business. Take that out, we're starting at $792 million. The midpoint of our guide for 2026 is $840 million. And how we're going to get there, you can see most of that is coming through our core growth. There's a little bit of pricing, a little bit of revenue coming through the new products that we launched last year. As we look ahead to 2030, there's still the core growth, but now you see a much bigger portion of that growth is tied to our new product innovations and entering those adjacent markets. Based on the strategic planning that we've done, the financial models that we have, we expect that organic business to grow to around $1.1 billion, which leaves a gap of roughly $500 million to cover in M&A. Now if we overdrive organic business, obviously, we can adjust accordingly, but the management team is committed to doubling the business by 2030. With M&A, that is about a 15% compounded annual growth rate. We reported 19.2% adjusted EBITDA for 2025. Our goal is to get to 25% plus. Biggest driver for us in terms of profitability is volume. As our sales grow, we're going to get that leverage. We have the capacity to grow in most cases, but we're not relying on that. We also have productivity initiatives, value engineering initiatives. We're going to be investing in automation. We have engineering teams looking at how we take cost out of our bill of material. We have what we're calling footprint optimization. You heard Matteo say that we are consolidating our Faster Canada business into the U.S. and Italy. So we have a location up in Canada that we're going to be closing midyear this year. You heard him say that we're going to consolidate our Faster U.S. business in Toledo, Ohio, which is a location we already have. It's going to generate productivity, allow us to eliminate some of the redundant management positions that we have. You heard Matteo, Billy, Rick talk about our low-cost manufacturing. We got a low-cost plant in Tijuana, Mexico, India, China. We already moved a lot of production to those locations as part of the in the region, for the region strategy. But in 2025, we put a lot of that on hold just with the whole tariff situation, the uncertainty. We're getting back. We're going to move additional production to those low-cost locations. And finally, through the divestiture of CFP, we are going to see a bump. We're going to see that this year. CFP was a great business. Great team over there, but it was a distribution business. The margin profile was much less than the rest. It wasn't core, and we're going to see an uplift of that. So the midpoint of our guide for 2026 is 20.5%, coming through primarily the volume, some of the productivity in the CFP. When we bridge from '26 to 2030, we see that footprint optimization come in, a bigger piece around net productivity and value engineering. So we believe our gross margins are going to expand. We're going to target SCA at 16% or less. It's going to lead to a 20% plus adjusted operating margin and a 25% plus adjusted EBITDA margin. Our businesses generate strong cash flow. We can fund our organic growth through our cash from operations. We just announced our second consecutive year of record free cash flow. One of the things that contributed to that record was our strong, strong focus on working capital. In 2024, we took out over $25 million in inventory. We were able to maintain those inventory levels even as we return to growth in 2025. This past year, we were really focused on working with our suppliers on extending those payment terms. As a result, we saw our cash conversion cycle reduced from 2024 to 2025 by 18 days. Going forward, we expect our free cash conversion rate to be right around 100%. We expect our CapEx spend to be between 3% and 6%. That's a bit higher than we've had in the last few years, but it reflects the investments that we're making in ourselves. We have some aging equipment that we need to replace. We're also investing in equipment to make some of the new products that you see. And I want to highlight that, again, we have capacity. We expect that we'll need minimal investments in footprint. Now depending on where we grow and how we grow, we'll have to adjust. I'm sure there'll be some additions, but they will be isolated. But overall, we expect that to be minimal. If we go back during that time of heavy acquisition between 2016 and 2023, we spent $1.3 billion on acquisitions. It was about 67% of our total capital allocation. The last 2 years, we pivoted. It was all about paying down debt. Our debt levels have jumped up over $500 million. Our leverage ratio was above 3. We were very intentional. We paid down over $150 million in debt in the last 2 years. Going forward, as we phase back into M&A, we expect that to tick back up. We're projecting about 50% to 60% of our capital allocation will be M&A focused. The one thing that's been consistent throughout has been our dividend. Now we're very, very proud of our dividend. It's in every press release. It's in all of our communications. We paid dividends for over 28 years. This year, 2026 will be the 29th year. However, that dividend has been the same amount since the beginning until now. So we just announced this morning that the Board has approved for Q1 an increase in our dividend by more than 30%. It's the first time in the company's history. This is after announcing last year for the first time in the company's history, a new share repurchase authorization. The Board had approved $100 million in share repurchases. Last year, we purchased about 1% of the company's stock just under $14 million. It was a great return. Sean mentioned the average price in the mid-50s, great return of value to our shareholders. We're going to continue to leverage that as we have excess capital, and we see that our shares are undervalued. Because of paying down that debt, our net leverage ratio, 1.8x is where we ended 2025. It's well within our target operating range of 1.5x to 2.5x. Our liquidity at the end of 2025 surpassed our debt for the first time in many years. We have flexibility. We have liquidity that will allow us to invest in ourselves as well as pursue M&A. And you heard our presidents talk about the white spaces that they have in their business units and how M&A might address that. I want to talk about our approach and some of the things that we're doing differently, including putting in financial guardrails for the organization to follow. And any M&A target is going to have to meet 3 strategic criteria. The first one is all about culture. You guys have heard us talk about it. Hopefully, you've experienced if you're in the room, talking to our teams. We spent a lot of time in the last 1.5 years building up our culture, and we need to make sure that we are acquiring companies that can fit with that. #2, it's got to fit with who we are. We have heavily designed engineered products that go into critical solutions for our customers. It creates a lot of customer stickiness. Products have to be complementary to what we already have within Hydraulics and Electronics. And third, it's got to be an opportunity in a growing or a market that has potential to grow from a region and an end market perspective. We're not looking for a turnaround situation. In terms of the financial guardrails, it's making sure that the growth potential and the margins contribute to our 2030 goals. We're looking for earnings and cash flow that will be accretive in year 1. There's going to be targeted synergies. Going forward, we're going to have dedicated teams upfront that work on the M&A evaluation, but we're going to have dedicated teams on the back-end that will be responsible for the integration, making sure that we can capture the targeted synergies. Every valuation we do is going to be anchored on analysis. We're going to have market-based multiples. And ultimately, what it comes down to is what is the return opportunity. And for us, we're going to measure that through our return on invested capital or ROIC. We know our ROIC is not where it needs to be. We've seen a decline. Our debt went up; our sales operating margins went down. If you look at 2025, if you adjust for the goodwill impairment charge we took in the third quarter, our ROIC was 5.7%. It's below our weighted average cost of capital. Going forward, we're targeting low- to mid-teens. How do we get there? As we grow, again, we got to ensure that with those incremental sales, we're seeing that margin drop to the bottom line. We're going to drop -- we're going to increase our operating income. The working capital focus that we've instilled we need to maintain. Our working capital is going to float with sales. As we start growing, our working capital levels will naturally go up. But that improvement we saw in our cash conversion cycle, we need to make sure that we hold that. Managing CapEx spend, making sure that we're investing in those initiatives that have the right return profile. And ultimately, because it's a big piece of the growth, we've got to make sure that we successfully execute on our acquisition strategy. We got to hold firm to the financial guardrails that we put in place. And so let me summarize in terms of what are our financial priorities as we march to 2030. We'll execute on our growth plan. We're winning our share of that sales funnel that Sean described at the beginning, we're seeing wins. We're pursuing wins. We're launching new products that generate revenue for today and in the future. And we have to prove that we can successfully execute on our M&A. We're going to expand gross margins, all about driving productivity, the value engineering, leveraging our global footprint and the capacity that we have. We need to maintain our earnings momentum. And this is just all about growing our earnings faster than sales, about balancing our SCA investments with our sales growth. And we cut off some of those investments. As we were declining, for instance, will tell you there are a lot of things they wanted that we didn't approve. And now that we're back into growth, we got to make sure that we're balancing those investments with that growth. And ultimately, it's about driving the improved returns, making sure that we're allocating that capital to initiatives that deliver sustainable shareholder returns. And for us, we're going to measure that through our return on invested capital. And so when I look ahead, I'm super, super excited, like we have a fantastic leader in Sean Bagan. We've got an incredible leadership team. The broader Helios family, we got engineers outside that are passionate about their products. And really, we have the team that can take the opportunities that we have in front of us and turn those opportunities into financial results. And with that, I'd like to invite our leadership back up on stage, and I'll turn it over to Sean for some closing comments.

Thanks, Jeremy. Thanks to our presidents. My goal here in these last few minutes is simple, leave you confident that Helios not only has the plan, but we have the people. We have the performance engine to deliver our 2030 goals and beyond. But before I close, I want to acknowledge one thing. Helios always hasn't been the easiest company to understand. We've grown quickly. We've transformed very significantly. And in the process, we've taken on many new challenges. But today, the picture is very clear. We have the right people, we have the right systems, we have the right strategy, and most importantly, we have the momentum to deliver it. So let's revisit that momentum model one more time. You've seen it throughout the day, but it's worth highlighting what makes this different and why it will work. Our customer-driven innovation gives us that line-of-sight confidence into our core 2030 ambitions and ensures that every new product we're bringing to market solves a critical problem. Our global market expansion turns these regional wins into global revenue streams. When you look at our operational centers of excellence, they are already driving those efficiencies and those margins improvements. And as we put more volume through our existing channels, you heard Jeremy talk about, we have the capacity. We're doing operational improvements from a capital expenditure perspective to get more efficient, but we will continue to see those margins accelerate. And finally, with the strategic acquisitions, those other things allow us to do that and our focus on our capital deployment and our position from a leverage ratio and our continued strong cash generation will open that up to really drive further. And our commitment is to double the size of our sales by 2030. That represents a 15% compounded annual growth rate and will be achieved with our M&A supplement in addition to attacking the new markets and generating above-market organic growth. We're also committed to driving our profitability at a faster pace than our sales. So you'll see there a target of at least 25% from an adjusted EBITDA perspective. That's how we build an enduring company, not through heroic efforts, consistent, scalable execution. Now let's talk about the accelerants that make these targets more than just projections. So first, we have catalysts, but these catalysts are nothing without a company that's capable of capturing each and every one of them. And that's where I believe our investment thesis becomes undeniable. You've seen the team. We have a high-performing team that's very accountable and focused on delivering results. We've rebuilt that culture of belief. Secondly, our leadership in engineering products that are very meaningful in critical applications, we will continue to do that, and we will be on the gas even further in 2026. And that leads to that multi-pronged strategy of how we grow, whether that's with just our compelling investments we're making, our organic expansion. We have pricing power and stickiness when we bring these products to market with our customers. And that's as a result of this disciplined NPI of ensuring we're bringing these meaningful products to market. And then you add strategic M&A on top of that, and this becomes a multiplier effect to our growth that allows us to have that strong balance sheet and continue to generate further growth that enables optionality over time from a capital allocation perspective. So we do feel very uniquely positioned to capitalize on the secular trends that Jeremy identified. And we believe Helios is a company that is no longer reacting to that market. We're out there shaping the future for ourselves, for our customers with intentionality, clarity and execution. So I'll close with this. I want to leave you saying, Helios has the strategy. We have the leadership. We have the operational engine. But most importantly, as I've said, we have the momentum. The CORE 2030 strategy isn't a distant vision. We're already executing on that destination, and we're moving forward very deliberately, very confidently, as you can see, and with discipline that you heard today. So thank you. Thank you all for being here and for joining on the webcast. Thank you for your time. Thank you for your engagement and for considering Helios as part of your investment future. Momentum is here. Opportunity is here. And the exciting part is we're just getting started. Thank you.

We will now transition to the Q&A portion of our program. So for in the room, we'll have microphones on the outside and the center, and we also can take questions from the webcast, and we've already gotten them coming in. So as they're getting set up, let me just start with one real quick from the webcast. And the question is really about from a long-term perspective, how do we think about the synergies of Electronics and Hydraulics together?

So I'll start. I mean very simply, you go back to 2016 when the pivot was made to diversify and grow the company through M&A. And that first acquisition with Enovation Controls was at the onset of seeing this electrification of Hydraulics. And today, I think our President brought to life how that looks in the future and how Billy and the Enovation business can complement the Sun and the Faster business and how we can then identify those new markets by attacking with those products that we talk about from a growth catalyst perspective. We're very intentional with our data center entry. You heard about Billy's win with BorgWarner on the Electronics side. Matteo talked about the opportunity with quick disconnects that we're really good at in couplings. We lead the agricultural industry. And then you carry that forward through our Balboa business. You talk about our Purezone and our water quality management. That's very intentional on bringing very innovative future solutions. And then finally, with the QMEH valve that Rick talked about, that's a very interesting product that gets into sensing and opens up a new aperture for us. And that's just not one where you just get in. You win, you get designed in, and that leads to a system, and that system leads to ongoing recurring revenue. So we're looking at it from the perspective of how can we continue to synergize that over time.

I think I saw some hands up...

Jeff Hammond, KeyBanc Capital Markets. Maybe just starting with the targets. It seems like the organic number is maybe on the low end and the M&A number is a little bit higher, particularly given maybe what's been a mixed track record. Just how do you think about the upside drivers to organic growth? And then on the M&A side, just how are you thinking the same or differently on the approach and learning -- what you've learned from kind of prior deal experience to kind of have a better path?

Yes. So I'll start. First, I think Jeremy did a nice job to show how that stacks and builds in. So we're committing to a 5% plus organic growth rate, $500 million would be needed from acquisitions or new markets. We can flex that. The main talking point is we're committed to doubling the company in 5 years. We're certainly getting a head start as we enter this year. Even at the upper end of our guidance is a plus 9% midpoint, we think we can achieve what we've laid out as we get into this year. And again, I would highlight, we are exiting with a lot of momentum at a plus 13% in the third quarter last year, plus 17%, plus 29% when you pull out CFP and then the low point of our Q1 guide plus 20%. So really, we will pace that, and I will want to highlight, we're not doing any due diligence right now. There's nothing imminent. We're not going to rush into this. But I'll also remind that Jeremy and I were not here when any of these acquisitions occurred. And so Jeremy laid out the framework, and you heard it throughout the presidents as to how we will -- our approach will be and what we will be targeting. And I think what you'll find is a much more disciplined approach upfront to ensure that we have the right fit. And over time, is in line with our core business' financial profile to help us achieve those 2030 targets.

Yes. I would add, when we think about a post deal, that process will look different. I mentioned dedicated teams. I think our presidents would say that with prior acquisitions, we didn't carve out, let's say, the enough resources to really drive that integration and go drive those synergies. And in some cases, there was a top-down approach where the acquisition was done and kind of handed over to the business, okay, now go operate and drive and move this forward. And so as you can tell, it started with our deep planning process, engaging the broader team to what are those areas that we need to focus on. They're going to be involved throughout the process and also have accountability to deliver results. The second thing I would say is it's got to be the right fit using the Custom Fluidpower as a business. Rick mentioned, it wasn't a core. It was actually a distributor that we had used before. And if it had been in any other market, probably in Australia, it would have been seen as channel conflict and our rest of our customers wouldn't like it. So that wasn't a fit. Some of the others are engineering, great resources that came, but we essentially paid a premium to bring in an engineering staffing team. And so it'll just be taking a different perspective on what are those opportunities, what is the right fit and then making sure that we've got the right structure to go drive the implementation and synergy capture.

I've got one more from the webcast from Jon Braatz with Kansas City Capital. There are some large adjacent market opportunities. Are they mostly served on an OEM basis? Or are there distribution opportunities? And on an OEM basis, how long can the sales cycle be?

I'll take this. Is that okay? I can tag on. Yes. I mean definitely for electronics, definitely a major play in the OEM space. And it depends on the customer on how long it takes to launch. Some of these industrial construction time, they're planning 2 years in advance and a program that may launch in another 3 years, right? So all the work and due diligence and testing and everything, you got to bring forward to actually successfully launch a product if there's some time out there. But there are also some quick wins. I mean for our Electronics segment through distribution, sometimes you can turn those wins on quicker. OEMs are a little bit longer depending on the customer and how much testing they want to do.

I would add to that, just reflecting what Billy shared, it depends on the OEMs because there are large OEMs that play in those adjacent markets, and those will typically be direct accounts because they won't buy through distribution. But then there are smaller OEMs where there are opportunities through distribution. And so we have the ability through the businesses, Matteo's and Billy's that do traditionally go direct more, but then also have the reach with Sun's global distribution network to play into those adjacent markets as well. So it actually kind of top to bottom, it gives us good coverage.

And if you get our product platforms right upfront, sometimes those sales cycles will go quicker. You have the right platform in place, those will go a lot quicker. And we've seen that throughout the Electronics segment.

I think I saw some questions upfront, if you want to bring the mic over.

Tomo Sano from JPMorgan. Two questions. The one is 5% plus organic growth. Could you talk about how much of that relies on cyclical tailwinds versus structural improvements such as share gains or go-to-market strategies?

Yes. So one, I would say it's a through-cycle target. We're not planning massive market recoveries or significant depressions. So we think it's a fairly balanced target that we're setting for ourselves. We think we've shown recently that we can outgrow the market and believe that would be important to continue to demonstrate. But it will be dependent on continuing with our go-to-market wins. We got to continue to do what we did last year. That $60 million we won last year isn't going to be all $60 million this year. Some of that, for Billy's comment, will hit future years, but we know we are designed in, and that's designed in for a lot of years into the future. We will continue to try and achieve more than $60 million of wins this year to help support that. But given where we're seeing our order book, which for the last 10 months, has been up double digits over the prior year month, that hasn't happened since 2022, gives us tremendous confidence that we can continue. Now as we step through this year, our second quarter will be really key for us. We're watching those order trends. And if they maintain, that will give us a lot of confidence in the back half as well. But right now, from a guidance perspective, we tried to protect on a low case. And certainly, we'll try and continue to drive towards the top end, if not go over as we've done with our quarterly guidance throughout the past 9 quarters.

Yes. And I would say over the time, the longer term, we're looking at it kind of 1/3, 1/3, 1/3, where 1/3 of that is just the general market, 1/3 of that is coming through the new product introductions that we have and 1/3 of that would come from adjacent. Now that may vary from year-to-year. But I think holistically, over the 5-year horizon, that's a relative split.

I think I saw a hand over here. Was there somebody who had a question? Back there, I see back in the corner. Brian can get that one.

Peter Psallidas from Rockefeller. I think in the past, you guys have said that you think maybe around $1 billion of revenue, you'd do somewhere in the high 30s gross margins, $900 million, mid-30s, just seeing it at 36% at $1.7 billion in 2030. Is that -- is there any change to that framework? Does that account for dilutive M&A? Just help us think through maybe the imaginations of how that evolves over time.

Yes. It's an internal conversation that we've had throughout our planning process, how high do we want to drive the margins. And there's a point you drive the margin and you're walking away from revenue and you're walking away from growth. That's a consideration as well as on the M&A. We're not sure what that trajectory looks like. We know there's opportunities in both segments. But we have to have the balance. And our commitment is to grow double the business. We want the growth along with the margin improvement. And then again, focused on that operating margin and the adjusted EBITDA margin. So is there an opportunity to go higher and drive to the high 30s? Yes. What we want to be careful is that we don't throttle the growth as well. And so we're going to take a balanced approach as we go forward.

Anymore? I think that's right here. Guy on walkway.

Chris Moore from CJS. Just when you think about the revenue target for 2030, the split between Electronics and Hydraulics, any thoughts there? Is there any kind of big picture thinking in terms of where that might shake out?

Yes. The Hydraulics, almost $500 million in revenue, they're going to be the biggest volume contributor or value contributor in terms of absolute dollars. From a growth rate in our plans, we see a little bit higher growth rate within the Electronics as well as a bigger margin improvement opportunity in the Electronics space. So we would expect growth in both margin expansion in both in terms of absolute dollars, more of that would come from Hydraulics. In terms of growth, we would expect Electronics to grow slightly faster. It's not a significant difference, but we do project them to grow a little faster. And from a margin improvement, leveraging our low-cost manufacturing centers, doing a lot of work around taking out cost of our bill of material, we see a little bit more improvement there in electronics.

On the -- in terms of the types of acquisitions, mostly tuck-ins we're talking about? Or I mean can you envision something in the $100 million to $200 million level? Just any thoughts there?

So I'd anchor back to what we've done, right? So what we've done is bought $500 million of revenue. So effectively, that contains 3 what we call transformational between Faster, Enovation and Balboa and a series of tuck-in smaller ones. We're not going to commit to one or the other. It depends on the cultural -- all the factors that our presidents talked about and where are our gaps. Over time, it has to fit the criterias that Jeremy laid out as well. But as I said, we're not in a rush to do this. We will be patient. We will ensure we're doing it with discipline, and we're doing it the right way. It will financially make sense. We won't be paying multiples significantly above what our trading multiples are. And then when we do them, we will have synergy capture. We will have dedicated teams delivering those. And over time, we're going to commit to about $500 million. Now that number could go down. If for instance, we have significant opportunity in that data thermal opportunity with [ Project Polar ] that Matteo referenced, but we're going to anchor on doubling the size of our business and go from there.

I'll add to that. I think the strategic fit is what's so core and critical. And as we've dialed in the strategy across the businesses, it's really about technology and how it fits, products how they fit and complement what we have today. And a tuck-in, as you look at those types of opportunities, if they bring like an accretive technology, there's a lot of leverage potentially in that for growth versus, let's say, a tuck-in that just sweeps up market share. And so what it all still comes back around to, whether it's transformational or whether it's a tuck-in is does it align with the strategy? It needs to make sense as we look out on the horizon in terms of where we're driving our product portfolio and our business portfolio.

I see one over here. Yes, go ahead.

Tomo Sano, JPMorgan. Second question. Looking ahead to 2030 growth targets, what do you see as the most critical cultural or organizational bottlenecks, especially in terms of M&A and PMI executions, where do you see your capabilities still need to be strengthened?

I think critical for the Electronics segment as we move forward is our product roadmap and launching on time on our customers' request. Supercritical as we go forward, as you saw the core markets where we're underserved and then the adjacent markets, as we talked about getting multiples on the product platform, make it once, sell lots and grow for the Electronics segment is super critical for us, and that's what we're doubling down on with resources, time, things like that. So that's critical for the Electronics segment.

I'll layer on what Billy shared in terms of the product roadmap and technology road map. And we've kind of alluded to it, but between Hydraulics and Electronics, we're working more and more together, like the QMEH valve that I highlighted really would not be possible without the engineering capabilities of the Electronics segment. And so there's this convergence. And as we look at sensing technology and hydraulics, and this is just as true for Matteo's space as my space, partnering with Billy and his team and understanding the roadmap of what we have and then looking out how that looks against potentially what takes place in terms of targets in the market for M&A. Those 2 converge. The other piece I would add is really about people that we've emphasized so much today, what we've done in terms of the Helios Leadership Academy, cultivating the next generation of leadership. One thing we've learned is to do M&A well, and this was highlighted a few times by Sean and Jeremy, you got to dedicate resources, mind share to do the integration planning, to the execution planning well, and we've learned from that. To do that properly, you've got to take people from the businesses and dedicate them, which means you have to have people within the businesses that could step up and maintain the momentum at the core. And so we've got great teams, great people, and we're cultivating that, but continuing to drive that cultivation to accelerate it to bring up more talent in the organization is got to be critical as we look at M&A going out.

And maybe to layer on top specific to the culture piece is that culture of innovation of design engineering. If you look at some of the products we have out there, I mentioned the ENERGEN, we've got the water care Purezone system, all the products that we're launching, I think that's a cultural element just of, again, our shared values, right, the excellence, the ownership, the honesty. It's one of the first things Sean put in place is when we got everybody together, who do we want to be and it starts with our shared values. And we go back. I love the tree image, that was super cool. You can see all the different companies. They're the roots of the tree, right? And we got to find -- whatever we bring in has got to fit as another root in that tree for us to be successful.

We had another question from online, Jon Braatz with Kansas City Capital. Any early thoughts on how global businesses might react or change strategies to the events in the Middle East?

I'll share perspective. I think the last 5 years have been a good learning curve for all of us in business. You go back to COVID and how we have to adapt to an event that was really unprecedented generationally for all of us and adapting on a daily basis. And the interesting thing during that time frame, a lot of businesses, let's say, closed, people worked from home. Our businesses were all critical and deemed as critical. We all stayed open. We never shut. And so we had to adapt on the fly. That was a great learning experience for all of us as leaders and as a business. Last year was also a good learning experience because we had to adapt on the fly to tariffs. And we all were able to manage that well financially across the businesses. We moved quickly at times. For my business, I highlighted we moved more assembly into our factories in Asia to mitigate the effect of that. And so as we look at the events unfolding in the Middle East, we watch it closely. You don't overreact, but at the same time, you're always doing contingency planning and looking at how do you leverage, how do you adapt? And we're regularly having those conversations across the business.

Anybody right up here?

This question is for Billy. I won't throw anything at you, but I'll ask you a question. So Enovation and Balboa have been part of the organization for some time and a lot of the push and the idea was to push the electronics into kind of the traditional Sun Hydraulics markets and industrial markets. And you kind of laid out kind of industrial and other markets. What do you think are the biggest obstacles to kind of crossing that chasm and getting some of that leisure, health and wellness product into the more industrial setting?

Timing, I think we've got to get our product cost right, I got to get the product right and cost. We are actively working through those programs. Talking about, I mentioned, leveraging the low-cost areas and also leveraging supply chain, getting the right suppliers to support us as we grow. We got a seat at the table from some large suppliers to help us go and foster some of these opportunities that are in front of us. Working with Rick's team, it's really interesting to watch. It's happening naturally now. Teams working closer together on product -- crossover products and watching things get launched out, some demo products and programs that are getting put out in front of some major customers. It's really awesome to watch how the synergies are starting to come together just naturally. And now you see this multiplier also happening when it comes to Hydraulics and Electronics and the things that our customers are seeing what we can bring together collectively, and it's a really powerful moment that we're watching unfold right in front of us. I can give a little more example. I can't give it all away, but there's some cool things that are happening between in the segments. And you see a little bit of it out today. And what people don't realize is where Enovation and Sun are faster on same vehicles, right? And we go to market a little bit different with OEMs and distribution, but we are on a lot of the same vehicle. We're all hit away and people just don't recognize that. And when you go to like a CONEXPO, you go to [ Vermeer ] and all of us got product on it, and it's pretty amazing to watch how it happens from a -- when you go talk to some of these large OEMs, sometimes the wet end or hydraulic end, the teams don't talk to the electronics, teams in those big organizations. So it's a little difficult to try to get talking together. But when we go show the value and what we can create for them together, that is where the powerful moment is taking place, and we're watching that unfold here as we move forward.

Yes. I'll elaborate on that in terms of our -- like Billy's team, my team and how we've been actively working together and give some specific examples related to that. And I'll share that Billy and I go back a long way because I started in Enovation Controls in 2006, about the same time Billy did. And so from a leadership perspective, we understand each other. I understand that business. And with the strategic focus that Sean has helped to bring to the organization, we've been dialing in that kind of strategy and how the Electronics and Hydraulics segments work together. And we talked about QMEH. There's a few other examples of how it's behind the scenes. It's the active engagement of the Electronics segment, helping to advance a lot of the electronic sensing capabilities that we're driving in the Hydraulics segment. And so that's active leverage that we're getting. There's also channel leverage. One of Billy's biggest distributors now is a legacy Sun distributor. And that was a deliberate move actually aligning distribution, and we're looking at how we do that more because what's happening is that distributor is actually integrating the Enovation Electronics and the Sun content as well into a solution. And we believe there's much more pull-through we can get across global distribution with Sun's reach. We're actively working that. And then as Billy shared, we have been collaborating more on some solution applications that there's just a seamlessness that our teams now are collaborating with as we look at those opportunities.

If I can just sneak in one more. Yes. So the 25% margin target, I kind of get that on the core growth because you've been there before, same with 36% gross margins. But as you built the M&A in, how should we think about offsets or dilution to that margin? Understanding you don't want to fix or upper, but oftentimes M&A comes in at lower margins and kind of makes that track a little bit harder.

Yes. I think it first starts with the financial discipline and what we're looking at and being honest with ourselves, is it going to contribute towards our 2030 goals? Do we see a path? A lot of that will come down to the synergy target. We don't want to build in this idea of we're going to buy in an x amount, and we're going to leverage it to grow sales across all the other businesses, right? We look at that as -- that just is on top, right? That's an on top benefit. So it starts with being very strategic and holding firm to our financial modeling. But we've talked about the capacity, and we're intentionally using the word optimization because M&A is going to play a hand in that. If we can acquire something, absorb that into our existing low-cost operations, we believe we can take cost out. Obviously, there's just some overhead corporate costs that we don't need to duplicate. But that's got to be known going in. And then knowing it going in, we got to execute it on the back end. And looking back, I wasn't with the company, so it's easy to look backwards. And again, the companies that were bought, they were profitable, they generated cash, but there was limited integration. In fact, at the very beginning, there was no plans to ever integrate, right? Helios was going to be a holding company, and it was planned. If you go back to the original targets that were set out in the last 5-year plan -- excuse me, it was known that those margins were going to dilute because the targets were much less than what Sun was at the time. So it was planned. And I think as we go forward, it's about making sure that we've got the right fit. How do we leverage what we already have to take cost out. But then also, we got to grow or acquire companies in markets where there's growth potential, right? Because if the markets are declining, it's just continual pressure to take cost out. How do we get in some of these spaces backed by these secular trends where there's some tailwinds behind it. And that's really what we're looking for. Now maybe we got to pay a little higher premium for that. Understood. But as Sean said, if we're trading at 14x, 15x EBITDA, we can't go out and pay 25%, right? We're just -- it's going to destroy value in day 1. So we got to find the right opportunities, making sure that we've got it at the right price points, but then how do we drive that synergy and value capture on the back end.

And then the only thing I'd add, Jeremy, is we know M&A is hard. We acknowledge that. However, what the company has done again from 2016 to 2023, was to get $500 million of revenue and at the time was 22% EBITDA. So if we can replicate something similar, we're confident we can bring the 22% up to the 25% to not be dilutive in addition to getting our core businesses with the volume getting up to $1.1 billion, back to Peter's question on kind of revenue increments and EBITDA that supports that 25-plus percent profile. So it can be done. We know it's going to be hard, but the way we go about it is going to be much different than it was done in the past.

Any other questions right here in the room? So then another one from online. What end markets or company-specific catalysts could drive upside?

I mean hopefully, the data center opportunity is the upside, not completely reflecting in our long-term plan. We have been conservative somehow. But now that we have seen what we were able to do in the last 6 months, if we think 6 months ago, we wouldn't think that we would have done that. So that's probably the key opportunity that we have as an upside for the long-term plan.

Anybody else right here? So I've got one more online. As the business has really diversified over the years, how do you think about cyclicality or seasonality at this point? Is there any trends to point to? Or how would you think about that right now?

Well, at a very macro level, today, as we stand, it's very encouraging to see PMI put up back-to-back months of expansionary plus 50 here in the U.S., coupled with continuous growth in industrial production. When those 2 things are going in parallel to the upper right, it's very good for our Hydraulics business and to a certain extent, Electronics. On the Electronics side, given that large consumer discretionary exposure we have, whether that's from the recreational side, marine, spas, hot tubs, there's some sensitivity to interest rates. And I know interest rates haven't come down as quickly as been expected. But certainly, that can be a significant catalyst as my prior experience with that powersports market, 2/3 of that product is financed. And so I know that when rates go down, it stimulates end market retail. The other piece, and I tried to talk to this earlier in my prepared slides was that the inventory channels -- Jeremy talked about our inventory. Our inventory is clean and continues to come down. We continue to grow with the same amount of inventory. But what's in the channels is what we really look at. We really pay a lot of close attention to our customers. John Deere historically being our largest customer and looking at kind of channel inventories on that ag and machinery side and also on the recreational side, they are in a much different spot. So as retail demand increases and these long cycles of ags being down has to lap at some point. It's a great long-term market that we will always be committed to, but we know it has to turn. So as soon as there's a sign of the retail, that's when we're going to get the lift. We are an early indicator. We're very short cycle. You saw it on the way down, and now we're feeling on the way back up with our double-digit growth.

Anybody in the room right there?

Peter Kalemkerian From Baird. You mentioned lead times as a competitive advantage, understanding that these vary across product categories, is there a way you could frame your lead time versus competitors in each business? And then on that $1.1 billion of organic sales growth, could you remind us what the excess capacity is that you currently have? I believe it's mostly in the Hydraulics business.

I'll start with the lead time portion of the question. Lead time is critical in terms of winning, particularly with the midsize and the smaller OEMs where oftentimes design cycles can be shorter or opportunities for optimization arise. And we've been able to drive lead times down. I highlighted that like on the manifold integrated packages, some of the growing pains that came with the acquisition, for example, of Daman products that created some operational challenges we have behind us and we've been able to drive our lead times down to often in sort of like a 6- to 8-week range. And sometimes less, we're actually able to do quick turns in less than a couple of weeks. And it's not just the manifold, but it's the integrated package that comes with the cartridge valves. And we've won quite a new business. We actually won a lot of business back last year. We did it by SKU by the way. We knew what we were selling. Because of those operational challenges, lost some content. We had a targeted plan. We actually won back twice what we targeted to win back. So we had great success. And we also know there are a lot of opportunities we won in quick turns compared to our competitors. It's known. It's public information through distribution. A lot of times, you hear chatter and/or just there's information that's publicly available. And we track that closely, and we are better than most of our competitors. And that's something that we are very focused on, especially on the upside of the market because as we've been winning in the core because we still really are in the low part of the market cycle, we're raising the floor. And as the market comes back, we want to make sure we protect that. So we're trying to stay ahead of that in our capacity management so that we can continue to maintain that competitiveness, but also improve position relative to our competition.

Yes. I would say on the Electronics side, whether you're in the Balboa business or Enovation, a little bit different. You have around a 4-week lead time on the Balboa business. Enovation is 10 to 12 weeks. But what's really critical, what we work really well with our customers on is getting our forecast right. We try to get a 12-month forecast from our customers so we can plan because some of our electronic components, you guys know that it's -- some of those lead times are -- could be up to a year. So it's important that we're driving a forecast so we can respond to the orders upticks as we've been seeing over the last several -- the last 8 months from the Enovation business, right? And the Balboa business continues to be pretty solid, too.

Anybody else have one? Yes, right here.

Jason Williams, Pios Capital. I was just hoping you could elaborate a little bit more on the data center opportunity. It seems like that came out of nowhere and looks like a potential large market for you guys. It was a little unclear to me. Are you already -- do you already have sales into that segment? And do you already have the solution developed? Or is that something that you think you can build a solution for? If you could just elaborate on the data center opportunity, that would be helpful.

So I don't think it came from nowhere. The trigger for us was that last year, the consortium was built and a standard was created for the product. So thanks to that decision, we were able to enter in a market that was completely different before last year. And the product is there, the solution is there. We don't have sales now already in our book, but they will be soon. And the key part that we are trying to play here is that given our historical heritage on leading the business for 50, 60 years, we think we can differentiate our offer compared to the current players. And that's what based on the meeting that we had with our potential customer really was interesting for them. Our solution, having the engineer already talking to them, given our experience is what was really capturing the potential on the long range.

So I've got one from online. You divested CFP and wrote down i3PD's goodwill. Is there anything else currently in the portfolio that doesn't 100% fit the profile going forward? How are you thinking about that?

So short answer, no. We're committed to the businesses we have. But as part of our standard work and that operating rhythm and that Helios Business System, we'll always evaluate the trajectories of our businesses and the strategic fit that Rick mentioned. And certainly, that will play more as we embark on any M&A as well. But right now, there's, one, no considered divestitures; and two, no active due diligence ongoing. It's laser focused on driving go-to-market wins and pulling wins through the funnel that we continue to see grow aggressively.

I have another one regarding the secular trends. So as you look at the secular trends that you've outlined around digitization and automation and robotics, is there any one that's really leading the way right now in the near term?

In the industrial mobile spaces that we play in, digitization, for sure, is critical sensing capabilities as electrohydraulics have become more intelligent, not just even what I would say are sort of passive electrohydraulics in the sense of you actuate a valve via solenoid, for example, coil, but actually getting the sensing close feedback loop. And that's an area that, for sure, in those markets, the core markets that we currently play in, is going to be a trend that will continue, and that is also driving a lot of our product innovation. If you look at our engineering and our road map, not just the product that highlighted today, QMEH, but a lot of what we have in development, it fits squarely and supports that secular trend.

Another key piece on the Electronics, as I've mentioned in my section, is connectivity is a critical part. Our customers are demanding the over-the-air updates, things like that, troubleshooting, which is critical as we move forward. AI built into our product, things like that, that we're really pushing for that's critical as we move forward. Customers are, we want AI, we don't know what to do with it. I think that's our job to try to help define what that means on machine learning, things like that, that we can bring to the table. But yes, connectivity, AI is critical as we move forward from the Electronics segment.

I think the one piece, too, I would add to that, that's in that digitization trend or secular trend and intelligence is the fact that as you look at the current generation of machine operators, and this applies across all of our end customers in the industrial space, there's a lot of talent that's retiring from the market. And there's years that it takes to develop skills oftentimes in machine operation. And those skills actually, when they're nascent, you're inefficient. And there are things that we're actively working on, not just on the sensing side, but how you bring that control to the application where that -- it makes it more efficient for an inexperienced operator. The most simple example that I would offer is like if you're driving a skid steer loader and you're raising the boom after you've picked up a bucket of dirt, you actually have to dynamically make sure you pivot the bucket while you're also raising the boom. Otherwise, as you raise the boom, the bucket just dumps out the dirt. So you could scoop 10 times, you get 5 equivalent scoops of dirt. And auto-leveling, for example, automatically leveling the bucket as you raise the boom, it's simple, but it's huge in terms of efficiency. So as you have less experienced operators, but this is just as true in ag and other applications. And so that's a portion of digitization in that secular trend and just one example of how we're trying to look for opportunities to bring solutions forward.

Any final comments, last call, last call for questions? Yes, right there.

Just one more. As you scale to 2030, how should we think about your supply chain footprint and related CapEx, which is roughly 3% to 6% of the total revenue across the maintenance capacity and IT investments?

Yes. I'll touch on the CapEx and let these guys touch on the supply chain. When we did our bottoms-up CapEx planning, some things came to light. The first was we do have some aging equipment that needs to be replaced, and that's just standard maintenance, right? It's not incremental. But then as we looked at new opportunities around data center specifically, also the water care that we've got going in Electronics, these are new technologies that require incremental investments, incremental machining capacity. If you look at data center specifically and some of the volume projections that are there, it's easy to get a PO for hundreds of thousands of components. And so if we're going to enter that space and Matteo and his team are trying to enter that space, we got to be able to fulfill and have a level of capacity. That's going to require additional machining equipment. Same thing with water care. It's a completely new technology, completely new manufacturing process. So we're investing in those capabilities as well. So that's a big piece of the CapEx. From -- as I mentioned on the footprint, we have capacity in the footprint. I think that was an earlier question maybe we didn't address around the organic sales, at what point do we have to address the footprint. I would say that's going to be very isolated. So depending on where the growth comes from, what region, what types of products, there might be something isolated that we need to do. But holistically, we have enough capacity to absorb $300 million, $400 million revenue increase. And so very limited on the footprint capacity, a significant piece on building up our new product capabilities, investing in aging equipment. And then the last piece is automation. Challenge these guys, don't come to Sean or I with a single CapEx request. It's got to fit within the context of a broader strategy. And one place that comes into play is the automation. And I think the teams can talk about what some of that automation looks like. So turn it over to you guys for the supply chain.

Well, I mean, from our side, the traditional business is really based on really long-time relationship with suppliers that have always worked with us. So -- and we will keep investing on them for the next years, obviously. When it's about data center, it's a new supply chain that we are building, knowing that the 2 main markets are in U.S. and China, following the principle of in the region, for the region, obviously. And so...

Yes. I think from the Electronics side is what we're seeing. I mentioned earlier, I feel like we're getting a seat at the big boy table in the past when we buy electronic components, sometimes we have to go through distribution. We're getting a voice direct at the supply base, and it's really helping. It's putting us in a lot better position as we move forward. As exciting it is on the customer side and opportunities we have, our supply base is really excited about delivering product for Enovation or the Electronics segment. It is really fun to watch. CS, we had a good visit with our supply base there. They see our vision. They know where we're going, and they want to be part of it. And with that, we have a little bit of leverage like you want to be part, you got to deliver at this price point. And that's really exciting for us and putting us in a position for the Electronics segment to go out there and compete. If you think about our competitors in the Electronics segment, I mean, you're talking about the Boschs of the world, people like the Garmin, how are we going to be competitive, right? We got to lean on our suppliers. We've got to have the best supply chain we get to go push forward and win those opportunities.

Like Matteo -- we have deep relationships like Matteo, I'll repeat that. Like Matteo, we have deep relationships with our supply base through Sun Hydraulics. And we continue to cultivate that where we really see the relationships with the supply chain going are more regionalization to be resilient to things that occur geopolitically in the world. And with our global footprint, there's more that we're looking at in terms of localization of supply. So that way, we are resilient. And sometimes it is in the lower cost environments, but really, that's not the driving factor. It's about lead time and resiliency to try to mitigate the effects of global trade disruptions.

All right. With that, I want to thank everyone on the webcast for joining us remotely and everyone in the room. We get to transition now to our networking lunch and ultimately plant tour. So thank you again for joining us, and have a great day.