EARNINGS UPDATE | OCTOBER 29, 2025 Q3 2025 THIRD QUARTER 2025 EARNINGS CALL | 1 Forward-looking statements This presentation contains statements that the Company believes to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the Company's future financial position, business strategy, growth and drivers, capital allocation, resiliency, targets ( ...

Core Insights - Materion Corporation reported strong financial results for the third quarter of 2025, with net sales of $444.8 million, an increase from $436.7 million in the prior year period, and affirmed its full-year outlook [1][4][11] - The company highlighted significant improvements in its Electronic Materials and Precision Optics segments, with record margin performance and a return to double-digit EBITDA margins in Precision Optics [3][4] Financial Summary - Net sales for Q3 2025 were $444.8 million, up 1% from $436.7 million in Q3 2024 [4][11] - Value-added sales were $263.9 million, reflecting a 1% organic growth driven by non-China semiconductor and space markets [4][11] - Operating profit increased to $34.9 million from $31.3 million year-over-year, while net income rose to $25.4 million, or $1.22 per diluted share, compared to $22.3 million, or $1.07 per share, in the prior year [5][11] - Adjusted EBITDA was $55.5 million, representing 21.0% of value-added sales, slightly down from 21.5% in the prior year [6][11] Business Highlights - The Electronic Materials segment achieved record EBITDA margins of 27.1%, up 700 basis points year-on-year, while Precision Optics saw a significant sales increase and approximately 1000 basis points of margin expansion [11][11] - Order rates increased double-digit sequentially across all business segments, driven by strong macroeconomic trends in semiconductor, energy, space, and defense markets [4][11] - Materion announced a supply agreement with Commonwealth Fusion Systems to provide materials for fusion technologies, indicating a strategic move into emerging energy markets [11] Outlook - The company expects a strong fourth quarter and has reaffirmed its guidance for adjusted earnings per share for the full year to be between $5.30 and $5.70 [8][11]

Core Insights - ESAB Corporation reported third quarter sales of $728 million, reflecting an 8% increase on a reported basis and a 2% increase on a core organic growth basis compared to the prior year [2][5] - The company achieved a net income from continuing operations of $64 million, translating to $1.04 diluted earnings per share, while core adjusted net income was $81 million or $1.32 diluted earnings per share [2][5] - Core adjusted EBITDA reached $133 million, a 7% increase, with a margin decrease of 20 basis points to 19.4% compared to the same quarter last year [2][5] Business Performance - The U.S. business returned to mid-single-digit growth as tariff uncertainties diminished, while EMEA and APAC regions experienced strong demand from high-growth markets [3][4] - The completion of the EWM acquisition enhanced ESAB's heavy equipment and automation portfolio, providing access to leading React technology [4][8] Financial Guidance - ESAB raised its full-year 2025 outlook for total core sales growth to 4.5% to 5.5%, with core organic sales growth projected at 1.0% and M&A contributing approximately 4.5% [5] - The core adjusted EBITDA outlook was increased to $535 to $540 million, compared to the previous guidance of $525 to $535 million [5] Historical Context - ESAB Corporation, founded in 1904, is a focused industrial compounder with a history of innovative products and solutions, employing approximately 10,300 associates and serving customers in around 150 countries [6]

Industry Trend - America is experiencing re-industrialization, with manufacturing reshoring across various industries [1] - Digitalization, robotics, and physical AI are becoming increasingly crucial due to labor shortages and skills gaps [1] Technological Advancement - Foxconn is constructing a state-of-the-art robotic facility in Houston, Texas, for manufacturing NVIDIA AI infrastructure systems [1] - The factory is digitally designed in Omniverse, with Foxconn engineers using a digital twin solution to validate systems before construction [2] - Seaman's plant simulation optimizes layout through design space exploration [3] - Isaac Sim is utilized to train and simulate robot AIs using the same digital twin [3] - Omniverse is used for large-scale sensor simulation, enabling robot AIs to learn to work as a fleet [4] - Vision AI agents, built on NVIDIA Metropolis and Cosmos, monitor robot and worker operations to detect anomalies, safety violations, and quality issues [4] Human-Robot Collaboration - Interactive AI coaches are used to train new employees, facilitating worker onboarding [5] - The age of US re-industrialization involves people and robots working together [5]

Core Insights - Luxfer Holdings PLC reported strong profitability and cash generation in the third quarter of 2025, driven by continued demand in defense and aerospace sectors [1][2]. Financial Performance - Net sales decreased by 6.5% to $92.9 million from $99.4 million, while adjusted net sales increased by 1.6% [4]. - Net income was $2.5 million, or $0.09 per diluted share, compared to $12.6 million and $0.47 per diluted share in the prior year [4]. - Adjusted EBITDA rose by 0.7% to $13.6 million, with adjusted diluted EPS increasing by 11.1% to $0.30 from $0.27 [4]. - The company generated strong free cash flow of $10.3 million, reducing net debt to $37.3 million [4]. Strategic Focus - Luxfer sharpened its focus on core and high-value markets following the completion of the Graphic Arts sale [4]. - The company announced the establishment of a Powders Center of Excellence within Elektron, expected to enhance growth and deliver approximately $2 million in annual savings [4]. Guidance - Luxfer raised its full-year 2025 guidance to an adjusted EPS of $1.04 to $1.08, with adjusted EBITDA projected between $50 million and $51 million [4].

Core Insights - The cost of sales and services is a crucial factor influencing Berkshire Hathaway's profitability, operational efficiency, and long-term growth [1] - Berkshire Hathaway operates as a diversified conglomerate with subsidiaries in various sectors including insurance, railroads, energy, manufacturing, services, and retailing [1] Cost Structure - Cost of sales and services constitutes approximately 50% of Berkshire Hathaway's total costs and about 45% of total revenues, directly affecting margins and operating leverage [3][8] - Effective management of these costs is essential to ensure that their growth rate remains lower than revenue growth, facilitating margin expansion and cash reinvestment [3] Strategic Approach - Berkshire Hathaway's strategy focuses on reinvesting retained earnings into acquisitions, capital projects, and marketable securities, making cost efficiency vital for compounding growth [4] - The company's decentralized management model allows subsidiaries to innovate and control expenses independently, which strengthens competitive advantages and preserves margins [4][8] Peer Comparison - 3M Company and Honeywell International also prioritize cost efficiency to enhance competitiveness and sustain operating margins, similar to Berkshire Hathaway's approach [5][6] Stock Performance - Shares of Berkshire Hathaway (BRK.B) have increased by 6.6% year-to-date, aligning with industry performance [7] Valuation Metrics - BRK.B has a price-to-book value ratio of 1.57, which is above the industry average of 1.52, indicating a relatively expensive valuation [10] Earnings Estimates - The Zacks Consensus Estimate for BRK.B's third-quarter 2025 EPS has increased by 23% over the past 30 days, while the full-year 2025 estimate has seen a slight increase of 0.3% [12] - Revenue estimates for 2025 and 2026 indicate year-over-year increases, although the 2025 EPS is expected to decline while the 2026 EPS suggests an increase [12][13]

Core Insights - Belden Inc. is collaborating with Accenture and NVIDIA to develop physical AI systems aimed at enhancing worker safety in manufacturing environments [2][4][9] - The new systems utilize advanced AI applications and time-sensitive network infrastructure to improve safety and quality control in factories [2][5][10] Group 1: Technology and Innovation - The virtual safety fence solution employs Accenture's Physical AI Orchestrator and NVIDIA's Omniverse and Metropolis libraries to monitor worker movements and pause robotic operations in hazardous zones [3][4] - Belden's Time Sensitive Networking (TSN) capabilities allow for microsecond-precise synchronization of video streams from multiple cameras, essential for real-time safety applications [5][7] - The integrated approach of Belden's physical AI systems reduces infrastructure costs and complexity while enhancing overall equipment effectiveness [11] Group 2: Market Application and Deployment - Following a successful pilot project, the virtual safety fence is set for commercial deployment at an automotive manufacturer later this year [4] - The physical AI systems address key manufacturing challenges such as labor shortages and the need for rapid facility modernization [10] - AI-powered vision systems have demonstrated real-time quality inspection capabilities, successfully identifying and removing defective pharmaceutical packages while maintaining production speed [8][9] Group 3: Strategic Partnerships - The collaboration leverages each company's strengths: Belden provides industrial networking, NVIDIA offers simulation and computing platforms, and Accenture contributes expertise in physical AI and manufacturing automation [9] - The partnership aims to create safer, smarter, and more connected industrial operations by integrating physical and digital worlds [1][2]

Core Insights - NVIDIA is collaborating with leading manufacturers and robotics companies to utilize Omniverse technologies for building advanced robotic factories and autonomous collaborative robots, addressing labor shortages and promoting reindustrialization in the U.S. [1][18] Group 1: NVIDIA Omniverse Technologies - NVIDIA's Omniverse technologies are being adopted to create digital twins of factories, enhancing simulation and operational efficiency [2][19] - The "Mega" NVIDIA Omniverse Blueprint is expanding to include tools for designing and simulating factory digital twins, with Siemens being the first to support this initiative [2][3][19] Group 2: Industry Adoption and Applications - Major companies like Caterpillar, Lucid Motors, and TSMC are implementing Omniverse for real-time factory planning, predictive maintenance, and supply chain optimization [7][8][9] - Belden is utilizing Accenture's Physical AI Orchestrator, which integrates NVIDIA technologies for safety monitoring and quality inspection in manufacturing environments [6] Group 3: Robotics Development - Robotics firms are leveraging NVIDIA's architecture to develop advanced robotic fleets aimed at improving productivity and safety in various industries [10][19] - Collaborations with companies like Figure and Agility Robotics are focused on creating next-generation humanoid robots using NVIDIA's simulation and training platforms [11][12] Group 4: Investment and Economic Impact - In 2025, a total of $1.2 trillion in investments was announced to enhance U.S. production capacity, primarily from electronics, pharmaceuticals, and semiconductor sectors [5] - The integration of physical AI and simulation technologies is expected to significantly accelerate the manufacturing process and enhance competitiveness in the industrial sector [5][19]

Core Viewpoint - Dover Corporation is recognized as a profitable manufacturing stock, but its growth is currently muted, leading to a cautious investment stance despite long-term positive trends in the industrial sector [1][2]. Group 1: Company Overview - Dover Corporation designs and manufactures a range of industrial products, including fluid management, refrigeration, material handling, mobile equipment, and identification systems, catering to global markets from infrastructure to process industries [3]. Group 2: Market Performance and Analyst Insights - RBC Capital Markets has maintained a "Sector Perform" rating on Dover, reducing the 12-month price target from $206 to $183, reflecting concerns over weak organic growth, which has been below 1% in recent quarters [1][2]. - The company faces uneven demand in end-markets such as residential construction and HVAC, which contributes to its current performance challenges [2]. - While margins and cost-cutting efforts are supporting the company's financials, significant revenue growth remains elusive, suggesting a need for caution among investors [2].

Core Insights - Pentair plc is recognized as a highly profitable manufacturing stock, with RBC Capital Markets maintaining an "Outperform" rating and increasing the 12-month price target from US$121.00 to US$124.00, citing solid earnings quality in Q3 results [1][2] Financial Performance - Pentair achieved a 160 basis-point expansion in return on sales and a strong incremental of approximately 82% in its Q3 results [1] - The company reported a return on invested capital of around 16.7%, which is an increase of approximately 120 basis points [2] Market Position - Approximately 75% of Pentair's business is derived from replacement and aftermarket markets, providing a defensive advantage amid broader industrial softness [2] - The company has successfully implemented tariff-mitigating price increases without signs of demand destruction, indicating strong pricing power [2] Business Segments - Pentair operates globally in water and fluid solutions, with segments including Flow, Water Solutions, and Pool, catering to residential, commercial, and industrial needs [3]