“we're encouraged by orders growth and backlog as well as pent-up catalyst demand that should eventually fuel strong growth as we progress through 2026 and into 2027.”

In context

“on rates. Wins in LNG, a number of large module equipment deals are expected to convert to sales in the back half of the year. In addition, we're encouraged by our pipeline in P&T, which grew high single digits year over year, signaling that the strength of long-cycle orders is expected to persist contingent on the pace of final investment decisions from our customers. We're diligently tracking the slower-than-expected aftermarket order rates for catalysts, particularly within petrochemicals, which has been influenced by overcapacity in the market. Alloy shipments can be temporarily delayed in the short term but are ultimately necessary for our customers to maintain yields. Those can only be deferred for a period of time. So while we acknowledge the challenges this business faced in 2025, we're encouraged by orders growth and backlog as well as pent-up catalyst demand that should eventually fuel strong growth as we progress through 2026 and into 2027. Let's move to Slide 10 to talk further about our expected segment margin expansion for 2026. In 2026, we anticipate the demand for our differentiated high-value solutions and continued pricing that is outpacing inflation will drive further margin expansion. On a segment basis, we expect improved volume leverage principally in our building automation and aerospace technology businesses, which will drive solid incremental margins, while P&T margins will be roughly flat in 2026 due to the impact of stronger projects growth in the second half. Our focus on productivity action and rigorous fixed cost management will continue in 2026. We're working diligently to rightsize our cost structure ahead of the planned aerospace spin and expect to eliminate stranded costs in twelve to eighteen months a”