Key Insights from Asteri Partners' Industrials Value Creation Benchmark (Q4 2024)
At Asteri Partners, we aim to equip Industrials companies with actionable insights to navigate a dynamic market. Our latest report, Industrials Value Creation Benchmark (Q4 2024), highlights key trends and performance metrics shaping the sector. Here’s a snapshot of the findings:
- America-First Policies: Following his re-election, President Trump’s pro-domestic manufacturing agenda is projected to drive 17.3% EPS growth in the Industrials sector, supported by tax cuts, regulatory reforms, and manufacturing incentives.
- Tariff Uncertainty: Proposed import tariffs may raise input costs and disrupt supply chains while encouraging domestic production. Companies are balancing these pressures carefully.
- Strengthening Labor Market: Eased labor tightness and a lower job openings-to-hires ratio have prompted companies to focus on reducing employee turnover and improving worker experience.
- Investments in AI: Over 50% of CEOs report adopting AI to enhance production efficiency, reduce costs, and improve product quality. Upskilling workers to collaborate with advanced technologies is a key priority.
- EV/EBITDA Multiples: Median multiples have climbed from 10.2x in late 2022 to 12.6x currently, reflecting market recovery and stability.
- EBITDA Margins: Margins have steadily improved from 9.0% in Q4-2021 to 12.2%, supported by the post-COVID economic recovery, supply chain improvements, and price adjustments.
- ROIC: Median ROIC has remained stable, improving slightly from 5.9% to 6.3% this quarter.
- Total Shareholder Return (TSR): TSR over the past 12 months has been primarily driven by EBITDA multiple expansion and increased capital investments.
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