I think we're all set. So I'm Kyle Menges. I'm Citi's US machinery analyst. Pleased to be joined by the Timken team today. To my immediate right, I've got Lucian Boldea, the President and CEO, and then Mike Discenza, VP and CFO. Thanks for being here with us today.
Happy to. Thank you.
Maybe to start, Lucian, you've now been in the seat for about six months, so it'd be great just to get your high-level thoughts on what stood out during your time at Timken thus far, and what opportunities you're most excited about going forward.
Yeah. Look, I think the one sentence summary is, it's, I'm very lucky. Came at the right time into a great company, and I think when you look at the position the company sits in, you know, you start with the most important part, which is the cash generation. How's that engine going? And it's been a strong one, and it continues to be strong. Health of the balance sheet, very strong. We're at the beginning of, hopefully, where the industrial cycle starts picking up, and our, that leverage is in a very healthy range at the, call it, the bottom of the cycle now. So that's a great place to start. You look at the portfolio, a number of acquisitions, a number of difficult choices on divesting a lot of automotive business have been done.
They're behind us, so now it's time to build on all that work that has been done and to continue from there, and I think the company is really poised for growth. Some of the choices we have in front of us, obviously, operating rigor is very important, so that's something that we're gonna continue to double down on. We've talked about the portfolio, and how that works on the portfolio is very important. Applying 80/20 to that and now broadening that 80/20 approach is critical beyond the portfolio.
Awesome. Maybe we can talk about some of your near-term strategic priorities. I know 80/20 is gonna be a main focus area for you, but just what should we expect from some of these 80/20 initiatives over the next 6-12 months?
Yeah, 80/20 is, these days, a very catchy word and, you know, sometimes not uniformly understood what it is and what it isn't. And people do it for different reasons. You know, if you separate, there's the 80 and there's the 20, which is the 80 is what I'm gonna double down on, and the 20 is what, what I'm gonna discontinue. And so how do you balance that, that investment is, investment of time and investment of mind share is important, and our focus is broadening this approach, but the main objective is not to make a smaller, more perfect company. The main objective is to get the organic growth engine going better than it is now, to leverage our global footprint, to accelerate the penetration globally of our acquisitions. That's why we're doing this.
So, but to do that and to avoid just adding a lot of resources, you have to stop doing something. So that's where this is a mindset, this is an approach, and you look at simplification. How do you simplify your customer mix, your product portfolio, in the end, your operations? Because, you know, the world of operating as a US company, where you're an exporter or you, or you make something in one region, that, that world is kind of behind us, at least for the time being. You have to operate in region, make in region, serve in region to avoid tariffs, to be able to serve your customers efficiently. So for that, you need to simplify.
This is all kind of one big umbrella of simplification, one big umbrella of giving 19,000 people the freedom to make choices on where are we gonna do less, where are we gonna do more? That's really the, the idea behind it.
Got it. And on the portfolio side, with the 80/20, you've already announced the auto OE pruning. You talked on the last earnings call, looking at perhaps pruning a single-digit % of the portfolio. I know you'll give more of a framework at the Investor Day that's upcoming, but just maybe some high-level overview on what you're doing and how you're thinking about balancing, doubling down on growth versus potentially exiting more areas of the business.
Yeah. Look, the focus is really, in the end, we wanna grow the top line. We also want to improve our mix and our margin in the end. So to the extent that we have businesses that are dilutive, and obviously, any company, if your average margin is a certain number, you're gonna have some businesses below and some above. So one way to improve the average is to stop things that are below, and that way, you avoid having to, you know, continue to drive up pricing on the things that are well above and jeopardize your growth right there. You wanna leave those growing very nicely, and you wanna stop those that bring you down. And so that's gonna be the focus. The focus is: What are the margin dilutive businesses?
And then can we fix them quickly, and you can underline quickly three times, or are they just not us? And if they're not us, then is there another better natural owner for those businesses who would be better positioned to take advantage of that market position?
Doubling down on growth, I guess in the immediate term, it's more gonna be focused on organic, but also some inorganic opportunities. Just talk about that a little bit.
Yeah. Look, I started out with, you know, how excited I am about our cash generation, our balance sheet, which means it allows you a balanced allocation of capital, which we are committed to. That includes M&A. So inorganic growth will be part of the story going forward, but first and foremost, we got to do what's in our hands today and not dream of what we could find tomorrow, and that's organic growth. And so how do we do that? And the great news is, the acquisitions that we have in our Industrial Motion portfolio, many of them were regional companies, and The Timken Company is about as global as they come. I wouldn't even call it global anymore. I would call it a multinational company because we have almost standalone operations now in every region of the world.
And thank God we have that with all the tariffs now, that, that really helps us, helps us operate efficiently. So in that framework, when you do all these acquisitions that are regional businesses, it affords you the opportunity to globalize those. So we have a couple of businesses, linear motion, our lubrication business, they're three-quarters of the footprint is European today. There's no inherent reason why that would be the case. They're not. It's not an application that only exists in Europe. It exists globally. So we're now on a very aggressive path, taking those, taking those to other regions. And obviously, first region, if you're already in Europe, you come to the Americas. And in one of those examples, for instance, we're up 20% year-over-year in the U.S.
Now, it's off of a smaller base, but it demonstrates we're able to build a pipeline very quickly. We're able to close on the pipeline at very good rates, which means what we're offering, the market wants. So now how do you, how do you accelerate that? How do you scale that? That's, that's really a significant organic growth opportunity for us.
Awesome. It's good to hear some early examples of success with that. You, you did mention on the fourth quarter call, you've now broadened out this 80/20 strategy, really across the entire enterprise. So maybe talk about some of those upfront investments and the initial costs. It sounds like it could be over a few quarters to position the company to see some of these benefits over the medium to long term. And yeah, can you give us just a sense of what that might look like and what value you think this could drive to Timken, both on the growth and the margin side?
Yeah, look, at this point, you know, it's important to understand where we are in the process. So portfolio 80/20, we kinda started almost the first week I showed up. We started in earnest, broadening the 80/20, sometime late Q4. So, we've done enough analysis to know that there is opportunity, so that we know. How big is it for our company? That's something that we're still working on. So what we're relying on now is what is typical. And what is typical for a company that embarks on this journey, is that in the first couple of quarters, you have a net cost to do this because there's a lot of analysis, there's resources. We already disclosed publicly, we've engaged a third-party firm to help us with this. And so that's kind of first half year.
Second half year, usually you start generating enough value that you pay for the investment, so it's kinda net neutral. And then third half year is when you start, when you start actually generating a net gain. So that would say that first half of 2026 will be in the net investment, second half, probably neutral, and then first half of 2027, we would see, we would see a return. You know, tell you that's what's typical. No self-respecting leadership team is gonna wanna be typical, so we're gonna try to do a little better than typical. But that's... If you picked up the phone today and called our good friends at Strategex, they would, this is what they would tell you.
Great. Maybe a high-level question for Mike. You were appointed CFO a couple of months ago, but you've been with the company for over 25 years, so I think it'd be great to hear your perspective just on how Timken and the portfolio has really transformed over time, as well as the strategy and just the evolution you've seen at the company over your tenure.
Yeah, thanks, Kyle. I have been with the company 25 years, and a lot has happened in that 25 years. When I started with the company, you know, I'll say we were more than 50%, bearings, probably closer to 90+% , bearings, more than 50% on highway markets. And as I look at it now, we've really accelerated growth into, I'll call it, the more attractive parts of the engineered bearings market. And obviously, what we've done with our industrial motion portfolio, really built out a nice portfolio. And then, what we've done over the last 10+ years is really focus on, I'll say, moving away from the more cyclical markets into more secular and higher growth markets.
Things like automation, passenger rail, renewable energy, where, you know, we have a strong right to win and a great, you know, secular trend behind it. And in those markets, which now make up probably a third of the company's revenue, we've been able to grow at a 10%, excuse me, a double-digit CAGR over the last 10 years. So, really transformed from what was a on-highway tapered roller bearing company, for all intents and purposes, into a much broader, much more attractive, much less cyclical company. So quite a lot has changed in 25 years.
It sounds like it. Lucian has already talked about the free cash flow and balance sheet strength, so you may be piggybacking off that. Can you speak a little bit to your capital allocation priorities in 2026 and any longer-term framework, but, you know, maybe more on the near term first?
Yeah. So, like Lucian said, really strong cash generation. That's happened and will continue to happen. We have a great cash-generating business. We've targeted our leverage to be in the, call it, 1.5-2.5 times range, and we've ended the last several years right in the middle of that range. So we've had, you know, we've had strong discipline, and I would say we're gonna continue to maintain that capital allocation discipline going forward. And it's been a balanced approach. You know, share repurchases, we've done quite a bit. You can see the slide here. You know, since 2013, repurchased more than 25% of our shares.
So we've been able to deploy capital there, but we've also built out quite an extensive portfolio of acquisitions. And so we'll continue to stay disciplined, we'll continue to stay balanced, but M&A remains an attractive opportunity for us, and we'll continue to deploy capital there.
Great. And maybe on that subject, just what's the M&A pipeline looking like today? How are you thinking about smaller strategic bolt-ons over the next few years versus maybe something a little more transformative?
Yeah, look, I think that's, that's part of the conversation we look forward to having at Investor Day. I can, you know, give you a bit of a teaser. You know, I think what, you know, at least the way I try to think about the world is, what are the macro trends that if I say them to this room, everybody nods their head and thinks it's obvious, it's nothing controversial? So, is it, automation and robotics? Is it electrification and power generation? Is it defense? You know, those are, those are the kinda persistent macro trends that are here to stay for the foreseeable future. So if that's the case, then the next dimension to that is: What are the industry verticals, the markets that the company wants to focus on?
You know, we already mentioned the one that we don't want to focus, which is the on-highway one. That's fine, but where are we going? What are those markets? At the intersection of those macro trends and the markets are enabling acquisition opportunities, and those come in different sizes. Obviously, you know, if you were where we are, putting all the eggs in one basket on a transformational one, there may be a time at some point to consider that, but I think there's opportunity in the short term for bolt-ons, there's opportunity for a little bit of pruning, and there's opportunity for adding.
You know, as Mike said, and I don't want to gloss over what he said, a third of the portfolio over the last 10 years has grown at 12%. So, you know, mathematically, double digits. Mathematically, that ought to be enough to lift the company. Why didn't that happen? The reason that didn't happen is because at the same time, we exited a number of businesses. Well, there's a couple of pieces of good news. We're kinda slowly running out of... You know, we had over $1 billion to exit when we were $2.5 billion worth of automotive. That proportion now is very, very different. I mentioned single digit total, what's in place, so there's a lot less to walk away from.
The one-third continues to pick up some momentum, continues to grow, and with accretive M&A to that growth, we really should be able to alter this, and bend the curve on the organic side, and then also enable us to do more bolt-ons.
Great. I'll pause to see if there's any questions from the audience. We got one over here.
Hey, thanks, Lucian, for making the time. I just wanted to ask, especially given your experience at Honeywell, we've seen the industrial automation market undergo a couple of changes over the last couple of decades, and your current Timken portfolio is quite geared towards six-axis or seven-axis robots that kind of, you know, they benefit from your strong positioning, like linear actuators, guides, things like that. So do you think that there is a need to shift the portfolio towards products that go more into humanoids, things like planetary roller bearings? Is that something you would look to do, considering that in 10 years' time, the future of industrial automation could be humanoid?
Yeah. Yeah, look, it's a great question. You know, automation will have a very significant impact and already has a very significant impact on us. So if you start... kinda the first level is autonomous operations. That's already here now. You know, we started with the dark warehouse, then we have the almost dark gigafactory. You have the offshore oil rig that runs autonomous, and the implication on that, the mine that gets operated remotely, the implication of that is reliability needs to be at a completely different level because in the end, yes, it's automated.
In the end, you'll hear from all our peers, the rest of the two days about all the AI that they use, but something still is gonna move coal around, something still has to move cement, something still has to convey things around. So, and that needs to be way more reliable because the maintenance person is now no longer, you know, at the lithium mine. They're in Santiago, Chile, and they come there once a week to do preventive maintenance, or they're in Oslo, and the offshore oil rig is offshore. So, that's the first dimension. Then factory automation is a big deal. You know, we all run factories in the Western world, and, you know, for the last few years, it's been very hard to attract talent in the factories. People don't wanna work shift work.
They wanna be flexible. They wanna have a, have a different work-life balance. That's the impact of COVID and kind of life is short philosophy. That really improves automation, and then... That's an immediate opportunity. All the things that you mentioned, our products are very well aligned with that, whether it's our linear motion, whether it's our automatic lubrication systems, whether it's our precision drives, and, and so on. Cone Drive, you name it, and not the least, also, also the bearings business, the base bearing business help there... Humanoids is the next frontier. We have our precision drive business that we've got a couple of acquisitions there.
We still have the legacy bearings business, because one thing you can count on is as compute power increases, as the cameras get better, the motion is more precise, the loads that get put on these, on these robots is higher. So that starts where you would have had a regular bearing. Now you're starting to talk about more sophisticated technology to be able to, to affect the motion that you need. So we'll continue to work on that. We're working with OEMs there, but I would tell you, my view is that's still very early, and there's plenty of short-term opportunity on automation that's more significant, whether it's warehouses, whether it's gigafactories, whether it's those type of those type of applications where there's massive investment being done today.
But, certainly excited about humanoids, and we have a portfolio there. We have a play there. We'll continue to look at enabling acquisitions. You know, other place you look at is what's the future of hydraulics versus electrification? How much of the hydraulics can be engineered with actuators? Then how do you control those? How do you fail safely, stop those? You know, because ultimately you have to have safe construction equipment, off-highway equipment, and so on. So, those are all growth vectors that automation is driving for us that we're so excited about. That's why when I mentioned the three macro trends, it was up first, because it's a big driver.
Sure. Any other questions? All right, maybe we can... Is there a question?
No.
Okay. Yeah, maybe we can switch gears a little bit. Digging into the initial 2026 organic sales outlook of 2% growth. So it sounds like it's pricing of about 1%. And then I guess the volume outlook would be about 1%. But yeah, curious why that wouldn't be a bit higher for 2026 when you consider the recent U.S. PMI print and the order trends that you've highlighted, and I think the backlogs up pretty nicely-
Yeah
year-over-year as well.
Yeah. Look, could be. We're not saying it couldn't. I think from where we sit today, you know, the key word is just uncertainty and a little bit of caution, on our part. What I would tell you is, you know, we're now, you know, hard to believe, halfway through Q1, and, you know, we still feel good about, about where we're headed in the year and fairly consistent with, with what we, what we said. You know, we're, we're now Chinese New Year, so that's always, you have to always watch when you compare quarter-to-date, year-over-year, because Chinese New Year moves one week back and forth, and it can really mess with your, with your comps. But, but all in all, I think we see a positive start, to the year.
I don't think we see, you know, your historical snapback that at some point you would expect. Now, you know, my favorite question to ask a lot of the people I interact with externally is, what assumption do you have in your models about the midterm election? And they say, "We don't have that factored in." And I'm like, "Okay, that seems like a pretty big event," and I think we could spend the rest of the morning debating what impact that could have on on demand. But that's one that's very unknown. Are there going to be additional stimuli? Are there gonna be additional things that, especially in our exposure to agriculture, exposure to construction infrastructure, what will the administration do to stimulate that? We don't know, but that's not baked in.
To the extent that that happens, then we could look conservative and bearish on our forecast. To the extent that doesn't happen, then we're probably gonna continue with the uncertainty or two steps forward, one step back, kind of approach that we've been in the last six months.
Got it. That's helpful. And you have highlighted recent encouraging order trends. The backlog is up, and as you exit 2025 and the 2026, can you speak to just what is driving this growth in the markets where you're seeing some positive activity?
Yeah, look, there is a number of markets. Obviously, aerospace and defense is always at the top of the class where you know when you forecast your sales, you're really forecasting your production because you have more demand than you have ability to fulfill in the short term. So that's kind of at the top of the list of growth opportunities. Renewable, still very strong. Our exposure is about 75-25, wind, solar. Wind is still very good, solar, not so much. So net, it still averages out as a decent story. Rail is pretty strong, and then at the other end, you still have agriculture that's relatively slow, and then mining and infrastructure somewhere in between.
So that's that's kind of overall the picture as we see it. Today, regionally, I would say, you know, things are evolving in a good way because, you know, last three years we kind of got used to the net is U.S. growth rate minus Europe decline equals final answer, and that's no longer the case. Now Europe is starting to find its footing also and starting to be a little more of a contributor than India, Central Asia, Middle East, Sub-Saharan Africa, really growing nicely, and China still a little more tepid.
... And the wind business at 75% of renewables, that's pretty much all China wind, right?
It's heavily exposed to China. But in the end, if you think of the applications, it's main shaft bearings for the wind, but that's heavy, heavy China. But then we also sell a lot into gearboxes, and so that's the ZFs, the Europeans that make those, so that's more OEM-
Yeah
type business, and some of that is European.
Yeah. And I am curious, what do you think is just driving some of the green shoots that you guys are seeing in Europe?
Yeah. Look, some of it, obviously, you know, at some point you reach a low enough level of demand, you deplete the inventories, and you start selling to demand. It's partly a function of the comps that are there, but it's also partly a function of really us refocusing, part is inorganic growth becoming organic growth as the acquisitions are there. Our Industrial Motion portfolio is different by design, where there's more revenue that's less cyclical, that's more services related. If you think of our lubrication portfolio, if you think about those are, those are not necessarily all OEM CapEx. You have a little more OpEx exposure with those, so that also helps smooth out the growth.
Got it. And you guys talked about being price cost positive for the year and expectation to recapture margins from tariffs as you're exiting 2026. Can you just remind us of the key buckets we should be thinking about there between cost savings, material inflation, gross tariff impacts, and pricing to bridge to your four-year price -cost outlook?
Yeah, I'll let Mike cover the complete walk with all those items. But what I would tell you is, you know, our customers, I think, appreciate that we have taken a disciplined and measured approach to this, and so we've been very, very public and very transparent with them. So this spending last year to really try to recover the dollars and now trying to really get back our margins. So they're working with us. I'm very encouraged that we're able to do that in a constructive way and not end up losing a bunch of share, 'cause again, what I'm solving for is organic growth, not just the victory lap on price.
And then Mike can talk about all the actions that we've done on self-help, because one of the things I'm very impressed with is our company is very good at if you look at how much business we've exited over the years, stranded costs would have killed you if you don't have a good muscle on self-help. And this company has that, and so we're continuing to leverage that. So Mike, if you want to talk about the elements of the-
Sure. So as you said, we are planning to be positive price cost for the year. That's really driven by our pricing actions. As Lucian said, we continue to price particularly to recapture margin on tariffs, which we committed to do by the end of this year, as well as you know, some of the cost actions that Lucian referenced. So, if you can think of it a couple different ways on our EBITDA bridge, we talk about material logistics costs. We expect that to be a net positive for the year, even though we have modest inflation across our material portfolio. The cost actions that we started last year, really targeting material cost reduction, are gonna benefit us this year.
So we expect to be net positive on, material logistics. And then manufacturing, you know, call it all else in manufacturing, will be a, probably a slight negative on that walk as we do have some costs coming in, merit costs for, for wages. You know, so, and, our cost savings actions there are not quite enough to offset, but net-net, all of that should be a positive price cost. You know, Lucian referenced the stranded cost, and, we did take some actions last year around, closing plants, and we've done that, pretty consistently. And so we will benefit this year from some of those plant closures as we, have gone past the point of the stranded cost, have actually gotten the cost out.
So, those things will contribute to us being positive price cost this year.
Great. And then are there any notable factors that are influencing your EBITDA margin outlook for the year?
Yeah, you know, a couple others. Obviously, those, being net positive there is gonna help, the-
Yeah
... tariff recapture, margin recapture, certainly helps with margins. We do have some headwinds in our S&A. Again, wage inflation, you know, our merit increases, as well as some variable compensation increases that are gonna be headwinds year on year. So those are calling, holding or hurting the margins. But in the end, with what we're doing on tariffs and pricing, you know, I think, like you said, net-net, we'll see the margin expansion and positive price cost.
Got it. And I would assume the recent executive order to the reduction in tariffs on India would benefit Timken, just given some of your bearings manufacturing exposure there. I know this wasn't included in the 2026 guide, but can you give us some color on what that benefit could look like in 2026?
Yeah. Look, so, step back to what we know, what's been announced informally, and then, what's been actually announced in terms of an executive order. So if you think of India tariffs, there's a 25% tariff that will go down to 18%. There is the additional 25% tariff, which was more to discourage India from buying Russian oil. And then there's the steel tariff of 50%. So on, let's say, you import $100 from India, the steel content on that $100 worth of import is tariffed at 50%. That will continue.
... the 25% Russian oil punitive tariff, that's gone. There is an executive order now, so that's gone. We'll see exactly when it flows through and what the effect is, when it is effective, but that's gone. The 25 going to 18 on the non-steel content, that's at least as of a day ago, it was not firm yet. So if all of it happens, the day it happens, it's give or take $0.01 per month when it happens.
Okay.
So if it's March one, then you know, it's simple math, or if it's April one, so on. So that's give or take what the impact is. You know, what's been announced so far is two-thirds of that is the impact. So still meaningful, but not a complete game changer.
Makes sense,
Just because we're so little.
Yeah.
It's the footprint now is so multinational. Again, I have a hard time thinking of us anymore as a global company because we're so multinational versus-
Yeah
... versus just a global exporter.
Yeah. Got it. I can pause there, see if there's any questions from the audience again. One over here.
Thank you. So you've discussed factory automation. I'm curious, in your plants and facilities, how much automation are you using, your plans for increasing that? And maybe related to that, just chat a bit about labor, attrition rates, et cetera. Are you finding the right talent?
Yes. Thank you. Yeah. So we, you know, we have a full spectrum of factories. If you think about bearings manufacturing, you know, you have the extreme super high volume, low mix kind of manufacturing, which is typically for automotive. That's not our footprint, that's not our factories, which is also the reason why we're de-emphasizing that business. So don't expect to see that type of manufacturing in our portfolio. Our portfolio is more bespoke, more custom. We pride ourselves on being able to prototype something for a customer, making two of something, and then scale that up to several thousand of an item versus the millions of the same item that tends to be more commodity, lower margin.
But even with that mix, we rely on automation pretty heavily in our factories because there's a lot of handling, a lot of grinding, a lot of honing, a lot of operations that you do, a lot of assembly. So to the extent that you can have automation, that's important. The other part that we do, and we have a very heavy factory footprint in Asia, that's new, and those truly are state-of-the-art facilities. You walk through there, they're lean, they're Kaizen, they use automation, they use the latest AI because we have a very strong IT center in Bangalore that we leverage for that. So those truly are what anybody would be proud of to show you.
But, also in, in everybody else's defense in our portfolio, they're new factories, so they're built, they're built from the ground up to be that way. They're very efficient, they're very low cost, really world-class in terms of cost and automation, and, and really overall, the management systems, the tools, all the digitalization that you can imagine. 'Cause look, the value in a factory, automating the equipment is important, but that's, you know, distributive control systems and PLCs have been around, you know, as long as I have been on this, on this earth. Whereas automating workflows, instrumenting that, that's the next frontier, and that's the frontier that we're on, right now.
How do you have a piece of equipment that goes down, send the signal to maintenance, creates a work order, gets the parts, the tools, and the mechanic walks up to the problem with a procedure, with instructions, with parts, with everything? It's not the age-old, "Well, we'll go on break, then we'll come back, and then we'll see there's a problem, then we'll go look for parts, then we'll find tools," and next thing you know, Sunday became Tuesday. This is all one place, one part, and that's the kind of technology that we have in our factories. It's one of the other things I've been very impressed by in, in the portfolio. Now, is every factory that way? No, but that's the beauty of being able to get best practices across and standardizing.
We announced earlier on changes in our organization, and we talked more about Chief Technology Officer, Head of Marketing. What was also in that announcement is we centralized operations under a center of excellence for the whole company. This is why, because there's still a lot of variability in what is best-in-class in our portfolio and what is maybe below our average. So how do you normalize that? How do you get all that at that best-in-class level?
Any other questions? All right, maybe we can wrap up with a little Investor Day teaser. Just... Yeah, I know we're still a bit a ways from the Investor Day, but just what can we look forward to in a few months, just from a high level, what should we expect and from you and the team to cover at the Investor Day?
Yeah, so there'll be two parts to Investor Day, and we're still working on catchy phrases and how we're gonna position that. But there is a short- to medium-term transformation where you kind of can elevate the current performance of the current portfolio, of the current company, of the current business model to another level. And so a significant portion of Investor Day will be dedicated to that, which is, you know, I'll call it the self-help piece. And so we want to make sure everybody walks out of there with, "Yep, these guys have a plan, and they will execute this plan." And that is sufficient to carry us out, you know, 24 months, 36 months, something like that, and really improve the performance from where it is today. And it's the usual suspects we've already talked about.
It's 80/20, it's portfolio work, it's regional penetration. Those are no big shockers, no big surprise vectors there. But really, not to put too much burden on my colleague, but putting a growth walk in front of you to say, "These are the elements you should expect that will contribute to revenue, and these are the elements you should expect that will contribute to margin, and this is how this is gonna play out." So that's the short term, kind of, elevate the performance of the current company. But then the second piece, which we want to introduce at that point. And again, there will be a difference. One is here and now, one is where we're going, is, okay, what is the transformation? And that's the: what are the macro trends? What are the focus industries?
From that, you'll hear from our new CTO who will talk to you about how our technologies will be aligned with that. And then from there, you know, you can start connecting dots on what other enabling M&A, and so on. But that's the here and now, self-help transformation, elevate the performance of what we've got, and then transform to what? Those are the two to have. So I hope, as you can tell, I can't wait because I'm kind of tired of saying, "I'll tell you on Investor Day," and if I tell you now, then what am I gonna tell you then? So it's not long enough for the team to prepare, but it's way too long for us to have to defer answering.
We're very excited about what we have, the story we have to tell, because we think it's a very credible one. It's very focused on execution, which means it puts a lot of pressure on us as a leadership team, which means if it doesn't work, we just need a mirror to find the people to blame. I welcome the challenge because I know the team we have, I know the passion we have, I know the engagement that we have, and I know the quality of the portfolio that we have. This portfolio can and will do better, and that's what we're gonna communicate.
Awesome. Good to hear. Well, Mike, Lucian, thanks for being with us today.
Thank you.
We'll wrap it up there.
Great.
Thank you.
Thank you.
Thank you.