ITT to Provide Highly Engineered Pump Systems and Aftermarket Services

Rhea-AI Summary

ITT Inc. signs a three-year agreement with ExxonMobil for the supply of API-610 centrifugal pump systems and related products, with a minimum contract commitment of $50 million and a total potential value of $80 million in revenue over the term. The agreement represents the largest single contract ever awarded to Goulds Pumps, ITT's industrial pumps and valves manufacturer. ITT's Industrial Process segment will provide heavy duty engineered centrifugal pump systems and aftermarket parts and services to ExxonMobil to support its existing operations, primarily in North America. The agreement allows ExxonMobil to leverage ITT technology to enhance user experience and lower the total cost of ownership through shortened project cycle times. ITT's CEO and President, Luca Savi, expressed gratitude for the partnership and highlighted their commitment to delivering high-quality pumps and a frictionless customer experience. The Industrial Process segment, with ~$1 billion in revenue in 2022, is a global leader in centrifugal and twin-screw pumps for various markets.

Insights

Market Research Analyst

The agreement between ITT Inc. and ExxonMobil marks a significant milestone for ITT's Industrial Process segment, potentially boosting its revenue by up to $80 million over three years. This deal is not merely a transaction but a strategic partnership that could solidify ITT's market position in the provision of industrial pumps and valves. Given the scale of the contract, it is expected to provide a stable revenue stream and could lead to further opportunities within the energy and petrochemical industry.

Moreover, the commitment to a minimum contract value suggests confidence in ITT's product offerings and services, which may be an indicator of the company's competitive edge in technology and customer service. The focus on enhancing user experience and reducing total cost of ownership through proprietary technology may resonate well with other potential clients, potentially leading to market expansion.

Financial Analyst

ITT's recent acquisitions, including Habonim and Svanehøj, reflect a strategic expansion into niche markets with specialized applications. These acquisitions, coupled with the new contract, could have a compounding effect on ITT's financial performance. The company's revenue from the Industrial Process segment was approximately $1 billion in 2022 and the additional minimum commitment of $50 million represents a 5% increase over the term of the contract, not accounting for potential upsides.

Investors should consider the impact of this deal on ITT's financial ratios, particularly its return on assets (ROA) and return on equity (ROE), as the efficient execution of the contract could lead to improved profitability. Additionally, the contract's long-term nature provides a predictable cash flow, which is favorable for financial planning and may be reflected in the company's stock valuation.

Energy Sector Analyst

The energy sector is known for its capital-intensive operations and the critical importance of reliable equipment. ITT's ability to secure such a large contract with a major player like ExxonMobil underscores the company's reputation for quality and reliability in heavy-duty engineered centrifugal pump systems. This agreement could serve as a benchmark for performance standards in the industry, potentially influencing procurement strategies of other energy companies.

ITT's global reach, with teams in North America, India and South Korea, demonstrates its capacity to serve multinational clients and manage complex supply chains. The partnership with ExxonMobil could enhance ITT's visibility and credibility in the energy sector, possibly leading to increased market share and a stronger negotiating position in future contracts.

STAMFORD, Conn.--(BUSINESS WIRE)-- Feb. 5, 2024-- ITT Inc. (NYSE: ITT) today announced the company has signed a three-year agreement for the supply of API-610 centrifugal pump systems and related products and engineered services to ExxonMobil, one of the world’s largest international energy and petrochemical companies. The agreement contains a $50 million minimum contract commitment, with a total potential value of $80 million in revenue over the term, and represents the largest single contract ever awarded to Goulds Pumps, ITT’s industrial pumps and valves manufacturer.

Goulds Pumps, a part of ITT’s Industrial Process (IP) segment, will provide heavy duty engineered centrifugal pump systems and aftermarket parts and services to ExxonMobil to support its existing operations, primarily in North America. Under the agreement, ExxonMobil has the ability to leverage proprietary ITT technology to enhance the user experience while lowering the total cost of ownership through shortened project cycle times. Goulds Pumps will also provide enterprise-wide support and a dedicated global project management team to oversee execution of the agreement.

“We are humbled and honored to partner with a blue-chip energy company like ExxonMobil on this important award. Our teams in North America, India and South Korea will work hard to serve ExxonMobil locally in each region to deliver high-quality pumps that meet our customer’s expectations, and to provide a frictionless customer experience. The award is a testament to the work our teams have done to position ITT as a supplier of choice for flow applications worldwide,” said Luca Savi, ITT’s Chief Executive Officer and President.

IP is a global leader in centrifugal and twin-screw pumps for the chemical, energy, mining and industrial markets with ~$1 billion in revenue in 2022. The segment has 17 manufacturing locations and ~2,700 employees globally. In April 2022, ITT acquired privately held Habonim, an Israeli-based leading manufacturer of ball valves and actuation technologies for harsh applications to grow IP’s valves portfolio. In November 2023, ITT announced the acquisition of Svanehøj, a Denmark-based pump manufacturer with leading positions in cryogenic applications for the marine sector, including deepwell gas cargo pumps, fuel and energy pumps and tank control systems, which closed on Jan. 19, 2024.

About ITT

ITT is a diversified leading manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial, and energy markets. Building on its heritage of innovation, ITT partners with its customers to deliver enduring solutions to the key industries that underpin our modern way of life. ITT is headquartered in Stamford, Connecticut, with employees in more than 35 countries and sales in approximately 125 countries. For more information, visit www.itt.com.

ITT-O

View source version on businesswire.com: https://www.businesswire.com/news/home/20240205495777/en/

Media:

Phil Terrigno

+1 914-641-2143

phil.terrigno@itt.com

Investors:

Mark Macaluso

+1 914-641-2064

mark.macaluso@itt.com

Source: ITT Inc.

FAQ

What is the agreement between ITT Inc. and ExxonMobil about?

ITT Inc. has signed a three-year agreement with ExxonMobil for the supply of API-610 centrifugal pump systems and related products, with a minimum contract commitment of $50 million and a total potential value of $80 million in revenue over the term.

What is the potential revenue from the agreement?

The potential revenue from the agreement is $80 million over the term.

What segment of ITT will provide the products and services to ExxonMobil?

ITT's Industrial Process segment will provide heavy duty engineered centrifugal pump systems and aftermarket parts and services to ExxonMobil.

What did ITT's CEO and President say about the partnership with ExxonMobil?

ITT's CEO and President, Luca Savi, expressed gratitude for the partnership and highlighted their commitment to delivering high-quality pumps and a frictionless customer experience.

What is the revenue of ITT's Industrial Process segment in 2022?

ITT's Industrial Process segment had ~$1 billion in revenue in 2022.