N.A. Chems & Pkg’g "Water conference takeaways" Spector

Research evidence excerpt

N.A. Chems & Pkg’g "Water conference takeaways" Spector

f displays and technologies focused on PFAS remediation, which is a focus Associate Analyst

for the industry but material revenues from filtration/clean up could be further out. gaurav-l.sharma@ubs.com

+1-212-713 4312

While industry growth for water has slowed in recent quarters, companies still

expect an improvement in later 2026/into 2027. Badger Meter (not covered), Nicole Grueneberg

provides the most detail on meter backlogs and thinks the slow down is temporary Associate Analyst

and project cycling related (wind downs before start ups). We have less visibility in nicole.grueneberg@ubs.com

+1-212-713-2469

our coverage to a near term improvement in Xylem and Veralto, but see

improvement in 2H for DD (easier comps) and ECL (lapping paper mill shutdowns). Anojja Shah

We have Buy ratings on Ecolab and DuPont, and Neutral ratings on Xylem and Analyst

Veralto. anojja.shah@ubs.com

+1-312-525 4310

Below we provide incremental takeaways from more substantive meetings:

Xylem takeaways

Xylem tour focused on many of the digital offerings across the portfolio. Growth in

water meter demand over the last 5+ years has been driven by increased focus on

leak detection and equipment upgrades. All meter companies we met with had

some form of "Advanced Metering Infrastructure" (AMI) or smart meters that

connect to cellular networks. Xylem's offering is unique in that they focus more on

a unique fixed network, on their own radio waves, which reduces congestion and

extends battery life.

On top of the AMI meters there is a digital SAAS for billing/digital connections, and

then another optional layer in Xylem Data Lake. The Data Lake is an extra charge

that gives customers a database with an integrated AI resource to answer a range