SMid Cap Industrials: Safety Culture: 80,000 Miles, 35 Sites, and the Secret Sauce for Sustainable Growth

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SMid Cap Industrials: Safety Culture: 80,000 Miles, 35 Sites, and the Secret Sauce for Sustainable Growth

J P M O R G A N North America Equity Research

18 June 2026

SMid Cap Industrials

Safety Culture: 80,000 Miles, 35 Sites, and the Secret

Sauce for Sustainable Growth

We traveled over 80,000 miles and visited more than 35 sites to see firsthand how North America Small and Mid Cap

safety is evolving from a compliance cost center into a strategic growth engine. Industrials

Through these on-the-ground experiences, we observed that the Total Recordable Tomohiko Sano AC

Incident Rate (TRIR) is emerging as a meaningful proxy for organizational (1-212) 622-1099

earnings quality, reflecting how well a company manages risk, retains talent, and tomohiko.sano@jpmorgan.com

executes. Our journey reinforced the conviction that a strong safety culture enables Brendan Shea, CFA

resilient margins and sustainable growth, underpinning our thesis that "Safety (1-212) 622-0770

Unlocks Growth." brendan.shea@jpmorgan.com

Liam Glass

• TRIR & Culture: Measuring What Matters for Performance: Our analysis (1-212) 464-5541

continues to show a correlation between TRIR improvement and financial liam.glass@jpmorgan.com

outperformance within our coverage, specifically adj. EPS growth and adj. Ethan Coyle

EBITDA margin expansion. Across our coverage, the prevailing companies (1-212) 270-0613

ethan.coyle@jpmchase.com

maintain below-industry-average TRIRs, which we view as a testament to J.P. Morgan Securities LLC

operational rigor and safety-focused management cultures. A robust safety

culture signals better labor retention, fewer operational disruptions, and

greater process discipline, all of which contribute to compounding growth.

• Beyond TRIR: Culture-Driven Metrics for Operational Excellence: