BAIRD 2026 GLOBAL INDUSTRIAL CONFERENCE - MIRION TECHNOLOGIES INC

Financial Performance:

• Q3 organic orders surged 62% with overall organic revenue growth accelerating to 6.5%, driven by a 14% increase in the nuclear power sector.
• The company is re-evaluating its long-term margin trajectory, withdrawing the 30% EBITDA margin target for 2028 due to increased OPEX spend on AI/cybersecurity ($10M this year), Paragon integration costs for a nascent reactor protection line, and a temporary mix-down from slower medical growth.
• Current margin accretion is estimated at approximately 1 percentage point annually, aligning with the historical 15-year pre-IPO average, with an expectation to resume this cadence or exceed it in the future as operating leverage increases.
• Paragon, acquired nearly a year ago, delivered 20% organic growth last year and is guided for 25% organic growth this year, highlighting the strength of the installed base catch-up spend.

Guidance and Future Outlook:

• Management forecasts a decade-plus of sustained capital spending growth in the nuclear sector, driven by the fundamental necessity to extend plant lifecycles and increase output rather than just new builds.
• No new large-scale nuclear builds are anticipated in the U.S. within the intermediate-term planning horizon; however, global new-build activity is expected to accelerate due to energy security concerns and geopolitical factors.
• The medical segment is projected to return to growth in the coming quarters, with the nuclear medicine business recovering from a six-to-12-month destocking period and normalization post-pandemic.
• Management plans to provide sharper margin and growth guidance early in 2027.

Business Segments and Product Lines:

• Nuclear and Safety (70% of revenue): 80% of revenue derives from the installed base (98% global fleet presence). Key growth drivers include life extension, power uprates, and digital modernization of instrumentation.
• New Build Activity: Booked a major utility-scale order in Egypt for two reactors; pending approval for six EPR reactors in France; Small Modular Reactor (SMR) revenue has grown from ~1% to ~4% of total revenue, tied to top industry players.
• Medical (30% of revenue): Radiation therapy and quality assurance (RTQA) is stabilizing with normalization in the U.S. market and improved stability in China, though Japan remains a drag; Nuclear Medicine is poised for recovery fueled by a pipeline of over 1,000 FDA drugs and a shift toward alpha emitters.
• Product Focus: Significant demand expected for neutron measurement, reactor protection systems, and health physics instrumentation; software and AI-enabled services are growing double digits, particularly in RTQA and nuclear medicine.

Market and Competitive Landscape:

• Mirion holds a dominant global position, ranking #1 in 20 of 22 product categories within the nuclear industry.
• The nuclear power sector is undergoing a secular shift where assets are transitioning from capital rationing to maximizing asset value, creating a robust environment for capital commitments.
• Hyperscalers (data center operators) are a significant tailwind, prioritizing any capital spend that generates incremental megawatts, with recent announcements representing the equivalent of two new nuclear plants.
• In the SMR sector, Mirion positions itself as a "pick-and-shovel" play on the broader emerging sector rather than betting on individual reactor manufacturers.

Risks and Challenges:

• Regulatory and geopolitical risks, specifically regarding the approval process for new global builds (e.g., the France EPR project).
• Integration costs associated with Paragon and the development of a front-loaded, pre-revenue reactor protection product line.
• Volatility in the medical sector due to hospital capital expenditure restraint and specific regional issues (e.g., anti-corruption concerns in China, slower recovery in Japan).
• Potential market disruption if AI-driven data center power demand slows, though management notes nuclear new build and installed base upgrades are driven by broader energy security needs rather than solely data center construction.

Management Commentary and Tone:

• The tone is highly confident and constructive, emphasizing a "bell has rung" narrative for a multi-decade nuclear renaissance.
• Management is assertive regarding the durability of current order dynamics, describing them as comprehensive and not narrowly confined to specific sub-segments.
• Leaders expressed strong belief in the partnership with industry giants like Varian (Siemens Healthineers) and the strategic value of their M&A capabilities.
• Brian Schoffer (CFO) adopted a pragmatic tone regarding margins, citing specific cost drivers and strategic investments that temporarily dilute margins but support long-term value.

Analyst Questions and Answers:

• Installed Base vs. New Build: Management clarified that 80% of nuclear revenue is from the installed base (life extensions/upgrades) and is less sensitive to political shifts or data center build-out cycles than new build revenue.
• Paragon Synergies: Confirmed that while the deal is margin-accretive overall, the specific investment in reactor protection systems will be dilutive until after the 2028 deadline.
• Medical Recovery: Analysts probed the "beta to alpha" emitter shift; management confirmed this leverages Mirion's superior alpha spectroscopy technology and is tied to a massive expansion in the drug pipeline and cancer center build-outs.
• China and Japan: On the RTQA segment, management noted stability returning to China but acknowledged Japan remains a key challenge affecting growth rates.

Other Key Points:

• The company serves 450 operating reactors globally and is deeply integrated into the value chain of nuclear medicine, ranging from diagnostics to dose calibration.
• Waste remediation and nuclear arsenal modernization (non-production safety instrumentation) are identified as key growth drivers for the "Labs and Research" sector, supported by bipartisan political will.
• The transition from beta emitters to alpha emitters in nuclear medicine represents a significant technological tailwind that aligns with Mirion's core competencies.