The following is a summary of the Modine Manufacturing Company (MOD) Q3 2024 Earnings Conference Call Transcript:

Financial Performance:

• Modine Manufacturing expects compound annual revenue growth of 10% to 13% over the next three years, with adjusted EBITDA margins targeted in the range of 16% to 18% by fiscal '27.

• The Climate Solutions segment saw outstanding Q2 results, primarily from data center business growth, which more than doubled year-over-year. Adjusted EBITDA for the segment improved by 47%, reaching a margin above 21%.

• Performance Technologies experienced a strong quarter in earnings and margin growth despite a decline in top-line revenue, owing to a decline in vehicular markets.

Business Progress:

• Modine is focused on expanding its data center segment, announcing new production facilities and capacity expansions in various global locations including the UK, Calgary, and Chennai. These expansions support growth in data center products catering to North American hyperscale and colocation customers as well as the global market.

• The company anticipates first shipments of its new 1 megawatt cooling distribution unit designed for high-density applications in data centers by the fourth fiscal quarter.

• A partnership with Gillig for supplying thermal management systems for hybrid vehicles marks a strategic move into the electrification of transportation.

Opportunities:

• Expansion in data center capacities and new manufacturing facilities globally aligns with increased demand from hyperscale customers, potentially accelerating revenue growth in this high-demand sector.

• Strategic partnerships and new product introductions in the EV thermal management systems demonstrate potential market expansion and alignment with ongoing electrification and environmental trends.

Risks:

• The segmentation and rationalization of the Performance Technologies segment in response to declining vehicular market sales pose challenges, potentially impacting short to medium-term revenue streams from these sectors.

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