Enerpac's margin slipped. What changes under its new plan?
The industrial-tools maker set new long-term goals after its adjusted margin fell. A completed acquisition changes the starting point, while stronger cash flow has its own explanation.
Enerpac Tool Group wants a higher profit margin by fiscal 2030. Its new plan follows a year when sales rose but its adjusted margin slipped, even as cash generation strengthened.
Research by Ticker Byline shows that Enerpac finished fiscal 2026 with a 23.7% adjusted EBITDA margin, below the headline goal above 25% in its old long-term plan. Its cash result went the other way: free cash flow exceeded reported net income.
The industrial-tools maker presented its new targets on November 4. Adjusted EBITDA is profit before financing costs, taxes, depreciation and amortization, with specified restructuring and acquisition costs also removed. The margin expresses that measure as a share of sales.
A different starting point
The new goal is a 25.5% to 26% adjusted EBITDA margin by fiscal 2030. The plan also targets average annual organic sales growth of 4% to 6% and adjusted earnings-per-share growth of 10% to 13% from fiscal 2026 through fiscal 2030. Organic growth excludes currency effects and acquisitions and divestitures.
Enerpac is now a different business. It sold Cortland Industrial in July 2023 and completed the SFE Group acquisition on October 28, 2026. The new plan starts with an estimated combined margin of about 24%, including SFE. Those portfolio changes matter when judging the old target against the new one.
Management expects commercial improvements, new products and operating efficiencies to lift the margin. The forecast also includes faster growth from heavy-lifting equipment than from services.
The cash record is stronger
In the year ended August 31, revenue increased to $652.3 million from $616.9 million. Reported net income fell to $89.7 million from $92.7 million, and the adjusted EBITDA margin declined from 24.9% to 23.7%. Lower service volume, higher incentive compensation and investment in growth and productivity weighed on annual earnings.
Operating cash flow rose to $130.2 million. After $10.6 million of capital spending, free cash flow was $119.6 million. That was about 133% of reported net income, using the company's cash-conversion definition. Lower inventories helped operating cash flow, while reduced capital spending also lifted free cash flow. The new plan targets conversion above 100% over its fiscal 2026 to fiscal 2030 period.
The near-term forecast is unchanged from October 28: fiscal 2027 adjusted EBITDA of $195 million to $205 million on revenue of $825 million to $845 million. It includes about 10 months of SFE. The new information is the longer-term plan, whose margin progress can be followed alongside the acquisition's integration.
The Enerpac company profile tracks earlier forecasts, annual results and acquisition financing. Our earlier SFE analysis explains how the purchase changed its borrowing needs.