May 04, 2018 • 09:00 am ET



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Denise L. Ramos

basis points of margin improvement. That included a 530 basis point improvement in components and a 70 basis point improvement in connectors. These results were driven by productivity, supply-chain and benefits from the combination of the CCT leadership team.

As we look ahead, not only do we continue to expect triple-digit margin increases from both IP and CCT in 2018, but we also anticipate significant gains over the coming years, as we further rationalize and implement LEAN across more of our global footprint. And as more of our innovation and growth initiatives drive the top line, this volume benefit will only add to the already significant operational upside we see ahead of us. In the strategic focus area of growth and innovation, we once again achieved significant progress. In the quarter, Motion Tech continued its track record of gaining share across multiple global market categories.

MT was awarded important new automotive platforms in North America, with two major OEMs. And these North American wins included expanded front axle and copper-free share gains. We expect to see an acceleration of our win rate in North America, based on the customer engagement generated by our new state-of-the-art facility in Mexico. In China, we won eight new awards, including four for EV and hybrid platforms with local Chinese OEMs. We get asked a lot about the visibility we have at MT based on our accelerating track record of OEM award wins. So I want to provide some insights today on the long-term vitality and growth potential we see in our friction OEM business. As it relates to visibility, the current OEM friction awards that we've already won represent $3 billion in future revenue through 2022.

Keep in mind that OEM represents only 45% of MT's revenue. We also have tremendous visibility in the long-term aftermarket demand, but our focus today is on OEM. In addition to these existing OEM awards, we also see significant growth potential in these following areas: share gains in key growth markets like China and North America, where we currently have less than 20% share of the OEM segment today; leveraging our global footprint to expand into new markets in South America and Asia; increasing our content with local Chinese OEMs that currently represent less than 20% of our revenue in China, but are growing at a CAGR of 50% since 2016; accelerating our EV hybrid growth capture strategies; expanding our content per vehicle, including increasing front axle content; increasing our win rates in growth categories like copper-free pads; and delivering onboard solutions that leverage ITT's revolutionary Smart Pad technology.

ITT's Smart Pad has gained significant market traction since its launch last year, and we are now in advanced discussions with multiple customers for onboard production applications. So with our $3 billion of OEM award visibility and these additional growth opportunities we expect to continue to significantly outperform the OEM markets we serve well into the future. At CCT, we have intensified our focus and investment in driving innovation