JPM European Capital Goods

J P M O R G A N Europe Equity Research 17 August 2026

European Capital Goods OW Sector Thesis and Strategy Theme Alignment

• Our Strategy team updated their key themes this morning with a focus on European Capital Goods Europe (see here), which highlights that Europe is attempting to move from an Phil Buller AC efficiency and economies of scale model toward a greater focus on security, ( resiliency, and strategic autonomy. We agree with their assertions that the implication of this being a longer lasting, policy-supported capex cycle which Akash Gupta AC spans defence, energy systems, grids, industrial capacity, digital infrastructure, ( and selected critical supply chains – this closely aligns with our positive

bottom-up view on EU Industrials/Capital Goods (see here). Relative to the Chitrita C Sinha AC ( US, Europe starts from a deeper underinvestment in the aforementioned verticals, so the catch up could be meaningful. We would also argue that PMI’s Jeremy Caspar and Q2 results are already starting to show early evidence of a sequential ( acceleration (see figures 6 & 8), which is far from being reflected in relative valuations (see figures 2, 3 & 4). We remain bullish on H2 and the outlook into J.P. Morgan Securities plc 2027 for the sector as a whole. Specialist Sales contact details: • Baskets: The Strategy team’s note covers seven thematic groups, all of which Sam Edmunds - Specialist Sales - our coverage features in, namely: 1) Energy security, Grid upgrade, European Industrials Renewables and Nuclear; 2) German fiscal expansion and infrastructure ( upgrade; 3) Strategic Technologies; 4) Defense Modernization (of primary relevance for JPM’s David Perry’s coverage); 5) Increased EU protectionism; 6) Aging Population; and 7) Ukraine Reconstruction and Eastern European Buildout. Across all seven groups, the physical infrastructure layer is the most investable, with Capital Goods (electricals/cables), Utilities (JPM’s Javier Garrido), Building Materials (JPM’s Elodie Rall), and Steel recurring as common beneficiaries. • Stocks: We have produced a matrix (table 1) showing our coverage’s alignment to each of the Strategy team’s themes, where 22 of the team’s 43 stock coverage feature. While there is clearly strong overall alignment to the themes, we would note that a number of names feature across several themes, most notably Siemens AG (OW/AFL) which has exposure to five of the seven themes and Siemens Energy (OW/AFL) which features across three, while Alstom (OW/AFL), Vestas (OW), Nexans (OW), NKT (N) and Prysmian (NR) featuring across two. • Further reading: For a round-up of Q2 results with a detailed assessment of end market trends by company, please see here and here. For our August monthly chart pack containing the most relevant leading indicaors that drive our sector, please see here. For a deep dive on the latest Power Generation trends, see here. For key takeaways from our June EU Industrials conference, see here, and for our 101 sector primer, please see here.

See page 6 for analyst certification and important disclosures, including non-US analyst disclosures.

Phil Buller AC Europe Equity Research ( August 2026 JPMORGAN

Table 1: EU Capital Goods – Positioning Across Strategic Investment Themes Energy security, grid upgrade, German fiscal expansion and Ukraine Reconstruction and Eastern Ticker Company Defence mordernization Increased EU protectionism Strategic technologies Ageing population trend renewables & nuclear infrastructure upgrade European Buildout ALO FP Equity ALSTOM ✔ ✔ ATCOA SS Equity ATLAS COPCO ✔ BOY LN Equity BODYCOTE PLC ✔ HLMA LN equity HALMA PLC ✔ IMI LN Equity IMI PLC ✔ KGX GY Equity KION GROUP AG ✔ KBX GY Equity KNORR-BREMSE AG ✔ LAND SE Equity LANDIS + GYR GROUP AG ✔ METSO FH Equity METSO CORP ✔ NEX FP Equity NEXANS SA ✔ ✔ NKT DC Equity NKT A/S ✔ ✔ OXIG LN equity OXFORD INSTRUMENTS PLC ✔ PRY IM Equity PRYSMIAN SPA ✔ ✔ SAND SS Equity SANDVIK AB ✔ SU FP Equity SCHNEIDER ELECTRIC SE ✔ SIE GR equity SIEMENS AG-REG ✔ ✔ ✔ ✔ ✔ ENR GR Equity SIEMENS ENERGY AG ✔ ✔ ✔ SMIN LN Equity SMITHS GROUP PLC ✔ SRAIL SE Equity STADLER RAIL AG ✔ SRAIL SW Equity STADLER RAIL AG ✔ VWS DC Equity VESTAS WIND SYSTEMS…