Sustainability

A Message from Our President and CEO

To Our Stakeholders:
Fiscal year 2026 was a year in which Applied’s performance and our sustainability commitments moved forward together. We delivered record sales and earnings, accelerated organic growth, and continued to strengthen the durability and resilience of both our company and our customers’ operations, while also building on the foundation we established last year with our inaugural double materiality assessment. The same discipline, technical expertise, and long-term thinking that drove our financial results this year are what allow us to serve as a responsible, resilient partner to our customers, associates, suppliers, and communities.

This past year, we continued our sustainability journey by further increasing transparency by submitting our first CDP disclosures and focusing on the areas that matter most to our key stakeholders:

OUR PEOPLE MAKE THE DIFFERENCE
Our associates are the foundation of everything we accomplished in fiscal 2026. As our business grew, our teams were focused on safety, development, and supporting one another. We remain committed to a workplace where every associate can thrive, and to giving our people the tools, training, and opportunities they need to grow their careers alongside the Company.

STRATEGIC SOURCING
As demand strengthened across our end markets this year, our role as a trusted strategic sourcing partner became even more central to our customers’ operations. Structural tailwinds, including an aging installed base of industrial equipment, a persistent technical labor shortage, and the reshoring of manufacturing to North America, are driving customers to lean on partners who combine deep technical knowledge with responsible, reliable sourcing. From our established positions in machinery, food & beverage, metals, and aggregates, to our expanding presence in emerging verticals, our role connecting technical solutions from leading, world-class supplier brands is increasingly critical to our customers’ complex supply chains. This year we also updated our Supplier Code of Conduct to reinforce our expectations of our suppliers.

ENVIRONMENTAL STEWARDSHIP
We continued to advance our environmental stewardship in fiscal 2026, building on the groundwork laid the prior year. This includes continued support for our customers’ own sustainability goals. Through offering energy efficient products and customized solutions, we help customers improve efficiency across their productions environments. Additionally, our remanufacturing and repair capabilities extend equipment life and reduce waste with limited downtime.

CULTURE OF GOVERNANCE
Strong governance remains the foundation for how we operate and how we earn the continued trust of our shareholders and stakeholders. Recent changes to the composition of our Board, including the addition of Pam Tomczik, reflect our ongoing commitment to thoughtful Board refreshment alongside long-term institutional knowledge.

Looking Ahead
I see significant growth potential and operating momentum across our business as we enter fiscal 2027, and I believe our sustainability priorities will remain important pillars to our growth. Our balance sheet strength, technical solutions, and disciplined approach to capital deployment position us well, and so does our continued focus on our people, our sourcing practices, our environmental footprint, and our governance. We are grateful to our customers, associates, suppliers, and all our stakeholders for their continued trust, and we look forward to building on this progress together.