Slide 1: Fourth Quarter 2017 Earnings Release
Fourth Quarter 2017 Earnings Release February 8, 2018 1
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES Statements in this presentation that are not strictly historical, statements regarding the Company's anticipated earnings, business and acquisition opportunities, anticipated revenue growth, anticipated operating margin expansion, anticipated
Slide 3: Strategic Priorities FY 2017
STRATEGIC PRIORITIES FY 2017 4.5% Core Revenue Growth 15% Adj Diluted Net EPS Growth Financial Outperformance Lowered ETR by over 500bps(1) Digital Strategy, IOT 107% FCF Conversion(1) (1) Excludes estimated provisional tax reform adjustments Innovation / NPIs Accelerate Growth Market Share Gains $1
Slide 4: Performance Summary
PERFORMANCE SUMMARY NON-GAAP ADJUSTED DILUTED REVENUE NET EARNINGS PER SHARE* +11.0% Core +3.0% +20.6% Acquisitions +5.9% FX +2.1% $0.82 $1,806.7 $0.68 $1,627.1 Q4 2016 Q4 2017 Q4 2016 Q4 2017 *Excludes, among other items, the estimated provisional adjustments for the tax reform 4
Slide 5: Performance Summary
PERFORMANCE SUMMARY OPERATING MARGIN GROSS MARGINS -110 bps Q4 2016 – 49.0% Core +50 bps +140 bps Acquisitions -100 bps Q4 2017 – 50.4% Transaction Costs -60 bps SG&A (as a % of Revenue) Q4 2016 – 22.1% +260 bps Q4 2017 – 24.7% 20.8% 19.7% R&D (as a % of Revenue) Q4 2016 – 6.1% -10 bps Q4 2016 Q4 20
Slide 6: Performance Summary
PERFORMANCE SUMMARY Three Months Ended Year Ended December 31, December 31, December 31, December 31, ($M) 2016 2017 2016 2017 Operating Cash Flow $318 $463 $1,137 $1,176 Cap Ex 40 48 130 136 FREE CASH FLOW $278 $415 $1,007 $1,040 Net Earnings (GAAP) $225 $337 $872 $1,045 Estimated Provisional Tax R
Slide 7: Professional Instrumentation
PROFESSIONAL INSTRUMENTATION REVENUE OPERATING MARGIN +17.5% -160 bps Core +5.6% Core +120 bps Acquisitions +9.6% Acquisitions -160 bps FX +2.3% Transaction Costs -120 bps $877.2 23.1% 21.5% $746.5 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Field Solutions* Product Realization* Sensing Technologies * Part of A
Slide 8: Industrial Technologies
INDUSTRIAL TECHNOLOGIES REVENUE OPERATING MARGIN +5.6% -40 bps Core +0.9% Core +10 bps Acquisitions +2.7% Acquisitions -50 bps FX +2.0% 20.7% 20.3% $929.5 $880.6 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Transportation Technologies Automation & Specialty Components Franchise Distribution 8
Slide 9: 2018 Outlook
2018 OUTLOOK Core revenue growth of 3.0% – 4.0% with ~30-35% fall-through 50 basis points of core operating margin expansion FX* tailwind of 150 basis points of revenue and ~$0.04 in EPS Estimated effective tax rate of 20% *based on 12/31/2017 exchange rates 9
Slide 10: 2018 Outlook
2018 OUTLOOK nd of gu idance at high-e S growth ~19% EP $0.17 - $0.20 $(0.04) $3.35 - $3.45 $0.04 $0.15 - $0.16 $0.14-$0.20 $2.89 FX ETR Interest / 2018 Adjusted 2017 Adjusted 3-4% Core Revenue Acquisitions Growth Shares / Other Diluted Net EPS Diluted Net EPS Guidance Fortive Formula Driving Double
Slide 11: Q&A
2018 OUTLOOK @ FORTIVE Q&A
Slide 12: Fortive
(2) FORTIVE