Veralto Corp · NYSE:VLTO
Veralto — Q2 2024 Earnings Presentation
37 slides from Veralto's earnings presentation, Jul 26, 2024
Slide 1: Second Quarter 2024 Results
Second Quarter 2024 Results July 25, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation, including statements regarding the Company's third quarter and full year 2024 guidance, the Company’s differentiation and positioning to continue delivering sustainable, long-term shareholder value and any other statements regarding
Slide 3: Opening Remarks
Opening Remarks Jennifer L. Honeycutt President and Chief Executive Officer Q2 2024 Results | July 25, 2024
Slide 4: Veralto 2024 Sustainability Report
Veralto / 2024 Sustainability Report 2023 Enduring Positive Contributions New Commitments 13 trillion 3.4 billion people around the world benefit from gallons of water treated and recycled 54.6% Hach solutions that through Trojan green house gas reduction help ensure clean Technologies systems targe
Slide 5: Q2 2024 key consolidated financial results
Veralto / Q2 2024 key consolidated financial results ADJUSTED OPERATING ADJUSTED ADJUSTED FREE CASH SALES PROFIT* EPS* EBITDA* FLOW* $1,288m $309m $0.85 $319m $240m core sales 24.0% adjusted +6% 24.8% adjusted 118% free cash growth* of +3.8% operating margin* year-over-year EBITDA margin flow conver
Slide 6: Core sales growth by region for Q2 and YTD 2024
Veralto / Core sales growth by region for Q2 and YTD 2024 NORTH AMERICA (48% of Q2 sales) WESTERN EUROPE (22% of Q2 sales) HIGH GROWTH MARKETS (28% of Q2 sales) Q2 2024 Commentary Q2 2024 WQ +6.1% WQ (0.6)% WQ +2.0% +5.4% +(0.2)% +4.4% PQI +3.5% PQI 0.2% PQI +6.9% North America: • WQ: Growth in both
Slide 7: Financial Review
Financial Review Sameer Ralhan SVP and Chief Financial Officer Q2 2024 Results | July 25, 2024
Slide 8: Q2 2024 consolidated performance
Veralto / Q2 2024 consolidated performance YOY $ millions, except per share data Q2 2023 Q2 2024 • Sales grew +2.8% year-over-year: Variance ◦ Core sales* +3.8% Sales $1,253 $1,288 +2.8% ◦ Currency: -0.8% ◦ Acquisitions & divestitures: -0.2% Core Sales Growth* 1.5% 3.8% • Gross profit margin up 230
Slide 9: Water Quality Q2 and YTD 2024 performance
Water Quality / Q2 and YTD 2024 performance ($ millions, variances versus prior year period) Q2 SALES Q2 ADJUSTED OPERATING PROFIT * +2.8% +5.5% $777 $192 YOY Change in Sales Q2 2023 Q2 2024 $182 $756 Price +2.4% Core Growth* +5.0% +4.0% Currency —% -0.8% 24.7% 24.0% Adj. operating profit M&A —% -0.
Slide 10: Product Quality & Innovation Q2 and YTD 2024 performance
Product Quality & Innovation / Q2 and YTD 2024 performance ($ millions, variances versus prior year period) Q2 SALES Q2 ADJUSTED OPERATING PROFIT * +2.7% $511 +6.8% $141 $497 Price YOY Change in Sales Q2 2023 Q2 2024 +1.4% $132 Core Growth* -3.5% +3.4% 27.6% Currency —% -0.7% 26.6% Adj operating pro
Slide 11: Q2 2024 Cash Flow and Balance Sheet
Veralto / Q2 2024 Cash Flow and Balance Sheet ($ millions) Q2 2024 Cash from operations $251 Financial position summary: Capital expenditures $(11) • Strong annual cash generation Free Cash Flow* $240 Free Cash Flow Conversion* 118% • Resilient and capital-light business model Q2 2024 • Gross levera
Slide 12: Q3 and FY 2024 Guidance
Veralto / Q3 and FY 2024 Guidance FY2024E Annual Sales and Core Sales Growth* ~$5.2b Q3 2024E Current Prior $5.0b Core Sales $4.9b +LSD to +MSD +LSD +LSD Growth* $4.7b Adjusted ~75 basis +50 to +75 Operating Profit ~23.5% points basis points Core sales +7.9% +8.1% +2.6% +LSD Margin* growth* Adjusted
Slide 13: Closing Remarks
Closing Remarks Jennifer L. Honeycutt Q2 2024 Results | July 25, 2024
Slide 14: Well-positioned to drive compounding earnings and free cash flow growth
Veralto / Well-positioned to drive compounding earnings and free cash flow growth ATTRACTIVE SECULAR GROWTH DRIVERS PREMIER FINANCIAL PROFILE and DURABLE BUSINESS MODEL PROVEN VALUE CREATION PLAYBOOK SAFEGUARDING THE WORLD’S MOST VITAL RESOURCES™ 14 Q 2 2 0 2 4 R E S U L T S | 14
Slide 15: Appendix
Appendix Q2 2024 Results | July 25, 2024
Slide 16: Reconciliation of GAAP to Non-GAAP Financial Measures
VERALTO CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTAL FORWARD-LOOKING INFORMATION THREE AND SIX-MONTH PERIODS ENDED JUNE 28, 2024 AND JUNE 30, 2023
Slide 17: Table of Contents
TABLE OF CONTENTS Page 1 Sales Growth by Segment, Core Sales Growth by Segment 3 Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and Adjusted Diluted Net Earnings per Share 4 Segment Sales, Operating Profit, Adjusted Operating Profit, Operating Profit Margin, and Adjusted Operating P
Slide 18: Sales Growth by Segment, Core Sales Growth by Segment
VERALTO CORPORATION Sales Growth by Segment, Core Sales Growth by Segment % Change Three-Month Period Ended June 28, 2024 vs. Comparable 2023 Period Segments Product Quality Total Company Water Quality and Innovation Total sales growth (GAAP) 2.8 % 2.8 % 2.7 % Impact of: Acquisitions/divestitures 0.
Slide 19: Sales Growth (Decline) by Segment, Core Sales Growth (Decline)
VERALTO CORPORATION Sales Growth (Decline) by Segment, Core Sales Growth (Decline) by Segment % Change Three-Month Period Ended June 30, 2023 vs. Comparable 2022 Period Segments Product Quality Total Company Water Quality and Innovation Total sales growth (decline) GAAP 2.0 % 5.0 % (2.5)% Impact of:
Slide 20: Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and EPS
VERALTO CORPORATION Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and Adjusted Diluted Net Earnings per Share The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP revenue, such as currency translation, a
Slide 21: Segment Sales, Operating Profit, Adjusted Operating Profit
VERALTO CORPORATION Segment Sales, Operating Profit, Adjusted Operating Profit, Operating Profit Margin, and Adjusted Operating Profit Margin ($ in millions) Three-Month Period Ended Six-Month Period Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Sales (GAAP) Water Quality $ 777 $ 756
Slide 22: Segment Sales, Operating Profit, Adjusted Operating Profit
VERALTO CORPORATION Segment Sales, Operating Profit, Adjusted Operating Profit, Operating Profit Margin, and Adjusted Operating Profit Margin ($ in millions) Three-Month Period Ended Six-Month Period Ended June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Other Operating Profit Adjustments 2 W
Slide 23: Net Earnings, Operating Profit, Adjusted EBITDA
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Three-Month Period Ended June 28, 2024 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 203 Interest Expens
Slide 24: Net Earnings, Operating Profit, Adjusted EBITDA
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Three-Month Period Ended June 30, 2023 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 209 Other Nonoperat
Slide 25: Net Earnings, Operating Profit, Adjusted EBITDA
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Six-Month Period Ended June 28, 2024 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 387 Interest Expense
Slide 26: Net Earnings, Operating Profit, Adjusted EBITDA
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Six-Month Period Ended June 30, 2023 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 434 Other Nonoperatin
Slide 27: Trailing Twelve Month Adjusted EBITDA, Gross Leverage, and Net Leverage
VERALTO CORPORATION Trailing Twelve Month Adjusted EBITDA, Gross Leverage, and Net Leverage ($ in millions) Three-Month Period Ended June 28, 2024 March 29, 2024 December 31, 2023 September 29, 2023 Net Earnings (GAAP) $ 203 $ 184 $ 200 $ 205 Interest Expense 30 28 25 5 Other Nonoperating (Income) E
Slide 28: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Three-Month Period Ended June 28, 2024 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales marg
Slide 29: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Three-Month Period Ended June 30, 2023 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales marg
Slide 30: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Six-Month Period Ended June 28, 2024 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales margin
Slide 31: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Six-Month Period Ended June 30, 2023 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales margin
Slide 32: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) A Amortization of acquisition-related intangible assets in the following historical periods (only the pretax amounts set forth below are reflected in the amortization line item above): Three-Month Period
Slide 33: Operating Profit Margin and Year-Over-Year Core Operating Margin Changes
VERALTO CORPORATION Operating Profit Margin and Year-Over-Year Core Operating Margin Changes Segments Product Quality Total Company Water Quality & Innovation Three-Month Period Ended June 30, 2023 Operating Profit Margins (GAAP) 23.1 % 23.8 % 24.5 % Impact of second quarter 2023 impairment charges
Slide 34: Cash Flow, Free Cash Flow, and Conversion Ratios
VERALTO CORPORATION Cash Flow, Free Cash Flow, Operating Cash Flow to Net Earnings Ratio and Free Cash Flow to Net Earnings Conversion Ratio ($ in millions) Three-Month Period Ended Six-Month Period Ended Year-over-Year Year-over-Year June 28, 2024 June 30, 2023 Change June 28, 2024 June 30, 2023 Ch
Slide 35: Statement Regarding Non-GAAP Measures
VERALTO CORPORATION Statement Regarding Non-GAAP Measures Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. M
Slide 36: Statement Regarding Non-GAAP Measures
VERALTO CORPORATION Statement Regarding Non-GAAP Measures • We calculate adjusted EBITDA by adding to operating profit amounts equal to depreciation and amortization and making the other adjustments reflected in the applicable tables above, which allows us to calculate and disclose such measure by s
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