Slide 1: Third Quarter 2022 Earnings Results
Third Quarter 2022 Earnings Results November 3, 2022 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to statements regarding Vontier Corporation’s (the “Company’s”) business and acquisition opportunities, anticipated revenu
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains references to “core revenue growth,” “free cash flow,” "free cash flow conversion," “adjusted free cash flow,” “adjusted free cash flow conversion,” “adjusted operating profit,” “adjusted operating profit margin,” “adjusted core operating margin
Slide 4: Q3 2022 Summary
Q3 2022 Summary Strong execution in a challenging environment Resilient portfolio, • Adj. Diluted Net EPS $0.86, +8% well-positioned for • Adj. Gross Margin +40 bps – strong price/cost performance and favorable mix (DRB) growth • Adj. Core Operating Margin +20 bps – profitable growth initiatives and
Slide 5: Q3 2022 Financial Performance
Q3 2022 Financial Performance Summary of Key Financial Items Revenue Adjusted Operating Profit Adjusted Diluted Net EPS ($M) Margin (%) $769 $788 24.4% 24.8% $0.80 $0.86 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 • Total growth: 2.5% • GAAP OP Margin (270bps) • GAAP EPS of $0.32 • Core growth:
Slide 6: Q3 2022 Free Cash Flow Detail
Q3 2022 Free Cash Flow Detail Adjusted FCF ($M) FCF Conversion (%) 90% Q3 2022 64% • FCF: $75M, -35%; conversion of 149% of GAAP Net Earnings • Adj. FCF: $87M, -29%; conversion of 64% of Adj. Net Earnings, primarily $122 reflecting continued challenges with sales linearity due to supply chain disrup
Slide 7: Performance by Platform
Performance by Platform Mobility Technologies Diagnostics & Repair Technologies Revenue Revenue ($M) ($M) • DRB +>30% • Matco same-store +2.5%* +1.4% sales +MSD; supply Core: (3.0%) • MT Core ex-EMV +6% Core: +1.5% chain improved • GVR Core ex-EMV • Net Franchisee adds +MSD; double-digit up slightly
Slide 8: Q4 and FY22 Considerations
Q4 and FY22 Considerations Q4 2022 FY 2022 • Total revenue growth: +LSD • Total revenue growth: +MSD – Core growth: +LSD – Core growth: ~Flat – Core growth ex-EMV: +MSD – Core growth ex-EMV: +MSD – EMV revenue down ~$100M YoY; prior guide ~$50M • Adj. Core OMX: flat to down 40 bps • Adj. Core OMX: ~
Slide 9: Vontier U.S. Fueling Dispenser Revenue – EMV Impact Update
Vontier U.S. Fueling Dispenser Revenue – EMV Impact Update ~$50M Indicates year over ~$740M year change ~$105M ~$640M ~$590M ~$535M Incremental EMV Revenue ~$300M to ~$350M ~$300M ~$250M Core U.S. Dispenser Revenue Base Growing GDP+ 2020 2021 2022 2023 Prior Est. Revised Est. • Lowering EMV adoption
Slide 10: 2023 Preliminary Thoughts
2023 Preliminary Thoughts Indicates range of potential outcomes Profitable Growth Initiatives & Platform Strategies 1 Growth includes contribution from organic growth and Invenco acquisition 2 Capital deployment includes benefit from carry over impact of share repurchase as well as future share repu
Slide 11: Vision & Strategy: Smart Sustainable Solutions for the Road Ahead
Vision & Strategy: Smart Sustainable Solutions for the Road Ahead We provide critical products and technologies that enable Workflow Solutions and their Automation for Mobility Ecosystem customers Leading Position in Mobility Ecosystem Provides Right to Play/Win 1 2 3 Optimize Core Expand and Divers
Slide 12: Summary
Summary Executing through challenging macro environment; controlling the controllable…accelerating cost actions EMV impact accelerated to Q4 due to macro challenges (impact to small fueling operators); Sustainable non-EMV core growth +MSD Continued top-line growth, strong backlog, and cost controls
Slide 13: Supplemental Reconciliation Data
Supplemental Reconciliation Data 13 13
Slide 14: Reconciliation of Gross Profit to Adjusted Gross Profit and Margin
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT AND ADJUSTED GROSS PROFIT MARGIN Three Months Ended Nine Months Ended $ in millions September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021 Revenue (GAAP) $ 788.0 $ 768.5 $ 2,312.5 $ 2,200.5 Gross Profit (GAAP) $ 359.9 $ 346.4 $ 1
Slide 15: Reconciliation of Operating Profit to Adjusted Operating Profit and Margin
RECONCILIATION OF OPERATING PROFIT TO ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING PROFIT MARGIN Three Months Ended Nine Months Ended $ in millions September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021 Revenue (GAAP) $ 788.0 $ 768.5 $ 2,312.5 $ 2,200.5 Operating Profit (GAAP) $ 1
Slide 16: Reconciliation of Adjusted Operating Profit Margin Expansion
RECONCILIATION OF ADJUSTED OPERATING PROFIT MARGIN EXPANSION Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 2021 Adjusted Operating Profit Margin (Non-GAAP) 24.4% 22.3% Core (Non-GAAP) 0.2% 0.2% Acquisitions (Non-GAAP) 0.2% 0.2% 2022 Adjusted Operating Profit Margin (Non-
Slide 17: Reconciliation of Net Earnings to Adjusted Net Earnings
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS Three Months Ended Nine Months Ended $ in millions September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021 Net Earnings (GAAP) $ 50.1 $ 127.3 $ 333.6 $ 300.6 Amortization of acquisition-related intangible assets 18.8 9.2 57.0 24.4
Slide 18: Reconciliation of Diluted EPS to Adjusted Diluted EPS
RECONCILIATION OF DILUTED NET EARNINGS PER SHARE TO ADJUSTED DILUTED NET EARNINGS PER SHARE Three Months Ended Nine Months Ended September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021 Diluted Net Earnings per Share (GAAP) $ 0.32 $ 0.75 $ 2.06 $ 1.77 Amortization of acquisition-related
Slide 19: Forecasted Adjusted Diluted Net Earnings Per Share
FORECASTED ADJUSTED DILUTED NET EARNINGS PER SHARE Three Months Ended Year Ended December 31, 2022 December 31, 2022 Low End High End Low End High End Forecasted Diluted Net Earnings Per Share $ 0.58 $ 0.63 $ 2.66 $ 2.71 Anticipated amortization of acquisition-related intangible assets 0.12 0.12 0.4
Slide 20: Reconciliation of Operating Cash Flows to Free Cash Flow Conversion
RECONCILIATION OF OPERATING CASH FLOWS TO FREE CASH FLOW AND FREE CASH FLOW CONVERSION RATIO Three Months Ended Nine Months Ended $ in millions September 30, 2022 October 1, 2021 % Change September 30, 2022 October 1, 2021 % Change Operating Cash Flows (GAAP) $ 91.3 $ 125.4 (27.2)% $ 139.8 $ 341.9 (
Slide 21: Reconciliation to Adjusted Free Cash Flow and Conversion Ratio
RECONCILIATION OF OPERATING CASH FLOWS TO ADJUSTED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW CONVERSION RATIO Three Months Ended Nine Months Ended $ in millions September 30, 2022 October 1, 2021 % Change September 30, 2022 October 1, 2021 % Change Operating Cash Flows (GAAP) $ 91.3 $ 125.4 (27.2)%
Slide 22: Components of Revenue Growth
COMPONENTS OF REVENUE GROWTH Components of Revenue Growth % Change Three Months Ended % Change Nine Months Ended September 30, 2022 vs. Comparable September 30, 2022 vs. Comparable 2021 Period 2021 Period Total Revenue Growth (GAAP) 2.5 % 5.1 % Core revenue growth (Non-GAAP) (1.9) % (0.2) % Impact o
Slide 23: Components of Revenue Growth by Platform
COMPONENTS OF REVENUE GROWTH BY PLATFORM % Change Three Months Ended September 30 2022 vs. Comparable 2021 Period Components of Revenue Growth Mobility Technologies* Diagnostics & Repair Technologies Total Revenue Growth (GAAP) 2.5 % 1.4 % Core revenue growth (Non-GAAP) (3.0) % 1.5 % Impact of acqui
Slide 24: Net Leverage Ratio and Reconciliation to Adjusted EBITDA
NET LEVERAGE RATIO AND RECONCILIATION FROM NET EARNINGS TO EBITDA TO ADJUSTED EBITDA Total Debt $ 2,657.7 Less: Cash (121.7) Net Debt $ 2,536.0 Adjusted EBITDA (Non-GAAP) $ 763.2 Net Leverage Ratio 3.3 Nine Months Ended Year Ended LTM $ in millions October 1, 2021 September 30, 2022 December 31, 202