Fortive Corporation · NYSE:FTV
Fortive — Q3 2019 Earnings Presentation
25 slides from Fortive's earnings presentation, Oct 24, 2019
Slide 1: Third Quarter 2019 Earnings Release
Third Quarter 2019 Earnings Release October 24, 2019 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, timing of acquisitions, dispositions and other transactions, anticipated revenue
Slide 3: Q3 2019 Financial Performance: Summary of Key Financial Items
Q3 2019 FINANCIAL PERFORMANCE* Summary of Key Financial Items Revenue ($M) Adjusted Operating Profit Adjusted Diluted Net Free Cash Flow ($M) Margin (%) Earnings Per Share ($) • Core growth: 2.1% • Adjusted Margins (80)bps Y/Y • Adjusted EPS +18% Y/Y • FCF: +6% Y/Y – Price: 1.5% – Core OMX: (25)bps
Slide 4: Q3 2019 Financial Performance: Cash Flow
Q3 2019 FINANCIAL PERFORMANCE* Cash Flow • Q3 2019: Free Cash Flow ($M) - Q3 2019 – Free Cash Flow: $348M (+6% versus Prior Year) – +$112M versus Q2 2019 – FCF Conversion: 168% of GAAP Net Earnings; 112% of Adjusted Net Earnings • Year-To-Date: – Free Cash Flow: $721M** (+3% versus Prior Year) Free
Slide 5: Segment Detail
@ FORTIVE Segment Detail
Slide 6: Professional Instrumentation Q3 Performance Overview
PROFESSIONAL INSTRUMENTATION Q3 Performance Overview • Continued short-cycle slowing at Fluke and Tektronix – Signs of broader industrial slowing intensified, with POS deteriorating throughout the quarter – Fluke driven by weakness at Fluke Industrial, which saw strong declines in both North America
Slide 7: Industrial Technologies Q3 Performance Overview
INDUSTRIAL TECHNOLOGIES* Q3 Performance Overview • Strong growth at GVR – North America driven by sustained momentum from EMV-related sales – Western Europe benefiting from continued share gains and significant service rollouts from Costco – Continues to build on its strong position in HGMs, with st
Slide 8: Guidance
@ FORTIVE Guidance
Slide 9: 2019 Guidance Highlights
2019 GUIDANCE HIGHLIGHTS* Q4 Guidance • Adjusted Diluted EPS: $0.96 to $1.01 (+5% to +11%) – Assumptions: – Core Revenue Growth (Y/Y): Flat – Core OMX: Flat – Tax Rate: ~15.0% Full-Year 2019 Guidance • Adjusted Diluted EPS: $3.42 to $3.47 (+12% to +13%) – Assumptions: – Core Revenue Growth (Y/Y): 1.
Slide 10: Supplemental Data
Supplemental Data* * From Continuing Operations 10
Slide 11: Adjusted Gross Profit Margin
ADJUSTED GROSS PROFIT MARGIN Three Months Ended Nine Months Ended $ in millions September 28, 2018 September 27, 2019 September 28, 2018 September 27, 2019 Revenue (GAAP) $ 1,601.2 $ 1,860.0 $ 4,695.2 $ 5,317.6 Acquisition-Related Fair Value Adjustments to Deferred Revenue 3.0 18.1 3.0 43.8 Adjusted
Slide 12: 2019 Adjusted Operating Profit & Margin (GAAP to Adjusted Walk)
2019 ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN (GAAP TO ADJUSTED WALK) Three Months Ended September 27, 2019 Nine Months Ended September 27, 2019 $ in millions Professional Industrial Corporate Total Professional Industrial Corporate Total Instrumentation Technologies Fortive Inst
Slide 13: 2018 Adjusted Operating Profit & Margin (GAAP to Adjusted Walk)
2018 ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN (GAAP TO ADJUSTED WALK) Three Months Ended September 28, 2018 Nine Months Ended September 28, 2018 $ in millions Professional Industrial Corporate Total Professional Industrial Corporate Total Instrumentation Technologies Fortive Inst
Slide 14: Adjusted Operating Profit Margin (Y/Y Walk)
ADJUSTED OPERATING PROFIT MARGIN (Y/Y WALK) Three Months Ended September 27, 2019 Nine Months Ended September 27, 2019 $ in millions Professional Industrial Total Professional Industrial Total Instrumentation Technologies Fortive Instrumentation Technologies Fortive 2018 Adjusted Operating Profit Ma
Slide 15: Adjusted Net Earnings
ADJUSTED NET EARNINGS Three Months Ended Nine Months Ended $ in millions September 28, 2018 September 27, 2019 September 28, 2018 September 27, 2019 Net Earnings From Continuing Operations Attributable to Common Stockholders (GAAP) $ 196.6 $ 190.0 $ 660.6 $ 494.8 Dividends on the mandatory convertib
Slide 16: Adjusted Net EPS
ADJUSTED NET EPS Three Months Ended (a) Nine Months Ended (a) September 28, September 27, September 28, September 27, 2018 2019 2018 2019 Diluted Net Earnings Per Share from Continuing Operations Attributable to Common Stockholders (GAAP) $ 0.55 $ 0.56 $ 1.86 $ 1.46 Dividends on the mandatory conver
Slide 17: Forecasted Adjusted Diluted Net EPS from Continuing Operations
FORECASTED ADJUSTED DILUTED NET EPS FROM CONTINUING OPERATIONS Three Months Ending Year Ending December 31, 2019 December 31, 2019 Low End High End Low End High End Forecasted Diluted Net Earnings Per Share from Continuing Operations Attributable to Common Stockholders $ 0.36 $ 0.41 $ 1.81 $ 1.86 An
Slide 18: Adjusted Diluted Shares Outstanding
ADJUSTED DILUTED SHARES OUTSTANDING Three Months Ended Nine Months Ended (shares in millions) September 28, 2018 September 27, 2019 September 28, 2018 September 27, 2019 Average common diluted stock outstanding 355.3 339.9 354.8 339.7 MCPS Converted Shares (a) 16.1 18.4 5.4 18.4 Adjusted average com
Slide 19: Free Cash Flow Conversion Ratio
FREE CASH FLOW CONVERSION RATIO $ in millions Three Months Ended Nine Months Ended September 28, 2018 September 27, 2019 % Change September 28, 2018 September 27, 2019 % Change Operating Cash Flows from Continuing Operations $ 355.8 $ 379.0 6.5% $ 778.9 $ 800.4 2.8% (GAAP) Less: purchases of propert
Slide 20: Adjusted Free Cash Flow Conversion Ratio
ADJUSTED FREE CASH FLOW CONVERSION RATIO $ in millions Three Months Ended Nine Months Ended September 28, 2018 September 27, 2019 % Change September 28, 2018 September 27, 2019 % Change Operating Cash Flows from Continuing Operations $ 355.8 $ 379.0 6.5% $ 778.9 $ 800.4 2.8% (GAAP) Less: purchases o
Slide 21: Free Cash Flow Conversion Ratio - Trailing Twelve Months
FREE CASH FLOW CONVERSION RATIO - TRAILING TWELVE MONTHS Three Months Ended Nine Months Ended Twelve Months Ended $ in millions December 31, 2018 September 27, 2019 September 27, 2019 Operating Cash Flows from Continuing Operations (GAAP) $ 422.5 $ 800.4 $ 1,222.9 Less: purchases of property, plant
Slide 22: Adjusted Free Cash Flow Conversion Ratio - Trailing Twelve Months
ADJUSTED FREE CASH FLOW CONVERSION RATIO - TRAILING TWELVE MONTHS Three Months Ended Nine Months Ended Twelve Months Ended $ in millions December 31, 2018 September 27, 2019 September 27, 2019 Operating Cash Flows from Continuing Operations (GAAP) $ 422.5 $ 800.4 $ 1,222.9 Less: purchases of propert
Slide 23: Net Earnings - Trailing Twelve Months
NET EARNINGS - TRAILING TWELVE MONTHS Three Months Ended Nine Months Ended Trailing Twelve Months Ended $ in millions December 31, 2018 September 27, 2019 September 27, 2019 Net Earnings From Continuing Operations Attributable to Common Stockholders (GAAP) $ 222.8 $ 494.8 $ 717.6 Dividends on the ma
Slide 24: Adjusted Effective Tax Rate
ADJUSTED EFFECTIVE TAX RATE Three Months Ended Nine Months Ended $ in millions September 28, 2018 September 27, 2019 September 28, 2018 September 27, 2019 Earnings before income taxes from continuing operations $ 257.7 $ 235.1 $ 811.0 $ 631.8 Income tax expense (43.7) (27.8) (132.8) (85.2) Effective
Slide 25: (2) FORTIVE
(2) FORTIVE