Slide 1: Second Quarter 2023 Earnings Release
Second Quarter 2023 Earnings Release July 26, 2023 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, including statements regarding anticipated financial results, global and regional economic conditions, industry trends, geopolitical events, interest rate and current exchange r
Slide 3: Q2 2023 Financials And Highlights
Q2 2023 Financials And Highlights Strong Execution Drives A Broad-Based Beat Q2 2023 YTD 2023 Q2 2023 HIGHLIGHTS Revenue $1,526M $2,987M Core growth 200 bps ahead of expectations Core Growth 5.5% 7.1% Reflects durability of portfolio & FBS operating rigor Adj. Gross 59.5% 58.9% Margin 250 bps adj. G
Slide 4: Confident in Raised 2023 Guidance
Confident in Raised 2023 Guidance Reflects Better 1H Performance And Durable 2H Outlook WHAT WE ARE SEEING WHAT WE EXPECT Healthcare Improvements On Track Durable Growth Outlook Pricing and productivity initiatives yielding higher growth and Raised FY core growth outlook; recurring revenue accelerat
Slide 5: Workflows Aligned to Secular Drivers
Workflows Aligned to Secular Drivers Strong Trends Driving Durable MSD Through-Cycle Growth Automation & Energy Productivity Digitization Transition Growth Core Growth (through-cycle) Connected Reliability MSD Environmental Health & Safety HSD Facility & Asset Lifecycle LDD Product Realization MSD P
Slide 6: FBS Innovation in Action
FBS Innovation in Action Accelerating Innovation With FBS Growth Tools Expanding In Connected Reliability Launch of solar tester SMFT-1000 globally, EV Charger Adapter in EMEA, and TruTest Solar Certification Software Named one of "America's Climate Leaders 2023" by USA Today/Statista Combining Prop
Slide 7: Q2 2023: Intelligent Operating Solutions
Q2 2023: Intelligent Operating Solutions Strong Execution Drives Record Quarterly Margin Highlights REVENUE ($M) ADJ. OP. PROFIT MARGIN • Accelerating Fluke NPIs drive MSD Y/Y order growth +3.6% +420 BPS Y/Y | +280 BPS Q/Q • Fluke Solar/EVSE shipments >2X Core +4.2% Core OMX +420 bps Y/Y | +280 bps
Slide 8: Q2 2023: Precision Technologies
Q2 2023: Precision Technologies Strong Growth And OMX Drive Upside Highlights REVENUE ADJ. OP. PROFIT MARGIN • Record Q2 driven by robust backlog in power and digital T&M solutions +7.7% +190 BPS Y/Y | +110 BPS Q/Q Core OMX +190 bps | +110 BPS Q/Q • Order deceleration in some verticals Core +8.4% re
Slide 9: Q2 2023: Advanced Healthcare Solutions
Q2 2023: Advanced Healthcare Solutions H2, 2024 Improvements On Track Highlights REVENUE ($M) ADJ. OP. PROFIT MARGIN • Strong capital expansion with record placements in June 0.6% -60 BPS Y/Y | +180 BPS Q/Q • Surgical rates expanding; US channel Core +3.5% M&A1 -1.5% Core OMX -65 bps Y/Y | +180 bps
Slide 10: Q2 2023 Revenue
Q2 2023 Revenue Strong Growth Across All Regions REGIONAL HIGHLIGHTS • North America growth driven by all 4.3% segments; durable software revenue Core: 5.5% Core North America HSD • W. Europe growth strong in PT, down in AHS and IOS; up mid-teens on 2-yr stack $81 $(5) $(13) $1,526 • China +LSD, lap
Slide 11: Q2 2023 Performance Summary
Q2 2023 Performance Summary Another Quarter Broadly Ahead Of Expectations PERFORMANCE ADJ. GROSS ADJ. OPERATING ADJ. EARNINGS FREE CASH HIGHLIGHTS MARGIN PROFIT MARGIN PER SHARE FLOW ($M) +250 BPS +190 BPS +9.0% 8.7% • Adj. gross margin +250bps driven by favorable price/cost • +190 bps of adj. OMX;
Slide 12: Q3, Q4, and FY 2023 Outlook
Q3, Q4, and FY 2023 Outlook Raising Outlook On Strong 1H Performance, 2H Momentum Q3 2023 Q4 2023 FY 2023 FY HIGHLIGHTS REVENUE $1,505 to 1,520M $1,580 to 1,595 $6,070 to 6,100M Core Growth 3.5% to 4.5% 3.5% to 4.5% 5% to 6% • Raising core growth outlook +75 bps 2-Year Stack 16% to 17% 18% to 19% 16
Slide 13: Strategy is Yielding Results
Strategy is Yielding Results Delivering Accelerated Growth, Margin Expansion, Earnings and FCF Growth Leveraging FBS and our connected workflow strategy to relentlessly drive sustainable results REVENUE ($B) ADJ. OP MARGIN ADJ. EPS NWC % SALES FREE CASH FLOW ($B) ~$6.1 25.5% - 26% $3.36-$3.42 13% ~$
Slide 14: Evolving To A Premier Company
Evolving To A Premier Company Differentiating Performance And Value Creation Durable, high-growth and cash flow compounder STRATEGY PREMIER ACCELERATING COMPANY PROGRESS ADJ. EARNINGS PER SHARE ANNUAL FREE CASH FLOW ($B) >2.3 CAPITAL DEPLOYMENT UPSIDE ~$6.75 CAPITAL DEPLOYMENT UPSIDE >1.6 ~$4.50 1.2
Slide 15: Appendix & Supplemental Reconciliation Data
@ FORTIVE Appendix & Supplemental Reconciliation Data
Slide 16: 2023 Segment Outlooks
2023 Segment Outlooks Intelligent Operating Precision Advanced Healthcare Solutions Technologies Solutions 1Q23 2Q23 3Q23E 4Q23E 1Q23 2Q23 3Q23E 4Q23E 1Q23 2Q23 3Q23E 4Q23E Core 9.7% 4.2% 4.5% 5% 13.7% 8.4% 2.5% 2% 0.1% 3.5% 6.5% 5.5% Growth1 26% to 27% to 26.5% 33% to 33.0% 32.5% 27.5% 33.5% 25.7%
Slide 17: FY 2023 Assumptions & OpCo Outlooks
FY 2023 Assumptions & OpCo Outlooks KEY OUTLOOK ASSUMPTIONS FY 2023 OPCO CORE GROWTH EXPECTATIONS1 Q3 Q4 FY IOS PT AHS FX: Modest Tailwind Modest Tailwind ~(1)% Fluke: MSD Tektronix: LDD ASP/Censis: LSD+ Corporate: ~$33M ~$32M ~$130M EHS: MSD Sensing: Flat FHS: LSD Interest: ~$30M ~$25M ~$120M FAL:
Slide 18: Adjusted Gross Profit and Adjusted Gross Profit Margin
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS PROFIT MARGIN Three Months Ended Six Months Ended $ in millions June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Revenue (GAAP) $ 1,526.5 $ 1,463.3 $ 2,987.1 $ 2,839.8 Gross Profit (GAAP) $ 905.4 $ 833.5 $ 1,753.6 $ 1,625.5 Acquisition-Related Fair Value
Slide 19: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Three Months Ended June 30, 2023 Three Months Ended July 1, 2022 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Year over Operating Technologies Healthcare Fortive Operating Tech
Slide 20: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Six Months Ended June 30, 2023 Six Months Ended July 1, 2022 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Year over Operating Technologies Healthcare Fortive Operating Technolo
Slide 21: Two Year Stack - Adjusted Operating Profit and Margin
TWO YEAR STACK - ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING PROFIT MARGIN Three Months Ended June 30, 2023 Three Months Ended July 2, 2021 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Opera
Slide 22: Adjusted Net Earnings and Adjusted Diluted Net EPS
ADJUSTED NET EARNINGS AND ADJUSTED DILUTED NET EPS Three Months Ended Three Months Ended Six Months Ended Six Months Ended $ in millions, except per share amounts June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Per share value Per share val
Slide 23: Two Year Stack - Adjusted Net Earnings and Adjusted Diluted Net EPS
TWO YEAR STACK - ADJUSTED NET EARNINGS AND ADJUSTED DILUTED NET EPS Three Months Ended Three Months Ended (a) $ in millions, except per share amounts June 30, 2023 July 2, 2021 June 30, 2023 July 2, 2021 Per share value Net Earnings and Net Earnings Per Share Attributable to Common Stockholders (GAA
Slide 24: Forecasted Adjusted Diluted Net EPS
FORECASTED ADJUSTED DILUTED NET EPS Three Months Ending Three Months Ending Twelve Months Ending September 29, 2023 December 31, 2023 December 31, 2023 Low High Low High Low High Forecasted Diluted Net Earnings Per Share (GAAP) $ 0.59 $ 0.62 $ 0.72 $ 0.75 $ 2.38 $ 2.44 Anticipated pretax amortizatio
Slide 25: Free Cash Flow Conversion Ratio - Trailing Twelve Months
FREE CASH FLOW CONVERSION RATIO - TRAILING TWELVE MONTHS (in millions) Three Months Ended Six Months Ended Trailing Twelve Months June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2023 Operating Cash Flows (GAAP) $ 321.0 $ 174.4 $ 464.2 $ 329.8 $ 495.4 $ 1,289.4 Less: purcha
Slide 26: Core Revenue Growth; Two Year Stack Core Growth
CORE REVENUE GROWTH Components of Revenue Growth Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Total Fortive Total Revenue Growth (GAAP) 4.3 % 5.2 % Core (Non-GAAP) 5.5 % 7.1 % Acquisitions and divestitures (Non-GAAP) (0.3)% (0.4)% Impact of currency translation (Non-GAAP) (0.9)% (
Slide 27: Adjusted Effective Tax Rate
ADJUSTED EFFECTIVE TAX RATE Three Months Ended Six Months Ended $ in millions June 30, 2023 July 1, 2022 June 30, 2023 July 1, 2022 Earnings before income taxes $ 250.4 $ 208.2 $ 456.2 $ 399.0 Income tax expense (41.4) (35.2) (73.6) (60.9) Effective tax rate (GAAP) 16.5 % 16.9 % 16.1 % 15.3 % Earnin
Slide 28: (2) FORTIVE
(2) FORTIVE