Vontier Corporation · NYSE:VNT
Vontier — Q3 2023 Earnings Presentation
29 slides from Vontier's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 Earnings Results
Q3 2023 Earnings Results >NION TIER’
Slide 2: Safe Harbor and Forward-Looking Statements
Safe Harbor and 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, an
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains references to “core sales growth,” "baseline core sales growth," "adjusted gross profit," "adjusted gross profit margin," “adjusted operating profit,” “adjusted operating profit margin,” "baseline operating profit margin," "segment operating pro
Slide 4: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) • Adjusted net earnings refers to net earnings calculated in accordance with GAAP, but excluding on a pretax basis amortization of acquisition-related intangible assets, Restructuring- and divestiture- related adjustments, transaction- and deal-related costs,
Slide 5: Q3 2023 | Summary & Highlights
Q3 2023 | Summary & Highlights • Solid performance across the Vontier portfolio ✓ Healthy, resilient end market demand Q3’23 ✓ Executing on strategic initiatives to ‘Accelerate Growth’ • Demand environment remains constructive ✓ Book-to-Bill 0.97X (0.98X YTD) Baseline Core Sales Growth +10% ✓ Backlo
Slide 6: Connected Mobility Strategy | Driving Industry Adoption
Connected Mobility Strategy | Driving Industry Adoption Sustainable Transportation Retail and Payment Technologies Delivering multi-energy technologies to decarbonize mobility Delivering top-tier products that elevate consumer experience and drive retailer success • ANGI partnering with Trillium to
Slide 7: Q3 2023 | Summary Financial Results
Q3 2023 | Summary Financial Results Sales Adj. Operating Profit Margin Adj. Diluted Net EPS Adj. Free Cash Flow ($M) (%) ($) ($M) $788 24.8% $765 22.1% $0.86 $128 $0.73 $87 Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 • Total growth: (3)% • Adj. Gross Margin +140bps • GAAP Diluted
Slide 8: Segment Results | Mobility Technologies
Segment Results | Mobility Technologies Sales Segment Operating Profit Q3 Highlights +8.4% 20.8% Core +4.1% • +12% baseline core sales growth Acq. +4.8% • Solid +MSD core sales growth FX (0.5)% $55 ✓ DRB +LDD with continued growth $248 $51 in tunnel car wash ($M) $229 ($M) ✓ Alternative Energy Solut
Slide 9: Segment Results | Repair Solutions
Segment Results | Repair Solutions Sales Segment Operating Profit Q3 Highlights +4.9% 27.0% • +MSD core sales growth Core +5.0% FX (0.1)% ✓ Led by continued double digit growth in Tool Storage and $49 Power Tools $153 $160 $43 ($M) ($M) ✓ Benefiting from high new product vitality and improved lead t
Slide 10: Segment Results | Environmental & Fueling Solutions
Segment Results | Environmental & Fueling Solutions Sales Segment Operating Profit Q3 Highlights (10.0%) 28.9% • +13% baseline core sales growth Core (10.3)% FX 0.3% • US Dispenser volumes above expectations; broad-based demand for new site builds & site refreshes ($M) $369 ($M) $104 • Healthy fuel
Slide 11: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow Free Cash Flow ($M) Debt & Liquidity ($M) Q3 2022 Q3 2023 Q3 2022 Q4 2022 Q3 2023 Cash from Operating Activities $91 $132 Gross Debt $2,658 $2,605 $2,367 Capital Expenditures (16) (18) (Less): Cash & Cash (122) (205) (264) Equivalents Free Cash Flow $75 $114 Net Debt $2,536
Slide 12: Q4 & 2023 Guidance
Q4 & 2023 Guidance Prior Guidance New Guidance 08/03/23 Q4’23 2023 2023 YoY Change YoY Change YoY Change Total Sales $770 – $780M $3,075 – $3,085M Total Sales Change (LDD) (L/MSD) (LSD) Core Sales Change (HSD/LDD)1 (L/MSD)2 (LSD)2 Baseline Core Sales L/MSD MSD+ HSD Adj. OP Margin 90 – 130bps1 (60 –
Slide 13: Connected Mobility Strategy Designed to Capitalize on Secular Tailwinds
Connected Mobility Strategy Designed to Capitalize on Secular Tailwinds across the Mobility Ecosystem Mobility Technologies ✓ Labor challenges ✓ Proliferation of connected devices ✓ Increasing regulatory requirements ✓ Evolving consumer demands ✓ Increasing site complexity ✓ Customer decarbonization
Slide 14: Appendix
>» Appendix 14
Slide 15: Full Year 2023 Guidance Assumptions
Full Year 2023 Guidance Assumptions • Sales Assumptions: ▪ FX: $(15-25M); ~$10M headwind vs. prior guidance ▪ Net M&A: $0-10M1 • Interest Expense: ~$95M ▪ Assumes ~$250M debt paydown • Tax Rate: ~22.5% • Share count2: ~156M • Includes full year contribution from Hennessy (~$0.05) 1) Includes ~$60M a
Slide 16: Segment Reporting | Historic Financial Detail
Segment Reporting | Historic Financial Detail 16
Slide 17: Vontier | A Compelling Investment Opportunity
Vontier | A Compelling Investment Opportunity Leading global provider of critical mobility & alternative energy technologies at the center of an attractive, rapidly evolving ~$30B Mobility Ecosystem Poised to benefit from attractive secular tailwinds Focused on maximizing shareholder value through t
Slide 18: Vontier has Unique Positions and Strengths to Win
Vontier has Unique Positions and Strengths to Win #2 in U.S. convenience retail POS #1 integrated technology provider to car wash industry in U.S. with 17k sites Top 10 global fleets IoT player (#1 ANZ, #3 UK) Leader in EV Charging smart software; ~1M+ drivers across 28 countries #1 NA player in CNG
Slide 19: Re-segmentation Aligns with Strategy and Shareholder Focus
Re-segmentation Aligns with Strategy and Shareholder Focus From: One Segment To: Three Segments* Mobility Technologies Repair Solutions Environmental & Fueling VNT OpCos Point-of-Sale (POS) and payment, Premium equipment Best-in-class IoT-based fleet monitoring, and financial services to environment
Slide 20: Connected Mobility Strategy
Connected Mobility Strategy Operational Excellence Accelerate Growth OPTIMIZE CORE EXPAND CORE ADJACENT MARKETS Drive Core Sales growth & Leverage current Expand into near-in Operating Profit margin positions to grow and high-growth adjacencies, expansion diversify portfolio diversify further VBS St
Slide 21: Smart Sustainable Solutions
VISION: OUR NORTH STAR Smart Sustainable Solutions We harness the Our innovations We connect customers – power of connected pave the way to and communities – with digital workflows and a safer and innovative mobility analytics to solve cleaner planet. technology and services high-value they need to
Slide 22: Supplemental Reconciliation Data
Supplemental Reconciliation Data 22
Slide 23: Components of Sales Growth
COMPONENTS OF SALES GROWTH % Change Three Months Ended September 29, 2023 vs. Comparable 2022 Period Mobility Technologies Repair Solutions Environmental & Fueling Solutions Total Total Sales Growth (GAAP) 8.4 % 4.9 % (10.0) % (2.9) % Core sales growth (Non-GAAP) 4.1 % 5.0 % (10.3) % (2.6) % Acquisi
Slide 24: Reconciliation of Gross Profit to Adjusted Gross Profit
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT Three Months Ended Nine Months Ended $ in millions September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Sales (GAAP) $ 765.4 $ 788.0 $ 2,306.2 $ 2,312.5 Gross Profit (GAAP) $ 359.0 $ 359.9 $ 1,060.1 $ 1,043.3 Amortization
Slide 25: Reconciliation of Operating Profit to Adjusted and Segment Operating Profit
RECONCILIATION OF OPERATING PROFIT TO ADJUSTED OPERATING PROFIT AND SEGMENT OPERATING PROFIT Three Months Ended Nine Months Ended $ in millions September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Sales (GAAP) $ 765.4 $ 788.0 $ 2,306.2 $ 2,312.5 Operating Profit (GAAP) $ 142.6
Slide 26: 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 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Net Earnings (GAAP) $ 90.6 $ 50.1 $ 270.7 $ 333.6 Amortization of acquisition-related intangible assets 20.1 18.9 61.
Slide 27: Reconciliation of Operating Cash Flow to Free Cash Flow
RECONCILIATION OF OPERATING CASH FLOW TO FREE CASH FLOW AND FREE CASH FLOW CONVERSION RATIO Three Months Ended Nine Months Ended $ in millions September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Operating Cash Flow (GAAP) $ 131.6 $ 91.3 $ 290.1 $ 139.8 Less: Purchases of prop
Slide 28: Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow
RECONCILIATION OF OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW CONVERSION RATIO Three Months Ended Nine Months Ended $ in millions September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Operating Cash Flow (GAAP) $ 131.6 $ 91.3 $ 290.1 $ 139.8 Less:
Slide 29: Net Leverage Ratio and Reconciliation to Adjusted EBITDA
NET LEVERAGE RATIO AND RECONCILIATION FROM NET EARNINGS TO EBITDA TO ADJUSTED EBITDA Total Debt $ 2,366.3 Less: Cash (263.6) Net Debt $ 2,102.7 Adjusted EBITDA (Non-GAAP) $ 723.3 Net Leverage Ratio 2.9 Three Months Ended LTM $ in millions September 29, 2023 September 29, 2023 Net Earnings (GAAP) $ 9