Vontier Corporation · NYSE:VNT
Vontier — Q3 2021 Earnings Presentation
20 slides from Vontier's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Earnings Release
Third Quarter 2021 Earnings Release November 4, 2021 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 2021 Summary
Q3 2021 Summary Exceptional execution delivers beat in a challenging environment – Adj. EPS $0.80 reflecting strong price actions and operating leverage offsetting inflation/supply chain challenges and challenging comparisons – Strong fall-through of >40% – Core revenue growth 0.8% vs. prior guidanc
Slide 5: Q3 2021 Financial Performance
Q3 2021 Financial Performance Summary of Key Financial Items Revenue Adj. Operating Profit Adj. Diluted Net EPS ($M) Margin (%) $0.80 $0.80 $747 $769 24.1% 24.4% Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 • Total growth: 2.9% • GAAP OP Margins -210 bps • GAAP EPS of $0.75 • Core revenue growth:
Slide 6: Q3 2021 Free Cash Flow Detail
Q3 2021 Free Cash Flow Detail Adj. Free Cash Flow ($M) and FCF • Q3 2021: Conversion (%) – Free Cash Flow: $114M, -51%; conversion of 90% of GAAP Net Earnings 162% – Adj. Free Cash Flow: $119M, -45%; conversion of 87% of Adj. Net Earnings, reflecting working capital build 87% $218 • 2021 YTD: $119 –
Slide 7: Performance by Platform
Performance by Platform Mobility Technologies Diagnostics & Repair Technologies Revenue Revenue +1.7% • Environmental +7.1% • HSD core Core (1.0)% core revenue Core +6.8% revenue growth grew high-teens% at Matco • GVR orders • 5th consecutive excluding EMV quarter of strong grew HSD franchisee $579
Slide 8: Thoughts on Q4 and FY21
Thoughts on Q4 and FY21 Q4 Considerations – Anticipate core revenue to decline MSD reflecting EMV comparison – Expect adj. core OMX of -50 to -75 bps, excluding restructuring costs – Expect adj. EPS of $0.77 - $0.81, including $0.03-$0.04 from DRB – ETR ~23% FY21 Considerations – Anticipate core rev
Slide 9: Supplemental Reconciliation Data
Supplemental Reconciliation Data 9 9
Slide 10: 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 25, 2020 October 1, 2021 September 25, 2020 October 1, 2021 Revenue (GAAP) $ 746.7 $ 768.5 $ 1,889.6 $ 2,200.5 Gross Profit (GAAP) $ 331.3 $ 346.4 $ 8
Slide 11: 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 25, 2020 October 1, 2021 September 25, 2020 October 1, 2021 Revenue (GAAP) $ 746.7 $ 768.5 $ 1,889.6 $ 2,200.5 Operating Profit (GAAP) $ 1
Slide 12: Reconciliation of Adjusted Operating Profit Margin Expansion
RECONCILIATION OF ADJUSTED OPERATING PROFIT MARGIN EXPANSION Three Months Ended Nine Months Ended October 1, 2021 October 1, 2021 2020 Adjusted Operating Profit Margin (Non-GAAP) 24.1% 20.0% Core (Non-GAAP) 0.7% 2.6% Acquisitions (Non-GAAP) —% —% Currency exchange rates (Non-GAAP) (0.4)% (0.3)% 2021
Slide 13: 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 25, 2020 October 1, 2021 September 25, 2020 October 1, 2021 Net Earnings (GAAP) $ 141.0 $ 127.3 $ 205.2 $ 300.6 Amortization of acquisition-related intangible assets 7.3 9.2 21.8 24.4
Slide 14: 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 25, 2020 October 1, 2021 September 25, 2020 October 1, 2021 Diluted Net Earnings per Share (GAAP) $ 0.84 $ 0.75 $ 1.22 $ 1.77 Amortization of acquisition-related
Slide 15: Forecasted Adjusted Diluted Net Earnings Per Share
FORECASTED ADJUSTED DILUTED NET EARNINGS PER SHARE Three Months Ended Year Ended December 31, 2021 December 31, 2021 Low End High End Low End High End Forecasted Diluted Net Earnings Per Share $ 0.65 $ 0.69 $ 2.42 $ 2.46 Anticipated amortization of acquisition-related intangible assets 0.10 0.10 0.2
Slide 16: Reconciliation of Operating Cash Flows to Free Cash Flow and Conversion
RECONCILIATION OF OPERATING CASH FLOWS TO FREE CASH FLOW AND FREE CASH FLOW CONVERSION Three Months Ended Nine Months Ended $ in millions September 25, 2020 October 1, 2021 % Change September 25, 2020 October 1, 2021 % Change Operating Cash Flows (GAAP) $ 245.8 $ 125.4 (49.0)% $ 480.6 $ 341.9 (28.9)
Slide 17: Reconciliation of Operating Cash Flows to Adjusted Free Cash Flow and Conversion
RECONCILIATION OF OPERATING CASH FLOWS TO ADJUSTED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW CONVERSION Three Months Ended Nine Months Ended $ in millions September 25, 2020 October 1, 2021 % Change September 25, 2020 October 1, 2021 % Change Operating Cash Flows (GAAP) $ 245.8 $ 125.4 (49.0)% $ 48
Slide 18: Components of Revenue Growth
COMPONENTS OF REVENUE GROWTH Components of Revenue Growth % Change Three Months Ended October % Change Nine Months Ended October 1, 2021 vs. Comparable 2020 Period 1, 2021 vs. Comparable 2020 Period Total Revenue Growth (GAAP) 2.9% 16.5% Core revenue growth (Non-GAAP) 0.8% 14.1% Impact of acquisitio
Slide 19: Components of Revenue Growth by Platform
COMPONENTS OF REVENUE GROWTH BY PLATFORM % Change Three Months Ended October 1, 2021 vs. Comparable 2020 Period Components of Revenue Growth Mobility Technologies Diagnostics & Repair Technologies Total Revenue Growth (GAAP) 1.7% 7.1% Core revenue growth (Non-GAAP) (1.0)% 6.8% Impact of acquisitions
Slide 20: Net Leverage Ratio and Reconciliation to Adjusted EBITDA
NET LEVERAGE RATIO AND RECONCILIATION FROM NET EARNINGS TO EBITDA TO ADJUSTED EBITDA Total Debt $ 2,604.5 Less: Cash (458.9) Net Debt $ 2,145.6 Adjusted EBITDA (Non-GAAP) $ 740.8 Net Leverage Ratio 2.9 Nine Months Ended Year Ended LTM $ in millions September 25, 2020 October 1, 2021 December 31, 202