Veralto Corp · NYSE:VLTO
Veralto — Q3 2024 Earnings Presentation
38 slides from Veralto's earnings presentation, Oct 24, 2024
Slide 1: Third Quarter 2024 Results
Third Quarter 2024 Results October 23, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation, including statements regarding the Company's fourth quarter and full year 2024 guidance, the Company’s differentiation and positioning to continue delivering sustainable, long-term shareholder value and any other statements regardin
Slide 3: Opening Remarks
Opening Remarks Jennifer L. Honeycutt President and Chief Executive Officer Q3 2024 Results | October 23, 2024
Slide 4: Veralto / TraceGains acquisition
Veralto / TraceGains acquisition TraceGains is a High Quality Business with a Compelling Value Creation Opportunity Q3 2024 RESULTS | 4 4
Slide 5: TraceGains Acquisition: Expands digital workflow offering – Source-to-Shelf
TraceGains Acquisition / Expands digital workflow offering – “Source-to-Shelf” Synergistic Offering Provides Enhanced Value Proposition for Food & Beverage Customers Q3 2024 RESULTS | 5 5
Slide 6: Veralto / Q3 2024 key consolidated financial results
Veralto / Q3 2024 key consolidated financial results ADJUSTED OPERATING ADJUSTED ADJUSTED FREE CASH SALES PROFIT* EPS* EBITDA* FLOW* $1,314m $317m $0.89 $327m $215m core sales 24.1% adjusted +19% 24.9% adjusted 98% free cash growth* of +4.6% operating margin* year-over-year EBITDA margin* flow conve
Slide 7: Core sales growth by region for Q3 and YTD 2024
Veralto / Core sales growth by region for Q3 and YTD 2024 NORTH AMERICA (48% of Q3 sales) WESTERN EUROPE (22% of Q3 sales) HIGH GROWTH MARKETS (28% of Q3 sales) Q3 2024 Commentary Q3 2024 WQ +6.7% WQ +3.7% WQ -1.0% +5.5% +4.2% +4.5% PQI +2.5% PQI +4.7% PQI +10.6% North America: • WQ: growth in water
Slide 8: Financial Review
Financial Review Sameer Ralhan SVP and Chief Financial Officer Q3 2024 Results | October 23, 2024
Slide 9: Veralto / Q3 2024 consolidated performance
Veralto / Q3 2024 consolidated performance YOY Q3 2023 Q3 2024 • Sales grew +4.7% year-over-year: Variance $ millions, except per share data ◦ Core sales* +4.6% Sales $1,255 $1,314 +4.7% ◦ Currency: -0.1% ◦ Acquisitions & divestitures: -0.0% Core Sales Growth* 1.0% 4.6% • Gross profit margin up 200
Slide 10: Water Quality / Q3 and YTD 2024 performance
Water Quality / Q3 and YTD 2024 performance ($ millions, variances versus prior year period) Q3 SALES Q3 ADJUSTED OPERATING PROFIT * +3.6% +4.2% $199 $801 Three months ended $191 Price YOY Change in Sales Q3 2023 Q3 2024 $772 +2.1% Core Growth* +3.0% +4.0% 24.8% 24.7% Currency +1.0% -0.2% Adj. opera
Slide 11: Product Quality & Innovation / Q3 and YTD 2024 performance
Product Quality & Innovation / Q3 and YTD 2024 performance ($ millions, variances versus prior year period) Q3 SALES Q3 ADJUSTED OPERATING PROFIT * +6.3% $513 +29.1% $142 Price Three months ended $483 +1.4% YOY Change in Sales Q3 2023 Q3 2024 27.7% Core Growth* -2.5% +5.7% $110 Currency +2.5% +0.4%
Slide 12: Veralto / Q3 2024 cash flow and balance sheet
Veralto / Q3 2024 cash flow and balance sheet ($ millions) Q3 2024 Cash from operations $224 Financial position summary: Capital expenditures $(9) • Strong annual cash generation Free cash flow* $215 Free cash flow conversion* 98% • Resilient and capital-light business model Q3 2024 • Gross leverage
Slide 13: Veralto / Q4 and FY 2024 guidance
Veralto / Q4 and FY 2024 guidance FY2024E Annual Sales and Core Sales Growth* ~$5.2b Q4 2024E Current Prior $5.0b Core Sales $4.9b +LSD to +MSD +LSD +LSD Growth* $4.7b Adjusted ~75 basis ~75 basis Operating Profit ~24.0% points points Core sales +7.9% +8.1% +2.6% +LSD Margin* growth* Adjusted EPS* $
Slide 14: Closing Remarks
Closing Remarks Jennifer L. Honeycutt Q3 2024 Results | October 23, 2024
Slide 15: Well-positioned to drive compounding earnings and free cash flow growth
Veralto / Well-positioned to drive compounding earnings and free cash flow growth ATTRACTIVE SECULAR GROWTH DRIVERS PREMIER FINANCIAL PROFILE and DURABLE BUSINESS MODEL PROVEN VALUE CREATION PLAYBOOK SAFEGUARDING THE WORLD’S MOST VITAL RESOURCES™ 15 Q 3 2 0 2 4 R E S U L T S | 15
Slide 16: Appendix
Appendix Q3 2024 Results | October 23, 2024
Slide 17: Reconciliation of GAAP to Non-GAAP Financial Measures
VERALTO CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTAL FORWARD-LOOKING INFORMATION THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 27, 2024 AND SEPTEMBER 29, 2023
Slide 18: Table of Contents
TABLE OF CONTENTS Page 1 Sales Growth by Segment, Core Sales Growth by Segment 2 Sales Growth (Decline) by Segment, Core Sales Growth (Decline) by Segment 3 Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and Adjusted Diluted Net Earnings per Share 4 Segment Sales, Operating Profit,
Slide 19: Sales Growth by Segment, Core Sales Growth by Segment
VERALTO CORPORATION Sales Growth by Segment, Core Sales Growth by Segment % Change Three-Month Period Ended September 27, 2024 vs. Comparable 2023 Period Segments Product Quality Total Company Water Quality and Innovation Total sales growth (GAAP) 4.7 % 3.6 % 6.3 % Impact of: Acquisitions/divestitur
Slide 20: Sales Growth (Decline) by Segment, Core Sales Growth (Decline) by Segment
VERALTO CORPORATION Sales Growth (Decline) by Segment, Core Sales Growth (Decline) by Segment % Change Three-Month Period Ended September 29, 2023 vs. Comparable 2022 Period Segments Product Quality Total Company Water Quality and Innovation Total sales growth (GAAP) 3.0 % 4.0 % 1.0 % Impact of: Acq
Slide 21: Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and Adjusted EPS
VERALTO CORPORATION Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and Adjusted Diluted Net Earnings per Share The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP revenue, such as currency translation, a
Slide 22: Segment Sales, Operating Profit, Adjusted Operating Profit
VERALTO CORPORATION Segment Sales, Operating Profit, Adjusted Operating Profit, Operating Profit Margin, and Adjusted Operating Profit Margin ($ in millions) Three-Month Period Ended Nine-Month Period Ended September 27, September 29, September 27, September 29, 2024 2023 2024 2023 Sales (GAAP) Wate
Slide 23: Segment Sales, Operating Profit, Adjusted Operating Profit (continued)
VERALTO CORPORATION Segment Sales, Operating Profit, Adjusted Operating Profit, Operating Profit Margin, and Adjusted Operating Profit Margin ($ in millions) Three-Month Period Ended Nine-Month Period Ended September 27, September 29, September 27, September 29, 2024 2023 2024 2023 Other Operating P
Slide 24: Net Earnings, Operating Profit, Adjusted EBITDA: Three-Month 2024
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Three-Month Period Ended September 27, 2024 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 219 Interest E
Slide 25: Net Earnings, Operating Profit, Adjusted EBITDA: Three-Month 2023
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Three-Month Period Ended September 29, 2023 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 205 Interest E
Slide 26: Net Earnings, Operating Profit, Adjusted EBITDA: Nine-Month 2024
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Nine-Month Period Ended September 27, 2024 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 606 Interest Ex
Slide 27: Net Earnings, Operating Profit, Adjusted EBITDA: Nine-Month 2023
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Nine-Month Period Ended September 29, 2023 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 639 Interest Ex
Slide 28: Trailing Twelve Month Adjusted EBITDA, Gross Leverage, and Net Leverage
VERALTO CORPORATION Trailing Twelve Month Adjusted EBITDA, Gross Leverage, and Net Leverage ($ in millions) Three-Month Period Ended September 27, 2024 June 28, 2024 March 29, 2024 December 31, 2023 Net Earnings (GAAP) $ 219 $ 203 $ 184 $ 200 Interest Expense 27 30 28 25 Other Nonoperating (Income)
Slide 29: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Three-Month Period Ended September 27, 2024 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales
Slide 30: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Three-Month Period Ended September 29, 2023 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales
Slide 31: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Nine-Month Period Ended September 27, 2024 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales
Slide 32: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) Nine-Month Period Ended September 29, 2023 Net earnings for calculation Diluted net Earnings of diluted earnings per Gross profit Operating Operating before income earnings per common Sales Cost of sales
Slide 33: Other Non-GAAP Adjusted P&L Measures
VERALTO CORPORATION Other Non-GAAP Adjusted P&L Measures ($ in millions, except per share data) A Amortization of acquisition-related intangible assets in the following historical periods (only the pretax amounts set forth below are reflected in the amortization line item above): Three-Month Period
Slide 34: Operating Profit Margin and Year-Over-Year Core Operating Margin Changes
VERALTO CORPORATION Operating Profit Margin and Year-Over-Year Core Operating Margin Changes Segments Product Quality Total Company Water Quality & Innovation Three-Month Period Ended September 29, 2023 Operating Profit Margins (GAAP) 21.8 % 24.4 % 20.5 % Third quarter 2023 impairment charges relate
Slide 35: Cash Flow, Free Cash Flow, and Conversion Ratio
VERALTO CORPORATION Cash Flow, Free Cash Flow, Operating Cash Flow to Net Earnings Ratio and Free Cash Flow to Net Earnings Conversion Ratio ($ in millions) Three-Month Period Ended Nine-Month Period Ended Year-over-Year Year-over-Year September 27, 2024 September 29, 2023 Change September 27, 2024
Slide 36: Statement Regarding Non-GAAP Measures
VERALTO CORPORATION Statement Regarding Non-GAAP Measures Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. M
Slide 37: Statement Regarding Non-GAAP Measures
VERALTO CORPORATION Statement Regarding Non-GAAP Measures • We calculate adjusted EBITDA by adding to operating profit amounts equal to depreciation and amortization and making the other adjustments reflected in the applicable tables above, which allows us to calculate and disclose such measure by s
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