Slide 1: Second Quarter 2022 Earnings Release
Second Quarter 2022 Earnings Release JULY 28, 2022 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, economic conditions, future prospects, impact of supply chain constraints, duration and impact of COVID-19 pandemic
Slide 3: Q2 2022 Financials and Highlights
Q2 2022 FINANCIALS AND HIGHLIGHTS A STRONG BEAT ACROSS PORTFOLIO, MITIGATING NUMEROUS HEADWINDS Q2 2022 FINANCIALS 1H 2022 HIGHLIGHTS 7% core revenue growth and 15% adj EPS growth in 1H $1,463M 8.9% • FBS mitigating numerous external headwinds Revenue Core Growth Demand remained robust 1 • 1H HW ord
Slide 4: Balanced 2022 Outlook
BALANCED 2022 OUTLOOK SUSTAINED STRONG CORE GROWTH AND MARGIN EXPANSION WHAT WE ARE SEEING WHAT WE EXPECT STRONG DEMAND AND RECORD BACKLOG RAISED CORE GROWTH Driven by accelerated innovation, share gains, and leverage Well positioned to navigate the evolving macro with more 1 to secular drivers. Har
Slide 5: Resiliency of Revenue Profile
RESILIENCY OF REVENUE PROFILE POSITIONED IN HIGHER GROWTH AND LESS CYCLICAL END MARKETS RECURRING REVENUE PROFILE TODAY 2016 ~18% Recurring Facility & Asset Lifecycle 2016 Non Recurring TODAY ~40% Software Divested Services Businesses Consumables Recurring Non Recurring Other ATTRACTIVE END MARKET A
Slide 6: Q2 2022: Intelligent Operating Solutions
Q2 2022: INTELLIGENT OPERATING SOLUTIONS PERFORMANCE MORE THAN OFFSETS F/X & SUPPLY CHAIN HEADWINDS INTELLIGENT OPERATING SOLUTIONS $ in millions Q2 2022 Highlights REVENUE ADJUSTED OPERATING PROFIT MARGIN • Strong supply / countermeasures driving favorable sequential HW growth +16.3% +30 BPS • LSD
Slide 7: Q2 2022: Precision Technologies
Q2 2022: PRECISION TECHNOLOGIES NAVIGATED SHANGHAI SHUTDOWNS, DELIVERED ON ROBUST DEMAND PRECISION TECHNOLOGIES $ in millions Q2 2022 Highlights REVENUE ADJUSTED OPERATING PROFIT MARGIN • Substantially mitigated Shanghai lockdowns with FBS countermeasures +5.8% +90 BPS • Strong demand continues acro
Slide 8: Q2 2022: Advanced Healthcare Solutions
Q2 2022: ADVANCED HEALTHCARE SOLUTIONS CORE GROWTH RAMPING AS EXPECTED ADVANCED HEALTHCARE SOLUTIONS $ in millions Q2 2022 Highlights REVENUE ADJUSTED OPERATING PROFIT MARGIN • ASP consumables growth was partially offset by lower capital sales due to supply chain +9.2% +300 BPS constraints • NA elec
Slide 9: FBS in Action
FBS IN ACTION ENABLING BROAD-BASED EXECUTION ACROSS PORTFOLIO... THE FORTIVE BUSINESS SYSTEM FBS APPLICATION FBS IMPACT • Lean Portfolio Management • 80% of new products aligned to strategic growth areas - doubled 3-year revenue potential from new products • Transaction Process Improvement • 25% imp
Slide 10: Q2 2022 Revenue
Q2 2022 REVENUE STRONG GROWTH ACROSS ALL MAJOR REGIONS REGIONAL HIGHLIGHTS • Broad strength in North America and Western Europe 10.9% NORTH WESTERN ASIA 8.9% Core AMERICA EUROPE • Strong growth across all High Growth Markets, up LDD despite Russia exit $66 $(40) HSD Mid- • China +Mid-Teens mitigatin
Slide 11: Q2 2022 Performance Summary
Q2 2022 PERFORMANCE SUMMARY STRONG FINANCIAL PERFORMANCE PERFORMANCE HIGHLIGHTS • GMX impacted by F/X ADJ. GROSS ADJ. OPERATING ADJ. EARNINGS FREE CASH headwinds partially offset by MARGIN PROFIT MARGIN PER SHARE FLOW ($M) favorable price and volume -30 BPS +190 BPS +18% -2% • 190 bps of adjusted OM
Slide 12: Q3, Q4 and FY 2022 Outlook
Q3, Q4 AND FY 2022 OUTLOOK ON TRACK FOR ANOTHER YEAR OF DOUBLE-DIGIT EARNINGS AND FCF GROWTH Q3, Q4 AND FY DETAILS Q3 2022 Q4 2022 FY 2022 REVENUE $1,430 – 1,455M $1,505 – 1,530M $5,775 – 5,825M •Q3: M&A ~4%, FX ~(3)% Core / Total Growth 9% to 11.5% / 10% to 12% 9% to 12% / 9.5% to 11.5% 8% to 9.5%
Slide 13: 2022 Revenue Walk
2022 REVENUE WALK 1H OUTPERFORMANCE DRIVEN BY IOS AND SHANGHAI MITIGATION ACTIONS KEY DRIVERS $ in millions ~16%* • 1H includes ~$55M of volume that 2-Yr Stack shifted from 2H:1H as a result of ~23% 110 2,960 mitigating Shanghai lockdowns 2-Yr Stack • Continued orders growth drives 55 2,840 25 recor
Slide 14: Strong Cash Generation and Balance Sheet
STRONG CASH GENERATION AND BALANCE SHEET ACCELERATED CASH FLOW GROWTH DRIVES SUSTAINABLE VALUE CREATION HIGHLIGHTS $ in millions ~ 3,680 • Enhanced portfolio and asset-lite +40% operating model accelerates FCF growth and improves FCF conversion • Accelerated FCF growth provides +90% 1,170 significan
Slide 15: Fortive a Force for Good
FORTIVE A FORCE FOR GOOD ACCELERATING PROGRESS AND IMPROVING ESG REPORTING RECENT HIGHLIGHTS • Realization of 2025 GHG intensity goal announced in 2021: achieved >50% GHG intensity reduction early • Commitment to an absolute GHG emissions reduction goal, aligned with the SBTi guidance to reduce Scop
Slide 16: Attractive Long-Term Financial Profile
ATTRACTIVE LONG-TERM FINANCIAL PROFILE EXECUTING OUR STRATEGY AND DELIVERING RESULTS SUMMARY • Strong Q2/1H performance reinforces confidence in FY 2022 outlook • Enhanced portfolio providing accelerated and more resilient revenue and earnings growth • 3-year stack reflects execution on through- cyc
Slide 17: Appendix & Supplemental Reconciliation Data
Appendix & Supplemental Reconciliation Data 17
Slide 18: Q3 and FY 2022 Segment Outlooks
Q3 AND FY 2022 SEGMENT OUTLOOKS Q3 2022 FY 2022 IOS PT AHS IOS PT AHS REVENUE GROWTH Core 11.5% to 14% 11.5% to 14% 1% to 3.5% 10% to 11.5% 9% to 10.5% 3.5% to 4.5% Total 12.5% to 14.5% 9% to 11% 7% to 8.5% 12.5% to 13.5% 6.5% to 7.5% 10.5% to 11% ADJ. OP. PROFIT >29% >24% >23% >28% >24% >24% MARGIN
Slide 19: Adjusted Gross Profit and Adjusted Gross Profit Margin
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS PROFIT MARGIN Three Months Ended Six Months Ended $ in millions July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 Revenue (GAAP) $ 1,463.3 $ 1,319.7 $ 2,839.8 $ 2,578.9 Adjusted Gross Profit Gross Profit (GAAP) $ 833.5 $ 755.5 $ 1,625.5 $ 1,467.4 Acquisitio
Slide 20: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Three Months Ended July 1, 2022 Three Months Ended July 2, 2021 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Technologies He
Slide 21: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Six Months Ended July 1, 2022 Six Months Ended July 2, 2021 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Technologies Health
Slide 22: Two Year Stack - Adjusted Operating Profit and Margin
TWO YEAR STACK - ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING PROFIT MARGIN Three Months Ended July 1, 2022 Three Months Ended June 26, 2020 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Opera
Slide 23: Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT MARGIN Three Months Ended July 1, 2022 Six Months Ended July 1, 2022 Intelligent Precision Advanced Total Intelligent Precision Advanced Total Operating Technologies Healthcare Fortive Operating Technologies Healthcare Fortive Solutions Solutions Solutions Solutions 2021 Ad
Slide 24: Adjusted Net Earnings from Continuing Operations
ADJUSTED NET EARNINGS FROM CONTINUING OPERATIONS Three Months Ended Six Months Ended $ in millions July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 Net Earnings Attributable to Common Stockholders from Continuing Operations (GAAP) (a) $ 173.0 $ 164.8 $ 338.1 $ 259.2 Dividends on the mandatory con
Slide 25: Adjusted Diluted Net EPS
ADJUSTED DILUTED NET EPS Three Months Ended (a) Six Months Ended (a) July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Net Earnings Attributable to Common Stockholders from Continuing Operations (GAAP) (b) $ 0.48 $ 0.48 $ 0.93 $ 0.76 Dividends on the mandatory convertible preferred stock to apply
Slide 26: Forecasted Adjusted Diluted Net EPS from Continuing Operations
FORECASTED ADJUSTED DILUTED NET EPS FROM CONTINUING OPERATIONS Three Months Ending Twelve Months Ending September 30, 2022 December 31, 2022 Low High Low High Forecasted Net Earnings Per Share from Continuing Operations (GAAP) $ 0.49 $ 0.53 $ 2.03 $ 2.09 Anticipated pretax amortization of acquisitio
Slide 27: Free Cash Flow Conversion Ratio - Twelve Months Ended July 1, 2022
FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED JULY 1, 2022 AND JULY 2, 2021 $ in millions Three Months Ended Twelve Months Ended July 1, 2022 April 1, 2022 December 31, 2021 October 1, 2021 July 1, 2022 Operating Cash Flows from Continuing Operations (GAAP) $ 294.4 $ 214.8 $ 287.0 $ 262.9 $
Slide 28: Adjusted Free Cash Flow Conversion Ratio - Twelve Months Ended July 1, 2022
ADJUSTED FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED JULY 1, 2022 AND JULY 2, 2021 $ in millions Three Months Ended Twelve Months Ended July 1, 2022 April 1, 2022 December 31, 2021 October 1, 2021 July 1, 2022 Operating Cash Flows from Continuing Operations (GAAP) $ 294.4 $ 214.8 $ 287.0 $
Slide 29: Core Revenue Growth
CORE REVENUE GROWTH Components of Revenue Growth Three Months Ended July 1, 2022 Six Months Ended July 1, 2022 Total Fortive Total Revenue Growth (GAAP) 10.9 % 10.1 % Core (Non-GAAP) 8.9 % 7.1 % Acquisitions (Non-GAAP) 5.0 % 5.3 % Impact of currency translation (Non-GAAP) (3.0)% (2.3)% Intelligent O
Slide 30: Adjusted Effective Tax Rate
ADJUSTED EFFECTIVE TAX RATE Three Months Ended Six Months Ended $ in millions July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 Earnings before income taxes from continuing operations $ 208.2 $ 207.5 $ 399.0 $ 326.2 Income tax expense (35.2) (25.5) (60.9) (32.5) Effective tax rate (GAAP) 16.9 % 12
Slide 31: Fortive
(2) FORTIVE