Slide 1: Second Quarter 2021 Earnings Release
Second Quarter 2021 Earnings Release July 29, 2021 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 the future impact of the COVID-19 pandemic, the Company's anticipated financial results, business, investment and acquisition opportunities, timin
Slide 3: Q2 2021 Summary
Q2 2021 SUMMARY • Strong earnings growth (+53.5%) and free cash flow in Q2, with core revenue above high-end of guide and strong performance across all segments as demand accelerated • Software businesses performing well on continued SaaS momentum (+LDD Y/Y) and return to growth for Professional Ser
Slide 4: Q2 2021 Financial Performance: Summary of Key Financial Items
Q2 2021 FINANCIAL PERFORMANCE Summary of Key Financial Items Revenue ($M) Adjusted Operating Profit Adjusted Diluted Net Free Cash Flow ($M) Margin (%) Earnings Per Share ($) $1,320 $0.66 $1,042 22.2% $290 $282 $0.43 19.9% Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 • Core growth
Slide 5: Q2 2021 Intelligent Operating Solutions
Q2 2021 INTELLIGENT OPERATING SOLUTIONS • Fluke revenue increased +Mid-30% Y/Y, and by +MSD sequentially: Robust demand continued across the business, with strong growth in each major geographical region – Fluke Industrial supported by strong POS across major regions, and share gains across key chan
Slide 6: Q2 2021 Precision Technologies
Q2 2021 PRECISION TECHNOLOGIES • Tektronix revenue increased +Low-30%: Benefiting from strategy to increase penetration in attractive, higher growth verticals such as electric vehicles, data centers, etc. – Mainstream and performance oscilloscopes, and Keithley all strong; high performance scopes be
Slide 7: Q2 2021 Advanced Healthcare Solutions
Q2 2021 ADVANCED HEALTHCARE SOLUTIONS • ASP revenue increased +HSD: Growth driven by Consumables, tied to improvement in elective procedure rates in most geographies and continued growth in global terminal sterilization capital equipment installed base – Elective procedures increased Y/Y but came in
Slide 8: Q2 2021 Financial Performance: Free Cash Flow Detail
Q2 2021 FINANCIAL PERFORMANCE Free Cash Flow Detail Free Cash Flow ($M) - Q2 2021 $290 • Q2 2021: $282 2020 – Free Cash Flow: $282 million ((3)% versus Prior Year) 2021 – Adjusted FCF Conversion: 118% of Adjusted Net Earnings – Strong conversion on execution and working capital management, as well a
Slide 9: FY 2021 Guidance
FY 2021 GUIDANCE New Prior What We Are Seeing / Expectations Guidance Guidance • Strong broad-based demand trends across core end markets Core Growth +10.5% - +12.0% +7.0% - +10.0% • Continued improvement in customer site access and "return to Total Growth +13.5% - +15.0% +10.0% - +13.0% work" expec
Slide 10: Q3 2021 Guidance
Q3 2021 GUIDANCE Guidance What We Are Seeing / Expectations • Broad-based improvement across end markets with opportunity to continue converting Core Growth +9.5% - +12.0% against backlog built in Q2 • Continued momentum in software on SaaS growth and Services recovery Total Growth +11.5% - +14.5% •
Slide 11: Update on Our Sustainability Progress in Q2
UPDATE ON OUR SUSTAINABILITY PROGRESS IN Q2 • Presented new goals / targets at May 19th Investor Day Fortive 2021 Sustainability Report – Announced accelerated GHG reduction goal → 50% intensity reduction for Scope 1 and 2 emissions by 2025 (from 2017 base year) – Announced 2025 Inclusion & Diversit
Slide 12: Q2 2021 Wrap Up
Q2 2021 WRAP UP • Q2 outperformance as demand accelerated across our markets; raised core revenue, adjusted operating profit margin and adjusted earnings per share outlook for the full-year • Demonstrating the success of our strategy to provide connected solutions for our customers' critical workflo
Slide 13: Appendix & Supplemental Reconciliation Data
Appendix & Supplemental Reconciliation Data 13
Slide 14: Q2 2021 Regional Commentary
Q2 2021 REGIONAL COMMENTARY North America Western Europe Asia Pacific Q2 Core Growth (Y/Y): +High-Teens +Mid-20% +Mid-Teens • Broad strength, particularly at Fluke and • Growth led by Fluke and Tektronix, • Growth highlighted by Fluke, Tektronix, Tektronix underpinned by strong POS Sensing and ASP –
Slide 15: Q3 & FY 2021 Guidance Summary
Q3 & FY 2021 GUIDANCE SUMMARY Q3 2021 FY 2021 • Adjusted diluted net EPS of $0.62 to $0.66 (+24% to +32% Y/Y) • Adjusted diluted net EPS of $2.65 to $2.75 (+27% to +32% Y/Y) • Assumptions: • Assumptions: – Core revenue growth of +9.5% to +12.0% – Core revenue growth of +10.5% to +12.0% – IOS ~14.5%
Slide 16: 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 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020 Revenue (GAAP) $ 1,319.7 $ 1,041.6 $ 2,578.9 $ 2,149.7 Acquisition-Related Fair Value Adjustments to Deferred Revenue — 4.6 — 11.5 Adjusted R
Slide 17: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Three Months Ended July 2, 2021 Three Months Ended June 26, 2020 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Technologies H
Slide 18: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Six Months Ended July 2, 2021 Six Months Ended June 26, 2020 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Technologies Healt
Slide 19: Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT MARGIN Three Months Ended July 2, 2021 Six Months Ended July 2, 2021 Intelligent Precision Advanced Total Intelligent Precision Advanced Total Operating Technologies Healthcare Fortive Operating Technologies Healthcare Fortive Solutions Solutions Solutions Solutions 2020 Ad
Slide 20: Incremental Adjusted Operating Profit Margin
INCREMENTAL ADJUSTED OPERATING PROFIT MARGIN Three Months Ended July 2, 2021 Three Months Ended June 26, 2020 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Technologies Healthcare Fortiv
Slide 21: Adjusted Net Earnings from Continuing Operations
ADJUSTED NET EARNINGS FROM CONTINUING OPERATIONS Three Months Ended Six Months Ended $ in millions July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020 Net Earnings Attributable to Common Stockholders from Continuing Operations (GAAP) (a) $ 164.8 $ 42.6 $ 164.8 $ 80.1 Dividends on the mandatory con
Slide 22: Adjusted Diluted Net EPS
ADJUSTED DILUTED NET EPS Three Months Ended (a) Six Months Ended (a) July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020 Diluted Net Earnings Per Share from Continuing Operations (GAAP) (b) $ 0.48 $ 0.13 $ 0.76 $ 0.24 Dividends on the mandatory convertible preferred stock to apply if-converted met
Slide 23: Adjusted Diluted Shares Outstanding
ADJUSTED DILUTED SHARES OUTSTANDING Three Months Ended Six Months Ended (shares in millions) July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020 Average common diluted stock outstanding 342.4 339.7 342.1 339.9 MCPS Converted Shares (a) 19.2 18.4 19.2 18.4 Adjusted average common stock and common e
Slide 24: Forecasted Adjusted Diluted Net EPS from Continuing Operations
FORECASTED ADJUSTED DILUTED NET EPS FROM CONTINUING OPERATIONS Three Months Ending Year Ending October 1, 2021(a) December 31, 2021(a) Low High Low High Forecasted Diluted Net Earnings Per Share from Continuing Operations Attributable to Common Stockholders $ 0.41 $ 0.45 $ 1.70 $ 1.80 Anticipated di
Slide 25: Free Cash Flow Conversion Ratio
FREE CASH FLOW CONVERSION RATIO $ in millions Three Months Ended Six Months Ended July 2, 2021 June 26, 2020 % Change July 2, 2021 June 26, 2020 % Change Operating Cash Flows from Continuing Operations (GAAP) $ 291.0 $ 309.1 (5.9)% $ 443.0 $ 430.8 2.8 % Less: purchases of property, plant & equipment
Slide 26: Free Cash Flow Conversion Ratio - Twelve Months Ended July 2, 2021
FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED JULY 2, 2021 $ in millions Three Months Ended Twelve Months Ended July 2, 2021 April 2, 2021 December 31, 2020 September 25, 2020 July 2, 2021 Operating Cash Flows from Continuing Operations (GAAP) $ 291.0 $ 152.0 $ 329.4 $ 217.5 $ 989.9 Less: pu
Slide 27: Free Cash Flow Conversion Ratio - Twelve Months Ended June 26, 2020
FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED JUNE 26, 2020 $ in millions Three Months Ended Twelve Months Ended June 26, 2020 March 27, 2020 December 31, 2019 September 27, 2019 June 26, 2020 Operating Cash Flows from Continuing Operations (GAAP) $ 309.1 $ 121.7 $ 247.1 $ 230.0 $ 907.9 Less
Slide 28: Adjusted Free Cash Flow Conversion Ratio
ADJUSTED FREE CASH FLOW CONVERSION RATIO $ in millions Three Months Ended Six Months Ended July 2, 2021 June 26, 2020 % Change July 2, 2021 June 26, 2020 % Change Operating Cash Flows from Continuing Operations (GAAP) $ 291.0 $ 309.1 (5.9)% $ 443.0 $ 430.8 2.8 % Less: purchases of property, plant &
Slide 29: Adjusted Free Cash Flow Conversion Ratio - Twelve Months Ended July 2, 2021
ADJUSTED FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED JULY 2, 2021 $ in millions Three Months Ended Twelve Months Ended July 2, 2021 April 2, 2021 December 31, 2020 September 25, 2020 July 2, 2021 Operating Cash Flows from Continuing Operations (GAAP) $ 291.0 $ 152.0 $ 329.4 $ 217.5 $ 989.9
Slide 30: Adjusted Free Cash Flow Conversion Ratio - Twelve Months Ended June 26, 2020
ADJUSTED FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED JUNE 26, 2020 $ in millions Three Months Ended Twelve Months Ended June 26, 2020 March 27, 2020 December 31, 2019 September 27, 2019 June 26, 2020 Operating Cash Flows from Continuing Operations (GAAP) $ 309.1 $ 121.7 $ 247.1 $ 230.0 $ 9
Slide 31: Core Revenue Growth
CORE REVENUE GROWTH Components of Revenue Growth Three Months Ended July 2, 2021 Six Months Ended July 2, 2021 Total Fortive Total Revenue Growth (GAAP) 26.7 % 20.0 % Core (Non-GAAP) 21.3 % 15.0 % Acquisitions (Non-GAAP) 2.1 % 2.1 % Impact of currency translation (Non-GAAP) 3.3 % 2.9 % Intelligent O
Slide 32: Adjusted Effective Tax Rate
ADJUSTED EFFECTIVE TAX RATE Three Months Ended Six Months Ended $ in millions July 2, 2021 June 26, 2020 July 2, 2021 June 26, 2020 Earnings before income taxes from continuing operations $ 207.5 $ 72.0 $ 326.2 $ 144.3 Income tax expense (25.5) (12.2) (32.5) (29.7) Effective tax rate (GAAP) 12.3 % 1
Slide 33: Fortive
(2) FORTIVE