Slide 1: Fourth Quarter & Full-Year 2022 Earnings Release
Fourth Quarter & Full-Year 2022 Earnings Release February 1, 2023 1
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES Statements in this release that are not strictly historical, including statements regarding the impact of the COVID-19 pandemic, business and acquisition opportunities, impact of acquisitions and dispositions, leadership succession, anticipate
Slide 3: Q4 & FY 2022 Financials and Highlights
Q4 & FY 2022 FINANCIALS AND HIGHLIGHTS A STRONG FINISH TO AN OUTSTANDING YEAR Q4 & FY 2022 FINANCIALS HIGHLIGHTS Revenue Core Growth 14% core revenue growth in Q4 | 10% in FY'22 • High-quality portfolio & strong execution deliver upside Q4 $1,530M Q4 13.8% FY $5,826M FY 10.1% 50 bps adj. GMX; 110 bp
Slide 4: Differentiated Performance in 2022
DIFFERENTIATED PERFORMANCE IN 2022 COMPARING FAVORABLY TO PEERS ON HEADLINE FINANCIAL METRICS SUMMARY CORE ADJ. ADJ. OP FCF GROWTH GROSS MARGIN MARGIN • Significant progress delivering on MARGIN our vision and strategy over the last 6 years • Portfolio today consists of higher growth and more profit
Slide 5: Q4/FY 2022: Intelligent Operating Solutions
Q4/FY 2022: INTELLIGENT OPERATING SOLUTIONS BROAD-BASED STRENGTH ACROSS THE SEGMENT INTELLIGENT OPERATING SOLUTIONS $ in millions REVENUE ADJUSTED OPERATING PROFIT MARGIN Highlights • Strong backlog and new product launches Q4 2022 FY 2022 Q4 2022 FY 2022 driving +DD growth at Fluke +9.5% +13.7% +33
Slide 6: Q4/FY 2022: Precision Technologies
Q4/FY 2022: PRECISION TECHNOLOGIES DELIVERED GROWTH AND MARGIN UPSIDE PRECISION TECHNOLOGIES $ in millions REVENUE ADJUSTED OPERATING PROFIT MARGIN Highlights • Record backlog, share gains and NPIs drive Q4 2022 FY 2022 Q4 2022 FY 2022 another quarter of DD revenue growth at Tektronix +16.7% +10.2%
Slide 7: Q4/FY 2022: Advanced Healthcare Solutions
Q4/FY 2022: ADVANCED HEALTHCARE SOLUTIONS BROAD-BASED GROWTH ACROSS SEGMENT AS EXPECTED ADVANCED HEALTHCARE SOLUTIONS $ in millions REVENUE ADJUSTED OPERATING PROFIT MARGIN Highlights • Core growth acceleration at ASP driven by Q4 2022 FY 2022 Q4 2022 FY 2022 improvement in elective procedures ex-Ch
Slide 8: FBS in Action
FBS IN ACTION SUSTAINING KAIZEN RESULTS 4 Operating 28 Cross-Fortive ...Sustaining Meaningful Companies... Teams… Project Results, Including: • Accelerating culture of • a 20% improvement in performance quality • Deep engagement with • a 50% reduction in past segment leaders and many due orders OpCo
Slide 9: 2022 Sustainability Highlights
2022 SUSTAINABILITY HIGHLIGHTS ACCELERATING PROGRESS FOR ALL STAKEHOLDERS RECOGNITION Newsweek's Most Responsible Empower Diverse & Invest In Our Protect The Work & Source Operate with Companies 4th Inclusive Teams Communities Planet Responsibly Principle consecutive year Advance an inclusive Create
Slide 10: Q4 2022 Revenue
Q4 2022 REVENUE DOUBLE-DIGIT CORE REVENUE GROWTH IN Q4 Q4 HIGHLIGHTS • ~1.5% M&A contribution, net of Therapy Physics divestiture NORTH WESTERN ASIA 11.3% AMERICA EUROPE • ~4% F/X headwind, better than Core: 13.8% expected Core • Broad-based growth across our $189 $19 $(53) Core Q4: +Mid- Core busin
Slide 11: Q4 2022 Performance Summary
Q4 2022 PERFORMANCE SUMMARY A STRONG FINISH TO 2022 PERFORMANCE HIGHLIGHTS ADJ. GROSS ADJ. OPERATING ADJ. EARNINGS FREE CASH • Adj. gross margin +50bps driven MARGIN PROFIT MARGIN PER SHARE FLOW ($M) by favorable price / cost +50 BPS +110 BPS +11% +62% • +110 bps of adj. OMX • +230 bps adj. OMX on 2
Slide 12: Balanced 2023 Outlook
BALANCED 2023 OUTLOOK REFLECTS CURRENT MACRO ENVIRONMENT AND PROACTIVE POSITIONING HIGHLIGHTS • Less cyclical portfolio driven by INTELLIGENT OPERATING SOLUTIONS 3.5% to 5.5% Core Growth recurring and secular drivers • Orders normalize at Fluke, expected to improve 2H • Enhanced market positions yie
Slide 13: Q1 and FY 2023 Outlook
Q1 AND FY 2023 OUTLOOK KEY ASSUMPTIONS Q1 2023 FY 2023 REVENUE $1,400 to 1,435M $5,950 to 6,100M •Q1: FX ~(2.5)% headwind Core Growth2 5% to 6.5% 3% to 5.5% •FY: FX ~(1)% full year headwind Total Growth 2% to 4% 2% to 4.5% ADJ. OP. PROFIT2 $330 to 345M $1,485 to 1,550M •Q1: Corporate ~$30M Growth 4%
Slide 14: H1:H2 Revenue Bridges
H1:H2 REVENUE BRIDGES OUTLOOK ASSUMES REASONABLE 1H → 2H STEP-UP KEY ASSUMPTIONS REVENUE 2022 ACTUAL 2023 OUTLOOK • Volume growth and mix drives 1H → 2H core revenue $(68) $77 $3,114 improvement as order profile $260 improves through year $(46) $125 $6 • F/X becomes a tailwind in 2H $2,986 versus 1H
Slide 15: Summary
SUMMARY Resilient Financial Profile: High recurring revenue, leading margins and free cash flow growth Platform Value Creation: Leadership positions in attractive markets with expanded innovation capabilities Unleashing the Power of FBS: Continuous improvement culture drives differentiated and susta
Slide 16: Appendix & Supplemental Reconciliation Data
Appendix & Supplemental Reconciliation Data 16
Slide 17: Q1 and FY 2023 Segment Outlooks
Q1 AND FY 2023 SEGMENT OUTLOOKS Q1 2023 FY 2023 IOS PT AHS IOS PT AHS REVENUE GROWTH Core 4% to 5.5% 10% to 11.5% 0.5% to 2% 3.5% to 5.5% 3% to 5% 3% to 5% Total 1.5% to 3% 7.5% to 9% (4)% to (2.5)% 3% to 5% 2.5% to 4.5% 1% to 3% ADJ. OP. PROFIT 27.5% to 28% 24% to 24.5% 24% to 24.5% 30.5% to 31% 25
Slide 18: Adjusted Gross Profit and Adjusted Gross Profit Margin
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS PROFIT MARGIN Three Months Ended Twelve Months Ended $ in millions December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Revenue (GAAP) $ 1,529.9 $ 1,374.8 $ 5,825.7 $ 5,254.7 Gross Profit (GAAP) $ 892.5 $ 794.0 $ 3,363.4 $ 3,007.1 Acquisiti
Slide 19: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Techn
Slide 20: Adjusted Operating Profit & Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT & ADJUSTED OPERATING PROFIT MARGIN Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fortive Operating Tec
Slide 21: Two Year Stack - Adjusted Operating Profit and Margin
TWO YEAR STACK - ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING PROFIT MARGIN Three Months Ended December 31, 2022 Three Months Ended December 31, 2020 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fort
Slide 22: Two Year Stack - Adjusted Operating Profit and Margin
TWO YEAR STACK - ADJUSTED OPERATING PROFIT AND ADJUSTED OPERATING PROFIT MARGIN Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2020 $ in millions Intelligent Precision Advanced Corporate Total Intelligent Precision Advanced Corporate Total Operating Technologies Healthcare Fo
Slide 23: Adjusted Operating Profit Margin
ADJUSTED OPERATING PROFIT MARGIN Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 Intelligent Precision Advanced Total Intelligent Precision Advanced Total Operating Technologies Healthcare Fortive Operating Technologies Healthcare Fortive Solutions Solutions Solutions Solu
Slide 24: Adjusted Net Earnings from Continuing Operations
ADJUSTED NET EARNINGS FROM CONTINUING OPERATIONS Three Months Ended Twelve Months Ended $ in millions December 31, December 31, December 31, December 31, 2022 2021 2022 2021 Net Earnings Attributable to Common Stockholders from Continuing Operations (GAAP) (a) $ 227.2 $ 167.9 $ 755.2 $ 579.7 Dividen
Slide 25: Adjusted Diluted Net EPS
ADJUSTED DILUTED NET EPS Three Months Ended (a) Twelve Months Ended (a) December December December December 31, 2022 31, 2021 31, 2022 31, 2021 Net Earnings Attributable to Common Stockholders from $ 0.64 $ 0.46 $ 2.10 $ 1.65 Continuing Operations (GAAP) (b) Dividends on the mandatory convertible pr
Slide 26: Forecasted Adjusted Diluted Net EPS from Continuing Operations
FORECASTED ADJUSTED DILUTED NET EPS FROM CONTINUING OPERATIONS Three Months Ending Twelve Months Ending March 31, 2023 December 31, 2023 Low High Low High Forecasted Net Earnings Per Share from Continuing Operations (GAAP) $ 0.47 $ 0.50 $ 2.30 $ 2.45 Anticipated pretax amortization of acquisition-re
Slide 27: Free Cash Flow Conversion Ratio
FREE CASH FLOW CONVERSION RATIO - TWELVE MONTHS ENDED December 31, 2022 AND December 31, 2021 (in millions) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 July 1, 2022 April 1, 2022 December 31, 2022 Operating Cash Flows from Continuing Operations (GAAP) $ 464.2 $ 329.8
Slide 28: Core Revenue Growth and Two Year Stack Core Growth
CORE REVENUE GROWTH Components of Revenue Growth Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 Total Fortive Total Revenue Growth (GAAP) 11.3 % 10.9 % Core (Non-GAAP) 13.8 % 10.1 % Acquisitions (Non-GAAP) 1.4 % 3.9 % Impact of currency translation (Non-GAAP) (3.9)% (3.1)
Slide 29: Adjusted Effective Tax Rate
ADJUSTED EFFECTIVE TAX RATE Three Months Ended Twelve Months Ended $ in millions December 31, December 31, December 31, December 31, 2022 2021 2022 2021 Earnings before income taxes from continuing operations $ 257.0 $ 175.7 $ 873.5 $ 677.5 Income tax expense (29.8) (7.8) (118.3) (63.3) Effective ta
Slide 30: Fortive
(2) FORTIVE