Veralto Corp · NYSE:VLTO
Veralto — Q1 2024 Earnings Presentation
32 slides from Veralto's earnings presentation, Apr 24, 2024
Slide 1: First Quarter 2024 Results
First Quarter 2024 Results April 23, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation, including statements regarding the Company's second 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 Q1 2024 Results | April 23, 2024
Slide 4: Q1 2024 key consolidated financial results
Veralto / Q1 2024 key consolidated financial results ADJUSTED OPERATING ADJUSTED ADJUSTED FREE CASH SALES PROFIT* EPS* EBITDA* FLOW* $1,246m $305m $0.84 $315m $102m core sales 24.5% adjusted +8% 25.3% adjusted 55% free cash growth* of +1.8% operating margin* year‐over‐year EBITDA margin flow convers
Slide 5: 2024 CEO Kaizen Week
Veralto / 2024 CEO Kaizen Week Veralto's First CEO Kaizen Week Completed in March Q1 2024 RESULTS | 5 5
Slide 6: Core sales growth by region for Q1 2024
Veralto / Core sales growth by region for Q1 2024 NORTH AMERICA (48% of Q1 sales) WESTERN EUROPE (23% of Q1 sales) HIGH GROWTH MARKETS (27% of Q1 sales) Q1 2024 Commentary 49 Q1 2024 8 WQ +4.7% WQ (2.5)% WQ (1.0)% +3.4% +(1.2)% 41 +(0.3)% PQI —% 9 North America: PQI —% PQI 0.4% 3 5 • WQ: Growth in w
Slide 7: Financial Review
Financial Review Sameer Ralhan SVP and Chief Financial Officer Q1 2024 Results | April 23, 2024
Slide 8: Q1 2024 consolidated performance
Veralto / Q1 2024 consolidated performance YOY • Sales grew +1.8% year‐over‐year: $ millions, except per share data Q1 2023 Q1 2024 Variance ◦ Core sales* +1.8% Sales $1,225 $1,246 +1.8% ◦ Currency: +0.2% ◦ Acquisitions & divestitures: -0.2% Core Sales Growth* 6.5% 1.8% • Gross profit margin up 220
Slide 9: Water Quality Q1 2024 performance
Water Quality / Q1 2024 performance ($ millions, variances versus prior year period) Q1 SALES Q1 ADJUSTED OPERATING PROFIT * +2.7% +9.4% Price +2.6% YOY Change in Sales Q1 2023 Q1 2024 Core Growth* +11.0% +2.8% Currency ‐2.0% —% M&A —% ‐0.1% Total Growth +9.0% +2.7% *See appendix for reconciliations
Slide 10: Product Quality & Innovation Q1 2024 performance
Product Quality & Innovation / Q1 2024 performance ($ millions, variances versus prior year period) Q1 SALES Q1 ADJUSTED OPERATING PROFIT * +0.4% flat Price +1.5% YOY Change in Sales Q1 2023 Q1 2024 Core Growth* +1.0% +0.2% Currency ‐3.0% +0.4% M&A 1.0% ‐0.2% Total Growth ‐1.0% +0.4% *See appendix f
Slide 11: Q1 2024 Cash Flow and Balance Sheet
Veralto / Q1 2024 Cash Flow and Balance Sheet ($ millions) Q1 2024 Cash from operations $115 Financial position summary: Capital expenditures $(13) • Strong annual cash generation Free Cash Flow* $102 Free Cash Flow Conversion* 55% • Resilient and capital‐light business model Q1 2024 • Gross leverag
Slide 12: Q2 and FY 2024 Guidance
Veralto / Q2 and FY 2024 Guidance Note: 2024 adjusted EPS guidance assumes an effective tax rate of ~25% and diluted shares outstanding of ~249m * See appendix for reconciliations to non‐GAAP measures 12 Q 1 2 0 2 4 R E S U L T S | 12
Slide 13: Closing Remarks
Closing Remarks Jennifer L. Honeycutt Q1 2024 Results | April 23, 2024
Slide 14: 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 14 Q 1 2 0 2 4 R E S U L T S | 14
Slide 15: Appendix
Appendix Q1 2024 Results | April 23, 2024
Slide 16: Reconciliation of GAAP to Non-GAAP Financial Measures
VERALTO CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTAL FORWARD-LOOKING INFORMATION THREE-MONTH PERIODS ENDED MARCH 29, 2024 AND MARCH 31, 2023
Slide 17: Table of Contents
TABLE OF CONTENTS Page 1 Sales Growth (Decline) by Segment, Core Sales Growth by Segment 2 Forecasted Core Sales (Decline) Growth, Adjusted Operating Profit Margin, and Adjusted Diluted Net Earnings per Share 3 Segment Sales, Operating Profit, Adjusted Operating Profit, Operating Profit Margin, and
Slide 18: Sales Growth by Segment, Core Sales Growth by Segment
VERALTO CORPORATION Sales Growth (Decline) by Segment, Core Sales Growth by Segment % Change Three-Month Period Ended March 29, 2024 vs. Comparable 2023 Period Segments Product Quality Total Company Water Quality and Innovation Total sales growth GAAP 1.8 % 2.7 % 0.4 % Impact of: Acquisitions/divest
Slide 19: Forecasted Core Sales Growth, Adjusted Operating Profit Margin, and EPS
VERALTO CORPORATION Forecasted Core Sales (Decline) 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 tran
Slide 20: 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 March 29, 2024 March 31, 2023 Sales (GAAP) Water Quality $ 749 $ 729 Product Quality & Innovation 497 496 Total $ 1,2
Slide 21: 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 March 29, 2024 March 31, 2023 Other Operating Profit Adjustments 2 Water Quality $ — $ (3) Product Quality & Innovati
Slide 22: Net Earnings, Operating Profit, Adjusted EBITDA, Margins
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Three-Month Period Ended March 29, 2024 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 184 Interest Expen
Slide 23: Net Earnings, Operating Profit, Adjusted EBITDA, Margins
VERALTO CORPORATION Net Earnings, Operating Profit, Adjusted EBITDA, Net Earnings Margin, Operating Profit Margin and Adjusted EBITDA Margin ($ in millions) Three-Month Period Ended March 31, 2023 Product Quality Water Quality & Innovation Other Total Company Net Earnings (GAAP) $ 225 Income Taxes 6
Slide 24: Trailing Twelve Month Adjusted EBITDA, Gross and Net Leverage
VERALTO CORPORATION Trailing Twelve Month Adjusted EBITDA, Gross Leverage, and Net Leverage ($ in millions) Three-Month Period Ended March 29, 2024 December 31, 2023 September 29, 2023 June 30, 2023 Net Earnings (GAAP) 184 200 205 209 Interest Expense 6 28 25 5 — Other Nonoperating (Income) Expense
Slide 25: 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 March 29, 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 mar
Slide 26: 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 March 31, 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 mar
Slide 27: 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 28: 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 March 31, 2023 Operating Profit Margins (GAAP) 23.8 % 23.0 % 27.2 % Impact of acquisitions and dispositions — 0.1 (0
Slide 29: Cash Flow, Free Cash Flow and Conversion Ratios
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 Year-over-Year March 29, 2024 March 31, 2023 Change Total Cash Flows: Net cash provided by operating activities (GAAP)
Slide 30: 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 31: 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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