Fortive (FTV)

Griffin Whitney VP, IR
James Lico President, CEO & Director
Charles McLaughlin SVP, CFO & Interim Principal Accounting Officer
Julian Mitchell Barclays Bank
Nigel Coe Wolfe Research
Andrew Obin Bank of America Merrill Lynch
Joshua Pokrzywinski Morgan Stanley
Andrew Kaplowitz Citigroup
John Walsh Crédit Suisse
Deane Dray RBC Capital Markets
Richard Eastman Robert W. Baird & Co.
John Inch Gordon Haskett
Call transcript
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My name is Angela, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Fourth Quarter 2019 Earnings Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Mr. Griffin Whitney, Vice President of Investor Relations. sir. ahead, go Please

Griffin Whitney

McLaughlin, Good the and are call. and and our Angela. Chief President joining Officer. Financial Jim you us President Chuck Officer; Executive on With Chief Senior afternoon, you, Vice thank and everyone, for Lico, our Thank us today

We present financial our on available the automation business call operations this Information. The specialty today's heading business of and the section and of periods. accordingly, on measures We on discontinued www.fortive.com, XXXX, of the call. SEC are October based under by have Financial are for as results historical required presented certain X, financial current the on and relating G measures included non-GAAP website, the continuing the results Regulation to on divestiture Information completed these non-GAAP Investors A&S operations.

During significant more basis. to financial of continuing on the factors All describe increases a that metrics or we presentation, references certain performance. and decreases year-over-year period-to-period year-over-year the will are impacted operations

do During any developments the laws to statements. that speak as events occur make on regarding quarterly the forward-looking within or of is Form forward-looking reports statements statements including federal assume statements or of the in that forward-looking SEC the subsequent we our will meaning differ on or securities may expect date anticipate to may cause obligation call, XX, report available we are and the that we Form will for XX-K in number These our they statements statements today. only results are year statements results from future. to these any risks these materially factors XX-Q. any forward-looking including subject regarding actual annual ended XXXX, Information the actual uncertainties filings These update December made, and that and not and might a from forward-looking materially make differ of forward-looking we

like Jim. I'd call the to that, With turn over to

James Lico

good everyone. and afternoon, Griffin, Thanks,

we flow. delivered XXXX a a adjusted fourth performance cash growth, results with strong strong margin XX.X% quarter operating the finish earnings provided free for adjusted as to Our excellent and

we a dynamics expansion. continuing operations earnings For margin core share slow demand billion growth short-cycle core progress of that across significant with in with the throughout half operating businesses At accelerate same portfolio, delivered second continued full our XX.X% results solutions. adjusted worth the around time, the workflow strategic high-quality, transformation points X% of these year, our to year. of revenue acquisitions per software-enabled achieved basis the We nearly our generated the and $X of basis, a respect year-over-year, closing XX face increase representing of the $X.XX on we of strategy

successfully we of quarter, key key make milestone to as the part the of TSAs fourth progress ASP's of the transformation, place with bring full sterilization end products. control. by countries before the the accomplishing the our us the second of majority remain is we of quarter. as the a the to that We our X end the As planned and enable to X closing of day closed infrastructure continue necessary ensuring integration China on portfolio on day We good remaining largest and keenly focused advanced integrating global in countries exit operations the under a

Financial separation. pleased announced management Officer, including split with progress separation of key we Morelli, In effect senior time, Vontier's as team, members Chief made of to toward work the continuing same the Chief toward Officer; and we and the we've completion to David are as an At the and are Mark President we the Vontier. significant Nomura of IPO Executive that December,

and of previously conditions for the position a to a end IPO year, market the the XX% of by put of to have first of as be in continue for Vontier we up for maintain an the second this on ready step form the first While in the is of will quarter, ourselves track of eventual to options communicated. transaction, half variety assess completion which the we of

the will quarter. with challenged provide the for been of I've week, the details Chuck cold the last that Given

Charles McLaughlin

and good everyone. Jim, Thanks, afternoon,

Gilbarco within $XXX mid-single-digit or offset For XX% and expected. slight Professional net year, largely QX, as revenue, Gordian, which adjusted was XXX largely over rates which the and recent contribution per short-cycle to net diluted were earnings currency million, Sales revenue in declines prior foreign reduced earnings Unfavorable based growth adjusted on at grew strong businesses XX.X% came by Instrumentation. Veeder-Root, Scientific growth exchange core Industrial in better Core increase were by from points. and was a by up highlighted the growth share Matco, across billion $X.XX. acquisitions basis $X

declined decreased core revenue revenue Technologies with Fluke, slower to at of continued double-wall tank the GVR developed Qualitrol market's revenue single-digit while than digits High-growth and growth single in a down markets growth and the in due North decline macro low Tektronix. Tektronix in Geographically, North reflecting grew winding core mid-single was conditions and GVR. China mid-single more the digits. Europe Western at soft America Huawei-impacted offset and was at Core Europe. Sensing strong low digits, up the single by posted Western digits both America as high performance upgrade the headwinds cycle associated

margin year-over-year solid quarter. during the More across XX.X%, portfolio. increase profit generated basis margin of of points. breadth of XXX of greater strong the increased each than our margin operating basis driven and was execution Core expansion operating expansion than half representing points, our XX companies a XXX basis operating operating Adjusted by points margin

the representing of This quarter. free cash ratio conversion year-over-year. resulted performance flow flow an $XXX strong During adjusted cash of of in XX% generated of for income XXX% free million the quarter, increase net fourth we

rates posted exchange reduced currency growth growth low Turning XX acquisitions single-digit growth to revenue. to continue contribution despite significant by our points. The of within segments. a Unfavorable in drive Professional Instrumentation of decrease sales basis instrumentation. core XX.X% recent professional overall foreign

increase which was points, basis Segment-level adjusted XXX of offset operating operating basis XXX acquisitions. a by associated margin operating of margins dilutive core were XX.X%, points margin including with

and price, margin operating model core was Our business execution. savings increase driven chain supply by

stabilization. slightly, in solutions Fluke including revenue by quarter, slightly. single-digit sequentially growth led expected, High-growth and and In year-over-year increase than low China, digits the some declined North softness of watch decreased Health which offset at point-of-sale the by strong we decline but North trends. single saw as Fluke at In negative partially markets America, as digits ISC, orders from Landauer Army in revenue. Industrial. signs but reflecting red early saw Solutions XX% Fluke recurring eMaint, still its markets Field declined Fluke result monitoring in U.S. developed annual posted improved at Gordian increase net mid-single America. grew continued digits, fourth a increase greater by high for increased another low Systems radiation Digital single a of low Fluke device. Qualitrol mid-teens core was in as Fluke which a new customers declined single-digit led Fluke in primarily grew double-digit

Sonic perform launch generated year. of momentum that Fluke revolutionary April continues continues PRÜFTECHNIK from ahead revenue and expectations million which at greatly of excellent broader to following in IIXXX worth its has enhanced see its Fluke liability XXXX end Imager to offering. the $XX of the

new performed solutions growth, momentum reflects across subscription-based growth WiFi-enabled demand by high well, and to set and high safety performance. more facilities improve iNet strong bookings. expanding strong for live-monitoring single-digit the at single-digit customer adopt connected Europe. driven ISC core generating America ISC's growth of North delivered worker The iNet real-time, growing Western capabilities ISC's as

wins quarter with with iNet as year-over-year the a in fourth grew customers. cross-selling. of gains Intellex also ISC strong offering digits total and order XX% Intelex progress a Intelex teams the double integration increase software deliver helped and for share make the future for year the in to to opportunity customer new unlock with in bookings continue The record

first the grew Western offset in since and core East. North mid-single core and strong America, partially -- Latin for was and Middle both growth Qualitrol's continued America, XXXX. bookings revenue which Europe in by positive quarter challenges digits, the growth delivered China marking

on in procurement With facilities volume force. quarter, and we large estimating customers, and helped quarter Service. sales the Gordian that planning, also greater was across facilities sales backlog by States with product saw Turning to FBS XX% across construction businesses, its and tools, very largest its including platform history. the performance growth. of delivering than reflecting return from investments we Postal strategic core application well made initial momentum plannings, driven and in the in enterprise growth Gordian strong Gordian management the United offering facilities with the management lead e end This increased our its performed asset

licensing driven comparison deals on by quarter fourth sequential saw but given of quarter large the hit amount the of growth year-over-year a the registered a in Accruent tough XXXX. a basis fourth high single-digit that decline in

EMS enough in drive continues growth product connectivity to offerings, momentum wasn't XXXX revenue the XX% of higher facility than software across in offset its greater While the strong see XXX generated number strong bookings including pace of execution win cross-selling. with performance productivity and better its sales to Accruent improve a lines, and and deals XXXX. the SaaS a larger all key into which licensing carry bookings rate quarter, for and to of Accruent decline

by compare single-digit realization offset the generated year was commercial PacSci sales and offerings from we as Tektronix. to satellite its revenue momentum, by customers decreased low than EMC broad-based digits it momentum and backlog as allowing and aerospace Invetech revenue excellent weakness core prior versus at for commercial year the bookings continued Product more the continued high saw electronics as tough strong led single see to EMC EMC defense with well. visibility ahead. maintain growth

-- revenue. Tektronix decrease core in low double-digit a registered double-digit

last The including strong As America headwinds saw the Tektronix in restrictions. which earlier that were due saw many Western mid-single introduced June to X scopes loss same expected U.S. quarter. pressure Europe well, from slowing generating and continued and demand X oscilloscopes growth in significant emerged the in at Tektronix mid-range and particularly its North series the of Keathley, of grew to share in successfully offering, high-teens gains digits. quarter, from business trade perform performance XXXX, Huawei the weak and continued across

growth sensing revenue removing North more in Western to decreased flat the through America. low growth that which and single of Core in quarter, a performance for Jim's end China by from persisted was broad-based as technologies much conditions Europe market, in key improved offset semiconductor benefited fourth weakness returned the XXXX. continued digits headwind in in than

digits, its saw growth well from Mexico. in grew consumables in China by as and continued strong led ASP ASP as performance service Geographically, performance business. low single strong

XX% approximately encouraged performance end closed an revenue single-digit our the ownership. start to enhanced to extended acquisition ASP's the XX% now China, quarter with by the closed growth in period The workflow facilities. direct ASP's our of fourth sterilization to October, prior At in central performance of which year weaker a in second control. early the offerings the and is quarter, solutions half with we Sensus opportunities health we continue growth departments. Japan, have We to of in saw our be global after under high of we good the comprehensive for significantly off our more we're cross-selling and as provide excited about ASP care Sensus connected of

grew significantly including Technologies. partially as points. of Industrial year. and turns where including improved Moving by applications basis XX.X%, FBS points. operating drove was X.X%, once of basis The revenue XXX of was Revenue by X.X%, offset to GVR, margin again rate throughout increase operating and which margin working exchange was Segment-level core the capital unfavorable ramp growth strong adjusted XXX led EMV core of Technologies margins currency OMX Industrial performance strong

platform by Transportation led core digits revenue single-digit core growth grew developed low in double-digit mid markets. by high For America. mid-single North generated single-digit in increase growth, GVR led Technologies

by As mid-single-digit also GVR fuel to procurement registered update expected, solution India. approaches. as its continues Halo, as in strong by fuel X-quart GMAR America solution, and high-growth decline in good deadline delivered Insite [ph] from remotely. another will North XXX to They market. China performance EMV-related released the momentum has been customers was logistics than liability management in received a new -- in markets October which across recently enables site more to quarter a and monitor momentum remote strong sustained performance which shift dispensers of sales with offset on and tied well XXX the America early called see Latin quarter GVR slower

such order across received to in recently network, Trinium Tridien's company, support EV existing European potential support growth. its distribution and a from EV for a This across for leverage large to the win, larger chargers the rollout service GVR GDR opportunity a the Tridien's capabilities oil -- and broader customer for charging major largest continued of customer's of highlights date from the a GVR base customer. a the order to opportunity legacy

saw decreased in its churn to growth processes, in revenue margin. customer Western in by continued digits offset more team and North customer which core TeletracNavman with the enhancing the America continues declines quarter, fourth business with TeletracNavman mid-single line overhauled Pacific, strong expectations. reducing America than Europe. TeletracNavman work in was Asia to support stabilize The North and

is the ahead, significant team making TeletracNavman of groundwork laying with for root there the performance ahead. work higher the is progress improved churn, While causes

strong category, of Matco digits Moving and was market tool and core high-performance performance driven high-speed the wrench platform's ratchet Matco's diagnostics maximum across its growth vitality to specialty infineum, tools extension by at fourth induced was to the the led grew franchise quarter, success also offering. particular, by power strength cordless the tools, latest tool impact Matco. to The Matco category. in scan December, benefit in the the its during introductions. from product storage the by tool distribution, new continues low product of light single diagnostic kit. revenue introduction Matco's bringing supported power and of growing

to that, it Jim. back I'll With over hand

James Lico

To with environment. Professional from and wrap strong technologies fourth the execution in challenging a up, momentum a industrial XXXX Chuck. from to quarter represented Thanks, finish solid Instrumentation continued

in basis operating of performance demonstration the deliver throughout the our core clear quarter Our both Fortive short-cycle resilience margin of quarter. enabling the system, portfolio, face in business and provided increasing expansion persisted demand the the of of that slow us XXX of to the power points a

software a strong approximately challenges, growth margin tariff-related headwinds the these cash saw faced through on revenue and since of we short-cycle to flow half we acquired X% have of expansion XXXX, challenges the we In number year. head from and slowing free across back Despite delivered spin. businesses the

have cautious Fortive about separation of slowness, Vontier macroeconomic progress industrial toward future. we quarters. made ASP, position continued moving also for the out of significant In signs addition, to the we're while integration there, the Clearly, are there with the forward and the coming for outlook

growth EPS initiating a points and respect XX full of are representing on With we effective single-digit XXXX to core annual diluted to adjusted The year-over-year of of approximately at to operations $X.XX, continuing guidance year guidance $X.XX our guidance, OMX tax an basis X% core assumes net low basis. growth, X% revenue rate XX%.

to our first net tax of effective We core EPS an guidance representing X% are adjusted assumptions $X.XX, This also $X.XX year-over-year approximately to revenue growth initiating rate decline diluted single-digit XX%. of includes quarter X%. and of of low

first a a Our in coronavirus so our disruption fluid we first is the are far This priority. it also seen is closely. safety quarter the guidance we have from and with China outbreak monitoring associated anticipates very throughout very foremost, China. situation, the Obviously, and $X.XX employees top our headwind of

was Griffin. that, to for not a our team. to decade minute XXXX their I our a our I'd I'm globe. how system while Fortive next team. team Fortive was of continuous the and team the to to take and proud challenges, outstanding turn long-term greater our the the drive look transformational enable deliver with want without to And business responded. to It's and dedication with performed of people truly it us year relentless acknowledge over of extremely closing, And improvement ahead stakeholders. I the In commitment value to for it our a forward broader efforts across of with all the to year like

Griffin Whitney

our concludes are ready That now comments. Angela, we Jim. formal questions. Thanks, for


line Mitchell your Barclays. with And comes from question Julian [Operator the of Instructions]. first

Julian Mitchell

question first around XXXX EPS the XX, the bridge. just Slide Maybe

in the trying $X.XX. guess on $X.XX left, give single last I'm the low $X.XX. OMX, then XX piece restructuring to I think because bps Looking because about understand, core gets of that put I savings at with about growth, if And from the that year you core you that digits you

the to bridge. restructuring trying fit just core -- where the does that or in understand I'm So growth savings

Charles McLaughlin

is Julian, Chuck. this Well,

I you're correct. roughly that that what -- think doing

one depends a into that maybe QX. here think the long on that is how we growth just embedded PI putting bit continue I probably that in got there? we're We've a probably then flat it's in QX negative the it in really little half down. you're got wildcard here, And first in and much how stays -- as

Julian Mitchell

see, I both that $X.XX organic and incorporates growth savings? the the restructuring

Charles McLaughlin

That's correct.

Julian Mitchell

a And in question, down to in was like just understand it's bunch pieces second guided then core up margin. PI in within again help and my QX, the the drop QX. it then It maybe us biggest QX, moving lot a looks

of around So sort us declines of that in sales. context in what's maybe swinging the just help understand steady-ish organic

James Lico

Julian, it's Jim. Yes,

right you're QX. about First,

of what sort half. we're half down in the we you bps saw so half, and think the second about the If or for second PI second XX in probably

saw really saw always So get the near chain supply in We number -- the we a that. saw savings QX a what and year, of certainly some was end of we strong pricing. bigger -- our portion we

little the a bit the plus X drove margin those quarter. is -- better in mix would So really expansion stronger

into I that's But headwinds principally Tek, same big than be first going we'll in to about like is certainly that, here, we heat of of anywhere businesses relative to contribution. things do the think the and have things quarter, be will that you coronavirus the Fluke think go I that more see and else. just part and probably the But part see the some PI you -- their come into is -- be it of As that offset. salaries like and


comes question Nigel your Research. next Wolfe the Coe And with of line from

Nigel Coe

So better hope feeling you're I Jim, soon.

different of things on want So cash to here. couple I a just start

bit Is of of we quarter, 'XX? And Sensus that that lower there's a M&A expected. relative than acquisition, original was during your that kind then acquisition? in better all was push this and this the So for on change Or Capex? about job spend was to a guidance out million $XXX

Charles McLaughlin

the the one Capex. first, would I second think I take

think than -- don't that we I I appreciably or different think lower normally than that's see.

we are we're and gave I'd impression, you're cost? about first of piece piece. the talking talking maybe -- much because about, pretty if how the on we the have, I you think deal out on go that So back figure shouldn't that stable you And

Nigel Coe

what Or there -- to Yes. should smaller XXXX? the X is deals all trying big we was is figure Sensus? it in be that What X how for Is modeled out acquisition as Sensus well? what or I'm

Charles McLaughlin

Sensus Yes. that's the acquisition. understand. No, I

Nigel Coe

Okay. details us on give contribution can Any you revenue 'XX? for

Charles McLaughlin

Sensus? to Relative

Nigel Coe


James Lico

So $XX-ish roughly yes, I growth, that of it's you're business That's $XX think, is, probably mostly talking the in kind range million year. to a SaaS business. million double-digit -- for figure, the

So we order to probably there. we think accelerate additional think and how investment the some with continue -- to some team think I about if put grow it we will in year growth that in as through the work we'll

mentioned offering remarks, gives in of ASP, we've we the a really at what combination As along in prepared got central the the sterilization department. us Sensus, with strong

our it's that sure year. growth, market in to in accelerate to through the of to can make here some order effort going we the be some investment to go that So accelerate growth

Nigel Coe

Okay. I kind what welcome but here to profile have? margin does my Sensus overstay don't want of

James Lico

gross at margins margin. what Pretty the close, we but lower operating than would high start

in They do So the gross you're talking service have a about business. XXs. margins

installation then margins to come continue to So brings profile obviously, start range. the it there's a obviously, to over we margin margins time. kind and the grow the can that XXs of and that operating component think down. up. service But is in XXs will the And We high software,

now this that and roughly think I range the they'll XXs the in -- in year. be probably they're


from next [ph] your is And Steve Tusa with JPMorgan. question line of the

Unidentified Analyst

contributions what from on business the that Just are XXXX? for revenue ASP, organic

Charles McLaughlin

as we that high be to but revenue digit, going own as up moving low probably -- more It's get things it's the under our of -- single shop.

going think So that's my would be pushing to three I be guess.

Unidentified Analyst

push Okay, of of the so TSA forward impact. that that kind includes kind of

then about impact from TSA? kind that Or just grow the last So year by that we growth, X%? excluding is with base whatever can revenue and of think organic the happened the the

Charles McLaughlin

to about is X%. grow, way I I'm growth think that end what how -- customer the about talking the is think at going

Unidentified Analyst


the what anyway but once. the So [indiscernible] can revenue is actual contribution you to it define organic

So as total amount the just as that would include from specifically. a organic percentage you business revenues, of Fortive

Charles McLaughlin

it's Yes, million. be of probably $XX to going north

On the the organic -- growth. organic just

mind, in we didn't QX Now year. keep there last have in

So [indiscernible]

Unidentified Analyst

a is mix month. in it's what so it's you're Yes. X-month X so saying. Yes, a

Charles McLaughlin


Unidentified Analyst

cash the And something from there or the was fourth a of performance, the around, on flow things TSA that think, accruals that. quarter, then in talked Was earlier of just just kind for in big kind that prepaids drag bump you organic Is of from was from quarter? some kind another kind moving That year? on stuff a that year-over-year and anything decent like Okay. the decent some of of of swinger unwind going this there. about I fourth

Charles McLaughlin

that us I related -- that But that the the that able fourth I for should were that some unusual say don't in bump there. how wasn't I do that, quarter. what there were cash to would -- things think to an those Yes, And that, probably to the got don't quarter. I expect in us is fourth think J&J you created business be

Unidentified Analyst


like kind not anything of base it's clean out for pulled of XXXX. XXXX. That's kind of a So was

Charles McLaughlin

and for really fourth seasonality normal us strong later quarter be in the QX. it's in Yes, to


the of America. question from of line is your with next And Andrew Bank Obin

Andrew Obin

revenue could the later? quarter, sort continue importantly, likely you see more that are Do than or return quarter, in a first you into earlier think, growth probably And third declines X that, organic you what quarter? last that reiterated coronavirus, or items swing and today. of that gave will quarter and the still second happening to So view X other I

James Lico

the dramatic have little easier a get say counting in comps swing our don't half. Well, any improvement economic would I we at guide, second big Andrew, on is the I as that think we look a

little So of bit a got we've And product launches. you some that. have

I if think That X in say the that I would upside would to if thing. us. better would some So things Europe, be get upside were be to

got start America in think I to we North example, growth the America, seen some places fairly we're seeing of If we've an digit, point single we've still where see stable. North of about we Admittedly, kind some seen sale, we've low point-of-sale. some of think as but think growth. I lately

the accelerates back just bit better. but So China I it to probably accelerates beyond Western -- growth In would upside think comes maybe to sooner. corona, Europe little be forget just story a

I think are embedded those of probably X the things.

You could go but I to about OpCo the is think it. best Opco, geography by probably way think

Andrew Obin

Great. it and pricing? still for And then how a into your follow-up And price/cost. just does figure how of imagine be XXXX? impact can more of XXXX, it I deal on in you? does favorable you question X decent Could slowing, trade price into tariff impact you sort Phase calculation is cost command

Charles McLaughlin

piece the way. of So to they signed just second impact the wasn't either us take that going trade to deal that,

for that's no impact And us. so

that I'd the some into year. of think will maybe expand our of that here. think we've terms there. to saw our the I carry our I price in in good At next of actions, margin that some first And you of like some reflecting momentum year, half, end think the got

does think I don't a not severely it environment feel inflationary we a cost for us. from like -- standpoint,

I So strong be that position's our to there. pretty think going


with your line of the Josh from Morgan Stanley. question And comes Pokrzywinski next

Joshua Pokrzywinski

fair the we it that I IPO. might kind a my the as come think Is whole pretty top about about guess, this of to of to So net fair acquisition it just question firepower like I on think here, head Fortive first Jim, through which guess, you it to piece. get close of a on way the Vontier out and way seems depending way transaction. on the debt-free thing,

James Lico

sure. Well we'll a be certainly in position, for good that's

Chuck about things in here, thinking remarks, prepared our lot comment do. still of the how we're about here. to I'll about debt let a As we structure plan highlighted the specifically

Charles McLaughlin

think especially I net an if these have companies of But proceeds I Yes, and -- given M&A improved, we're going don't we IPO think be accelerate to. to both -- going would we're get here. to firepower where are some but

zero to on debt so think And get we net don't Fortive. I

-- debt, we'll is disproportionate Vontier to the of take a amount. going not I think some but

Joshua Pokrzywinski

it Got XXXX. were guess, bias it. then environment I I core especially if up, in about the leakage held guess, of half. this to growth the what's from in does? what some way plus the reinvestment demand better, And that's back? should it of is of maybe That's $X.XX different we fall the just being the bottom $X.XX firm helpful. is to line. some is guess, restructuring Or a I asking thinking reinvest to currently if versus back growth expect improvement whatever

Charles McLaughlin

And think I for we where could did look half always restructuring opportunities the deliver that we so the think I is growth. the we Well, to But we'd we reason accelerate could if see growth. back accelerate.

deal we a materializing. we bit think happily that around But through see more. VCM with us deliver of our fall situation maybe we'll normal I XX%. And little when see it


Your next question comes from the line of Citi. Andy Kaplowitz with

Andrew Kaplowitz

talk about in GVR you thinking about or can you're Chuck, XXXX. Jim how

India. GMV But in us China slowing have growth. You obviously related still

I orders think but maybe lumpy contributor been to are it's a bit. surmise, XXXX, getting I it's a lately. pushed

you overall more what about and that business think give can us color on to So how seeing. you're

James Lico

Thanks. Yes, sure, Andy.

China the thing think I pretty So is predictable.

that knew from sort benefit And that, wane, of to double-wall we upgrade. a tank year in inevitably tremendous and predictable. going that was We've came have seen We that. last fairly

news in a will rollouts. So been be our growth actually think GVR big more will, good -- I don't source on China seen some recently, XXXX. really have -- of of most for we've some we've necessarily we seen India project

other the you're of in as the going be to So a get and of quarter quarter half little as back markets. and contributor think see year, the hit high-growth I to the we as into second well a miss. be But growth the India some may first for GVR

Tritium. for continue the That with them helpful the it Came was customers we as story the thought will to the the around highlight to be America what remarks, story. EMV some So the obviously, in comments was we with big really mentioned see now in, a in quarter. -- in we And bigger well I maybe made which come is see think way And in in the saw, GVR Latin prepared starting XXXX. quarter. Europe is then in we should the of nice benefits to was as

point starting for growth as a that's So well.

of still levers be them additive But a number year. get EMV rate. will to So their will growth the that think -- can number we there be throughout this big

Andrew Kaplowitz

quarter, And starting talked flow the it to to Accruent, Saas. then about conversion asking about just less you was

is mentioned Do outlook I is tough comp. you you cyclical? your the this a think single-digit given guys traditional Accruent decline, called quarter? it of in you high XXXX. And last declines more QX, in Or as what's it just think here more for

James Lico

sort the if we at a -- quarters single-digit we away seen and get ownership our growth looked just If we've -- since current our of look of mid over ownership. at Yes. from

So here in all, recently care SaaS well. we've prepared which of connected, offerings. in mentioned growth which said offering, the health like we're first some good our the is remarks, We what I seeing did think of is, seen we really

and EMS offering our facility example, an really space our management of As and XXX our which offering, CMMS offering parts are offering.

we some they saw were quarter, that the and businesses. going as parts thought to than were were we So last or of more business be. do those down, we growth good mentioned have SaaS We bookings legacy down thought in

for better here with a mid-single-digit to that made deals certainly I see comp. that licensing sit of quarter forward we we we sort is path and think year growth. had But in Some which a of XXXX, of our over tough the that fourth as we team, larger back look in the ago,

businesses, a it done business. of Gordian sort we're very takes eMaint the while and as of good. about think more $XXX and then with management excited business, million asset kick digital about And those that in. With little growing facilities that the what we we've well businesses exceptionally as to still Fluke almost broadly, for SaaS as But

of the dynamics Like at said, a So got we work we've bit good. market little do I talked about are that. Accruent, to

consistent opportunities think I think the that's an we we're and said when look from as with we at, what But future doing perspective, Fortive what all total, we where we're we like in like before. I well.


line comes John from Crédit And with your question next Suisse. of the Walsh

John Walsh

do of each how around standpoint go the following capital up you and we the questions businesses ability of forward the bit earlier balance like pipelines look talk sheet. to just to the Maybe for as little those allocation some M&A? a about from a Can

James Lico

certainly are mentioned, I we in Well, well did the as in Yes. intellect fourth Sensus the think we half. -- we second as completed we quarter,

In So had second a in couple summer, good the of we PRÜFTECHNIK. the very half. deals

good had business. for as good offering, and breadth being Sensus Tek Intelex and health core pretty Fluke was of part our really offering part the in additions well. care we our of So the ISC really safety being

just of And of deployment. with we're got So we've busy for as our that across be good all platforms, -- some see things well. continue capital number get XXXX things here opportunities the some a we strategic Board a place going. opportunities we're businesses, we funnels, our And in several hopeful John, Obviously, across really we to our now right for platforms. pretty funnels. of we're we'll We active, done highlighted those but and plan I the our across our next for of and as key with very of all years with reviewed look in some the think

John Walsh

then Dave team Vontier, we get on don't of and you've kind to there had think I And your wanted your chance of the announced appointment Great. Mark management as both since thoughts think get there. the about perspective to a just we've

James Lico

Yes, we're really excited.

student very think a been in Mark days a certainly they to person FBS -- bit improvement and with got implementing experience. continuous DBS back where long for and were Technology to back Lean is considerable a number of has of it time is a United much who's goes I businesses. He applied this a He's some principles. a

company he's incredibly experience, think results experience, public brings So oriented. he transformation business he I brings

with some really for excited. Dave Chuck for coming he these Mark, And into businesses is left. the businesses. having for the responsibility have we're leader. and excited organization group we're went Dave he I us to CFO And these I think a Nomura's He's Dave's right? think, And who back, I really great before somebody knows Gates. these before Dave worked knowing was He's it's coming decades. really about. -- financial businesses So financial

have but we very future businesses. I is I think continuous place. company up great in those So with now team leadership in we of with also the combination a We public their both belief already think improvement, that in leaders the both strong have external think experience, Vontier's having really that already experience, sets


And your of next question the Capital comes Markets. with line RBC from Deane Dray

Deane Dray

brave what a the enough other in impact company to take appreciate math, that really that first to all really stab seen would at you coronavirus Xylem through I the X We've were it be quarter. go today. did

in the do maybe about shutdowns? $X.XX? get any can So precision you how assumption Is Any there. if interested a it with hearing the that start we -- more plant what's supply chain, be you bit I'd the can,

James Lico

evolving our for people Yes. and there. it's is. is we safety that Thanks, our situation it China, obviously, a of situation, an It's health of obviously, country the security the crisis Deane. priority as and first the difficult And very said, over

So from first to situation. we're our sure in and a foremost, focused are I business the teams perspective, fine. doing we help we're that can on think, And making what

We things some an are have as an of to some Fluke at relative to example that some as products, measurement helpful products diagnosing temperature our example.

the and foremost. really week got being to How It's we another really, first think, that's of $X.XX So is straightforward. pretty down. I

So the only factories of not also that's customers. but inactivity

out just fact the year been And I slower. about I've And times. of how And the than I a we decades over a coming pretty of be is. a that's and experience to for China going slower our leading think little have we the little I've of you efforts -- couple talked slower of ramped we've of year a been new come new there. of come you normal. up number that usually, out think

typically and as new really not we the as combination So out quickly up year. of of probably week it's the coming the would lost really

X it's you an and our to come February is going is how customers to our our Now are starting really know, -- X to I'll which occur; and quickly just We about I is as an happen. freight Tier they do flights, supply and up, and X the going even the you, chain tier the we're on the own we're commercial example. evolving and thing next our ship, Tier lanes. What's seeing one some factories pretty and then X supply commercial back, factories. example, transactions situation third is piece really tell second week. point, how the is start-up relative think going as and come to But things: confident as XX an Deane, chain, up; looking at come how

how countermeasures come And So -- things. see we But of sort place start we've of and to that's have evolve the have happens. we in We're we'll just all those X see into really, weeks to clear on that get to the to going we've out to really very pretty in got as with next all week known to X much maybe it how to felt we play But over what will see we've quickly. obligated happen X we think days, or thus obligated be things what and how felt about far. last situations.

Deane Dray

That's of might great those kind best examples cross-selling color. sales and any forces hoping And sort citing from whole be. are the and Can then Sensus, what We're incentives were on interesting, you all lines? of bolt-ons. strategy for provided the cross-selling, along of the kind there. around opportunities the give ASP And any of you that's

Charles McLaughlin


in and great first, itself. business, says So is of which this a

is to we're and solution really the And solution is forward, which there departments. accelerate for we so going their a some to take opportunities investments commercial sterilization central great really think one is team

position customers, have IDNs, got, and they're some as a as example, that's very in first strong. And So sets foremost. we some probably then we we've places, an stronger like in said,

the -- situations global a introduce such opportunity is incentivizing probably to the the opportunity sales force. set certainly we're certainly Sensus those take because there, On for a within more customer them and have to obviously, to global basis, and is ASP cross-sell So we ASP business.

really business with. We I we make to do So to it. But to really, sure a good bought want begin cross-sell. both emphasize opportunities but --

said, in I As our combination quarter. fourth the we great in XX% core us to this over strongly forward for that number yet. growth not think with. go But very a That's is


And of with from your the question Eastman line Richard is next Baird.

Richard Eastman

bit Jim, Fluke little a around could touch -- Industrial. you to circle

this you some to third you at point? to does of Or the seem encouraging. growth to that so I to midyear? feeling think relative general favorably seasonal by the look spoke does Fluke business there what's that quarter more fourth your kind cycle How And Industrial? start on channel in the would

James Lico

fourth in I bit We still we're saw a comp. China, we little and Fluke think better the China, thought. in performance fourth And than U.S. performance little Europe bit the a Western North tough in better Yes. than principally America. grew the the that was we If quarter about trends point-of-sale at third, did and think in originally little we a a off bit. down.

business a -- I as So goes on maybe corona ago, few we just really we've come in that out, mentioned probably impacted at volume got dramatically hasn't more given to Fluke the questions daily Fluke. of

little probably bit good. we here, get And We So Western better sort we've got the Europe, at stay don't to We channel inventory the to pretty are down China. first watch the a that flattish least think continues in still of maybe really to it's positions issues. to U.S. see in The big think start on track. half, be going within based to inventory in on comp.

dramatic So these here we from industrial in don't any with downturn expect economy the customers.

at the most point. corrections us think would are this of inventory you so that behind And

Richard Eastman

that was business. it I lost companies let of standpoint? then have second here. with The I the And and Did stay again, there business business only of toughest short-term I the Tektronix side, that mean, last comps T&M kind on the Okay. in same? with a me year. frame. Is functionality most restrictions on a ramping, we obviously May, in Tek, the the their go but part think, Huawei time electronics think case with first of ramp in place saw same on T&M quarter. the of just, from But not But is the the in

[indiscernible] quarter there? So comps are through second very tough, the pretty much

Charles McLaughlin

the the still in year But in in half I it's beyond of that's end mean, of but if right this about at tougher this I the about it. X in, little half, a more in restriction bit first went them don't think there's the so compares five bit the enough think to and year, worry first certainly May, first months normal Yes, a little months a of not year. second There's heard I of than we that. the half

James Lico

down be I we're something back though, the Tek more But really at in Huawei they seeing think X while to we sort something purchases thought. Rick, of usually as for you going come Europe. forever. Tek. this And that thing just to kind larger delayed a know, of -- or that's and I see is really can't the of really is if that what's X downturn piece delayed be a of but larger little and -- America X quarters market number turns. while That's that think for dramatic X really, current it's when about quarters think North get our Large

start as And so see improve the to year. we we'll think get into we things to start further

Richard Eastman

that seems with fairly fades to last low question little me half, I the standpoint, think core? me. start a at Okay. and potentially PI the fourth -- maybe it guide some Is second core backlog about relate perhaps for short-term the IT, between core and corporate And whereas 'XX, there and off industrial in to GVR of quarter. strong for strengthen much Tek. fourth because as by that quarter If starts just the the in difference bit growth IT And growth from a then single-digit there, single The PI it off low they issues then these and digits. Fluke negatively PI

Charles McLaughlin

Chuck. is this Rick,

into you low have year. it think especially I comps roughly digit. the don't IT PI but half in as being quite being through with still negative, same running way first the goes correctly easier I the single

of a or the mid-single-digit we'll this bit -- continue I'd -- them the especially business, last think, of earlier don't from slowdown low I in XXXX. a in liability year. the the think expect that think see have QX that is wave, in beyond in talking EMV though about of will even here year, versus compare on -- I'm shift throughout end they little that don't growth the that October. the tough I But balance in a I

I don't back slows I year it can the see. So anything the on half down think of

James Lico

just about. And a that we put like EMV, couple talking context, were just in of things like before, we talked Rick, we said about

second As improves the India mentioned, I half. also through

So see probably bit I EV you little business a vehicles charging electric more. start to ramps the think --

So non through you've going as year things the start well. got to accelerate are EMV to that that a few are related


And your the with Inch next Haskett. John of line question is from Gordon

John Inch

Just on that discussion. picking up IT

of for year. margins higher So Yes, -- are benefit year, mid-single-digit Why think it year, if flat. guide? are profit IT first bit some throughout the based we've is the kind to these quarter this pretty contribution relatively are a the I'm of in low I are and got the assuming is little for the good your on EMV, now those OMX

Charles McLaughlin

And Well, a talking of But one, off if it's business, -- to to I X%, growing a basis I year. think think come IT XX pretty is through that's points with is coming going strong you're mean is IT see. would would IT expect would year. the you're going with through about you that what I -- see think what or that, I that X%

John Inch


But bit XXXX. a thought you're So should basis I more in about quarter be little flat going performance thought, first and it's actually up the Chuck, terms in the was saying your I of in Or we... guide to IT XX points?

Charles McLaughlin

account into be I -- in up the talking I'm thought sorry, and I accelerates I operating year. but be would then QX, that the the were slightly think taking think expansion. you margin about IT through about, X% it's will not coronavirus

John Inch

about margin was I Yes. expansion. No, operating talking

So same about thing. we're talking the

Charles McLaughlin

where They just XXX. had they did a quarter

but So year. compares. margin tough lapping momentum expansion then last really the great I They they're had think some there, good there's that

John Inch

That's fair.

to Just a for sec. switch to wanted Vontier

of about Board? You to yet. the be rails What's announcement the there that? been would what they the an management, hasn't going announced on You've Board? would are the be, Like timing but the presume

James Lico

freedom. Well, yes, we a our chair. announced mean, I lot of Board. of we've haven't commented as degrees the Karen on We've got

Board because we're the And year. going and interviewing had IPO, of boards commitments in shape forward on. been recruiting to do shape building if to in to positive. for And number never you we on, Board folks. We as talked who's structure the share. very know, a separation, about, you think good so been at whatever, later construct. want the need join will, incredibly of the -- in in -- a would we're of the move and I the are the those I have our what people based separation, say We folks interested. as We're full good process the we're with got for We've or that to on that we've we we've comment to Board how many has

John Inch

next And from a if what line anything, Jim, time the are perspective? milestones,

Charles McLaughlin

this of ourselves going putting to call. to be noted position do we're the by think on, on even I of there's an a But we've end things Well, able lot as in QX. IPO

progress. place. to we're is you best timing for what market point. But market And has that So But us. mentioned, gone our by is we'll position look be we'll assess going the management what we're And the in with really see conditions as -- pleased the team like. in

James Lico

things. to milestones things be the like that John, be -- would that, to prepared some You'll kinds and of our of see filing start those for specific, just

that and You'd like meetings here things to in in weeks see that the here. start coming the


I this time. for further closing And turn at remarks. back we Griffin would no questions like the to have to call Whitney

James Lico

that afternoon. transformational in number XXXX. in of time the support for we we're the to for But put about both feel And of want really available here. the indulging year. It's we Fortive we we about enter a and We'll look next all year, new taking cold strong Griffin are -- thank follow-up as decade around we for in a minor things Vontier to We to position as days. for and my your good new us forward that. a ourselves for everybody, certainly, continued incredibly everyone about, over number things thanks, talked excited a a clearly, a and about Fortive, team year several into talked Well, me we this decade for the XXXX make conversations and those and

to forward the on soon here And road. your for seeing great everybody, you a thanks, today. look day. So we Have time


concludes for participating. Ladies Thank gentlemen, conference and today's you call. this

now may disconnect. You