Vontier(US:VNT)2023-05-06 23:34Financial Data and Key Metrics Changes - Reported revenue of $776 million increased by 4% on a core basis, or an 11% baseline increase excluding the impact of the EMV sunset [23] - Adjusted operating profit of $161 million declined slightly versus the prior year, with an adjusted operating profit margin of 20.8%, down approximately 100 basis points [23] - Adjusted earnings per share of $0.68 was above guidance and relatively flat with the prior year despite an $0.11 headwind from EMV [24] - Adjusted free cash flow in the quarter was $78 million, representing 73% conversion ahead of normal seasonality [24] Business Line Data and Key Metrics Changes - Mobility Technologies: Sales increased over 18%, with core growth of 12%. DRB grew over 20%, and ANGI sales were up over 30% [25] - Repair Solutions: Revenue increased over 10% to $181 million, supported by record sales during the Matco Expo event [28] - Environmental & Fueling Solutions: Reported revenues declined approximately 4% to $314 million, but baseline core revenues increased 10% excluding EMV impact [29] Market Data and Key Metrics Changes - Demand for U.S. dispensers is tracking ahead of initial expectations, driven by robust new site builds and site refresh activity [29] - Environmental Solutions demand benefits from regulations across multiple regions, while aftermarket parts leverage a large installed base for growth [30] Company Strategy and Development Direction - The company is focused on a connected mobility strategy, emphasizing operational excellence, core growth acceleration, and leveraging adjacent markets [10][11] - Recent strategic initiatives include the sale of GTT for $107 million to strengthen the balance sheet and return capital to shareholders [9] - The company aims to optimize its cost structure and achieve multiyear margin expansion opportunities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook due to healthy end markets and strong secular drivers [43] - The company raised its adjusted EPS guidance for the full year, reflecting strong first-quarter results and solid end market demand [36] - Management remains vigilant in the current macro environment but is optimistic about the fundamentals and momentum of the strategy [10] Other Important Information - The company is targeting a reduction in absolute Scope 1 and Scope 2 emissions by 45% and Scope 3 emissions by 25% by 2030 [21] - The company has a diverse customer base across various sectors, including car wash, multi-energy fueling, and convenience retail, which are facing common challenges [39] Q&A Session Summary Question: Can you help us understand the core sales outlook for the second quarter? - Management indicated confidence in the outlook due to healthy markets and strong secular tailwinds across all segments [43][45] Question: What is the phasing of the $300 million EMV sales headwinds through the year? - The EMV headwind is more back-end weighted, with approximately 60% expected in the second half of the year [47] Question: How were orders tracking versus Q4? - Orders remained strong with a book-to-bill of 1, despite accelerated backlog deliveries due to easing supply chain conditions [48][49] Question: What was the breakdown of price versus volume in organic growth? - Approximately 40% of the growth came from price, with 60% from volume growth [50] Question: Can you discuss the franchisee momentum in Repair Solutions? - The company reported strong franchisee additions in Q1, indicating a positive outlook for the Matco business [55] Question: What are the expectations for pricing across businesses in Q1 and for the full year? - Pricing contributed about 4% to baseline growth in Q1, with expectations for 2% to 3% price increases for the full year [63]