Vontier (VNT) Q4 2023 earnings summary

Executive summary

• Q4 baseline core sales grew 5%; adjusted operating margin was 22.0%, up 20 bps YoY, and adjusted diluted EPS was $0.80.

• FY sales were $3,095.2M, down 2.8% reported; core sales declined 2%, while baseline core sales grew 9%.

• Connected Mobility and portfolio initiatives were positioned to support growth, profitability and free cash flow.

Financial highlights

• Q4 sales were $789.0M, down 10% reported and 7% core; net divestitures reduced growth 2%, with no FX sales impact.

• Q4 GAAP net earnings were $106.2M vs. $67.7M; adjusted net earnings were $125.4M. GAAP diluted EPS was $0.68 vs. $0.43, and adjusted diluted EPS was $0.80 vs. $0.81.

• Q4 operating profit was $146.4M; adjusted operating profit was $173.9M vs. $190.0M, with adjusted margin of 22.0% vs. 21.8%.

• FY adjusted diluted EPS was $2.89 vs. $3.08; GAAP net earnings were $376.9M vs. $401.3M.

• FY adjusted free cash flow was $436.1M with 96.8% conversion; Q4 adjusted free cash flow was $153.0M with 122.0% conversion.

Outlook and guidance

• FY24 revenue guidance is $3,050M-$3,110M, with core sales growth of 4%-6%.

• FY24 adjusted operating margin is expected to expand 80-110 bps; adjusted EPS guidance is $3.00-$3.15.

• FY24 adjusted free cash flow conversion guidance is 90%-100%.

• Q1 revenue guidance is $745M-$760M, with core growth of 2%-4% and adjusted EPS of $0.68-$0.72.

• Q1 adjusted operating margin is expected to expand 40-80 bps; FY guidance excludes Coats and assumes neutral FX for the year.