Vontier Corporation (NYSE:VNT) Q1 2024 Earnings Call Transcript

Page 2 of 2

Anshooman Aga: Yes. Thanks, Julian, and thanks for the comment — so our fourth quarter will be our strongest quarter both from a revenue and operating profit margin perspective, typical seasonality for us. So we’ll see a step-up from Q2 into Q3 and then another step-up from Q3 into Q4. A lot of it is tied to the timing of rollout of some of the projects, for example, the Shell and Chevron iNFX rollouts continue with stronger revenue in Q4 on those, but also the timing of some other projects, including some larger projects in backlog for our ANGI business.

Julian Mitchell: That’s helpful. Thank you. And then just as we’re thinking about the organic growth rates for the year as a whole, particularly, I suppose, mobility, just wanted to check sort of the latest thoughts on the organic guide for the year. And within that, what’s assumed for DRB after that 10% drop in the first quarter? And EFS, a very strong start to the year on organic growth. That moderates in Q2, as you mentioned. Is it sort of a mid-single-digit growth rate for the rest of the year aside from just Q2?

Anshooman Aga: Yes. Thanks, Julian. On Mobility Technologies, we’re expecting the full year to be mid-single digit. We’re seeing continued strength in the convenience store, as Mark talked about in the prepared remarks. And we’re seeing good uptake of our Invenco by GVR solutions. So we expect good growth out there. Also our alternative energies business, which is really our CNG, RNG business and starting to see some hydrogen, we see a continued demand as our fleet customers continue to think about sustainability. That business is growing double digit, and we have strong growth for the back half of the year also in that business. And then also EVolve, which driven by Driivz, we’re starting to see that starting to add as it continues to scale to our growth rates.

So overall, mid-single-digit growth in that business. Our fueling business, that should be growing mid-single digit, mid-single digit plus this year. We see continued strong build-out of convenience stores, but also, as Mark said in the prepared remarks, the replacement cycle is also going to be supportive for long term in that business. So we’re seeing good growth. Aftermarket parts continues to grow well and also good legs in our environmental business, which grew high single digits in Q1. Q2 in Environmental has a tough compare, but then again, growth in Q3 and Q4 in environmental.

Mark Morelli: Yes, Julien, I just want to jump in on the back of that. I think one of the things that’s happening this year is we’re seeing the benefit of some new product introductions. They’re really gaining scale, particularly as we progress into the year. I think we’ve, with our Q1, we’ve kind of derisked our year a bit. And we feel like with the investments we’ve been putting in, we’re really driving significant new product development in environmental in the VF business as well as Invenco. And I think that traction we’re definitely seeing an uptake with customers, so that should certainly build through the year.

Julian Mitchell: Great. Thank you.

Anshooman Aga: Thanks, Julian.

Operator: Thank you. There are no further questions at this time. And I would like to hand the call over back to Mark Morelli for some closing comments.

Mark Morelli: Yes. Thanks, operator. Thank you for joining us on today’s call. I’m really encouraged by the start that we’ve had to the year, and I’m confident in our ability to execute on growth and margin expansion. And we continue to progress what we’re calling the connected mobility strategy. I think it’s great for growth, but it’s also highly differentiated. And I want to thank our teams for our continued strong progress, their dedication to achieving results and executing our vision. So we look forward to seeing many of you in the coming weeks in person. Have a great day.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

Follow Vontier Corp

Page 2 of 2