Veralto Reports Fourth Quarter and Full Year 2025 Results
Veralto (NYSE: VLTO) reported strong Q4 2024 results with sales increasing 4.4% year-over-year to $1,345 million, and non-GAAP core sales growth of 4.6%. Q4 operating profit margin was 22.9%, with net earnings of $227 million ($0.91 per diluted share).
For full-year 2024, sales grew 3.4% to $5,193 million, with operating profit margin at 23.3%. Net earnings reached $833 million ($3.34 per diluted share), while operating cash flow was $875 million.
Looking ahead to 2025, Veralto projects low-to-mid single-digit core sales growth, with Q1 2025 adjusted earnings per share expected between $0.84-$0.88. Full-year 2025 guidance anticipates operating profit margin expansion of 25-50 basis points and adjusted diluted earnings per share of $3.60-$3.70.
Veralto (NYSE: VLTO) ha riportato risultati solidi per il quarto trimestre del 2024, con vendite in aumento del 4,4% rispetto all'anno precedente, raggiungendo 1.345 milioni di dollari, e una crescita delle vendite non GAAP del 4,6%. Il margine di profitto operativo del Q4 è stato del 22,9%, con utili netti di 227 milioni di dollari (0,91 dollari per azione diluita).
Per l'intero anno 2024, le vendite sono aumentate del 3,4%, raggiungendo 5.193 milioni di dollari, con un margine di profitto operativo del 23,3%. Gli utili netti hanno raggiunto 833 milioni di dollari (3,34 dollari per azione diluita), mentre il flusso di cassa operativo è stato di 875 milioni di dollari.
Guardando al 2025, Veralto prevede una crescita delle vendite core a singola cifra bassa o media, con utili per azione rettificati nel primo trimestre del 2025 attesi tra 0,84 e 0,88 dollari. Le previsioni per l'intero anno 2025 anticipano un'espansione del margine di profitto operativo di 25-50 punti base e utili per azione diluita rettificati di 3,60-3,70 dollari.
Veralto (NYSE: VLTO) reportó resultados sólidos para el cuarto trimestre de 2024, con ventas que aumentaron un 4,4% año tras año, alcanzando 1,345 millones de dólares, y un crecimiento de ventas no GAAP del 4,6%. El margen de utilidad operativa del Q4 fue del 22,9%, con ganancias netas de 227 millones de dólares (0,91 dólares por acción diluida).
Para todo el año 2024, las ventas crecieron un 3,4%, alcanzando 5,193 millones de dólares, con un margen de utilidad operativa del 23,3%. Las ganancias netas alcanzaron los 833 millones de dólares (3,34 dólares por acción diluida), mientras que el flujo de efectivo operativo fue de 875 millones de dólares.
Mirando hacia 2025, Veralto proyecta un crecimiento de ventas básicas de un solo dígito bajo a medio, con ganancias por acción ajustadas en el primer trimestre de 2025 esperadas entre 0,84 y 0,88 dólares. La guía para el año completo 2025 anticipa una expansión del margen de utilidad operativa de 25-50 puntos base y ganancias por acción diluida ajustadas de 3,60 a 3,70 dólares.
Veralto (NYSE: VLTO)는 2024년 4분기 실적이 견조하게 나타났으며, 매출이 전년 대비 4.4% 증가한 13억 4,500만 달러에 이르렀고, 비 GAAP 핵심 매출 성장률은 4.6%로 기록했습니다. 4분기 운영 이익률은 22.9%였으며, 순이익은 2억 2,700만 달러(희석주당 0.91달러)였습니다.
2024년 전체 연도에 대해 매출은 3.4% 증가하여 51억 9,300만 달러에 도달했으며, 운영 이익률은 23.3%였습니다. 순이익은 8억 3,300만 달러(희석주당 3.34달러)에 달했고, 운영현금흐름은 8억 7,500만 달러였습니다.
2025년을 전망하는 Veralto는 저에서 중간 단일 자릿수의 핵심 매출 성장을 예상하고 있으며, 2025년 1분기 조정 기준 주당 이익은 0.84에서 0.88달러 사이일 것으로 기대하고 있습니다. 2025년 전체 연도 가이드는 운영 이익률이 25-50 베이시스 포인트 확장을 예상하고 있으며 조정된 희석 주당 이익은 3.60에서 3.70달러로 예상되고 있습니다.
Veralto (NYSE: VLTO) a annoncé des résultats solides pour le quatrième trimestre 2024, avec des ventes en hausse de 4,4 % par rapport à l’année précédente, atteignant 1 345 millions de dollars, et une croissance des ventes non-GAAP de 4,6 %. La marge bénéficiaire opérationnelle du Q4 était de 22,9 %, avec un bénéfice net de 227 millions de dollars (0,91 dollar par action diluée).
Pour l'année entière 2024, les ventes ont augmenté de 3,4 % pour atteindre 5 193 millions de dollars, avec une marge bénéficiaire opérationnelle de 23,3 %. Le bénéfice net a atteint 833 millions de dollars (3,34 dollars par action diluée), tandis que le flux de trésorerie opérationnel s'élevait à 875 millions de dollars.
En regardant vers 2025, Veralto prévoit une croissance des ventes clés à un chiffre unique faible à moyen, avec un bénéfice par action ajusté au premier trimestre 2025 attendu entre 0,84 et 0,88 dollar. Les prévisions pour l'année 2025 anticipent une expansion de la marge bénéficiaire opérationnelle de 25 à 50 points de base et un bénéfice par action dilué ajusté de 3,60 à 3,70 dollars.
Veralto (NYSE: VLTO) hat starke Ergebnisse für das vierte Quartal 2024 bekannt gegeben, mit einem Umsatzanstieg von 4,4% im Vergleich zum Vorjahr auf 1.345 Millionen Dollar und einem Non-GAAP-Wachstum des Kerngeschäfts von 4,6%. Die operative Gewinnmarge im Q4 betrug 22,9%, mit einem Nettogewinn von 227 Millionen Dollar (0,91 Dollar pro verwässerter Aktie).
Für das Gesamtjahr 2024 wuchs der Umsatz um 3,4% auf 5.193 Millionen Dollar, mit einer operativen Gewinnmarge von 23,3%. Der Nettogewinn erreichte 833 Millionen Dollar (3,34 Dollar pro verwässerter Aktie), während der operative Cashflow bei 875 Millionen Dollar lag.
Für das Jahr 2025 erwartet Veralto ein Wachstum des Kerngeschäfts im niedrigen bis mittleren einstelligen Bereich, wobei die bereinigten Erträge pro Aktie im ersten Quartal 2025 zwischen 0,84 und 0,88 Dollar erwartet werden. Für das Gesamtjahr 2025 wird mit einer Erweiterung der operativen Gewinnmarge um 25-50 Basispunkte und einem bereinigten verwässerten Gewinn pro Aktie von 3,60 bis 3,70 Dollar gerechnet.
- Q4 2024 sales increased 4.4% YoY to $1,345 million
- Full-year 2024 sales grew 3.4% to $5,193 million
- Strong cash generation with $875 million operating cash flow in 2024
- Projected margin expansion of 25-50 basis points for 2025
- Strengthening demand in industrial water treatment and consumer-packaged goods markets
- Modest single-digit growth projection for 2025 indicates growth expectations
Insights
Veralto's Q4 and full-year 2024 results present a compelling narrative of resilient growth and operational excellence. The 4.6% core sales growth in Q4, coupled with a robust 23.8% adjusted operating margin, demonstrates strong execution in challenging market conditions. The full-year performance, with
Several key performance indicators deserve attention: First, the free cash flow conversion rate approaching
The end-market dynamics are particularly encouraging. The strengthening industrial water treatment demand in North America and recovery in consumer-packaged goods markets globally indicate a broader market recovery. This positions Veralto well for 2025, with projected adjusted EPS of
The TraceGains acquisition aligns with management's strategic focus on enhancing capabilities in food safety and quality solutions. The company's emphasis on disciplined capital allocation, prioritizing acquisitions in clean water and food safety sectors, suggests a clear path to value creation through both organic growth and M&A activities.
Key Fourth Quarter 2024 Results
- Sales increased
4.4% year-over-year to$1,345 million 4.6% - Operating profit margin was
22.9% and non-GAAP adjusted operating profit margin was23.8% - Net earnings were
$227 million $0.91 - Non-GAAP, adjusted net earnings were
$238 million $0.95 - Operating cash flow was
$285 million $263 million
Key Full Year 2024 Results
- Sales increased
3.4% year-over-year to$5,193 million 3.7% - Operating profit margin was
23.3% and non-GAAP adjusted operating profit margin was24.1% - Net earnings were
$833 million $3.34 - Non-GAAP, adjusted net earnings were
$883 million $3.54 - Operating cash flow was
$875 million $820 million
"Our fourth quarter results were highlighted by mid-single-digit core sales growth across both segments, robust cash generation and the acquisition of TraceGains," said Jennifer L. Honeycutt, President and Chief Executive Officer. "This capped off a strong full-year performance in which our talented team, powered by the Veralto Enterprise System, executed well on our strategic priorities and delivered core sales growth, margin expansion and adjusted earnings per share above our initial guidance." Honeycutt continued, "From an end market perspective, demand continued to strengthen throughout 2024 highlighted by industrial water treatment in
"We begin 2025 with a stronger financial position and a more positive view of our end markets relative to 2024. We believe the durability of our businesses, fortified by the Veralto Enterprise System, will enable us to successfully navigate a globally dynamic macroeconomic environment. For the full year 2025, we are targeting low-to-mid single digit core sales growth with another year of margin expansion and strong cash generation. Over the long term, we expect to drive value creation through disciplined capital allocation, with a bias towards acquisitions that enhance our ability to help customers deliver clean water, safe food and trusted essential goods," concluded Honeycutt.
2025 Guidance
The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP sales, such as currency translation, acquisitions, and divestitures.
For the first quarter of 2025, Veralto anticipates that non-GAAP core sales will grow low-to-mid-single digits year-over-year with adjusted operating profit margin between
For the full year 2025, the Company anticipates that non-GAAP core sales will grow low-to-mid-single digits year-over-year and that adjusted operating profit margin will expand 25 to 50 basis points year-over-year. The Company is targeting adjusted diluted earnings per share in the range of
Conference Call and Webcast Information
Veralto will discuss its fourth quarter results and financial guidance for 2025 during its quarterly investor conference call tomorrow starting at 8:30 a.m. (ET). Access to the call, webcast and an accompanying slide presentation will be available on the "Investors" section of Veralto's website, www.veralto.com, under the subheading "News & Events" and additional materials will be posted to the same section of Veralto's website. A replay of the webcast will be available in the same section of Veralto's website shortly after the conclusion of the call and will remain available until the next quarterly earnings call.
The conference call can be accessed by dialing +1 (800) 343-4136 (
ABOUT VERALTO
With annual sales of over
NON-GAAP MEASURES AND SUPPLEMENTAL MATERIALS
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. Calculations of these measures, the reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, as applicable, and other information relating to these non-GAAP measures are included in the supplemental reconciliation schedule attached.
In addition, this earnings release, the slide presentation accompanying the related earnings call, non-GAAP reconciliations and a note containing details of historical and anticipated, future financial performance have been posted to the "Investors" section of Veralto's website (www.veralto.com) under the subheading "Quarterly Earnings."
FORWARD-LOOKING STATEMENTS
Certain statements in this release, including the statement regarding the Company's anticipated first quarter and full year 2025 financial performance, the Company's differentiation and positioning to continue delivering sustainable, long-term shareholder value and any other statements regarding events or developments that we believe or anticipate will or may occur in the future are "forward-looking" statements within the meaning of the federal securities laws. All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, Veralto's liquidity position or other financial measures; Veralto's management's plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; the effects of the separation or the distribution on Veralto's business; growth, declines and other trends in markets Veralto sells into; new or modified laws, regulations and accounting pronouncements; future regulatory approvals and the timing thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Veralto intends or believes will or may occur in the future. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings. These forward-looking statements speak only as of the date of this release and except to the extent required by applicable law, the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
VERALTO CORPORATION | |||
CONSOLIDATED CONDENSED BALANCE SHEETS | |||
($ in millions) | |||
(unaudited) | |||
As of December 31 | |||
2024 | 2023 | ||
ASSETS | |||
Current assets: | |||
Cash and equivalents | $ 1,101 | $ 762 | |
Trade accounts receivable, less allowance for credit losses of | 812 | 826 | |
Inventories | 288 | 297 | |
Prepaid expenses and other current assets | 186 | 188 | |
Total current assets | 2,387 | 2,073 | |
Property, plant and equipment, net | 268 | 262 | |
Other long-term assets | 523 | 398 | |
Goodwill | 2,693 | 2,533 | |
Other intangible assets, net | 535 | 427 | |
Total assets | $ 6,406 | $ 5,693 | |
LIABILITIES AND EQUITY | |||
Current liabilities: | |||
Trade accounts payable | 395 | 431 | |
Accrued expenses and other liabilities | 850 | 834 | |
Total current liabilities | 1,245 | 1,265 | |
Other long-term liabilities | 517 | 410 | |
Long-term debt | 2,599 | 2,629 | |
Total equity | 2,045 | 1,389 | |
Total liabilities and equity | $ 6,406 | $ 5,693 | |
This information is presented for reference only. Final audited financial statements will include footnotes, which | |||
VERALTO CORPORATION | |||||||
CONSOLIDATED AND COMBINED STATEMENTS OF EARNINGS | |||||||
($ and shares in millions, except per share amounts) | |||||||
(unaudited) | |||||||
Three-Month Period Ended | Year Ended December 31 | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Sales | $ 1,345 | $ 1,288 | $ 5,193 | $ 5,021 | |||
Cost of sales | (544) | (542) | (2,088) | (2,120) | |||
Gross profit | 801 | 746 | 3,105 | 2,901 | |||
Operating costs: | |||||||
Selling, general and administrative expenses | (424) | (403) | (1,644) | (1,536) | |||
Research and development expenses | (69) | (57) | (253) | (225) | |||
Operating profit | 308 | 286 | 1,208 | 1,140 | |||
Non-operating income (expense): | |||||||
Other income (expense) | — | — | (9) | (14) | |||
Interest expense, net | (28) | (25) | (113) | (30) | |||
Earnings before income taxes | 280 | 261 | 1,086 | 1,096 | |||
Income taxes | (53) | (61) | (253) | (257) | |||
Net earnings | $ 227 | $ 200 | $ 833 | $ 839 | |||
Net earnings per share: | |||||||
Basic | $ 0.92 | $ 0.81 | $ 3.37 | $ 3.41 | |||
Diluted | $ 0.91 | $ 0.81 | $ 3.34 | $ 3.40 | |||
Average common stock and common equivalent | |||||||
Basic | 247.6 | 246.6 | 247.3 | 246.4 | |||
Diluted | 250.3 | 248.2 | 249.6 | 246.8 | |||
This information is presented for reference only. Final audited financial statements will include footnotes, which | |||||||
VERALTO CORPORATION | |||
CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS | |||
($ in millions) | |||
(unaudited) | |||
Year Ended December 31 | |||
2024 | 2023 | ||
Cash flows from operating activities: | |||
Net earnings | $ 833 | $ 839 | |
Noncash items: | |||
Depreciation | 40 | 39 | |
Amortization of intangible assets | 38 | 48 | |
Stock-based compensation expense | 65 | 55 | |
Loss on product line disposition | 15 | — | |
Impairment of equity method investment | — | 15 | |
Changes in operating assets and liabilities | (116) | (33) | |
Net cash provided by operating activities | 875 | 963 | |
Cash flows from investing activities: | |||
Cash paid for acquisitions, net of cash acquired | (363) | — | |
Payments for additions to property, plant and equipment | (55) | (54) | |
Proceeds from sales of property, plant and equipment | — | 2 | |
All other investing activities | (16) | (3) | |
Net cash used in investing activities | (434) | (55) | |
Cash flows from financing activities: | |||
Proceeds from the issuance of common stock in connection with stock-based | 24 | 4 | |
Net transfers to Former Parent | — | (147) | |
Consideration paid to Former Parent in connection with Separation | — | (2,600) | |
Payment of dividends | (89) | — | |
Proceeds from borrowings (maturities longer than 90 days) | — | 2,608 | |
Net cash used in financing activities | (65) | (135) | |
Effect of exchange rate changes on cash and cash equivalents | (37) | (11) | |
Net change in cash and cash equivalents | 339 | 762 | |
Beginning balance of cash and cash equivalents | 762 | — | |
Ending balance of cash and cash equivalents | $ 1,101 | $ 762 | |
This information is presented for reference only. Final audited financial statements will include footnotes, which | |||
VERALTO CORPORATION | |||||||
SEGMENT INFORMATION | |||||||
($ in millions) | |||||||
(unaudited) | |||||||
Three-Month Period Ended | Year Ended December 31 | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Sales: | |||||||
Water Quality | $ 811 | $ 782 | $ 3,138 | $ 3,039 | |||
Product Quality & Innovation | 534 | 506 | 2,055 | 1,982 | |||
Total | $ 1,345 | $ 1,288 | $ 5,193 | $ 5,021 | |||
Operating profit: | |||||||
Water Quality | $ 204 | $ 194 | $ 768 | $ 730 | |||
Product Quality & Innovation | 124 | 116 | 529 | 472 | |||
Other | (20) | (24) | (89) | (62) | |||
Total | $ 308 | $ 286 | $ 1,208 | $ 1,140 | |||
Operating Profit Margin: | |||||||
Water Quality | 25.2 % | 24.8 % | 24.5 % | 24.0 % | |||
Product Quality & Innovation | 23.2 % | 22.9 % | 25.7 % | 23.8 % | |||
Total | 22.9 % | 22.2 % | 23.3 % | 22.7 % | |||
VERALTO CORPORATION | |||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||
($ in millions) | |||||||||
Three-Month Period Ended December 31, 2024 | |||||||||
Sales | Operating | Operating | Net earnings | Diluted net | |||||
Reported (GAAP) | $ 1,345 | $ 308 | 22.9 % | $ 227 | $ 0.91 | ||||
Amortization of acquisition-related | — | 10 | 0.7 | 10 | 0.04 | ||||
Other items B | — | 2 | 0.1 | 2 | 0.01 | ||||
Tax effect of the above adjustments H | — | — | — | (2) | (0.01) | ||||
Discrete tax adjustments I | — | — | — | 1 | — | ||||
Rounding | — | — | 0.1 | — | — | ||||
Adjusted (Non-GAAP) | $ 1,345 | $ 320 | 23.8 % | $ 238 | $ 0.95 | ||||
Three-Month Period Ended December 31, 2023 | |||||||||
Sales | Operating | Operating | Net earnings | Diluted net | |||||
Reported (GAAP) | $ 1,288 | $ 286 | 22.2 % | $ 200 | $ 0.81 | ||||
Amortization of acquisition-related intangible assets A | — | 12 | 0.9 | 12 | 0.05 | ||||
Other items B | — | 1 | 0.1 | 1 | — | ||||
Separation costs C | — | 7 | 0.5 | 7 | 0.03 | ||||
Tax effect of the above adjustments H | — | — | — | (5) | (0.02) | ||||
Rounding | — | — | 0.1 | — | — | ||||
Adjusted (Non-GAAP) | $ 1,288 | $ 306 | 23.8 % | $ 215 | $ 0.87 | ||||
Year Ended December 31, 2024 | |||||||||
Sales | Operating | Operating | Net earnings | Diluted net | |||||
Reported (GAAP) | $ 5,193 | $ 1,208 | 23.3 % | $ 833 | $ 3.34 | ||||
Amortization of acquisition-related | — | 38 | 0.7 | 38 | 0.15 | ||||
Other items B | — | 4 | 0.1 | 4 | 0.02 | ||||
Separation costs C | — | 1 | — | 1 | — | ||||
Net loss on disposition of certain | — | — | — | 10 | 0.04 | ||||
Tax effect of the above adjustments H | — | — | — | (9) | (0.04) | ||||
Discrete tax adjustments I | — | — | — | 6 | 0.02 | ||||
Rounding | — | — | — | — | 0.01 | ||||
Adjusted (Non-GAAP) | $ 5,193 | $ 1,251 | 24.1 % | $ 883 | $ 3.54 | ||||
Year Ended December 31, 2023 | |||||||||
Sales | Operating | Operating | Net earnings | Diluted net | |||||
Reported (GAAP) | $ 5,021 | $ 1,140 | 22.7 % | $ 839 | $ 3.40 | ||||
Amortization of acquisition-related | — | 48 | 1.0 | 48 | 0.19 | ||||
Other items B | — | 1 | — | 1 | — | ||||
Separation costs C | — | 7 | 0.1 | 7 | 0.03 | ||||
Standalone Entity Adjustments E | 6 | (38) | (0.8) | (138) | (0.56) | ||||
Fair value losses on investments F | — | — | — | 15 | 0.06 | ||||
Impairments and other charges G | — | 12 | 0.2 | 12 | 0.05 | ||||
Tax effect of the above adjustments H | — | — | — | 15 | 0.06 | ||||
Discrete tax adjustments I | — | — | — | (12) | (0.05) | ||||
Rounding | — | — | 0.1 | — | 0.01 | ||||
Adjusted (Non-GAAP) | $ 5,027 | $ 1,170 | 23.3 % | $ 787 | $ 3.19 | ||||
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Notes to Reconciliation of GAAP to Non-GAAP Financial Measures
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 Ended | Year Ended | ||||||
December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||
Pretax | $ 10 | $ 12 | $ 38 | $ 48 | |||
After-tax | 8 | 9 | 29 | 36 | |||
B | Costs incurred during three-month period ended December 31, 2024 related to certain strategic initiatives ( |
C | Costs incurred during the year ended December 31, 2024 related to the separation of the Company from Danaher primarily related to IT costs and certain regulatory fees ( |
D | Net loss on the disposition of certain product lines during the year ended December 31, 2024 ( |
E | This amount encompasses management estimates of operating as a standalone entity incurred during the year ended December 31, 2023 ( |
F | Fair value loss related to an impairment of an equity method investment in the Water Quality segment for the year ended December 31, 2023 ( |
G | Impairment charge related to tradenames and customer relationships in the Product Quality & Innovation segment for the year ended December 31, 2023 ( |
H | This line item reflects the aggregate tax effect of all nontax adjustments reflected in the preceding line items of the table. In addition, the footnotes above indicate the after-tax amount of each individual adjustment item. Veralto estimates the tax effect of each adjustment item by applying Veralto's overall estimated effective tax rate to the pretax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. |
I | Discrete tax matters relate to changes in estimates associated with prior period uncertain tax positions, audit settlements and excess tax benefits from stock-based compensation. |
VERALTO CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||
Sales Growth by Segment, Core Sales Growth by Segment | |||||
% Change Three-Month Period Ended December 31, 2024 vs. | |||||
Segments | |||||
Total Company | Water Quality | Product Quality & | |||
Total sales growth (GAAP) | 4.4 % | 3.7 % | 5.4 % | ||
Impact of: | |||||
Acquisitions/divestitures | (0.3) % | 0.6 % | (1.6) % | ||
Currency exchange rates | 0.5 % | 0.6 % | 0.3 % | ||
Core sales growth (non-GAAP) | 4.6 % | 4.9 % | 4.1 % | ||
% Change Year Ended December 31, 2024 vs. Comparable 2023 | |||||
Segments | |||||
Total Company | Water Quality | Product Quality & | |||
Total sales growth (GAAP) | 3.4 % | 3.2 % | 3.7 % | ||
Impact of: | |||||
Acquisitions/divestitures | — % | 0.3 % | (0.4) % | ||
Currency exchange rates | 0.3 % | 0.4 % | — % | ||
Core sales growth (non-GAAP) | 3.7 % | 3.9 % | 3.3 % | ||
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Forecasted Core Sales Growth, Adjusted Operating Profit Margin, Adjusted Diluted Net Earnings per Share and Free Cash Flow to Net Earnings Conversion Ratio
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 translation, acquisitions and divested product lines. Additionally, we do not reconcile adjusted operating profit margin (or components thereof), adjusted diluted earnings per share or free cash flow to net earnings conversion ratio to the comparable GAAP measures because of the difficulty in estimating the other unknown components such as investment gains and losses, impairments and separation costs, which would be reflected in any forecasted GAAP operating profit, forecasted diluted earnings per share or forecasted net earnings ratio.
% Change Three-Month Period | |
Core sales growth (non-GAAP) | +Low-to-mid-single digits |
Three-Month Period Ending | |
Adjusted operating profit margin (non-GAAP) | |
Adjusted diluted net earnings per share (non-GAAP) | |
% Change Year Ending | |
Core sales growth (non-GAAP) | +Low-to-mid-single digits |
Year Ending December 31, 2025 | |
Adjusted operating profit margin (non-GAAP) | +25 to 50 basis points |
Adjusted diluted net earnings per share (non-GAAP) | |
Free cash flow to net earnings conversion ratio (non-GAAP) |
VERALTO CORPORATION | |||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||||
Cash Flow and Free Cash Flow | |||||||||||
($ in millions) | |||||||||||
Three-Month Period Ended | Year-over-Year | Year Ended | Year-over-Year | ||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||
Total Cash Flows: | |||||||||||
Net cash provided by operating | $ 285 | $ 263 | $ 875 | $ 963 | |||||||
Total cash used in investing | $ (394) | $ (22) | $ (434) | $ (55) | |||||||
Total cash provided by (used in) | $ (16) | $ 97 | $ (65) | $ (135) | |||||||
Free Cash Flow: | |||||||||||
Total cash provided by | $ 285 | $ 263 | ~8.5 % | $ 875 | $ 963 | ~(9.0)% | |||||
Less: payments for additions to | (22) | (22) | (55) | (54) | |||||||
Plus: proceeds from sales of | — | — | — | 2 | |||||||
Free cash flow (non-GAAP) | $ 263 | $ 241 | ~9.0 % | $ 820 | $ 911 | ~(10.0)% | |||||
Operating Cash Flow to Net | |||||||||||
Net cash provided by operating | $ 285 | $ 263 | $ 875 | $ 963 | |||||||
Net earnings (GAAP) | $ 227 | $ 200 | $ 833 | $ 839 | |||||||
Operating cash flow to net | 1.26 | 1.32 | 1.05 | 1.15 | |||||||
Free Cash Flow to Net | |||||||||||
Free cash flow from above | $ 263 | $ 241 | $ 820 | $ 911 | |||||||
Net earnings (GAAP) | $ 227 | $ 200 | $ 833 | $ 839 | |||||||
Free cash flow to net earnings | 1.16 | 1.21 | 0.98 | 1.09 | |||||||
We define free cash flow as operating cash flows, less payments for additions to property, plant and equipment | |||||||||||
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. Management believes that these measures provide useful information to investors by offering additional ways of viewing Veralto Corporation's ("Veralto" or the "Company") results that, when reconciled to the corresponding GAAP measure, help our investors:
- with respect to the profitability-related non-GAAP measures, understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers;
- with respect to core sales and related sales measures, identify underlying growth trends in our business and compare our sales performance with prior and future periods and to our peers; and
- with respect to free cash flow and related cash flow measures (the "FCF Measure"), understand Veralto's ability to generate cash without external financings, strengthen its balance sheet, invest in its business and grow its business through acquisitions and other strategic opportunities (although a limitation of free cash flow is that it does not take into account the Company's non-discretionary expenditures, and as a result the entire free cash flow amount is not necessarily available for discretionary expenditures).
Management uses these non-GAAP measures to measure the Company's operating and financial performance.
- The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons:
- Amortization of Intangible Assets: We exclude the amortization of acquisition-related intangible assets because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe however that it is important for investors to understand that such intangible assets contribute to sales generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized.
- Restructuring Charges: We exclude costs incurred pursuant to discrete restructuring plans that are fundamentally different (in terms of the size, strategic nature and planning requirements, as well as the inconsistent frequency, of such plans) from the ongoing productivity improvements that result from application of the Veralto Enterprise System. Because these restructuring plans are incremental to the core activities that arise in the ordinary course of our business and we believe are not indicative of Veralto's ongoing operating costs in a given period, we exclude these costs to facilitate a more consistent comparison of operating results over time.
- Other Adjustments: With respect to the other items excluded from the profitability-related non-GAAP measures, we exclude these items because they are of a nature and/or size that occur with inconsistent frequency, occur for reasons that may be unrelated to Veralto's commercial performance during the period and/or we believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult.
- Standalone Adjustments: We believe these adjustments provide additional insight into how our businesses are performing, on a normalized basis. However, these non-GAAP financial measures should not be construed as inferring that our future results will be unaffected by the items for which the measure adjusts.
- With respect to core operating profit margin changes, in addition to the explanation set forth in the bullets above relating to "restructuring charges" and "other adjustments", we exclude the impact of businesses owned for less than one year (or disposed of during such period and not treated as discontinued operations) because the timing, size, number and nature of such transactions can vary significantly from period to period and may obscure underlying business trends and make comparisons of long-term performance difficult.
- With respect to core sales related measures, (1) we exclude the impact of currency translation because it is not under management's control, is subject to volatility and can obscure underlying business trends, and (2) we exclude the effect of acquisitions and divested product lines because the timing, size, number and nature of such transactions can vary significantly from period-to-period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term performance difficult.
- With respect to the FCF Measure, we exclude payments for additions to property, plant and equipment (net of the proceeds from capital disposals) to demonstrate the amount of operating cash flow for the period that remains after accounting for the Company's capital expenditure requirements.
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SOURCE Veralto
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