AME - Earnings call transcript Q2 2022

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Operator

Welcome to the Second Quarter 2022 AMETEK Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct the question and answer session [Operator Instructions] I will now turn the call over to Kevin Coleman, Vice President of Investor Relations and Treasurer. Mr. begin. may you Coleman,

Kevin Coleman

Officer; Good second thank call. quarter Dave Officer. Chief today Richard. President Executive us Chief and With for for are Financial Executive and Chairman AMETEK's XXXX Zapico, Bill morning, you, Burke, you Vice and joining me and Thank earnings conference

this the expectations. During differ the may based found of to that making be risk on press or A affect intangible disclaims statements, the amortization. factors discussion revise call, significantly uncertainties cause XXXX are which and be results of on adjusted will excluding detailed section adjusted now risks today's made in that may and We'll and then in Investors our be GAAP or to Bill, or call intention our it and for contained any is measures after-tax, actual up various the will AMETEK's website. open any Any to basis, forward-looking results XXXX the and call I'll meeting can obligation update our Reconciliations future SEC. subject acquisition-related questions. begin with an from remarks results to course uncertainties on and Dave. we references over filings release Dave we'll forward-looking statements. of on turn to change with AMETEK prepared by today's between

Dave Zapico

quarter, expansion sales with Thank you, and organic excellent Kevin, robust and earnings. stronger-than-expected another everyone. good outstanding had record operating morning, growth, AMETEK performance, margin

a record to our niche backlog. leading and organic and impressive order across broad-based demand billion growth strong diversified remains Importantly, $X.X markets,

increased earnings of outlook our guidance XXXX, and for results we the for quarter year. second back our the half our have Given

to results. our turn me quarter let Now second

was of a headwind up quarter a a Book-to-bill over orders Operating the quarter X-point XX.X% book-to-bill. second basis our year about prior Acquisitions a despite XX% year incremental $X.XX, XXX range margins. XX.X%. with over XXXX. the quarter, excellent XXXX billion, second million, $X.XX currency XX%. This versus challenging driven increase in the the performance of Organic record million, quarter, margins was added of XX%, were share, $XXX to $XXX in highly the margins sales the the per with of outstanding a quarter. same Second was X.XX points were very X% eighth was quarter up point a in a of up a stronger-than-expected consecutive period record were of in year prior prior quarter second foreign up comparison. $X.XX EBITDA by Organic EBITDA in strong sales earnings guidance positive our the quarter from income above to in record the XX% XXXX. and XX% quarter led were the up Operating performance. and record over diluted sales and strong $X.XX operating

some provide let operating additional details group Now at level. the

headwinds were Electronic Organic second Group. impressive, was last with more margin operating the EIG's profit in and resulting division. up in our across in operating currency than from growth with Precision very quarter, Instruments our up XX% the Electronic robust particularly quarter. and P&I Ultra across businesses the growth strong our performance EIG remains record Technologies impressive expansion sales for acquisition First, XX% were $X.XX Group year's quarter. Sales billion, offsetting contributions. foreign Organic Instruments

strength second excellent tremendous the and efforts basis performance to would excellent the operating prior make year results in XX.X%, sales were AMETEK EMG's quarter our to also operating the operating growing the businesses. and quarter. differentiated our XX% operating strong sales of were second year EMG's commitment quarter EMIP the $XXX.X EMG's the margins operating versus versus sales margins were automation the quality a contributions year. Electromechanical for to prior important EMG's year compared AMETEK Overall, quarter, for period. X% like second model XX sustained reflecting was growth delivered our Group our the XX% our income growth of up both quarter. in and the I and outstanding million, growth points many million, up record $XXX.X in the XX% quarter businesses, the up the in million, versus also your with strong was and of Second income at prior $XXX.X colleagues all quarter. employees. to income XX.X% The organic broad-based, up across in thank success. you was the with prior

Now the me -- with global touch the the components. challenges continuing constrained, electronic remains of be chain supply on to challenging the let supply availability Overall, chain. largest

noted decided inventory have previously, as additional chain. the select to of demand support strategically tight components strong we to As the a against supply we hold and hedge customer

Additionally, AMETEK's additional job global sourcing of an sources supply. identify are teams doing working outstanding to

leading uncertain outstanding supply and more are issues we to The combination price with chain power provides this in chain have strong expense. and offset inflation ability manage margin the our supply a able been than to this pricing times. confidence pricing, our of spread us again leading to quarter higher higher inflation, these through to capabilities inflation these While global

and team, support the we the to in shipments. networks able excellent anticipated. our system our the sales China COVID noted business efforts and quarter expected and Due chain from across China operate delay some on to a During quarter lockdowns were lockdowns These closed half second the we that loop quarter of driven production China our the than first caused we of to parts into year. were second impact logistics the in less supply of earnings call, the adjust to

were production The of zero-COVID we the Additionally, policy the as your something tremendous future. impact able resumed time. for to China commitment and react lifted, shipments. of Thank China's as this need much you in team weeks resilience closely are watching last entire our during two and quarter, restrictions we of is during in adjust recover to we multi-ship the delayed were to and the

our Now switching to strategy. acquisition

Our for value-enhancing strategic acquisitions. top capital remains priority allocation the

Our M&A pipeline strong. is very

active of attractive are pipeline acquisition Our corporate managing unit busy business candidates. and development an teams

a in sheet half balance our providing highlight active cash moment, the support us year. the strategy, to to second will Bill have with in a flow and we be strong and acquisition we meaningful excellent capacity of As expect

We growth consistently in of also growth. remain investments support the our focused on benefits strategic levels We're driving higher in organic businesses their seeing organic these investing stronger growth of by to initiatives.

the role Their vitality development advanced of of and this strong the continues Webb aligned extreme quarter. very measure also position This success primary of very the hexagonal-shaped Our expand supported recently to deep vitality which AMETEK's XX% a was mirrors, yield advanced of James next deepest allowing technology ultraviolet markets. development manufacture production capabilities playing and systems images us opportunities. sharpest amazing level Zygo's our for in investments of semiconductor efforts these large protection growth Telescope's James second optics of provides example incredibly of sales These ability Middlefield, leadership to capability. infrared an of The research, up One the develop reflects mirror. aspheric in lenses. our of complicated areas niche high-growth Connecticut, our which for mirrors to new important supporting solutions, for the engineering extreme part precision compelling into in Telescope the AMETEK's across of universe. leading-edge index, expansion generation Truly the in technologies. design One is optics. are very of images Zygo precision our in use and optical based Space generation products precised business' next business, EUV provides Zygo produced is the the make optics, Webb in of the to equipment. due XX semiconductor the with

the AMETEK capabilities examples we and highly of of provide many our two across Just unique and technologies customers. the differentiated

results remainder to With our backlog, increased the order the quarter, turning of solid record guidance. continued strong the momentum earnings outlook and have in second our Now full we year. year for our

sales share high This guidance share. high compared to with to expected now For our are mid-to of expect digits, digits. organic overall digits be single guidance versus $X.XX prior year, high of be per from year the previous up to single our in expected for earnings range up to XXXX. to increase $X.XX XX% up be single up per diluted sales the full Diluted also to an XX% of the now is range to $X.XX $X.XX, we

be the sales and quarter, to expect third to diluted compared high last range earnings For $X.XX expected per share, $X.XX the period digits single X% of in the are overall we prior year. be same versus in up XX% to to third quarter the up to year, the

demand our in remains various macroeconomic headwinds, we businesses closely operating not level. are are businesses the we our seeing and solid as While monitoring slowing are

second with ability capability. strong outlook our ability given results backlog, outstanding increases price in operating and and offset to confident We are excellent. summary, year, were quarter the inflation for AMETEK's our improved In

businesses differentiated diverse Our well markets. of technology are positioned solutions serving with growing niche set a

Our markets. of attractive levels driving is organic long-cycle higher with growth growth, our and and are mid- initiatives portfolio aligned

turn positioned model capital navigate to the to shareholder glad flow cash firmly deploy while the and growth. business take value. asset-light challenging our deliver remains environments, strong us it will questions. sustainable of financial and be of the Bill cover Burke, then some to will now over we'll I long-term your to Bill? Additionally, to provides AMETEK flexibility and continuing who increased quarter, drive details

Bill Burke

Thank you, Dave.

quarter second tremendous by AMETEK delivered sales led and growth performance. and noted, in strong the operating results Dave orders As excellent

Let quarter. for financial me additional provide some the highlights

was were $X XXXX. million as a sales total prior and with quarter year. quarter X.X%, percentage second million, of $XX.X expenses administrative the of in line Second And up the general from

rate income. this full approximately sales to from was the up on in tax levels year, X.X% sales XX.X% in second effective the For of quarter versus lower be driven The are expenses XX.X%, by the from quarter XXXX. tax down and modestly of second XXXX in The administrative rate lower general foreign and was XXXX. of X.X% quarter expected

depreciation XX.X%. anticipate second in either differ full or for were and the or approximately our amortization $XX intangible acquisition-related approximately Depreciation For amortization rate amortization to this expect and the and effective the our expense be capital can XXXX, tax the $XXX rates tax approximately million, Capital model. per between to be and And And $XXX full negatively, to expect million past, year, asset-light XX% we've expenditures share. $X.XX $XX year, million. reflecting or as stated quarter diluted rate. estimated of sales, quarterly continue X% million, in from business was quarter we for we after-tax dramatically, in positively year to including actual we $XXX expenditures of million full be the about

million second the quarter. flow in $XXX quarter, was sales. and the million free capital cash was $XXX cash of XX% operating For Operating flow was working

cash the approximately full for expect We free conversion XXX% income net flow year. to

to decision demand the strategic working flow and our the supply Our and select hedge experiencing certain to capital cash inventory we support continued are in times to lead chain. customer add strong reflect results areas across against longer

we of open During approximately repurchased shares a quarter, X.XX $XXX for X.X approximately the million repurchased $XXX market year-to-date, in stock we've the million. of for shares, And million million. second total

priority the it strategic capital at our shareholders for times. XXXX. with best quarter the was deployment equivalents the debt and ratio end was million. ratio cash of X.X AMETEK of Total As is top ended slightly quarter, reminder, on cash debt-to-EBITDA at end times, debt-to-EBITDA our second and remains down our net capital. our we billion provides as our second gross X.X a $X.X returns At billion, $X.XX from and this Offsetting believe acquisitions debt of the the $XXX the

with AMETEK material levels As a flows. noted, of XXXX, and debt maturities sheet due modest robust until cash no strong balance Dave has leverage

quality positioned strategically investment operating approximately conclude, initiatives. meaningful a the growth we $X.X performed exceptionally outstanding delivering of high businesses environment. result, earnings in positioned the deploy in capital year, facilities growth, well cash to our strong with very long-term and challenging the half continue well a of in back to our our a We well sales strategy quarter, to performance remain going invest of initiatives. Kevin? into second To we'll As support in in and acquisition existing billion growth credit our are

Kevin Coleman

please Thank Great. open Richard, the for lines could Bill. we you, questions?

Operator

[Operator first our Fargo. the on Instructions] from Allison Poliniak from line And question comes Wells

Allison Poliniak

going Just orders. you, back strong to and very obviously,

But slowing. cadence any any seeing region you're coming color in in, end change what in seeing whether there? of terms the or market? not really you're been Just any mentioned there has intra-quarter You

David Zapico

so Yes. pretty each orders month strongest in we with just our of June, with results very month quarter the I were July mean we And strong strong and July, and our being had the outlook. typical. consistent ended

regions EMG both in in subsegments All XX. major that that in healthy had rates XX strength there's up the So nicely. was was world. we was and continue up growing up really -- order all growth was groups. X. we EIG of are growing organic strength at We're Overall, operate

pretty feels from where it So we sit. good

remarks, that, as And to XX% to backlog have, start the pandemic. right billion, in we from mentioned In prior and COVID not addition a that's anywhere $X.X we up now. seeing of just we're good, to and the record of about prepared weakness feeling we're any -- the

Allison Poliniak

And the as this quarter step-up the inventory to issues in again the Is on in supply are orders coming out just think sequentially. dependent year? Or some it coming of How chain that to you're half seeing then is suspect there of was about look it that we the back still of and there? stabilized? really a orders due obviously should that's that inventory level I some in. we

Bill Burke

-- on those we've And make we and coming concerned continue chain, the inventory the to sure react to have Yes, I hit we you've We've there, order strong support that. about to Allison. got we're are to rate think supply got with to it going in, still orders.

say Obviously, lean, you that supporting make nail increased we've think I now. continue we're manage we're very got running would head, closely. are and them you've I to in we'll know hit on to focused it sure place. orders So the the And on but we've the

Operator

comes Our Stanley. line next Mr. question Pokrzywinski on from Morgan from Josh

Joshua Pokrzywinski

question I of on doing guess Just well. AMETEK I guess is first totality the Europe.

more watching challenges, or orders like than things Because underneath up a mentioned surface costs you're energy Anything, that You just macro guess, KPI obviously, the lot. there? growth. I the a

that's manifesting Just in wondering that, itself business? way any your

David Zapico

the started Europe. to businesses our Last X% in up and quarter, aerospace strength automation orders accelerate. notable had were And we aerospace really in and businesses,

place certainly it Ukraine geopolitical a Again, and us. but the Europe that things now, -- Russia turn up it's to feels closely strong, it So may going as costs there. not. good for had very fuel pretty be for we're watching demand good the in a on sign is Europe of from a that looking And in now, with the right down perspective and right we Germany, first and quarter was But X%.

Joshua Pokrzywinski

& side. just then the And on aerospace -- defense

back in some chain supply either chain there. for the of your to necessarily but starting kind told you by want because component and that lot a be you at kind think all I to in are just to accumulating worse Not your delivery gliders don't that guys the for bottlenecks producing, being to get supply come customers meantime? or are stuff throttle of they're of other or waiting in building in inventory seeing

David Zapico

I opposite. mean, quite the right now it’s

Our quarter. in in low business were double up defense & our the aerospace digits orders

us, low the grew in within Our for commercial it stronger, market and and was digits single commercial up mid-teens And aftermarket. business strongest growth was up the quarter. first better defense the than

interactions a of have at looking for the asking we're us more. we most half, our So very and with customers are second strong

market of or anything. ahead in any seeing demand growth slowdown pent-up cycle And is it. demand a I has of got we're long not because So of think that

Joshua Pokrzywinski

Then just What you mind. was question in the more don't quarter? one price if

David Zapico

Right.

was second inflation. than So the and more of was continued X% our in offset about quarter, about price to X% inflation sales. Pricing

it leadership think as price growth volume maintained about of point organic our growth. the XXX the And results X% AMETEK we growth we we and spread. markets. portfolio about speak So and niche product And highly in XX% nature differentiated position X% had the basis and to

So quarter it that was a we think good from really viewpoint.

Operator

on Research. question from Coe Nigel comes line from next Our Wolfe

Nigel Coe

those comments. echo certainly I

growth quarter. quarter this third of sales for context just outlook So in on the mid-single-digit XX%

pretty should more looking well, be mid-singles upper the there. what's the just I'm of Just the wondering mid-single-digit rates bit can end with we a that as covering if at if be outlook? wondering, strong you especially order specific

David Zapico

because have If you actually of some really, the of carbon And high we quarter dig headwinds. guide single is mid-to three rate. But into quarter of two. reflects quarter seasonality it, exposure. kind quarter tax currency a digits because a quarter in copy and And the bit expecting European two little three, difference we're of we a little three between have the higher

some but conservative, sequentially appropriately are it consider there with would dynamics organic is and tax the we mid-to-high. rate So

back not So a holding us it's currencies bit. mid

Nigel Coe

goes think is adjust I the it, tougher, And X%. if XX% comp but to comp just maybe you

impact but wondering price on is And just rates. obviously there Europe margin margin manage. this maybe pretty confirm So that quarter? like dollars, from of margins, you just then Can least It cost -- but you sort there's any geo wondering is geographic strong, to impacts if very And to then was how any neutral obviously, it's that? just the was if seems the strong. at not rates, margin

David Zapico

when mean, was basis XXX I up I basis look the and as it for XXX reported margins business, points core. No. the whole at points

price. EMG see XX of think you improved margins XX%. core basis the in of So and and up really through were cost we reported, incrementals basis there. core points EMG margins margins total at XXX had flow-through of reported healthy incrementals -- points And I you strong strong as up sales, when XX%, look and very EIG groups, XX% were both XX

than feels like expansion. getting inflation price, more it offsetting So with and we're we're margin

So story. as executing in are it's And great our their I business a think teams well. margin really

Operator

comes Brett Americas. line next from question Our Linzey Mizuho on from

Brett Linzey

more upstream businesses a be First know assembly. lot your from just or inventories. channel final three inventories tend question on of is linkages, I end two to and use to

of Just end and relative of you assessment curious visibility chains might demand? some levels have what those value to your those into level versus

David Zapico

Yes.

Instruments we're users Electronic about selling largely XX If you Group, think our there.

of So are user our we the have customized. and products end a view good

on in stuff put you don't EMG double products. the we're going more they're by chain it your levels could indicated backup highly engineered over expensive a food ordering be a just a of people not of seeing we because of and back to on the but there, strong So like -- When the they're about. that about it's has our to And you our we're you problem right now, talked case but growth. couple think not customized, of have shelf ordering ordering, orders have business,

in feels the the half pretty we're second still like we're right the So it demand and areas of optimistic year. about is growing, and

Brett Linzey

cost. just back price then to And

like you a just volume of of kind the the early So the And for 'XX actions? some price or on get price of what based 'XX into some could like in that might wraparound what How or mid-year thinking look incrementals of the price for into we are look cost, terms on 'XX? X%. and curious tailwind decrementals as about algorithm

David Zapico

Right. about basis a to XXXX, start early little had point will that we strategy about maintain but that think want the of employed the second XXX continue. talking that we It's we've second half same the in quarter. to we the spread year, pricing When

difference half the the want and for So XXX is points. going to X% to the of going pricing inflation second continue be a to our year, a of that. X% between budget think be is we is and sales part big discussions, And We here basis while. and future of

thought to So our process. that's influence going

positive I into next expect also. to spread would year So main

Brett Linzey

And your normal just a course quick complexion list anything can Or surcharges? follow-up. of Would share you there? is a lot more say you of actions pricing versus the

David Zapico

the there -- but in retracement both. commodities we're a list, I base things tied could combination is of mean that like a in there a be bit, for where It's but a and most indexes price. shipping of and are of to certain it lot it's situations,

go give when the try to have same But down. saying time, we'll it's it to price. get second half in base year. of it's with XXX we situations, the transparent But spread and that you point in the things So customer, some basis back at we're it maintain your for obvious,

Operator

from line Sprague on question Research. next Vertical comes from Our Jeff

Jeffrey Sprague

or businesses? our want into in the that performing of anniversary of they're year kind your year to were kind anniversary that for last view those last and I talk the the of three. kind or accretion outlook of just now about sort two change And deals in done the as last How have the of here any they portfolio? kind of month

David Zapico

No.

a and the really experienced pleased management And all. are the has the to the those the make supply I business now to And have we businesses of into the more half is Electronic getting realign the those chain year, opportunity them the problems all the I'd that integrated experienced They deals. HX the into to for Instruments in think our AMETEK. took with across we us second had And lot. businesses, significant -- bought and second those problems get momentum in AMETEK. outlook half we're but Group. really positive, were year, businesses, going to were same embedded them we're a teams some I -- have the of related think impact for

So really the year. of half first second we during momentum. significant I this also XXXX, year made a into of I progress and lot see the And think,

Jeffrey Sprague

say And on the of kind I or balance kind into couple the anything of the about first look of minutes the things potential David. the as call, missed of you of year? you pipeline deal Did actionability current here

David Zapico

Jeff. question, active. looking deals. remarks. a in I prepared good very our mean We mentioned that we multiple that's We're remain at No,

returns. As focused on we're always, long-term

One of X.X% is debt About things our long a I'm XX% the rate. of fixed is debt at and our about term interest profile. excited

to limited have if interest So really on rise, it's a rates us. effect going if there's --

prepared recently our years. in revolver. next the in we his We remarks, mentioned Bill debt As couple have maturities no upsized of

I in our we're you'll to in and good the executing M&A a second of M&A. is I us our be And regarding hearing So strategy. expect pipeline very terms strong, be of in from said, half year position the as

Operator

Our question Bank Obin line next Andrew comes from America. Instructions] of on [Operator from the

Andrew Obin

on question and volume. Just another price

in second FX And a volumes appreciate it and well. In is much I that was much the half? terms there there headwind raise, price guide of as your how of how was better

David Zapico

Yes.

different you what's market businesses with understand positive. FX come and happening spread really in starting that. So, to the It's we're XXX some we'll commodity not maintain What tough is a of basis complicated points into giving down. when saying take very that our we're information out. and it's mix of And account to a

maintain XXX So we're saying the what inflation of we'll is and in but point half spread between price second -- basis the a year.

Andrew Obin

M&A. follow Jeff's And just on up question to on

take have a hearing you business bottoms of a of sort the is bottoms back seeing at anything you these any sort lot we in anything You your private Are Do market stacks? where from look to as equity new they in organization. different months away, M&A market you up XX a Are of units leaders? versus change your up maybe activity behavior, this were ago? X chase about

David Zapico

Yes. The -- between I bit quality of together. a And mentioned and in are a coming very prior premium. call in, the And private still that high. attracting a they're they're But the can public go to closer multiples AMETEK and for private advantage were assets, have multiples and coming matter. financing balance right getting pay difficulty its and a in sheet, is there it sellers us some some you an finance impacting because equity from gives potential now buyers if deal that markets for

Operator

from Mr. on from question Davidson. D.A. comes Summerville Matt next Our line

Will Jellison

Summerville. Jellison Will Matt on for is This

taking, future? you on So would normalized challenges diversification. you including organization supply the picture you're best chain mentioned call, to learned practices the year in supply of that plus that across levels when last Are the some you've you And bigger about more throughout want faced. reach the the even actions sustain supply chain supply chains that wondering, any there was I

David Zapico

businesses distributed their their between It's corporate they drive a units, several committed business model, I having model really -- P&L learned question. chain because learned we great our and business that there's and managers is things. running sound supply team. We those centralized the them our think a interaction good And fundamentally business

forward. that redesign time. substitutions electronics more manufacturers did that we whole probably matter. engineering and our first going this with that change and component is develop distributors qualified capability learned -- the both spend for they also and the shortages We closer We're We our leverage and is looking rate, chip thing through semiconductor one through for how purchase saw will to relationships

more to. it as of a navigating view opposed can That's dealing distributed a So excellent from challenges, with it's relying bit being fundamentally, on it's I we as model. We're And key that But one this direct put be said, we've through my to will -- change distribution. thing our little I is as results. area. business had these in did,

We decisions. capability these and redesigning, people engineering these businesses to qualified us help And solve strong component owning and factor making also find our good is a have key substitutions. shortages

answer question? your did -- that So

Nigel Coe

that follow-up, nature, that offers And extent Zygo made that increase meaningfully great. might than events more as like wondering Webb a wondering was highly the And visible what of historic was the was about I to it are Telescope, do you those content a like to if then visibility Yes, absolutely. otherwise the I that having have? business start the of catalyzes on that, point to orders you James

David Zapico

designing and optics really other in in mentioned the does market, think can stands developing community, research I thing the there there's couple do it. people really it out us. And the EUV of only and that it drive a customers I to

So of do thing And employees see the kind us improving already type our because we're customers that to positive they and they Zygo events also expertise. world. is well for how those drive to help of But us, known. our and see it

and So AMETEK. lot we does have help, like that a it around businesses of

Operator

online comes Joe question next from Our from Mr. Giordano Cowen.

Joe Giordano

it about just the the to incentivizing to is that you -- impact? globally? where that Or Just the isn't way are built curious, think this guys about kind think U.S. you Like helpful you do what Are is does as agnostic plant off. of how when chips, specifically? a the set we have

David Zapico

satisfy probably Wherever to to certainly is in more put what's and say in there's happening with going be a we're it's going get national agnostic. things we'll there. fair the But our I'd of some share to now it. And built general, have world, business in Yes. we're like opportunities, incremental security capacity at defense. our shot

Joe Giordano

through of market? by go Dave, any then, like kind outlook the in can And you changes

David Zapico

businesses. think growth were I our businesses. sales organic up very broad-based analysis had process expecting essentially They in up across quarter single And was be process the you Hobson, businesses on digits process and all across sales strong digits. for Yes, we're and double businesses, fluid And growth all particularly high in, process for to low the a quarter. our in Taylor take organic now that Zygo,

sales Organic that. we our in digits each up defense. up sales digits. & across OEM raised double and aftermarket, mid-teens were growth quarter, commercial sales aerospace and So commercial single with the for Total businesses low were segment. Aerospace & strong defense growth up across defense low were

our commercial, with high year, And sales commercial defense. businesses, the for growing in up power up organic if now defense the And grammable both high and growth single percentage notable sales business. & single excellent full organic a to in basis stronger expect now power power And but at in be power So look industrial our up we you business quarter, was A&D digits. on digits with to & our businesses in in our strength also. we mid-teens also be industrial for expect

that high solutions, raised segment growth. also. raised to single year really was both our also seeing that And then digits. for be And a So & the solutions, automation engineered finally, strong we

grow at all the are strength and year. to the we're rest the of single So organic for those of high subsegments an businesses improved our reflecting guide now digits. And forecasted really

Operator

Graham from question next Scott from Markets. comes Loop Our Mr. Capital

Scott Graham

doing just thanks that Yes, now. for so

number the You can in productivity you a the give us question. quarter and for expectation me saved just the Dave, the year?

David Zapico

was Cost in Yes. $XX million. the quarter savings

and that of cost getting We're redesigning a So them designed lot a engineering. things of value level. at these through good lower quarter. a And we're really some getting

is us the And number savings for the year, cost $XXX lot. million. So a that's helping

Scott Graham

No change there?

David Zapico

it's of and change. half materials. No of half About it's OpEx

Scott Graham

before. there's on that lined Could particular, of going half there's to It of sort went like acquisition directed close how deals? little bit second any? deals. gate the we be One was second lose think you on; a things of you this what you're even a closings maybe comment thinking some? color on half. different are we at you're more more -- perhaps where the than just a expect Did your than mean, of heard I've situation I couple Just kind me Do and longer in of You to a through signaling response have is you even at just more sort up sounds been

David Zapico

Yes.

feel positive things some bigger never that at happen You are can And having constraint with deals can processing types Scott. the and right are because now can some looking that volume change. within And I on deals of are and size we of has they're confident high. the and the tell and deals, really both we're But the the AMETEK there of deals that at. interactions typical things look

the year. fixed -- busy. people the the and are cash we busy half be about our think the into a busy, the differentiator -- flow, strong the to We're strong situation talked second deals. balance real of that's going we look I debt, So us that our as with with sheet, And get we're we for

Scott Graham

second Because than really The Could if the one bit better unbundling Just little I obviously, for that digits maybe the you year, full we quarter, you're ones half? did expected more, the and for us the a all optimistic more in in for may. all the on of of are second you those organic. four. organic tell on which

sort second the versus you're how quarter raises much second was what seeing the half? because in were So of better of those

David Zapico

rates one question. general, is across had the that Good In we growth I'd attention. the board. of second order quarter caught that the good aerospace market commercial area were point out a my in one the things The

the into XXXX. and positives So second I'm year looking of there in half the for some

Operator

line Mr. Next Brett question from Hardman from on Melis Research. comes

Brett Hardman

you're cost I forward. good seeing what in of So given inflation, you've your already on on terms price get a outlook particular just color to wanted of more in going but cost, in sense

this, but Sorry last X% impact quarter. missed was this if inflation quarter, X% I

will you supply is just while. the of for business components But as expect for wondering, we the I'm rest move impact general or that to in here chain the particular, bad sort be said inflation across do so of is inflation and continue a electronic Or to decreasing in increase? it You through plateauing year? your

David Zapico

like good things inflation, areas commodities. you are other Yes, in, and time, in But price the you increasing. are that wages really question. coming at have that's a is What like see same the decreasing some back

now that's effect it's predict. why sequentially went from That's stabilize quarter. I at to increasing. think but still now, we in difficult positive is net have But is back inflation Right costs. in points but are inflating, dynamics We're to maintain some going different in is spread. increasing right things the things So the that, and going clearly, It XXX are the still coming to that to where are basis happening are there some that still things X% place. X% net

the But good it now, you we'll quarter, we've and but about where that, that's to change next it. manage is. tell but -- that right So a system over got may

Operator

this will We the Kevin turn at for call remarks. I closing further have over to time. Coleman no questions now

Kevin Coleman

for Richard, conference again, you call Thank joining thanks, today. our and everyone,

webcast the As a have a day. of accessed reminder, ametek.com. today's replay and great investor Thanks a be may section of in

Operator

today's for Thank and you concludes participating. you, ladies This conference. Thank gentlemen.

now disconnect. may You

Kevin Coleman	Head of IR
Dave Zapico	CEO
Bill Burke	CFO
Allison Poliniak	Wells Fargo
Josh Pokrzywinski	Morgan Stanley
Nigel Coe	Wolfe Research
Brett Linzey	Mizuho Americas
Jeff Sprague	Vertical Research
Andrew Obin	Bank of America
Will Jellison	D.A. Davidson
Joe Giordano	Cowen
Scott Graham	Loop Capital Markets
Brett Hardman	Melius Research

AMETEK (AME) 2 Aug 222022 Q2 Earnings call transcript