Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the AMETEK’s First Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to Kevin Coleman, Vice President of Investor Relations and Treasurer. ahead. go Please

Kevin Coleman

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

results XXXX expectations. filings During differ may update disclaims or based future detailed making contained risk on may or A statements, be the will factors call, results call significantly references adjusted cause the are risk to any forward-looking any which and SEC. that this statements. Any XXXX be excluding of will today’s amortization. that actual guidance is various AMETEK intangible in to results subject from course uncertainties an the uncertainties of after-tax, AMETEK's acquisition-related revise made we forward-looking on obligation to discussion or intention basis, XXXX change and or our on with to affect

Reconciliations on the measures between then it questions. and begin of Bill, website. our remarks Dave press section today's and up can in We'll our open by GAAP and be with Investors release prepared found we'll and call for adjusted

Dave. to I'll the meeting now turn over

Dave Zapico

Thank to you, an quarter. good results AMETEK in first excellent everyone. XXXX had Kevin, and morning, start the outstanding with

order demand across and growth of another in led markets record sales solid Continued strong our diverse end set to backlog. of

and operating Our margin delivered businesses profit in robust the operating record with performance expansion quarter. tremendous

flows the Bison flow our of on Additionally, and year a cash that Engineering. & first we reported generated record portion cash of Gear acquisition

earnings we outlook of the full year. and remainder results XXXX, these the are sales increasing our for the guidance Given for

quarter turn to our let results. me Now first

X Organic niche single organic up our same the success XX% AMETEK’s year growing while of sales markets. and strong leadership percentage $X.X the were headwind. continued with our points X%. sales against added a foreign positions comparison. sales were Demand Acquisitions in also XXXX. on its across in growth initiatives First solid attractive low overall up orders over was digit diverse currency prior slight remains orders X% growth was excellent and at a difficult basis growth quarter organic Organic the quarter. million period reflects

X.XX for quarter positive over of million quarter book-to-bill. our quarter $X.X the in increase was Book-to-bill an the from consecutive with ended of the backlog XXXX. record end XXth We a of billion of $XXX

noted, first AMETEK’s a record exceptional. As was performance in XXXX. a Operating million operating the quarter was $XXX.X of quarter the over increase the quarter in first income XX%

record from of quarter sale core from strong up in a XX.X% gain in Core acquisition basis XXXX an dilution exclude with the XXX up our or quarter basis were the XXX year. points and impressive points in expansion each the operating facility margins were Operating group. the margin margins prior to first

in a to the strength businesses expansion above per high of of range guidance differentiation margins was EBITDA million were XX% the XX.X%. our a quarter to margin work prior and up and outstanding of great a EBITDA testament $XXX year model is the our over This operating of up earnings the our share quarter $X.XX of per quality $X.XX of first tremendous led and versus XXXX This with teams. prior performance share. of $X.XX, earnings our operating diluted XX% the

details let level. Now the group some me additional provide operating of

quarter. businesses is organic strong across in sales foreign of currency sales added our with billion. acquisitions businesses XX%, excellent sales geographies were to of prior delivered This the defense in aerospace EIG group. quarter. growth instruments and Organic electronic sales percentage up based our points strong slight with growth year and the XX% the $X.XX versus growth broad headwind with First, the operating three performance particularly up and

XX% up quarter. basis the in prior profit robust were EIG’s year. $XXX.X impressive year, from a versus points EIG the while a Operating XXX prior record operating in was profit income the resulting XX.X% million operating margins was up

results in $XXX.X first the delivered million, growing with versus with the sales businesses EMG's up Growth in and also X% solid quarter X-point organic were our strong & operating Group Electromechanical the prior currency The across sales quarter Aerospace excellent year, strong sales a the headwind. growth X% was organic notably quarter Defense and in quarter. foreign performance.

a year's was basis, operating in and On first excluding income up core $XXX.X acquisition operating were gain EMG's in the dilution first a EMG the margins quarter the quarter. XX were points of versus first from XX.X%. last million, facility margins sale and XXXX, quarter basis

All our deploy businesses performance working tremendous our excellence, operational conditions, changing expansion, on our growth are and colleagues. acquisitions market well. These capital quickly strategic and for acquisitions. the long-term So AMETEK us allow and AMETEK development of to new react market and all by elements to strategies overall businesses in invest global growth model, value-enhancing product

our for strategic to flow capital switching remains and Now strategy. strong The acquisition our acquisitions. primary cash focus deployment

active have attractive pipeline candidates, managing a and an this to We strong financial we strategy. of significant and sheet balance are support acquisition capacity

acquisition, Bison's market Engineering. technologies, for across technology announce within a food businesses, customized wide with markets I'm Bison expand control and leading provider including motion applications and presence motion deeper participation our transportation and secular helping most an range and growth attractive expanded use complementary applications, excellent & automation our recent Bison control enables AMETEK's linear wider highly an this within market. excited a of Gear power that electrification providing is fit offering is requirements. markets. growing is of product and Bison solutions with to automation, attractive strategic the in portfolio of beverage, high-precision existing

has based St. million. and sales in of annual Charles, is approximately Illinois, Bison $XX

growth includes our investments by strategy, of remain we product to adoption organic and initiatives. new sustainable growth investing broader ends, focused development. In ensuring on acquisition driving and addition growth strategic This has in digitalization growth making

celebrate our research, including great the and and XXXX, of who $XXX innovation we breakthrough marketing. million efforts development to opportunity. development in businesses, through and sales of now growth of engineering provided of recognize in driving the investments all Award. new Innovation is we technology This demonstrates these and growth For new is expect AMETEK award approximately invest One best way the product support expanded initiatives, AMETEK organic annually to work business

PLX control, reverse opening small high-end further up The non-destructive product XD enterprises, introduction Creaform's the scanning professionals engineering, segment. The developing handheld quality is business provider new leading attractive our offering expands for such and automated its and innovative most innovation of PLX. Creaform was a metrology and Canada, as a recent metrology XD of for breadth and based portable accessible new applications Levy, award solution, to XD measurement development testing. makes market technologies winner Creaform, in of

addition Creaform's In addition Creaform a HandySCAN flagship set the a added XD scanners their to Limited. also metrology-grade to XD the platform, Alete PLX, recently to new BLACK The latest HandySCAN scanner on-going new innovative industry team and devices. new Creaform products entire into metrology. for would to handheld boundaries standard like for extend I their and the push to to congratulations efforts my

of Now turning to cautious macroeconomic term outlook short in for We the the remainder the uncertainties due year. our environment. the to in remain

strong long-cycle company's However, manage given our and markets the ability model positions we continued across mid well and strength confident challenges. of attractive these capabilities, leadership the AMETEK to are backlog growth. us position and for record The operational our through growth in proven

and results balance our outlook first earnings year, for strong are and our quarter guidance. the the of Given sales we increasing

be up versus prior expect the now year, to overall up of to expected guidance full sales with mid-single digits, mid-to-high single digits our be digits. sales For mid-single up we organic

range last compared Diluted year up to $X.XX to of $X.XX earnings X% per the from the X% per guidance $X.XX, be for share in $X to is expected increase This diluted to year's now are an range previous to of our share. results.

second up of to prior X% quarter, we high-single year. to the per share, overall sales up to to For X% versus mid with anticipate $X.XX digits earnings $X.XX be the

In record capabilities economic margin had sales orders quarter. proven earnings an positions navigate delivered markets We flows cash allowed record challenging differentiated in cycles. The operating our solutions, increased summary, have excellent AMETEK guidance through us company's expansion, for and year. and robust strong backlog, attractive market-leading a and the technology to growth, first

growth. sheet us balance flexibility cash well and strong shareholder continued remain to long-term meaningful We AMETEK's deploy provide value. positioned for to capital Additionally, flows drive robust

will details we be your financial will it I Burke, will who of Bill? now some turn take questions. over the then the quarter, cover to glad of Bill to

William Burke

you, Dave. Thank

had performance and As operating an delivered positioning quarter, of a AMETEK outstanding first well Dave noted, year. in high record-level We us the quality earnings to the start quarter.

Let me provide highlights. some financial additional

administrative well as general First compensation prior to $XX.X and more return expenses spending. of from normal the quarter discretionary year as million levels up to $X due the expense, were higher million,

million in due sales, income lower percent was expenses up X.X% For quarter, to expected pension largely of expense due XXXX, XXXX's approximately levels costs. and general are Other XXXX higher of below modestly and a diligence headwind $X versus administrative income and of of X.X level and sales. to the be

the XX% XXXX. the tax rate effective The in first versus first quarter was in of quarter XX.X%

For estimated anticipate in to XXXX, differ XX%. quarterly either positively dramatically, we between we our past, continue effective tax negatively rates rate. stated or this to XX% the tax be can as And and actual from rate full-year

$XX we Depreciation was or for of be the the million approximately about in expenditures Capital full $XXX X% quarter capital million, first $XX and quarter the expense sales. in and amortization were expect to expenditures million.

[Ph] share. we million, to million, and approximately diluted acquisition-related $XXX intangible full $XXX the amortization amortization year, after-tax, including For approximately be expect $X.XX of depreciation or per

Cash the flow sizeable capital million flow of outstanding working a first first XXX% Operating $XXX was $XXX was record year. the in the growth flow XX% cash Free a sales. was the year. of versus XX.X% the versus quarter record million a of over up XXXX. prior prior also was in Operating cash quarter quarter up

of a flow While very was free conversion net income. XXX% strong cash

of March equivalents XXXX. billion, at debt from $XXX and cash XXst million. of $X.X billion $X.XX debt down this Total the was at Offsetting is cash end

debt-to-EBITDA was times. net of our was and ratio debt-to-EBITDA end first at Our ratio X.X gross the quarter times, the X.X

given flows. we very During Gear deploy cash sheet Bison and capital, and the of to strength well we acquired the positioned first strong additional Engineering, balance and remain our quarter,

capacity, initiatives. billion support with credit facilities in We to growth of $X.X cash approximately existing have significant financial our

year has to robust the start delivered sales expansion margin summary, In our high-quality business organic and results growth, Kevin? strong with earnings. exceptional

Kevin Coleman

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

Operator

Instructions] Davidson Matt Summerville comes & D.A. [Operator of first Company. you. Thank Our question from

is open. line now Your

Matt Summerville

informing your Dave, couple pretty sound businesses you positive A remind they us a morning. have go-forward to view environment? kind follow-up. may on how then consider questions. be Morning. your you you And Obviously, be of canary-like this Thanks, I the and what can

Dave Zapico

cost-driven of we a Yes. the And largely business mid portfolio. largely not --that's so our market. businesses, have we and canary. short-cycle have to was be a we've in motors But part Matt, used long-cycle canary our don't floor-care the what

our So across now is strength what portfolio. we're really right looking at

right So we now. any see don't canaries

Matt Summerville

what price-cost, And going where that's absolute like, you to you of about in expect you. just talk versus a with follow-up, QX Dave, you magnitude Thank the realization in can to were XXXX look XXXX? respect and

Dave Zapico

inflation. to Matt. Great that our offset pricing first Right. question, more continued In quarter, than

was Our X%. a X%, more about than pricing bit and was inflation

So a expect XXX bit. we had a spread to pricing little for basis points. the a than And the full incremental year, moderate we of more

we'll think entire X% get the we So for year.

the in. AMETEK So the results of the -- position portfolio leadership our that and in to highly product the differentiated operate niche markets and nature speak we

on and we're to positive pricing, customers we're adding pretty our we're So value also. value, getting and

So for some we think can continue it time.

a moderate can bit, a inflation while, outpace going it's for to here inflation may we price. and think we we with be While think

Matt Summerville

Thank David. Perfect. you,

Dave Zapico

Matt. you, Thank

Operator

Poliniak moment comes from Thank question This Allison our you. for next of question. Wells Fargo. One

line Your is open.

Allison Poliniak

morning. good Hi,

Dave Zapico

Allison. morning, Good

Allison Poliniak

have trends I about did macro. the Obviously, but any seeing? what just talk driving you're know of little that view you cautious -- just pretty Dave, canary bit that for cautious terms view, really solid more of backlog in a mine, Thanks. say you I guys, that's you the don't the in and were results given you're would you, note, coal just Can some noticeable today.

Dave Zapico

balance in but our confident X.X. still the in macro That's remarks, And pretty cautious in the X.XX. bison if we was it both year, you the And and we're for environment. in prepared strong. risks take the given the are as early we book-to-bill Yes, given of our the guide how year are was It mentioned in acquisition, out global and groups. positive was a I

is backlog levels. over historical XX% annual Our sales well of is above normal

to positioned well pretty we're think I year. this perform So

portfolio, the patterns. mentioned of that seeing out. our long have But returning mid good. And look some it really cycle. comps. difficult when have of We're And some also play across is chain an you ordering feels our the that EIG, starting there that we're like we're biggest feeling business, accelerate. to and part supply now to normalized is improving We is that expectation we and more And we're

pretty we're So good. feeling

Allison Poliniak

Great. And of you're then, Thanks. reasonable more Any M&A sort pipeline, start on becoming color seeing, are you for nice guys? provide you acquisition the with the year. multiples what Any to there? and bison thoughts can

Dave Zapico

the with and come in like capability there years strong pricing million like deployed Right. That's there. the our excellent has differentiator with and a a and like wide an acquisition balance in really is on But our and continue and question. very deal. fit more deep a We We our attractive pipeline And candidates. And And in good feels have our with position great feels it provide filled it pipeline. with business. to strong we coming our capabilities it. expanding sheet broadly, with And, automation bison quarters we bit. it's that about talked And $XXX very, our we're strategy about pipeline. a

pricing done that and the years pipeline of developing have to going many we're in with year. on for this coming that -- optimistic work fairly our deals, success some we've strong the I'm

Allison Poliniak

you. Great. Thank

Dave Zapico

Okay, Allison.

Operator

question. One of Markets. comes Deane our RBC for moment Capital next from question This Dray

line Your is open.

Deane Dray

Thank morning, you. Good everyone.

Dave Zapico

morning, Good Deane.

Deane Dray

because can got we and markets segments. called you both the out tour and with Thanks. defense take that Maybe the can maybe key end start arrow in of

Dave Zapico

Right, right. Exactly Deane.

were excellent quarter. segments and XX% particularly and the an the all full and positive now and first really our and overall segments, both defense to defense strong. be sales organic year. the aftermarket Both A&D up to with aerospace had And the increase across defense commercial start we mid-XXs commercial growth saw the business in strong organic to year our market our the given tailwinds, across but And segments. similar for to Our were year growth we and sales up end our expect start

Overall sales offset last And of key process, end including to headwinds. And process being gas. Process. year. XX% acquisition to remains the demand digits currency similar organic We solid be up Organic by growth expect expect oil Next, looking continue for across for largely growth research, to for up increased as XX%. market our sales I'll quarter. Process was in to go quarter the and we the medical, were sales businesses ahead, had Navitor, mid-single in we year, end strong foreign broad-based markets, and the

And the mid-single-digit our from This RTDS. our low organic moving our to similar segments. Industrial first and up growth growth continue was Industrial quarter driven in by low teens. we segment. Industrial organic Strong with the growth Power single-digit across & acquisition, results And Power Power expect growth for both contributions businesses overall & sales with to recent & in XXXX, expected

and And Engineered of given and first finally, our year line & in comparisons sales Automation our in quarter flat expectations the were Solutions. timing shipments. prior with customer Organic

Solutions across Deane. Engineered XXXX, continue to Engineered we with for of all & solutions a up business. mid-single That's business be Automation to the organic & growth expect digits similar rates For company, sales around our our walk Automation both

Deane Dray

Allison's question is a you. And That’s normalization and actually all question supply follow-up of a normalizing the helpful. chain. Thank around really follow-up to

you you on How the back said maybe Bill, that that, was when case, so for scarcity. in expand spacing has recently time, be anything could because size? at before coming of smaller out what you but this you and And just buffer Thanks. -- will out? orders to any are played anything maybe releasing the in more -- if customers bit on And order inventory? just normalized it's inventory buffer just a now product -- So it patterns, releasing

Dave Zapico

improved, we're out OEM-related to end there And The out. supply more ordering times customers And to is and back chain businesses. dynamic that normal. normalized lead our has because now aren't comment a in patterns the market play that seeing that it -- more Yes. the our early plays just ordering return businesses are I'd than

but little communicating a than So quarters for were we've EIG, more in expecting. we been what EMG it's several

our backlog. book-to-bill -- we're normalization overall, both times. performance. lead of back We is just the And in We're with and really -- getting pleased our very record with pleased to back the normal getting very was groups, to up order

William Burke

but bit add going the see expect the of you're we've did year on little inventory as release the And balance the inventory quarter, to in in the protecting we hand. in progress our we year, through Deane, case from a perspective, we'd over that right say, so, enough making last and inventories just as built of or had up sure that you customers we

Deane Dray

maybe would seasonality? see in flow just cash result above conversion, we free higher And that inventory normal release some

Dave Zapico

we're benefit as inventories free see will in flow, it's going working continuing be I a will to in being -- would it you XXX% release think XXXX. grow we'd which for expect overall be think that to capital, the -- a the of to which cash business, area all but be I the requires

Deane Dray

to great That’s Thank hear. you.

William Burke

and we cash conversion flow cash first record quarter. in the free record flow, Then, operating had XXX%

as we to to benefits see our think the flow. in normal, So back cash business getting is you're going

Deane Dray

Thank you. That’s great.

Operator

Thank question. Pokrzywinski One moment the comes Stanley. Josh of you. This from Morgan next question for next

is Your line open.

Joshua Pokrzywinski

I on Hey in just morning here guys. want to little dig Dave, bit good a throughput.

you you revenue sizable but beat. backlog quarter, So had built pretty a this

or So particularly to ramp into the news. maybe good kind terms how ability at, other I EIG your an of that's of is own the willingness But should based of eat revenue about in on where backlog? there side guess think that your we the own further of guess, on I you're kind supply is capability to

where want given through own the that should backdrop? think conversion year? like kind just Or raise how of this be? your Is higher about you'd to cyclical you sort throughput to the or Like we of backlog do

Dave Zapico

Yes.

recent at but expect convert the to to balance I'd on of strong EIG on issues the all with of is profit backlog EIG performance we're more. the cylinders. be acquisition the expect to And the long-cycle as And along year, business. lower typical. one have still growth, a of fire in seeing margins. has And last of it's more year-over-year And of happening you're view, pricing, think just And bit Abaco in EIG the strong end quarter also they're from year, I solid along been board. year. stay in would my Navacar, a excess able strong mean it excellent. to it's doing things the starting I I is little our resolve, supply very for just these in we acquisitions And the and the well. really for a RTDS is that's across with did

And really we've our foot it feels So off good for EIG. think don't I gas. taken the

Joshua Pokrzywinski

Got it. just on I business. guess That's helpful. automation And then your

Is have gear, some this automation the You in into where seeing record of different backlogs big the and projects folks things of there folks? from fit the that business? the that on nearshoring, like those value as same kind well. chain? out more are Are sitting driving there's mega mainline controller, something you are that you orders, as Or

Dave Zapico

precision it's control. mean I in we're No, motion similar.

So a automate diverse we're relatively that about can we example & really Engineering fix they're things markets. about. perfect bunch acquired, mean year that's and a backlog. in that quick is automation we order. and moving something Gear of we're But have of factory and We're end Bison to what limited, And in business they you're of the talking I a just end them. markets. medical And capacity

after of electrification automation of synergy, requirements freeing capacity with reshoring same cost are spot. to on and a growth provide a us sweet time, the it's really lot our at and And but drivers to go business up

the improve we So capacity can we businesses, -- largely our in existing Bison. really have while

in drivers secular saying good backlogs. automation with growth So that's you're line markets strong in there's and where these what

Joshua Pokrzywinski

guys. for Excellent. Thanks have you all I

Dave Zapico

Thank you.

Operator

comes Thank from Stand Research. Melius the Wertheimer by Rob question. next for of question you. This

line open. Your is

Robert Wertheimer

were to execution circle where to very M&A wanted one have including, could developing it out the a that I strong market, one very called time. the well peers back some positive comments best I of of your be person ever. AMETEK call think, So M&A, kind And very

there? quite feel they changing about the general are So down, think dynamics the I I'm strong, your prices in coming curious indicated And M&A markets. on you if what's

Dave Zapico

bit. M&A in first overall The down market was the quarter quite Yes. a

to of a credit market is and of strong, said, overall are it's now. acquisition A And strategy. $X.X are private And good. Bill capability. exploring And we're we're -- over headway. equity it. the active opportunities level but you what that our really lot billion businesses we cash And very the remain pipeline self-funded not financing facilities. are is a a largely active financing some lot have, So make we cautious as existing of now, buyers But because and meaningful right have less of in in of of

thresholds are about a aspect areas, our future. good we're working the with. this And for also the to we financial our opportunity we'll companies excited stick on And the And it's capital recently a we're are we of in to in that acquired. very of our our us. provide We're So to returns the that presence delivering with differentiate growth They use very attractive us growing strategy for we've orders. level we're and to important companies performance excited strong traditional want deploy. --

same it's has in think flow a strong of buyer the at position same we're incrementally sheet, I the setup, viable we're a deals. better a an cash balance has that time, pipeline and that has because So strategic but

Robert Wertheimer

Thank total the you sense like sense. on of your go a logistics cost X just little in different in whomever? And mentioned I'm pricing curious a a then in to happening some little Have it or dramatic what's of down give to bit comment us us sense breakdown barely Is maybe towards up inflation? you give year. more makes there. really or base Great. of seen the to X, just areas bit That phase a end you. follow on, of direction, the

Dave Zapico

Right.

about things costs, other but our logistic inflationary We're like commodities, costs seeing As and was said, decreasing some wages and inflation costs there's in X%. I some travel.

year sticky, inflation and it's we're bit this from but what net a it sure, there's So we for think seeing. moderate will

portfolio with in of our that companies. we're but well deal positioned -- our with pricing So to

Robert Wertheimer

you. Thank

Operator

question. Nigel question of Coe Instructions] stand from Our Please [Operator next Wolfe for Research. comes the next by

Your open. is line

Nigel Coe

we February, came put plan, which more back XQ if morning everyone. so untypical, is think a stronger, you good [Indiscernible] bit Thanks lot than normal. the of to but sort I the a late not when together in go is January, obviously, upside it

talk if an stronger. better to I'm the So what inflection saw you wondering perhaps in defense. was maybe China about you just a in Curious upside? lot expected. Clearly, you than surprised a A&D saw maybe coming lot was if

Just driven conversion kind of maybe mainly walk or was chain And better. about supply talk demand off driven? customer it backlog

Dave Zapico

Yes.

first and The point just driven. was overall, backlog was our also positive book-to-bill it groups in both driven, not order

point what better. the is changing chain getting is supply second The is really much is

to we're convert XX% was And So able backlog. mentioned China, it up you on particular, about more growth. in in

as So was good grower. lockdowns, is our COVID there recovering developing And nicely it a business they're from there.

book-to-bill, all had and geographies. the really we We we're convert it's both. on strong So across backlog good

Nigel Coe

there's about no No, question it.

about that talked now and you'd expectation burn You the expect some year-end. to backlog between

that chain real supply which You Have of the what you Did starting with about natural seen happen April? backlog sort very happened see in quarter? David, is March, order burn we you through to patents changing, improvements. second change, on time. the that Curious in Are talked already?

Dave Zapico

of started It's -- in while, users so last lot customized a last But seeing have year, out year. for bit We a because did We and not directly been see chip And OEM we we order going OEM quarter. in it. and much our the on it's patterns see businesses. we Yes. over we end expensive started calling to we're the products, selling little and to like much it that. they things have did businesses, pretty our see a aren't it to mainly

Nigel Coe

to seems I'm queue end the close then here. And Great. Okay. it of like the

The control, size. throw a do motion I'll some these bit more more become more one of think control? for don't acquisition a seen to deals, kinds can. Bison in time control a the question I maybe I of motion player scale of maybe motion Is we've there X desire of if deal, So or maybe the

Dave Zapico

And the there attractive to a I we business few very add be are now but technology has need at and a right And would a really has there characteristics. I don't it. us. be was the value. -- looking that Bison businesses fit business that not think we It they and a capability is go And to price. after. that been value add successful of improve able applications and We to the to to we fair the have we're go other have desire, think that just niche, substantial to It have. we after all can more those address can

and to at. And really in fits looking several for opportunities, it be there So offerings. the -- solution that really businesses looking and our we're businesses opportunities like to are adds showing we're are toolkit value to we're we're And other at. but our -- right think going there I going that those wait And are up.

Nigel Coe

Great. Thanks Dave.

Dave Zapico

Okay. Thank you Nigel.

Operator

Inc. question Please This moment Glynn of go comes Co. & ahead. the question. Oppenheimer Christopher next for One from

Christopher Glynn

of Kevin. good cycle. you Amazing X.Xx at about point thanks see ask anniversary. as hit But I this did organic Abaco, in supply the chain book-to-bill Bill, morning the Dave, to X-year to want kind the the Hey in just

integrating, Just to it project? of scaling And getting the years that business. it is nice X of is know for overall kind an update here in, Or episodic? a past mode on kind would curious you in

Dave Zapico

electronics, We're the The definitely it's crisis right we No, we augmented episodic. all areas. right and chain business. strong. bought not I that first management the is the market work back of after to had we get had -- it, through in we you go mean, supply if really in now And we're we've in the team. gear with And that. think defense I also

a us going forward. contributor that big and accelerate business for going to So be is

Christopher Glynn

parse about that, to EIG, you to And another? continue? expect first of could mid-single-digit at from organic outperformance on quarter we Great. kind kind the of the one you're relative Similar that two do kind outlook, of the segments thinking how

Dave Zapico

Yes.

grow groups good both digits stronger digits. grow have think a to both the have mid-single chance I groups a year organically. for to EIG, full bit the mid-single but EMG, very potential little than

Christopher Glynn

you. Thank Great.

Dave Zapico

Chris. you Thank

Operator

next moment question. One the for

Bank Andrew next Our of comes from question of Obin America.

Your line is open.

David Ridley-Lane

for on Ridley-Lane improvements to Andrew. This of is Lot morning. chain. supply David commentary about Good

down Just quarter, what you about revenue business? Aerospace it messages growth an a your constraints mixed just update specific could very to more strong availability heard had this chain. about component in go revenue. Obviously, and We've little, on Aero's supply be

Dave Zapico

And The entire grew chain organic as in supply improving the aero-specific is growth quarter. chain mid-XX% supply is. we our

have team We management good business. running that supply good a there, team a chain

is business So was that took out it feels like year that on and area, That segment. our strongest we the accelerating.

right -- what now, always different And looking are there at. we're markets. So in Aerospace growth the is see accelerating but challenges in I us

David Ridley-Lane

that. And commentary reshoring-related Instruments there any would you Group, demand. point is very Can re-acceleration there? that then you're projects, Are you that for on that helpful identify actually Thanks themes etcetera, certain secular Electronic to? seeing some maybe are in that interesting the

Dave Zapico

More niche secular the opportunities approach of -- is there and lot driving our A than our focus. it growth. secular are

are actually in quarter. semiconductor is the we businesses We the niche In have our Semiconductor up very where after area go the semiconductor that, well, first quarter. most flexible memory up examples. businesses market, of are. give the And opportunities that it was X% that sales, And about are couple of in the down. I'll reason was first you the some They a in participate aggressive. which is our business,

also in very strong which research, We semiconductor participate now. is

very just the were optics In within semiconductors EUV strong.

the and So can that at years, we're for same weakness adapt, and agile is growing. been doing time, in there and we've the very some We're market.

when opportunities look for you whole the So is across our I are agile. big very We're I sure. thing, growth businesses there think think, that

dedicated to get markets. lets after distributor don't that with and Our And stopping. them businesses I see model management us teams

David Ridley-Lane

Thank you the for details.

Dave Zapico

Thank you David.

Operator

from Please the ahead. Michael of next question. Cowen. for moment One Anastasiou TD comes question go This

Michael Anastasiou

There's commentary as late Can markets. areas the briefly specifically plays in life my different year? science-related area you medical you your that appreciated. portfolio for morning. of Thank and the question. would and some for where outlook for destocking describe end color Good been just be taking Any your in of

Dave Zapico

single about it XX% growth And digits. full up mechanical The and quarter, the business. market components was of high Engineered teens for And be business in it Sure. also sales we year, the medical in to high our our strong our expect now. with is up Rauland

So had in to because in medical the to growing nurses. we're right the really with Rauland, David improve we much be I product And space. of primary that the in discussion like just their efficiency about niches expect are it's

long make and nurse I've States as more in call have nurses shortages the United nursing systems efficient. alive, And been Rauland's as you

dealing of that out we Rauland a pandemic, area. and spending successful on and very coming So in shortages, lot of see the with has great the products

our EMC a components devices that single-use-type and in procedure, building for accelerating. And single of that business we're dealing we're lot is business, with

are those we and doing of teens make businesses the up large businesses of part core were that both in well, medical our quarter. high the up So

Michael Anastasiou

Great. Thank you.

Operator

our Thank final you. One for question. moment

Our comes last question Baird. of from Joseph Donahue

Your open. line is

Joseph Donahue

Hey guys. are Rob. I am How you on doing? for

Dave Zapico

Good.

Joseph Donahue

that following spending? R&D you kind it expect on take earlier. rest strong, you on through The Could we Should kind had the to commentary year? stay just of think, up the temperature the of of you the

Dave Zapico

smaller semiconductor, and nodes. technology technology there's now relation lot we're smaller from I one and for new a the to to -- happening In think -- transitioning

where one semiconductor I So it's area research the the of seeing that Again, in another strength right think in now. we're we're business spending, our areas niche. strongest and right it's of the

Joseph Donahue

difference segments you. be then growth. side, could about? on anything Got And this any below we Is EMG going on there our else bit but be across thinking the improvement little two normal seasonal just that in a supply or should looked

Dave Zapico

you was think growth EMG organic X%. look the at up I when

had a good, quarter. So they good

had You currency. headwinds some from

still faster And grew so EIG sure, but really for solid. was EMG

Joseph Donahue

you. Got it. Alright, thank

Dave Zapico

Thank you.

Operator

back turn concludes closing Thank our for segment. Coleman to now Kevin over it remarks. Q&A you. That I'll

Kevin Coleman

Thank everyone, conference joining you, you, today. Chris, our for and thank call

webcast section a of great a the reminder, day. ametek.com. replay of Investors in Have today's a be can accessed As

Operator

conclude And in does This program. all your the participation thank for conference. today's you

now disconnect. may You

AMETEK (AME) 2 May 232023 Q1 Earnings call transcript