VNT - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by. My name is Maria, and I'll be your conference facilitator this morning. At this time, I would like to welcome everyone to Vontier Corporation's Fourth Quarter 2020 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations. Ms. your begin may you conference. Curran,

Lisa Curran

Chief Good Thank President for Mark and and Dave and you Chief Financial everyone, us you, Morelli, our on Vice President are Maria. joining today the thank me and morning, call. Senior Officer; Executive Officer. our Naemura, With

otherwise decreases noted, adjusted are our These the normalized also call. the website, increases presented the to Financials. Financials. financial measures We financials on relative financial these financial heading for today's reflect measures year-over-year measures will www.vontier.com, Investors estimated posted SEC website or unless by is heading normalized financial non-GAAP required supplemental present on under stand-alone section non-GAAP our the of to public Regulation under certain the supplemental available that costs. note on Information G Please relating data company

certain During or year-over-year. additional materials the of more the significant that supplemental references factors period-to-period will impacted All we that The metrics describe are year-over-year and performance. financial to presentation, performance. describe impacted factors decreases year-over-year increases

we forward-looking the to assume statements they as to any meaning cause These securities any and date or regarding With forward-looking to report that risks over differ we actual XX-K. federal in today. forward-looking forward-looking occur will the results to on regarding or obligation differ like from are the turn future. within annual only I'd Mark. made, including not the uncertainties, forward-looking may statements SEC of from statements expect materially to we statements These is that subsequent subject any the our a call call, actual speak in forward-looking number factors statements that, we update and these available Information of materially do statements. statements filings and or these laws, Form will events may the anticipate are and developments During that make of results make might

Mark Morelli

our to everyone, Lisa. and Thanks, fourth welcome call. quarter morning, Good earnings

marking of get recognize the truly operational end caused year. the challenges. unprecedented quarter, for want economic, extraordinary results to pandemic we the I a considerable to personal and COVID-XX Before performance, our team's The

so our continue results. the possible do employees the the who and thank did their it tireless partners we to Not made through headwinds, front us And of well and through only making excellent ongoing work dedication of so are to want and as actions the pandemic. I first posting business opportunities in most significant as with team

reflecting continued as gains business strategic XXXX. accelerated XX%, Matco. A points. is single-digit market and the adjusted excluding year flow core of another at as quarter, core the greater double-digit at EMV adjusted growth the we point Business key our as focus growth we the drove EMV growth. Vontier quarter the System drive These of share expansion team and results drivers The finish top-tier XXX Our basis of to free earnings outstanding X.X% growth of to underscore portfolio than delivered a secular margin cash revenue resiliency XXX%, and lines strong operating of demand continued of of Furthermore, with outperformance. core product proof that delivered ended Veeder-Root high and of across still quality strong Gilbarco in backlog the of adoption when well our benefit even conversion

we structural also single-digit high previous for product growth portfolio only processes profitable lean and development. efforts management, market on will growth talent capital improving portfolio drove adding were the working growth able productivity, and control Importantly, to deliver launching outlook, progress for to core sprint results revenue accelerator focused across growth platforms, to opportunities. insights provide which continuing making Not future innovation investing by position we cost these into we benefits and our continue XXXX. exceeded and realized to which the while our ahead steady also We're deploying our gain

strategically across markets. is positioned portfolio attractive Our

for This our expansion from growth X% outlook of operating core XXXX solutions, Vontier expectation, on growing of a As of a We of regulation more the favorable includes guide, basis With and core we economic $XXX efficient revenue view by clean, ranging remain greater to core significant greater increasing balance mobility acquisition and initiating the and decline to XXXX $XXX through million. full year stability stronger than towards which our adjusted building million secular headwind cycles. margin will growth growth capacity. utilizing our better, includes enduring evolve sheet focused deploying are and XX drivers a X% need points. EMV our of provide growth business even that, our model

growth expected is more half. Excluding despite the comps second in be revenue impact, challenging mid-single our digits to core EMV the

year. and and first impact dynamic last of coupled the demand quarter accelerated solutions. Additionally, in year we half, EMV of XXXX our headwinds second per in due demand In growth working guidance ahead year in and the earnings guide in the halves, from QX, of equates capital recovery regulatory adjusted mid-teens opposite share for per EMV $X.XX. the of second full results April net All half favorable pandemic to benefited adjusted we of a conversion second in flow the the half a X half cash XX% share the amounts to of growth the deadline of we with Where earnings anticipate comparison V-shaped basically of first the of XX%, strong tale than adjusted very sum, continued reflecting full in as performance. for XXXX free range have payments decline a to tax this and range. to approximately greater timing a from resulting diluted expectations The $X.XX this reflecting Mexico adoption the

identified Navman. progress impact advancing simplification help a to I'm sunset. anticipated the and regulatory further imperatives and as of number such Hennessy the As actions well as initiatives, strategic and innovation I outlined We've and continued EMV growth and businesses important markets, in confident we These high-growth in made improvement these will deliver. penetration October, profitable Teletrac in offset we of initiatives include productivity as

our than adjusted ability such, year to will top growth earnings quarter first assumptions to $X.XX, core diluted points. turn and our our Dave results. of impact net to away. take guidance in basis Dave core guide that, you high the I'll drivers of XXX inflation. also OMX earnings and it full of Dave, financial guide $X.XX it and includes single-digit from As per of share than over which greater offset provide revenue With through EMV remarks. and to assumptions line the adjusted our walk initiating the expectations more of XXXX reflects key his We're

David Naemura

Mark. Thanks,

markets driven prior Our period. strong $XXX in growth experiencing both to experienced earnings that GVR in adjusted demand Matco in EMV driven core $X.XX $XXX fourth rollout This was growth double-digit led net expansion the increase in of The primarily share through, with to return Core year the adjusted at million, through by the $X.XX growth, in we margin XX% volume translated QX. in points Mexico fourth net with regulatory-driven increase for earnings in fourth quarter growth. third the continued strength to mid-teens earnings And from in core to in of America, operating continued strong the quarter compared Matco. growth double-digit of strong saw quarter the and million and per by were quarter. X.X%, recovery North year the The continued which we XXX basis posting fall prior was the and demand period. of high-growth the also adjusted an quarter

the had X.X%. For core year, full of we minus growth

and expand the power we resilient XXXX for markets full that the second serve. in nature to of The continue underscoring year, However, half we experienced the operating of sharp our reflects still they gross full margins the VBS. recovery of in businesses the

QX by demonstrated Our core growth. enable gross demonstrated prior which to the year, quarter cost similar in to was and team's $XXX adjusted our year more fund primarily both highest application delivered operating XX operating management of million cost environment. the expansion of to the this expansion, growth for to function we operating have dynamic we the in that basis margin profit positioned We period, to driven strong margin of $XXX compared exit continued contributed XXXX through sales profitable million and fourth expenses. environment a performance VBS cost strong points, us of and remains prudent to priorities the a continued And actions in have we for in what continued the although well in

with quarter. is And seasonality. of performance growth in to while XXX% in strong, translate cash flow a was line QX conversion the our $XXX strong through adjusted flow performance to earnings in free it normal Our of cash with continued million,

Further, increase on levels adjusted payments, needs XXXX $XXX in flow with this pandemic year create only inventory year-over-year A net leverage in at flow how adjusted have generated is X our factor and free full performance conversion a operating the Nonetheless, benefited For cash underlying XXXX, payments. our cash of free withholding cash this pleased of cash million spin outstanding extremely of to or year companies executed teams which work we XXX% remind working you of key well driving will function flow free This with to federal capital free the full lever was we biggest some environment. cash I basis. we driving whereby likely with flow we anticipate to the flow demand, XXXX by management. exceptional income top-tier throughout performance XXXX. to working free that performance. levels drive XXXX this will Ultimately, in working the tax And flow expect a pace at the cash while capital capital timing XXXX performed historic X are many folks exited increase capital maintaining will We was to low. a from working a of the will metrics, headwind in see earnings. VBS

continued high-growth performance Mobility of Looking from platforms. of X in GVR our had to low growth the by double-digit line growth X.X%, and we top momentum strong at revenue EMV where led markets. core demand see technologies

environment online record franchise demand X.X% in the strong strong demand demand we and core accelerate in Mexico, XXXX. driven for continued technician to have in the markets, of continue experienced we our diagnostics QX, coming the strong as remains platform, the in strong Mexico other including security and regulations are the broadly historically repair saw our which main return we parts technologies continued In high-growth And India improvements feel positioned The products growth grew Overall, double-digit to employment and was low growth saw drivers. with that Matco. Matco being our performance markets. lumpy, sequential growth high-growth a well net mentioned QX. driven of we we by are from and saw to at out business, more fiscal additions by base we anticipated, new As healthy. and previously mid-teens with having rather

April in and excluded We grew driving orders the in orders revenue quarter developed ahead teens declining the we recognized to the in actions we of with in both we quarter, also total the with of platforms. backlog mid-teens exclude year from in the grew which markets, after work $X.X growth growing charge for would Last full year adjusted actions markets high-growth Order of total, XXXX. our both million, begin our in saw Matco low digits our operating adjusted in growing operating that of the from to which course and deadline a with as momentum improvements. $XX is in QX, charge QX. we in markets I QX, America upcoming We GVR and operating with high-growth of a additional XXXX strong a second and profit. exit operational for We Matco noted exceeded digits mentioned the of net at the most anticipate continue will North during generally through in mid-teens. And restructuring sequential high EMV targeted series we a profit. million growth single ordering improvement significant growth aligned regions. over return mid-single around did row

Before XXXX to through walk our will Mark, I EPS back bridge. turning it you

that the QX EMV initiatives growth these guidance, combined earnings about year XXXX by profitable a costs headwind we'd and restructuring As actions of actions, Also, out completed expected of growth. return those At driver the more than expect of Mark during our will be of price our $X.XX. in XXXX, will midpoint with took is the easier an the of in course that of the QX offset key an are temporary along of the mentioned, offset to last benefits be impact of compare with of other measures. cost initiatives, and we the

currency expect approximately favorable. be to We $X.XX

Mark. Lastly, primarily rate. $X.XX headwind a below higher a that, back to are the line and turn expected reflecting to $X.XX, it other With I'll about tax be items to of

Mark Morelli

this, Thanks, continued was for We're growth rising the of welcome presented building into realized many of path a To substantial of as not occasion XXXX through we jumping about Dave. a delivering There's execution out and quarter as head as we nearly your excited off durability on all proud sequential is The our working these our since that our our the resourcing programmatic of productivity, environments runway and year but engage of springboard team all for to we XXXX ESG to last strategy. forward, lot long with We in business working momentum, only we've our no invest with including and into stewards out challenges. wrap and a in stakeholders energy capital a our was point question I'm that with metrics, capital. our an historic certainly economic to safe a high the of future. towards efforts operational multiyear cycles I'm opportunity separation and and transformation employees, year. this since you XXXX. to creating past putting proven improvement opportunities. also important to up, progress made initiatives model partner

our as the and there we are believe is year. well that defense be a highlighted, Dave the best and for As progress comparison are ready much battle-tested, while the through offense. work positioned to growth done, dynamics is And good we teams

remain and value also of will in markets With approach. and to and We're organic disciplined the prudent in and recognize optionality, to invest for of We remain inorganic opportunities turn evolving secular and over aware our in continue shareholder this decision-making well term. in like to unlocking the that, the back the our hyper-focused drivers creative Lisa. long on I'd rapid capital value environment. structures call And we

Lisa Curran

concludes That our we Thanks, are questions. Mark. formal ready for Maria, now comments.

Operator

Our of comes Instructions] of Coe question first [Operator the from Nigel line Research. Wolfe

Brian Lau

If the improving would great. just to the an thinking growth? outlook introductions what macro for into then just specifically Brian also, in India, Nigel. Was quarter, maybe how the are geography drove 'XX? new is we access that? That backdrop and on sites about product And by about that This could or GVR talk things in like it be you and

Mark Morelli

India returned growth. to Happy Yes. do so, Brian. Yes, to

as serve really a there importantly, well. up very that's even marketplace. called so and market, the as been good Latitude, well know, As we've the things, out. kind impinged more But backlog for it's of been got customer got access will do installations. we But to COVID of is tenders, off a in number into doing kind a responded the business. of It's by picked a we've so product I being well of great the positioned can It's you lumpy mentioned, them, big site, we one certainly, sure. you think that We've to tenders to well. a and And there the deal

continuing high think unique, to part of growth. our markets, position single geography, To mid-single also the capitalize was kind that Western look at when had David as -- developed high and of in in think as a sequential when North single grew So we're the is to on the the you there is America markets, that's at was walk a up grew to driver and sequential improvement, also through that, And question beginning India as to a through, well you play the of growth, get down. played and China I about I mid-teens great had looking Europe that's if Matco digit we're developing QX. see. bit The great secular and sequentially, second there improvement. GVR the then you at little look in was was which because digits. Mexico that kind said, world, your India around digits

Dave, talk to about So want XXXX? with that, you do

David Naemura

next compared saw this, frankly, EMV or Yes, the some with dynamics year We the strength And that's issues the we really America-driven with XXXX, some about of are to Matco. and year both we'll EMV, those that some have talked North compare great. XXXX. to of and of

And see next North growth -- high-growth the U.S. when and and anticipate those we driven developed the so do look America-centric. we'll from growth With in as EMV markets growth of will the outside headwind think headwinds U.S., some from the coming compare areas, most being in to continue of outside but for see we offset, well. markets be outside forward, we of other and recoveries including year that, the U.S. those the of more the

Operator

question next Citigroup. the Kaplowitz of line from comes Andy of Our

Andrew Kaplowitz

on or like to guidance? You business obviously could to XX%, Dave, It seems Mark closer in your you're what's again QX. your simplification which they work you reported into using update strong VBS in incrementals guiding on baked 'XX us QX. like look and were did

to XX%. I think before us think more about told you've

than reduce So of finding complexity? increase we inherent incrementals forward? businesses? are faster to Have higher does thought smaller mean opportunity you more going your profitability And as that some can in thinking about start increased you you productivity you

Mark Morelli

of the really the areas works, where application through VBS and have about uncovering tools separation And question. digging more I focus initiative we're this here is Andy, really that really simplification can that love we opportunities. really deeper that into our ferret shows that I we Yes. What is do out the how that. of better. and the using And found we portfolio we kind is think here

see beginning through. coming of I think you're that some to

get we our think next encouraged see some we these fully very of I'm backs opportunities. as I by behind into year what

to very But I'm put encouraged I excellent I an there's we're seeing, the runway think guide the and ahead. out terms on I'll net-net, numbers guidance, total opportunities just we what leave it of In of think there.

Operator

of Our the Mitchell comes Julian from next of question line Barclays.

Julian Mitchell

the that you'd headwind think had what versus also, very, I from And XXXX? narrowing a Maybe just just said year headwind assume in XX% I sort you a high in this before, That decremental EMV margin, question maybe do think, said $X.XX plus. we implies, what bigger very a around a 'XX. of you'd of that? And headwind EMV drove high

check Just if misheard double wanted that. to I'd

Mark Morelli

Yes.

Let too. and the question, start Dave, over turn with I'll it me -- I'll to

a little think first getting So of I all, better visibility. we're

kind us of of So is is to for difficulty $XXX good the think a the for against: that to us tell. this million But to the to million $XXX certainly improved One bit outlook adoption on an narrow up range that news. really is rate hard is we're I

is point. X point. better number off It terms we other off had of the So jumping jumping a lower a was in

you've also we think and through of I And of what's of were here terms is gaining of folks that's backlog. a on got to a And smaller there's that total bit these part And the we thing that, have other in got and dispensers, sell and call. of hard that's X-step a that too, kits is call it. thousands it's better a mix then kind network so then share. built retailers, distribution, the called you've and EMV between adoption difficult rate

much as what this seeing what in we think So through and can, of problem, outlook we're has what and terms working what then where changed we're we're we're are our you we I on transparency -- we're updating is. doing as as

but after what can. even happens it's hard best I to think doing pretty the So we're April, call we

these go think we'll some what of But we want we're become as better to anything then it. certainly smarter, Dave, you get see. on I you we update in through as as that? add we known, do dimensions confident

David Naemura

Yes.

initiatives margin in U.S., bit technology come decremental guide, about rate. Julian, said the that our it piece, right are products around the off But higher XX%. we higher impact. reasonably there, on offsetting little you're think also, and at -- to component, tend actions, profitability collectively with in the I think our These I growth a as the

we pretty good So that. feel about

Julian Mitchell

markets or sort valuations. follow-up a some telematics, maybe of guess, portfolio to around respects: is maybe broader I of X frothy buy just in, very, you're the EVs One looking very in in thoughts, And

kind acquisitions? the think that market, how all then valuations electric on does in change vehicle-related are Tritium you of how like that So think also you you how stakes about changing and point the and value? in at about And things to Driivz that crystallize on

Mark Morelli

Yes.

markets. couldn't growthy all, excited of first very fragmented. So more be these about we It's

of billion around As know, out of about around telematics a the chain you it's around opportunities stops. with and know, about of side gotten we and that $XX store the SaaS and smart TAM in. we're And kind a we cities, excited and supply not retailing dispensing many just building adjacencies portfolio you with fuel point-of-sale are logistics opportunities as many and truck convenience business. Because We've operate the portfolio into there. and the

well represents As e-mobility, think I opportunity. an as

then forward, we've And the great balance pretty of And untap is And looking to that. acquisitions. I adjacencies, cultivation. doing on the think same. of We've we got on of any the to we're new continued be sort that. at there. it's as there's So certainly strategic work. very strategy peel team in that sheet now able stuff kind And market near-in bolt-ons, in updates kind engaged and We're the a onion don't the strategy full to got much working a move M&A exciting

X I valuations, we're which valuations, and paying management obviously we're managing is one the mean, the is attention there; company what's think around the of Tritium, is great I thing -- investments: which in in minority many you and Driivz, energy fast-charging other that in space, a may about is we've that happening know, DC too. you as certainly, the got company a seeing the software EV to The these marketplace. mentioned in thing and there

early provides seat learn. front-row really it's market. mind, in able a so And where really And innings to we're in us the that very keep

Operator

next of Research. of Sprague comes question the line Vertical from Our Jeff

Jeffrey Sprague

me, from please. Just X

does where would backlog backlog, on what question Just assume year But you riddle delivered, would on first and where you back to ended have of -- else ends and understand obviously we EMV, where leave up. or be assuming on the adoption nothing adoption, happens? that based kind roughly the whole

David Naemura

at about we base, year's next our would installed of install activity. count we -- look the XX% would We and about we little over count a When then XX%, have base. backlog our converted

midpoint probably be the the mid-XXs exiting we'd today. XXXX So range on out of the put over we based XX%, of kind

Jeffrey Sprague

a Great. there. so those things go outright follow-up is and kind elsewhere? minority maybe owner to is And they're little ambition the around from super on the away kind your majority are just it's question, earlier to of like things if stakes, to trading you, again, nice It's buy to hot. kind But these unclear ultimately of if right? of of to play But businesses some the just plays, wants the these what a have dynamics The stuff or risk back speak. the of channel-and-partner

just this see frothy elsewhere You at could going potentially valuation. some

David Naemura

difficult also the commercial to terms of But confidential. -- actual folks It's terms of Yes. hypothesize maybe these outside we with agreements that here, the have these of We existing arrangements -- Jeff. ownership. are the are our terms

and this that in our understand position we we're optionality, these said activity to being And this of assets. But we lot we hard a -- the frankly, our seeing particularly it's So think of kind dynamic, and, market exciting. on in like early like a stage in all this agree having that's I that that, hypothesize, ultimately, space. I

Mark Morelli

it's for And actually Tritium today. Central million. sell It's call charging is of mostly e-mobility, electric products we Europe. other in The our about just that what thing we $XX -- I'll mostly revenue, there which throw is

And market's we're an to So a -- ton. it's the to It's that's a exciting for this it's is untap and I this looking market, of year learning. stage best lot that describe quickly. grown at past think excellent learning best really kind the way we're But that. represents evolving and the ways

Operator

Suisse. Our from of next the of comes Credit Walsh line John question

John Walsh

Maybe capital allocation. question to circling the back around

looks at relative average wanted repurchase. on you hit being here on share are you in kind least the in to get Just how can versus basis. guiding QX kind threshold ROIC you for of where share an able your dilution in like what that count did to sense find deals these It XXXX balancing XX% you're some to diluted of

David Naemura

Ultimately, that capital beginning and is where of the allocation, to That's fair spin about you impact the part remains dynamic I of think the that the But highest seeing the compensation right focused about is there. Having think of our preferred definitely sense. M&A vehicle that, from we're repurchase priority But I to in return, times to get there. little say be priority. our share adding we is Yes, on John, we're now come terms think value. it's when a that in M&A when are, shareholder we impacted could our just there and makes stock-based more we see said definitely think spin date. think us way M&A remaining shareholder by

John Walsh

if do into what within sorry as point-of-sale it. of for on I'm -- did growth I business of business you thinking missed in 'XX? quarter? that the focus And lot a part GVR are How EMV. maybe how follow-up, And the then about a Great. then the the

David Naemura

about of didn't We sale. talk point specifically

think a did the this U.S., thing clear, have there. you outside position. are so talking don't space we system well and question, heart of U.S., the your like we're the EMV As online, new I there. put And I knew on in. have the when and We coming point-of-sale the We the so growth well our your for card I we you have our position the it's embedded in part and the position just outside an that is which percentage to we exciting talking exact But dispenser, like grew in U.S., of EMV, payment know, we considered think to in some good about products strong, is I we not be point-of-sale dynamic. But the us. product. dispenser credit

Operator

ISI. comes Our Evercore Raso the from David of next question of line

David Raso

quarter My trying you digit are the the Really, is backlog mentioned, first a backlog And you back EMV? means for mid-single. is is to single implying of to trying given cash Do seems EPS, of figure flow. the imply. to quarter. I'm year And it balance the high growth the the implying you're then I'm just the out fourth year is up $X.XX, guide to the you're dynamic. XX%, really It figure about which cash in the quarter first you're $X. end sure guide. non-EMV. below quarter, trying EPS, the you ex just in guide? rate gave up half out questions flow Is the to the to was The second what that expecting lastly, first half for the then And growth about And you're at usage, I'm trying make the use any second, sheet have year. slow of of like for sheet that's And on balance EPS but

David Naemura

Going with back maybe around point your the components, guide, these starting to David.

tale going easier talked And the half see is because first about we we'll look, So on the quarter. seeing come to a be some the the X that come compare, of both here, back volumes second permanent through. quite also EMV note costs the bit halves. stronger And we're in but

still some there's So puts and takes.

the out a necessarily tying worse dynamics that some second beyond than the point, guiding the are of that first your are see coming your probably And in by -- first, not we'll first aren't So coming there a the backlog, of quarter. but EPS through lot quarter strength ultimately, first. that volumes there impact little to the we're kind it of

to to point. first very definitely the strong, going your So is quarter be

not we the point significant in that backlog. that well out, about GVR growth other a had growth of had big Now Matco, in were as of point But in was growth we good EMV the U.S.-related. backlog parts you and good driver

having the without we're seeing front backlog, that at of fair exact it's out to growth in that me, number rate. that pretty I say think think I in not albeit So parsed

some cost. driver we'll well. would here pulls for first a the also because to is, at which in to and lot will there's half. in moving important due do of that and still the So other revenue will that as that in move online. second. event we're Matco, timing of effects to it's very big the would a bit quarter, a Historically, of don't think along that pandemic. all a the that organization first quarter lot really and a have expo second second We necessarily costs, that little the happening I our of That's frankly, the But the be have we demand

trying So a on I directionally, dollar to without you're think correct necessarily put it.

David Raso

debt just I'm balance implied in the what's do is no the Or sheet in trying you more figure the the your guide question what flow to can what's also cash model? just lower implied in I'm usage and out usage. guide? it trying usage, the -- and you to balance net just want with the about third sheet for

David Naemura

Yes.

cash conversion So tailwind talked conversion this about big free of we bit of year. next And about XX% about next we had a a -- as saying, talked year. working was And capital flow Mark headwind I we year. a -- anticipate, little

tend But to So you cash as we conversion, lower know, significantly around conversion towards be we XXX% -- about that. anticipate it a lower so people will point flow little year-over-year. free well,

So from in we of with of some the XXXX. trade-offs some things see benefits kind normalizing

allocation implying as M&A, not doing in our deal. capital we're anything any guide far As for around

always for be would like upside, kind be purely this would M&A organic is guide. So us. it of a

David Raso

conversion So on flow M&A would use income reduction. the of no debt XX% active just no sheet cash There's repo. that M&A, repo, whatever, simply short-term whatever and balance or cash no flow for interest the bring or cash or

David Naemura

right. That's That's right.

Operator

of Our Gordon from the next Inch question comes John of line Haskett.

John Inch

narrowing just on bit you a little of of little going could the process how smart know kind I public. maybe I'm this about could was I and out know you've know about you wondering working. -- this process. talked you Vontier just folks -- talk and I more you the But are in is this. this And cities one talked as want couple you we at to possibly M&A different you've Just things a that are past, you get number some adjacencies maybe other gas you C-suite this? the of if how like have pretty lay even But senior mentioned me bit opportunity could initiative. a driving I look about if of But a that, please. about canvas, blank can very talk obviously, strikes are overwhelming. and have with respect wide it a you a -- How of into the the -- world little you mean stations. think you right? things you and c-stores -- to I about ex criteria, how a about guys have thinking or to

Mark Morelli

Yes.

in it it the some is puts GTT, So about our a while United States. intersections still penetration a pretty of XX,XXX And exciting small these, think into us field. you business, in if

convenience with management, then of X.X every monitored. spoke that being In are fleet terms million to X site. on -- average fueling sites within refueling you if the per about XXX,XXX store the monitoring about And vehicles X dispensers globally we're of

And of ability And data These also They're narrow So think But then you that how brought of can this lot strategy we monetize in, I priorities. know, be it do got you in of those We've bubbling the what's and all I is is as be the there's that you a of as on are of team coming lot. space in up very we properties, sort growthy. right. episodic. something up exciting. at terms convinced to the want it's spaces pretty and a looking to to excited. a the fragmented. in want with working well M&A be field both mean as quite wrestle you folks --

to they're relatively look a a at. factors is news there's we be good these that number all of we in have in. places. The reason So near Like that

is to leverage these And in places. something have something these leverage exciting. also very too, spaces, have We we which to across

the that this time. allocation and have out optionality. will That when well best rigorous these of And things get, say through It's the lot both that that best the we're does think ferreting a to as capital these we of absolutely aspect opportunities cultivation through we just of a heritage us onboard no that really executives we the kind through a like process, that give too. approach think I well. as means bit as we in things. I think given say So the have we at disciplined, this through

John Inch

lend say future immediate themselves targeting obvious adjacencies both Mark, would or Matco that to what competencies to acquisitions core you would are you not and that are GVR? Vontier's

Mark Morelli

Yes.

this excellent solving an in problems customers core in space. competency have We high-value with

Our lot sort can there. there's pretty depth significant that in a serve well And the leverage. customers our brands then of then we also recognized. when are And We've how got we you across businesses, scale the look capability the to entrenched allocating and of and can in M&A VBS deeply other on have the this we that also acquisitions. also business that competence how application is new we is of apply

it. a got lot to we've here, with and to So excited work so I'm leverage

Operator

from Mitchell comes line Our of question Julian next of Barclays. the

Julian Mitchell

just that Maybe just year follow-up. QX that didn't hear to but this telematics. perform guide in missed to what's how check of I and much the I'd mention relative mid-single-digit So EMV. one did for embedded also wanted ex it, growth in

David Naemura

In we Julian, looking fourth saw were we it's and progress the quarter, I Dave. we track. on think the for, remain

flushing was the we've of through of of of As and looking churn through earlier, we're It's really is you see And in time P&L in down to next about SaaS We've business, change. that it's we've business. some as takes rate but talked to that forward some the It churn indicators moderate. the of more the kind second make. operational we're a and starting prior But a the a of SaaS function revenue looking was to half in at quarter, priorities churn year. what about year. more the the flow talked seen it know, fourth

So operational on definitely feel track with moves it priorities I focused we've big on about But we're guide talked effect a next it the on slowly. have year we're would still the say, like doesn't and because those.

Operator

final or Morelli over like floor our to closing Mark Ladies I'd the turn for additional any back remarks. question. and to gentlemen, that was

Mark Morelli

Thanks, Maria. incredibly and ahead. also us excited I'm ability have us. of this with team's this that you, to about importantly, very more the execute very road I'm ahead. in for these of folks, springboard joining it This headwinds day. excited been on to team. engaged take And see together multiyear of into us more today's good ability couldn't Thank as have advantage transformation a and Yes. proud a opportunities on is come very to today compelling road these front Bye us and and to now. this call, be for in happens management what We're

Operator

call. conclude and This you, ladies Thank today's does conference gentlemen.

You disconnect. now may

Vontier (VNT) 12 Feb 212020 Q4 Earnings call transcript