Fortive Corp at JPMorgan Industrials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Steve Tusa - JPMorgan - Analyst : So we always just like to start off with a bit of an update on what you guys are seeing and a bit of commentary on just the near-term trends in the business.

Question: Steve Tusa - JPMorgan - Analyst : And are you seeing in your -- I guess, in the short-cycle businesses, the ones that are the hardware businesses, some of them go through distribution. What are you seeing from an orders to sales conversion perspective? We had a couple of companies here this week who talked about orders being okay, but a bit of an elongation of the sales cycle. So are you seeing anything on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 12:15PM, FTV.N - Fortive Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : And on that PT side, which verticals would that be in? Would that be in semiconductor verticals, EV verticals? What types of verticals?

Question: Steve Tusa - JPMorgan - Analyst : As far as Fluke is concerned, you said the POS is pretty good. How about your orders and kind of how the channel is positioning itself?

Question: Steve Tusa - JPMorgan - Analyst : So just as a -- you've been around for a while. Obviously, you're not going to be managing the business over the course of the next year. But how are you guys at Fortive reacting to all the headlines? And what's the boardroom conversation like? Are you guys dusting off a restructuring or a recession playbook? Or are you kind of powering through what you need to do given -- look, you don't really know in the first place, right? So how do you react and handle this situation? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 12:15PM, FTV.N - Fortive Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : We'll maybe delve back into the businesses a little bit but want to get the tariff question out of the way. Can you just give us a bit of color around your -- remind us of what your cross-border exposure is and where that would be most acute? And then what do you see here when it comes to Mexico and China and maybe Canada as well and Europe and Asia?

Question: Steve Tusa - JPMorgan - Analyst : I don't know. I've lost track --

Question: Steve Tusa - JPMorgan - Analyst : Nothing in Mexico?

Question: Steve Tusa - JPMorgan - Analyst : Okay. So there really isn't much to say for you guys from a tariff perspective. I mean --

Question: Steve Tusa - JPMorgan - Analyst : Right. But is there anything incremental? No incremental risk that you see from what we know today?

Question: Steve Tusa - JPMorgan - Analyst : Yeah. Okay. Great. When it comes to the separation, maybe just give us an update. And any updates on timing, structure? Just maybe walk through what your thinking is on that front.

Question: Steve Tusa - JPMorgan - Analyst : And Olumide, I guess, looking ahead and thinking about strategy a bit, what are some of the different ways you may attack to approach portfolio management, investing in the business? What's top of your mind as far as where you take this new company and how you manage it?

Question: Steve Tusa - JPMorgan - Analyst : Any pruning to do in your portfolio? I know a lot of the companies now are kind of doing a little bit of a version of 80-20 where they're walking away from some lower margin, lower growth products. You guys obviously have really high margins. So I can't imagine there are that many REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 12:15PM, FTV.N - Fortive Corp at JPMorgan Industrials Conference lower-margin products. And the way you guys run the business, it's not like you leave nickels around the factory. So any pruning that you're looking to do?

Question: Steve Tusa - JPMorgan - Analyst : So when we think about a new Fluke product and putting aside entering a new vertical like utility or solar or whatever you guys did a couple of years ago, which is obviously a winner, that's more probably applying like what you have to a new vertical. But what is the key to like a really good new product at Fluke? Like I go to these conventions and it's a yellow handheld with some like wires and a little clip at the end and some dials and things like that. Like what is the -- you mentioned software. Like is it the user interface? Is it -- AI a part of this? Like what do you think is like the most exciting thing about these new products that keep them chugging like this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 12:15PM, FTV.N - Fortive Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : Yeah. We've been impressed over the years. I mean, it's a part of the portfolio, you'd think it would be more cyclical than it actually is.

Question: Steve Tusa - JPMorgan - Analyst : Now how about the other businesses on the software side? It just seems to be pretty steady state. Anything there that you're seeing that's interesting? And is there any risk that as more niche vertical software businesses that -- AI can come in and disrupt some of this?

Question: Steve Tusa - JPMorgan - Analyst : What are you seeing in terms of customer IT budgets? And there's obviously a lot of focus on building out AI and maybe that's taking a bit of a chunk out of what would have been more niche vertical software applications. Are you seeing any of that? We've seen some of that in some of the other larger design software companies out there.

Question: Steve Tusa - JPMorgan - Analyst : And then just lastly on AHS, I guess -- all right, I'm not sure who to ask on this one yet, but it's you. Okay. You're not out the door yet. Maybe I'll throw this one your way. What are you seeing in the trends there? Anything moving around in the distribution channel for consumables or pretty steady state? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 12:15PM, FTV.N - Fortive Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : As long as there's no pandemic, which we don't need --

Question: Steve Tusa - JPMorgan - Analyst : Well, you never know what can happen here these days. So just on the margin front, you guys have put out longer-term margin targets at the Investor Day. Are those your targets as well, kind of the next leg of the multiyear targets? Or will you take an opportunity to put your own stamp on things when you guys come out or when the split happens?

Question: Steve Tusa - JPMorgan - Analyst : Okay. Looking forward to that. And then just on the PT side, any updates there on the positioning of that business? Is that also going to have a new kind of margin target? And what's the story with Tektronix and the trends there and strategically kind of how you guys are approaching that business for -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 12:15PM, FTV.N - Fortive Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : Okay. Any questions from the audience? None? Okay. How are you going to integrate AI into FBS? How do you -- I know you guys have already been doing that. But going forward, what are you seeing as opportunities to integrate AI into FBS?

Question: Steve Tusa - JPMorgan - Analyst : And then just one more question for me. Are you reaffirming guidance today? Or is that like implicit in your commentary that things are on track?

Question: Steve Tusa - JPMorgan - Analyst : Okay. Anything else? Jim, thank you so much for coming, and congrats on a great run.

Question: Steve Tusa - JPMorgan - Analyst : When do you officially leave the building? What's --

Question: Steve Tusa - JPMorgan - Analyst : Well, and congrats to you, and best of luck on this new endeavor.