Fortive Corp at JPMorgan U.S. All Stars Conference Summary

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

Question: Stephen Tusa - JPMorgan - Analyst : That they're going to split the company to a degree, and Precision Technologies will be the NewCo and RemainCo Fortive will be the RemainCo. And so, we're going to touch on that for a sec. But before that, let's just talk about what you're seeing throughout the world here on a macro basis. You have a bunch of different businesses that are exposed to many different trends, but a good global footprint. So maybe last stop here before a quiet period for all these companies that I cover. So you're going to be the last voice. So what do you see out there on the macro?

Question: Stephen Tusa - JPMorgan - Analyst : When you think about kind of reaffirming the guidance, is that really across the board on when it comes to sales EPS? Is it some of these companies more recently have said, you come in, EPS is good, margins are good. The sales may be a little bit weaker, given the tough volume environment. Anything on those metrics at all that's worth noting? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 3:00PM, FTV.N - Fortive Corp at JPMorgan U.S. All Stars Conference

Question: Stephen Tusa - JPMorgan - Analyst : Okay. And then as far as the just the PT side, in particular, Tektronix, PacSci, the sensing businesses. Maybe just what are you seeing there more specifically? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Yeah. We talked about it earlier today after '22 and '23 of double-digit growth. We're seeing this year a negative low single digit growth. The change here as we've come through the year is when we get to Q3, customer demand or orders will turn positive for PT and specifically Tektronix, we started to see some of that turn positive for the sensing companies last quarter. And we're seeing pretty close to what Jim talked about in some of the more the technology companies. We play into a lot of the large technology and semiconductor companies. We started to see some green shoots there and some orders start to come back around. The inventory levels are really good in our channel. The European business is still a little bit soft in the industrial space. And what hasn't come back yet is some of the modernization that China talked about, the money flowing down to modernize equipment. We really haven't seen -- we haven't seen any of that get to the end customers.

Question: Stephen Tusa - JPMorgan - Analyst : Right. And so those orders though, I think there's a bit of a lag time to those? Or is that -- when does that translate into sales for PT? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 3:00PM, FTV.N - Fortive Corp at JPMorgan U.S. All Stars Conference Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Yeah. Specifically for PK, it'll be three quarters out that you'll start to see sales turned positive. Both based on the increased customer demand and orders, and we've got tough comps from (inaudible)

Question: Stephen Tusa - JPMorgan - Analyst : You talked about the unlocking value in the near term. What is the valuation construct here? I mean, you've mentioned the recurring business, the cyclical growth business. I would assume the recurring one, you would think has a bit higher (multiple speakers) than the second growth. What are the appropriate metrics and comps that we're using for this?

Question: Stephen Tusa - JPMorgan - Analyst : The [450] target you guys have put out there, does the buyback kind of get you there now? Or is that no longer really been relevant?

Question: Stephen Tusa - JPMorgan - Analyst : Got it. Just for future reference, when you do put out an EPS number. It's like giving a dog a bone. So you have to got to be careful with the exact EPS number. We're going to obviously run with that. We have enough trouble coming up with them on our own. So we kind of lean on you guys. As far as the next steps for PT, is there a chance for if somebody came along and wanted to negotiate on some of these assets before the transaction, is that you guys picking up the phone? Or are we kind of sitting there waiting for this thing to go?

Question: Stephen Tusa - JPMorgan - Analyst : If I came along and gave you a big number for a big portion of PT, is there a potential for it's a big part of the portfolio, do the company becomes too small to spin from a critical mass --

Question: Stephen Tusa - JPMorgan - Analyst : Okay. The break-up costs and stranded costs anything new there, just from a details perspective?

Question: Stephen Tusa - JPMorgan - Analyst : Okay. Jumping into the businesses a little bit on the PT side, I think you've guided that tech on at a low double-digit decline. What does that imply for the second half for tech? Just remind us so what that implies for the second half? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Yeah. I think second half is around the negative mid-single digit -- low double digit for the second half. You'll see a step-up in Q4 in the sales piece. And those are orders that we got a quarter before that will be shipping in Q4. So we feel good about how we forecast the business there.

Question: Stephen Tusa - JPMorgan - Analyst : Okay. And then you mentioned earlier today, China what are you guys seeing there? I think you mentioned it's 15% of your sales, which verticals are you seeing any signs of life there? And what are the weakest parts of this? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments The good news about China is we've gotten inventories in a place when we do sell, we get orders back in. Nothing has changed. All of that is baked into the guide that we have. We're still waiting to see some green shoots in China. And right now, we're not seeing a lot.

Question: Stephen Tusa - JPMorgan - Analyst : And as far as sensing is concerned, that's a business that people don't really know a lot about, what are the key drivers there and what are you seeing for that business over time? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Yeah. So we make sensors that are specialized for application. A lot of the reason that technologists choose one of our sensors is the application know-how that we have. So the end markets, whether it's utilities could be critical environments which could be healthcare or semiconductor or the food and beverage industry. Those are the places where we get a premium for the products, and we've seen continued growth. The sensing businesses that are more general-purpose, more factory, industrial automation, those are the ones that are -- there's more competition in that space and that's more in that low single digit growth.

Question: Stephen Tusa - JPMorgan - Analyst : And then just lastly or maybe second, the last and Tektronix. Just talk about the drivers there. What you see longer term, what are some of the key areas of growth that you're focused on Tektronix? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Yeah. We strategically positioned the portfolio around electrification and power. And a piece of that started back more than a decade ago with the acquisition of Keithley Instruments. It's taken us into the space we've built upon that with the acquisition of the EA. So think of all the way from power semiconductor, which there's a lot of new technologies coming out and the semiconductor space, which drives new test and measurement equipment through all the electronics. When I say the electronics is everything you just look around and you can see that we're electrifying almost everything in our world that used to be just mobile phones and computers. But now you know, it's gone to vehicles and that's leading into batteries and storage, which the last piece of this is the change to the power grid and utilities. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 3:00PM, FTV.N - Fortive Corp at JPMorgan U.S. All Stars Conference And that's a place that we have a play with one of our sensing companies with the sensors and solutions -- software solutions for that space. So I kind of crossover Tek and went into Qualitrol, but that's the whole electrification space. It's a 10-year trend.

Question: Stephen Tusa - JPMorgan - Analyst : In the R&D side, you're talking about Tektronix or you're talking that year EA? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Tektronix. Taking the EA product into where Tektronix is really strong data in the R&D lab. That's where we have, where we can give them access.

Question: Stephen Tusa - JPMorgan - Analyst : Got it. And I guess -- so they can both -- you would expect both them to grow next year like both Tek and EA? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Both Tek and EA. Correct.

Question: Stephen Tusa - JPMorgan - Analyst : PT. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 3:00PM, FTV.N - Fortive Corp at JPMorgan U.S. All Stars Conference Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments Yeah. I think, we have a very well-run businesses in PT. I think the upside on that opportunity is how we apply FBS to the EA business and be able to drive a little more operating margin there. But that's the target we have for next year.

Question: Stephen Tusa - JPMorgan - Analyst : So you don't anything unusual about the NPI is there, doesn't really sound like you need to step up R&D or anything like that seems pretty steady-state? Tamara Newcombe - Fortive Corp - President and Chief Executive Officer of the Precision Technologies and Advanced Healthcare Solutions segments I would say that.

Question: Stephen Tusa - JPMorgan - Analyst : So one business that we all know is great tremendous brand is Fluke. It's been a little bit tough to analyze in the end markets you think it would be weak. It flows right through. What are the end markets that have been growing the most at Fluke? What have we as analysts missed as far as that business definitely being stronger than we would have expected in a sustainable way?

Question: Stephen Tusa - JPMorgan - Analyst : How big is that now, eMaint?

Question: Stephen Tusa - JPMorgan - Analyst : And if you look at those markets and you talked about how big are those as a percentage of Fluke? I mean, is that like now 30% --

Question: Stephen Tusa - JPMorgan - Analyst : That's pretty impressive because I mean, those were kind of --

Question: Stephen Tusa - JPMorgan - Analyst : Any of those markets you're particularly worried about like what have been the ones that have fallen off --

Question: Stephen Tusa - JPMorgan - Analyst : I think these are growing and they're now 30%. What are the markets that you've seen pullback? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 3:00PM, FTV.N - Fortive Corp at JPMorgan U.S. All Stars Conference

Question: Stephen Tusa - JPMorgan - Analyst : Who are the key public comps here? for Fluke?

Question: Stephen Tusa - JPMorgan - Analyst : It's amazing wherever we go to a convention, no matter what convention it is always like Fluke booth, no matter what is. It could be anything and there's always that yellow (multiple speakers)

Question: Stephen Tusa - JPMorgan - Analyst : [FAL] and software growing high single digits still. And are there any above or below that range and any kind of movement in those businesses as we evaluate a bit of a more challenging IT spending environment?

Question: Stephen Tusa - JPMorgan - Analyst : How quickly can you guys get to $1 billion in revenue in those businesses?

Question: Stephen Tusa - JPMorgan - Analyst : How much of that business is now SaaS versus license?

Question: Stephen Tusa - JPMorgan - Analyst : 55%. Great. And I guess when you think about the margin drivers, not going to pin you to [75], but when it comes down to Fluke, and then the software businesses, are any of those expanding at a faster rate? I know there was a lot of opportunity.

Question: Stephen Tusa - JPMorgan - Analyst : And then lastly, just on AHS, that business seems to be now hitting its stride after the distribution channel restructuring. But what would you expect for growth, one of the drivers there in the next year as well. I know the margin here has been a big debate, 30% is the target. Should we similarly think that you're going to give Olumide an opportunity to give his own view on that.

Question: Stephen Tusa - JPMorgan - Analyst : What's the difference between like (inaudible) be growing like double digit in some ways. What's given for you guys (multiple speakers)

Question: Stephen Tusa - JPMorgan - Analyst : And then one last question for you AI. You guys were kind of ahead of this game several years ago. Obviously, things have changed from a technology hardware perspective. How do you comment on what you're seeing out there, whether it's the hype, the reality, like where do you come down the AI debate as far as what you're using?

Question: Stephen Tusa - JPMorgan - Analyst : Yeah. I'm one of the top users and research family and I'm trying to like to have it do that in a morning meeting in like travel for me and like do all the research and it's not working out like that.

Question: Stephen Tusa - JPMorgan - Analyst : Any questions for you guys? Unidentified Participant (inaudible - microphone inaccessible) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 3:00PM, FTV.N - Fortive Corp at JPMorgan U.S. All Stars Conference

Question: Stephen Tusa - JPMorgan - Analyst : And I think to your credit, since you guys came out as a public company, I mean, you've moved incredibly fast. I think we were thinking about this transformation is kind of almost like a every couple of three years, there'd be a big move and like you guys were like right out of the gate moving pretty quickly, which I think also hurt to a degree because the underlying business is getting better. But if the community it pulls up Bloomberg, they see like flat reported results. But I give you full credit for coming out having a vision like going after it because most guys are kind of sit there and the 10-year kind of see your run just like the paycheck for three years, restructure then come out with something else. I've seen it before.

Question: Stephen Tusa - JPMorgan - Analyst : Great. Well, thanks so much. Congrats again, congrats, Tami as well. And congrats to JPMorgan for pulling off another great day.