Donaldson Company Inc (DCI) 2023 Q1 法說會逐字稿

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Donaldson Company, Inc. First Quarter 2023 Earnings Conference Call. (Operator Instructions)

你好，謝謝你的支持。我叫 Regina，今天我將擔任你們的會議接線員。此時，我想歡迎大家參加唐納森公司 2023 年第一季度收益電話會議。 （操作員說明）

I would now like to turn the conference over to Sarika Dhadwal. Please go ahead.

我現在想將會議轉交給 Sarika Dhadwal。請繼續。

Good morning. Thank you for joining Donaldson's First Quarter Fiscal 2023 Earnings Conference Call. With me today are Tod Carpenter, Chairman, CEO and President; and Scott Robinson, Chief Financial Officer.

早上好。感謝您參加唐納森 2023 財年第一季度收益電話會議。今天和我在一起的是董事長、首席執行官兼總裁 Tod Carpenter；和首席財務官 Scott Robinson。

This morning, Tod and Scott will provide a summary of our first quarter performance and an update on our outlook for fiscal 2023. As a reminder, we have posted a supplemental quarterly earnings presentation summarizing our results and our outlook on our Investor Relations website at IR.Donaldson.com.

今天上午，Tod 和 Scott 將提供我們第一季度業績的摘要以及我們對 2023 財年展望的更新。提醒一下，我們已經在 IR 的投資者關係網站上發布了一份補充季度收益報告，總結了我們的業績和展望.Donaldson.com。

During today's call, we will discuss non-GAAP or adjusted results. For fiscal 2023, non-GAAP results exclude $7.6 million in pretax restructuring and related charges stemming from our previously announced organizational redesign. It is important to note that the redesign is ongoing, and there will be additional charges forthcoming.

在今天的電話會議中，我們將討論非 GAAP 或調整後的結果。對於 2023 財年，非 GAAP 業績不包括我們先前宣布的組織重新設計產生的 760 萬美元稅前重組和相關費用。請務必注意，重新設計正在進行中，並且即將收取額外費用。

For fiscal 2022, non-GAAP results exclude $3.4 million in pretax charges related to the termination of our operations in Russia. A reconciliation of GAAP to non-GAAP metrics is provided within the schedules attached to this morning's press release.

對於 2022 財年，非 GAAP 業績不包括與我們在俄羅斯的業務終止相關的 340 萬美元稅前費用。在今天上午的新聞稿所附的時間表中提供了 GAAP 與非 GAAP 指標的對賬。

Additionally, please keep in mind that any forward-looking statements made during the call are subject to risks and uncertainties, which are described in our press release and SEC filings.

此外，請記住，在電話會議期間做出的任何前瞻性陳述都存在風險和不確定性，這些在我們的新聞稿和 SEC 備案文件中有所描述。

With that, I'll now turn the call over to Tod Carpenter. Please go ahead.

有了這個，我現在將電話轉給 Tod Carpenter。請繼續。

Thanks, Sarika. Good morning, everyone. I am pleased to report a strong start to fiscal 2023 as we build upon momentum we had in the fourth quarter. Once again, we delivered double-digit top and bottom line growth. Our margins improved, gross margin increased both sequentially and year-over-year and operating margin of 15% reached a 6-year quarterly high. This improvement resulted in solid incremental margins and contributed to strong free cash flow conversion.

謝謝，薩里卡。大家，早安。我很高興地報告 2023 財年的強勁開局，因為我們在第四季度的勢頭基礎上再接再厲。我們再次實現了兩位數的收入和利潤增長。我們的利潤率有所提高，毛利率環比和同比均有所增長，營業利潤率為 15%，創下 6 年來的季度新高。這一改善帶來了可觀的增量利潤率，並促成了強勁的自由現金流轉換。

Before diving deeper into sales, I will address the organizational redesign we announced in October. This company-wide redesign is aimed at better positioning us to serve our end market customers. One of the key value propositions of Donaldson is our deep, long-standing customer relationships. Once completed, this redesign will allow us to more efficiently direct resources to strengthen commercial execution across our entire customer base. We have moved away from our previous matrix organization structure, which included a regional focus towards a more comprehensive end-market customer-focused model. That said, due to our global presence, all of our employees play an important role in our growth.

在深入探討銷售之前，我將介紹我們在 10 月份宣布的組織重新設計。這一全公司範圍內的重新設計旨在更好地定位我們以服務我們的終端市場客戶。唐納森的關鍵價值主張之一是我們深厚、長期的客戶關係。一旦完成，這種重新設計將使我們能夠更有效地引導資源，以加強我們整個客戶群的商業執行。我們已經擺脫了以前的矩陣組織結構，其中包括區域重點，轉向更全面的以終端市場客戶為中心的模型。也就是說，由於我們的全球業務，我們所有的員工都在我們的發展中發揮著重要作用。

With the new model, our 3 focus areas now include: one, end market customers. We're aligning resources and cost structures to meet the specific needs of each end market in which we operate. This will enable expedited decision-making and allow us to serve customers in a more efficient and effective manner.

有了新模式，我們的 3 個重點領域現在包括：一是終端市場客戶。我們正在調整資源和成本結構，以滿足我們運營所在的每個終端市場的特定需求。這將加快決策速度，並使我們能夠以更高效和有效的方式為客戶提供服務。

Two, employee development. This simplified structure reduces our organizational complexity and enables clear advancement paths for our employees.

二、員工發展。這種簡化的結構降低了我們組織的複雜性，並為我們的員工提供了清晰的晉升途徑。

Three, profitable growth. Our business units will now have full P&L responsibility as opposed to that previously shared with the regions. This creates greater internal ownership and accountability for short- and long-term performance. It also provides strong alignment with respect to strategic capital allocations.

三、盈利增長。我們的業務部門現在將承擔全部損益責任，而不是以前與地區分擔的責任。這為短期和長期績效創造了更大的內部所有權和問責制。它還在戰略資本配置方面提供了強有力的一致性。

With these changes and as of the beginning of second quarter, we have 3 new reportable segments: Mobile Solutions, Industrial Solutions and Life Sciences. We expect to provide new financial segment information to help with modeling under the new construct during the second quarter.

隨著這些變化，截至第二季度初，我們有 3 個新的可報告部門：移動解決方案、工業解決方案和生命科學。我們希望在第二季度提供新的金融部門信息，以幫助在新結構下進行建模。

Now I will cover some highlights from our first quarter. Sales were up 11% year-over-year, driven by the combination of pricing of 11% and volume growth of 8%, partially offset by a currency translation headwind of approximately 8%. Adjusted EPS of $0.75 was up 23% versus the prior year.

現在我將介紹第一季度的一些亮點。銷售額同比增長 11%，這主要得益於 11% 的定價和 8% 的銷量增長，部分被約 8% 的貨幣換算逆風所抵消。調整後每股收益為 0.75 美元，較上年增長 23%。

As expected, pricing implemented to offset inflationary pressures drove much of the sales growth and is a reflection of the hard work that Donaldson team put forth over the last year.

正如預期的那樣，為抵消通脹壓力而實施的定價推動了大部分銷售增長，這反映了唐納森團隊在過去一年中所做的辛勤工作。

From a cost perspective, inflation continues to be at high levels. However, we've been encouraged by the moderation of input costs throughout the first quarter and expect to be price/cost positive for the balance of the year when comparing to the prior year.

從成本角度來看，通脹繼續處於高位。然而，我們對整個第一季度投入成本的下降感到鼓舞，並預計與上一年相比，今年剩餘時間的價格/成本將是積極的。

On the demand side, overall end market conditions remained favorable. Further, with the stabilization of global supply chain pressures, we have worked down some of our late backlogs and are seeing improved fill rates. And once again, our region-for-region strategy is paying dividends as the relocalization of our manufacturing is enabling a return towards more normal on-time delivery rates.

需求端，整體終端市場行情依然向好。此外，隨著全球供應鏈壓力的穩定，我們已經處理了一些後期積壓的訂單，並且訂單履行率有所提高。再一次，我們的區域對區域戰略正在帶來回報，因為我們製造業的重新定位使我們能夠恢復到更正常的準時交貨率。

Customer service is always our focus and our investments in the first quarter, such as those for capacity expansion are aimed at continuous improvement in this regard.

客戶服務始終是我們的重點，我們在第一季度的投資，如產能擴張，旨在在這方面持續改進。

This quarter, we also reinvested back into our business through R&D and the scaling of our acquisitions. We are strengthening our organic growth capabilities through R&D, which is forecasted to be up approximately 10% for the full year.

本季度，我們還通過研發和擴大收購規模重新投資於我們的業務。我們正在通過研發加強我們的有機增長能力，預計全年增長約 10%。

We are also expanding upon our inorganic growth, leveraging our recent acquisitions to further diversify the company. First, we announced that Solaris Biotech, the first Life Sciences acquisition we completed in fiscal 2022, entered into a new agreement with San Francisco-based Wildtype, a company focused on creating cultivated seafood. We will collectively collaborate to develop and design a next-generation family of bioreactor systems to help meet the growing demand for seafood.

我們還在擴大我們的無機增長，利用我們最近的收購進一步使公司多元化。首先，我們宣布 Solaris Biotech 是我們在 2022 財年完成的第一筆生命科學收購，它與總部位於舊金山的 Wildtype 公司簽訂了一項新協議，該公司專注於培育海產品。我們將共同合作開發和設計下一代生物反應器系統系列，以幫助滿足對海產品日益增長的需求。

When we acquired Solaris, we knew the company was uniquely positioned for growth in the food and beverage industry through its product portfolio, and this is the first step in expanding into the rapidly growing market of alternative proteins.

當我們收購 Solaris 時，我們知道該公司通過其產品組合在食品和飲料行業的增長中處於獨特的地位，這是向快速增長的替代蛋白質市場擴張的第一步。

Second, following the acquisition of PA Industrial Services, we further expanded our service capabilities through our iCue monitoring service, which offers remote monitoring of industrial dust collection equipment by Donaldson product specialists. This accelerates response time and service levels. iCue provides operational insights to customers via a web-based dashboard. In conclusion, from an operational and strategic standpoint, we are pleased with what we accomplished this quarter.

其次，在收購 PA Industrial Services 之後，我們通過 iCue 監控服務進一步擴展了我們的服務能力，該服務由唐納森產品專家提供對工業除塵設備的遠程監控。這加快了響應時間和服務水平。 iCue 通過基於網絡的儀表板為客戶提供運營洞察。總之，從運營和戰略的角度來看，我們對本季度取得的成就感到滿意。

Now I'll provide some segment detail on first quarter sales. Total company sales were $847 million, up 11% compared with 2022. In Engine, total sales were $605 million, up about 15%. Pricing added 13% and FX was an approximate 7% headwind.

現在我將提供有關第一季度銷售額的一些細分細節。公司總銷售額為 8.47 億美元，與 2022 年相比增長 11%。在引擎方面，總銷售額為 6.05 億美元，增長約 15%。定價上漲 13%，而外匯逆風上漲約 7%。

Sales in Off-Road of $108 million were up 15% with growth in all major regions, except APAC, and were driven by continued high levels of equipment production and growth in our Exhaust and Emissions business in Europe.

越野車銷售額為 1.08 億美元，增長 15%，除亞太地區外，所有主要地區均有增長，這主要得益於持續高水平的設備生產以及我們在歐洲的尾氣和排放業務的增長。

On-Road sales of $36 million were up 14% from prior year supported by an increase in medium and heavy-duty truck builds, particularly in North America. Supply chain conditions are improving but are still limiting growth in this business. Excluding currency, sales in both Off-Road and On-Road were up in all major regions.

在中型和重型卡車製造量增加的支持下，尤其是在北美，公路銷售額為 3600 萬美元，比上年增長 14%。供應鏈狀況正在改善，但仍限制了該業務的增長。排除貨幣因素，所有主要地區的越野車和公路車銷量均有所增長。

In Engine Aftermarket, sales were $427 million, an increase of 14% with both the OE and independent channels up double digits. As always, proprietary product performance is an important driver and PowerCore sales were up over 20% in the quarter.

在發動機售後市場，銷售額為 4.27 億美元，增長 14%，OE 和獨立渠道均增長兩位數。一如既往，專有產品性能是一個重要的驅動因素，PowerCore 的銷售額在本季度增長了 20% 以上。

On the independent side of engine aftermarket, we continue to focus on expanding share in underpenetrated markets such as Mexico and Brazil, where we're seeing encouraging growth rates.

在發動機售後市場的獨立方面，我們繼續專注於擴大墨西哥和巴西等滲透率低的市場的份額，我們在這些市場看到了令人鼓舞的增長率。

In Aerospace and Defense, sales of $34 million were up 22% year-over-year, with strength in new equipment and replacement parts as the commercial aerospace industry continues to recover from pandemic-related softness.

在航空航天和國防領域，銷售額為 3,400 萬美元，同比增長 22%，隨著商業航空航天業繼續從大流行病相關的疲軟中復蘇，新設備和更換部件表現強勁。

Now I will touch specifically on our China engine business given the importance of the geography for us over the long term. Sales were down 6% versus the prior year, but up 1% on a constant currency basis. The overall market continues to be challenging and is further negatively impacted by ongoing COVID-19 lockdowns. That said, our strategy has not changed as we see opportunities to grow our share through our technology and the best-in-class quality of our offerings. We look forward to reporting on our progress in China in the quarters to come.

考慮到地理位置對我們的長期重要性，現在我將具體談談我們的中國發動機業務。銷售額較上年下降 6%，但按固定匯率計算增長 1%。整個市場繼續充滿挑戰，並受到持續的 COVID-19 封鎖的進一步負面影響。也就是說，我們的戰略沒有改變，因為我們看到了通過我們的技術和一流的產品質量來擴大我們的份額的機會。我們期待在未來幾個季度報告我們在中國的進展。

Now I'll turn to the Industrial segment. Industrial sales increased 4% to $243 million. Pricing added 7% and FX was an 8% headwind. Industrial Filtration Solutions, or IFS, was the largest contributor, growing 9% to $181 million, mainly due to industrial dust collection new equipment and replacement part sales.

現在我將轉向工業部門。工業銷售額增長 4% 至 2.43 億美元。定價增加了 7%，而外匯是 8% 的不利因素。工業過濾解決方案 (IFS) 是最大的貢獻者，增長 9% 至 1.81 億美元，這主要是由於工業除塵新設備和更換零件的銷售。

Our Process Filtration business continues to exhibit strong growth and growth potential. Excluding currency, this business grew greater than 20% over prior year.

我們的工藝過濾業務繼續展現出強勁的增長和增長潛力。不包括貨幣在內，該業務比上一年增長了 20% 以上。

Sales of Gas Turbine Systems, or GTS, were approximately $26 million, reflecting a 53% increase. Timing of orders is a big factor in the cadence of GTS sales. And last year, we had an unseasonably soft first quarter due to order timing. Sales of special applications were $36 million down 29% and the story centers largely around our disk drive business. Last year, our disk drive customers pulled forward orders in an effort to mitigate global supply chain issues and are now destocking. This and an overall reduction in disk drive market demand has caused the sales degradation larger than expected. Although disk drive performance has driven an overall decline in special applications, one bright spot continues to be sales of our high-tech venting products for batteries and powertrains in the auto industry. This remains a key strategic area for Donaldson given how well our venting technology can serve this rapidly expanding market.

燃氣輪機系統 (GTS) 的銷售額約為 2600 萬美元，增長了 53%。訂單時間是影響 GTS 銷售節奏的重要因素。去年，由於訂單時間的原因，我們第一季度異常疲軟。特殊應用程序的銷售額為 3600 萬美元，下降 29%，主要圍繞我們的磁盤驅動器業務展開。去年，我們的磁盤驅動器客戶為了緩解全球供應鏈問題而提前下訂單，現在正在去庫存。這和磁盤驅動器市場需求的整體減少導致銷售降幅大於預期。儘管磁盤驅動器性能導致特殊應用的整體下滑，但一個亮點仍然是我們用於汽車行業電池和動力總成的高科技透氣產品的銷售。考慮到我們的防水透氣技術能夠很好地服務於這個快速擴張的市場，這仍然是唐納森的一個關鍵戰略領域。

To summarize, we feel good about the way we started the year. We are reiterating our full year guidance, which reflects record sales and record earnings results, gross margin expansion and operating margins at a multi-decade high.

總而言之，我們對今年開始的方式感覺良好。我們重申我們的全年指引，這反映了創紀錄的銷售額和創紀錄的盈利結果、毛利率擴張和營業利潤率處於數十年高位。

Now I will turn it over to Scott for more details on the financials and an update on our outlook for fiscal '23. Scott?

現在，我將把它轉交給斯科特，以了解有關財務狀況的更多詳細信息以及我們對 23 財年前景的最新展望。斯科特？

Thanks, Tod. Good morning, everyone. I would like to start by saying how pleased I am for the employees around the globe who are able to see the results from their hard work and dedication over the last several quarters. It was undoubtedly an unprecedented and challenging operating environment. I will provide some additional color on our outlook for the balance of the year. But first, we'll give more details on first quarter results.

謝謝，托德。大家，早安。首先，我想對全球員工感到高興，他們能夠看到他們在過去幾個季度的辛勤工作和奉獻精神所帶來的成果。這無疑是一個前所未有的、充滿挑戰的經營環境。我將為我們對今年餘下時間的展望提供一些額外的色彩。但首先，我們將提供有關第一季度業績的更多細節。

To summarize, sales grew 11%. Operating income was up approximately 18% and EPS of $0.75 increased 23% year-over-year. Gross margin of 33.9% improved 10 basis points versus 2022 and 100 basis points sequentially. As our pricing actions from last year continue to work through our financials and given the expectation for ongoing input cost stabilization, we anticipate continued year-over-year gross margin improvement through the balance of the year.

總而言之，銷售額增長了 11%。營業收入增長約 18%，每股收益 0.75 美元，同比增長 23%。毛利率為 33.9%，比 2022 年提高了 10 個基點，環比提高了 100 個基點。由於我們去年的定價行動繼續影響我們的財務，並考慮到對持續投入成本穩定的預期，我們預計毛利率將在今年餘下時間繼續同比改善。

Operating expenses as a percentage of sales were 18.9%, favorable by 80 basis points over prior year driven primarily by leverage on higher sales. Operating margin of 15.0% was up 90 basis points versus prior year largely due to operating expense leverage.

營業費用佔銷售額的百分比為 18.9%，比上年高出 80 個基點，這主要是受銷售額增加的影響。營業利潤率為 15.0%，較上年增長 90 個基點，這主要歸功於營業費用槓桿。

I'll now touch on segment profitability. On the Engine side, pretax profit margin of 15.0% was up 130 basis points year-over-year as our pricing efforts more than offset inflationary pressures. On the Industrial side, pretax profit margin was 15.6%, down 80 basis points versus prior year. As a reminder, our 3 fiscal 2022 acquisitions, Solaris, PAIS and Purilogics fall into the segment. Excluding these acquisitions, pretax profit margin would have been up 50 basis points versus prior year. As Tod discussed earlier, we remain focused on growing these businesses. We are pleased with the integration progress and look forward to seeing them scale.

我現在談談細分市場的盈利能力。在發動機方面，由於我們的定價努力抵消了通脹壓力，稅前利潤率為 15.0%，同比增長 130 個基點。在工業方面，稅前利潤率為 15.6%，比上年下降 80 個基點。提醒一下，我們在 2022 財年的 3 次收購，Solaris、PAIS 和 Purilogics 都屬於該領域。排除這些收購，稅前利潤率將比上年提高 50 個基點。正如 Tod 之前討論的那樣，我們仍然專注於發展這些業務。我們對整合的進展感到高興，並期待看到它們的規模。

Now turning to a few balance sheet and cash flow statement highlights. First quarter capital expenditures were $28 million, mainly driven by capacity expansion investments in North America. Cash conversion in the quarter was just shy of 100% versus about 30% in 2022. We're now back to more normalized levels of conversion following the negative inventory-related working capital impacts from the prior year.

現在轉向一些資產負債表和現金流量表要點。第一季度資本支出為 2800 萬美元，主要受北美產能擴張投資的推動。本季度的現金轉換率略低於 100%，而 2022 年約為 30%。在去年與庫存相關的營運資本受到負面影響之後，我們現在回到了更正常的轉換水平。

In terms of capital deployment, we returned $74 million to shareholders with $28 million in the form of dividends and $46 million in share repurchases. Our balance sheet remains a great asset for the company, and we ended the quarter with a net debt-to-EBITDA ratio of 0.8x.

在資本配置方面，我們以股息形式向股東返還了 7400 萬美元，其中 2800 萬美元以股息形式支付，4600 萬美元用於股票回購。我們的資產負債表仍然是公司的重要資產，本季度末我們的淨債務與 EBITDA 比率為 0.8 倍。

Now I'll walk through our fiscal '23 outlook, beginning with sales. We expect fiscal 2023 sales to increase between 1% and 5%, consistent with our previous guidance. This includes a negative impact from currency translation of about 5%, which is 100 basis points higher than we expected at the beginning of the year. Pricing should contribute about 6% of sales.

現在我將介紹我們的 23 財年展望，從銷售開始。我們預計 2023 財年的銷售額將增長 1% 至 5%，與我們之前的指引一致。這包括約 5% 的貨幣換算的負面影響，比我們年初的預期高 100 個基點。定價應佔銷售額的 6% 左右。

To help with modeling, we detail pricing a bit more as the cadence of our pricing actions in fiscal 2022 create more difficult comparisons as we progress through this fiscal year. Last year, price in the second half of the year was twice what it was in the first half. Consequently, 2023 pricing benefits will decrease as we begin to lap the prior year's actions resulting in stronger sales growth earlier in the year.

為了幫助建模，我們更詳細地介紹了定價，因為我們在 2022 財年的定價行動節奏會隨著我們在本財年的進展而造成更困難的比較。去年，下半年的價格是上半年的兩倍。因此，2023 年的定價收益將減少，因為我們開始重複上一年的行動，從而在今年早些時候實現更強勁的銷售增長。

For engine, we expect a revenue increase of between 1% and 5%, slightly stronger than our previous guidance driven in part by an improvement in our Off-Road and On-Road projections. Off-Road and On-Road sales are expected to be flat versus 2022, which is up from our previous negative low single-digit outlook.

對於發動機，我們預計收入增長 1% 至 5%，略高於我們之前的指引，部分原因是我們對越野和公路預測的改進。越野和公路銷量預計與 2022 年持平，高於我們之前的負低個位數展望。

In both of these business units, we are seeing somewhat improved end market conditions. For example, the chip shortage, which has impacted On-Road sales appears to be improving slowly, allowing us to meet pent-up demand.

在這兩個業務部門，我們都看到終端市場狀況有所改善。例如，影響公路銷售的芯片短缺似乎正在緩慢改善，使我們能夠滿足被壓抑的需求。

As mentioned last quarter, our focus is on higher-margin opportunities in these businesses, and we are intent on ensuring alignment of the value we deliver with the margin profile of our programs. With respect to aftermarket and aerospace and defense, we continue to forecast mid-single-digit growth despite strong prior results, reflecting ongoing favorable end market conditions.

正如上個季度所述，我們的重點是這些業務中利潤率更高的機會，我們致力於確保我們提供的價值與我們項目的利潤率相一致。在售後市場、航空航天和國防方面，儘管之前的業績強勁，但我們繼續預測中個位數增長，反映出持續有利的終端市場條件。

In Engine aftermarket, high levels of vehicle utilization in most major regions and market share gains in underpenetrated regions are the drivers. Aerospace and Defense sales are expected to continue to benefit from the stronger commercial aerospace industry, which remains below pre-pandemic levels.

在發動機售後市場，大多數主要地區的高車輛利用率和滲透率低的地區的市場份額增長是驅動因素。航空航天和國防銷售預計將繼續受益於更強勁的商業航空航天業，該行業仍低於大流行前的水平。

Now I'll discuss our outlook for the Industrial segment. We expect sales growth of between 1% to 5%, down about 200 basis points from our previous guidance. The reduction in guidance is driven by weakness in our disk drive business, which falls within special applications.

現在我將討論我們對工業部門的展望。我們預計銷售額增長 1% 至 5%，比我們之前的指引低約 200 個基點。指引的減少是由於我們的磁盤驅動器業務疲軟所致，該業務屬於特殊應用。

We had previously forecasted disk drive to be pressured during the first half of fiscal 2023 based on trends we were starting to see late in fiscal 2022. This is our most consumer-facing business and has been impacted by weaker demand from PC markets and cloud providers. End market behavior has caused the client to be steeper than and likely to persist longer than originally expected, driven by customer inventory destocking and softer market demand. As such, we now anticipate special application sales to be down mid-teens versus our previous guidance of flat year-over-year.

根據我們在 2022 財年末開始看到的趨勢，我們之前曾預測磁盤驅動器將在 2023 財年上半年承受壓力。這是我們最面向消費者的業務，並受到 PC 市場和雲提供商需求疲軟的影響.在客戶庫存去庫存和市場需求疲軟的推動下，終端市場行為導致客戶比原先預期的更陡峭並且可能持續更長時間。因此，我們現在預計特殊應用銷售額將下降 15% 左右，而我們之前的指引是同比持平。

Now moving to IFS sales, which make up the majority of our Industrial segment. We continue to project a high single-digit increase as the performance of our dusk collection and process filtration businesses remained strong. Further, sales from our recent acquisitions fall into this business unit. Lastly, within Industrial, our GTS sales outlook of low single-digit increase is unchanged.

現在轉向 IFS 銷售，它占我們工業部門的大部分。由於我們的黃昏收集和過程過濾業務的表現依然強勁，我們將繼續預測高個位數的增長。此外，我們最近收購的銷售額屬於該業務部門。最後，在工業領域，我們保持低個位數增長的 GTS 銷售前景不變。

Now I will discuss our margin outlook. Consistent with previous guidance, we expect to deliver an operating margin within a range of 14.5% and 15.1%, up from 13.5% in the prior year due to gross margin expansion and operating expense leverage. Expense discipline is always a focus for the company and becomes increasingly important as we face a potential recessionary environment, while maintaining our commitment to strategic investments. With respect to EPS, we are reiterating our previous range of between $2.91 and $3.07, which at the midpoint represents an approximate 11% increase from a record fiscal 2022.

現在我將討論我們的利潤率前景。與之前的指引一致，由於毛利率擴張和運營費用槓桿，我們預計營業利潤率將在 14.5% 和 15.1% 之間，高於去年的 13.5%。費用紀律始終是公司關注的焦點，並且隨著我們面臨潛在的衰退環境而變得越來越重要，同時保持我們對戰略投資的承諾。關於每股收益，我們重申我們之前的範圍在 2.91 美元到 3.07 美元之間，中點代表比創紀錄的 2022 財年增長約 11%。

Now on to our balance sheet and cash flow outlook. We expect cash conversion in the range of 110% and 125% in line with our previous guidance, driven by benefits from improved inventory efficiency. Notably, this implies a higher than historical average year.

現在進入我們的資產負債表和現金流量展望。我們預計現金轉換率將在 110% 和 125% 之間，這與我們之前的指導一致，這得益於庫存效率提高帶來的好處。值得注意的是，這意味著高於歷史平均水平的年份。

Our capital expenditures forecast remains between $115 million and $135 million. This includes investments in tooling and equipment for new products and technology, maintenance and infrastructure investments, capacity expansion and continuous improvement projects.

我們的資本支出預測保持在 1.15 億美元至 1.35 億美元之間。這包括對新產品和技術的工具和設備的投資、維護和基礎設施投資、產能擴張和持續改進項目。

With respect to capital allocation for the balance of the year, we remain committed to M&A to further our presence in life science markets and to consistently return capital to shareholders through dividends and share repurchases.

關於今年剩餘時間的資本配置，我們仍然致力於併購，以進一步擴大我們在生命科學市場的影響力，並通過股息和股票回購持續向股東返還資本。

Now I'll turn the call back to Tod. Tod?

現在我會把電話轉回給托德。托德？

Thanks, Scott. I would like to thank the Donaldson team for the tremendous work they continue to do every day. I view our results this quarter as a testament to their strength, agility and talent. We are well positioned for a successful fiscal 2023. Our job now is to not only deliver for our customers and shareholders this year, but to lay the groundwork for the future. A major component of this groundwork is the organizational redesign we have embarked upon, and I look forward to reporting on our progress in this regard as we move throughout the year. While the potential for a recessionary environment looms, we can and will build upon our position as the leader in technology-led filtration.

謝謝，斯科特。我要感謝唐納森團隊每天繼續做的大量工作。我認為我們本季度的業績證明了他們的實力、敏捷性和才能。我們為 2023 財年的成功做好了充分準備。我們現在的工作不僅是今年為我們的客戶和股東提供服務，還要為未來奠定基礎。這一基礎工作的一個主要組成部分是我們已經著手進行的組織重新設計，我期待著在我們全年行動時報告我們在這方面取得的進展。雖然衰退環境的可能性迫在眉睫，但我們可以而且將會鞏固我們作為技術主導過濾領域領導者的地位。

Our free cash flow generation and balance sheet strength put us in a position to continue our company's evolution irrespective of macroeconomic fluctuations through the following: One, our Advance and Accelerate solutions, our more resilient existing businesses such as Replacement Parts, Process Filtration and Venting Solutions remain priority areas of investment as we build out our capabilities and work to drive increased market share gains.

我們的自由現金流產生和資產負債表實力使我們能夠通過以下方式繼續公司的發展，而不管宏觀經濟波動如何：一是我們的 Advance 和 Accelerate 解決方案，我們更具彈性的現有業務，如更換零件、過程過濾和通風解決方案在我們增強能力並努力推動增加市場份額的過程中，我們仍然是優先投資領域。

Two, R&D investments. At the core, we are technology-led, and our commitment to R&D is steadfast. We are very excited about the work that is taking place in areas such as our Materials Research Center, which was built to further the development of our polymer-based chemistry solutions.

二是研發投入。我們的核心是技術領先，我們對研發的承諾是堅定不移的。我們對材料研究中心等領域正在進行的工作感到非常興奮，該中心旨在進一步開發我們基於聚合物的化學解決方案。

Three, M&A. Last year, we acquired 3 companies, 2 in the life sciences space and 1 in services, all in sectors with structurally higher margin profiles than our company average. While we are thoughtful about our acquisition strategy, we are committed to deploying capital in this regard.

三、併購。去年，我們收購了 3 家公司，其中 2 家在生命科學領域，1 家在服務領域，所有這些公司的結構利潤率都高於我們公司的平均水平。雖然我們對我們的收購戰略深思熟慮，但我們致力於在這方面部署資本。

Finally, our outlook for the remainder of the year reflects some caution. However, I am excited about our future growth prospects. Aided by the new organizational structure and our strong leadership team, Donaldson is poised to execute and invest faster, delivering for our customers and shareholders and continuing on our mission of advancing filtration for a cleaner world.

最後，我們對今年剩餘時間的展望反映出一些謹慎。但是，我對我們未來的增長前景感到興奮。在新的組織結構和我們強大的領導團隊的幫助下，唐納森準備更快地執行和投資，為我們的客戶和股東提供服務，並繼續履行我們為更清潔的世界推進過濾的使命。

Now I'll turn the call back to the operator to open the line for questions.

現在，我會將電話轉回給接線員，以便打開問題熱線。

(Operator Instructions) Our first question will come from the line of Brian Drab with William Blair.

（操作員說明）我們的第一個問題將來自 Brian Drab 和 William Blair 的台詞。

Tod, you just mentioned that the prospects of a recession loom. But like many other industrial companies, you're not seeing it right now, at least not outside of special apps. Your large customers like CAT and Deere reported strong results recently and don't appear to be seeing a recession. I'm just wondering if you could talk a little bit more about what you're seeing? What you're hearing from your customers about what they're expecting for the operating environment in calendar '23.

托德，你剛才提到經濟衰退的前景迫在眉睫。但與許多其他工業公司一樣，您現在看不到它，至少在特殊應用程序之外看不到。你的大客戶，如 CAT 和迪爾，最近報告了強勁的業績，而且似乎沒有看到經濟衰退。我只是想知道你是否可以多談談你所看到的？您從客戶那裡聽到的關於他們對日曆 '23 中的操作環境的期望。

That's correct, Brian, we're really not seeing the oncoming recession at this point in time. Order intake is kind of about what we would have expected. We do have slight destocking on some of the OES channels. And so therefore, a little bit of a softness just as we would have expected to have happened that we've talked about in the past. But right now, across all end markets, all geographies, our backlog remains strong and the end market remains strong across the full portfolio with the noted exception of our disk drive business.

沒錯，布賴恩，我們目前確實沒有看到即將到來的經濟衰退。訂單攝入量與我們的預期差不多。我們確實對一些 OES 渠道進行了輕微的去庫存。因此，正如我們過去所討論的那樣，有點軟化。但現在，在所有終端市場、所有地區，我們的積壓訂單仍然很強勁，而且終端市場在整個產品組合中仍然強勁，但我們的磁盤驅動器業務除外。

So I guess is it fair to say -- when you say a recession might be looming, it's more the headlines what the economists are saying. But if you were operating Donaldson without seeing all these headlines, you wouldn't be expecting a recession at this point. Is that correct?

所以我想這樣說是否公平——當你說經濟衰退可能迫在眉睫時，經濟學家所說的更多是頭條新聞。但如果你在沒有看到所有這些頭條新聞的情況下經營唐納森，你就不會期望此時會出現衰退。那是對的嗎？

We're just trying to be balanced, Brian. As we take a look at our company as we consider all the potential factors going forward into the next fiscal year, we are looking to give a balanced outlook based upon all the economical factors as well as all the facts and data that we have when we do a hard internal look into our corporation, and we believe that we've achieved that with this guide. And so that's where we're coming from.

我們只是想保持平衡，布賴恩。當我們在考慮下一財年的所有潛在因素時審視我們的公司時，我們希望根據所有經濟因素以及我們擁有的所有事實和數據給出一個平衡的展望對我們公司進行嚴格的內部調查，我們相信我們已經通過本指南實現了這一目標。這就是我們的出發點。

Yes. Got it. Okay. And then the $7.6 million in -- associated with the redesign, what was that spent on? Is that -- was there severance involved there? I'm just curious how that breaks down.

是的。知道了。好的。然後是與重新設計相關的 760 萬美元，這些錢花在了什麼地方？那是——那裡涉及遣散費嗎？我只是好奇它是如何分解的。

Brian, this is Scott. So yes, it's both severance and then some costs associated with execution of the redesign. We're working through the redesign. And we still have a bit of a ways to go. So we'll have more to say about that at the end of next quarter, but those were the costs that were incurred in the first quarter.

布賴恩，這是斯科特。所以是的，這既是遣散費，也是與執行重新設計相關的一些成本。我們正在進行重新設計。我們還有一段路要走。因此，我們將在下個季度末對此進行更多討論，但這些是第一季度產生的成本。

Are there ongoing cost savings associated with the redesign?

是否有與重新設計相關的持續成本節約？

Yes. Well, like I said, we're partway through that. So when we get -- we'll be done by the end of next quarter, and we'll have an update on total expenses and any associated savings at the end of the next quarter.

是的。好吧，就像我說的，我們已經完成了一半。所以當我們得到 - 我們將在下個季度末完成，我們將在下個季度末更新總費用和任何相關的節省。

Okay. And then just what was organic volume growth in engine and organic volume growth -- revenue growth in industrial in the first quarter?

好的。那麼第一季度發動機的有機量增長和有機量增長——工業收入增長是多少？

We had total -- in terms of total impact for the quarter, we had 11% price, 8% volume and then a minus 8% in terms of FX. So our FX impact will be greatest. Presuming rates stay where they are, the FX impact will be the greatest this quarter. We bumped up the FX impact by 1% for the year, up to 5% now. So we kept the overall revenue guidance the same at 3%, even with an increase in the FX headwind from 4% to 5%.

我們有總 - 就本季度的總影響而言，我們有 11% 的價格，8% 的數量，然後是負 8% 的外匯。所以我們的外匯影響將是最大的。假設利率保持不變，本季度外匯影響將最大。我們將當年的外匯影響提高了 1%，現在最高為 5%。因此，即使外匯逆風從 4% 增加到 5%，我們仍將整體收入指引保持在 3%。

Okay. Those numbers you gave are for consolidated, right?

好的。你給的那些數字是合併的，對吧？

Correct.

正確的。

Your next question will come from the line of Laurence Alexander with Jefferies.

您的下一個問題將來自 Jefferies 的 Laurence Alexander。

This is actually Dan Rizzo on for Laurence. You mentioned the pricing flowing through. As costs decreased, I was wondering if historically speaking price concessions? Or is it something you guys do or something that your clients look for -- customers look for?

這實際上是 Dan Rizzo 代替 Laurence。你提到了流經的定價。隨著成本的下降，我想知道歷史上價格是否有優惠？或者這是你們做的事情或您的客戶尋找的東西——客戶尋找的東西？

Yes. So I mean it's different across the various components of the business. The largest piece would always be the OE piece, right? And we've been working with those customers for a couple of years now as costs started increasing to make sure the relationship was reasonable. And I think we've made good progress there. There's still a few actions left to complete to catch all the layup on costs. You can see that in our gross margin improvement over the last several quarters sequentially. It's slowly layering in. We were happy with the gross margin performance this quarter. And so we're expecting cost to be hopefully flat when we're all said and done with this year.

是的。所以我的意思是它在業務的各個組成部分中是不同的。最大的一塊永遠是 OE 塊，對吧？隨著成本開始增加，我們已經與這些客戶合作了幾年，以確保這種關係是合理的。我認為我們在那裡取得了很好的進展。仍然需要完成一些操作才能完成所有上籃成本。您可以在過去幾個季度的毛利率連續改善中看到這一點。它正在慢慢分層。我們對本季度的毛利率表現感到滿意。因此，當我們今年都說完之後，我們預計成本有望持平。

And if costs suddenly went down, I'm sure our OE friends would be knocking on our door, and we would have those conversations with them just as they were willing to have a conversation with us as costs are going up.

如果成本突然下降，我相信我們的 OE 朋友會來敲我們的門，我們會與他們進行這些對話，就像他們願意在成本上升時與我們進行對話一樣。

And the other businesses, if it's a business where we're providing a bid, we adjust based on current costs to stay competitive in the market. And then the independent aftermarket, we certainly have more latitude for pricing there. And we just want to make sure we stay competitive in the markets that we operate in.

而其他業務，如果是我們提供投標的業務，我們會根據當前成本進行調整以保持市場競爭力。然後是獨立的售後市場，我們當然有更大的定價自由度。我們只是想確保我們在我們經營的市場中保持競爭力。

And then I don't know if I missed this or not, but the COVID lockdowns in China or just everything that's going on there, is that having an effect on your -- I guess, your growth or your just demand within the region?

然後我不知道我是否錯過了這一點，但是中國的 COVID 封鎖或只是那裡發生的一切，是否影響了你的 - 我猜，你的增長或你在該地區的公正需求？

So clearly, it's having an effect on the demand within the region. Also the uncertainty looking forward within the region However, it's not having an effect on our ability to win new projects with Chinese-based national companies. and we continue to do so. So we look forward to when China opens up, their economy gets back to normal, and we would expect that to be a tailwind. We're just not sure when that is going to take place given the fits and starts relative to COVID within the country.

很明顯，它對該地區的需求產生了影響。該地區前景的不確定性也沒有影響我們與中國本土公司贏得新項目的能力。我們將繼續這樣做。因此，我們期待中國開放時，他們的經濟會恢復正常，我們預計這將是順風。鑑於國內與 COVID 相關的時好時壞，我們只是不確定何時會發生這種情況。

All right. And then finally, is there a target that I may have forgotten about for operating margin? I mean, is it like 15%? Or is it higher? I don't know if you've said this before.

好的。最後，是否有一個我可能忘記的營業利潤率目標？我的意思是，它是 15% 嗎？還是更高？我不知道你以前是否說過這個。

Well, we -- we gave -- I mean, a target for the guidance for this year or for the future?

那麼，我們 - 我們給出了 - 我的意思是，今年或未來的指導目標？

No, no, just long-term outlook. In terms of this is what we think we can achieve, given what's going on, and this is what we hope to achieve, that type of thing. Not for this year.

不，不，只是長期展望。就此而言，考慮到正在發生的事情，我們認為我們可以實現，這就是我們希望實現的那種事情。今年不行。

Yes. So I mean, we gave a prior target at our last Investor Day, April 9, 2019. We have another Investor Day April 2023, where we'll be glad to host you in Bloomington here, and we'll be providing longer-term targets at that point in time.

是的。所以我的意思是，我們在 2019 年 4 月 9 日的最後一個投資者日給出了一個先前的目標。我們有另一個投資者日 2023 年 4 月，我們很高興在這裡接待您在布盧明頓，我們將提供更長期的當時的目標。

Your next question will come from the line of Dillon Cumming with Morgan Stanley.

您的下一個問題將來自 Dillon Cumming 與摩根士丹利的合作。

I just wanted to ask kind of on the [full year] sales outlook again, maybe framing this up a bit differently, but you mentioned you were starting to work down some of the late backlog in the quarter. When you look at your level of backlog coverage for the full year, kind of current levels of backlog versus implied, full year sales, would you say that coverage is maybe higher than normal or kind of in line with normal seasonality, just kind of like a flavor of how you're framing the full year sales guide relative to that backlog level?

我只是想再次詢問有關 [全年] 銷售前景的問題，可能會有一些不同的框架，但你提到你開始處理本季度的一些後期積壓工作。當您查看全年的積壓覆蓋率水平時，當前積壓水平與隱含的全年銷售額相比，您會說覆蓋率可能高於正常水平或與正常季節性一致，有點像您如何根據積壓水平制定全年銷售指南？

Yes. Thanks, Dillon. So we'd say it's in line with the guide. We baked that in. We haven't seen an appreciable change since we gave full year guidance. Surely, we're really very, very proud of the quarter that we just turned in. But we also believe that we have really given a balanced approach to how we expect the year to play out.

是的。謝謝，狄龍。所以我們會說它符合指南。我們把它烤了進去。自從我們給出全年指導以來，我們沒有看到明顯的變化。當然，我們真的為剛剛上交的這個季度感到非常非常自豪。但我們也相信，我們確實對今年的預期結果給出了一種平衡的方法。

Okay. Got it. And then maybe just one last one on Life Sciences. I know you mentioned you're going to release some intra-quarter data maybe to help frame up the modeling side of it, but just wanted to see if you can give us a flavor ahead of time around what the kind of revenue margin profile that Life Sciences business might look like when those numbers do come out.

好的。知道了。然後也許只是關於生命科學的最後一篇。我知道你提到過你將發布一些季度內數據，可能有助於構建它的建模方面，但只是想看看你是否可以提前給我們一個關於什麼樣的收入利潤率概況的味道當這些數字出來時，生命科學業務可能看起來像。

Yes. So like we said, we're going to -- our new organizational structure was effective the 1st of November. So we're completing our updated segment analysis as we speak, but we expect to have 3 segments going forward. and moving into more of a focus on the Life Sciences business. We would expect that business to have higher margins in our traditional businesses, which is where we've been investing in good solid growth rates. But before we issue the second quarter's results, we'll give you an 8-K with updated historicals for the new segments going forward. So people can see how those businesses performed and that will help our great analyst group with their modeling.

是的。所以就像我們說的那樣——我們的新組織結構將於 11 月 1 日生效。因此，我們正在完成更新的細分市場分析，但我們預計未來會有 3 個細分市場。並更多地關註生命科學業務。我們希望該業務在我們的傳統業務中有更高的利潤率，這是我們一直在投資以實現良好的穩健增長率。但在我們發布第二季度的結果之前，我們會給你一個 8-K，其中包含未來新細分市場的更新歷史記錄。這樣人們就可以看到這些業務的表現，這將有助於我們偉大的分析師團隊進行建模。

(Operator Instructions) Your next question will come from the line of Rob Mason with Baird.

（操作員說明）您的下一個問題將來自 Rob Mason 與 Baird 的對話。

I had a question just around your margin guidance. It did not change for the full year, and you certainly can appreciate we're only 1 quarter into the year, but you did get off to a very good start, particularly on the gross margin line. And Scott, I thought you mentioned operating margin this year would benefit from both gross margin expansion as well, operating expense leverage.

我對您的保證金指導有疑問。全年都沒有變化，你當然可以理解我們今年只有一個季度，但你確實有了一個很好的開端，特別是在毛利率線上。斯科特，我認為你提到今年的營業利潤率將受益於毛利率的擴張以及營業費用槓桿。

So I guess, thinking literally, it kind of suggests that -- yes, I'm not sure how much gross margin opportunity we still have for the balance of the year versus, again, the first quarter start. And again, understand the seasonality potentially in the second quarter is typically a seasonally lower quarter. But I'm just curious, was there anything unusual in the first quarter gross margin that benefited there? Or how we should think about gross margin for the year relative to the first quarter?

所以我想，從字面上看，這有點暗示——是的，我不確定今年餘下時間與第一季度開始相比，我們還有多少毛利率機會。同樣，了解第二季度的潛在季節性通常是季節性較低的季度。但我只是好奇，第一季度毛利率有什麼不尋常的地方受益嗎？或者我們應該如何考慮相對於第一季度的年度毛利率？

Yes. So I mean we expect the majority of the operating income improvement to come from gross margin improvement. You had it right, our second quarter is always our seasonally weakest gross margin quarter mainly due to all the holidays that fall in that hurts production, and that brings our margin down. So we're expecting, I would say, relatively traditional seasonality for the company this year. And you can see we layered in this quarter, pretty significant pricing. So that will benefit the second quarter and the quarters going in. We are lapping pricing from last quarter. But we do expect year-over-year margin improvement for the rest of the year, which is what really drives that operating margin improvement, with the second quarter being the weakest.

是的。所以我的意思是我們預計大部分營業收入的改善將來自毛利率的改善。你沒看錯，我們的第二季度始終是我們季節性最弱的毛利率季度，主要是因為所有假期都會影響生產，這會降低我們的利潤率。因此，我想說，我們預計今年公司將出現相對傳統的季節性。你可以看到我們在本季度分層，定價非常重要。因此，這將有利於第二季度和接下來的幾個季度。我們正在對上一季度的定價進行調整。但我們確實預計今年剩餘時間的利潤率將同比提高，這是真正推動營業利潤率提高的因素，第二季度是最弱的。

Okay. Maybe just a follow-up. Tod, you kind of touched on a balanced outlook for the year within your guidance. When we established the guidance, it portended a fairly strong confidence level around the first half and wider range of outcomes, [additionally] around the second half. Has your second half visibility improved any at all since September or degraded? I'm just curious, based on your order rates, fill rates, how you're maybe thinking about the second half now?

好的。也許只是一個跟進。托德，您在您的指導中談到了今年的平衡展望。當我們制定指南時，它預示著上半年的信心水平相當高，而下半年的結果範圍更廣。自 9 月以來，您下半年的能見度是否有任何改善或下降？我很好奇，根據您的訂單率、訂單率，您現在如何看待下半年？

Overall, our visibility in the second half really hasn't changed from the beginning of the fiscal year. We would say that the visibility that we do have supports the guidance that we have. We would tell you that we see typical structure first half, second half. Within this guidance, more like our typical behavior is 48% or 49% in the first half, 51% or 52% in the second half. We would expect that to really lay in that way for our company. We do believe the first half is a bit stronger on the comps in our balance guide than the second half. So for example, we just did $847 million and grew 11% in Q1, but keep in mind, in Q4 of last year, our number was $890 million.

總體而言，我們下半年的能見度與本財年年初相比確實沒有改變。我們會說，我們確實擁有的知名度支持我們擁有的指導。我們會告訴你，我們在上半場和下半場看到了典型的結構。在此指導下，更像我們的典型行為是上半年 48% 或 49%，下半年 51% 或 52%。我們希望這對我們公司來說真的是這樣。我們確實相信上半場在我們的平衡指南中比下半場更強一些。例如，我們在第一季度完成了 8.47 億美元，增長了 11%，但請記住，在去年第四季度，我們的數字是 8.9 億美元。

And so when you really take a look at all of that and really kind of layer that in, we really believe that we have a properly balanced approach to first half, second half, and we're returning back to a more normal type of a cadence that we've seen in previous years.

因此，當您真正審視所有這些以及其中的某種層次時，我們真的相信我們對上半場和下半場採取了適當的平衡方法，並且我們正在恢復到更正常的類型我們在前幾年看到的節奏。

We have no further questions at this time. With that, I'll turn the conference back over to management for any closing remarks.

目前我們沒有其他問題。有了這個，我將把會議轉回管理層聽取任何閉幕詞。

That concludes the call today. Thanks to everyone who participated. I look forward to reporting our second quarter results in early March. Have a great holiday season, everyone. Bye.

今天的電話會議到此結束。感謝所有參加的人。我期待著在 3 月初報告我們的第二季度業績。祝大家假期愉快。再見。

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

女士們，先生們，今天的電話會議到此結束。謝謝大家的加入。您現在可以斷開連接。