Veralto Corp (VLTO) 2024 Q1 法說會逐字稿

My name is [Shelby], and I will be your conference operator this morning. At this time, I would like to welcome everyone to Veralto Corporation's First Quarter 2024 Conference Call (Operator Instructions) After the speaker's remarks, there will be a question-and-answer session.

我叫[謝爾比]，今天早上我將擔任你們的會議操作員。此時，我歡迎大家參加 Veralto 公司 2024 年第一季電話會議（操作員說明）。

(Operator Instructions)

（操作員說明）

I will now turn the call over to Ryan Taylor, Vice President of Investor Relations. Mr. Taylor, you may begin your conference.

我現在會把電話轉給投資人關係副總裁 Ryan Taylor。泰勒先生，您可以開始會議了。

Good morning, everyone. Thanks for joining us on the call. With me today are Jennifer Honeycutt, our President and Chief Executive Officer; and Sameer Ralhan, our Senior Vice President and Chief Financial Officer. Today's call is simultaneously being webcast. The replay of the webcast will be available on the Investors section of our website later today under the heading Events and Presentations. A replay of this call will be available until May 8, 2024.

大家，早安。感謝您加入我們的通話。今天與我在一起的有我們的總裁兼執行長 Jennifer Honeycutt；以及我們的高級副總裁兼財務長 Sameer Ralhan。今天的電話會議同時進行網路直播。今天晚些時候，我們網站的投資者部分將在「活動和演示」標題下提供網路廣播的重播。本次電話會議的重播將持續至 2024 年 5 月 8 日。

Before we begin, I'd like to point out that yesterday, we issued our first quarter news release, earnings presentation and supplemental materials, including information required by the SEC relating to any adjusted or non-GAAP financial measures. These materials are available in the Investors section of our website, www.veralto.com under the heading Quarterly Earnings. Reconciliations of all non-GAAP measures are provided in the appendix of the webcast slides. Unless otherwise noted, all references to variances are on a year-over-year basis.

在開始之前，我想指出，昨天，我們發布了第一季新聞稿、收益演示和補充資料，包括美國證券交易委員會要求的與任何調整後或非公認會計準則財務指標相關的資訊。這些資料可在我們網站 www.veralto.com 的投資者部分的季度收益標題下找到。網路廣播投影片的附錄中提供了所有非公認會計準則衡量指標的調節表。除非另有說明，所有提及的差異均以同比為基礎。

During the call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings.

在電話會議期間，我們將做出聯邦證券法含義內的前瞻性聲明，包括有關我們認為或預期將來將會或可能發生的事件或發展的聲明。這些前瞻性陳述受到許多風險和不確定性的影響，包括我們向美國證券交易委員會提交的文件中列出的風險和不確定性。

Actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law.

實際結果可能與我們今天所做的任何前瞻性陳述有重大差異。這些前瞻性陳述僅代表截至其作出之日的情況，我們不承擔更新任何前瞻性陳述的義務，除非法律要求。

And with that, I'll turn the call over to Jennifer.

這樣，我就把電話轉給詹妮弗。

Thank you all for joining our call today. The first quarter of 2024 marks our second consecutive quarter of solid operating execution as a stand-alone company. We are driving steady, profitable growth and continuous improvement through greater focus and accountability using VES fundamentals, basic blocking and tackling.

感謝大家今天加入我們的電話會議。 2024 年第一季標誌著我們作為一家獨立公司連續第二個季度實現穩健的營運執行。我們利用 VES 基本原理、基本攔截和鏟球，透過更專注和問責，推動穩定、盈利的成長和持續改進。

For Q1, we delivered 8% adjusted earnings growth year-over-year, driven by 2% core sales growth and 90 basis points of adjusted operating profit margin expansion, and we exceeded our guidance across the board. Our financial performance reflects our culture of continuous improvement and demonstrates our ability to deliver on commitments.

第一季度，在 2% 的核心銷售成長和 90 個基點的調整後營業利潤率擴張的推動下，我們實現了 8% 的調整後盈利同比增長，全面超出了我們的指導。我們的財務表現反映了我們持續改進的文化，並展示了我們兌現承諾的能力。

From an end market perspective, we are seeing healthy trends across our key verticals. In our Water Quality segment, we continue to see positive secular growth drivers across industrial markets, particularly in North America, along with steady demand at municipalities. And in our Product Quality & Innovation segment, we are seeing modest signs of recovery in consumer packaged goods markets.

從終端市場的角度來看，我們在關鍵垂直領域看到了健康的趨勢。在我們的水質領域，我們繼續看到整個工業市場（尤其是北美）的積極長期成長動力，以及市政當局的穩定需求。在我們的產品品質和創新領域，我們看到消費品包裝市場出現溫和復甦的跡象。

Most notably, PQI's recurring revenue grew mid-single digits year-over-year for the third consecutive quarter. Equipment bookings for marking and coding started to show signs of recovery late in the first quarter, and we continue to see encouraging trends at some of our large CPG customers led by food and beverage.

最值得注意的是，PQI 的經常性收入連續第三個季度年增中個位數。用於打標和噴碼的設備預訂在第一季末開始顯示出復甦的跡象，我們繼續看到以食品和飲料為首的一些大型消費品客戶的令人鼓舞的趨勢。

Based on our first quarter results and improving market trends, we continue to expect our core sales growth rate to modestly improve sequentially throughout the year.

根據我們第一季的業績和不斷改善的市場趨勢，我們繼續預期我們的核心銷售成長率將在全年中持續小幅提高。

Looking at our full year guidance, we are on pace to deliver low single-digit core sales growth and are trending toward the high end of our adjusted operating margin range of 50 to 75 basis points of improvement over 2023. As a result, we have modestly increased our full year adjusted EPS and free cash flow conversion guidance. Sameer will cover that in more detail a bit later in the call.

從我們的全年指引來看，我們正在努力實現低個位數的核心銷售成長，並趨向於調整後營業利潤率範圍的高端，即比 2023 年提高 50 至 75 個基點。了全年調整後每股收益和自由現金流轉換指引。 Sameer 將在稍後的電話會議中更詳細地介紹這一點。

Confidence in our ability to deliver on commitments is, in large part, grounded in the Veralto enterprise system. Our proven system for driving growth, operational improvements and leadership development. A core tenet of the VES is continuous improvement or Kaizen.

我們對履行承諾能力的信心在很大程度上建立在 Veralto 企業系統的基礎上。我們經過驗證的系統可推動成長、營運改善和領導力發展。 VES 的核心原則是持續改善或 Kaizen。

During March, we completed Veralto's first CEO Kaizen week as a stand-alone company. CEO Kaizen week is a long-standing tradition of our enterprise system and personally one of my favorite weeks of the year. The purpose of this year's CEO Kaizen week was to drive value-accretive growth. For one week, we immersed 12 cross-functional teams at Gemba where the real work happens across 6 businesses in 5 countries.

三月份，我們作為一家獨立公司完成了 Veralto 的首個 CEO Kaizen 週。 CEO Kaizen 週是我們企業系統的長期傳統，也是我個人一年中最喜歡的周之一。今年執行長改善週的目的是推動增值成長。在一週的時間裡，我們讓 12 個跨職能團隊沉浸在現場，真正的工作發生在 5 個國家的 6 家企業中。

The Veralto executive team worked alongside associates in our operating companies to solve some of the most complex challenges and yield high-impact results. For example, this year's event included increasing customer engagement in North America and EMEA to drive incremental sales growth of Hachs consumables.

Veralto 執行團隊與我們營運公司的員工一起解決一些最複雜的挑戰並產生高影響力的結果。例如，今年的活動包括提高北美和歐洲、中東和非洲地區的客戶參與度，以推動哈希斯耗材的銷售增量成長。

Improving the customer buying experience at Videojet to accelerate key growth initiatives and using lean conversion tools for make-to-stock products at a Hach distribution facility in North America to optimize efficiency, improve on-time delivery and meet increasing customer demand. The benefits of any Kaizen week include immediate solutions that are rapidly implemented and yield real-time results. Success is proven by sustaining these results, which we track following the Kaizen event.

改善偉迪捷的客戶購買體驗，以加速關鍵成長計劃，並在北美哈希分銷工廠使用精益轉換工具進行按庫存生產的產品，以優化效率、提高準時交付並滿足不斷增長的客戶需求。任何 Kaizen 週的好處包括快速實施並產生即時結果的即時解決方案。透過維持這些結果來證明成功，我們在 Kaizen 活動之後追蹤這些結果。

From a big picture perspective, this year's CEO Kaizen week, fortified our ability to deliver on our commitments to key stakeholders and reinforce that at Veralto, we are all practitioners of continuous improvement.

從大局來看，今年的執行長改善週增強了我們兌現對主要利害關係人的承諾的能力，並強化了在 Veralto，我們都是持續改進的實踐者。

Turning now to our financial results for the quarter. Core sales grew 1.8% year-over-year, led by price increases across both segments and modest volume growth in our Water Quality segment led by our industrial water treatment businesses. Notably, both segments delivered recurring sales growth in the mid-single digits year-over-year, increasing our percentage of recurring sales to 61% of total sales in the quarter. As compared to our guidance, we exceeded core sales growth expectations due to strong commercial execution and better-than-expected volume at both segments, particularly within consumables.

現在轉向我們本季的財務業績。核心銷售額年增 1.8%，主要得益於兩個細分市場的價格上漲以及以工業水處理業務為主導的水質細分市場銷量的適度增長。值得注意的是，這兩個部門的經常性銷售年均實現中個位數成長，使我們的經常性銷售佔本季總銷售額的比例增加至 61%。與我們的指導相比，由於兩個細分市場（尤其是消費品領域）強勁的商業執行力和好於預期的銷量，我們超越了核心銷售成長預期。

On the margin front, we delivered 90 basis points of adjusted operating profit margin expansion primarily through price execution, productivity improvements and cost optimization. Adjusted EPS was $0.84 per share up 8% year-over-year and $0.06 above the high end of our guidance range, and we generated over $100 million of free cash flow, further strengthening our financial position.

在利潤率方面，我們主要透過價格執行、生產力提高和成本優化，實現了調整後營業利潤率擴大 90 個基點。調整後每股收益為 0.84 美元，年增 8%，比我們指導範圍的上限高出 0.06 美元，我們產生了超過 1 億美元的自由現金流，進一步增強了我們的財務狀況。

Looking now at core sales growth by geography for the first quarter. Sales in North America grew over 3% year-over-year with sales in high-growth markets flat and sales in Western Europe down about 1%. In North America, we continue to see strong growth in our water treatment businesses across industrial verticals, including food and beverage, chemical processing, mining and power generation.

現在來看看第一季按地區劃分的核心銷售成長。北美銷售額年增超過 3%，高成長市場銷售額持平，西歐銷售額下降約 1%。在北美，我們的水處理業務在食品和飲料、化學加工、採礦和發電等垂直工業領域持續強勁成長。

We also continued to see strong demand for municipal customers for UV treatment systems. In Western Europe, core sales were down modestly year-over-year, primarily due to timing of UV system projects and the strategic portfolio actions in our Water Quality segment that we mentioned in our Q4 earnings call. Apart from these 2 items, core sales in Western Europe were steady year-over-year in both segments.

我們也持續看到市政客戶對紫外線處理系統的強勁需求。在西歐，核心銷售額同比小幅下降，主要是由於紫外線系統項目的時機以及我們在第四季度財報電話會議中提到的水質部門的戰略投資組合行動。除這兩項外，西歐這兩個細分市場的核心銷售額均較去年同期穩定。

In high-growth markets, core sales were essentially flat year-over-year as growth in Latin America and India was offset by low single-digit decline in China as anticipated. Despite the year-over-year headwind in Q1, we believe our end market environment in China has stabilized.

在高成長市場，核心銷售額比去年同期基本持平，因為拉丁美洲和印度的成長被中國的個位數小幅下降所抵消，正如預期的那樣。儘管第一季出現同比逆風，但我們相信我們在中國的終端市場環境已經穩定。

That concludes my opening remarks. And at this time, I'll turn the call over to Sameer for a detailed review of our first quarter financial performance.

我的開場白就到此結束。此時，我會將電話轉給 Sameer，詳細檢視我們第一季的財務表現。

Good morning, everyone. I will begin with our consolidated results for the first quarter on Slide 7. First quarter net sales grew 1.8% on a year-over-year basis to about $1.25 billion. Currency was a modest benefit, offset by the divestiture of Salsnes product line. Salsnes was a small commodity filter product line in our Water Quality segment that was divested in January.

大家，早安。我將首先介紹投影片 7 上第一季的綜合業績。貨幣帶來的好處不大，但被 Salsnes 產品線的剝離所抵消。 Salsnes 是我們水質部門的一條小型商品過濾器產品線，於 1 月被剝離。

Core sales growth in Q1 was 1.8%. Price contributed approximately 2% growth in this quarter, in line with expectations. This aggregate price increase is also in line with historical levels. Volume was down a modest 40 basis points year-over-year. This was better than we expected, primarily due to higher sales volumes of consumables and both segments during the quarter. Gross profit increased 6% year-over-year to $747 million. Gross profit margin increased 220 basis points year-over-year to 60%, reflecting the benefits of pricing as well as improved productivity and reduced material costs.

第一季核心銷售額成長 1.8%。價格為本季貢獻了約2%的成長，符合預期。這總價格漲幅也符合歷史水準。成交量較去年小幅下降 40 個基點。這比我們預期的要好，主要是由於本季消耗品和兩個細分市場的銷售增加。毛利年增 6% 至 7.47 億美元。毛利率年增 220 個基點至 60%，反映出定價優勢以及生產力提高和材料成本降低的好處。

Adjusted operating profit increased 5% year-over-year. and adjusted operating profit margin expanded 90 basis points to 24.5%. We delivered strong margin expansion while investing in our sales and marketing efforts to drive future growth. We also increased our R&D investment to 4.8% of sales, up 20 basis points over the prior year period. These investments are aligned with our strategic growth plans and we expect to continue to fund ongoing growth investments.

調整後營業利潤較去年同期成長5%。調整後營業利益率擴大 90 個基點至 24.5%。我們實現了強勁的利潤成長，同時投資於銷售和行銷工作以推動未來成長。我們也將研發投入增加至銷售額的 4.8%，比去年同期提高了 20 個基點。這些投資與我們的策略性成長計劃一致，我們預計將繼續為持續的成長投資提供資金。

Looking at EPS for Q1. Adjusted earnings per share grew 8% year-over-year to $0.84, and free cash flow was $102 million, down from the prior year. This decline is primarily due to cash interest payments that we did not incur last year prior to our spin-off.

看看第一季的每股收益。調整後每股收益年增 8%，達到 0.84 美元，自由現金流為 1.02 億美元，較前一年下降。這一下降主要是由於我們去年分拆前沒有支付的現金利息。

Moving on, I will cover the segment highlights, starting with Water Quality on Slide 9. Our Water Quality segment delivered $749 million of sales, up 2.7% on a year-over-year basis. Currency was neutral and the divestiture of Salsnes had 10 basis point impact on sales this quarter versus the prior year period. In addition to this divestiture, we strategically exited small product lines in our Water Quality segment in the fourth quarter of 2023.

接下來，我將介紹各個細分市場的亮點，從幻燈片 9 上的「水質」開始。貨幣是中性的，Salsnes 的剝離對本季的銷售額與去年同期相比產生了 10 個基點的影響。除了此次剝離之外，我們還在 2023 年第四季策略性地退出了水質領域的小型產品線。

As we previously mentioned on the earnings call in February, Exiting these product lines resulted in approximately 60 basis points headwind to core growth for the segment in this quarter. Despite this headwind, core sales grew 2.8% year-over-year as compared to 11% core sales growth in the prior year period, bringing the 2-year core sales growth stack for Water Quality segment to about 7%. Pricing contributed 2.6% to core sales growth and volume was up 30 basis points year-over-year.

正如我們之前在 2 月的財報電話會議上提到的，退出這些產品線導致本季該細分市場的核心成長出現約 60 個基點的阻力。儘管有此不利因素，核心銷售額仍較去年同期成長 2.8%，而去年同期核心銷售額成長率為 11%，使水質部門的 2 年核心銷售額成長達到 7% 左右。定價對核心銷售成長貢獻了 2.6%，銷量較去年同期成長 30 個基點。

This is the first quarter of volume growth for Water Quality since Q1 2023. Our volume growth in this year's first quarter was driven by strong demand for our water treatment solutions in industrial end markets and UV treatment systems in municipal end markets.

這是自2023 年第一季以來水質銷售成長的第一個季度。 。

Recurring sales across the segment grew mid-single digits, highlighted by increased sales of reagents and chemistries used in our analytical instruments at municipalities in North America. Adjusted operating profit increased 9% or $16 million year-over-year to $186 million. Adjusted operating profit margin increased 150 basis points RECONNECT to 24.8%. The increase in profitability reflects solid pricing execution and improved productivity. Moving to the next page.

該部門的經常性銷售額實現了中個位數成長，其中北美各城市分析儀器中使用的試劑和化學品銷售的增加凸顯了這一點。調整後營業利潤年增 9%，即 1,600 萬美元，達到 1.86 億美元。調整後營業利益率增加 150 個基點 RECONNECT 至 24.8%。獲利能力的提高反映了穩健的定價執行和生產力的提高。移至下一頁。

Our PQI segment delivered sales of $497 million in the first quarter, up modestly versus the prior year period. Core sales were essentially flat on a year-over-year basis as price increases of 1.5% were largely offset by 1.3% decline in volumes.

我們的 PQI 部門第一季銷售額為 4.97 億美元，與去年同期相比略有成長。核心銷售額比去年同期基本持平，1.5% 的價格上漲在很大程度上被銷量下降 1.3% 所抵消。

Recurring sales grew mid-single digits with growth across the portfolio, increasing the mix of recurring sales for PQI to 63% in Q1. In Packaging and Color, sales were up low single digits year-over-year, highlighted by growth in recurring software and subscription revenue. In contrast, marketing and coding sales declined modestly, reflecting lower demand from CPG customers as compared to Q1 2023.

隨著整個產品組合的成長，經常性銷售額實現中個位數成長，第一季 PQI 經常性銷售額的比例達到 63%。在包裝和顏色領域，銷售額年增率較低的個位數，經常性軟體和訂閱收入的成長凸顯了這一點。相較之下，行銷和編碼銷售額略有下降，反映出與 2023 年第一季相比，CPG 客戶的需求較低。

This decline, however, was less than what we had anticipated in our guidance. As Jennifer mentioned, we continue to see modest signs of recovery in CPG markets with consumable sales up mid-single digits year-over-year for the third consecutive quarter and equipment bookings showing pockets of improvement.

然而，這一下降幅度低於我們在指導中的預期。正如詹妮弗所提到的，我們繼續看到消費品市場出現溫和復甦的跡象，消費品銷售額連續第三個季度同比增長中個位數，設備預訂量也出現了一些改善。

We remain cautiously optimistic that CPG volumes will improve sequentially as the year progresses. PQI adjusted operating profit was $139 million in the first quarter resulting in adjusted operating profit margin of 28%. This was a strong margin performance for PQI and demonstrates the earnings power of these businesses.

我們對消費品銷售將隨著今年的進展而環比改善保持謹慎樂觀。 PQI 第一季調整後營業利潤為 1.39 億美元，調整後營業利益率為 28%。 PQI 的利潤率表現強勁，展現了這些業務的獲利能力。

Turning now to our balance sheet and cash flow. In Q1, we generated $115 million of cash from operations and invested $13 million in capital expenditures. Free cash flow was $102 million in the quarter. Note, this included about $57 million of cash interest payments, which we did not incur in Q1 2023 prior to our spin-off.

現在轉向我們的資產負債表和現金流。第一季度，我們從營運中產生了 1.15 億美元的現金，並投資了 1,300 萬美元的資本支出。本季自由現金流為 1.02 億美元。請注意，這包括約 5700 萬美元的現金利息支付，這是我們在分拆之前的 2023 年第一季沒有支付的。

At the end of the quarter, gross debt was $2.6 billion and cash on hand was $827 million. Net debt was $1.8 billion resulting in net leverage of 1.5x. In summary, we further strengthened our financial position during the quarter and have ample liquidity. This gives us flexibility in how we deploy our capital to create long-term shareholder value with a bias towards M&A.

截至本季末，總負債為 26 億美元，手頭現金為 8.27 億美元。淨債務為 18 億美元，淨槓桿率為 1.5 倍。綜上所述，本季我們的財務狀況進一步增強，流動性充裕。這使我們能夠靈活地部署資本，以創造長期股東價值，並偏向併購。

Turning now to our guidance for 2024. Beginning with our updated expectations for the full year. As Jennifer mentioned, we are on track to deliver our target of low single-digit core sales growth at the enterprise level and in both segments. We're targeting 100 to 200 basis points of price, consistent with historical pre-pandemic levels. From a sequential perspective, our guidance assumes that year-over-year core sales growth increases modestly quarter-to-quarter through 2024.

現在轉向我們對 2024 年的指導。正如珍妮佛所提到的，我們有望實現企業級和兩個細分市場的低個位數核心銷售成長目標。我們的目標是價格上漲 100 到 200 個基點，與疫情大流行前的歷史水準一致。從環比角度來看，我們的指引假設，到 2024 年，核心銷售年增率將逐季小幅成長。

Looking at adjusted operating profit margin, our target remains 50 to 75 basis points of improvement this year. Based on our Q1 performance, we are trending towards the high end of this range. Given our Q1 results and current view on margin improvement for the year, we have increased our full year adjusted EPS guidance to a range of $3.25 to $3.34 per share, up from our prior guidance range of $3.20 to $3.30 per share. In addition, we increased our free cash flow conversion guidance to a range of 100% to 110%.

考慮到調整後的營業利潤率，我們今年的目標仍然是提高 50 至 75 個基點。根據我們第一季的表現，我們正趨向於該範圍的高端。鑑於我們第一季的業績和目前對今年利潤率改善的看法，我們將全年調整後每股收益指引從之前的每股 3.20 美元到 3.30 美元提高到了 3.25 美元到 3.34 美元的範圍。此外，我們也將自由現金流轉換指引提高至 100% 至 110%。

Looking at our guidance for Q2, we are targeting core sales growth in low single digits on a year-over-year basis, with adjusted operating margin of approximately 23% and our Q2 2024 guidance for adjusted EPS is $0.75 to $0.80 per share.

從我們對第二季的指導來看，我們的目標是核心銷售年成長在較低的個位數，調整後的營業利潤率約為23%，我們對2024 年第二季調整後每股收益的指引為每股0.75 美元至0.80 美元。

That concludes my prepared remarks. At this time, I'll turn the call back to Jennifer for closing remarks before we open up the call for questions.

我準備好的發言就到此結束。此時，在我們開始提問之前，我會將電話轉回給 Jennifer，讓其結束語。

In summary, as a stand-alone company, we have increased focus, discipline and accountability across all levels of the enterprise, which has elevated our level of execution. We are driving continuous improvement and investing in future growth as our end market environment gradually improves. We are off to a positive start in 2024 with solid growth and strong margin expansion in the first quarter.

總而言之，作為一家獨立的公司，我們在企業各個層面都加強了專注、紀律和問責制，這提高了我們的執行水平。隨著我們的終端市場環境逐漸改善，我們正在推動持續改進並投資於未來成長。我們在 2024 年迎來了良好的開端，第一季實現了穩健成長和強勁的利潤成長。

Our financial position remains strong and we continue to take a disciplined approach to capital deployment with our primary focus on strategic acquisitions with attractive returns.

我們的財務狀況依然強勁，我們繼續對資本部署採取嚴格的方法，主要專注於具有有吸引力回報的策略性收購。

Looking ahead, we remain focused on driving commercial excellence, continuous improvement and disciplined capital allocation to create shareholder value while safeguarding the world's most vital resources.

展望未來，我們仍然專注於推動商業卓越、持續改進和嚴格的資本配置，以創造股東價值，同時保護世界上最重要的資源。

That concludes our prepared remarks. I want to thank you all again for joining our call. And at this time, we're happy to take your questions.

我們準備好的演講到此結束。我想再次感謝大家加入我們的電話會議。此時，我們很樂意回答您的問題。

(Operator Instructions)

（操作員說明）

We'll take our first question from Scott Davis with Melius Research.We'll take our first question from Scott Davis with Melius Research.

我們將回答 Melius Research 的 Scott Davis 提出的第一個問題。

The 60% gross margin is a pretty incredible number when you really think about the mix of businesses you have. But should we think about this as kind of high watermark or would you think about it as more of a step up into a new level of entitlement? How do you guys think about it?

當你真正考慮到你擁有的業務組合時，60% 的毛利率是一個相當令人難以置信的數字。但我們是否應該將其視為一種高水位線，還是將其視為邁向新的權利水平的一步？大家覺得怎麼樣？

Maybe I'll take that one, Scott. Overall, as you got to look at margin perspective, some of it comes down deliver of a mix. I think it's still going to be in the 58% to 60% kind of ZIP code.

也許我會選擇那個，斯科特。總的來說，當你從利潤角度來看時，其中一些因素取決於組合的交付。我認為它仍然會是 58% 到 60% 的郵遞區號。

As Jennifer mentioned on the call earlier, we saw good sort of a rebound in the consumables in both sides that really helps us on the margin side, both in the Water Quality and PQI side. But as kind of equipment starts coming back at the rest of the year and the second half of the year, we should be in that 58% to 60% kind of ZIP code.

正如 Jennifer 在早些時候的電話會議上提到的，我們看到雙方的消耗品都出現了良好的反彈，這對我們在水質和 PQI 方面的利潤方面確實有幫助。但隨著某種設備在今年剩餘時間和下半年開始恢復，我們應該處於 58% 至 60% 的郵遞區號區域。

And just following on a little bit to a comment you made, Jennifer, on increasing accountability. I understanding has always been that the Danaher business system always drove a pretty high level of accountability. How have you tweaked it to even raise that to a different level? And what kind of changes have you made when you think about just tightening things up for the assets that you have here?

詹妮弗，接下來是您關於加強問責制的評論。據我了解，丹納赫業務系統始終推動著相當高水準的問責制。您如何調整它以將其提升到不同的水平？當你考慮收緊你這裡擁有的資產時，你做了什麼樣的改變？

Yes. I mean I think it's always challenging to provide an equal level of focus across a very, very large enterprise like Danaher has I think a smaller, more nimble $5 billion business, obviously, allows us to focus exclusively on these businesses, whereas there were many more factors sort of previously with the life sciences and diagnostics side in Danaher.

是的。我的意思是，我認為在像丹納赫這樣非常非常大的企業中提供同等程度的關注總是具有挑戰性的，我認為更小、更靈活的50 億美元業務顯然可以讓我們專注於這些業務，而有很多業務更多因素以前與丹納赫的生命科學和診斷部門有關。

And so some of the things that we've done here is we've just -- we've raised the level of not only expectation but visibility to how we're operating, the tools that we're using by way of VES, and we're really focusing on the critical few.

因此，我們在這裡所做的一些事情是——我們不僅提高了期望水平，還提高了我們的營運方式、我們透過 VES 使用的工具的可見性，我們真正關注的是關鍵的少數人。

Every business is a little bit different. Their evolutionary maturity is a little bit different. And as a result, we focus on using fit-for-purpose tools in our VES toolbox to make sure that we're elevating the level of performance of each of those businesses.

每個企業都有點不同。他們的進化成熟度有點不同。因此，我們專注於使用 VES 工具箱中適合用途的工具，以確保我們提高每項業務的績效水準。

Congrats on the quarter. Good luck this year.

恭喜本季。祝今年好運。

And we'll take our next question from Andy Kaplowitz with Citigroup.

我們將回答花旗集團安迪·卡普洛維茨的下一個問題。

Jennifer and Sameer, how are you feeling about the PQI recovery at this point? I know you mentioned North America and Western Europe, you continue to see signs of recovery. You talked about equipment demand coming back late in the quarter. Maybe you could elaborate on that equipment trend. Have you seen follow through in that food and beverage recovery that started, I think, in Q4? And how are you factoring in China-related growth in that segment for the rest of the year?

Jennifer 和 Sameer，您目前對 PQI 的恢復感覺如何？我知道你提到了北美和西歐，你繼續看到復甦的跡象。您談到了本季末設備需求的回升。也許您可以詳細說明一下該設備的趨勢。我認為，您是否看到了從第四季度開始的食品和飲料復甦的後續行動？今年剩餘時間裡，您如何考慮該領域與中國相關的成長？

Yes. We're really encouraged by the PQI performance here in Q1, particularly around our consumable revenue stream or recurring revenue. Is this the third sequential quarter that we've seen mid-single-digit growth there. And with regard to sort of how those markets, particularly in food and beverage, recover from a downturn, we will always see the consumable revenue stream ramp first.

是的。我們對第一季的 PQI 表現感到非常鼓舞，特別是在我們的消費品收入流或經常性收入方面。這是我們連續第三個季度看到中個位數成長嗎？至於這些市場（尤其是食品和飲料市場）如何從低迷中復甦，我們總是會先看到消費品收入流的成長。

And that's as a result of CPG customers coming back online that were previously mothballed they're getting those lines running, they're refurbishing equipment. And so we always see that leading our equipment growth. Now on the equipment side, we did see some nice pockets of growth relative to orders late in the first quarter. And so this is sequentially encouraging and very closely maps to the pattern of what we would have seen with consumables recovery first, followed by equipment recovery.

這是由於先前被封存的 CPG 客戶重新上線，他們正在讓這些生產線運行，他們正在翻新設備。因此，我們始終看到它引領著我們的設備成長。現在在設備方面，我們確實看到相對於第一季末的訂單有一些不錯的成長。因此，這依次令人鼓舞，並且非常接近我們所看到的首先回收消耗品，然後回收設備的模式。

Andy, only other thing I would add from a guide perspective, we're building equipment recovery more in the second half, while the owners, as Jennifer mentioned, in March, were very encouraging, good discussions with the customers that those business teams are having but we're still cautious and we are building into anything on the equipment side in the second half than in the second quarter at this point.

安迪，從指南的角度來看，我要補充的唯一一件事是，我們在下半年更多地進行設備恢復，而正如詹妮弗在三月份提到的那樣，業主們非常鼓舞人心，與客戶進行了良好的討論，這些業務團隊正在但我們仍然保持謹慎態度，我們正在下半年比第二季度在設備方面進行任何建設。

Very helpful. And then maybe a similar question on the Water Quality side, Obviously, you've talked about strengthening industrial business for a while now. Maybe talk about the resilience of that. Are you seeing North American municipalities on the Hach side spend anymore? Is there -- do you see any risk of higher rates, maybe impacting that side of the spend?

很有幫助。然後也許是關於水質方面的類似問題，顯然，您已經談論加強工業業務有一段時間了。也許談談它的彈性。您是否看到哈希一方的北美城市不再花錢？您是否認為利率上升有任何風險，可能會影響這方面的支出？

Yes. So the nice thing about our business, Andy, is it's largely an OpEx-focused set of businesses. So interest rates, CapEx approval cycles we are minimally impacted by. And because we operate at the high end of the value continuum in terms of being integral to operating municipal water plants. We see steady spend there.

是的。安迪，我們業務的好處在於它主要是一組以營運支出為重點的業務。因此，利率、資本支出審批週期對我們的影響微乎其微。因為我們在營運市政水廠方面處於價值連續體的高端。我們看到那裡的支出穩定。

And following the pandemic when municipalities were kind of in lock down relative to their levels of investment. They are starting to execute on their project backlog. And that means that as they execute on that activity. There will be more analytics and testing required for refurbishing plants and getting going on those improvements.

在疫情大流行之後，各城市的投資水準都受到了限制。他們開始執行他們的專案積壓工作。這意味著當他們執行該活動時。翻新工廠並繼續進行這些改進將需要更多的分析和測試。

So we continue to see good demand here that's continuing to recover municipalities. And we also have a variety of opportunities here in water reuse and recycling, reclaim activities as well. So we're encouraged by the muni markets that are starting to recover and look forward to continued execution there.

因此，我們繼續看到這裡的良好需求，這些需求正在繼續恢復城市。我們在水的再利用和回收、回收活動方面也有各種機會。因此，我們對開始復甦的市政市場感到鼓舞，並期待在那裡繼續執行。

We'll take our next question from Jeff Sprague with Vertical Research Partners.

我們將回答 Jeff Sprague 和 Vertical Research Partners 提出的下一個問題。

Hey Jennifer, just first on just kind of the M&A side of the equation. Obviously, a couple of quarters out of the box here probably kind of a solid year. So to think about it given the time line of the spin. Just wonder how the pipeline is coming together. Do you see things that are actionable. And do they lean towards one segment or the other?

嘿，詹妮弗，首先談談等式的併購方面。顯然，開箱即用的幾個季度可能是堅實的一年。因此考慮一下旋轉的時間軸。只是想知道管道是如何整合在一起的。您是否看到了可操作的事情？他們傾向於某一細分市場還是另一細分市場？

Yes. This is everyone's favorite topic, I think. We are 207 days post spin, I think, today. So it's still early days here. But I have to say, we have a very, very robust process and a strong pipeline of activity, both in the Water Quality side, the PQI side with a number of opportunities that we're considering.

是的。我想這是每個人最喜歡的話題。我想，今天已經是旋轉後 207 天了。所以現在還為時過早。但我必須說，我們在水質方面和 PQI 方面都有一個非常非常穩健的流程和強大的活動管道，我們正在考慮許多機會。

We are going to stay disciplined here, consistent with our heritage and focus on making sure that we're going after the right markets, strong companies within those markets and making sure that they come at the right valuation. We continue to like businesses that have similar operating model, durability and financial profile to those that we have in the portfolio today. Businesses that can drive VES, or if they can utilize VES for continued improvements in growth in margin.

我們將在這裡保持紀律，與我們的傳統保持一致，並專注於確保我們追求正確的市場、這些市場中的強大公司，並確保它們獲得正確的估值。我們繼續看好那些與我們目前投資組合中的企業具有相似營運模式、耐用性和財務狀況的企業。可以推動 VES 的企業，或是可以利用 VES 持續提高獲利成長的企業。

And certainly, our bias towards M&A is an important catalyst here going forward. But we will continue to maintain the rigor and the discipline that we have inherited from our history. And as always, M&A is a little bit episodic. We do see more opportunities opening up relative to actionability as the year progresses. And so we are encouraged by that.

當然，我們對併購的偏好是未來發展的重要催化劑。但我們將繼續保持我們從歷史中繼承下來的嚴謹和紀律。像往常一樣，併購有點偶發性。隨著時間的推移，我們確實看到了更多與可操作性相關的機會。因此我們對此感到鼓舞。

And then maybe unrelated and for Sameer. Given that maybe kind of the consumables versus equipment mix doesn't really shift a whole lot until we get into the second half of the year. Why is it that margins would be down sequentially Q1 to Q2 on sequentially higher revenues?

然後對於 Sameer 來說可能是無關的。考慮到在進入下半年之前，消耗品與設備的組合可能不會真正發生太大變化。為什麼第一季到第二季的利潤率會在收入連續增加的情況下連續下降？

As we go from Q1 to Q2, Jeff, this is -- really ends up -- the first thing is the second quarter ends up being a seasonally heavier trade show activity quarter for us. So the operating expenses do go up seasonally just for us in Q2 and Q1. And that's kind of -- I would say, applies to both the segments. The other fact that is just some of the corporate spending. As we said at the beginning of the year in February, right, we just want to be very cautious and judicious as you bring in the corporate expenses, from a stand-alone company perspective.

當我們從第一季到第二季時，傑夫，這——實際上最終是——第一件事是第二季最終成為我們季節性貿易展覽活動較多的季度。因此，我們第二季和第一季的營運費用確實會季節性上升。我想說，這適用於這兩個細分市場。另一個事實只是企業支出的一部分。正如我們在二月年初所說的那樣，從獨立公司的角度來看，我們只是希望在計入公司費用時非常謹慎和明智。

So some of that is just how we're pacing in and slowly in the second quarter, some of that just going to ramp up. And lastly, I would say, as Jennifer mentioned, we are investing on the SG&A side. And in Q1, we did make investments. We're going to start seeing more run rate impact as you move into the second quarter. So it's really a combination of those 3 things that's driving the sequential decline.

因此，其中一些就是我們在第二季度緩慢推進的方式，其中一些只會加速。最後，我想說，正如 Jennifer 所提到的，我們正在 SG&A 方面進行投資。在第一季度，我們確實進行了投資。當進入第二季度時，我們將開始看到更多的運行率影響。因此，這實際上是這三件事的結合推動了連續下降。

Does it bias towards one segment or the other?

它是否偏向某一細分市場或另一細分市場？

No, it's pretty universal across the board.

不，它是非常普遍的。

We'll take our next question from Mike Halloran from Baird.

我們將回答來自 Baird 的 Mike Halloran 的下一個問題。

So following up on Jeffrey's question, as you became a stand-alone company, did you have to change processes lean in any way from an organizational perspective with incremental resources, whatever, to essentially build the muscle on the M&A side, obviously, a little bit less prioritized at Danaher?

因此，接下來傑弗裡的問題是，當你成為一家獨立的公司時，你是否必須從組織角度以任何方式改變精益流程，並增加資源，無論如何，以本質上增強併購方面的實力，顯然，一點點丹納赫的優先順序降低了？

So is there anything that you've had to do to build that up more than what you had done when you came in here and centralization of resources. And then I guess the second part is how integrated is that with your R&D functionalities as we see here today?

那麼，除了你來到這裡時所做的事情以及資源的集中化之外，你還需要做些什麼來建立這個基礎呢？然後我想第二部分是與我們今天在這裡看到的研發功能的整合程度如何？

So clearly, standing up -- a stand-alone company does require a corporate organization to support it. Previously, tax and treasury and all of those functions were taken care of for us. But with respect to sort of the M&A trajectory, we were very deliberate in bringing in top talent in our strategy and sustainability function and our corporate development function. Both of those individuals that sit on my staff have long-standing histories within Danaher building strategy and executing on M&A. Insofar as the muscle building within the operating companies themselves.

很明顯，一家獨立的公司確實需要一個企業組織來支持它。以前，稅務和財務以及所有這些職能都是由我們負責的。但就併購軌跡而言，我們非常慎重地在策略和永續發展職能以及企業發展職能中引入頂尖人才。我的員工中的這兩個人都在丹納赫制定策略和執行併購方面有著悠久的歷史。就營運公司本身內部的實力建設而言。

We have upskilled the capability for our leadership within the operating companies to be able to performed strong due diligence, look at effective ways of integrating and so on. So we spent actually quite a bit of time here in both the ramp up to the spin and following the spin itself.

我們提高了營運公司領導層的能力，使其能夠進行強有力的盡職調查，尋找有效的整合方式等。所以我們實際上花了相當多的時間在旋轉的加速和旋轉本身。

And the second one is just kind of putting the commentary together on the Water Quality and the PQI side as far as starting to see some green shoots in specific areas or recovery in specific areas. How much of that is embedded from here from a guidance perspective? Are we talking relatively normal sequentials, or is there an assumption for an improved backdrop as we get through the year and just had some context?

第二個只是將水質和 PQI 方面的評論放在一起，直到開始看到特定區域的一些萌芽或特定區域的恢復。從指導的角度來看，其中有多少是從這裡嵌入的？我們是在談論相對正常的序列，還是在我們度過這一年並了解一些背景時假設背景有所改善？

Hey Mike, yes, I'll take this one. Essentially, it's pretty kind of a gradual sequentially improving quarter-by-quarter that you just built into the guide at this point. As I said earlier, really what we're building is this point for -- in the near term is really more on the consumables side, still that trend slowly kind of building equipment side, it's really more in the second half of the year.

嘿，麥克，是的，我要這個。從本質上講，這是一種逐季度逐步順序改進的方式，您此時剛剛將其構建到指南中。正如我之前所說，我們真正構建的是這一點 - 短期內實際上更多的是消耗品方面，仍然是緩慢的構建設備方面的趨勢，實際上更多是在今年下半年。

So there's a little bit of a macro backdrop helping us some of the equipment side coming back, but it's going to be pretty moderate sequentially kind of going up, but on a year-over-year basis, as you can imagine, from the Q3, Q4 will be better. That's how the math works.

因此，有一些宏觀背景幫助我們的一些設備方面有所回升，但從第三季度開始，環比增長將會相當溫和，但從同比來看，正如你可以想像的那樣，Q4會更好。這就是數學的原理。

We'll take our next question from Deane Dray with RBC Capital Markets.

我們將回答加拿大皇家銀行資本市場部 Deane Dray 提出的下一個問題。

I appreciate all the color and specifics in the slides in your prepared remarks. I'd like to get a very specific question in Water Quality, if I could. So the new EPA regulations on PFAS, the 4 parts per trillion is really -- as that pushes the testing technology limits. And right now, it's still you have to use a prohibitively expensive mass spec, no utility really can afford that.

我很欣賞您準備好的發言中幻燈片中的所有顏色和細節。如果可以的話，我想問一個關於水質的非常具體的問題。因此，EPA 對 PFAS 的新規定確實是萬億分之四，因為這推動了測試技術的極限。現在，您仍然必須使用極其昂貴的質譜儀，沒有公用事業公司真正負擔得起。

So is the industry any closer, are you all any closer to what might be a more economical test because all this is going to be seeing incredible demand over as of now, as of 2 weeks ago.

那麼，這個行業是否更接近了，你們是否更接近可能更經濟的測試，因為截至目前，截至兩週前，所有這些都將出現令人難以置信的需求。

Yes. Great question, Deane. We knew that the EPA was headed towards a 4 parts per trillion limit of detection here. So that's not fundamentally new news for us. What is new news there is the time line for compliance with [Salsnes] in 2027, but you are right that this is a phenomenally difficult and complex problem to solve in a fit-for-purpose way. Right now, the way to solve for this is water sample set to centralized lab, run through GC mass spec, answers come back, a couple of weeks later.

是的。很好的問題，迪恩。我們知道 EPA 的檢測極限正在朝著萬億分之四的方向發展。所以這對我們來說根本不是什麼新消息。新消息是 2027 年遵守 [Salsnes] 的時間表，但你是對的，這是一個非常困難和複雜的問題，需要以適合目的的方式解決。目前，解決這個問題的方法是將水樣本設置到集中實驗室，透過氣相層析質譜儀運行，幾週後就會得到答案。

In the meantime, the municipality has discharged tens, if not hundreds of thousands of gallons of water. We are investing in this area. We do believe we have a right to play here. Hach unit of itself has over a 70-year history of innovating in the analytics space. We've got a broad portfolio there. And certainly, on the water treatment side, particularly in UV applications, we've got great expertise there as well.

同時，市政府已經排放了數十萬加侖的水。我們正在這個領域進行投資。我們確實相信我們有權利在這裡比賽。哈希公司本身在分析領域擁有 70 多年的創新歷史。我們在那裡擁有廣泛的產品組合。當然，在水處理方面，特別是在紫外線應用方面，我們也擁有豐富的專業知識。

But I would say this is a long game here with solutions that are not imminent, but we're probably still a couple of years out here in terms of identifying and developing fit-for-purpose technology that addresses both detection and destruction. We think that winning is going to require both.

但我想說，這是一場漫長的遊戲，解決方案並不是迫在眉睫的，但在識別和開發適合目的的技術來解決檢測和破壞方面，我們可能還需要幾年的時間。我們認為獲勝需要兩者兼具。

And right now, the analytical test options, as you say, are not fit for purpose in terms of being at plant. And frankly, destruction technology is not readily available either. There are products out there, granular activated carbon being one of them that can capture PFAS but what happens when you refresh those resin beds, you're just moving the PFAS to some other place like a landfill. So it's going to be a long journey here, but we are investing in a number of organic activities and are open to inorganic options as well.

正如您所說，目前的分析測試選項不適合工廠的目的。坦白說，銷毀技術也不是現成的。有一些產品可以捕獲 PFAS，顆粒活性碳就是其中之一，但是當您更新這些樹脂床時會發生什麼，您只是將 PFAS 轉移到垃圾掩埋場等其他地方。因此，這將是一個漫長的旅程，但我們正在投資許多有機活動，並對無機選擇也持開放態度。

That's really helpful. And I fully appreciate that time line that you've suggested that's everything that we've heard as well. There's a question between wanting something and there's a demand -- industry demand versus the practicality given the complexity of the molecules. But I really appreciate the color. And I'm so glad to hear you mention destruction as well because that's an opportunity.

這真的很有幫助。我完全感謝您所建議的時間表，這也是我們所聽到的一切。想要某種東西和有需求之間存在一個問題——考慮到分子的複雜性，產業需求與實用性。但我真的很欣賞這個顏色。我很高興聽到你也提到破壞，因為這是一個機會。

And then just for a follow-up question, and I'll echo Scott's comments about that 60% threshold on gross margin and how big a deal that is. And I remember when Danaher hit that level as well. And just one of the ways that you might be able to boost that further I know your business model is a direct to customer on the -- overall and especially on the Hach consumables where you just would think there'd be more of a distribution angle to this, which would lower that cost of getting the reagents to the customers.

對於後續問題，我將回應 Scott 關於 60% 毛利率門檻的評論以及這有多大。我記得丹納赫也達到了這個水準。這只是你能夠進一步推動這一點的方法之一，我知道你的商業模式是直接面向客戶——總體而言，特別是在哈希消耗品方面，你會認為會有更多的分銷角度這將降低向客戶提供試劑的成本。

Just where does that stand? Is that a nonstarter? Or is that something you've explored? I know in some countries, you will use distributors just because it's not practical to have direct, but just where does that stand?

那到底在哪裡呢？這是一個無用的東西嗎？還是這是你探索過的東西？我知道在某些國家/地區，您會使用分銷商，因為直接分銷是不切實際的，但這又如何呢？

Yes. I mean I think you're right, Deane. We do and will use distribution for our analytics businesses in certain countries. They tend to be areas where we don't have critical mass in terms of staffing up the full capability of selling direct. We think it's actually a good thing to sell direct. And it's part of what I would consider to be the secret sauce because we have that long-standing technological applications knowledge.

是的。我的意思是我認為你是對的，迪恩。我們已經並將在某些國家/地區使用分銷來開展我們的分析業務。在這些領域，我們在配備完整的直銷能力方面缺乏足夠的人才。我們認為直接銷售其實是件好事。這是我認為的秘密武器的一部分，因為我們擁有長期的技術應用知識。

And it's that customer intimacy and the insight to their processes, their process control, their analytics needs, they're unmet, that the problems that have yet to be solved that give us great insight and creates the flywheel of feedback loop from our sales and service organization to our new product development organizations that help us continue to innovate and evolve the product portfolio to solve unmet customer needs.

正是客戶的親密感以及對他們的流程、他們的流程控制、他們的分析需求的洞察力，他們尚未得到滿足，那些尚未解決的問題為我們提供了深刻的洞察力，並從我們的銷售和銷售中創造了反饋循環的飛輪。

So we are not inclined to sort of steer away, if you will, from our direct sales model just from a margin benefit standpoint. We think there's lots of opportunity by virtue of applying VES, and working on mix. The teams are doing a great job here in delivering margin as a result of just good operating and execution, right? The factories are running better, procurement teams are pushing back on inflationary pressures, and we're doing far fewer spot buys. So we had a number of other levers that we can pull relative to margin without compromising the secret sauce of customer intimacy.

因此，如果您願意的話，我們不會僅從利潤率的角度就放棄我們的直銷模式。我們認為應用 VES 並進行混合工作會帶來很多機會。由於良好的營運和執行，團隊在交付利潤方面做得很好，對吧？工廠運作得更好，採購團隊正在抵禦通膨壓力，我們的現貨採購也少得多。因此，我們有許多其他槓桿可以在不損害客戶親密度的秘密武器的情況下提高利潤率。

We'll take our next question from Andrew Krill with Deutsche Bank.

我們將回答德意志銀行安德魯·克里爾的下一個問題。

I wanted to ask on -- going back to price and price costs more specifically. Just can you give us an update on what you're assuming there? I think we've heard from several companies like transportation, labor, certain raws all continue to be pretty inflationary.

我想問——更具體地說，回到價格和價格成本。您能否向我們介紹一下您的假設的最新情況？我想我們已經從運輸、勞動力、某些原材料等幾家公司聽說通貨膨脹仍然相當嚴重。

So is the guide assuming you can stay price cost positive, like on a margin basis or just dollars? And anything there would be really helpful. And if there's any big difference by the segments?

那麼，該指南是否假設您可以保持價格成本為正值，例如基於保證金或僅以美元為基礎？那裡的任何事情都會非常有幫助。各個細分市場之間是否有很大差異？

Andrew, I'll take that one. Essentially, from a price, from a guide perspective and the future look perspective, we're modeling in price in line with historical norms. So it's 100 to 200 basis points. This quarter, of course, as things are rolling off, we came in a little bit towards the high end of that range. But I think from an outlook perspective on the guide perspective, 100 to 200 basis points is a good way to model.

安德魯，我要那個。本質上，從價格、指導角度和未來展望來看，我們正在根據歷史規範對價格進行建模。所以是100到200個基點。當然，本季度，隨著事情的進展，我們有點接近該範圍的高端。但我認為從後市的角度和指引的角度來看，100到200個基點是一個很好的建模方式。

On the raw materials and the material side, look, I think it's a pretty broad mix of kind of things that we buy all the way from semiconductor, some of the circuit boards down to stuff in plastics and think of those nature that's kind of tied to commodities. I would say the operating discipline and the VES really helping us kind of manage that, I think, has been a big differentiator. That's going to really reflected in Q1. And the question that Scott and Deane had us over the gross margin side.

在原材料和材料方面，你看，我認為這是我們購買的各種東西的一個相當廣泛的組合，從半導體、一些電路板到塑膠材料，想想那些相互聯繫的性質到商品。我想說，操作紀律和 VES 確實幫助我們進行了管理，我認為這是一個很大的差異化因素。這將真正反映在第一季。史考特和迪恩向我們提出了毛利率方面的問題。

We saw a big uplift from that side as well. I think really, going forward, having the operating discipline, making sure we are doing less of the smart buy I would say, inflationary pressures are there. We are managing, managing them really well, but it's also about the operating discipline to make sure we are minimizing any smart buys, which can really have a big impact on the market side.

我們也看到了那邊的巨大提升。我認為，確實，展望未來，遵守經營紀律，確保我們減少明智的購買，我想說，通膨壓力是存在的。我們正在很好地管理它們，但這也與營運紀律有關，以確保我們最大限度地減少任何明智的購買，這確實會對市場產生重大影響。

So I would say pricing. We're doing the value in used pricing, and it's showing up in the market side for the price side, there's a lot of discipline that all starts all the way from operating discipline.

所以我會說定價。我們正在二手定價中實現價值，它體現在市場方面的價格方面，有很多紀律，所有這些都從營運紀律開始。

And then for a follow-up on free cash flow conversion, it's nice to see the conversion boosted for the year from 100% to 110%. Just any more insight into like what changed to give you cost through 1 quarter? And looking ahead, should we be maybe thinking of like 100% conversion as kind of a lower like legacy Danaher was very consistently over 100%.

然後，對於自由現金流轉換的後續行動，很高興看到今年的轉換從 100% 提高到 110%。想了解更多關於 1 季度成本變化的資訊嗎？展望未來，我們是否應該考慮 100% 的轉換率，因為傳統丹納赫的轉換率較低，但始終超過 100%。

Yes. Andrew, if you look at free cash flow conversion, right, just as a reminder, we do give the conversion on the basis of the GAAP metrics, right, not on any kind of adjusted metrics. So essentially, when you look at that, just add the amortization and the share compensation or the stock-based compensation, I think based on all that stuff, we should be a little bit on the 100%, a little over 100% but really going towards 100% to 110% range this quarter for the full year for us. That guidance is really driven by getting more conviction on the margin side.

是的。安德魯，如果你看看自由現金流轉換，對吧，只是提醒一下，我們確實根據 GAAP 指標進行轉換，對吧，而不是任何類型的調整指標。所以本質上，當你看到這一點時，只需添加攤銷和股份補償或基於股票的補償，我認為基於所有這些東西，我們應該有點 100%，略高於 100%，但實際上本季度我們全年的成長率將達到100% 到110%。這項指導其實是由對保證金方面的更多信心所推動的。

As Jennifer mentioned, our margin will be towards the high end on the 50 to 75 basis points that kind of flows down, that gave us a more conviction. And also, there's a noncash charge in there as well, right, this quarter that's flowing to the GAAP net income, which is tied to the sales divestiture. So that's kind of just from a math perspective, and adds to the cash flow conversion as well. But overall, it was better operating performance.

正如 Jennifer 所提到的，我們的利潤率將在 50 到 75 個基點的基礎上趨向高端，並有所下降，這讓我們更有信心。此外，本季還有一項非現金費用流入 GAAP 淨利潤，該淨利潤與銷售剝離相關。所以這只是從數學角度來看，也增加了現金流轉換。但整體而言，其營運表現較好。

And we'll take our next question from Nathan Jones with Stifel.

我們將回答 Nathan Jones 和 Stifel 提出的下一個問題。

I'm going to follow up on Deane's question on distribution, but I'm going to come at it from the PQI side because I would have thought there might actually be some more opportunities to leverage the distribution model and maybe reduce the cost to serve on the PQI side than on the water side, potentially maybe in lasers where there's not the same kind of consumable revenue or some of the smaller customers that maybe don't need thatkind of super high level of service from you guys. So any commentary you could make on maybe the potential from that side of the business to leverage distribution a bit more?

我將跟進 Deane 關於分發的問題，但我將從 PQI 方面來解決這個問題，因為我認為實際上可能有更多機會利用分發模型，並且可能會降低服務成本在PQI 方面而不是在水方面，可能在雷射方面，那裡沒有相同類型的消費品收入，或者一些較小的客戶可能不需要你們提供那種超高水準的服務。那麼，您可以對業務方面進一步利用分銷的潛力發表什麼評論嗎？

Yes. I mean I think it's probably the same answer as for water. I mean we do have distribution and we do consider use of distribution depending upon where we're selling in the world and what types of products are in the portfolio. This is something that we always consider in terms of when we when we decide to make investments and which product lines actually require a more significant level of applications, knowledge and insight.

是的。我的意思是，我認為這可能與水的答案相同。我的意思是，我們確實有分銷，並且我們確實考慮使用分銷，這取決於我們在世界上的銷售地點以及產品組合中的產品類型。當我們決定進行投資以及哪些產品線實際上需要更高水準的應用程式、知識和洞察力時，我們總是會考慮這一點。

But I will tell you that like in water, there are pretty significant insights to be gained from understanding customer problems in a direct way for any kind of customer who's on the packaging and color side or on the marking and coding side. And it actually spurs a great deal of our innovation.

但我會告訴你，就像在水中一樣，對於包裝和顏色方面或標記和編碼方面的任何類型的客戶來說，透過直接了解客戶問題可以獲得相當重要的見解。它實際上刺激了我們大量的創新。

You will recall from our fourth quarter call that Videojet launched 7 new products last year. They additionally launched another 2 in the first quarter, and these are on the back of innovations for direct to customer feedback. So I continue to be a little bit biased here towards our direct model because I do think it creates a customer intimacy required to have those untapped insights relative to some of the problems that they face. But we do use distribution, and we selectively consider that in the course of every strategic planning cycle.

您還記得在我們第四季的電話會議中，偉迪捷去年推出了 7 款新產品。他們還在第一季推出了另外兩款產品，這些都是在直接向客戶回饋的創新的支持下推出的。因此，我仍然對我們的直接模式有一點偏見，因為我確實認為它創造了一種客戶親密感，需要對他們面臨的一些問題擁有那些未開發的見解。但我們確實使用分銷，並且我們在每個戰略規劃週期的過程中選擇性地考慮這一點。

I wanted to ask a follow-up on recycle and reuse in industrial markets, which is a market, I think, has significant growth potential over the next 5, 10, 20 years and would certainly be a market that's right in the bull's eye for a lot of your water quality business. So maybe some commentary on trends in industrial recycle and reuse markets, what you're seeing going on there and what the opportunities are for Veralto to play in those markets?

我想詢問工業市場回收和再利用的後續情況，我認為這個市場在未來 5 年、10 年、20 年具有巨大的成長潛力，並且肯定會成為一個最受關注的市場。那麼也許對工業回收和再利用市場的趨勢有一些評論，您看到那裡發生了什麼以及 Veralto 在這些市場中發揮作用的機會是什麼？

This is a great question, and absolutely. We see a great deal of activity, interest and growth potential in both recycle and reuse. And it's one that is pan-operating company, I would say, across our water quality businesses. So the intersection of ChemTreat, Trojan and Hach, can all play in that space. And in fact, do have conversations amongst themselves and amongst the sales folks in the field relative to solving those kinds of applications.

這是一個很好的問題，而且絕對是一個很好的問題。我們在回收和再利用方面看到了大量的活動、興趣和成長潛力。我想說，這是一家跨我們水質業務的泛營運公司。因此，ChemTreat、Trojan 和 Hach 的交集都可以在這個空間中發揮作用。事實上，他們之間以及現場銷售人員之間確實就解決此類應用程式進行了對話。

But increasingly, by virtue of the importance of ESG amongst our customers. We do have them coming to us saying, "Look, my company has just said, I've got to use 25% less water and of the water that's not used in the process. They've got to recycle 50% of it, right? So can you help me with both reduction and recycling.

但由於 ESG 在我們客戶中的重要性，這一趨勢日益明顯。確實有他們來找我們說，「看，我的公司剛剛說過，我必須減少使用 25% 的水以及過程中未使用的水。他們必須回收其中 50%，對嗎？你能幫我減少和回收嗎？

And those are great -- those are sweet spots for us. We've got a great product portfolio that can be deployed to these applications. And so we continue to be excited about the space.

這些都很棒——這些對我們來說是最佳點。我們擁有可以部署到這些應用程式的出色產品組合。因此，我們繼續對這個領域感到興奮。

And we'll take our next question from Andrew Buscaglia with BNP Perles.

我們將接受法國巴黎銀行 (BNP Perles) 的安德魯·布斯卡利亞 (Andrew Buscaglia) 提出的下一個問題。

So I just wanted to check on the Water Quality side, you're talking about really strong industrial demand in your guide -- you did much better than your guidance. I'm wondering what changed, I'd say, from December, January to what transpired throughout the quarter? And then just the sustainability around that? What's driving that really?

所以我只是想檢查水質方面，您在指南中談論了非常強勁的工業需求 - 您做得比您的指導要好得多。我想知道從 12 月、1 月到整個季度發生了什麼變化？然後就是圍繞它的可持續性？到底是什麼推動了這一點？

Yes. I mean I think we still see pretty strong industrial output here, particularly in North America. I think as we mentioned in our prepared remarks, we do see food and beverage coming back, which across the portfolio is the largest continuous industrial segment that we play in. But likewise, chemical processing, mining and power generation all continue to be strong.

是的。我的意思是，我認為我們仍然看到相當強大的工業產出，特別是在北美。我認為，正如我們在準備好的發言中提到的那樣，我們確實看到食品和飲料正在回歸，這是我們參與的整個投資組合中最大的連續工業領域。都繼續強勁。

We do see opportunities around the reshoring activity as well as the world becomes a little bit more fractured relative to its trade relationships, and so that's providing great opportunity, particularly with respect to microelectronics and the CHIPS Act and so on. So we do see a good macro environment here, particularly in North America for our industrial sector.

我們確實看到了回流活動的機會，以及世界相對於其貿易關係變得更加破碎，因此這提供了巨大的機會，特別是在微電子和 CHIPS 法案等方面。因此，我們確實看到了良好的宏觀環境，特別是在北美，對於我們的工業部門而言。

A lot of little things it sounds like. Yes, yes. And you got a lot of questions on M&A. Obviously, that's where a lot of interest lies. I'm wondering if you can comment on your margins, especially in Water Quality are quite high. How are you thinking about margins as you add M&A to your portfolio? Is there enough out there where you could see some accretion or generally long term, is this not really -- should we not expect those margins to stay where they are if you're adding deals?

聽起來像很多小事。是的是的。您有很多關於併購的問題。顯然，這就是很多人感興趣的地方。我想知道您是否可以評論一下您的利潤，尤其是在水質方面相當高。當您將併購納入您的投資組合時，您如何考慮利潤率？是否有足夠的地方可以看到一些成長或總體上是長期的，這不是真的嗎？

Yes, Andrew, as we've kind of stated in the past, and when it comes down to M&A, it really -- we follow a very disciplined and rigorous approach around markets, companies and valuation with respect to the financial metrics, it really is a combination of multiple factors, right? We look at ROIC, we look at margin, what's are the things that we can add to the portfolio that can drive overall core growth and create synergies, how do we apply VES into the acquired businesses to really create the differentiated value.

是的，安德魯，正如我們過去所說的那樣，當談到併購時，我們確實在市場、公司和財務指標方面遵循非常嚴格和嚴格的方法，這確實是是多種因素的結合，對嗎？我們關注ROIC，我們專注於利潤率，我們可以在投資組合中添加哪些東西來推動整體核心成長並創造協同效應，我們如何將VES應用到收購的業務中以真正創造差異化價值。

So it really comes down to the value creation potential and ultimately, that's based on a combination of all these different financial factors that we kind of look at as part of our rigorous process. So I wouldn't really focus on one metric versus the other. It really comes under the combination of all to see how they will create long-term value.

因此，這實際上取決於價值創造潛力，最終，這是基於所有這些不同財務因素的組合，我們將其視為嚴格流程的一部分。所以我不會真正專注在一個指標與另一個指標。真正需要將所有因素結合起來，看看它們將如何創造長期價值。

We'll take our next question from Brian Lee with Goldman Sachs.

我們將回答高盛布萊恩李 (Brian Lee) 提出的下一個問題。

Lots has been covered on the call. So maybe just a few follow-ups, I guess, on PQI. Can you remind us how far out does your visibility extend on the equipment backlog and then the recent strength you're seeing in bookings? And then also maybe remind us what are the mix implications? You kind of alluded to them, but mix implications for margins in PQI as you move through the year. And it does sound like equipment will grow relative to consumables, how should we think about that in the context of margins?

電話會議中已經涵蓋了許多內容。我想，也許只是針對 PQI 進行一些後續行動。您能否提醒我們您對設備積壓的了解程度以及您最近在預訂中看到的實力？然後也許還提醒我們混合影響是什麼？您有點提到了它們，但在這一年中，您對 PQI 利潤率的影響混合在一起。聽起來設備相對於消耗品確實會成長，在利潤率的背景下我們應該如何考慮這一點？

Yes. I mean, I think what we see here is visibility for equipment in the 60- to 90-day time frame, right? This is the short-cycle business. So a lot of our confidence around equipment here in the second half is a product of history, right, where we see cycles of food and beverage and consumer packaged goods sort of decline in recovery. We see typical patterns, which is pretty intuitive of the inks and solvents, spare parts, consumables recovering first as these lines are brought back online and then equipment following when funds are available to do line expansions, equipment upgrades and so on and so forth.

是的。我的意思是，我認為我們在這裡看到的是 60 到 90 天時間範圍內設備的可見性，對嗎？這就是短週期業務。因此，我們對下半年設備的信心是歷史的產物，對吧，我們看到食品和飲料以及消費品包裝的周期在復甦中有所下降。我們看到了典型的模式，這是非常直觀的，當這些生產線恢復上線時，墨水和溶劑、備件、消耗品首先恢復，然後當有資金用於生產線擴展、設備升級等時，設備也隨之恢復。

So you do see in the guide that we've projected a rebalancing of kind of consumables and equipment here in the back half of the year. And so we've accounted for that.

因此，您確實在指南中看到，我們計劃在今年下半年對消耗品和設備進行重新平衡。我們已經考慮到了這一點。

And then just one on Water Quality. I think a couple of questions ago, you were talking, Jennifer, about the demand in water reuse, water recycling somewhat from an ESG footprint from a growing subset of your customers. I think there's also a growing subset of customers and industries here levered to power gen growth. We're seeing low growth on the grid in the U.S. especially. First time in a while really seeing some positive inflection.

然後是關於水質的一項。我想幾個問題之前，詹妮弗，您談到了水再利用的需求，水的回收利用在一定程度上來自於越來越多的客戶的 ESG 足跡。我認為這裡還有越來越多的客戶和產業利用發電成長。我們尤其看到美國電網的低成長。一段時間以來第一次真正看到一些積極的變化。

So can you kind of give us a sense of from your vantage point, the different technologies, product sets you have the microelectronics sector, how much of the mix it is? And then it seems like there's just incremental volume growth opportunities there. Maybe if you could just speak to that a little bit.

那麼您能否從您的角度讓我們了解您在微電子領域擁有的不同技術、產品集，它們的混合程度是多少？然後似乎那裡只有增量的銷售成長機會。也許你能稍微談談這一點。

So the business that is -- benefits most from the CHIPS Act and microelectronics is Trojan that sells UV treatment systems in for high-purity -- ultra-high-purity water. That water has to be exceedingly pure given the manufacturing requirements for semiconductor wafer fab. But there are pockets of other equipment and analytics and so on that get sold into that space. But we've really seen some nice growth in our UV treatment business as a result of sort of the onshoring or reshoring of fabs here in North America as well as the ones that continue to be built in China.

因此，從《CHIPS 法案》和微電子學中受益最多的企業是銷售用於高純度、超高純度水的紫外線處理系統的 Trojan。考慮到半導體晶圓廠的製造要求，水必須非常純淨。但還有一些其他設備和分析等被出售到該領域。但由於北美以及繼續在中國建造的工廠的本土化或回流，我們的紫外線處理業務確實出現了一些不錯的成長。

And Brian, the only other thing I would add to that is as you're going to look at the bid activity that our teams are seeing, we're seeing a pretty healthy bid activity that's kind of tied to the reuse point that earlier Nathan had as well on the municipal side and then on the semi side on the -- for the UV treatment system. So the bid activity is actually pretty good on both sides. That kind of tie back into the Trojan business.

Brian，我要補充的唯一一件事是，當您查看我們團隊所看到的出價活動時，我們看到了相當健康的出價活動，這與之前 Nathan 的重用點有關。是半側——用於紫外線處理系統。因此，雙方的投標活動其實都相當不錯。這種與特洛伊木馬業務的連結。

And it appears that we have no further questions at this time. I will now turn the call back over to Ryan Taylor for any additional or closing remarks.

目前看來我們沒有其他問題了。我現在將把電話轉回給瑞安泰勒，以徵求任何補充或結束語。

Thanks, Shelby, and thanks, everybody, for joining us today. We really appreciate your time and engagement. As normal, I'll be available for follow-ups today and throughout the next coming days and weeks, should you want to talk, please reach out to me. And at this time, we'll conclude our call. Thank you so much again, and we'll join you next time.

謝謝謝爾比，也謝謝大家今天加入我們。我們非常感謝您的時間和參與。像往常一樣，我今天以及接下來的幾天和幾週都可以進行後續跟進，如果您想交談，請與我聯繫。此時，我們將結束通話。再次非常感謝您，我們下次再加入您。

That concludes today's teleconference. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。