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| Statement |
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| I mean, so good news is that clearly we're still a pretty high backlog, which is encouraging to see |
| We continue to see solid demand for our products with organic orders also up 5% |
| So again, very encouraged, very happy and to see the performance and look forward to another great year here in 2024 |
| I was very impressed by the entrepreneurial and technological spirit that has made this company grow at an impressive organic CAGR of 15% over the past three years |
| Starting on Slide 3, in 2023, we demonstrated again how we continue to outperform against our long-term Investor Day commitments with double-digits growth in revenue, adjusted EBITDA, adjusted EPS and free cash flow |
| I was very encouraged to see how the team continues to navigate that difficult market by being very nimble and agile in terms of pivoting to those areas of good growth |
| Again I think on a two year stack, they still saw high single-digits order momentum, which is pretty impressive when you consider everything that is going on in China today |
| IRX is our competitive differentiator and combined with our ownership model, we remain confident in our ability to execute on our commitments |
| And it's very exciting to see as I travel around the world, the high level of engagement and energy that we have across our organization |
| So, we remain highly disciplined in this environment and we see just a lot of good opportunities out there |
| Vicente Reynal To the first question, absolutely, demand generation is really helping us tremendously because then think about, I mean, our products can be applicable to pretty much any end market and we're being very selective and with demand generation, we can really reach this highly fragmented customer base in a very cost effective way, very rapid, very quickly |
| I think that's controlling what we can control and taking the actions to ensure that we can deliver that solid margin improvement |
| Today, our balance sheet is stronger than ever and we enter 2024 well positioned to build upon our progress to date |
| So I think it's just part of that as Vik said, continuous improvement, good evolution and having the news travel fast, so that we can react and course correct if something is not going the right way |
| The combination of our product portfolio, multi-channel, multi-brand strategy, massive install base and unmatched commercial and operational footprint provides an exceptional foundation for continued market share growth, both organically and inorganically |
| And when you look at the main buckets, I would say, the first bucket of that improvement or good incremental margin comes in from the initiatives that we always do, the I2V, price, very good continued growth momentum on the aftermarket, particularly the recurring revenues |
| On the left hand side of the page, we have some very exciting news to share |
| And with the use of the demand generation, we were able to position that product line into a very good growth end market on first of all take sales |
| Obviously, margins have been really strong here the last three to four years |
| Finally, as shown on the right hand side of the page, we continue to make progress towards our aggressive 2030 goals, and we're already well on our way to achieve them |
| I mean, we saw strong double-digit organic revenue growth in the first half of 2023 in Asia Pacific, mainly driven by China |
| And as shown on the left hand side of the page, our employee satisfaction is over 600 basis points higher than the industry average |
| We believe our employee ownership model drives the increased employee engagement and as illustrated on the center of the page, we have created a massive economic opportunity for our employees and their families |
| I'll say broader Middle East and India, also very good momentum |
| I was just in Europe last week and really solid momentum from some good pockets of growth that we're seeing |
| We finished the year on a high note with strong fourth quarter and full year results, despite the constantly changing macroeconomic environment |
| Now that being said, we entered the year with healthy backlog, solid backlog |
| So it generates a very good solid aftermarket |
| Our balance sheet is as strong as ever, and with our discipline and comprehensive capital allocation strategy, we remain resilient and have the capacity to deploy capital to investments with the highest return as we continue our track record of market, our performance |
| With IRX, as our competitive differentiator and over 400 impact daily management sessions or IDMS across our company each week, our high performance culture encourages a strong focus on execution |
| Statement |
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| Organic orders were down 1.6%, driven by the Life Science businesses |
| The order decline was mainly driven by prudently de-booking an order from an electric truck manufacturer in Europe that had some battery supply issues |
| In addition, as a reminder, Q1 has a very tough comp as we deliver 20% organic revenue growth in Q1 of 2023 |
| Do you feel like the efficiency of manufacturing has returned to pre-COVID levels? Obviously, there's a lot of disruption, coming out of the pandemic, which I'm sure was a headwind to margins in some capacity |
| But what we would say here is, and we've acknowledged this before, probably the ones that maybe slightly below expectations comparatively speaking are probably the ones where IRX and that integration process probably didn't get embedded from day one, if not before |
| I mean, basically they had a situation where the battery supplier went bankrupt, and that led to these truck manufacturing not being able to produce the trucks |
| The one area of PST that like a lot of the folks are seeing some headwinds here |
| Only because I mean, I think still there's a little bit of supply chain disruption here and there that happens, right? And so giving you, for example, I mean, the situation with the Red Sea, the situation in the Panama Canal, I mean, a lot of that creates supply chain disruption and we as a company that we're so global and being so good in terms of assembly, anytime oil supply chain disruption, it creates inefficiencies in the factory |
| Vicente Reynal Chris, I would say that, I mean, it has become more difficult |
| And I'll say that APAC, Asia Pacific is the one that has the most headwinds specifically I'll say here in the first half of the year |
| Industrial vacuum and blower were down low double-digits in orders, but up low double-digits in revenue |
| And it is driven mainly by tough comps |
| We expect our normal seasonality to return in 2024 from a revenue perspective, which means that Q1 will be the lowest revenue quarter of the year |
| It's not like that exit rate sets up a tough incremental comp |
| Julian Mitchell And just as we're starting out the year, looking at orders naturally, the sort of volatile quarter to quarter, reflecting what you said on a sort of a tough Asia environment in the first half of the year and sort of very tough orders comps |
| So it was like, does demand generation -- has demand generation or other tools allowed you to outgrow the decline in life sciences? And then maybe the same question as Jeff asked in a way, but does the other side of this look like a bounce back or does it just look like a return to normal growth? I don't know whether destock or whatever at your customers has led to below normal sales and you kind of pop back up in '25, or whether you just resume normal growth? I will stop there |
| From an orders perspective, yes, I mean China in the fourth quarter was down mid-single-digits, but keep in mind that this is on top of low double-digits orders growth that they saw in Q4 2022 |
| I mean, they have seen similar declines, like the balance of the life science businesses and biopharma related markets |
| Joe Ritchie Look, it sounds like you've been on the road slow trotting the last several weeks |
| What does the recovery look like? Is there a bounce back? Has there been a decent |
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