Vontier Corporation (VNT) Earnings Call Transcript & Summary

So good morning, everyone. Thanks for coming. Welcome both everyone here in the room. We got a full house, obviously, and everyone on the webcast as well. And we're excited to be here for our first Investor Day post spin. We look forward to educating you a bit on the portfolio. We're going to update you on the strategic vision, share a little bit about what we're doing, where we're at and where we plan to go. Before I continue, just a couple of housekeeping items, of course, first of all, our presentation is now available for download on the website. You can go grab that if you haven't already. And then we will also be making some forward-looking statements today. These statements are made based on our best view of the world as we know it today, and are subject to risks and uncertainties as defined in our SEC filings. We'll also be referring to non-GAAP financial measures. Information on those are available on the Investor Relations section of our website. As I mentioned, a pretty full agenda this morning. We're going to give you some clarity by segment -- new segments, which hopefully you saw on Monday, you're going to hear from the leaders of some of those businesses as well as some of our other leadership team. We're going to have 2 separate Q&A sessions, you'll see kindly ask that when we get to those, you keep your questions to the segments that we've just presented. And then for those of you that are here in the room, we're going to stay for lunch, if you've chosen to stay and that will be down on the 12th floor. With that, I'm going to kick things off. We're going to start with a short video, and then I'm going to bring up Mark. So thank you again. [Presentation]

Well, good morning, folks. Thank you for being here today. We're really happy to tell our story. It's a great time for us to be able to illuminate for you where we're going. We're very proud of the accomplishments we've made and hopefully, you'll be able to see that today. The progress we've made over the last couple of years since spin, as well as we're going to talk about our strategy going forward. I think you're going to see a growthy story that is underpinned by strong secular drivers and the opportunity for us to take advantage of a great set of regulation that's out there that drives all of our business segments. For those of you that don't know me, my background comes -- starting my career at United Technologies at more than 15 years, where I was a student of lean. I manage global businesses for them and really focus on operational excellence. And then I wanted to learn more about growth. So I went and became a CEO of a clean tech company, and are willing to grow on the technology side and portfolio transformation as President of Brooks Automation. And I got to put in place operating systems and learn and work on portfolio transformations and growth. More recently, I was at Columbus McKinnon, which is an industrial company where we had a great success in very few number of years on doubling EBITDA and ROIC. And so what brought me here is, Vontier is a premier industrial technology company, a lot of runway for operational excellence, for accelerating growth and a portfolio transformation. I couldn't be more happy to be here with all of you today. Let's start with some key messages. First of all, I think if you look at the video, it really captures our vision for a smart, sustainable solutions and our unique ability to be able to position and lead in what we call the mobility ecosystem. And we are providing a new segmentation, you're going to see in Q1, we announced it earlier this week. And this segmentation illuminates our strategy and gives transparency to investors so they can follow us along this story. I'm incredibly proud of the progress we've made and the transformation. So when you take a look at the market that we serve, it's about a $30 billion growthy market and it is that mobility ecosystem. We have not only a right to play, we have a right to win. We call our strategy for untapping this growth, connected mobility strategy. And this is our third chapter. So we're very excited about walking you through that today and how we are going to untap value. And I will tell you this team is a proven team. It is the right team right now to be able to do this. So we're very excited to be here. You're going to get to meet them today. If you go -- roll this back a little bit from our days of spin in October of 2020, we had this opportunity to launch a premier industrial technology company. And we knew that we had a strong portfolio of brands and capabilities. But we also recognize, we had a lot of work to do. Having a resilient portfolio is not enough because we are facing one of the largest secular drivers, the U.S. EMV secular driver that this industry has probably ever faced. And so we had the benefit of many years of a tailwind that was turning into a headwind. And so we -- when we took a look at the opportunity in front of us, we knew that we had to generate more growth because in the prior couple of years of spinning, we recognized that we were getting our growth from that U.S. EMV cycle. In other words, the non-EMV portion of our business was actually declining. And so we knew that we had work to do. So we put in place a set of profitable growth initiatives. We redeployed the Vontier Business System or VBS, and we focused it on how do we start driving non-EMV growth. And we started with a bunch of platform strategies. So in Chapter 2, this was what we called unleashing our potential. We knew we had a drive for better. And I think if you followed our story, you recognize the evidence is there. It started to work. And so we -- one of the key aspects of this is we deployed around the critical few priorities. We recognize that we couldn't do everything, we had to do these things above and beyond everything else, and we deployed that with VBS. So we called this our profitable growth initiatives and platform strategies. We executed around it, and we started -- we did some acquisitions that, as you can see, was a strong deployment of capital. So overall, let's take a look at the scorecard, how did we do in our early years through 2022 or even today. We turned that, I would say, steady low single-digit decline for non-EMV revenue into a strong mid-single-digit growth. And if you followed us, it was actually higher than that. But we're saying over this period of the last couple of years, it's normalized to a mid-single-digit growth. And at the same time, in spite of $500 million of revenue, $250 million of operating profit rolling off, that's the roll-off or the sunset of EMV, we expanded margins more than 100 basis points, which means that there was a lot of work that had to be done to make that happen. The portfolio has also begun to transform. And I would say when you take a look at just a composition fact here, having more than 500 software engineers is great, but we put about 1/3 more on top of that and our recurring revenues improved. So when you look at sort of this body of work in the first couple of years, no question evidence of progress, but we still have a lot to untap here. We deployed about $1.7 billion of capital, and we did this in a way that was very disciplined. And in fact, we're promising double-digit returns on that. So we pivoted to stock buybacks, and we did a couple of very meaningful acquisitions that you'll hear about here today. So before I go on, let me give you that snapshot of what we look at -- roughly, when you look at Vontier today, roughly $3.2 billion business -- last year, about 7% ex EMV, what we call baseline core growth that is sort of underlying our performance here, good operating profits, good margins, decent recurring revenue, but very impressive cash flow. About $1.4 billion of cash we've generated over this '20 to 2022 period. And I think that's a hallmark of our business, very strong free cash flows with a disciplined capital allocation. About half of our business is in the North American market. And so -- excuse me, 75% of our business is North American market and about half of our business is environmental and fueling solutions. But you see diversification around that, importantly, high-growth markets, are important for us to untap as well as you're seeing the segmentation of the new mobility technologies and repair solutions and they're outgrowing our environmental and fueling solutions business. So let's take a look at the segmentation that we've announced, and we're going to walk you through it today. We've had 1 reporting segment. And what we're moving to in Q1 is this distinct 3 reporting segments to give you clarity on our strategy. The new mobility technologies, these businesses have commonality. And the commonality is integrated point-of-sale systems and payment. They are IoT-based automation for the mobility ecosystem. They share that common theme, very much moved up the technology stack, connected hardware, a lot of application software. We're going to talk about that. You're going to see that today in our presentation that there's a lot of commonality with untapping opportunities for customer high-value problems for mobility technologies and alternative energy is a great theme there. Repair solutions, this is premier equipment sold to service technicians and repair shops. And then I think most of you all know, Gilbarco Veeder-Root, we call GVR, is our environmental and fueling, which is above ground and below ground retail fueling where we're a market leader and I would say, best-in-class worldwide. When we launched our company, we said we want to be a premier industrial technology company with operational excellence, accelerating growth, but we want to do it based on core values. We want to be core value led. So from day one, we launched our core values, which we -- I personally deeply believe in, and many of my colleagues around the world were very passionate about these. And let me walk you through it. One, aside from teamwork, which we know is the basis of everything, we have a passion to win. We're not here to play. We are here to win in our marketplace. And each of us, I think, are driven with that passion. We talk about continuous improvement in lean. Our way of articulating this is reimagine better. Good is never good enough. It's about continuous improvement. And credit what's next is about innovation. It's about pioneering, it's about agility. So we all believe in these core values. And what makes it unique is the Vontier Business System or VBS, it underpins everything we do, and it underpins our core value. So we're happy to walk you through that. We're happy to talk more about this, but it powers everything we do. And this is truly, I think, a very unique equation on top value. Let me walk you through a customer journey in the mobility ecosystem. The age of mobility is going to change more in the next 10 years than all our lifetime. Energy transition is here, folks. The energy transition is about better sustainability. It's about affordability and it's about energy security and balancing all 3 of those. And the mobility ecosystem is the convergence of all of that. It's the conflux of those 2 mega drivers. We're not going to be in the automotive supply chain. We're not going to build electric vehicles. We're not going to go and build out the electric grid. But look where all this ends up, look at the mobility ecosystem, how much change does that have to go through? How much investment is going to go here. Look at our customers and look at the journey they're on. 50 years ago, this is a retail fueling side, gas station, if you will. And look how that is evolving today. We're going to talk about that evolution today because our customers in the mobility ecosystem have a lot of challenges they face. First and foremost, consumers. They expect a contactless, seamless, easy experience, which is safe and secure in terms of payment too. Look at the productivity challenges. This is a huge amount of disparate assets that are spread out geographically, and folks are rolling up their assets. This is huge capital outlays, operating at relatively low margins. Think of the opportunities they have to enhance their productivity. Imagine the labor challenges and skills challenges they have to operate more efficiently. So as investment is going into this, they need more tools and capabilities, and we have an excellent ability to be able to provide that for them. So when you imagine what does the -- this $30 billion market look like, let's just take a look at it. The mobility ecosystem is the set of products and services that keeps the world in motion connected by the roadway. It enables the movement of people's goods and services. And just from this simple snapshot, you can see all of the touch points that Vontier has. We have more than 50,000 c-store or convenience store point-of-sale sites. We're in more than 260,000 fueling sites worldwide, 17,000 car washes just in the United States, the world leader. We visit 150,000 repair shops every week. You think about the depth and breadth we have, we're building out electric charging stations when we have 35,000 plugs under management today and 500,000 fleet vehicles, the number is actually more than that. So there is no other company with the depth and breadth in the mobility ecosystem than us. So we have a tremendous opportunity here to untap value. Let's imagine, how that evolves. This is one of my favorite photographs. Last summer, I went with Ganesh, our Chief Strategy Officer to Norway, visited this site, had to get a photograph of this afterwards. This is a photograph of this site in Norway. Why is Norway so interesting? More than 80% of vehicles that are sold today are electric vehicles in Norway with almost 1/4 of the installed car park electrified today. You know what, go to the convenience store, let's understand what's happening there with this massive energy transformation. Surprisingly, to many of you is that the number of dispensers in the last couple of years have actually gone up, fueling dispensers, not electric charging. Look at the site, electric charging, on-site energy management because it's now a microgrid, a very attractive inviting retail experience that has fresh food, beverages, a place to be able to wait and enjoy your time. Of course, clean bathrooms, safe environment. Services like car washes are almost on every one of these locations. These are turning into mobility hubs and there is significant investment that are going into them. So I think it was really educational for us to be able to see this and understand this because when you look around the world, you see investment that is going into this infrastructure. And it makes sense when we touch every one of those from a content perspective, we move up the technology stack. This is a convenience retail example. Let me give you one on fleet, very similar what is happening with fleet and mix fleet management. Traditional needs around fleet is, of course, how do you do operational efficiency, safety and compliance. But at the same time, they are trying to think about how do you become net 0. How do you understand the dramatic changes that are occurring and you rely on digital technology because of alternate that are coming out how do you make sense of this and how do you run your fleet more efficiently. So we're very much invested in fleets. You're going to hear more about that today and how do you drive a more sustainable operation. The third [indiscernible] to show you is on repair solutions. The repair shop is changing significantly over a longer period of time. And I think when you think of the challenges here that it's kind of staggering to see what repair shops are up against. Because of the labor and skills challenges, service technicians have the highest wages that they've ever had. The car park is aging, it's now 12.2 years. That's the longest that folks have ever held on to vehicles, and it's only going to age more and there's going to be a mixed fleet on the road. How does all of that get repaired and the complexity. And one of the things that I think a lot of folks miss on the repair shop and the secular driver here is related to that aging car park is getting -- which requires a lot of service that population of age vehicles is actually growing, which means that our market for service is actually growing and the complexity of repair. So there's a lot going on here, and that means there's a lot of opportunity for us to solve high-value customer needs. Let's take a look at our roughly $3.2 billion revenue shown here on the left, and it's segmented by what we're calling our platforms that we'd like you to follow us buy. In the middle, is the market growth rates -- excuse me, the market size and then on the right is the market growth rate. So what you can see here is environmental and fueling is a roughly $3 billion market, pretty disciplined competition in this marketplace where we have a leading best-in-class solution growing at low single digits. Repair solutions is about twice the market size, growing at mid-single digits and growing with new categories that are coming to market in there to meet the changing needs of the car park. And then the largest market is mobility technologies. Folks, we already have a $900 million business in mobility technologies today in a very growthy $21 billion market opportunity. And so we're very well positioned for growth. Let's talk about what's driving that growth and why do I believe that these market segments have growth within them. Mobility Technologies are underpinned by secular drivers on the multi-energy future. At the same time, folks in that industry are doing industry consolidation. Industry consolidation favors us because we do business with the largest players in the mobility technology market. And as it consolidates and as they try to wrestle regulation, operational efficiency, all those things, we provide solutions to them, and those are excellent secular drivers for us. The secular driver in repair solution are already tipped into it. it's about the complexity of the car park. It's about labor shortage. It's about the aging vehicle fleet, but the changeover of that fleet over a longer period of time. And in fact, what we're going to show you today is that a vehicle between 7 to 12 years is in its sweet spot for us for repair. That population of vehicles over the next 15 years is going up. As that goes up, we have more opportunity to serve that repair, and it will be 90% internal combustion engines by 2035. So it's still a mixed fleet opportunity and complexity to repair is in our favor. So we're really happy to show you that. Environmental fueling is about regulation, and that regulatory environment is only improving. There's underpinning regulatory drivers for environmental fueling for above ground and below ground. And that has constantly driven our industry. But aside from this super cycle, I think what a lot of folks miss is that they think that that's over. There's no more regulatory driver. In fact, we are probably seeing more regulatory drivers on the horizon than we've ever seen before. We're going to show you that because that drives our business going forward. So we're excited to talk about that. One of the things that we're going to leverage here is our position to win. And I showed you, and we talked a little bit about that, we are positioned here with depth and breadth with winning positions already. Looking at all 3 of these segments, number 1 or number 2 in important parts of this mobility ecosystem. And this gives us incredible leverage to be able to solve the next set of high-value problems. Now let's discuss Connected mobility. We're now in our third chapter as Vontier. And our third chapter is underpinned by smart, sustainable solutions that we're providing to the mobility ecosystem. And the way we'd like to describe this to you is our opportunity for all of our businesses to connect smart hardware, provide application software and scale across the mobility ecosystem. And we think this provides a tremendous amount of opportunities for us because we are solving our customers' high-value problems. And there's 3 pillars that help bring to light what we work on. And each of our businesses think about this in terms of 3 pillars, optimizing the core, expanding from the core and then driving into near and adjacent markets. So let's take a look at that. Our depiction of our connected mobility strategy, this third chapter, is with these 3 pillars. The first one, optimizing the core is continued operational excellence. Folks we're in early innings. There's a lot of opportunity for us to continue to drive margin improvement. And we're going to walk you through that, so you're able to understand that. We, no question, have made progress there, but we have not untapped all the value opportunity, and we're going to give you some really concrete examples so you can understand we're still in early innings. VBS underpins all 3 of these pillars. You can imagine the VBS tools and capabilities that we have here to continue to drive operational excellence. The second 2 pillars are about accelerating growth. How do we expand already our strong presence in this mobility ecosystem and create from those leverage points, diversify our portfolio and continue to grow. And then adjacent markets. Adjacent markets play an important role here because of the energy transition, because of the changes in technology that are occurring, and these are near-end adjacencies. And we're going to talk about these near-end adjacencies so you can see that and you can understand it. So the first one is on optimizing our core business. Let me give you 1 example. We started very early innings with a simplification program launched through VBS where we could understand our segmentation by business and where do we have an opportunity to focus and raise price. We started prosecuting that before inflation hit. In fact, we have always been price cost positive because of that initiative across the business. So clearly, there's a hallmark of an embedded process and capability there. And by the way, I will tell you, we are about third or fourth innings in on a set of priorities of operational excellences across our business. So we've got a lot more opportunity to pick that up in terms of platform simplification, product line simplification and footprint reduction. So we're very happy to continue that underpinned by VBS. Accelerating growth, this fares prominently in our expanding from our footprint already, integrated POS and payments, the IoT automation, we have key strategic initiatives here to leverage our -- and I'm going to give you an example. Let me give you 1 right now. When we started looking at our opportunity to accelerate growth, we started off by saying, how do we spend money on R&D. Looking 2020, about $126 million of R&D, the majority of that spend was on sustaining. Sustaining activities don't necessarily drive growth. Almost 40% was on new product development. New product development drives growth. That was less than a $50 million spend. In 2023, folks, we are going to double our new product development spend to more than $100 million. Not doubling total R&D because we're taking the majority of that out of sustaining. How do you do that? The underpinning processes there of VBS at work. We've lopped off this long de minimis tail on sustaining efforts, and we've refocused that through product line simplification into a more concentrated spend. This will help us enable growth. Look already at some of these examples. DRB has a Patheon base, Patheon is name of the product, cloud-based point-of-sale system, that's an excellent example. Veeder-Root out of Gilbarco has been -- launched a new tankage that is definitely getting traction in the market due to EPA regulation of the California Air Resources Board. So excellent examples here. But what this means is those investments are going to pay off more growth in the future. Let's take a look at DRB as an expand the core example. One of the stories about DRB, I think folks miss, is that DRB is a deeply embedded point-of-sale system with connected hardware and software. And those workflow solutions and data analytics are applied to the carwash industry. This is an industry where the IoT and automation didn't exist. Folks, DRB doesn't make rollers, they don't make brushes. They don't build carwash hardware. They don't do that. They are a deeply embedded point-of-sale workflow software company. And when they brought that to this industry, look at the growth, more than 30% growth last year, expanded margins 400 basis points, well outgrew the market because of what it solved in terms of productivity problems with the car wash operators as that industry is consolidating. That's what car wash operators need. They need to enhance the end user experience, and we do that with pricing models and also how they attract them through applications, and they improve their operating efficiency. This is an example of how a mobility technology business operates, and that same theme is there in the other businesses. Let me give you another example of expanding the core. This is the aftermarket business or parts business out of GVR. This depiction of some of these photographs are some of the things you can imagine what those products would entail. A couple of years ago, when we started our profitable growth initiatives, we said, "Gee, you know what, U.S. EMV represents a great opportunity for us to gain share in the marketplace. But what underpins a large installed base is a thriving aftermarkets business. We recognize we were underpenetrated in aftermarket. We recognize this as a long-term trend. Folks, we've grown this at a 20% CAGR, well above fleet margins. And we have a long runway of opportunity in front of us because we're still underpenetrated from where we should be in that market. Folks, this infrastructure is going to be in the ground for a long period of time, and we're going to generate a lot of business in the aftermarket parts. When you think about connected markets, this -- excuse me, connected mobility strategy and adjacent markets, there are lots of things that are being driven by alternative energy, data analytics and AI come to mind, no question, but also EV charging software. ANGI is a great example of how we're taking advantage of alternative energy. What's shown here on the left is compression technology that we engineer and provide for CNG, and we're getting into hydrogen. Hydrogen is a natural stepping stone for us because it operates at higher pressure. We also have a business that's now combined for ANGI, is about $75 million that is growing at 30%. And this business gives us that opportunity also to start selling into hydrogen and dispensing as well. So this is a natural right to play and wind in alternative energy. And let me give you a snapshot too in an adjacent market. We studied the electric charging infrastructure market. The DCFC, the fast-charging publicly available market. And we said, what is a legitimate place for us to play and win. We initially thought of, well, should we be in the manufacturing of chargers. Wwe quickly came through our analysis that probably the most growthy and margin-accretive space is on the operating system software. We acquired Drives, a leader in the space that is growing exponentially with the number of plugs under management. This example here shows and comes out of Europe in front of a convenience store. However, when you think about one of the largest markets in the world for this, once again, the Nordics, we have 75% of the publicly available, excuse me, charging stations in the market in Nordics, 75% under management with Drives today. So this is a growthy opportunity with the right for us to play and a right for us to win. So when you look going forward, we talked in our press release, we're at 4% to 6% organic growth driven by our mobility technologies, repair solutions and environmental solutions. And one of the things that I like the most is when you look at the snapshot of our portfolio in 2020 to 2023, look at the portfolio transformation already. We've increased the number of percentage of recurring revenue, and we were about 30% non-ICE in 2020, we're now about 40% -- excuse me, 45%, non-ICE, almost 50% in 2023, non-ICE already, portfolio transformation at work. And when you think about this through 2028 in the long run, think of our value creation framework, mid-single-digit growth, adjusted operating margin expansion with strong incrementals as well as strong free cash flow that underpins this business. So one of the hallmarks that we hope that folks will ascribe to Vontier over time is that we do disciplined capital allocation. We're going to generate -- we have generated a lot of cash flow. We're going to generate more cash flow and know us for being disciplined capital allocator with strong returns. And already, we have a I would say, an early but important track record for you to be able to key off on that. Internally, we think about our purpose and our vision. And this is very important to me and I think all our employees. We view our North Star as accelerating smart, sustainable solutions for the road ahead. And our purpose is that we can mobilize the future to create about a world. Folks, sustainability is in every one of our business segments. If you're in mobility technologies, you think about car wash with water conservation and chemical conservation as well as building out alternative energies. In the environmental fueling business, we own the world's largest retail fueling network. But that means we can make it more sustainable with vapor recovery, leak detection. Folks, we are incredibly proud of our ability to have a major imprint on sustainability in this world based on what we do. And my last chart here is a snapshot takeaway on the road ahead. We are a leading provider of this critical mobility for a multi-energy future. We serve a rapidly evolving $30 billion market, which is the mobility ecosystem, and we're poised to take advantage of these strong secular drivers that underpin that. Our framework delivers strong shareholder value because of disciplined capital allocation, and we have the right management team. What particularly excites me about this, folks, is that EMV is now sunset. We are at a trough 2023, which is a springboard opportunity that's driven by these secular drivers and our positions to win. So with that, let's take a look at our mobility technology platform, The New One. [Presentation]

Our new mobility technology platform brings together a set of capabilities that untapped opportunities within the verticals which they serve, whether it be in the car wash segment, whether it be in telematics whether it be in serving convenience, retail, point-of-sale and automation. But it also gives us the opportunity to leverage these capabilities across this segment because they're the same technology stack capabilities that are also being required. So we have the opportunity to serve customers today and in the future, serving their high-value problems, and their high-value needs. We believe that this gives us a sustainable competitive advantage, and we're providing unique solutions to market to be able to untap this value. When you take a look at it today, it's $900 million in revenue. It's already a decent margins. So it's a business at scale today with 40% recurring revenues and the software service sales or software sales is about 1/3 of that business. So already, we have a lot to leverage in terms of capabilities and moving up the technology stack. So we're very excited to walk you through that. We're going to give you some presentations from our business leaders in this segment. So with that, let's turn it over to Ian.

Good morning. My name is Ian Williams. I'm excited to walk you through DRB systems today. We've got a lot to teach you at the carwash industry and why you should care and how it fits into the mobile connected ecosystem Mark just talked about. A little bit about me. My name again is Ian. I've come from a deep career in data storage, data technology, building at the cloud ecosystem early days and then helping small businesses take advantage of the cloud ecosystem over time. And I'm really excited to apply that background, that learning into this market space. So let's jump into it and give you a quick overview about DRB, who we are what we do and why us. As Mark talked about, we're a leading POS provider for the car wash industry, but we really care about bigger things in terms of sustainability and providing that data backbone for our customers. We're going to walk you through some examples of our customers and how they think about car wash, the carwash industry and how the mobility ecosystem is going to continue to grow, and their part in that ecosystem because it's really data-driven. So one of the data points, I want to start off the presentation with is how many gallons of water it takes to wash your car in the driveway. I'm not sure if anybody knows, but it's about 100 gallons to simply turn that hose on and start washing your car. Simple data point, a carwash operator that's really focused on operational efficiency using data, managing the devices inside that ecosystem can get it down to 30, and they're pushing to go lower all the time. So there's an automatic sustainability advantage for our customers, and they're looking to DRB to look at that information, liberate that information and allow them to make good decisions. So we're a core part of their infrastructure. Some of the highlights of our business. We're about $1.8 billion in terms of total available market for DRB. We're primarily U.S. and a little bit of Canada. Canada is an emerging market for us. And we're mid-single digits in terms of growth opportunity. Some of the other key data points we're really excited about is 38 million subscriptions have been sold on DRB solutions by our customers. Our customers are core parts of the fabric of their community, whether thinking about fleets whether thinking about community operations and customers, but they're really embedded in their communities itself. And we have 17,000 systems deployed. You can see the recurring revenue number being 40% of our business. We believe that will continue to expand over time. And we're really happy as we've got 600 key employees that have been on this mission for years. My Vice President of Sales, for example, has been in the business for 25 years and has seen tremendous change. We continue to grow that part of our business. Two other elements of our business, the revenue business model. We look at software, hardware, both are core components. When you drive into a car wash, we're the first device you actually integrate with, you actually interact with. We're capturing your payments, we're allowing me to choose to wash that's proper for you based on a journey that, that car wash operator wants to make sure you experience consistently. Software is the heartbeat of that business. And then we have an other area that's really defined by payments, payment simplification, payment enablement and really thinking about some of the overall services we can provide in that market as well. So service, software, hardware, make up the core component of our business. Some other terms you may not recognize, tunnel and In-Bay. If you recognize them, fantastic, we're always looking to hire DRB in terms of market experts in this space. In-Bay Automatic, also known in Europe as a rollover is where you actually drive into the solution. the technology goes around your car quickly and you exit. And I'll show you an example of that in the following slide. That's about 12% of our business today. The tunnel market is the core of the growth, and we'll talk about how the tunnel continues to expand and we're always looking for other growth areas as well. And I'll walk you through that in a few slides here. So a quick primer for you. I just want to make sure you all understand the customer types we're talking about. On the top left, you'll see Title wave. Title wave is a great customer of ours that has really been the epitome of the growth story for the industry over the last 5-plus years. Title wave is standardizing a format to have a consistent operational experience and they are absolutely laser-focused on building members and having you come into their car wash with that happy smiling employee, easy technology to interact with and get through that as an express tunnel. We want to get you in and out quickly. And that's about a 5% to 6% CAGR. Historically, a fragmented market, a lot of small businesses that have actually been aggregated with institutional capital moving in to consolidate and provide a much broader footprint. On the other side of the chart, you see in-Bay or as I said earlier, our rollover technology, much larger in terms of the actual number, but much shorter in terms of the tunnel experience. They're about 30 feet long, whereas the tunnel express can be 120, 150, 200 feet long. So very different experiences. On the tunnel, you get pulled in through a conveyor. You stand in your car, you enter, it pulls you through, you're gone. In In-Bay Automatic, you pull in, you stop, again, that technology goes around. So just to level set you in terms of the different types of solutions out there and the different customer types we serve. The In-Bay is much more of a c-store convenience store or legacy gas station customer. On the left, that Title wave experience is much more of a pure tunnel operator that wants to come in for a purpose-built mission and exit their site. And I've been told I'm not allowed to spend more than 5 minutes on this slide, and it's going to be tough. This is an area I can talk all day about, this is when we provide the digital heartbeat for the car wash tunnel operator. This is a schematic of what a typical car wash experience would look like in that express lane. And we are already helping our customers capture information about you as you come into that site. We use license plate recognition technology. We use RFID technology, and we're starting to gather information about who you are, time of day, and think about the data of the data we're starting to build that customer profile with. You're interacting with the point of sale, we're capturing payment. We're making it easy for our operator. We do not want our operators to be technologists and technology integrators. That's our job. Our job is to demystify and simplify the technology for them, aggregate the data and allow them to make data-driven decisions, we want them to focus on the operational part. All the parts that Mark highlighted that are not part of our business. We don't do rollers. We don't do construction. We are strictly the technology heartbeat of that business for them. Once you enter the tunnel, if Mark is paying for the expensive wash and I'm the guy looking for the lower cost wash, I want to sneak in faster than Mark. I want to take his product. The operator needs to stop that from happening. So we actually have queuing technology to make sure Mark's experience is going to be the experience he paid for. Ian is going to get the experience that he's paid for. So that queuing technology is critical on workflow management for the car wash. I'm going to jump down to the AI collision piece. These are operational efficient devices. Our operators want to get cars through as quickly as possible. You as a customer want to get through as quickly as possible. AI is critical. Because as you're loading that tunnel, you're loading that conveyor, the last thing you want is to get cars too close together. And someone like me touches the brick when I shouldn't, we skip a roller and cars get closer and closer and closer. We don't have the opportunity to have an operator at every single part of that car wash. So technology has to help us. It has to make sure that our journey is safe, simple and consistent. And we have a product called, no pileups, which literally paints a box around your vehicle and watches space compress and flow through that car wash. And again, I can talk about this all day. I promise I won't. Then we jump into our customer examples. This gives you a flavor for the customers and the different types of information they're expecting us to provide us that digital backbone for their business. Driven Brands, a publicly traded company has 350 car washes on our management. They are an enterprise. They are looking for enterprise expertise, enterprise data reporting and information across all their sites. They will continue to aggregate individual washes and pull them into their universe and are looking for us to help them do that seamlessly. That's a large enterprise customer example. Crew Carwash here, if you're in the Midwest. Indiana based, the Dahm family started this business in 1948. Family run operations still, third-generation owners and probably one -- known in the industry is one of the best operators in the business. They are committed to a fast friendly experience and they have a very different use of technology in their lanes. They're looking for us to provide mobility so that you can be greeted by their customer agent to make sure you have the best experience possible. Mint is an operation of Calgary, Alberta, and they're actually spanning both Canada and the U.S. They've got 8 car washes that are under operation. And they did an amazing job doing homework in the space to understand how they could be the best player in their space. We're really excited to partner with Mint and see where their business is going to grow over the future. And finally, 7-Eleven and Circle K. You're going to hear some of these logos and some of these customers consistently throughout the day through the different presentations. And this is the heart of the mobility ecosystem that Mark talked about. These folks are making car wash decisions in an isolated event today. We can really provide data across a much broader footprint to help them think about retail customer experience, carwash experience, as well as some of the fueling choices they're going to look at. That is a unique position for Vontier to be able to play. We're really excited to talk about that in more detail. I only spent 7 minutes on that slide. So I promise we'll keep moving. So how do we book on either side of our offering. So we talked about the tunnel and now we think about the customer experience before and after. Before you actually invest in a car wash, we have data models that will help to make sure you put the site at the right spot. The worst thing in this environment for a carwash operator is to guess wrong on the location and so we have data models that consider traffic patterns, where you work, where you're coming from in terms of home, how to put those models together to make sure you're putting the shovel in the ground at the right space. We're also helping our customers build up membership connections. As they think about their role in the community and they think about driving that recurring revenue for more predictability in their business, we're excited to provide mobile tools, e-commerce tools and workflow solutions to help them with that. So we have an automatic benefit to helping our customers grow their business. Mark explained a little bit about the connect, manage and scale solution. I think this is a great graphic in terms of thinking about how we do that for our customers. We don't want islands of technology out there. And as I said earlier, I don't want the customers to be the digital integrator. That's our job. How do we think about taking these different connected devices, providing a backbone and a single pane of glass to view their solution, where we're having opportunities to provide more density, how to use pricing in certain models and certain sites quickly and scale their business to grow wash count, to reduce labor costs and to maximize that subscription. And we're poised with great tailwinds. We continue to see the demand for recurring revenue and us as users having that better connection with the provider in my area. I want to make sure that I'm not bound just to a strict geography. I want to have an opportunity here to go to a solution that's consistent and a user experience that's consistent for me. There's no doubt digitalization is going to continue to drive those workflows and those high demands for enterprise technology. And then we think about the do-it-for-me model. Car wash operators, again, are valuing your time, want to make sure you can get on site, get through that car wash quickly and have an experience that you're very happy with so you keep coming back. So the desire for convenience will really be at the back and the tailwind for us going forward. And finally, environmental restrictions, I talked about earlier, it takes about 100 gallons of water to wash your car in the driveway, 30 gallons or better inside a carwash and by the way, in terms of point of reference, when you shower, the average is about 30 gallons of water as well. So you are using literally to car wash as much water inside that tunnel as you are inside the shower, unless you've got kids like mine that spend a little more time in there. So -- but bottom line is we're really excited by the tailwinds at our back. Mark explained the optimized core and some of our opportunity to expand and drive new adjacencies. Optimizing the core is very simple. DRB did not have the tools that Vontier brings to the table. So when Mark talked to the management team about DRB coming into the fabric of Vontier, there's an immediate upside with things like Vontier business system, there is training and technology and culture inside VBS that we can apply to DRB quickly and see upside. It's really going to allow us to drive better product management solutions, better road map decisions but there's a discipline inside of Vontier that we're benefiting from. I'm going to jump in to expand the core and adjacent markets really quickly here. But before I do that, this is a key slide for you to understand. Our customers have changed over the last 5 years. This shows you single-set operator and how they made up the complexity of the composition of the market in 2018. Single-set operators were 55% of the overall deployment of town car washes in 2018. That has reduced significantly as institutional capital has moved in. Customer experience has been more consistent and broader across a membership base, and we've seen regional and national grow dramatically. And as I talked about Driven Brands earlier, there's an enterprise level expectation of reporting management tools and robust POS systems, which we are positioned to win. DRB started out in 1984 servicing single-set operators. Today, DRB services 17 of the top 20 enterprise customers in the business. Our business is scale. And a single-set operators think about their business as a life cycle and they look to exit and possibly sell to a larger national is consolidating. On a DRB platform, it's much easier to migrate that information, right? We provide a value base inside that life cycle for our customer. So we're really positioned well to win moving forward. I'm going to skip data platform. I probably talked enough about data, but data again has to be consistently laid out, whether you're a single-set operator or an enterprise customer. There's also capability expansion. There's more opportunity for machine learning and artificial intelligence inside that tunnel, especially around safety and conservation. Payments enablement. Our customers are looking for choice. Our customers are looking for simplicity and making sure that payments are easy to interact with our customers. And we see that market changing on a daily basis. And finally, geographic expansion. As I said at the start of the presentation, we are primarily U.S.-based. We're building up our opportunities in Canada. We're excited about that. But there's an opportunity outside of the U.S. that really could grow our business strongly. So we're really starting to evaluate some geographic expansion by taking our capabilities, and this is a capabilities chart. This is our value chain to our customer base. All the things in black on the left-hand side, the upstream value chain are all the solutions we provide today. I've touched on some of those. On the right, this is an exciting growth area for DRB. As Mark is thinking about the connected opportunity for us across Vontier, we really believe there's a $300 million TAM that we can access quickly with some of our solutions, and it provides both an expansion opportunity and then we can lift and shift this model into some adjacencies. So as I get ready to close up here, we're well positioned in the market regardless of how we go from single site to nationals across the food chain in the carwash industry. We're also at the forefront of how mobility technology is going to enable and continue to grow this space, and we think about some of the opportunities across Vontier. And we're not even at the forefront of -- or we're not even at the stepping stone where cars are going to go in terms of accessing that information, sharing it broadly and pulling you into this universe where we think carwash plays a critical part. So in summary, we believe we're a high-growth engine inside of Vontier. We believe we're a critical part of the mobility connected ecosystem. We really continue to provide a wider array of services and solutions for our customers, and we believe we can continue to scale successfully. So there's a lot to unpack there in terms of the carwash industry. I'm looking forward to continuing our conversation earlier. Thank you for your time.

I head the Retail Solutions business. I'm excited to be here. I'm going to talk to you on how we are going to -- we are creating a technology powerhouse in convenience retail. I joined 5 months back to head the Retail Solutions business. I'm ex-Honeywell. I was from the Honeywell -- I set up the Honeywell Connected Enterprise, the IoT software business of Honeywell. My background has been in technology, software, services, business transformation. So Mark talked about the Mobility Technologies segment and the mobility hub. So we are core to the Mobility Technologies segment. So what does Retail Solutions do? Our core offer set is serving our convenience retail the c-stores with leading payment, point of sale, automation and IoT services. So we draw your attention to the chart on my left. Payments is approximately 40% of the business, which is payments hardware, payment terminal, payment software. The point-of-sale loyalty piece is around 30%. I'm rounding it off so that it's easy to remember. And then we have the automation, which has multiple pieces in it. It's connecting the sites so that it functions efficiently and also upgrading the sites. So both greenfield as well as brownfield. So that's the automation piece. And then there is the remote management, the connected assets that Mark talked about in terms of creating a network using our philosophy of connect managed care. So we compete in a large market, it's $4.4 billion TAM. It's mid-single-digit market growth. I said our business is at scale. We are a $435 million. Retail Solutions were set up by pulling different portfolio elements that serve the retail space within 1 tier. And then we layered the acquisition we did recently of Invenco to create this portfolio. The business is 2/3 U.S., 1/3 international. We are already in 40 different countries. But what's really proud for us is, we are #2 in point of sale in North America. We are already executing the connected asset strategy. So we have more than 165,000 devices under management. We have more than 3 million loyalty subscribers in our high-growth markets. And all of this is contributing, almost 29% of our recurring revenue in our portfolio. So our reason for existence is to really solve customer problems, along, I would say, 2 dimensions. One is the consumer engagement and other is on improving productivity, and I'll talk about that in more detail. By consumers, I'm talking us basically. So it's all of us who go to convenience stores and shop. We are the consumers. And the challenges of the convenience store is solving is how do we engage, how do we drive more foot traffic, et cetera, into the store. So if I talk about our customers, which is the convenience retail customers. So this segment has been growing over the years. It's grown at a very decent 5% CAGR. And especially in the last 3 years, it has grown almost 23%. And the reason for this is, the store is integral to the community. Let's say, almost -- pretty much the entire U.S. population stays within 10 minutes of a convenience store. And that's very important. That's critical on how we are executing our strategy as well as how -- why this format will stay relevant for days to come -- for years to come. The in-store contributes a significant part of the convenience store and the mobility hub that Mark talked about. It's 2/3 of the transactions happen in-store, and the store contributes to a significant piece of the margin, almost 60%. Now the reason these stores, they are integral to the community, it's almost you can call them a community store, and they are continuing to evolve. And I take you through over the years, it started in the early part of the last century in terms of dispensing fuel and gas, and from there, it has evolved into many of you probably have visited stores, which was an array of basically refrigerators with refrigerated goods and that was in the '80s, '90s and it has started changing into becoming much more service oriented. You see more things in the store now, more services, car washers, you see quick service restaurant, you see fresh food. And then from how I interact or we interact with the store, there is mobile, there is frictionless. There are different formats. And then the energy part of it, not sort of a very clear picture of how it's a multifuel setup. And that's where it's evolving. So the forecourt is changing. The store is changing, the services around the store is changing. And we are seeing this from the types of investments that some of the large chains are doing. The size of the store itself is almost 50% bigger. It's 46% larger. And they are investing heavily in technology. And we'll talk about the drivers in a minute. And why is this so critical. In a nutshell, the store is transformed to become from plus gas to plus services. So from a -- from the investments that the customers are making, the convenience stores are making, a large driver of that is labor. The site is fairly complex, there are significant number of different assets on the site. We talked about the different services. There are things between the pumps and the point of sale to the services around car wash, the restaurants, the fresh food management, and then you also have pretty much any story you've walked into. There are not many people there. There are a handful of people managing the store and that's very common across any format. And -- so these 2 really are driving a big investment from how the store operates. Layer that against how we interact with the store, how we typically interact with how our day-to-day shopping. Our -- many of us on the buying behaviors are different. Our orientation towards better, different, better-for-me type products. So it's changing the mix. And then it's always mobile first. There is -- we want to have multi formats of transacting a payment. The energy infrastructure, as we talked about, is changing. So the technology trends are impacting. So if I'm a store operator, the big challenges for me is, how do I drive foot traffic, how do I drive revenue and growth in the store? And I've already made significant investments in my assets. So how do I actually sweat the assets. How do I make sure it's worth, it's yielding what I wanted it to yield. With that lens as we think about why we are relevant to them. We are the specialists in convenience retail. We know our space. We know our customers. We work with more than 350 different customers, big and small, and we know their needs. Our product offerings, the breadth and depth really enable us to provide that end-to-end service. And the design -- how we deliver the service, how we help our customers scale really enables them to be successful and drive profitability. And then there's another big piece, Mark referred to this in his presentation as well, which is around the changing requirements around regulations, around compliance. And that's a continuous feature in how the stores are operating and how we need to help our customers really make sure they're ahead of the curve there. So all of these really drive how we are executing our portfolio and helping our customers drive productivity and engagement. And I'll take you through in the next slide in -- what actually is happening in the site. We call it -- it's a factory without a lot of people. So there are a lot of different things going on in that convenience store site and then part of the mobility hub. So as a simple example, if I'm initiating a fueling transaction, the fuel needs to be authorized, the payment needs to be authorized. It needs to interact with the point of sale. I may have a loyalty program, so it needs to interact with the loyalty program. There is a tank underneath in the ground. So the dispensing of the fuel needs to be measured and has to be accurate. And then the transaction has to be closed. Likewise, same thing happens in a store, inside the store when I initiate a transaction. It's between payment approvals, between inventory management and closing the sale. But that's just the 2 normal typical transactions we have been used to. There are other things that are there on the site. There is car wash. So again, the point of sale needs to be integrated with the car was. There's different formats of energy dispensing. There's restaurants. You have new services, you have last mile delivery, you have e-commerce solutions. So a whole set of things are happening, and our products are touching every part of it. So that's 1 side of the consumer engagement side. Now on the other side, I talked about improving productivity and making sure the assets are working. So this is where our IoT asset management, the different types of service delivery of EV, hydrogen, gasoline dispensing and then the site needs to be integrated. Everything needs to function. And at the end of the day, I need to make sure everything is reconciled. I need to have proper reporting by store, by fleet of stores so that I understand what happened that particular day. So that flow of data, flow of information needs to be seamless. And of course, on top of all of that, we need to make sure we are driving the objectives of compliance, ESG, et cetera. So pretty much our solutions run the convenience store. Other than supplying the labor, we can pretty much touch every part of what happens inside the store and the mobility hub site in totality. So we run these mission-critical operations. So now I'm going to shift gears. So we talked about our customers, we talked about our market. And now I'll share a little bit more details around how we are driving our strategy forward. Our key part is to grow our core business. And from there, we want to extend our solutions to solve the problems I just mentioned around increasing productivity and enhancing consumer engagement which will drive more recurring revenue. And from there, we want to make sure we are expanding margins. So executing our connected mobility strategy, between optimizing the core, expanding the core and pursuing adjacent markets. I talked about Invenco acquisition a little bit earlier. So a quick note on Invenco. We acquired in Invenco in September 2022. It's been a win-win acquisition. It helped us augment our offers in the payment space. Invenco brought us good capabilities in product development, design and technology. And we are also able to take this portfolio to our customers in a total end-to-end solutions. If I go into what we are doing from driving our optimizing core and growing the core business, a big part of it is we pulled in different parts of the portfolio to create retail solutions. It came with its own systems, its own processes. So one of the pieces we are really driving is to shift our product portfolio from a regional execution to a global execution, to shift our engineering execution from regional to global. And creating architecture design, which really helps us become more and more flexible. And then in the same way in moving our legacy methodologies into what we call the state agile from execution. And we are not doing this in isolation. This is all with the lens of really delivering customer value. Our customers repeatedly -- again, keep in mind, we do have low labor, high turnaround in the sites. So we need to make sure products are easy to build, easy to deploy and stress free to maintain and manage the complexity. And that's what this is helping deliver. And what we are seeing already is there's more than, say, almost 30% increase in time to market, and we are planning almost 40 different releases in the next 6 months. And here is an example of that. So this was Maple Fields, which was -- which is a 50 store chain. Their big challenges were around wait time, system support maintenance and managing their software portfolio. And what we did was we helped really deliver a solution through our flagship Passport point of sale, self-checkout, which standardized the offer across the store and ensured there is remote support and ensured ultimately, the lower total cost of ownership for our customers and driving more value. Now let me talk more on the connect manage scale on how we are extending growth, expanding the core to really drive recurring revenue. It's building on the same theme of products being easy to build, easy to deploy, easy to manage. What connect manage scale really does is it helps us to connect to this complex array of devices locally, but manage them on a global scale using the technology infrastructure, using the processes that I outlined. And we believe in the next 3 years, we will be able to get to more than 3x in connected devices. That's a very good metric to see how we are deploying the outcomes for our customers in terms of uptime, in terms of productivity, in terms of incorporating new features into the product. It will also lead to margin expansion and a very good recurring revenue base. Remember, I mentioned 29% of recurring revenue today, we should get to 50%. There's a piece here, which is iNFX in that manage line there. And I would like to dive a little bit deeper into iNFX because it's so critical for us to execute our portfolio and this strategy. iNFX came -- is a technology that came with the Invenco acquisition. And we'd like to call iNFX as the operating system that runs the mobility hub. It's a unique plug-and-play approach, which has not been done in the industry before to manage the entire convenience site and the hub. What we have seen and heard from our customers in the past is any technology change, any compliance change, any software feature upgrade, takes months for the customer to deploy because of the monolith nature and the point solutions that have been deployed on the sites. And what iNFX is doing is it's decoupling that and creating a more modular hardware agnostic scalable solution. And from days -- from months, it becomes days now. And if I have built the connectors, I build once and then deploy it, I deploy in minutes basically. And it's as easy as changing a light bulb. And so this is really powerful. And what it really does for the industry, it's game changing. And executing this will really give us the right scale and the right capabilities to deliver the connect manage scale philosophy to our customers. And as the site changes, we are going to see more and more need for this because the complexity keeps increasing. So the number of devices, number of systems that run the site keep increasing. So having a common operating system that actually helps scale rapidly and manage change rapidly, becomes extremely critical. And ultimately, the site operators can focus on running the business, which is mainly make sure I get the foot traffic, make sure I'm driving growth, I'm driving profitability. And we take care of the infrastructure, we take care of all the headaches that go with the infrastructure and make sure it's successful for our customers. Now bringing it back together, it's -- we are executing an integrated connected offer with connected paws, connected payments, including trickiness. We want to scale our assets with our connected asset management, connect manage scale, using iNFX. We want to drive operational insights because we want close loop transactions and make sure that the customers benefit from the productivity of sweating the asset. And from there, we want to also make sure we have a good partnership ecosystem that helps us deliver this to our customers. So in sum, we want to drive growth. We compete in a large market. We have very good customer access. We know our customers. We know the industry. We want to extend the solutions to solve critical problems around engagement and around productivity, and in the process expand margins through innovation and software execution, which creates sustainable value to our investors, to our customers, and to our people. And that's how we are creating the technology powerhouse of convenience retail. So with that, I'll introduce Alain, and thank you very much.

In sustainable fleets group of businesses. Alternative energy and sustainability is driving the future of sustainability. It's a group of business focused on that. But before I begin, a bit of background myself, I've been in tech industry for more than 2 decades. I spent the first part of my career focused on leading R&D and product development building hardware, software and SaaS solutions. For the second part of my career, I've led businesses both very high-growth businesses as well as turnaround businesses in multiple industries with multiple go-to-market models. I've been with Vontier for almost 2 years. I've been leading the Teletrac Navman business. And recently, I've taken on the leadership of a group of businesses, again, focused on net zero transition, alternative fueling capability. Let me start by describing those businesses to you. Teletrac Navman, we are a global provider of telematics and fleet solutions for targeting the fleet operators and fleet owners. At ANGI, we are the leader in CNG, compressed natural gas and renewable natural gas as well as a growing provider of hydrogen solutions in the fast-growing alternative energy space. We provide full end-to-end systems in those markets. At Drives, we are the operating system provider for EV charging infrastructure. We provide smart software solutions enabling the hardware as well as the operators to run the hardware effectively. These group of businesses did not come together just because of that. They came together because really customers are asking us, fleet customers are asking us, how do they go through this net-zero transition. They're not just asking about how does the fleet change from ICE to EV. They're saying, okay, if I do that, how do I manage the infrastructure. So complexity is growing for our customers. And we're bringing these capabilities together that create a unique set of capabilities to help our customers on that journey effectively. So this creates a uniquely capable set of programs for our customers. For the rest of the presentation, I'd like to do a deeper dive on Teletrac Navman, then I'll circle around to talk more about ANGI and Drives who are in their own rights, leaders in their markets, in the very, very exciting markets that they operate in. Let me start with Teletrac Navman. We are a global telematics provider for fleet owners and operators. We provide solutions that connect the vehicles, the drivers to the back office operation. We play in a $6.5 billion market -- size of the market, growing double digits, very exciting market that's growing. We are a top 5 international provider. We have about 18,000 customers and track more than 0.5 million vehicles and assets globally. So we are operating at scale. This business is a recurring business revenue. Most of the revenue is SaaS recurring 97% of that is the SaaS. We have a global geographic footprint. So we are diversified when it comes to -- from a geography perspective. You can see the chart on the right-hand side there. And while we are diversified, we're also a leader in some of the geographies that we operate in. For example, Australia, we are the #1 leader there, where you have a proven playbook that we're leveraging to take internationally into other regions that we operate in. I talked about geographical diversification. We are also diversified in the industries that we serve. We serve attractive, diverse and large end markets that help build and mobilize the world, they're significant. They are growing double digits. They're asking for more digitization. At the end of it, this allows us to be also diversified and resilient in the face of macroeconomic headwinds. The bottom line is we provide our solutions to help our customers improve their profitability, improve their efficiency, improve their sustainability and improve their productivity. What are the key drivers driving this double-digit growth in this market? We talked about labor shortage. There's increasing fuel prices. Everybody sees that. Safety and compliance is getting more and more complex. The price of insurance is growing. A lot of the fleet operators are seeing increased price of insurance. We address those needs with our one-stop shop end-to-end solutions with our workflow software solutions to address labor shortages, fuel optimization tools for fuel price increases, we will have capabilities around safety, video telematics, safety compliance solutions as well as driver scorecarding to assess the risk of the drivers and help with insurance costs for our customers. The most exciting trend that is driving a massive transformation in the fleet market is the energy transition, as Mark mentioned earlier, with the energy transition, there's an increased set of complexity that the fleet operators have to deal with. They have different types of vehicles they're trying to figure out which energy, which type of fuel do they use for their vehicles, long-haul trucking versus short haul, et cetera. So there is a significant amount of complexity and bringing these businesses together within the Vontier ecosystem, we have a true capability -- true end-to-end capability to address those needs and help our customers on their net zero journey. So I'm very excited about that. From an offering and a portfolio perspective, we've got an extensive hardware portfolio to address multiple customer use cases for tracking different type of assets. We also have a significant number of applications to address different pain points for our customers. We bring those applications together in one AI platform, our TN360 microservices architecture platform, it's a modern platform that we recently launched globally. So we're very excited about that. We provide the end-to-end solution sold as a recurring revenue model. So we sell an integrated system, a single pane of glass, hardware, software for our customers and make that available for our customer in an easy fashion. If we step back and we think about our connect managed scale capability, it's really about what we focus on is customer impact. So our solutions are all about providing operational insights for the customers, allowing them to run their operation more effectively with emission reduction information, asset tracking, reporting, safety capabilities fuel optimization as well as optimizing uptime of their assets. That creates significant customer impact. When they leverage our solutions, they see significant fuel savings of 20%, improved uptimes of 15%, accident reduction of 12% and improved productivity of 20%. That in itself translates immediately to the bottom line, allowing them to scale and grow their business. So the ROI on our solution is very obvious for our customers, and that's what's driving significant adoption in this space and growth in this space. We are connecting, managing and scaling our customers' operations with our solution. Let me step back and talk about our connected mobility strategy. As Mark mentioned, we have 2 main pillars: first, around operational excellence and optimizing our core; second, about accelerating our growth, expanding our core in our adjacent markets. From optimizing the core for Teletrac Navman, it's really about accelerating the turnaround for this business, and I'll describe that in more detail. But expanding the core, there's multiple elements, there's elements of scaling the people and growing the team, elements of geographically scaling our go-to-market, expanding our solutions and providing more and more solution for the customers, and I'll describe those as well. When it comes to the adjacent markets, I talked about the net zero fleet transition that the customers are going through. That's very exciting, and it's exciting across the 3 businesses that I mentioned because bringing those capabilities together creates an end-to-end set of solutions for the customers. But also in adjacent markets, ANGI evolving in providing more hydrogen fueling system, ANGI is the leader in compressed natural gas and renewable natural gas is now expanding into new markets, it's going to enable accelerated growth as well as Drives. Drives is a provider not just for fleet, a provider for charging point operators whether on-the-go charging or destination charging. It's a key provider of operating system in those markets as well. So they have significant growth potential there, and I'll describe that in more detail. Stepping back on the turnaround. So if you've been following Teletrac for some time now, it's been challenged when it comes to revenue, growth as well as profitability. So we spent the last couple of years since the spin and the business has been going through a massive, massive transformation. Let me talk to you about what are the different elements. First and foremost, we've taken the business from a regionally structured business and globalized functions and create a global scalable kind of structure in the organization. That allowed us to leverage the talent globally, scale the business while improving profitability on the business. Second, we've moved upstream to larger customers. So we refocused on larger customers. What that's allowed us to translate to is increasing the customer deal size. So in the last couple of years, the customer deal size has tripled. That is significant. So that reduces our cost of acquisition down in the business as well. We've also launched our new modern platform. That allowed us to close the product gaps and increase our competitive advantage. That's translating today to our ARR growth, our bookings growth and -- double-digit bookings growth in the different regions. ARR growth, a significant reduction in churn on this business. So we're excited about where this business is today from a trajectory perspective. There's a lot more work to do. There's a lot more value to untap as we continue to leverage the VBS tool sets and capabilities like focus and prioritization process that helps us significantly on moving upstream and continue to grow this business moving forward. But we're excited and very proud of what the team has achieved over the last couple of years. Shifting to our growth initiatives. From a growth perspective, I would say from a new capabilities, it's about expanding the team. So we recently continue to grow the team, hired a new experienced R&D leader to accelerate and scale our capabilities when it comes to execution on the product and product road map. We've also hired a global leader for our commercial organization to grow and accelerate our go-to-market initiatives. We are leveraging from a geographic scaling perspective, we're leveraging the Australia playbook, the capabilities of the multichannel that we have in Australia. We're taking that internationally with our new global leader that's going to allow us to expand our footprint in the marketplace and grow the market and the business effectively. From a solutions perspective, we continue to focus on providing more and more operational insights for our customers. So we're moving upstream to more analytics capabilities for the customers. as we shift to larger customers, we see more and more interest in that aspect of our solution. We're also focused on safety and risk management, video telematics. Safety is a big, big thing for fleet, fleet operators today. So we're launching a number of new solutions in that space. It's going to allow us to capitalize on that trend effectively. Let me tell you how that works. So if you think about the traditional solutions in the telematics space, and Mark mentioned that earlier in his presentation. Historically, customers have been focused on tracking the vehicles, kind of understanding basic performance of the vehicles themselves. Historically, customers have been focused on tracking the vehicles, kind of understanding basic performance of the vehicles themselves. But as we add more and more capabilities, we're seeing a multiplier effect on the average revenue per vehicle, average revenue per unit per month, right? So -- and that can go up to 5x from where we are today. Why is that exciting for us? That's exciting for us because the big chunk of our customers is still on that traditional solutions bucket, right, on the left-hand side. And as we add more and more of this capability around safety and analytics, we can move them up the value chains, solve more of their pain points, drive increased average revenue per vehicle as well as more return on investment for our customers. So very excited about how we're going to grow and scale this business. Let me give you an example. This is a food and beverage transportation company. They were using multiple providers for telematics, for video telematics for their safety. We came in, we provided them an end-to-end single pane of glass, holistic solution for that customer. And we were able to kind of provide them with all the capability, all the pain points being addressed in 1 solution integrated with their back-office ERP to be able to provide through operational insight. This is the customer that I described in the 5x kind of bucket when it comes to average revenues. That's exciting. As we shift upstream, we go to larger customers, we provide more capabilities. This is how we're going to grow and scale this business effectively. Sorry. I went backwards. This is the most exciting chart here. So let me tell you why it's exciting because if you think about -- if you're a corporate entity or you're government, everybody has net zero goals by a certain date. So the market is shifting. Everybody needs -- if you're operating any certain fleet, you're trying to figure out how do I get from where I am today with a significant ICE base of vehicles into my net zero future. The questions we're getting from those customers is it's not just about managing my fleet because, yes, I can manage my fleet, but how do I manage the infrastructure? If I pick electric vehicles, how many chargers do I need? How do I keep my operations running? Because the fleet is really the operation for them. Do I go hydrogen? Do I go CNG? What type of vehicles? What's the right mix? So they need help in their planning. They need help to figure out which vehicles are the right ones for their route, et cetera. And we provide within the Teletrac Navman platform, we provide planning tools allowing them to decide on which vehicles to transition to what by when. We also help them manage. They need to manage a mixed fleet. Historically, it was one-sided vehicles. Now it's a mixed fleet with multi-energy future. So they need to manage that. We also provide that capability in the platform. They need to manage the infrastructure. This is where Driivz comes in. The EV charging uptime is key. You need to make sure that the electric vehicle chargers are up and running. So your vehicles are charged next day for your operation. They also need alternative fueling, so they need to manage the infrastructure when it comes to hydrogen, et cetera. This is where ANGI as a leader in that space comes in as well. So with these capabilities, we can be a trusted adviser for those fleet customers. We can help them on that journey. We can help them in the complexity. We can simplify the complex here. So we're very excited about the combination. Now let me jump into ANGI and describe to you why ANGI is exciting. ANGI plays in the compressed natural gas. It is the #1 solution provider in North America for CNG and renewable natural gas. The reason for that is to provide a scalable system. And we work with our customers to make sure that as our customers grow, we can add more and more capabilities with reducing their life cycle costs. We work with them from an engineering, from a kind of development perspective as well. We leverage the worldwide distribution of GVR and have a strong worldwide service capability. ANGI provides an end-to-end solution. This is not just the fueling dispensers. This is everything from compression, storage, service, automation, remote monitoring. So significant capabilities, and this is why ANGI is the leader in that space. That leadership position obviously translates to strong global customers. We're talking about major fleet customers. We're talking about major providers as well. That's driving double-digit growth in this market and this business. So we're excited about the growth that this business is going to bring in and continue to bring in for years to come both from a bookings and revenue growth perspective. So ANGI is the leader in the space. Shifting over to Driivz. Driivz, we are the leading operating system provider for global EV charging. We are -- the markets we serve, I talked about on-the-go destination, massive, massive growth in the number of infrastructure growing there. What's exciting about this business? This business grows when our customers grow. So as more and more charges come online, our platform, our kind of return is growing because we -- the revenue models are based on number of chargers as well as utilization of these chargers. So we're very excited about the upswing of that market and what that means for Driivz. Driivz has an extensive offering. This is 100% recurring revenue, by the way, has an extensive offering from charging network management, billing payments, smart charging, strong customer engagement, remote management. What we're seeing is that we can remotely reset some of these EV charging infrastructure to make sure they're up and running. So -- about 80% success rate of remotely fixing some of the challenges with chargers. Very exciting. So energy management capabilities as well. What are the key differentiators here. This is about being an open system. This is about being really the operating system where customers can actually go build their own applications on top while we abstract the hardware layer. We have more than 500 chargers and 700 hardware chargers that this platform can operate. So we are hardware-agnostic. We allow the customers to pick the hardware while we abstract that layer for them and provide them the true operating system for it. It's high scalability. So we scale effectively with the customers. We see hundreds of millions of transactions on the platform. So platform is set up for scalability as well as high availability. Remember, you want to go to a charger to charge your vehicle, you want it to be up and running. So availability is key in this market. And what that's translating to, again, breadth of the solution, strong capability, strong set of customers with -- did I go back? No, this is actually -- it's a very good comment, very similar customer base, which is exciting. So we've got very large customers in this space. And what's exciting about this business, last year, ARR doubled in 1 year. We expect that trajectory to continue with very, very strong growth in this business. because the chargers under management are going to continue to grow exponentially as the market grows. Okay. Let me -- in closing, let me just talk through our alternative energy and sustainable fleets. So we bring in together a group of businesses that have differentiated capabilities in their own rights, but together, they help on this transition, this net zero transition for the fleet operators. Teletrac Navman is on an accelerated turnaround. We've done the initial turnaround. It's in core growth. Q4 was a core growth quarter for us. We're excited about the future and how do we accelerate our growth in this business. Driivz is a leading software provider in the massively growing electric vehicle infrastructure charging space, targeting all segments of the market that are on-the-go, destination charging as well as fleet. So we are -- we have a piece of the pie on all the growing pies there. So that's exciting. And it's a leader. It's got massive capabilities. ANGI, a leader in CNG, RNG and growing in hydrogen. These businesses together bring capabilities in hardware, software, services, more than 65% of these business revenue is recurring. So excited about the opportunity of creating a more sustainable future here, leveraging the capability of these businesses. With that, thank you. I'm going to pass it on to Ryan for our Q&A session.

Give us a few minutes. We're going to set up some chairs here on stage and bring back everyone who has presented so far this morning. So if you guys want to come up, grab a chair. Also for those of you on the webcast, you do have the opportunity to enter your questions via the portal. I have a little iPad here. I can see them coming in. So we'll take some questions here in the room and on the webcast. And for those in the room, we do have 2 mics, I believe, running around. So if you could just wait for those before asking your question. I appreciate it. I saw Cliff's hand first of all. Go ahead.

Cliff Ransom, Ransom Research. Two quick questions. How do you instill lean thinking in them?

Yes. I think it's a very good question. Lean is a very important cultural mindset. As many of us may know, a lot of our concepts were born on the factory floor, but quickly moved in the business process. The lean element is, I think, hard at work when you see particularly when they apply it to agile product development for software and the sprints that they do, the process they do, they all follow policy deployment, if you're familiar with that tool and capability and they all follow the same process of spelling down our critical fuel initiatives and drive the same level of accountability across the organization. The engagement that's pushed down into the companies through continuous improvement and employee engagement around kaizens are also at work on all these businesses. So those same lean daily management principles in a more technology-enabled setting are clearly at work. And then for the innovation side, too, a lot of what we're talking about here and we showed in terms of how we have called the de minimis projects and focus on the more important ones. So a lot of our tools and capability are at work. Some of these companies are new like Invenco is new, DRB is new. So obviously, in early innings there. But you heard from Ian, that clearly, they're embracing our opportunities here. We also have a focus and prioritization process. It's part of lean to call out which is the most important opportunities to work on. So I think there's a lot of initiatives there. We share a common language, a common set of engagement with employees around that. And we're seeing that it's working. You see the growth that we're getting. You see the margin improvement that we're getting in these businesses. We've got folks attention within the company, and they're all in the same music spreadsheet, if you would say.

Perhaps, I'm sorry, I didn't introduce myself. I'm Cliff Ransom from Ransom Research. Alain, how did you use these kinds of techniques and practices and mindsets as you went about your Teletrac Navman reconstitution, if you will?

Yes, that's a great question. Yes, as we were thinking about how to focus our go-to-market around what type of customer, we leverage things like the focus and prioritization process that highlighted where we're really kind of getting value, how can we go target the right segments of the markets. When we run the obviously, kind of the SaaS operations, SaaS business, we're looking at kind of policy deployment or what are some of our key initiatives to drive across the company as well as leveraging the different tool set from a KPI measuring around our customer success organization, our customer support organization. So it's leveraging these lean tools in different aspects where they actually apply to the benefit of the business and the customers effectively. So we were able to kind of find the best of both worlds there effectively.

Yes. One of the fact sets that they did where they applied lean is they were -- when we took the business on, the business was experiencing 25% churn. And so here's where application of lean toolkits on churn reduction has reduced that, it's now more than half, like a 60% reduction in churn as he showed in his chart. So clearly, the team engaged a lot of lean tools there.

We'll go with Joe, and then we'll come back to Julian.

Yes. So Mark, maybe my first question is on the realignment. So you talked about how you're doing the realignment to create -- to basically enhance your value creation. So maybe just expand on that a little bit more. And then also, just along those lines, the company has been undergoing a transformation. As part of that, there have been divestitures as well. Is there any signaling that is going on here as well associated with the realignment?

Yes. So I think the realignment is each of these segments, as you'll see, also in the afternoon, when you see other segments, they all share the same selling to the mobility ecosystem in some form or fashion. They all have a connect, manage, scale theme. However, the realignment, we think provides our strategy and our deployment capability and some of these tools and capabilities we're managing the businesses this way because we think there's more of a tighter set of applications of what we're bringing to market with what customers want. So it's like -- as an example, the retail solutions, we studied this for about 18 months, and we started with engaging with our customers. We actually did a study out of our strategy group, and we did a lot of VOC from customers. And so we think this brings together the right kind of capabilities that we can really deploy around our customers to execute what we believe is a better growth path. I don't think you should -- so I think it's around strategy execution and then I think it's transparency on how we're going to manage businesses and investors can follow us. So I think it fits well. We thought a lot about this segmentation before pulling the trigger on it, and I think it's the right thing for us to untap value. I don't think you should read into it anything about further divestitures. As you know, we look at our portfolio all the time. We've announced 2 divestitures. We're providing a small segment, so you can see those separately. But I think that sets it up to be very clean for investors to follow our strategy going forward. But I don't think you should read into it anything further beyond that, we're trying to untap value here, and this is our best way to untap value and show transparency to shareholders.

That's helpful. And then I guess, maybe my follow-on the convenience retail opportunity, it's pretty clear on the schematic, how you -- how well positioned you are to take hold of that trend, but maybe provide a little bit more color on what the opportunity is, how far along we are? And how do you expect the investment to change over the next 3 to 5 years?

Yes. So it's an exciting trend. I mean if you think about the depth and breadth that Karthik has already in this business. It's a sizable business with a lot of software engineers and a lot of capability. I think job #1 that he's tackling is the integration of Invenco. That sets us up as a technology leader in the space, and they're getting a lot of attention from very large customers based on what he described to you, which is very compelling to solve their problems. I think predominantly, there is a very fragmented and siloed business today. I mean we just organized it on leadership with a Chief Product Officer or a Chief Innovation Officer. So I think some of the same things we ran into with Teletrac Navman in terms of fragmentation and siloed approach, fundamentally are at work inside that retail solution businesses. So now that we've organized it, we're going to run it with an ability to scale it and eliminate some of those silos and create some of that leverage, which is so important when you're on a software-enabled company like retail solutions. So I think that we're going to pick up a lot of efficiency benefit, just like we did in Teletrac Navman, we're going to pick up those efficiency benefits in retail solutions. So I don't -- I don't think we need a huge boost in spending. We have a lot of that first pillar on optimizing the core, where we're going to ring a lot of benefits out just by managing that business differently and better. So we're very excited about that. And then with the iNFX capabilities we have there, we've got a great runway.

Julian, right here in the front.

Julian Mitchell at Barclays. Maybe a first question just to Ian and Karthik. So you talked about the mid-single-digit dollar sort of market growth rate. I just wanted to understand sort of within that, what's the assumption around the kind of hardware installed base growth? Just to try and understand like how much is market growth from pricing or higher dollar content per site? Any help around those kind of things. And then for Alain, just Teletrac, the market growth rate is low double digit. Your own business for various reasons has obviously undergrown that. So just want to understand like how quickly you get back to low double-digit growth or even higher there? Is the expectation that you grow with the market? Or do we get above-average growth for you because you've had undergrowth kind of for some time? And what's the timing around that?

Perfect. Thank you. Do you want to start? I can start. So thanks for the question. So from the car wash side of things, obviously, hardware is just integral to what we do today, will continue to be for the near future. But software really unlocks the value, especially as we connect these solutions for our customers. We are certainly looking at high single digits for DRB in terms of growth opportunity in a mid-single-digit market. So going forward, I think we're well poised again with that balance between hardware and software? Karthik?

Yes. And likewise, it's -- for us, the way we think about it is we are building products, and then we have to put the products together and deploy solutions at the end market. That's what the customers want. And that's always a combination of hardware, software services, cloud. And more and more, iNFX is becoming an interesting important component of that piece. So that's how we are executing. And we diligently look at P times Q. So we always look at what actually is getting deployed from a pricing standpoint and what actually is the volume that's coming, and then we think through the opportunities and in conversations with our existing installed base as well as the new installed base.

Maybe I'll just add, Julian, I think your question also was how much of the market growth is price or inflation, we've assumed 2% kind of low single-digit kind of inflation environment when you start thinking from the '24 to '26 kind of range that we're talking about out here.

Yes. On the Teletrac's side, obviously, we've discussed this year mid-single digits for this year, but we are on accelerating our turnaround activity expected double digit and at some point higher than market rates in the next kind of couple of years as well as we accelerate our turnaround as well.

So I think we have time for maybe one more. I don't see any online. Steve?

A question for Mark and then also one for Ian. So for Mark, one of your pillars you talked about in terms of optimizing the core pricing. Perhaps you can grade yourself on how your ability to price historically and then what your view is going forward? And maybe you can just kind of quantify that a little bit? And then for Ian, you guys have owned DRB for 2 years. It'd be great to hear what the run rate of the business is today. I think when you bought it, you talked about $170 million are for sales and 25% margins. Just it'd be great to hear kind of what those numbers look like today? And then also, you talked about 17 of 20 customers that you service, but I noticed the biggest one wasn't on there, which is Mister Car Wash. So perhaps you can discuss your relationship with Mister Car Wash, if you have one, if you don't, and how you're helping enable their growth?

So let me talk about pricing. So I think we started strategic pricing before there was a very low inflationary environment when we originally rolled out what we are calling our focus and prioritization process, which essentially, with segmenting the market of customers and products and determining where we sort of underpricing, where can we raise price. And so we started that rolling up across our operating company, started in GVR with no -- with a very low inflationary environment where people are not even talking about inflation at that time. And so I rate us really high in terms of being ahead of the curve. And then, of course, when inflation started going up, then we already had the mechanisms in place then to add to that and start adding in inflationary pricing. So I think we still run those analytics. We still are pushing on strategic pricing. So I anticipate -- we were definitely mid-single-digit pricing opportunities. And I think when you heard from Anshooman, we intend to say price/cost positive. We've always been price cost positive since running the company. And this is a very disciplined market. It's industrial tech. We don't think that the market will give up pricing easily, historically, has not. And I think there's real merit for us to raise some of the prices that we have clearly in the marketplace. And so I think we feel really good about our ability to hang on price and stay price/cost positive going forward. So I'll turn it over to Ian, if I answered your question.

Yes. So from -- I'll ask you, Anshooman, to talk a little bit about the multiyear growth, especially as we report a new platform here. Overall, a very strong year last year for DRB across those large customers specifically as we talked about the nationals and regional growing tremendously. And a specific question about Mister is interesting. I appreciate that you know the industry obviously well and understand who's in the opportunity box for us. Customers like that, that kind of scale, we certainly talk to constantly. We're always watching the industry players and where they go. But they have obviously chosen a different path in terms of some unique software capability they want integrated to their solution, they've chosen to be that integrator of choice. For us, we're always looking for other opportunities to add value in terms of different parts of that workflow. We'll continue to track down all the top 20 in the space and really want to be legitimate and complete with their solution offering. Anshooman, do you want to...

Yes. Just from a DRB standpoint, roughly a $250 million business is what we said in the past, and I'll leave it at that. The business is growing strong. We expect double-digit growth in this business to continue into this year.

Margins?

Above fleet average.

Have they expanded since [indiscernible]

Yes. 400 basis points.

400 basis points. Yes.

Since you bought it?

Yes.

Yes.

All right. So that concludes the first Q&A. We're going to take a short break around 10 minutes or so, trying to make up a little bit of time. So let's say, back in here, please by 10:35. [Break]

All right, everyone. We're going to get started again here and start the second half of the session. If everyone could kindly take their seats, we'll have some people coming in. But we're going to kick things off with another quick video, and then we're going to start a discussion on environmental and fueling solutions with Dave Coombe. Thank you. [Presentation]

Hey, good morning, everybody. I'm Dave Coombe. I'm delighted to present the environmental and fueling solutions business, which I've got the pleasure of leading here at Vontier. I've been with the business and the industry for 19 years. I'm incredibly passionate about the business, and I'm incredibly passionate about the customers that we serve around the world. Retail fueling is expected to grow for the next decade at low single digits or more. And I'm excited about the industry prospects and Vontier's position within that. Today, I'm going to provide an overview of the industry, discuss some of the secular trends, explain how the company's connected mobility strategy is poised to capitalize on the growth drivers within the industry here. So the fuel retail market is highly regulated. It's safety and compliance driven. And because of this, it's got an attractive market structure. Vontier's environmental and fueling solutions platform has market-leading products solutions, global reach and incredibly deep customer relationships. We're well positioned to capitalize on the customer landscape that's consolidating and that's driving new site rebuilds, it's driving upgrades in North America and mature markets. We have an incredibly large installed base of over 1 million fueling devices installed out in the field today. And that really provides high single-digit growth for our aftermarket spare business with proprietary parts and regulatory frameworks that are really protecting the long-term supply of those parts here as well for the long term. We're really competitively advantaged to capitalize on the multiple regulatory mandates in environmental safety, fiscal and payment security and new infrastructure build-outs that are taking place in emerging economies here as well. So with that, it's an attractive market structure, coupled with strong growth drivers here, our leading share position and our scale is really going to lead to sustainable growth, margin expansion and cash generation for the long term here, regardless of the pace of the energy transition. So let me just double-click a little bit more into our business. Like I say, it's a niche market. It's highly regulated. It's a $3 billion market. It's growing at low single digits and it's supported by several secular tailwinds that we see here, and I'm going to talk to those as we run through here today. We are the leading provider of hardware and software solutions for below ground and above ground fueling infrastructure. Our longevity in this space, our experience and our big customer relationships allow for the delivery in best-in-class solutions, meeting regulatory and environmental standards so that our customers can concentrate on running their business. What -- how we do it is hard to replicate. We've got a highly integrated, comprehensive portfolio, digitally enabled with strong direct sales, distribution partners and an aftermarket support infrastructure that really takes care of our customers. With that incredibly strong installed base and presence on over 260,000 retail fuel sites around the globe, we have got incredibly strong share positions in a lot of those large customers around the world. And so we've got this proven model, a history of delivering strong cash flow, and that's going to fuel high-growth opportunities across Vontier. So let me just drill down a little bit further on that comprehensive portfolio here for our fueling business. Our environmental platform encompasses the majority of our underground products. That really helps our customers, giving them environmental protection that they need to operate their fuel stations safely and compliantly. Our fuel dispenser solutions really encompass our above ground product set, and those dispenser units out in the field continue to play an increasingly important role in marketing and sales conversions for our customers there as well. And all of that is underpinned by a very strong aftermarket parts business and services that have strong IP, which protects that long-term supply. So I've talked to you a little bit about the market and the industry and a little bit about us, but let me talk to you about why we're so positioned well to win here. And our position in the fuel retail space is really driven by 4 areas: we've got best-in-class solutions for complex and environmental compliance needs; we've got a large installed base around the globe, leveraging those solutions; that broad commercial coverage; and those big customer relationships, which is a real competitive advantage. We focus on innovations and have done for many years on those evolving global regulatory requirements in there. And we've got incredibly deep roots in the Vontier Business System for more than 3 decades of driving lean, focused processes, driving productivity. And that's really helped us expand margins in the past, and it's going to continue to help us expand margins here as we move forward over the planning horizon. So let me just give some more color on that continued focus on innovation and how we're leveraging that extensive installed base globally here. We're delivering high-impact actionable insights, integrated workflows with customers in that connect, manage, scale framework that my colleagues talked about earlier here today. Those solutions are really driving uptime for our customers. They're reducing -- helping reduce their operating costs. They're preventing environmental leaks, they're reducing theft and they're delivering high-quality fueling experiences for end customers. We really do provide with the technology and the installed base that we got a 360-degree view of that filling environment, solving our customers' high-value problems. So let me come on to the secular tailwinds that we're seeing here. And I think Mark covered those early on here, but we're seeing evolving regulations and they're really driving demand for above and below ground equipment globally. This has been a history, staple history of our business. And I think we're only seeing those regulations grow in terms of the volume, but also increasing in complexity. We're seeing industry consolidation in mature markets, and that's driving demand for fueling products here as well. Infrastructure build-outs and adopting and upgrading of regulatory and compliance standards in emerging markets is driving growth for above and below ground fueling products here. And then finally, the data points to a slow and gradual transition of the car park towards EVs. And for the next decade or more, we're going to see that confluence, I think, as a number of the presenters talked about multi-energy investments going into C-stores, and that's going to result in a long runway opportunity for the fueling solutions business with replacement cycles and refreshes. We're well positioned to capitalize on these key trends, and we see resilient demand for fueling infrastructure supported by continued business growth. So let me just double click down a little bit more on the energy transition. And this is certainly a world according to Vontier. There are multiple studies and reports out there on fuel equipment demand modeling done by various agencies and institutions and they all support longevity for the fueling infrastructure projects for more than a decade to come. What we're showing up here is an independent assessment by KPMG. This is a conservative base model that shows that low single-digit growth over -- out until 2035 here as well. So the market TAM remains stable over that 15-year period, reflect a decline in demand in mature markets, and that's going to be offset by emerging markets that still heavily investing in building our ICE infrastructure, and that provides significant growth runway as well for our aftermarket parts and service business here as well. The key drivers that are going to drive that low single-digit growth. I've already talked about, but it's really the complexity of regulations across the markets. is that customer site consolidation that's taking place in mature markets are growing aftermarket parts business that's really built on the foundation of proprietary components required to drive the security standards that the markets are acquiring today and really those infrastructure buildouts in emerging economies. The analysis that we've got here doesn't show any potential upside for some of those regulations as they play out over time here. So Industry revenues will be durable over the long term as well as strong cash flow generation for multiple years that are going to fuel high-growth opportunities here for Vontier. So let's just quick double-click down a little bit further into Norway, which is really the tip of the spear as a country that's really transitioning its fleet to electric. Multiyear investments have already taken place. And Mark talked about 80% of new car sales already being EVs. The total car park today in Norway is about 22% of EVs today. But despite those heavy inroads into electrifying the fleet, the demand for fueling infrastructure has remained strong in Norway. And whilst the chart on the far left here shows that the number of fuel retail sites has remained pretty flat. What we are seeing is growth in the number of fueling dispensers, and that's really been driven by an increase of shift away from urban stores to more suburban and highway stores and locations. And so that has an impact on the business here. And these are destination C-stores, like the one Mark showed earlier. These are places where people want to go and so forth. With mixed energy and that picture and the visual that Mark had up at the start of the day here really demonstrate that confluence of energy, and that includes petrol and diesel infrastructure. So we see this as a stable opportunity for Vontier in the fuel systems and service and a growing opportunity for our software solutions businesses as well. So let me talk to our connected mobility strategy. The first pillar here that we talked about is optimizing the core of our business, really leveraging the Vontier business system. And like I said earlier, we got more than 3 decades of building lean foundations in our business to drive operational efficiency and excellence. As we look to expand in the call, we really want to take advantage of those growth segments in here. So we want to capitalize on the industry consolidation that's taking place in developed markets with new build-outs and site expansions in North America and mature markets. We want to capture the growth that's out there for environmental products through regulations and replacement cycles. I'll talk to that a little bit more shortly here. We are digitally enabling our aftermarkets business to really capitalize on growth with the large installed base that we got here in North America with those proprietary parts and really looking to expand the installed base in emerging markets we fit for market products. As we advance into Pillar 3 here, we're certainly looking to extend Veeder-Root's technologies to other regulated liquid bridge in here and looking at more AI and data analytics that are going to drive the growth of this business further on. So let me talk about optimizing the core, our first pillar here. We've already taken significant actions within our business to simplify the organization structure and really optimize our cost base in the platform, whilst providing a clearer focus and accountability for our teams. We've been on this journey for a while. But as Mark said, there's a long runway to the plans that we got here. So as you kind of look at the far left, we've got multiyear projects that's looking to reduce the number of SKUs of our dispenser platforms. That's really looking to reduce that by 50%. We've made some great progress already, but more to go. And that's going to reduce complexity whilst driving our operational execution. We're standardizing globally here as well in the middle on high-valued, well-engineered internal components, and that's leading to margin expansion and open the strength in our supply chains. And those 2 drivers are really helping us consolidate and localize our manufacturing footprint to deliver the best products at the best cost position. So optimizing the cost structure through these clear projects and initiatives and a long-term plan here is going to deliver incremental operating profit for the business over the next 3 years. Let me talk about what's going on in North America. I'm not sure this is well understood. We've come off the back of a massive EMV growth cycle here. I think there's some interpretation or some view that the above ground business was just going to fall away. That's not the case. And what we're seeing here is a lot of the larger chains, as you can see from the pie chart here, and the smaller regional retailers are actually investing and consolidating here in the market. So whilst the number of sites in North America remain relatively flat. What we are seeing, and again, you see in terms of the CAGR up here on the pie charts is we're seeing those large segments, those large retailers investing heavily in new to industry sites building out destination C-stores and refreshing acquired sites, which is going to drive investments in fueling equipment infrastructure. And this isn't an assumption. The larger retailers that we show over here on the right are all investing heavily in new infrastructure build-outs in those C-store destinations, and that's a matter of public record. You can go into their annual reports, you'll see that in there. So as we think about these large players, let me tell you why I feel pretty good about why we're going to win in this space, particularly here in North America. So I'd like to say, these large players are investing in their networks. As a result, they're adding new sites, they're consolidating smaller operators. They're rebuilding and refreshing those existing sites. And with these changes, we're not only seeing the investment in the infrastructure, we're also seeing the number of average dispensers increase from 4 to about 6 as these site formats are becoming larger to be that mobility hub that Mark and the team have talked about a little bit earlier here. And we're also starting to see the start of the recycle -- replacement cycle start to pop. So the early EMV adopters are now starting those replacement cycles here as well. So our share position, this is why we feel good. Our share positions with these growing segments of the market is incredibly strong, certainly market-leading. And I think that provides us with great opportunity, strong visibility into the 250 million U.S. dispenser demand that we communicated before in 2023, and we can see that continue to scale over the coming years related to the drivers that we see up here on the right of the slide. So let's just step back and take a look at the overall environmental and fueling solutions business and focus more on what's happening outside of U.S. dispensers. In international fueling equipment, we see the continued infrastructure build-out in emerging markets with increasing focus on environmental, payment and security regulations in here, government incentives that are really driving focus on biofuels. We're also seeing growth in that aftermarket business here, high single digits. And that's really been leveraged from the large installed base and some of the share gains, I think we've done over a number of years in here, and we're starting to offer innovative solutions and really getting that focus on the business here. And then environmental solutions, we're going to capitalize on the regulation enforcement, the underground tank replacement cycles that are taking place in many markets, but specifically here as well in the U.S. So we feel good about that. Let me just drill down a little bit on that infrastructure build out and give you an example of what's happening in some of those emerging economies. India is obviously an economy that's expanding. With that, there's lots of investment going into building out the infrastructure, really increasing the number of sites here in the mid- to long term. But not only are those -- that is money going into building out that infrastructure. What we're also seeing is the sophistication of these sites is also increasing, expanding the value of requirements for fueling and automation infrastructures in here as well. So there's a lot of investment going into technology to improve productivity, enhance security and really comply with the evolving environmental regulations in here. So that's driving the content and the value solutions that Gilbarco Veeder-Root and Vontier are able to provide as fueling stations develop and customer expectations here have continued to evolve. Let me talk a little bit more about our aftermarket parts opportunity. And I think Mark hit it early on. We've seen a 20% CAGR in that business over the last couple of years. That's really driven by a number of factors. I talked about the large installed base that's expanding as those parts and so forth have been delivered through that EMV cycle are those solutions have been delivered through the EMV cycle. That installed base operates in a heavy IP and regulatory framework. We're also starting to see those dispensers now come out of warranty after that heavy period of investment. But we've also internally within the organization, really focused on setting up an organization that's really focused to capitalize on the growth of the aftermarket business. We've expanded the product offering to maximize customer benefit. We're leveraging innovative digital tools to help customers access parts and materials. So they can do that much faster and much easier. And we're also implementing strong e-commerce tools to support that high single-digit growth at high margins, above fleet margins for our business. This is probably my favorite slide in the deck here as well. So our business in terms of environmental and fuel retailing for many years has benefited from the number of regulatory drivers in this space is, like I say, it's a heavily regulated safety-compliant market, and that makes it attractive for us here. What we've seen moving forward is that there's more regulatory drivers in terms of number. They're growing in complexity as environmental, fiscal and security regulations continues to drive growth and mature here as well. And whether it's upgrades that are being dictated by payment devices with payment card industry standards that are driving upgrades all around the world or whether it's fiscal regulations that will leave behind a stronger aftermarket parts business with proprietary technology or whether it's regulation for the biofuels and vapor recovery solutions has taken place in many markets is also driving demand. So let me just give a bit of a case study or an overview here, an example of our environmental business, which is around our underground products. And this product set this group here really drive above fleet margins for us. But let me give you an insight as to how those products are creating a safer and sustainable world. So our vapor recovery solutions that we've got within our Gilbarco Veeder-Root business really prevent VOCs from escaping to atmosphere or perforate into atmosphere during the filling process. Governments worldwide are implementing those regulations to prevent these vapors from escaping, particularly in many emerging markets, Mexico, India, as great examples, more on the horizon here. Vontier's made recovery solutions really do provide that product to meet those environmental and safety and compliance needs really recovering those vapors as they go to atmosphere. And I know I couldn't be more proud of the teams of what all our teams do in that product delivery and building those solutions that actually keep creating a more sustainable planet here. So let me just wrap up here and recap. We like this space. The fuel retail market is highly regulated. It's safety and compliance driven. And because of that, it's got an attractive market structure. Growth is going to continue at low single digits for many years to come here. And I think the drivers for that are covered in the presentation, but I think they're relatively well understood. At Vontier, we believe we're well positioned to take advantage of these secular tailwinds continue to drive that growth, shareholder value, and that's going to drive continued strong cash flow generation over many years, that's going to fuel high-growth opportunities across this platform and Vontier. So I appreciate everybody's time here today. Thanks for listening. With that, I'm going to pass it over to Tim here who's going to talk about Matco. [Presentation]

I'm really excited to be here to talk to you about the repair solutions part of the Vontier business, specifically really focusing in, obviously, on Matco Tools. Just a little bit about myself. I actually started with and have been with Matco on and off, I should say, for 35 years, and this is my 12th year as the President of Matco. So when I look at Matco, I'm really proud to be part of the journey that we've been driving in our business. It's a very durable business model, and it's really been known for its growth. We do so through innovation and leveraging our supply chain partners to drive our product vitality. And I'll touch on that a little bit. And we do that through our growing network of franchise ease and we're also supporting them with a lot of digital initiatives as we go through the year. So who are we? We're a business that a leading manufacturer in toolboxes and we repair -- and we distribute automotive repair tools, diagnostics, hardware items and whatnot, and I'll get into our product lines a little bit. We serviced a $5.7 billion market. We do so through our 1,900 franchisees in both the U.S. and Canada. And we do it by leveraging what we feel is a best franchise distribution system in the business. Now here are our product offering. So when you think about Matco, sometimes there's confusion over what we serve. So we do service, as Mark alluded to, 150,000 different automotive repair shops. That includes OEM dealerships. We would call on GM, Ford, Chrysler. We call on independent repair shops. We call on heavy-duty repair shops. We call on motorcycle shops. We even call on marinas. So we call on everything out there that we can service with our wide variety of tools. And as you can see there, it starts with our tool storage, diagnostics, specialty tools, hardline and power tools. And if you look at the hardline area right there, we already have a wide array of tools to support EV repair in the marketplace. Now one of my -- this is my favorite slide, as Dave said before, and one of the things, right, Matco tools, it's a tool come. But we're also evolving and have been evolving into a lifestyle brand. And you can see here in the pictures that there's different things where our customers that they really value and cherish the Matco brand. They happily buy our T-shirts, our bins or sweatshirts. And as you can see in the picture, even socks. And we've got sunglasses for your dog if you need them. I think one of the things with our model is we are one of the ones that walks the last mile into a repair shop, and that opens up opportunities for us. Most people might not know, but we've had a 20-year relationship with Oakley, and we are actually the #2 reseller of Oakley sunglasses in the United States. It's another thing that in our arsenal to our franchisees. And then my favorite is the people that value the product, they even go so far is put the Matco logo and tattoo it on their arm. So when I look at the model itself, we go, as I said, through our franchisee network. And it's really looked at by customers as like a white touch service, right, white glove service, I should say. And so when our franchisees walk into a store, their customers appreciate the value of their being able to jump on our store. And I call them stores just to clarify there because I know you're going to look at them as trucks, but we look at them as stores. And so we'll jump on the store, they can actually touch and feel product. They love our payment terms and the warranty processes afterwards. In addition, customers look at our franchisees as advisers to them, to help them understand, hey, I've got a job here, what tool would help me do it faster and quicker. And they really come to value that part of our business. The other question that franchisees get asked when you walk into a shop, hey, what do you got this new that can help me get through my job faster. And so that's why product vitality is so important to us. And as I said earlier, we leveraged our supply chain and our partners to really drive our high vitality rate, which is at 30%, and we measure that on a yearly basis, not 3 years. The other piece of our business is what we provide in in-house financing. So there are going to be big ticket items, specifically toolboxes and diagnostic scan tools that are a higher price point for a franchisee to actually lend to or borrow money to a customer, but we have this program that our portfolio is around $400 million and enables them to buy those high-ticket items like toolboxes and diagnostics. And then we've been well versed in VBS, having been acquired by Danaher back in 1986. We've been with Danaher, Fortive and VBS and really understand the playbook when it comes to driving VBS in our business. And so one of the things when I look at this business, and I think sometimes there's confusion and people think of it one way, but when we look at the secular tailwinds of our business, we are going to be seeing an increasing vehicle miles traveled over this time frame. We're going to see the average age in the car park increase. We're seeing already, and we'll continue to see the complexity of vehicles increase as well. And then one of the issues the business before the pandemic was a technician shortage, it still continues, and that creates some knowledge gaps. So on the next few slides, we can go a little bit deeper on how we look at these tailwinds that we have. So on miles driven, you can see on the chart on the left, we've got the actual miles over this time frame going out to 2035, increasing. And as Mark said before, we also see the vehicle age increasing in the car park. And one of the keys that -- on the chart on the right is that the actual age of the car park and what we call the sweet spot of repair is between 7 to 12 years over that time frame into 2035, that continues to grow and that will fuel our business as we move forward into the future. Now another piece when I talked about increasing complexity is ADAS, advanced driver assistance systems. And many of you today probably have a vehicle that has this system. And many of you may or may not have to deal with the issues that comes with repairing those. It's created, as you can see on the chart here, Level 2 autonomy, when it starts to grow into Level 3, it's going to increase the number of sensors. Now today, what a body shop saw 10 to 15 years ago come into their shop on a collision side and what it took to repair that with a little bond and some sand paper. Today, we've got sensors. It's completely changing the technology that body shops are happy to deal with. And we think that's going to be a considerable driver. There's even a system out there. You might know it's even on the lower-end vehicles, a very lower form of ADAS called automated front braking systems. That's now available in most vehicles in the U.S. and actually is being mandated to occur in all production in 2025. The other thing that we look at is the car park. And as Mark was alluding to before, we don't -- with the car park, there's going to be ICE-out in the car park. And ICE repair is going to continue as we look at the vehicles from a complexity standpoint, there are going to be some changes. When we look at electric vehicles, yes, there are fewer moving parts in electric vehicle. And then probably the maintenance and repair might be -- will decline slightly. But the other piece of the equation here is that the components that you find in electric vehicles are more expensive than you can find in an EV -- I should say, an ICE vehicle. Now there was just some data released when they were going through, I think it was CCC through some of the insurance claims that were published. And they actually went out and compared a front-end collision on an electric vehicle to the front-end collision on an ICE vehicle. On the lower end side of the chain there, actual cost of repairing on an EV was 20% more than on a nice vehicle. And when you go up the chain into more of the luxury and SUV, the actual cost was 50% more. So there's definitely going to be an impact when it comes to the repair of EVs as we go forward with the cost to offset the frequency. And then when we look at the automotive aftermarket over time and the types of repairs we're going to see, as you see, it starts to grow, but on the chart here on the very end, we're going to have ADAS adding complexity and the cost of repairs, electrification and electronics in addition. And so it's going definitely one of the key things here is that what we're really going to see is now we're going to have shops dealing with a myriad of different types of vehicles. we're going to have EVs. We're going to have ICE. We're also going to have hybrids and they're going to have to be ready to be able to repair all 3 types of the vehicles. I think one of the things when you look at the cost of the overall, and it's in that little box. Just think about 15 years ago, if you got a crack in your windshield and you called the windshield company. They'd send somebody out. They show up at your workplace and they take it out and do it for about $400 to $500. In today's new vehicles, that can't happen because those -- once they replace the front -- the windshield glass, they have to calibrate the cameras. They have to do that for safety or it's going to prevent -- cause some other issues. And so the cost is well over $1,000 to do that today on the newer vehicles. And then when we look at the portfolio itself, like what's the impact to our business over the long term from what's going to be in a toolbox -- we see -- and I'll start on the right here, the specialty. Yes, specialty to us is what you use specialty tools to repair under the hood engine transmission and whatnot. And we'll see that decline over time. But we have cordless and air pneumatic tools. We see that as flat. You're still going to have to have a cordless tool or an air tool to repair an EV or hybrid car. Tool storage, we see increasing because as I just mentioned, they're going to have to be dealing with these 3 different types of vehicles coming into their shop, they're going to need more tools and thus more tool storage to handle that. And then with the complexity, we're going to see a growth in diagnostics and calibration tools that will be required. And then shop equipment. We talk about the ice park, right, you'll still be out there, as Mark said, 90% of 20, 35 ICE vehicles in the car park, but now we're introducing EVs. So you needed an engine crane in your shop from a shop equipment standpoint. Now you're going to be -- need a lift to be able to go in and take those battery cells out of a car. So there's going to be a lot of different equipment that's going to be required to service all 3 of these. And then we see hard line, again, you're going to need ratchet sockets, wrenches to fix all 3 types of vehicles. So we see that flat in this experience. And so one of the things is we have -- when we talk about connection with our diagnostic scan tools, our customers are connected and about 45% of all vehicles today require a diagnostic scan when they're going -- or getting repaired. What we have introduced in our system with our partner, Opus IVS, is what we're calling technician as a service. And what that is, is that in many cases, you shop and see a car come in, they might have had missing a number of master techs they need to do repair, shortage of technicians as well, knowledge gaps. And so when they get stuck on a vehicle, they can buy a product that they can go through subscription and it enables them to actually reach out, contact a master tech in a remote location. They can see the sensor codes that they're working on with viewfinders they can see -- actually see what's going on, and they can walk the technician through the repair, which really helps drive the overall shop's productivity. They'd rather do it themselves than send it out to a dealership to get it fixed. And so when we look from the pillar -- strategic pillars that Mark mentioned earlier on, for us, optimizing the core, as always, continuous improvement. So how do we drive productivity through our toolbox plan? How do we continue to drive our industry-leading vitality? And then how do we always continue? The one thing about this business, it's really about service at the end of the day. It's really about service. So how do we continually drive our service metrics to our franchisees? When I look at expanding the core, it's going to be focused really on storefront expansion. We have a lot of opportunity there. And then we want to continue to gain share in tool storage and cordless. And then in the adjacent markets, as I -- we see the investment. We've always been focused on our franchisee as our sales model, and we're making the investments now to bridge out into driving our e-commerce capabilities to enhance that part of our business. And then as I mentioned, the technician as a service. So one of the examples with VBS is it's been interesting with the pandemic because, I think, right, 3 years ago, we were emptying out offices. As the smoke cleared, all of a sudden, my call center went from being everybody in one building to people distributed. I've got people all around the country. It all brings a lot of issues. I was just reading an article in The Wall Street Journal about it. But it's how do you train, how do you do whatever? And -- but we began to see our phone service metrics decline. And so what we did is we had a Kaizen event. And Kaizen is -- basically means change, Kai and Zen, for the good. And it's an organized activity where you go doing root cause problem solving and try and identify what the issues are. We did do that and when -- then we elevated to what we call our policy deployment process, we deployed the VBS tools. And you can see on the results on the right here how that improved for our business. It's just one example is that you talk about lean and the tools that we have across the business, you can deploy VBS anywhere in your business. And so for key growth initiatives, again, I mentioned the storefront expansion. We currently still have roughly about 30% open territories that we can fill in our market through -- for tool storage. We can drive our growth through product innovation, product throughput and also promotions to drive activity, and that's a part of our business to gain share. In cordless tools, one of the things we realized over the course of the last couple of years is that we were not gaining the share we needed to do in cordless. We had a nice tool that was out there, very well accepted in the industry. But our overall breadth of the line was not where it should have been. So we partnered with another supplier, and so now we have 2 in our cordless space. And we really think we're going to pick up share and recently did that at the end of last year, and the results are exceeding our expectations. And then diagnostics is always going to be an opportunity for us as we leverage our partners in the supply chain to drive different innovations to help support an overall shop's productivity. And then one thing we did arm our franchisees with over the last year or so is our patented distributor app. And what is that? What it enables a customer to do as a franchisee is to have access to them 24/7. Normally, in this business, you'll call on Tom's Ford at 8:30 on a Tuesday, and then you'll be back the following week. This enables them, the customer, to have contact with their distributor 24/7. They need things about, they can make payments. They can actually buy tools. The franchisee can run promotions to them. They can actually handle a warranty. And by that, I mean they can take a picture of a socket that say a 10-millimeter that broke, send it to the franchisee and let them know that, hey, next time you're here, make sure you get a 10-milliliter socket on the truck to replace mine at the store. One of the other things we're also doing through data analytics is the recommendation engine. And so as an example, one of the things we have seen is if somebody -- a customer buys an inverted torque impact, they are 30x more likely to buy a harmonic balance or installer. So those kind of recommendations will help in both applications here drive sales off our store. And so when we look at the garage of the future, I just again talked about the secular headwinds that we're seeing, the garages are going to start. I mean they're going to be seeing a wide range of vehicles, and they really have their work cut out for them as we go forward. I think the ability to continue to supply them smart diagnostics to help productivity drive through, I mentioned the virtual tech help, the technician as a service is another key driver, and then being prepared to help them as they start to transition when they begin to see EV vehicles come in which they're all going to have to have a separate base set up from a safety standpoint to deal with these cars. And then on all the equipment, it's going to be required to service these vehicles. So as I walk away from here, I think we really -- with those headwinds that I've just explained and what we've got going on in the business, I think our company and this Matco Tools is really positioned to continue to drive our growth as we move forward. We're going to be able to continue to innovate with our network of supply chain partners to drive our innovation and product vitality scores. And then we, as I just mentioned, have a nice opportunity to continue to grow our network of franchisees in both the U.S. and Canada and then support them with digital applications with the app and then enhancing our overall e-commerce capabilities. And with that, I appreciate your attention, and I will turn it over to Katie.

Well, good morning. I'm Katie Rowen. Delighted to be here. It's really hard to follow the photos of the Matco Tools, but I'm going to do my best. Delighted to talk to you about ESG at Vontier. It's a topic I'm really passionate about as our Chief Sustainability Officer. Our entire team is passionate about it. I've been in the space for a number of years, including leading sustainability on the Fortive side. So let me start with this, let me start with what ESG is not at Vontier, okay? It's not an isolated program. It's not about optics, right? It's not about virtue signaling. It is about unlocking value across a number of really critical dimensions. And you see some of those on the screen, right, operations, talent, governance, and notably, sustainability. You've heard from my colleagues throughout the morning, our strategy is inextricably bound with sustainability, right? We're providing smart, sustainable solutions for our customers. We're helping our customers meet their own ESG goals, which is a big secular tailwind for us. And another secular tailwind that Mark and others talked about, of course, is the energy transition. Vontier is providing critical multi-energy technologies to really enable a balanced energy transition, one that's sustainable for sure, but also is safe, secure, affordable and available. And optimism for the future really has to be grounded in reality. And the world will not hit its climate goals without a multi-energy future, right? The U.S. national blueprint for transportation decarbonization lays that out quite well. It's why so much investment is pouring into spaces like EVs, clean hydrogen, and the like, right? Different classes of vehicles, different modes of transportation are going to need different technologies. And Vontier is set up to compete to win and have impact across that very diverse multi-energy fueling landscape. I love this slide. It's simplistic, right, but this is a photo of dispensers across the Vontier portfolio. You've got everything from traditional petrol dispensers, right, which are critical. We continue to innovate to make the petrol base more sustainable. Dave talked about vapor recovery, their additives that make it more sustainable, ethanol fuel dispensers and the like. Alain talked about compressed natural gas and hydrogen. You see those in the center there. Those are going to be critical for medium-duty trucking and long-haul trucking. And of course, this is just the dispensers on the page, right? We play across the broad value chain. So ANGI, for example, is providing storage, compression services and the like. And then, of course, you see the EV chargers there, right, powered by Driivz, our EV charging software, that's really enabling the scalability and reliability of the EV charging network. So regardless of the pace of the transition, regardless of the eventual technological winners in each space, we're really set up and positioned to win. And beyond fueling technologies, as you heard from my colleagues and teammates throughout the morning, we're providing smart, sustainable, secure solutions across all of our segments, and you see some of them listed. I'm not going to speak to all of them today, but let me just hit on a few by segment, some mobility technologies. You heard from Alain, Teletrac Navman's fleet management software, right? It's enabling fuel optimization and reductions. His business and the software is enabling customers to transition from ICE to EV. I'm working with Teletrac right now to get a better handle on our very disparate global fleet as a part of Vontier's own greenhouse reduction goals. You've heard from Ian relative to DRB, really compelling water conservation and chemical prevention story. You just heard from Tim relative to Matco and repair solutions. They're providing tools for ICE vehicles, for EV vehicles, for all the powertrains in between those. But I think one of the under-told stories relative to Matco is just the importance of repair shops, again, relative to meeting our climate goals. 25% of passenger vehicles account for 90% of passenger vehicle air pollution, right? Is that aging ICE car parc with old, outdated emission systems, exhaust systems. So the maintenance of that aging fleet is a really critical part of the story. And then you heard from Dave relative to environmental and fueling. There, I would touch on sort of payment security technology, anti-fraud technology, certainly, the environmental compliance portion of that business, which is critical to detect and prevent underground leaks. So the OpCo offerings are impressive in their own right, but the team is also really energized by our ability to collaborate and innovate across OpCo to really scale more sustainable solutions for our customers. And you see a great example on the page here, and this is in the commercial and industrial space involving an underserved vertical, in this instance, mining. And you've got Teletrac retail solutions and fueling solutions coming together, stacking technologies to help mining companies in places like South Africa, optimize their assets and their energy usage. Certainly runway to grow here. You can imagine additional OpCo offerings being added in the future, ANGI hydrogen fueling systems, for example. And so the takeaway bar really says it all, right? It's about the breadth and depth of our portfolio that allows us to connect, manage and scale the mobility ecosystem for more sustainable outcomes. And this is my last slide. I'm going to spend a few minutes on it because I think it's really important. Are we walking the walk as an organization, right? What are our goals and what have we achieved? And we're all very collectively proud of this slide and the progress that we've made, right? Our goals speak for themselves. We would put our goals up against just about anybody. These are not easy goals. These are rigorous goals. And let me just start with diversity. Last year, we increased our global female leaders from 22% to 26%. We also increased our U.S. black and Latinx employees, again, just last year from 10% to 15%. On the operational excellence side, we already have enviable safety statistics, but we continue to push really hard there in the spirit of continuous improvement. It's important from a business continuity, operational excellence standpoint and even more importantly, critically important from an integrity standpoint and taking care of our people. That's something that all of us are incredibly passionate about. You see that last year, we reduced our total recordable injury rate by 30%. We also achieved 9 more ISO certifications relative to safety and environmental management. We're on track to have 100% of our manufacturing sites across the globe be ISO-certified across those dimensions by 2026. You see the energy Kaizens at the bottom there. It's the best of who we are, right? Cross-OpCo, cross-functional employees come together, add a manufacturing site and find creative ways to reduce costs, reduce emissions, reduce electricity, all the while they're learning and developing and we're propagating the VBS culture. And the energy Kaizens and the energy across the organization around them has really given us momentum relative to our rigorous greenhouse gas emissions targets. You see those on the screen there, 45% absolute reduction in Scope 1 and Scope 2 by 2030 and then net zero by 2050. Our baseline year was 2020, and we've reduced our absolute Scope 1 and Scope 2 just in the last 2 years by 13%. And that's despite the fact that our fleet grew and we had acquisitions. And when you just look at our Scope 2, which is our purchased energy across the globe, in the last 2 years, we've reduced that by roughly 27%. So huge cost savings, huge impact, reducing our environmental footprint. The team is excited about it and energized by it. We also submitted to CDP, formerly known as the Climate Disclosure Project, last year for the first time, and we received a top 30% score with a B score, top 30% of all reporting companies right out of the gate. It's reflective of the rigor with which we're tackling sort of our own program internally, how we're tackling sort of climate risk and opportunity and environmental management. So I'll just say this: we're focused on driving value across ESG. The team is really energized and galvanized by everything that you've heard today, right, by providing smart sustainable solutions for the road ahead. And I really look forward to updating you in the years to come about our progress and the impacts that we're going to have across the globe. So with that, thanks, and I'm going to pass the stage over to Anshooman.

Good morning, everyone. For those of you who I have not had the pleasure to meet with yet, I'd like to give a brief introduction about my background. I've been with Vontier 7 months. My previous public company CFO experience included a company that operated in the mobility ecosystem that went through a technology-led transformation and emerged a clear leader in the space with increased EBITDA margins. The opportunity at Vontier excites me because we're uniquely positioned to win and drive significant value. Before I get into the meat of the presentation, there's been significant ongoing discussion about the macroeconomic conditions, the state of the economy in the news. Our end markets are resilient. And I want to take a moment to reconfirm guidance for Q1 and the fiscal year. Just as a reminder, for the fiscal year, our baseline core revenue will grow mid-single digits. Our baseline adjusted operating profit margins expand by 180 to 200 basis points translates into an EPS of $2.73 to $2.83 and a cash conversion of 90% to 100% for the year. As you heard today, we operate in attractive and resilient end markets, supported by secular tailwinds. We're uniquely positioned to win with the breadth and depth of our portfolio centered around a Vontier connected mobility strategy. The foundation of this Vontier connected mobility strategy is based on a culture and track record of strong execution. It delivers on a value-creation framework, attractive above-market growth, margin expansion powered by VBS, robust free cash flow underlined by disciplined, return-driven capital allocation. Post spin, we've shown strong financial performance as a result of operational excellence and execution. We have a top-tier financial profile. Revenues grew high single digits. Adjusted operating profit and adjusted EPS grew double digits. These results were enabled by the strong execution of our profitable growth initiatives and platform strategies. One profitable growth initiative that I'm extremely proud of personally is our strategic pricing. We operated in a highly dynamic and high inflation environment, but we were cost/price positive every quarter, every quarter since spin. Perhaps most notably, we managed to increase our operating profit margins by 110 basis points despite significant EMV headwinds. The strong performance led to significant free cash flow generation. Over the 3 years, we generated approximately $1.4 billion in cash or average free cash flow conversion of 100%. This enabled us to deploy capital effectively, including share buybacks and acquisitions like DRB, which I will expand on later. As Mark and the business leaders explained, our connected mobility strategy will drive above-market growth while expanding margins. There are 3 pillars: optimize the core, which drives operational excellence, and expand core in adjacent markets that accelerate our growth. VBS is the cornerstone of our culture and a source of competitive advantage. It's a philosophy. It's a set of values, a series of processes and tools that define who we are and how we do what we do. It's part of our culture, a culture of continuous improvement, a culture of problem solving, a culture of breakthrough performance, and a culture of winning. The tools and processes driven by employee engagement, support innovation, growth and productivity across our business. Let's look at a couple of examples of VBS at work. One of the tools in VBS is a focus and prioritization process or FPP. Our environmental and fueling business is applying this FPP process to reduce the number of global dispenser platforms. In 2022, we -- sorry, in 2020, we started off with 32 global platforms, over 4,000 SKUs. By the end of 2022, we've reduced the number of platforms to 20, over a 700 SKU reduction or 16% reduction. We still have a significant amount of runway as we plan to get to below 10 dispensers and a cumulative reduction of 35% of the SKUs. Besides the direct cost reduction from the -- by simplifying the process, it reduces our working capital by reducing our inventory. It also has incremental benefits. For example, Mark talked about reducing the sustaining part of R&D and being able to redeploy those dollars for new product development, which enhances our growth profile. It helps to improve our on-time delivery, helps our procurement organization have more scale on a fewer set of parts and drive further cost out of the business. It enables, example to the right, our manufacturing footprint reduction. We started off with 3.8 million square feet. We've taken the first steps to consolidate some of our European operations and take out 8% of our manufacturing footprint. We still see significant runway to further improve our productivity and consolidate our footprint. We already have attractive margin profile. As a lot of you are aware, over the last few years, we benefited from the regulatory-driven EMV super cycle in the U.S., during which we gained market share. The EMV upgrade supercycle sunset in 2022. Our 2023 guide of approximately 21.8% operating profit margin includes base business operational improvements of 180 to 200 basis points driven by $45 million of in-year savings from our restructuring program. That $45 million equates to a run rate of $55 million on a full year basis, and that's at the high end of our previous range. Over the next 3 years, we'll expand margins of 150-plus basis points. This is driven by higher growth and higher margin elements of our portfolio. Also, we regularly evaluate our portfolio for financial and strategic fit. Additionally, VBS will continue to drive improvement in productivity. This margin expansion translates into strong 30% to 35% incrementals in our business. Before moving to growth, as you've heard, we've resegmented our business. Not only do these new segments align strategically with our business, they also provide more transparency to our investors. This is one of the first things I had heard when I joined the company 7 months ago, about breaking down our business and providing more transparency. The 3 segments serve a $30 billion TAM that's supported by secular tailwinds in all 3 segments. The market portfolio is underpinned by the Vontier connected mobility strategy and is poised to deliver above-market growth and expand margins. In Mobility Technologies, our margins will continue to expand further as we continue to scale our recurring revenue in that segment. Normalized for the EMV sunset, our 2023 growth is supposed -- is expected to be mid-single digits. Looking forward to the next 3 years, Mobility Technologies will grow high single digits with growth in the higher-growth verticals. Secular drivers support this business: evolving customer needs, industry consolidation, multi-energy future. And we'll continue to gain shares in our market-leading businesses like DRB. The repair solutions business is going to grow mid-single digits. The complexity of the car parc, supported by our industry-leading product vitality, franchise growth, all support growth in this business of mid-single digits. Probably underappreciated, our environmental and fueling business is going to grow. There is low single-digit growth in this business. As you heard from Dave, his favorite slide, regulations are going up. There is more and more regulation in this business. Regulation for below-the-ground environmental, above the ground, vapor recovery, payments. PCI standards keep evolving. The old ones have to sunset. We're talking about PCI too sunsetting by 2027 in the U.S. When you look at industry consolidation in the space, again, referring back to Dave's slide, there continues to be consolidation in the space with the large national and regional players continue to grow to open new stores at the expense of the smaller single-shop operators. We are poised well with these large national and regional players with our market share. We have programs like aftermarket growth that's all going to support this low single-digit growth in this business. Overall, this equates to an attractive mid-single-digit growth for Vontier. Strong free cash flow is a hallmark of our business model. Over the previous 3 years, we've generated $1.4 billion in free cash flow or 100% cash conversion. This fiscal year, we've guided to a 90% to 100% free cash flow conversion or approximately $400 million of cash. For 2024 to 2026, we'll generate another $1.5 billion of cash flow or approximately 100% cash conversion. Cumulative over this 4-year period, that's $1.9 billion of free cash flow. That equates to just under 50% of our market cap today. This cash flow gives us significant optionality for capital deployment using a returns-driven capital allocation framework. We have a healthy balance sheet with staggered maturities and an attractive weighted average interest rate of 4.1%, assuming a 5% SOFR. We've indicated in the Q4 earnings call that we're going to pay down $150 million to $200 million of debt this year. It's going to be targeted on the 2024 maturities. We've actually paid down $50 million of debt in the first quarter already. We expect to be in our target leverage range of 2.5x to 3x net leverage by the end of 2023 and support our -- and are committed to our investment-grade rating. Over the last 2 years, we've deployed $1.7 billion in capital focused on delivering strong returns for our shareholders. For 2023, as I mentioned, we'll generate approximately $400 million of cash. $150 million to $200 million is earmarked for debt reduction. The remainder of the capital allocation will be heavily biased towards share buybacks. At the current multiple, it's hard for M&A to compete with buybacks from a returns perspective. From '24 through '26, we'll have approximately $1.5 billion to $2 billion of capital to deploy while maintaining our leverage. Expect disciplined, balanced, return-driven capital allocation, which will also include acquisitions. Our M&A lens includes both financial hurdles and strategic filters. Our M&A process is strategy-led. It must align with our strategy. It must enhance our core capabilities. From a financial criteria perspective, we target double-digit return on invested capital in 3 to 5 years. We look for opportunities to deploy the VBS playbook to drive synergies, synergies to accelerate growth and improve margins. We target acquisitions to be accretive to our growth and profitability profile over time. As an example of capital deployment on M&A, let's look at DRB. This accounted for over 50% of the capital we deployed, of the $1.7 billion we deployed over the last 2 years. This acquisition demonstrates the capabilities and strength of our acquisition process. Car wash is an attractive fuel-agnostic market adjacency where we had very little presence before this acquisition. It plays in attractive segment of the market, aligning with our connect, manage, scale competencies. DRB is the clear leader in the car wash point of sale, payment, workflow automation and control software. And it provided us opportunities to deploy VBS to accelerate growth and improve margins. Let's look at the results for the first year of ownership. Revenue increased by over 30%. Our profit margin expanded by more than 400 basis points. Let's look at the multiple we paid as a basis of 2022 EBITDA. Net of the tax asset, we paid 10x on 2022 EBITDA. While we're extremely proud of the accomplishments of the DRB team over this past year, we are even more excited about this -- what this business brings to the future. Since my colleagues started naming their favorite slide, this is my favorite slide. It is the money slide. I started off with the value-creation framework: above-market growth margin expansion, robust free cash flow generation and disciplined capital allocation. Our midterm targets align with this framework: a 3-year CAGR in the mid-single digits, supported by the mobility -- connected mobility strategy, which will accelerate our growth. We'll expand operating profit margins 150 basis points plus enabled by VBS. Based on our current share count, double-digit EPS growth, 100% free cash flow generation or approximately $1.5 billion, enabling return-driven capital allocation to drive shareholder value. As a reminder, the EPS target of 10% or greater is at the current share count and the current portfolio. The capital deployment gives us incremental upside. I'm confident in our abilities to deliver on these targets. In summary, we have a clear path to value creation. We operate in attractive markets supported by secular tailwinds. We have a portfolio of market-leading resilient businesses and coming off the sunset of EMV, a strategy that provides attractive growth, margin expansion and significant free cash flow generation. Thank you. And I'd like to turn it back to Mark.

Let me wrap up for a couple of minutes. Thank you for being here today. We are so happy to share with you our story. We are well on our way of establishing a premier industrial technology company demonstrating operational excellence and accelerating growth. I think when you think of Vontier, think of disciplined capital allocation. There's no question in my mind that we're making great early strides on that, and we intend to continue to do so. When you look to see why we're so excited, we serve this $30 billion mobility ecosystems market that is growthy. It supports a multi-energy future. And we have so much here that we have penetrated, where we can serve high-value customer problems today and into the future. And as we advance in a digitally enabled world, we have the talent and proven capabilities to untap that value. This is the strategy on a page. This puts together pretty much everything that we've summarized for you. It talks about our purpose and our vision that is deeply embedded and entrenched with ESG. We believe in building a great company by doing good in the world. And we can change the world with what we're doing. Our strategy for connected mobility is a 3-pillar strategy: operational excellence and accelerating growth, and here's our value-creation framework. And I think the most important thing also to say is that we are doing this value-driven with our basis built around the Vontier Business System. So with that, if you look at our investment thesis, we provide the critical mobilities and alternative energy technologies that will bring this $30 billion very attractive market opportunity and to reach -- and we have excellent opportunities for growth based on the secular tailwinds that are available to us. We think that we can do this through disciplined capital allocation, and we've got strong free cash flows to be able to untap value. And we have an energized team with the talent and capabilities to make this happen. So with that, folks, I think I am so happy to say that we've sunsetted EMV, that we're through this and 2023 is a trough year. And what underpins everything we're doing here is that growth rate and that margin expansion that I think you can see at work already today, the momentum is there, and we'll read through as we look to the next couple of years. So with that, let's have some Q&A, and we'll wrap up today's session with some Q&A. Ryan? Thank you.

Give us a second here. For those of you online, we're going to get some chairs on stage again. As a reminder, if you do have questions, please feel free to submit those via the portal. And we have some questions here in the room as well. If you could wait for those mics again, just as we did last time. All right. Okay. I missed you last time, so we'll start with you.

Guy Hardwick from Crédit Suisse. Can we talk a little bit about the aftermarket opportunity in fueling? It was very helpful. You gave $375 million for aftermarket revenues, of which $175 million was parts. If you're serving 260,000 sites, it kind of implies like $1,400 of annual spend, of which $600 is in parts. Are those numbers kind of make -- are those realistic numbers in terms of like -- keep that in context for us. How does it vary from developed to emerging markets? And where could you get it to? And in terms of aftermarket, what sort of pricing should we assume going forward?

Yes. Let me answer that, and I'll turn it over to Dave for some additional color. What we recognize is that the fueling opportunity is -- this parts opportunity is going to be with us for a long period of time. And we started looking at the net opportunity by doing some of the math that you exactly talked about. We recognize that this was an area that we hadn't focused on. We were roughly probably 10% penetrated where we saw not only an opportunity in the United States but an opportunity internationally. And from a scoping and scaling perspective, the developed markets have a lot more installed from technology and capabilities, just the number of dispensers. And as you see that building out globally and particularly in high-growth markets, as you saw the content going from, let's say, a fueling depot, which is roughly $6,000 to $7,000 per site to like $90,000-plus, there's just a lot more in the ground that needs to be maintained. And as you can see, these things use parts. And so it's a great long-term opportunity for us. Dave, would you like to add some color?

I mean all I think I would add to that, Mark, is that I think with the compliance and regulatory frameworks that are being driven, what that's driving is more security standards for equipment out there, whether that be fiscal regulations not all related to payment, et cetera. That's just creating that longer runway for a bigger installed base of secure parts. And because they're secure, they're heavily regulated. It means we've got a pretty captive installed base out there as we drive that.

David from the back?

Just a quick question. After hearing about all the organic growth opportunities, is it safe for us to assume that $1.5 billion of free cash flow in '24 through '26, if the valuation stays anywhere near where it is, we should see a large majority of that to be share repo?

Yes. I'll answer it and I'll let Anshooman chime in on one of his favorite questions as well. There's no question that we have prioritized share repo based on the outstanding returns that it generates at these kind of prices. So I think that we have pivoted to that. And I think that demonstrates our commitment to a very disciplined returns orientation for capital deployment. But you want to go ahead and chime in on this as well, Anshooman?

David, so we have a returns-driven capital allocation framework. We evaluate every opportunity based on -- from a lens of a shareholder, what drives the highest return. So at this valuation, it's hard for M&A to compete, but we did one with Invenco, which did a 20% return on invested capital for our shareholders. But you could assume at this valuation, share buybacks remain a priority.

And a quick question on Invenco. I'm just curious, the evolution from point of sale from in-store to the pump. Can you tell us how that's evolving and how that could change the potential replacement of the pump system out in the forecourt?

Yes. So the integrated payment system, the point of sale is no question quite integral, as you know, to the C-store environment. And there's regulation that is constantly requiring upgrades in that technology. What iNFX does particularly is, it enables you to modify the software just around that regulatory change and provide that upgrade. Instead of changing the entire set of that monolithic C-suite software point of sale, you're just changing that one element, which means you can do a very quick upgrade to the system. And that's different. That's dramatically different than what's available in the market today. It's different than what we had previously. It's different than what other folks have. So I think if you think of this as a contemporary microservices application-based software, those are all the words you use, but that's what it practically does. That's what it enables for our customers, and that's why it's so valuable as part of this mobility ecosystem. So it's going to enable us to adapt very quickly to those changes for our customers so they can meet that really quickly.

I see the value to the customer. I'm just trying to make sure, does -- is there any impact on the hardware needed around it? Or is it just a replace of the display? And then how much does it cannibalize your point-of-sale business inside the convenience store?

Oh, I see.

I'm just trying to get that...

Yes. It is the software we provide in the convenience store, and we can continue to upgrade the hardware when the hardware is needed an upgrade for regulation. So I think it provides more flexibility for our customer base, but this is the in-store software that folks would buy from us on a recurring revenue model. So this is accretive to us.

The key is it's accretive to everything we do today or did before.

It doesn't cannibalize.

I think I'll just take one online since we have one. This will be for Anshooman. We mentioned in the slide there that we had 70% non-ICE revenue by 2028. Does that model in capital deployment?

Yes. By 2028, there's a large part of that, that comes through organic. There is some M&A factored in there since it's more of a 2028 number. We do have some capital deployment in there but not much.

Trying to spread it out a little bit. Joseph Donahue?

Joe Donahue with Baird. I guess, Anshooman, you first. Can you talk about the expectations built into the operating margin expansion, whether that's going to come more from leverage or from gross margin?

It's coming from both. Our Vontier Business System drives productivity across whether it's driving improved margins, optimizing our cost structure. And then obviously, as we grow, there's some scale benefits also from that. So it's really a brand of both growth and productivity that gets to the margin expansion targets. We target 30% to 35% incrementals, and that also allows us for some organic investments in the business.

And then on the product side, kind of 2 questions. How is Driivz' market share in the U.S.? And then there is some mention like on earlier calls, the retail build-out potentially for the Matco network. Has there been any update to that?

Yes. So I'll take the Driivz question, and we'll turn the Matco one over to Tim. Look, the electric charging, fast charging networks are mostly established in Europe, where we have established a leadership position, predominantly in the Nordics. But we have a strong presence in the U.K., Ireland, other parts of Europe as well. Obviously, we're very excited to bring this technology to the U.S. EVgo is in the U.S. They're a large customer of ours already that has adopted our operating system software. So even though you go to EVgo, you may not see Driivz there, but Driivz is the operating software. And what's compelling about this is that folks that have to manage networks of chargers, they're going to have to make a decision. Am I going to write that software myself or am I going to leverage a leading software capability already out there in Driivz? And we're of the bet that as we go forward, there will be a large population of folks where they're destination related, where they're on-the-go related or where they're managing fleets will also opt to make that decision to source our hardware -- excuse me, our software, and it's hardware-agnostic. So it's -- I think the EVCI network in the United States, there's a tremendous amount of investment from an infrastructure perspective that the government has funded, and I think that represents a net pretty strong opportunity for us in the United States. You want to answer the macro question?

Yes. So on the storefront side of us retail or employee, we started that program last year just to learn the ins and outs of managing it from inventory AR and everything else in managing employees. We had 7 out there by last year, end of last year. We are going to start increasing. But our strategy with that program is more about going into underpenetrated areas that we have in the marketplace and then how do we flip those over into a franchisee system because that's our preference is to run it as a franchisee business.

Joe in the back.

My question is for Anshooman. So thanks for listening and providing the additional financial detail. When you take a look at the Mobility Technologies margins today, I would imagine that that's probably where the biggest opportunity is given the growth rate, given some of the issues that we've already discussed with Teletrac Navman. Help us kind of understand where those margins can go. Can they -- where can they go? Can they go as far as where the other 2 segments are?

Over time, they definitely will get to where the other segments are. In there is not only Teletrac that's right now in the early stages of a very successful turnaround. They've done a phenomenal job. There's also the Driivz investment in that business. This business is software margins. We've got 60-plus premier customers. And the revenue model is a true SaaS model, and there's too far out there you get. Every time our customers add another charger, we manage that charge point, we get a monthly recurring revenue. As there's more and more transactions, as more EV vehicles come into play, we get a transaction fee per transaction. So there's exponential growth in that business. Right now, it's obviously a very fast-growth area where we're investing money.

Great. Great. And then my one follow-up to Dave since we've referenced your favorite slide a couple of times now. The '20 to '25 time frame, so clearly, there's more regulations. I'm just curious if the impact from those regulations can be as great as the impact as you've seen in the previous decade. And what regulation specifically should we be paying close attention to?

It's a great question. I think regulations continue to play out over time here for sure that we've seen. And the challenge with some of the regulations, and we've seen that historically as well, sometimes they don't quite hit the time frames that you'd expect from an enforcement perspective. I think there was a lot on there in the slide that we talked to. So as Anshooman talked about, there's PCI sunsets on the payment card industry that's taking place in multiple markets as those regulations sunset. So I think that's always an important one to pay attention to. It's pretty well known due to fiscalization in certain markets like Brazil, as an example, that's rolling out now. So I think that are some of the core ones. I think vapor recovery continues to roll out in a number of markets, India, Mexico, that is importing now. That's driving investment in that fueling infrastructure for sure.

Yes. One I'd like to piggyback on a little bit that's closely related here is that in the United States, the tanks have been underground now. There's -- a lot of them are coming up on 30 years. And what's happening is when they reach the past 30 years, the owner of those sites can no longer get insurance. And so -- it's also their prone to leak at that age. And so there's a big tank upgrade cycle that we're kind of in the early innings of right now. So I think the good news is we don't see anything as big as the U.S. EMV because that was -- it was great, but it was just a little bit large. So it's great on the upside. It's certainly bad on the downside. And so we see sort of the steady drumbeat of many of these kind of regulatory drivers that are all bite-sized and meaningful and an increasing number of them. So I think that's a good backdrop.

Coming to Julian down here.

Maybe just wondered if you could flesh out any more color on the near term. I understand you have reiterated guidance, but kind of anything to call out specifically on the top line? And also, there's obviously been some sort of eruptions in the financial world recently. How are you thinking about that financing book at Matco in that light? And then kind of looking out further, going back to that point on the margins by segment, are we assuming kind of similar operating leverage medium term across the 3?

Yes. So I'll give the Matco comment or question 2 as well as the operating leverage instrument. But before we do, let me sort of give you a little bit of a sense on the macro environment. Obviously, we've spun the company in, I would say, historically unprecedented amount of turmoil. We brought the company public in 2020. It's -- this team is battle-tested. And I can tell you one thing for sure, we never take anything for granted. With EMV super cycle going over west, we are agile, we're nimble. Obviously, we read, just like everybody, some concerns what could happen with the economy longer term. I would definitely say this, even though we are agile, we're nimble, we're looking and watching, we're not seeing signs of the market sort of giving way. We have a lot of leading indicators out there. So we definitely see a very constructive market right now. At the same time, these are resilient businesses. I mean, if you looked how they performed in the last major downturn like 2008 to 2009, they're pretty resilient. That doesn't mean they're immune to a major recession, but at the same time, they fared much better than many other industrial tech-type companies out there. So we have reason to be encouraged. And once again, we're a team that's use delineate pretty tough stuff. And so we're fit for whatever the world is going to throw at us.

I'll take the Matco question first. So one thing to keep in mind for Matco is the health of the technician is extremely strong. When you look at technician employment, it's at record levels. When you look at technician wages, it's at record level. If there were to be a recession, what happens? People keep their cars longer. They still have to repair their cars. So generally, technicians bode well through a recession. Also, these are the tools of their trade. They have to make payments on the tools of their trades to stay gainfully employed. So our portfolio has historically performed pretty well when you look at delinquencies, which we're looking at a weekly basis, when you look at write-offs and reserves. I'll take reserves as an example. It's traded between 150 basis points from the lowest to the highest. Through the end of the fiscal year, we're probably in the top quartile just from a conservatism perspective. So it's a pretty healthy portfolio, and we have a lot of discipline and control around this portfolio. Your other question around operating leverage in the 3 businesses. At this time, I'll say, yes, near term, think of similar operating leverage across the 3 businesses. Over time, as our recurring revenue in Mobility Technologies grows, this is a pure SaaS business that we're growing, so there is opportunity over time to grow the operating leverage in that business.

I'm going to pause and take another online question here. I'm going to give one to you, Katie. And then Mark, you can probably chime in on this as well. But can you talk a little bit about what we're doing from an employee retention standpoint, how we're attracting and keeping best talent?

Yes, it's a great question. I think -- first and foremost, I think a lot of what we all talked about throughout the course of today has been really critical. It's allowed us to punch above our weight. People want to work somewhere where they feel like it has a purpose and meaning. And when we talk to candidates about our vision, our purpose, what we're doing across the globe, we get a lot of traction with candidates. It certainly allowed us to punch above our weight as this entire management team has been kind of remade by Mark over the last 18 months, and we've brought in a lot of talent. In addition to that, a number of things across the inclusion, diversity and equity landscape, a lot of growth and development opportunities that Amy Plasha, our CHRO, has led and brought to the table. So it's across the whole kind of life cycle of employees from recruitment to development, to promotion and too many things to sort of mention here with this audience. But those are the comments I would make.

Yes. I'll just chime in that our values and purpose are very meaningful to me personally, and I think all of our senior executives. And I think when -- the authenticity around that and when we engage with employees about the ability for us to impact the world in a very sustainable way through not only what we touched today but also our new technology is bringing forward is also very meaningful to us. So I think that's a big part of where people want to work these days. I mean they need to identify with, is this company really committed to doing something good? Are they really adding value? Are they authentic in what they mean about that? Do they have a strong value system within their company that is affirming to them? And we have a lot of genuine intent around inclusion and diversity. We have a theme, We Belong Here, where we want employees to feel like no matter where they come from, whatever walk of life, they're going to be included and they're going to be celebrated for that. So I think it's just -- in a very contemporary sense, I think we're connecting with folks. So I think we're bringing in the right talent to lead this business into this next decade. And I think that's incredibly critical because there's 3 things that I think about intensely. One is strategy, the other is the operating system to unlock that strategy, and then the third is talent. And if you can attract that talent, which I think we have, then you've got a real formula here for success.

We have about 5 more minutes. I'm going to try and sneak in 1 or 2 more come. Down front here.

You have retail married in with what you guys are now calling environmental and fueling. How are you going to ensure that, that business logic kind of isn't lost under this new structure that you have?

Yes. Thank you. That's really a good question. When you think -- when retail essentially evolved...

GDR, there was a business logic and strategy...

From our above-ground and below-ground fueling systems, it was because there was a gas station, and they started with some beverage cooling. They needed to have a point-of-sale system. So it was -- it kind of -- the entire format, if you will, started as a gas station. And so it was kind of a natural birthplace to get started. But now as you see it evolving, it's actually a liability that you're so closely tied with the hardware because customers want a software system. And in fact, the buyers are different buyers of the petrol-based infrastructure versus the in-source stuff. So it has evolved so significantly that you really have to be seen as a modern contemporary software company with some connected hardware. And so we got that right. We know how to connect the petrol to the inside of the store. But now it's so much more than that now that we've got to evolve that and be in a contemporary sense. There are still customers that want to buy from us in an integrated fashion, and Costco is a great example. We provide the technology capabilities for Costco, which is one of the largest retail fueling networks out there and very robust and reliable and very high-quality product. And -- so we approach them with one face to them. So there -- sometimes there's customer preferences. We're going to take that into account. But there's no question that the underpinnings of these businesses are set up the right way now to untap volume into the future.

Okay. One more. Steve, I've seen you a couple of times.

Two questions. So for Tim, your unnamed #1 competitor, if you benchmark the margin profile of Matco versus them, you guys are, call it, 300 basis points above them. Can you help us understand why that is, number one? And how you can sustain -- should we worry about margins going down as you guys grow? So I just want to understand those dynamics. And then just for the broader team, you made a point of calling out organic growth has historically been 8% ex EMV. You've called the trough in EMV. I'm just -- it's really striking to me that now you did 8% growth before, but now you're saying 4% to 6%. So I'm just really curious to understand that dynamic as well.

Yes. Well, let me jump in there on both, and I'll let Tim answer certainly more in depth on the Matco one. So first of all, we're very happy to disclose these kind of margins. But as Tim will explain, we have incredible leverage and capabilities with our supply chain that both enables a high degree of vitality that 30% is a 1-year number. So that means 30% of what Matco is bringing to market every year is new that year. That's what that number means. So a high degree of innovation also with great leverage and great margins. So I'll let him get a little bit more in depth on that. And by the way, that is sustainable because we've seen it's sustainable over a long period of time. And so we anticipate we'll continue to see that sustainability. So why don't you go ahead and jump in on that one?

Yes. I think the key difference between -- as I mentioned early on, that we've been part of the Danaher business is supportive and driving productivity through our business now for the last 30-some-odd years. And that's been our approach, and I think that's what separates the 2 of us.

The other thing that I'd like to be able to answer for you is the outlook on growth. I think, no question, you see the underpinning of growth there. I think what we're giving to the market is responsible guidance given the overall possible softening in the macro environment that could occur. But right now, we see a pretty constructive backdrop to that. I'll just leave it at that.

One more. Cliff?

I have a question that's prompted by the fact that I was force-fed by Danaher and United Technologies and -- that's your backgrounds. The 150 basis points over 3 years in the kinds of businesses you run, particularly in the transition to a software business, strikes me as very low. Now I appreciate you got to give guidance someplace. Talk to us a little bit about if you are more successful than that, how nimble can you be about redeploying that money and something other than share buybacks in terms of investment internally or M&A? How nimble can you be if you have more money to spend?

Yes. So thank you for that question. First of all, we appreciate that what we're giving represents certainly opportunity for us to beat that. I think DRB is a great example. I think we gave guidance. We didn't slow down based on the guidance that we gave. We took advantage of every opportunity available to us because it was good for our customers, it was good for our employees, good for the shareholders. And we're going to -- we put our hands on the steering wheel and we push on the gas, and sometimes we go further faster than we anticipated. And that's happened a lot in the businesses we've had the pleasure of running. And so I would say that's exactly what we try to do. There are lots of opportunities for us to deploy inorganic opportunities for growth within these businesses, but the businesses compete for capital. Within the businesses, they compete for capital. We take the best of the best ideas and we deploy around those. So if we have more money to spend, we'll spread that a little bit more and we'll probably go a little more faster. But once again, we're giving you the direction. We're giving you sort of our sense of magnitude. But as always, we'll do our best to exceed that.

All right. We're going to wrap it there. As a reminder, for those of you staying for lunch, it's down on the 12th floor. There are stairs if you need it. And we'll see you guys down there. So thanks again for coming. Appreciate your attention. And now...

Thank you.

Thank you. Thank you for coming.