Vontier Corporation (VNT) Earnings Call Transcript & Summary

All right. Good morning, everybody. We're going to go ahead and get started here. So, first off, I want to say thank you to everyone who could be here with us in Chicago today, and thank you to those of you listening on the webcast. We know it's a busy time for all of you, so we appreciate your interest in Vontier, and we appreciate you taking the time today. So just to give you a little lay of the land, we're here at NACS, which is the National Association of Convenience Stores, largest annual trade show of the year. It's sort of a massive show, a lot of excitement going on, a lot of folks here. But we wanted to bring you here just in an effort to help address a lot of your questions. We get a lot of questions, Mark, Anshooman and I when we're with you around the businesses, how they come together and just broadly more detail about the convenience retail end market. So we're hopefully going to spend a lot of time on that today. And our intent is to really help educate you here on this end market. We want to give you a better understanding of our strategic vision. We want to share with you our conviction for the growth drivers in this end market and how we're creating significant opportunities and competitive advantages that position us to lead the evolution of this end market. So, I won't cover these next two slides, but please read through them at your leisure. And I want to go through the agenda a little bit here. So, we're going to kick things off with a quick video after me. We'll bring Mark up. He's going to give you a little bit of a strategic overview of Vontier. Then he's going to double-click into convenience retail a bit. And then we're going to have a number of our business leaders come up, four separate business leaders to walk you through various parts of our verticals within convenience retail. We'll have a quick Q&A session, 10, 15 minutes, and then we'll follow that with a break. And then we have an exciting industry panel. We have some folks here with us today that will help give you a little bit of an outside perspective. So you're not just hearing from us how excited we are. And then we'll come back with a brief financial update from Anshooman, another Q&A session in the end. And then we'll -- for those of us here in the room, we're going to head down to the show floor and do our booth tour. For those of you on the webcast, we'll be cutting our webcast right after the last Q&A. So, thanks again. Appreciate you being here. I'm going to bring up Mark, like I said, before we do that, I'm going to start with a quick video. Thank you. [Presentation]

Well, folks, welcome. We are so happy to have you with us here in Chicago as well as joining us by the webcast. What a better time than now to do this. Vontier is a business of transformation. We just passed our fifth year anniversary and a lot has changed. A lot we can be incredibly proud of in terms of where we came from, what the company is today and the hard work that's gone into it. But not only that, bringing you here to Chicago for such an important event for us also marries our two worlds. It's been a bit difficult with investors to try to explain our story. And we've been on this journey. It's been complicated. We've had the pieces, we've had the assets that we've had. But now when you look at our portfolio, so much has changed and what a better place to bring you than the next show with more than 20,000 visitors that are going to be here today, what an incredibly vibrant industry, and we can show our strong businesses, our strong brands and make it real world for you all. So you have a very good practical understanding of where we're going. So I couldn't be more excited to have you with us today. And we're going to talk about a lot of stuff, and you're going to see a lot of things that we're really excited about. So, the first is, I hope that you recognize that Vontier is a more focused company. It is purpose-built, it is leveraging strong secular drivers, and it is a performance-oriented company that we are incredibly proud has a strategy that strings things together, and we have a vision and a mission that also works. And a big part of that is how we're positioned in our markets. We're going to have a little bit of a departure on how we talk about our businesses. We're great at talking about our opcos and our businesses and our brands. But what maybe you'll see different today is that we're starting to bring this together around vertical markets. And importantly, the convenience store vertical market is so important to us that you can see that real world in live. And it's that positioning in markets that is truly differentiating for us. We have strong depth and breadth, and that provides a capability for us to create more leverage in the industry and where we can also compete. Shortly after we launched, we talked about our Connected Mobility strategy. Our Connected Mobility strategy is more at work today than it ever has been, and it is our guiding light for the future and where we go. So what you will see today is the advancement of our Connected Mobility strategy, and we're doubling down on it because it's what's driving growth, it's what's driving margins. It's what's driving differentiation, and it's how we compete. And in fact, that's how we can deliver outperformance and continued growth in this industry and beyond. We have an updated tagline. And we're excited about this tagline because it is about Powering the Way the World Moves. Look at what we do. We provide energy. Energy is about power, but it's multi-energy. But powering is also about connected smart hardware and software. And that powering is a big part of how we provide value to our customers. It's high-value problems that we're focused on. It's not technology for the sake of technology, and it leverages our unprecedented depth and breadth in this industry in a unique way to bring this forward for differentiation. What you will see also when you visit the booth later today is that we're bringing this under the Vontier umbrella brand. And so we're very excited with our refreshed Vontier brand launch and our tagline. A lot of work has gone into it, a lot of thoughts gone into it. It makes a ton of sense for us. I think it will make a lot of sense for you. Many of you know Vontier. We're a $3 billion company. These are our reporting segments that I think you're quite familiar with. I think they hold together. If you may remember and you've stuck with our story for a period of time, you may recognize that we reported in one segment not that long ago. When we segmented our business, we're providing more openness, more transparency, and we think that this is the right framework where we can also provide you with the level of granularity and transparency into our business where you can follow our results on a quarterly basis. But the other framings are also really important, and we're going to be talking about these other framings, particularly on vertical market segments or end markets. And we serve three end markets. I'm going to get into that a bit more before we just do a deep dive, but look how big the convenience retail is for us. 70% of our business is serving convenience retail with our businesses and brands. What a more perfect place for you to be here today where we can help explain that and make that real for you. And then we have a good geographical coverage. Most of our coverage, even though we're a global business, and we're proud of that is in the United States and also less than 1% of our revenue is coming from China. When we look back on our journey, I am incredibly proud of what we're able to do here today and we can do in our business that we couldn't do at the time we launched in October of 2020. My gosh, has the world changed since then? And also has Vontier changed? We spun with a great legacy of brands and businesses with an outstanding market leadership in a business system with a deep, rich heritage around that. We couldn't be more proud of those assets that we inherited and had. But at the same time, we have to look at reality. We're a spin of a spin. Our businesses needed attention and investment and needed a strategy to hold our businesses together. And in fact, many pieces of that portfolio didn't fit, and we divested them, which are no longer part of our portfolio. And then we put capital to work with strong returns. Part of that was through M&A, and we're very proud of the M&A that we've done, and we believe we're posting really strong returns from those assets. And more importantly than that is also an excellent strategic fit. So our Connected Mobility strategy is more at work today than it ever has been. But what enabled us to do that funding? What enabled us to reposition the business. It's not just the strategy work we did. It's the investments that we've done, particularly around new product development and innovation. And we had to self-fund this. And the way that we did this, not only a responsibility to improve margins that were already strong margins, it was through an 80/20 process. We incorporated that into our strong business system, and we started executing that in early innings. I will also say today that we have a long runway of 80/20 initiatives. But how else were we going to fund this? We couldn't go to investors and say, come back years later. We already had headwinds from COVID. You all remember the EMV challenges that we had where it was a great strong secular tailwind turning into a secular headwind. So we had a lot of things we had to work through. I couldn't be more proud to be able to show you the innovations that we have today, where those seeds were planted in our infrastructure many years ago that are coming to fruition as we speak today. Part of that is on the software side and more than doubling our software engineers and creating the software factory has been incredibly important. to the value propositions that we're adding to our customers today and as we go forward. You're going to hear a lot about our products there. You've heard about products like iNFX and HUB. And I think you're going to also when you tour our factory -- or excuse me, our floor down on the convention floor, you also see very practically how they work, and you can hear from folks on the industry panel. Importantly, the market that we serve is this $30 billion mobility ecosystem market with higher recurring revenues. But a big piece of our story is how do we frame it from a customer-back centricity. And more simplistically, we serve three attractive end markets in this $30 billion mobility ecosystem. And these three markets, we like them. We like them all because they've got great secular drivers. We're going to spend a lot of time on convenience retail today. I don't want to double-click on it too much at the moment because we're going to spend a couple of hours here together going deep there, but great secular drivers that we can leverage and our position is unique in that industry. But also, we're not talking much about fleets today. That's for another teach-in day or about repair, but these have strong secular drivers as well. Look at what fleet operators can leverage from Vontier. Look at our market leadership positions, look at the problems they're trying to solve. A lot of those same problems are the same. And in repair, there's a great backdrop from repair. If you read the articles recently about the average price of a new vehicle is more than $50,000 and the average age of the fleet continues to grow. It's almost 13 years. So what happens when you have an aged fleet. It needs more repair. The sweet spot of repair is opening up and it's more vibrant than it ever has been. It's a little held back from the consumer, but the backdrop with strong secular drivers are there, and it is an attractive longer-term market. Many of you may know this, but if you don't, it is really important to understand. If you look at these three vertical market segments, our positioning here in some of the most critical spots in the mobility ecosystem is strong market leadership, #1 or #2. What does that mean when you have such a strong depth and breadth? What do customers rely on you for? We have a responsibility not only to bring these siloed brands forward, but we have leverage that we can create when we work across brands in a way that makes it better for our customers and is truly differentiating. And when you look across those three segments, there are three strong secular tailwinds that I want to bring a little bit of focus to. And the reason why is I think some of them can also be misunderstood. The first is digitalization. What is it? It's about the capability for folks to leverage technology in unique ways that they can better their environment from a productivity perspective or how our customers attract consumers to their sites. It's essentially how they compete on their business from a profitability perspective and drive revenue into a very competitive space for them. And so digitalization for convenience retail is important. It's also important in our other two segments and fleets as well. It's a function of what technology is able to do. But what it is not is technology for the sake of technology. Folks are out there making these investments, whether we talk about AI or we talk about more smart connected products, there's a lot of leverage here that people can get to solve real-world problems. I want to make sure that we really understand this through our conversations that we have today is that we are advancing this in the right way that makes sense for our customers. We are focused on solving customer problems, not advancing technology for the sake of technology. The other thing that is really relevant for all of our businesses is around regulations and compliance. Many of you may know the story from spin and you know about EMV. Wow, that was the mother of all regulatory compliance things that hit the business, a massive tailwind that turned into a massive headwind right about the time we spun. And I think the misconception when you look back to 2020, 2021 and even early 2022 was the belief that, my gosh, nobody is ever going to have to replace another dispenser again. I can't tell you how many times that we've been in conversations with investors and trying to explain what we believe the value proposition was sort of post-EMV world. And we can understand maybe the confusion because it was such a dramatic industry event. However, industry regulation is happening worldwide. And this is not political football folks. This is about keeping water clean. This is about security of payment. This is about governments that want to collect their tax revenue. All of these kind of regulations drive our industry, and there is a steady drip, drip, drip of regulation worldwide that drives our industry. We invest in that with engineering capability and talent, and we leverage that to make not only the world a better place to live, but also it makes a great business, and it makes a better business for our customers as well. So compliance and certification is a big part of that, and that is an ongoing driver. So ask us questions about that. We're really happy to continue to illuminate that path ahead. The other thing is about energy expansion. And what is that? That is that, and I think we get it, when it comes to road travel, when it comes to how we enable the mobility ecosystem, it requires more energy, not less energy. And our portfolio is about how we serve the multi-energy future. Now I'll tell you, we're not great at predicting elections, and we're not in the business of predicting elections. But today, we're positioned to be able to provide the right portfolio, the right choices in the right profit pools regardless of the decisions that governments make that advance those technologies. We're very proud of our ability to grow the EV infrastructure. We're incredibly proud of making investments on the petrol-based infrastructure when a couple of years ago, it was not very well thought of. When we really understood that this is going to be around for a long period of time, and we stepped forward and made investments, you see the fruits of those investments that we've made today. Folks, it's not about an energy transition. It's about energy expansion. It's not about knowing what government is going to be in office and what they're going to preference. It's about having the right portfolio that people can have that choice regardless of what government is in office, and we're in the right profit pools where we're creating returns for investors. Let's hear from our customers around this, too, because these secular drivers are about solving the customer problems. Here's a couple of different quotes here that we can leverage on. On digitalization, it's also about integration. It's about the lack of actionable insights. A folks love to talk about AI today. It seems like that's all that we hear on Squawk Box every morning is a new story on AI. It's in the press all the time. But the practical reality of having the data and turning that into something that is actionable is very real and very tangible for our customers. We have the benefit of our leading positions to sit on a lot of data. That is just a right to play. The key is how do we turn that from our integrated smart products and application software into actionable insights. Regulatory and compliance is a major drag for our customers in terms of their cost to be able to comply. One of the things that's also differentiating for us is our depth and breadth in the industry creates application knowledge. And that application knowledge means that we can help navigate this field better than anybody else on a worldwide basis so that our ability to provide solutions and compliance can help our customers navigate this in a much more cost-effective way, and it creates a lot of value for all of us. So we deeply are entrenched in this area, and we work closely with our customers and regulatory bodies to help advance the industry. And then, of course, energy expansion, folks are wrestling with that because you see that patchwork out there. How do you manage fleets? How do you manage the car park? How do you provide solutions that are also integrated and seamless to bring that together in sensible ways. We're incredibly well positioned to do that. When you think of our business, you think of the opportunity to create value. And our three-pillar framework might be recognizable to you, but it's changed a little bit. I'm going to walk you through this. We have this three-pillar strategy that we think drives shareholder value. And the first one we really want to spend time on is an accelerating growth. I think it's the piece of our story that maybe is the most understood. And if you see and understand the underpinnings there and you see the work that we're doing, I think that we can really understand that the value creation potential from how our stock is traded is clearly has some strong underpinnings. We have strong margins already, but our 80/20 process or something internally we call FPP or focus and prioritization has a lot of legs, and we're going to talk a bit about that today and about deploying capital. Deploying capital is something we take seriously and returns on how we deploy capital, we feel incredibly accountable for, and we're very disciplined on how we do that. But before I get into that, let me just touch on our mobility strategy here. And this is a strategy we launched a little while ago, but I think it holds a matter of fact, better today than ever before. The analogy I want to make for you is think back on Industry 2.0, Industry 3.0, Industry 4.0. Remember where we were trying to connect the assets on the factory floors, and we're saying, this is about better asset management and real capabilities going to be driven here. Nobody has really put that together for the mobility ecosystem. You all read all these announcements and you see this incredible infrastructure that's being built out worldwide. Look at all those assets that are being put in the ground. Look at all of that capability that needs to be managed better. And they're very disparate and they're changing due to regulation and they're changing because of the dynamics of acquisitions where the larger players are buying some of the smaller players. Sometimes the larger players are buying the medium players. And that creates an incredible patchwork by which how do you manage this? And when you think about we're probably at mobility ecosystem 2.0. The industry has not had the tools and capabilities to be able to manage this. And when you imagine a mobility ecosystem 4.0, look what can be put to work. So they have better productivity of their assets. They have better asset management. They have higher uptime, better results, and they have more connectivity to their customers to be able to make them more specific to each individual customer and attract them to their sites through loyalty programs. So when we look across the mobility ecosystem, this is what we think about on connect managed scale, and we're going to give you real-world examples about that and how that works in a very seamless way. We're going to spend time on it, particularly when we're integrated with some of the solutions here with Austin Lieb at the end, but it's about how energy is being delivered. It's about more investments that are being made on the forecourt. But not only that, think about it with all of our touch points and all of the opportunities to make a payment transaction, whether you're a car wash, whether you're inside the store, whether you're paying at the pump. Why can't that be unified? Why are there so many different payment transactions and capabilities? Why can't that accrue to the same loyalty program? And why can't that whole infrastructure work in a more seamless, more intelligent way where it can provide itself with new software updates that come over the air. If you think about those kind of things, it kind of makes common sense. In today's day and age, why aren't those capabilities exist. What we're talking about is putting that infrastructure in place. And what does that do for asset management and compliance? What does that do from an end-user capability? They can bring more products to market with open system architecture much more fluidly. They can reduce their cost of operations. They can increase their uptime, and they can speed to market new products. All of that is capable with a more modern capable infrastructure. We are not creating rocket science here folks. We're taking really well-tested capabilities from other industries that this industry deserves. Let me give you an example. Many of you heard about our rollout with iNFX and our Invenco brand products for Shell. It's now been rolled out to more than 12,000 sites. And what does it really provide? It provides the critical infrastructure. It's not about a single dispenser. It's about how they work in concert in unison. It's about how you can order at the pump. It's about how that infrastructure can move forward and it can comply with regulation and not be so burdensome for Shell. It was so valuable to Shell, they even rolled it out to their franchisees that were not company-owned assets because of their ability to manage this infrastructure with an open system API-based infrastructure. We're through the growing pains of the early innings on that, and we're talking with Shell about how we also expand that. So it's about bringing these concepts to this industry that haven't existed before. Another one is around fleets. And we're not going to spend time talking about fleets here today much, but I do want to tell you that some of those same kind of things are at work. We have something called the vehicle identification solution. It's at work in the Middle East, and we roll this out on countrywide rollouts. And it's the integration of when you have a fleet vehicle, when you sign up for that fleet vehicle, where it has an RFID capability, recognizes the vehicle, it recognizes the pump, it makes a secure transaction. That prevents fraud. That makes there's a secure payment that's at play. Governments love that. And so there are governments that have actually endorsed this technology and have rolled this out countrywide. Look at the number of transactions that are being processed here. What a great business and a great business model. So when you think about this, what do these kind of examples do and what we're going to share with you today is not only do we have an attractive market, it expands the businesses that we're in. It expands the TAM. It expands our recurring revenue. And in fact, when you combine this with our 80/20 processing capabilities, we get greater leverage with scale, and that means we scale on platforms that provides more -- better economics for us and for our customers because they can leverage a scaled platform. So how do we get here? We got here because of our focus on strategy and for our investment. In fact, the left-hand side of this chart is quite indicative of something in our playbook that we're incredibly proud we're able to pull off. If you can start simplifying your product lines, and by the way, we have a lot more room to move on this as well, you can pull out your sustaining costs and you can channel that, one, drop to the bottom line for investors to get expanding margins, but also that gives you the firepower to self-invest on some of what you see what's at work and at play today. And look at the right-hand side, our product launches since launch have gone up by an order of magnitude. Without our ability to create our own self-help story here and to invest, we wouldn't be able to be positioned where we are today and be as optimistic about how we're positioned in the future. And here are great examples. We're going to talk about Patheon today and how that's going to drive revenue into the future. In fact, when you look at our Car Wash business, many of you follow our story, you know it had a great run-up and now it's taken a step back with some of the higher interest rates. It is now on a quarter-by-quarter sequential basis on the mend and returning to growth, and it's off the backs of innovation. Interest rates haven't changed much. The new tunnel builds are not going up by a whole amount, but we're providing innovation to the industry, and this innovation is driving growth. It's what customers need to be able to serve that better. Retail solutions, we're going to talk about that. We're going to talk about automatic tank gauge. You're going to be experts on automatic tank gauge by the end of this. And then also on the repair side, we're also making important investments. What we can leverage here is our innovation capability and our high vitality to industry as the #2 player. So when you look about the second pillar that we talked about, which is optimizing, we also recognize that we have delivered real value through 80/20. And these are some real practical examples for you to think about because they are real world. But we are still relatively early innings on the deployment of this. The complexity that we have with a number of SKUs, the complexity that we have around product lines and how we push that out to other parts of Vontier are very real. They're very tangible, and this is going to be a gift that's going to keep on giving. When it comes to deploying capital and returns on capital, we've generated more than $2 billion of cash since spin. And we put that to work in share repurchases, but mostly acquisitions. And what we're incredibly proud of is our ability to do this in a very disciplined way where we pride ourselves on having returns on our capital deployment. So it's something that is dynamic. We don't have a formula around our capital return deployment -- or excuse me, our deployment of capital, but it's something we take very seriously. And I think when you look over a multiyear basis, what is the real differentiator that we can provide as a company is strong returns on capital. So this is something that is very much alive at work. When you think about M&A, think about bolt-ons, when you think about M&A, think about high returns. And of course, we've done a fair amount of stock buybacks because I feel like and I still feel like our company is significantly undervalued. So what are we talking about? How do I summarize this for you? Certainly, it's about attractive end markets and a large and expanding TAM. Certainly, it's about having an unmatched portfolio of leadership positions, but it's about how we differentiate and what do you do with that to create further value, not just for ourselves and our shareholders, but more importantly, for our customers. How do we deliver that value through integrated solutions. You're going to hear a lot about that today because that's where the puck is going, and that's where we're skating. And it's about high outcomes, reducing complexity for our customers, lowering costs and being a trusted partner as we go forward. We just announced a reorganization of our business. What's been behind that reorganization of our business? It's about how do we serve our customers better? How do we reduce some of this complexity? How do we bring solutions to them that work more in unison? And why don't they have one throat to choke when they're buying so many different product lines from us. We can step forward with our organization, and we can embrace the trends we see. And it's our responsibility to act as that trusted partner to be more customer-friendly. We've got a great opportunity in front of us, and I couldn't be more excited about it. So let's talk about convenience retail. That's what we're here to see and understand and what a better place to see it than at NACS show. This is an international show. You're going to see a lot out there. It's very dynamic. It's a great industry to be in, but it's not something that folks think much about. It touches people's lives on a regular basis, and it's something that we all rely on around the world on a regular basis, but it's not something folks think much about. How do we define it? Certainly, it's the stop at the convenience store. And it's about aboveground and belowground fuel pumping technology and capabilities, and you see those represented there. But it's also about inside the store and the retail solutions that we find. But our definition of convenience retail goes beyond the convenience store. Our definition of convenience retailing is about convenience retailing. It's your stop along the highway or in your local neighborhood to consume a service. It's roadside retailing. What also that incorporates in our definition is car wash. We see a lot of independent car washes has been very growthy in a number of years, and we believe in that infrastructure. And a lot of EV charging and alternative energy is also about that stop along the highway where it may not be at a convenience store. I think more and more, it will be at a convenience store, but charge point operators also operate autonomously. It is that stop on-the-go retailing, which is our definition. And that's what we're here to talk with you about today. So let me frame it a little bit before we get into some more of the deep dives. First piece is, my gosh, what a changing dynamic and vibrant industry. About 1/3 of all bricks and mortar is retailing, is convenience retailing. This is the most frequent in convenience retail from an individual of anyone. It's not a destination per se, although Buc-ee's might be for some, but it's your stop on your way to somewhere else where you're picking up something. And in fact, it's incredibly growthy, incredibly resilient and historically has been. I'll show you in the next chart, but our growth projections are very respectable 6%. And those formats are changing. And one of the big areas is around what happens inside the convenience store. 60% of the revenue comes from inside the convenience store, and these nonfuel sales are quite resilient and growthy. And in fact, even during periods of downturn, this is the critical infrastructure. It's growing at 4% historically. And the average, look what's happening look at the infrastructure out there, the average footprint is getting bigger. There's more dispensers per site that are going in, and it's more about food convenience. Why is that? There's three things at play. The first is the proximity. And whether it be yourself or whether it be contractors coming to your home or somebody on the go traveling on a trip, it is about proximity. There's 150,000 convenience retail sites in the United States alone and nearly half of all Americans live within a mile of a convenience retail. Now sometimes we speak with analysts who may not own a car or might live somewhere in the suburbs and they might go to work in the city. One thing to also recognize is that contractors love the convenience retail. Format as well. And you may not necessarily leverage it yourself as an end user, but Americans leverage this a lot as end users. It is also critical infrastructure. Look at times of need, whether it be around COVID, it was open. It was a critical infrastructure. Many towns and rural locations, it might be the only place that is open for you to get convenience store items. And at the same time, in times of relief or where you need relief such as hurricanes, this infrastructure is relied upon and it's innovating beyond fuel. Look what's happening here at the show, look what's happening in announcements. I have teenagers. I talked to other folks that have teenagers. When I was a teenager, I used to go to the mall. I talked to other folks and the teenagers go to Wawa. It is a changing format. It is something that is very vibrant in terms of the food offerings. And folks are really connected to those food offerings, whether it be barbecue at Buc-ee's or whether it be pizza at Casey's, depending on where you live or you saw the recent announcement of racetrack buying Potbelly, food convenience is a big deal. It's about creating leverage from that stop with great hot food items that are there that attract folks to the site. And that also creates a lot more loyalty to their brands. So whether you're talking about your corner type convenience store that is also about 2,000 square feet and dispenses gas or whether you're talking about a multipurpose rural site with around 5,000 square feet with more of like a tunnel car wash capability or an in-bay car wash capability or curbside service or something we call a real mobility hub, which is a large-format store that could be upwards of 15,000 or Buc-ee's, which can be 60,000 square feet. This is a vibrant changing format that is very attractive. And the most important thing is folks that are making that investment are the winners. Take a look at this data. This is really interesting. If you look at the largest operators in convenience retail or convenience stores, the largest operators only represent about 150 organizations compared to the almost 70,000 small mom-and-pop retailers. But look where the growth is. The growth is where folks are making these investments. They're consolidating the industry and they're putting new formats to work. It's the largest market from a dollar perspective. It's growing faster and folks, that's where we have 2/3 share. So we love serving mom-and-pops. But if you're not able to make investments in this industry, consumers are going to more and more stop at these more modern convenience store formats, and this is our sweet spot. We win in this market with the winners. Let's take that theme forward. Look at car wash. Same thing. 40 organizations represent the national and regional players. And the single site or township, as we call them in that industry is an order of magnitude larger. However, the balance of the market is into the larger players, where we have higher share. That is also where the industry is growing. We are winning with the winners. And when you look at our technologies and our capabilities, we are best suited to keep winning with the winners because that's where we're focused on solving their high-value problems and bringing it together from an integrated network. So when you go out there and you look at all the data points on how this industry is growing, it is the winners that are growing in this industry. And it's our ability from our position, our ability to compete and put our new innovation and products to work that make a real difference. And that's what's exciting for me is you get to see that firsthand here today. Let's look at the competition. How do we compete globally? We have some great competitors on a global basis. But when you break them down into competition and fueling, we have some great competitors there or when you break them down into competition on environmental, which is below ground, we have some great competitors there or retail, we have some great competitors there. But what does this chart tell you? It tells you that nobody is competing with us across the spectrum of convenience retail. So what does that mean? That means that these siloed approaches, while it might create a lot of value, and we do have leadership positions in all these markets, it's our ability to bring this together in a unified way that creates real value for our customers that is truly differentiating. And so this is truly unique to us in the industry. In some sense, it's the strategic positioning we have the leverage, but we have to bring that forward in tangible credible ways. And the way that we unlock those is through connect managed scale across our solutions, and that's what we're going to talk with you about today. So, what's next? I'm going to introduce Mark Williams, and he's going to talk about Forecourt. But before I do that, it's important because everything that I talked about, we're going to break it down. We're going to give you real examples about it. We're going to give you a chance for Q&A. So whether you're here in the room or whether you're joining us online, please compile your Q&A. We're going to have a break after these presentations for Q&A. We're going to do an industry panel, and then we're going to do our financials. We're going to ask a lot of the modeling questions after that Q&A as well. So, with that, let me turn this over to Mark Williams, who's our new President of our Integrated Forecourt and Retail Solutions business for convenience retail. It's a multi-brand responsibility. Some of the best leading brands in the industry are represented by Mark does, and it's a global business. So, with that, come up to the stage. Mark?

Thank you. Good morning. I'm Mark Williams. Like Mark said, I'm the President of our Forecourt Solutions business. I've been with the company for going on 20 years now, a number of different roles, but most recently as the Chief Operating Officer for our Environmental and Fueling Solutions business. I'll start with a brief overview of what we mean when we talk about forecourt and retail solutions. Forecourt is comprised of fueling or above ground and environmental or below ground. Fueling represents the fuel dispenser and the embedded payment terminal that most consumers interact with on a weekly basis and where we have #1 share globally. Environmental represents the solutions we provide to ensure that the on-site storage and movement of fuel is done safely and efficiently and is traceable. The core product line here is the automatic tank gauge or ATG, which gives retailers network-wide visibility to their underground fuel inventory via the intelligent device that's on the wall inside of every fueling site and that's tied to connected sensors, which measure the liquid volume in the underground storage tanks. We have #1 market share globally on ATG as well. Other core environmental products include the submersible turbine pump, which physically pumps the fuel from the underground storage tanks up to the fuel dispensers and solutions around fuel quality, leak detection and vapor recovery. Lastly, retail solutions represents our technologies used inside the convenience store. The point-of-sale system where customers pay for their goods inside the store is the largest offering, and we have #2 market position here. The point-of-sale market is attractive because of the various integrations required with all of the different site systems across the site, which makes it a sticky beachhead with our customers. It's also not an easy market for others to get into because of all of the integrations required with the payment terminals of the dispenser as well as other touch points as well as all of the certifications required on all of the major oil company payment networks. You have to have all of those to be able to be broadly available with your point of sale. Other retail solutions technologies include our food service ordering equipment, kitchen management systems and self-checkout terminals. The market we play in is attractive and has proven resilient over time. That resilience is driven by a number of key factors. First is the footprint of C-stores. The sheer density of C-stores puts them in close proximity with customers and consumers need to fuel their vehicles brings them back repeatedly to those C-stores. Also, the forecourt has really -- or the industry has really continued to innovate beyond the old cokes and smokes model and has broadly expanded the array of products they sell as well as moving really credibly into food service. Mark talked about that a bit, but you can find rabid fans of Sheetz and Wawa that will debate for hours over who has the better sub or you look at the fact that Casey's is now the fifth largest chain in the U.S. from a pizza perspective, the industry has become very credible from a foodservice perspective. Also, convenience stores have driven significant innovation on their loyalty programs. And that paired with the increased breadth that they sell today, plus their growing presence and really credible food service has helped them take share from other retail verticals. Third, the consumer demand has really continued to shift to a need for convenience. That ongoing shift to high-frequency shopping occasions with a premium on convenience plays right into our industry strengths. All of this together has resulted in consistent industry profit growth in both profits and sales. Convenience stores processed more than 160 million transactions a day. With that level of volume, our customers place a major focus on consumer engagement, both to build loyalty and to drive impulse sales. The industry has really started to leverage digital media to reach their consumers to drive consumer behavior and the average in-store basket sale is now up over -- or in-store basket size is now up over $8. We approach the market through five core segments: national accounts, major oil affiliates, regional accounts, hypermarkets and travel plazas and small and single-site operators. As a note, the site count that you see on major oil affiliates isn't incremental to the other sites. With a few small exceptions, the major oil companies don't own sites directly. Rather, their presence is spread across the other segments as they work to sign up dealers to sell their fuel. We still call on them directly, though, as both because they influence their dealers' purchase habits and because we see them as a growing customer directly for our retail technologies. While we segment the market as you see it on the chart, I'll simplify it a bit and talk about the bifurcation between smaller retailers and larger retailers, and Mark touched on this. Small and single-site retailers are the largest segment of the industry by site count, representing roughly 60% of the sites in the industry. The segments on the chart above the small and single-site retailer segment are collectively comprised of larger retailers. And while they represent the other 40% of sites, they represent more than 2/3 of industry spend, and it's where we have 2/3 share. These larger retailer segments are where the industry growth is coming from. Our alignment and share with the large retailers who are driving the industry growth really positions us well to capture an outsized share of industry spend. Because the segments have different compositions and needs, we tailor our go-to-market approach by segment. From a go-to-market perspective, we leverage a mixed direct and channel model, calling direct on our national accounts and leveraging our distribution channel to reach the small and single-site retailers. For the segments in between, we leverage a hybrid model working directly hand-in-hand with our valued channel partners. Of note, our distribution channel represents a significant competitive advantage for us, especially on fuel dispensers where the industry model is exclusive. We're aligned with the best and largest distribution channel partners that continue to invest in their businesses to scale with the industry. And you'll be hearing from one of our leading channel partners on the industry panel coming up here in a bit. If we take a deeper dive into the national account segment and larger regional accounts, again, that's where we have particular strength and the strongest share, driven by our history of technology leadership, reliability and the strength of our service network. Our alignment with the larger retailers helps us get an outsized share of industry spend as these segments spend at a higher or more frequent rate than smaller retailers. Not only do these retailers typically either replace or upgrade their equipment on a more frequent basis, but they also drive the majority of all consolidation in the industry with roughly 8,000 sites acquired over the past five years. These acquisitions typically have two benefits for us. First, the acquiring company will often change the spec to our equipment for the chain that they purchased, resulting in go-forward competitive conversions. And second, there's often some level of short-term spend required to bring the acquired sites up to the spec of the acquirer. Additionally, this segment also drives the heaviest portion of new-to-industry site builds, also resulting in outsized spend. It is worth noting not every convenience store will win in the future. And you've probably seen this in some of your towns, right? What you'll often see is a large modern convenience store is built and then within a couple of months, you might see one or two sites, either corner or within a few blocks shut down as they lose their volume. It's our alignment with the retailers that are driving the industry growth and doing the acquisitions and building the new stores that really provides us a really compelling opportunity. And as these larger retailers continue to grow through acquisitions and new site builds, they grow more sophisticated, and that allows us an opportunity to deepen our relationship and stickiness with them, leveraging data-driven technologies to help them better run their complex businesses. We've seen continued strength -- we've seen continued strong investment by our customers and expect that to continue with a handful of key drivers. There are more than 800 new-to-industry stores and raise and rebuilds annually and another 4% to 6% of existing fueling infrastructure is just refreshed annually as it ages. In addition, there are periodic but frequent regulatory and compliance upgrade cycles, typically either environmental or payment regulations and retailers continue to invest in existing sites as innovation drives further upgrades. I want to pause for a moment, and Mark touched on it a bit, but I want to pause and really hit on the importance of the regulatory and compliance mandates to our industry. There's a consistent flow of regional mandates around the globe that drive consistent spend cycles and that are really important to our business. There are PCI payment regulations, fiscal and anti-fraud regulations and environmental regulations around leak detection and vapor recovery among any number of other regulations. The key point here is, and Mark talked about this, the regulations are typically not around kind of political hot potatoes. And so there's a lot of consistency around the regulations, and it provides a stability to the regulations such to the regulatory cycle. And then we're deeply engaged in helping shape and drive those regulations. Both fuel margins and inside store margins have been strong, allowing our customers to fund the significant ongoing investment. And in talking with our customers, there's strong confidence that this positive margin environment will continue to persist. I'd highlight here one more time how our strong alignment and share with larger retailers really positions us well from an outsized -- an outsized share of industry spend. As you look across the slide, larger retailers open the majority of new stores in the industry. They refresh and remodel their existing stores more frequently. They're more proactive on compliance upgrades, and they continue to lead the industry forward on consumer engagement and operational efficiency technology upgrades. We drive competitive advantage by bringing integrated hardware and software solutions to market that help our customers solve their high-value problems, which in turn makes us sticky with them. As one simple example, the fuel dispenser is actually now a pretty heavily integrated solution. There's an integrated payment terminal, which integrates into the convenience stores point-of-sale system and payment network. It's also integrated into the site's forecourt controller, which controls the flow of fuel on the site. Not only does the payment terminal process the payment transaction and trigger the fuel flow, but it also serves as a great customer engagement point for our retailers to reach their consumers during the two minutes when their customer is literally tethered to the dispenser with a hose. We provide the media software and solutions that allow our customers to reach the customer -- their customers with tailored messages and offerings. Additionally, we integrate remote management into the software, allowing larger retailers to remotely monitor and manage their dispensers to both reduce downtime and service costs as well as to remotely deploy software. And I'll pause there for a second because I think that's something we all take for as advantage as consumers, right? We're all used to our phone. You get frequent software upgrades pushed to your phone and you don't even think about that. But if you back up just a handful of years ago, that wasn't possible on most gas pumps or fuel dispensers. With the technology that we have now, we can remotely push the software updates, whereas a handful of years ago, you would have to roll a truck to that site to do the software upgrade. So we really focus on continuing to bring connected technologies that help our retailers optimize their operations and reduce their costs. One other note on the benefit of the integrated solutions. We have a common payment platform that we can embed anywhere on the site, whether it's into the fuel dispenser, the EV charger, car wash entry terminals or in-store at the point of sale. And that's attractive to retailers for a handful of reasons. First, it gives them a common consumer interface, which they can use to create a common user experience for their retailers so that, that customer touch point at the site is consistent, whether it's from a payment flow or a loyalty program, it's a consistent user experience across all of the different pay points, and our customers see a lot of value in that. Second, it makes it a lot easier for our retailers to deploy upgrades, applications, new software, whatever it is, to push that out to all of their different payment points across their site and across their network. And third, and we'll spend more time on this during the booth walk-through, it drastically reduces the certification burden that our customers face. Our environmental suite of integrated products spans a wide array of products and solutions to help a retailer drive compliance and manage their fuel inventory with real-time remote monitoring to drive uptime and reduce risks and costs. The automatic tank gauge, where we have #1 share globally is the primary offering in the environmental solutions stack. Our Veeder-Root tank gauge is really you can think of it as the Kleenex brand for automatic tank gauges globally, and we have more than 350,000 installed worldwide. Again, it's really a smart or intelligent device sitting on the wall of every fueling site out there with connected sensors in the underground tanks to allow retailers to effectively measure and manage their underground fuel inventory. Other offerings within our environmental stack include water protection solutions, fuel quality solutions, leak detection, vapor recovery, the submersible turbine pump that again pumps the fuel up from the underground tanks to the dispenser and remote connectivity solutions tying it all together for network-wide management. We also offer an array of retail technology solutions for retailers. And this graphic, I think, does a really good job of just highlighting how complex a convenience store is these days. There's just a ton going on. When you think about the fact that a modern convenience store has something around 70 to 100 revenue-generating assets and typically only a couple of employees on site and in an environment where store level employee turnover is north of 100% on average, it really highlights the opportunity to win with technologies that help retailers streamline their operations and simplify their business. Our solutions enable a unified consumer experience, engage customers to grow revenue and reduce costs and operational complexity. As I mentioned earlier, our payment solutions allow us to provide payment points anywhere on site with a common user experience and common certifications and to route to payment processors through common integrations with our electronic payment server. As part of that common user experience, we make it easy for retailers to leverage their loyalty programs and digital commerce applications on that common payment system anywhere across the site. We also offer media solutions that enable our retailers to reach their consumers across any number of display touch points across the site. We have remote management and reporting solutions available for the in-store assets integrated with our similar fueling and environmental remote management solutions, driving further efficiencies for our customers. As retailers look to reduce cost or sometimes just redeploy where their labor is, we also offer self-checkout terminals. Before wrapping, I'll talk through just one example of a customer who's using our integrated solutions to great benefit. Town Pump is a good customer based out of Montana with more than 100 sites, and they're spread across a very broad geographic footprint. And that's the biggest challenge they have, servicing their sites across that broad geographic footprint. Service techs often have to drive up to 6 hours each way to service their site, creating a significant cost burden as well as extended site downtime. The opportunity with Town Pump originally started as a payment retrofit opportunity as they were looking to get ahead of some upcoming payment regulations. As we work through their needs with them, however, they quickly understood how integrating remote management with the fuel dispenser would increase their site visibility and allow them to reduce the number of costly site visits required to maintain their sites. Not only does the remote management solution allow them to remotely address a wide array of their issues, but it also allows them to remotely deploy software updates across their entire estate of assets. Between the remote issue resolution and that remote deployment of software, Town Pump estimates the elimination of 75% of their previously needed site visits. The payment terminal paired with the remote connectivity now provides us our next opportunity to work with Town Pump as we work with them on a potential media rollout across their sites to give them a touch point to reach their customer with messages. Before I wrap, I'll highlight just a few key messages again. Vontier stands as the leader in forecourt and retail solutions, and we work with the best retailers in the industry to address their fueling, environmental and customer engagement needs. Our leading market share with the scaled growing players ensures that we will grow as they lead the industry in consolidation and investment, both in new stores and new technologies. Market investment is also supported by new store builds, regular refresh cycles, regulatory compliance and ongoing innovation and technology upgrades. Our integrated solutions help retailers boost revenue, cut costs and accelerate innovation while expanding Vontier's available market. Appreciate the time, and I'll turn it over to Andy Bennett here to talk about the energy expansion.

Good morning. Great to see everyone. My name is Andy Bennett, and I have responsibility for convenience retail here at Vontier. And it's great to have the opportunity to talk to everyone this morning. I wanted maybe just to give a little bit of my background prior to joining Vontier. So most of my career, I've been working at bringing hardware and software together in an integrated way. Spent a little over a decade at Schneider Electric, where we're building really hardware and software solutions designed for the energy industry. And when you pull those things together, that's, of course, a technology challenge, but it's also really a people challenge, right? You're taking folks from two blocks of life and getting them to coordinate. More recently, I had responsibility at IBM running what's called AI applications. And that's everything IBM does inside of asset management and the IoT set of applications. And so for me, I think these were pretty important experiences because it's allowed me to think about how do we get hardware and software to work together, which, of course, is at the heart of what we're doing in convenience retail here at Vontier. For the last three years here at Vontier, I've had responsibility for the Driivz business unit. That's the software business that focuses on EV charging. And Driivz as a company, Mark mentioned earlier, that's a #2 position in the market. That's right behind Tesla. It's not exactly an exact comparison because we're #1 when it comes to making pure software in an agnostic way for the industry. So Driivz has really experienced some great, great growth over the last few years. But anyway, as we jump forward to convenience and retail, hopefully, a little bit of that background explains what I'll be focused on. I'll come back to that and talk a little bit about that towards the end of this presentation. But what we want to talk about here this morning is this concept of the energy expansion that's taking place in the market today. We know that traditional fuels are going to continue to be dominant. That's without a doubt the case. But we also know that this expansion is creating great market opportunity. So, today, when we think about EVs and alternative fuel sources that we have available to us, that's about a $2 billion TAM that, of course, we want to be participating in. For us, of course, it's about thinking about how do we bring sustainable biofuels to the industry, everything we do in compressed natural gas and obviously, the things that we're doing inside of EV charging. So that growth will take place over the next few years. That mix is going to change, right? So if you look at this chart, we say great in a few years, maybe somewhere like 10% of that is a mixture of EV and other sources of energy. But I don't know. I mean maybe this is right, maybe it's wrong. If we were to go back five years ago, what would this chart say? Well, some industry analysts said there'd be no more fueling and it would be all EVs. Well, that's clearly not the case. So it doesn't really make much of a difference to us from a Vontier perspective, what this mix looks like. The bottom line, and I think the most important takeaway is we have solutions no matter what that mix looks like, okay? So that is a really important place for us to be today in the marketplace. So looking forward, another important point is just from our perspective, it's an all-the-above model, right? It's not a will it be EV and will it be traditional fuels. We need to be prepared and we are prepared as a company for all of the above. So lots of great things happening in the marketplace that will continue to help this growth. There's a lot of support from a regulatory standpoint. When you think about some of those renewable fuels, we have things like the federal renewable energy standard, California low carbon fuel and then the clean fuel protection tax credit that was part of the original IRA. Everyone knows that NEVI funding was here and then it went away and then it came back. Well, it's back. And so that's another $4.8 billion here in the United States coming back to fund that infrastructure, which is a great thing. But again, regardless of which way policy swings, we're going to have the right solutions. And of course, convenience and retail is at the absolute epicenter of deploying all those types of fuels. Okay. So looking forward here a little bit because we're not -- this isn't necessarily something we're waiting on and already convenience retail are doing a lot of great things in this area. We already have a lot of efforts going on today in biodiesel. You can think about vegetable and cooking oils that are being reused and put into fuel types, and this is really starting to take off. That is going to continue to grow for sure. And then in EV charging, even with some reductions in some of the OEMs that are producing cars, we're still seeing greater than 20% growth in Europe for charging, right? We're still seeing high, high single digits or even double-digit growth in EV charging here in the United States. So those are going to continue to grow and all sorts of convenience and retail are already jumping on this opportunity. It's going to be really important. So why do they have an advantage? Because I would argue convenience retail has a distinct advantage and definitely has an advantage over some of the folks that do this in isolation. The first thing is they have the best locations already, and that's pretty critical, right? They're already in that position. You heard Mark talk about this earlier, 90% of the U.S. population today lives within about 10 miles of a convenience store. That's a great thing. That's a great place. That's a great piece of infrastructure to have. They already have the on-site amenities. So if you're driving an EV car and if you go to charge what we call on the go, you're going to be there for 15 to 20 minutes. The opportunity for you to go in and buy food has increased. We also know through data that when those drivers go in to buy food or things within the convenience store, they tend to actually buy the higher-margin items. So this is a great thing for convenience and retail to take advantage of. And then the last point, there's a distinct advantage that convenience retail has when it comes to supporting the new infrastructure for things like EV charging. They have multiple sources of revenue. They have that food, but they also have fueling and that helps them support what could be a very expensive set of infrastructure. So all those things, we think, put convenience retail in a unique and advantaged position in the marketplace. So what do we do in this area here at Vontier? We already have a lot of solutions today around biodiesel. You'll see that when you guys get a chance to come up to the booth a little bit. You see what we're doing with DEF and some of the dispensers that think about how do you deal with biodiesel, what are the environmental conditions associated with that. ANGI, of course, very much focused on hydrogen. And so everything we do with compressors, controllers and those dispensers are a big part of our total marketplace. Today, in the United States, a little bit more fleet focused. But in Europe, we certainly see that for the car park as well. And then obviously, we look at this and ultimately, we know that this gives all sorts of fuel optionality for our customers. For customers that are looking at a turnkey EV offering, this is something that we bring to market. And essentially, what this does is allows us to think about the charger, the installation, the site selection, ultimately, the field service and the management of that entire solution for a convenience retail space. It's a great quote there from one of our customers that basically looked at not just the ability to get going with EV charging, but also the ability to have this managed and have a single, single sort of payment scheme. So you don't have to think about how do you charge at that EV charger -- excuse me, use a credit card versus at a pump versus inside versus, of course, in the car wash. So great success and huge movement for us in this area today. Driivz, of course, is a software platform that we build for the EV charging industry. When we bought Driivz, the thesis was pretty simple, right? We wanted the experience of charging a car to be as easy as it is to fuel your car with gas. And I'm sure most of you know the industry has had to move in that direction. This has been a frustrating thing for a lot of charge point operators. And that's our objective, is to make that as easy as possible for those drivers. So what does Driivz do? Driivz is fundamentally a software platform that sits behind white label by large charge point operators. It allows them to manage the complexity of billing and tariffs. If you're in Europe, you can imagine you're driving around, you might drive from different stations and you want to have roaming capability, you might pass borders. So there's a lot of complexity associated with the billing of EV charging and the reconciliation of that billing. It's also, of course, built so that drivers can get to the right chargers. There's a driver experience portal. But fundamentally, what the platform is designed to do is to look at the state of the network. Are my chargers working? Are they up? Are they running? Are they actually delivering electricity to these vehicles? And if they're not, what the platform is doing is it's using self-healing algorithms. It's using artificial intelligence to look at error codes and constantly solve in a proactive closed loop by closed loop being without any human intervention, right? The whole concept is fix the problem before anyone knows about it, don't have to deploy a truck, don't have to send someone else out to flip a breaker. That costs a lot of money. So that's what the platform is doing. We have run over a terawatt of energy through the platform to date. And to give some sort of view of what a terawatt is, that would be like the equivalent of 1,000 nuclear power plants running. It'd be about 1 billion homes, 1 billion U.S. homes, which use a lot of energy. So, clearly, energy is a big part of what we also need to think about. I'll kind of hit that in a couple of slides here. So why do we win with Driivz and what's working here? I got asked this question a couple of times last night at dinner. It kind of comes down to these three things on the left. Driivz has been around for almost a decade. And very early on, the decision was made not to make a shrinkwrap bunch of software, but to build software that was fundamentally designed to be scalable, meaning not tens of chargers, but tens of thousands or hundreds of thousands of chargers on the platform that also needed to be flexible and interoperable. And what I mean by that is when you target the #1 CPOs in the world, when you target these really large companies, they're going to have lots of other systems, right? So you have to build software that was designed from its infancy to integrate with those other systems. It's not trivial, right? It means a lot of open APIs, means thinking about what sort of systems you'll have to integrate with and then standardizing that. And then, of course, obviously, if you look at any leader board, many of them published this concept of a charge point management system, we're clearly #1 in terms of all feature functionality out there in the market. So those customers that you see there, EVgo or Shell or Circle K, Mer is one of the largest charging companies in Europe to give you some reference point there. Most of them had something. A lot of times, it's a homegrown thing. They decide to build their own thing. And then over time, it doesn't work or it doesn't scale or has too much complexity. And so they move over to Driivz. Also, you'll see a company there by the name of Element. Element is a really large provider of technology to fleet companies. So Driivz is continuing to have great success in fleets. We're not going to talk about that today. But one of the reasons why is because the software allows for people to charge in depots when they're on the go, right, DC fast charging and of course, when they're home, right? Because a lot of drivers take those vehicles home at night, but they need -- there needs to be some reconciliation to pay them back for that charging. So a little bit about the energy consumption. To give a frame of reference, I talked about that terawatt of energy earlier. But if you think of a grocery store with all the refrigeration and storage, it uses a lot of power. But convenience retail is starting to become a pretty significant consumer of electricity. And that's an important concept because electricity is getting more expensive. Certainly, you get more expensive because of data center consumption as well. But we're talking about 4x more energy consumption, right, at almost 2 megawatts for a normal convenience center. So a lot of what we have focused on over the last three years, four years within Driivz is how do you embed complex energy management into the platform. And what I mean by energy management is it's software, again, that's sort of behaving a closed loop, and it's looking at all the energy consumption taking place at a site. So what you might do is you might have a battery on site and therefore, when energy is inexpensive, you charge that battery up. when energy gets more expensive, you discharge that battery. That energy management system might also throttle back the actual charging and a lot of that's invisible to Driivz. But ultimately, what you're doing is you're trying to reduce those demand side charges. Utilities can cost a lot of money when you're at peak points, right? They can also have penalties associated with that. We also have customers in Europe that are already taking that energy consumption behavior and they're using it to actually bid into the frequency markets. They can adjust their behavior, they can bid ahead of time and they actually make money on the way they use energy. And one of the things we know, and this is just an interesting takeaway, if you just plug in a bunch of chargers and you let them go and let people charge without active energy management versus actively managing that energy, you actively manage it, you can charge about 6x as many cars in that same period of time because of those efficiencies. And what this means is for large companies or companies that have sites, they're saving about $50,000 per site per year by using active energy management. Okay. So we obviously already have a great track record looking back here. If you think about all the things we're doing with renewable and biodiesel, some incredible growth, 13% plus growth over the last four years. And of course, with the EV side of what we do, we think about the plugs under management, those are the charging plugs, over 90% growth in that market. So really well established, but also really, really, really strong growth rates in this area. So to wrap up, we know energy demand is going to continue to grow. But more importantly, we know the mix is going to continue to change. I think the important takeaway there is, again, we don't know what that mix is going to exactly be. But what you see is we have the breadth of solutions to go solve that either way. Convenience stores are clearly in just a fantastic spot to go capitalize on this, right? If you think about biodiesel and everything associated with that, they already have the infrastructure in place. They already have the locations. That's a relatively easy move. And so they're going to absolutely gain and do well in this area. And maybe just a last comment. And I got asked this question last night at dinner, and it was around our differentiation. And I think what you're going to see here today, and hopefully, you'll see at the booth, right, is that there's a lot of folks that have fantastic point solutions in this marketplace. There's absolutely no company that has all those point solutions but has the integrated software that pulls it together that has integrated asset management to pull that all together. And more importantly, it's absolutely no company other than us that has that and has the ability and all the technology to deal with this changing fuel type that's going to take place over time. We already have GVR dispensers. We already have the ATGs. We already have ANGI doing CNG. We have Driivz and Connect owning the EV market. And of course, we have everything we do in Invenco to pull that all together. So it's a pretty incredible time. It's incredible to be part of convenience retail. It's great to meet everyone. Thank you for the time. Appreciate it.

Good morning, everyone. My name is Devon Watson. I have the pleasure of leading the Car Wash Solutions team for Vontier. I've been in the software industry for about 25 years, most of that time helping companies move from on-prem software to the cloud, and that's a storyline you're going to see repeated here. I spent the last 10 years at a company called Diebold Nixdorf, which is the global leader in ATMs. And while I was there, I ran product, I ran strategy, I was Chief Marketing Officer and led the banking division, all of which is very similar to the car wash, right? It's mechanical devices installed out at scale, driving consumer experience and payments for our customers. There's really two sides of our business. We have tunnels and we have in-bay. The tunnel is basically a conveyorized factory. You drive your car up, you start to move along that 80- to 120-foot tunnel to go through all the steps of washing. The in-bay is often attached to a convenience store. It really -- you drive in and then the devices move around you. They have two slightly different business models. The tunnel is really focused on the subscription, right? So they're after a membership model, drives a lot of revenue. And we've seen a big boom of that over the last several years, right? So, two to three years ago, the industry driven by low interest rates, pretty cheap building costs, pretty cheap labor in general, was building around 800 new tunnels a year. We've now seen that stabilize at around 500 tunnels a year, and we see that pace continuing on for many, many years to come. Reason being the industry can absorb that, right? At 800 tunnels per year, it's hard to run a really good wash. At 500 tunnels a year, the industry can drive quality, excellence and really get those washes to perform. Both of these segments are undergoing transition, right? The tunnel car wash market is getting more sophisticated with the membership model. The in-bay car wash is becoming a more integral part of the retail consumer experience, and that means it needs to be joined together with everything else happening in the forecourt and in that C-store. So the modern car wash, this is really a complex operation. If you think about the front end, you're talking about a retail store right? You drive up, our cameras see the car coming. We know if you're a repeat retail visitor. We know if you already have a membership or not. You're going to interact with a payment station. It's going to ask you for your phone number or e-mail address so that we can market to you. You might get greeted by an attendant who's using a remote tablet to take your payment, ask you questions, et cetera. The front end is really that retail store, and that data at the point of sale is getting passed into CRM systems that we also provide to do targeted marketing, loyalty promotions and things like that. There's then the factory, right? So there's a number of devices as you move through that car wash. You have blowers, you have jets, you have brushes, et cetera. We don't make those mechanical devices. but we control all of the digitization of how that factory automation happens. So think of us as an end-to-end digital provider for that front-end point of sale and consumer engagement and for the factory automation on the backside. This is a great market, right? We love everything about it. Our clients are successful. They're profitable. They're growing, and they're very durable. And I'll unpack that a little bit in the next slide. And because we benefit both from upfront sales of smart devices, payment stations, license plate reading technology, et cetera, and Software-as-a-Service, we really win when our customers win. So as they drive same-store sales, they want to buy more products to help keep that cycle alive and continue to build the business over time, and we can sell them the next product. So it's a very virtuous link that we have with the customer base. The segment is extremely durable. If you look at the chart on your left, in a good economy, people buy a new car. You want to keep that new car clean, shiny, dry, so you can show it off your friends. In a bad economy, the car becomes a major asset that you do not want to have rust and fall apart. Either way, you're going to go get that car taken care of, keep it clean, keep it cared for. The other thing that we really like about this segment providing tailwind is that the move to subscription services is benefiting car wash, right? This is something that we see play out across many industries, the move from do-it-yourself to do it for me. How many people wash their car with their kids? There's one good parent. I don't either. Millennials don't seem to own hoses and nobody else wants to use the hoses either, right? There is a clear trend towards going to these membership-based models and do-it-for-me. And that means same-store sales are growing with our customers, which is fantastic. The car wash industry is also starting to go through consolidation and professionalization. Historically, it's been very much a mom-and-pop industry. And over time, we're seeing more acquisitions, more build-out with those top operators. And we're winning with those winners. So DRB has a great market share in both segments. But as our customers grow, as they acquire, we're winning disproportionately there, and that's a great thing. The reason is, as you become a larger and larger operator, your problems multiply, right? More sites, more problems. All of a sudden, it's very, very difficult to run legacy software on-prem, right? You need cloud-based solutions, you need consolidated reporting, you need more standardization, okay? The best operators relentlessly standardize. The last thing you want is a hodgepodge solutions and different types of technology. You want to consolidate that. You want to move it to the cloud so you can scale and operate efficiently. So the big idea in our business is really owning the brains of the car wash, okay? Like I said, we don't do the blowers, motors, jets, mechanical devices. We provide the digital infrastructure. And the best way to think about that is plus. okay? Patheon is our next-generation point-of-sale solution. Beacon Catalyst, our CRM and loyalty app products. And by bolting those together, Patheon plus Catalyst, now we're making a seamless consumer journey. It's cloud-based, it's omnichannel. If a consumer comes up and wants to interact with a kiosk, great. We're going to ask for their customer information. We're going to create a record. We're going to start to sell them to a membership. If a consumer downloads the mobile app and wants to drive up to the site with a prepaid code, great. We got you for that, too. If a customer wants to go online, change their membership, maybe even cancel it, guess what, we're going to catch that, and we're going to offer you a different rate to remain a member. So we're surrounding the customer with the technology end-to-end. And I'll tell you a little bit about how that's working for our customers in terms of retention, how it's boosting stickiness and how it's driving same-store sales. The other plus on this chart is key. We're taking the front-end tools, Patheon Catalyst, that retail store, and we're bolting it to the factory. And Sgt. Sudz is a recent acquisition of ours. We bought this company in June, and it controls that factory line, okay? So now we're bringing together both the way that you manage your customer base and the way that you manage the final bits of the customer experience, which is the actual car wash itself to complete that digital chassis. Breaking down Patheon a little bit more. So with Patheon plus our Catalyst and Beacon technologies, we're really changing the outcomes for our right? We've done studies very, very deep, looking at how car wash performs using kind of the legacy technology, whether it's from us or a competitor and using this new tech stack that's cloud-based, it's omnichannel, it's very flexible. And the results are just astounding, right? We're seeing 10% membership growth by being able to really market to those customers in super segmented personalized ways. When Devon shows up to the site, we know who Devon is. We know if he's been there before. We know if he used to be a member and now should be part of a reacquisition campaign. That's driving great membership growth. We're also seeing big reductions in churn. The way that we manage churn is in two buckets, right? It's involuntary and voluntary churn. Involuntary churn is your credit card needed to be updated, right? Sometimes that can be handled automatically in the background. That's great. Other times, you might need to prompt that user, hey, it looks like you got a new credit card, update your information. We can do that online. We can do that via mobile, et cetera. And then finally, we're growing total revenue by bringing people back to the site with a more holistic bit of marketing tools bolted right into that point of sale. These are things that you just cannot achieve with legacy competing offerings. So that's creating this end-to-end ecosystem for the digital car wash. And we're -- fundamentally, we're moving our customers from legacy environments where it's a disjointed consumer experience. You might not have a mobile app. You might not have a website, right? These things create confusion for the customer, complexity for the operator and complexity is the enemy of profitability. We're moving them to a world where they have built-in capabilities for marketing. Everything is omnichannel. Payments are built in throughout, so you can pay in app online on a web page on your phone at a pay station, et cetera. And we're giving the customer real-time access to data and telemetry about how that wash is operating. So I'll get a little more technical here. This is that other plus that you saw on the prior slide. This is how we go from running the retail store at the front end of that consumer experience to the factory at the back end, where all of a sudden now motors, pumps, blowers, et cetera, need to fire. Again, those aren't what we build. Those are kind of a commodity. We handle the digital piece. So when you pull up to a site, you go to the pay station, you decide that you want the extra shiny wash. That's going to be $25 because that's a premium wash. We send that information to our tunnel controller. Our tunnel controller says, the extra shine wash contains the following steps as you go through the tunnel and then sends that to the motor controller, which actually sends electricity to all of these -- if you didn't pay for the extra tire shine, it's not going to turn on that device. And by bringing that all together, now our customers have the full brains of the car wash from one provider, right? That's a great link between the retail store and the factory automation component. This isn't easy, right? Running a good car wash is hard. Having all these digital tools makes it a lot easier to do. So we really like the position we're in. We're seeing continued growth within the tunnel car wash market, that 500 sites a year that I mentioned, and we're winning a fantastic share of that. So we're continuing to grow the number of sites under management. At the same time, we're growing our recurring revenue on top of it. And this is where we've seen the sequential growth that Mark mentioned. We're really proud of what we're doing with Patheon, bringing our customers to next-generation cloud-based tool sets, and it's building that ARR base, and it's allowing us to both expand share of wallet and expand the size of wallet because as our customers drive more same-store sales, there's more money to spend on the next capabilities, the next features to really have great consumer experience and a great operation on site. So, in conclusion, this is a fantastic market, fundamentally attractive capabilities in terms of the secular growth trends. We're seeing consolidation in the marketplace that benefits us. We're winning with those winners. And we have the right portfolio to really drive accelerated growth for our business and on the competitive vector as well. So, thank you very much, and I'll turn it over to Austin.

Hello, everyone. My name is Austin Lieb, and I am the Chief Product Officer for Convenience Retailing. I spent the last three decades transforming product and tech organizations at Mobil Oil, Pfizer and Ingersoll Rand, driving innovation, share gain and margin expansion. Since I've joined Vontier, I've been acting as the Chief Product and Technology Officer for the Environmental and Fueling Solutions business. What excites me most about this industry is the tremendous opportunity there is to drive digital and an integrated transformation. As you heard before, convenience retailing is vibrant. We're under a profound transformation where formats are evolving to large mobility hubs with expanded offerings. But the industry is at a point of inflection where siloed systems and disconnected data visibility is impacting retailers' ability to simplify operations and increasing complexities are raising costs to unlock the full potential of these sites, the forecourt, the retail site, the car wash, and we have to operate as an integrated unified ecosystem. And Vontier is uniquely positioned to provide differentiated value propositions to our customers as we have the broadest set of products in our portfolio. We have the largest installed base with over 1 million assets connected. We've got the strongest channel and the most trained technicians. We are winning and have credibility with the targeted segments in the market, and we are embedded in a highly regulated market with stringent payment and environmental requirements. At Vontier, we are ready to drive the integrated digital transformation. Customers are facing challenges. They're facing challenges with the complexity of their format evolution, but they're also facing challenges with how tech solutions are delivered to retailers from vendors. Retailers live in tech silos. They've got disconnected systems that increase costs, slow innovation and fragment the consumer journey. Every broken journey is a lost revenue opportunity. Data fragmentation is also a major barrier. Retailers can't optimize their site operations or leverage insights to effectively reduce costs without enterprise and network level visibility. And compliance is becoming more complex, increasing certification costs, security risks and operational overhead. This is why our mission matters. We are creating an integrated unified mobility ecosystem that simplifies operations, increases uptime and delivers a consistent, seamless experience from fueling to the store to car wash. Why now? Well, there's multiple converging forces. First, with the complexity of the format evolution, new sophisticated solutions are needed to meet retailers' evolving requirements. Second, the technology has matured. The tech that's required in order to deliver an integrated mobility hub is available now, and it's available at the right economics. And third, standing still, the risk has never been higher. Retailers that don't integrate systems have fragmented consumer journeys, increased operating costs and lost revenue opportunities. This is the moment to act, and Vontier is leading the digital transformation. So what is our big idea? It's delivering an integrated ecosystem that solves our customers' pain points. Solutions articulated on the left side of this slide. At the center is connectivity. That is the core of our integrated ecosystem. Our mission is to connect Vontier's broad set of devices and scaled software, both on-prem and to the cloud to solve our customers' high-value problems. This includes boosting in-store conversion through integrating media into the dispenser, simplifying compliance and lowering certification costs through unified payment and driving uptime and total cost of ownership through remote resolution. All examples I'll break down later. But we've made a tremendous amount of progress. This isn't just an idea. It's happening now. You'll see it at the booth. We spent a lot of time breaking down monolithic legacy systems into modern, open microservices, cloud-connected architectures. This enables us to easily develop, deploy and maintain solutions in the market, and it also provides scalable, secure and future-ready solutions. As Mark mentioned before, today, our customers carry the burden of integration. They're stitching together point solutions provided by different vendors with our integrated solution, Vontier changes that equation. Our integration happens at two levels. First, on-prem, where we're connecting devices and software to deliver outcomes on the site. Here's the reality, right? There's a lot of technical work to integrate. It takes thoughtful design and development to ensure seamless communication between all the pump electronics, the payment terminals, the various different software applications like the 4-core controller. But that integration enables us to speed new features to market, and it also unlocks real meaningful value for our customers. A great example of how they're getting value, while a consumer is at the dispenser, right? Retailers can leverage advanced media features like tailored promotions, interactive coupons or loyalty-based personalization in order to drive and convert to in-store purchases. At the booth, you'll see some of our new advanced features with the integration to point of sale. Consumers can order in-store offerings at the pump. But another key point of how we're integrating is we're really building modular building blocks that drive flexibility for our customers. If a consumer -- a customer still has useful life in their dispenser, they don't have to upgrade their entire dispenser. They can modernize and maintain compliance through a payment upgrade kit or deploy media to improve the consumer experience at their own pace, site by site. These are great examples of how our integration is enabling our customers' ease of deployment of our solutions as well as how they extract value from our solutions. The second level happens at the network level. This is where we're providing connectivity and unlocking real-time visibility across retailers' networks. Our next-generation cloud platform, the hub, it's making it happen. It's built on a modern, scalable technology with open architecture for extensibility. And it collects all the data from the equipment at the site, providing one pane of glass, a unified user experience for our customers so they can have visibility and control assets across their network. And it's also designed to expand, expand across all of Vontier's portfolio, future acquisitions as well as strategic partnerships where we can add additional value. And again, double-clicking on where is the value coming to the customer, it's really remote diagnostics and remote resolution. If a customer can deploy software upgrades remotely or troubleshoot and triage challenges at the site without ever rolling a truck or use automated workflows to ensure that a technician has the right parts for a first-time fix. As we talked before, remote sites, they've got to send a service tech 6 to 10 hours each way. If you can eliminate that second trip, that's a game changer. So this is why our network level integration is really critical to unlocking the full value of our connected ecosystem. Another really powerful example of a network-level platform is unified payment. Retailers spend hundreds of thousands of dollars and thousands and thousands of resource hours managing certifications across multiple points of sale, multiple payment terminals and multiple acquirers like Fiserv and Chase and complexity has been compounded through acquisition and consolidation. So national accounts and major oil companies have a significant number of software and device configurations to manage. It can take up to nine months of real heavy technical work to roll out a new payment terminal across each unique configuration. But our differentiated architecture changes all that. Since our indoor payment terminal and our outdoor payment terminal are built on the same architecture and integrated into our iNFX application platform, we reduced significantly the number of configurations and therefore, significantly reducing certification efforts. Also with one unified payment platform, it covers every transaction from fueling to EV, to car wash to in-store, simplifying compliance, saving costs, delivering a seamless consumer experience, but also allowing our customers to shift their investment and resource time to more critical growth initiatives. Enabling the Connected Mobility strategy happens across three pillars. First, at the physical level, we've got smart devices with edge compute capability, connectivity and interoperability through harmonization of chipsets and operating systems. We've got, at the digital level, scaled software through our state-of-the-art software factory. We build modern modular architectures that are easy to deploy and upgrade. And then at the intelligence level, that's where we have unified data and application platforms. So the HUB and iNFX, which we'll talk a lot more about at the booth. They're providing connectivity at the site, unlocking advanced analytics and predictive insights. And so just bringing that to life in a real example. Smart device. A great example is our TLS 450+. It's our next-generation automatic tank gauge. It's a master sensing and measurement edge device. Retailers use it to maintain environmental compliance, manage inventory. It meets the latest security standards as well as it provides remote connectivity. It's also built on a microservices architecture where selects quick deployment of new features to the field. Scaled software comes to life with our Veeder-Root Device Management application, which we love acronyms here. We call it VRDM. That provides site visibility to alarms for leak detection, low inventory, water levels in your tank or a faulty sensor. But the beauty really happens at the intelligence level where the TLS 450+, the VRDM application interact on the HUB, which really turns insights into actions with advanced features like remote software upgrades, predictive maintenance, automated and smarter workflows as well as enterprise-wide configuration changes. But to bring this really to life, let's dive into a national account. One of our national accounts has over 500,000 alarms a year. They have a whole call center who spend 24/7 just calling sites trying to diagnose and resolve these challenges. And then for the ones they can't resolve, they have to send a service truck and they're losing revenue, they're not fueling at a dispenser and having challenges at site during that time. They believe with this unified solution, they're going to save $20 million over the next few years. Now that's measurable ROI. And so that is one example, but we are really attacking complexity and cost head on and delivering meaningful outcomes for our customers, lowering total cost of ownership by eliminating siloed systems and reducing truck rolls through remote resolution, improved operational efficiency through automation and smarter workflows, seamless consumer experience through personalized media and integrated loyalty. And we're also reducing the complexity of compliance through unified payment, but also maintaining compliance for critical equipment for our customers by ensuring we meet critical safety, payment and environmental standards. And then lastly, we're able to deliver features to the market much faster. And so our customers benefit from that. And we've seen real measurable outcomes that we've calculated with customers, getting at least 50% cost reduction through remote resolution, a 75% acceleration in certification. And we're not only delivering features to market 2x faster, our customers have been able to accelerate their deployment 200%. So this is how our integrated system translates to measurable outcomes with our customers. And jumping back to a slide that Mark talked about earlier. This approach also unlocks a lot of growth and efficiency within Vontier. First, expanding our target addressable market from $30 billion to $40 billion by pivoting from products to solutions and outcomes. Second, driving reoccurring revenue. We have a target to hit 40%, and we're getting there through new software-based and services revenue streams. And then third, improving profitability through simplification. Talked about a -- we moved from 11:1 edge controller platforms. Yes, this provides value to our customers. But for us, it drives significant efficiency with engineering, where those folks are no longer working on managing complexity, we're shifting their time and energy to focus on innovation. So this is how we grow, improve margins and deepen customer stickiness. So as we close, the message is clear, sites are evolving to multiservice destinations where integration is more critical than point solutions. Our customers need flexible and scalable architectures to optimize their operations, lower cost, but also to adapt to their continued evolution. And our integrated solutions allow us to achieve quicker innovation to market, better consumer experience and lower cost to customers. But integration, it's no longer optional, it's strategic. It's a lever that unlocks higher margins, reoccurring revenue and defensible market share. With the integration of our smart devices, our scaled software and our unified platforms, the transformation is not just possible, it's economically compelling. And with that, I'm going to pass it to Ryan Edelman to kick off Q&A.

Why don't we go ahead and get started in the room here with some questions. It's Julian first, sorry.

Maybe a question around Slide 36. It's a very helpful one that goes to those five different sort of verticals, fueling and environment and so on. So maybe help us understand kind of what -- is there any way of quantifying the advantage that you see from being much broader than all the rivals? There's always this debate about best of breed versus one-stop shop. Maybe help us understand whether it's growth rate or margins or pricing or something what value you're extracting from having that.

Yes. So, first of all, we don't think there's a substitute for having the right leadership in a siloed position. And we think that, that's the bedrock by which you need to fundamentally compete. And if you look at a lot of our customers, they also buy in silos. And so the industry is really structured around silos. So I think it makes a lot of sense that that's where the basis of competition is. But I think more and more that there is a competitive advantage that can be derived by integrating across. And if you listen to customers and what they're up against, consumers when they go on the site, they don't use your products necessarily in that silo sense. They might buy a sandwich, pump gas or get your car wash. Why can't that accrue to the same loyalty program? That's just a very practical example of why don't solutions work better across the capabilities. And if you look at what these larger players are doing in the industry, they're buying a lot of these products from us. So when you listen to their feedback, too, like why don't I have to go to four different places within your company to try to get answers to try to get stuff to work together. So I think the dynamic of competition is changing. And I think it's based on real-world practical examples to bring that together. So to answer your question is, yes, I do believe that it will result in better growth for us because we can provide additional solutions to market that layer on top of. But there's no substitute for having the right solution within the silo, and I think that's the basis to compete. The other element here, too, is that we want to offer our customers choice. We believe in open system architectures, too, where they should be able to buy best-in-breed, but we should also be able to provide best-in-breed where that makes sense for us or we leverage a partner to provide best-in-breed. But there's no substitute for having best in breed. We're not trying to lock them into a monolithic infrastructure that they can't get out of. We don't think -- we think that's an antiquated way of doing business, and we believe in that open system architecture model.

Mark, you mentioned at the beginning, convenience retail, $11 billion market, low to mid-single-digit growth. But you also mentioned you recently changed your alignment at the company. So maybe talk about sort of what that means. And you said you're aligning around vertical markets. Like you're already growing, if I look at EFS or mobility, like mid-single digits. So why wouldn't you grow faster, maybe significantly faster than the market over the next couple of years?

Well, that's a great question, Andy, and that's the same question I have for my management team. Now look, I think we're really excited about this reorganization. And what makes us so excited about is the feedback we get from customers. We started a process, maybe it was about a year ago, NACS last year, and we started getting some feedback from our customers about how complicated we are doing business with, about how siloed we are. And I think it's a little bit of an artifact of that OpCo type structure where we hold deep accountability by business. And we really like that model that we've inherited. But at the same time, when you start looking at our strategies and where our products show up, it makes a lot of sense to get the feedback that we've gotten from our customers around that. And it kind of through the summer, we engage in a process where we have our Vontier Business System. We go to Gemba, we listen to customers. We have teams of folks. And we really created from a pretty wide swath of management being involved with this problem solving around customer back, and we really said, we really have a significant opportunity here. And so we've reorganized based upon that. The later months this summer, we really brought it to fruition really in the last couple of months. And what you see is a reorganization globally based on products, where we bring brands together for solutions. And we don't think we compromise on our siloed leadership and capabilities. We've got real depth, real capability there that we're not giving up. But it's this coordination across our businesses, so we have accountability across our businesses to bring these solutions together better. And why can't we have a one throat choke for a key account or global account manager. It makes a lot of sense when you see great customers buying all of our solutions that we should be able to bring that together in a better fashion. Make that complexity our problem, not our customers' problem. And that's what the industry is forcing our customers to do. They're forcing them to integrate these solutions. You're forcing them to live with these silos. That should be our problem to be able to break that down and solve that for them. And so we're very excited about our new structure, and we're fundamentally excited about it because of the customer feedback we get when we explain to them.

Can you give us a little bit of lessons learned with some of the struggles around the shell, just given that seems to be a nice playbook if you can roll that out to the larger accounts. So kind of lessons learned -- and then also, again, we're all trying to quantify a little bit your ability to leverage your capabilities that are broader than anybody else. Can you give us an example, quantify in some way a traditional large site. These larger sites are being developed. But what percent of that revenue you already have customers doing the breadth, right, tank gauges, dispensers, payment systems, EV, just to get a sense of if you did get two of the four, three of the four, what kind of dollar content bump we get?

Yes. So let me take the first one and then the second one, I'll answer and also I'll turn it over to my colleagues here, maybe Austin and Mark will be able to answer about the kind of revenue bump. So the first question was around Shell and what were the lessons we learned here. Look, I think there's an incredible lesson around not only having the technology capability, but also having the service network to be able to stand behind this and the depth that we have in the industry. So think about we acquired Invenco. They had the microservices technology. You've talked to some of our management team, yes, we had to do some work to get it to where it really needed to be. But fundamentally, why didn't Shell roll out that solution? You combine that with a company like Vontier and GVR and now you've got a real depth and breadth to be able to support the rollout across the United States and every one of their convenience stores. So it's not just having the right technology. It's -- or having the best technology. It's having that depth and breadth to be able to support that in the industry. And there's nobody better to be able to support these kind of rollouts for us. But there's growing pains when you roll out these technologies. You're not just putting a dispenser on site and the dispenser might go down. Think about it, you have all their payment rails. If you bring down their system, you bring down their capability to process payments. That is a critical technology for them. And so our ability, our technology capability, and we've brought in people that have run the cyber airline system in the past or have done this at scale in other technologies where you bring up a network with high reliability and you have to be able to provide the software updates in a way and patches in a way that you keep a high reliability up there. And so you need to stand behind that. Those launches can be painful as you might realize, but we're through those kind of growing pains. And I think when you look at Chevron that's rolled out at 8,000 sites, folks like that are now looking at, well, what comes next? How do you expand that network of APIs on site. And so I think we've really earned our strides to be able to do this in the industry and stand behind that. So that's one. The other thing is what kind of uplift can we get. In many ways, our opportunity is a land-and-expand opportunity. What I just described at Shell was a land and expand opportunity with iNFX, starting with the payment around the dispenser and those payment rails and bringing that to fruition around the dispenser. But think about that open system architecture, that's the backbone. So it's a land and expand opportunity. When you look at what's happening in the convenience retail, we might have a pocket of strength somewhere. It's a real land and expand opportunity for us, not only within the United States, but also globally because look what's happening in convenience retail on a global basis, it's turning from a fueling kiosk into a modern convenience retail. So a lot of our solutions are not just based on winning with the winners, it's about landing and expanding in the industry.

Exactly. And I'll give you a few examples.

[indiscernible] the number for -- he told me right now the larger sites that starts to really dominate roll organic and rollout. What is the average revenue on that site if you have your, say, the dispenser strength is number one, [indiscernible] catching up, tank gauge, some of the new technology rolled out yesterday sounds interesting. Can you help us at all -- what we're getting 150,000 on the big sites, and that could come 450,000. If we had 3 of the 4 categories. I'm just trying to get a sense of the outgrowth versus the industry.

Yes. Let us come back to you on absolute numbers. What I would say is if you anchor it off the fuel dispenser, where we have #1 share, and that's probably the single biggest purchase that a retailer makes when they open a new site. If we add on all of the other technologies upfront, whether that's tank gauge, the submersible turbine pump, the point of sale, you probably have the opportunity to add rough numbers, 30% to 50% incremental revenue upfront to a site if we're able to attach the full set of suites amongst what we're talking about. But then I think it's also a matter of the land and expand that Mark was talking about. I think a lot of the upside is that ongoing revenue that you get. So, yes, there's the upfront sale. But as we have these integrated solutions that we actually tie together with remote connectivity, it's the ongoing recurring revenue that I think gets us really excited, whether it's the remote connectivity for the remote management -- asset management systems, the iNFX microservices, the media applications. Once you have all of those physical touch points locked down on site, it's a lot to grow off of from an application going forward. So, yes, we absolutely see growth of share across those stacks with #1 share in dispensers, #1 share in ATG, #2 share in point of sale, growing share in chargers. But you're absolutely right, there's a lot of sites out there that don't have all of our equipment. So step one is tie them together in a way that they work really well, so they buy all of our equipment and let us come back with better numbers. But I'd tell you, if you're building on to the fuel dispensers, you probably have another 30% to 50% upside. But then on top of that, I think what's at least from my perspective, really compelling is the ongoing piece circle on top.

Yes. And just to build on what Mark said and jumping a little bit back to what Julian's question to ask is when you look at unified payment, which we talked about, right, that's a true differentiator. And as part of that, we're going into -- we're expanding the footprint of our payment terminals going indoor to retail, integrated into car wash, integrated into EV. And you'll see that at the booth. In addition, on the Veeder-Root side, and you also see -- we'll have some discussion at the booth. We've got 350,000 automatic tankages consoles on the mall. 120,000 of those are 30-year-old technology. And the economics of it is much easier for a retailer to upgrade a controller because if they switch to a competitor, they've got to replace all the probes and sensors sometimes break up concrete at the site. But then the ATG's integration into the submersible turbine pump and the advanced analytics and the cloud connectivity also drives that connectivity on-prem, where we're seeing a lot of customers that are loyalists to our ATG to then the potential opportunities to convert them to our STPs and then the recurring revenue for folks that are loyalists of our entire platform with the advanced features that we are launching at the hub, which you'll see today where we've got a lot of interest, which drives that reoccurring revenue.

So, Anshooman, I think, a comment, and then we're going to try and wrap it there to stay on time.

Yes. Just to be more specific, reasonable sites would have opportunity for just upfront over $200,000 of revenue and then all the recurring revenue is software maintenance, SaaS services like iNFX, maintenance, spare parts. So the recurring revenue keeps giving. And then there's the maintenance cycle as the payment industry standards changes, they might buy a payment kit. After 10 years, they might replace the dispensers all over again. The ATGs will be replaced over time. So it's a site that continues to keep on giving because we're bringing out new technology. We're bringing out integrated connected technologies. So as we're doing remote monitoring, there's a fee for that. So there's -- it's always a plus, plus, plus.

All right. So we're going to wrap it there. For now, we'll come back. Nigel, hopefully, we can hold that question. We'll have a little bit more time later. We're going to take a quick break while we reset the stage for our industry panel. We'll be back here in like five minutes. [Break]

We're going to get started back in the room here with our industry panel. We've got a great group of folks here assembled to kind of give you their perspectives. Moderating our panel, as I may have mentioned earlier, I may not have forgotten now, is Elaine Kanak. She's our Chief Marketing Officer for overall Vontier, and she's going to lead us through the Q&A. So Elaine?

Great. And I'm joined on stage by Dan Munford. He's the CEO of Insight Research and Global Convenience. We've got Elaine Mohr, who's the GM of Operations for Shell Mobility Americas; and Tracy Long, who is the CEO of D&H United, now United Uptime Solutions. So thank you all for joining us. Super excited to have you here. We're going to start by talking about industry trends. So Tracy, I'm going to start with you. Do you want to share with us what your outlook is for the industry growth for the next two to three years? And any distinctions you see between new to the industry sites versus site refreshes.

Thanks so much again for having me on the panel. It's a pleasure to be here. Look, I've been leading this company now for about three years, and I have only seen growth progress each year that I've been here, both for NTI and for retrofit upgrades. From an NTI perspective, I mean, I think the ROI for our end customers is really still strong. And almost every one of those large strategic accounts that Mark talked about has put out a multiyear NTI growth plan. And I've only seen those revise upward when I look at it over the last 12 months. So that continues to be strong. On the retrofit upgrade side, Mark Williams talked about a lot of the trends, right? M&A, maybe was -- it slowed down a little bit at the beginning of this year, but it's back with a vengeance. And when that happens, we see a lot of need for upgrades and name changes and bringing those sites that were just acquired up to the standard of the acquirer. And then the other thing we're starting to really see an impact from is in the late '90s, there were some regulations that came into play that required the whole industry to replace their tanks. The tank typically has a 30-year-ish lifespan. So really over the last 18 months, we've started to see demand for those tank replacements start to increase as well. So all of those tailwinds, I think, are leading to some really healthy growth rates.

That's great. And from an industry consolidation perspective, you mentioned that. What do you see the outlook on that going forward? Do we expect more of the same?

I think it's only going to continue to increase. And it has a lot of impact on our industry. I think most are positive. You guys talked a lot about them today, right? As our end customers get bigger and more sophisticated, they're investing more in technology and in thinking about how they control their assets in a better way. They also get much better at procurement, much more professionalized from a procurement perspective. And while that might hurt some of us upstream from a pricing perspective, I think net-net, it helps us because they really start to value partners who can help them drive this concept of uptime and help them drive their own revenues and their own business growth. And so I think that this is a good thing from a professionalization perspective for the whole industry and will continue.

Yes. And I think we agree that as our customers start to think about solutions and rather than individual products, that's good for everyone. So, Dan, you're really a thought leader in the space, and you've spoken a lot about food convenience and the sort of emergence of C-stores as viable alternative to quick-serve restaurants. Do you want to talk about what's driving that and the prevalence around the globe?

Sure. Well, I mean, we -- I guess, optimism and opportunity is a short answer. But the -- we've got a very good global radar screen for the best operators globally. So we're tracking -- we have three competitions that help us track who -- what the leaders are doing in many of the developed -- most of the developed markets globally, best EV hub in the world, best foodvenience store in the world and the new one, which is smartest store in the world. And it's not a survey globally, but it does show you where -- what the best operators are investing in and where they're seeing success. And clearly, the opportunity that they're going after is you can fuel your car once every couple of weeks, but you fuel your body 3x a day. And there are huge opportunities in food convenience, as we call it, food service as it's known for our sector. We're in the right place to do that, and we're increasingly getting the right capabilities operationally to do that very well. So it's interesting. I think we're at an interesting point in the industry actually.

Yes, I agree. And how do you see this influencing retailers' purchasing perspective and their investment strategies? And what kind of pain points are they running into? And how are they managing those?

Well, I think, again, if you look at the leading operators globally and look at what they're doing, I mean, you could take Applegreen as an example, Circle K as an example, they're making significant investments. I think since 2014, Applegreen have spent -- have invested $1 billion in the U.S. market. Massachusetts, I think they spent $750 million in the Massachusetts market. In Europe, we see Circle K acquiring Total in multiple European countries. Obviously, Germany is a big move, and they spent $3.8 billion on that. So those operators have got huge confidence that they can take existing sites that perhaps haven't been sufficiently optimized and optimize those sites. And obviously, food is one of the big opportunities within that. But there are lots of other opportunities as well. I mean some really interesting stuff this morning on car wash and the opportunities in car wash. I mean one of the things anecdotally on car wash is why people are washing their drugs are washing their cars more because there are more sensors on the cars. So the car will tell you the sensor is not working, so you go and wash it. So I think technology is driving opportunity.

That's great. And Tracy, how about you -- what kind of changes are you seeing in capital expenditures from retailers? And how do you see that transitioning year-to-date? And what might be driving that?

Yes. I mean, as I mentioned, we're seeing, from our perspective, capital budgets increase, right? Our C-store customers allocating more money to NTIs to M&A to upgrading and retrofitting, particularly on this beginning of this tank wave that we're starting to see. So that's really positive. Now I will say this year, kind of in response to the economic environment, we have seen them pull back a bit on their maintenance budgets, right? So they're looking to see where can I cut costs, where can I use mobility technology to help me with that? Where can I use some of my in-house technicians to do some of the easier service work. So that's, I think, something you see ebb and flow with what's going on in the larger economy. But from a capital budget perspective, we're only seeing increase.

Yes. And that's great. I think looking to reduce maintenance costs is a great selling point for some of our remote connectivity solutions. So, Elaine, you've got 13,000 Shell sites across the United States. It gives you a really unique vantage point on the industry. Do you want to talk about how you see technology fueling growth in the space?

Sure. I think we celebrated 100 year as a Shell oil company. I've been with the company for 29 years, might be almost 20 years ago. So as long as we've been around, what -- we've been known for quality fuel. I'd say if we're looking into the future and say, what is the biggest bet we're making is around loyalty. And broadly, loyalty, what that means for us and herein lies the opportunity and the challenge around technology is there are companies even within our industry that have done really well. But by and large, we have been on the slower end in terms of making that transition that the customers have come to experience and know about their everyday transactional experience, right? So what I mean by loyalty is we've got to get away from the encore dispenser transaction, that physical transaction that we've relied on successfully over the years and take that to an off-site experience. And I think if you can get that transaction into the hands of the people's phones, that unlocks the next level of loyalty that I think we're going to be embarking on. So, that is easy to say because I think in so many verticals outside of ours have done it successfully. It's the way in which you target customers, it's the way in which you attract them, send promotions. It's the way in which you integrate. I heard payment in the earlier panel discussions. It's got to be seamless and automatic and simplified, right? So the payment gets integrated in there. And in cases, when you show up to the site, you don't even have to pick out your wallet. It just is on your phone. It opens up the dispensers, which, by the way, is a technology that we do have. It's not widely prevalent in the use of our customers. But -- so all of that is technology driven, and there is not one thing that we're thinking of, and we have a very ambitious plan around all of those things. But the other side of, I think, the industry as we look to what does that mean and how challenging, how difficult of a task is that is around the fact that, yes, the beauty is we have one of the largest, if not the #1 market share in terms of count in the U.S. So on one hand, we're trying to create one brand proposition that we can make a promise to the customers that they can expect the same consistent offer every one of these 13,000 locations. On the other hand, we go to market in a distributorship model or wholesaler model as we call it. So we've -- and the beauty of that benefit is that we're partnering with the best people in the industry that know exactly what type of sites, offers, capabilities are right for those local markets. And they all have very diverse needs and ways and systems that they're structured around. So we've got to create the technological solution to unify all of those local wholesalers who we want to partner with, we want to continue to partner more with to be able to integrate with the Shell national offer that we have. And so that we're offering a national brand and a national footprint and presence, but coupled with the solutions that are specific and unique to those local markets that also work. So when I say all those things, there's not one thing that is not driven by technology. So I think that is where technology is coming to play.

That's great. And you've just talked about a lot of operational complexity. So, Dan, I'd love you to talk about how you see as convenience stores become these multi-energy, multi- amenity sites, what kind of complexity does that introduce for operators? And how are they solving for that?

I mean we should think about the store manager in that environment. It's become an incredibly overloaded role, hasn't it? I mean -- so obviously, from a technology point of view, it has to be made simpler for the store team. You can have the right technology, of course, and you can have the right fresh food offer. But I think the real challenge, and again, obviously, it's a challenge for the whole team, not just the store manager and the business is around having the right people in your business to operate that. And again, as has been mentioned this morning, turnover rates are often across the industry, very high. And so as the business has become more and more complicated and as food service particularly becomes an important factor, it's hard to do that. So where you see the best businesses differentiating themselves, it's the ones that can hang on to their people. I mean, QuikTrip, for instance, we just saw with QuikTrip on Monday. We were hosted by the division operations manager. He's been in the business 25 years, and he started off as a clerk. He knows every aspect of that business. And obviously, QuikTrip are paying more or less double the industry rate. So they -- and they -- and obviously, the other thing is they're developing those people, they're training them. They're giving them a career in the industry. And obviously, as we become more complex businesses, this becomes really, really significant, I think, as a point of differentiation.

Yes. Yes, that's great. Elaine, Shell was one of our launch customers for our new microservices architecture and FX. Do you want to talk about that decision-making process? What went into that and how you decided to move forward?

Yes. I'm very excited about this partnership. I was at the -- almost at the very beginning stages of this decision-making and the journey that we've been on. I remember when I first introduced what partnership this meant, what we're trying to accomplish and was introducing it into the -- inside the organization, I needed to find a really common sense nontechnical way of explaining microservices architecture, really for me probably than anybody else. But I -- and the way that we launched that made sense, I think, light-bulb moment for a lot of people within our company was we were in this monolithic architecture structure for a long time. And the most -- single most important reason why we needed to go to this was because of what I was translating microservices to modular, if you will, right? It was this notion that in order to go to market in the speed in which we needed to do it, we needed the capability to be able to do multiple things at one time. We couldn't just put one item and think all of our resources and time required to develop one solution and then think about what to do next. We needed the capability that this solution brought, which said, you know what, we've got to tackle the car wash solution issue. We've got to tackle the loyalty integration that has to happen between local third-party loyalty programs and Shell fuel rewards programs at the dispensers. We've got to automate some of the processes that our wholesalers have to go through every day as part of their settlement processes. We -- I mean, there's a long list of things that we want to accomplish. And this microservices solution really was the idea that started our pipeline building for all the benefits that we're now working on that we're delivering, and we've started to deliver on those. So that was primary the biggest reason. And then I would say the secondary was going to the cloud. And I remember presenting this concept like who's not in the cloud these days, right? Who is not in the cloud? So I think it was an obvious benefit that people related to. But specifically for us, that meant I heard in the earlier panel, somebody talking about stability. In our network, stability when you're talking 13,000 sites is everything. We do not want to bring down transaction, which is about 75%, probably increasing percent of transactions that are done on credit cards today, right? Surprising that there's still 20%, 25% of cash transactions, but we can't afford to bring down a network of 13,000 sites, not for a day, not for an hour, right? And when we do, and you had blitz, it is incredibly painful. So the cloud technology was a way in which for us to start to see our network before things could pop up and have some proactive monitoring capability and observability into our assets and be able to prevent and make some really smart important choices about what type of alert systems do we to create and be able to have visibility into so that we could potentially prevent any of the downtime that could be coming our way. So that was a huge benefit as well. So those, I would say, are the two main reasons.

That's great. And are you seeing any early benefits that you want to share with the group?

Yes, so many. I would say the one feature that we've already launched is the Mashgin self-checkout solution integrated to our entire network. So we've got about 25 sites that are participating today between the two POS systems that we operate from. The beauty of the Mashgin example is, historically, in this monolithic architecture system that we had, the idea of introducing a third-party POS system was quite not just complex, but risky. It took a lot of time, but it would -- we would making that investment decision with a lot of uncertainty, whether is it going to actually work? Is it going to be worth the effort, time and energy and resources having to support that POS system with all the investment that needs to go in to have the adoption rate with our customer base, with our wholesalers that take that choice. So what this solution brought is now we have a proven case of introducing essentially a third POS option into our network relatively easily. So that's the real game behind the match gen adoption. Even if we don't get the uptake of the aspirational numbers, right? In time, I believe self-checkout will be just like grocery stores. All the gas stations will eventually adopt and the adoption rate will come and all of those things. But I think the capability in terms of technology is having done this really easily, and we couldn't have done it without the Invenco partnership, right?

Yes, that's great. I think of the iNFX platform as kind of the app store for convenience retail, where we've got our apps. We love it when you use our apps. We also want to make it really easy to use other apps. So that's great. So, Tracy, your company announced a new name. Congratulations. You're now United Uptime. So tell us a little bit about what drove that decision-making process and what it means to you and your customers.

Yes. So thanks. It's hot off the presses. We just did it on Monday. So we are one of the largest channel partners in the forecourt space for Vontier. And we have 1,300 employees who go out every day and install and service and do compliance services for convenience stores and travel centers. And we have really seen a change in the way that our customers talk to us over the last three years. So, traditionally, it's always been help us control our maintenance budgets, help us make sure that we don't run out of money by September or three months before the end of their fiscal year, help us think about this from a cost perspective. And what we've noticed really a lot over the last 18 months is a change to talking more about uptime. So help us get up and running so we can get back to the business of making more money and satisfying our own customers' needs ourselves. So we did some value proposition work about a year ago, and every single customer we talked to mentioned the word uptime in their interview. In fact, it was mentioned at least 8x here this morning, I lost count after about eight, but it is how this industry is speaking today. So we decided, let's put it in our name. And that's what we did. We're making a commitment to helping the whole industry think more about uptime.

That's great. So, United Uptime, formerly D&H, has been a long-time partner of Vontier, and we very much appreciate that. Do you want to talk about why you continue to partner with Vontier?

I mean it's simple. They're the industry -- they have the best brands. They're investing in the technology that's going to take the whole industry to the future. And then more recently, they've made their commitment to customers and channel partners very apparent in this reorganization and trying to do business in a more business-friendly manner. I worked at many large companies in my past, JCI, Tyco, GE, and you're always hard to do business with when you're that big. But for a company to realize that and really say that they're going to invest money in becoming easier to do business with, that means a lot. So those are some of the reasons.

That's great. Thank you. So we're going to close out by talking about the future. Elaine, what's next for Shell? And how do you see technology continuing to play a role in unlocking productivity and revenue growth?

Continuation of the things I mentioned, right? We're now moving into Phase 2 of what we call the projects that are going to be enabled with the Invenco solution and our partnership. So many things on that road map that I could talk for hours. But I heard some conversation earlier about, for example, car wash. It turns out that surprisingly, 30 -- more than 30% of car wash transactions at a gas station occur when customers drive up directly into the car wash instead of going to gas -- to pump gas and going into the C-store. So by not having that car wash terminal payment processing capability linked to the rest of the sites and having that capability linked to our loyalty program and the platform, it's a very disjointed disconnected experience and opportunity list. So that's one of the examples of the things that we're going to be working on so that it's fully integrated. It processes payment just like you would at the pump, just like you would inside the store, and it would roll in all the loyalty capability and the ability to create schematics together and so on and so forth. So the future is in continuing to develop our capabilities as a Shell brand so that when we go out to the market and we try to compete for the business of partnering with the best in the market, in the industry that they're coming to the table and saying, only when you can integrate my solutions here, only when you can adopt my own loyalty program there and only when you can offer this that we would be able to meet that challenge and create those custom solutions. So super excited about all of those opportunities.

That's great. And Tracy, we've chatted a little bit about the energy expansion. How do you see the role of electrification and traditional fuels going forward?

Yes. I mean, I think I agree with everything that was said here by Austin and Andy and others, right? It's only going to continue. And while we feel like we might have seen a bit of a slowdown lately, as you guys pointed out, it's still growing high single digits, maybe double digits. We've seen over the last 12 months, an demand from the likes of Circle K, EG, Pilot, Love's, they're all gung-ho and moving forward with installations. And it's the C-store space, I think, is really leading the charge right now. That's great.

That's great. And Dan, you're on the leading edge of kind of the biggest and most innovative retailers. Do you want to talk about what emerging trends you see on the horizon and what's next for the industry?

Well, obviously, all of the above. But I think one other thing which we're noticing a lot of interest in is looking at how you go to market and looking at how consumers buy things and what motivates them. And if you look at the Far East and you look at social commerce and how important that's become marketing departments, and this is a global trend, and we're seeing it in -- certainly in Europe increasingly, marketing departments are becoming social media departments. And the retailers that are -- obviously, so retailers are -- this is an opportunity, but it's also a problem because often, it's the independents in markets that are able to adapt quickest and become trend leaders as well as trend followers. And by social media, I'm really talking about TikTok and Instagram video particularly and how important they are with Gen Z, if you look at Gen Z, how important they are. Certain retailers are actually -- big retailers can do this or doing this well. Marks & Spencer is an interesting example in the London market that's really become trend leading. And I think this is going to be increasingly important. We need to get a handle on this as an industry. And obviously, in order to be successful, you have to have a product offer that's exciting. You have to have the right products that you sell, but you also have food service is also really important here. So I think we call it viral food convenience is a big opportunity for our industry.

That's great. Well, big thank you to all of our panelists, and thank you all. So, thanks, guys. That's it for me.

I'd like to thank participants. It was a really great and engaging panel. It was great to hear about the strength of our industry from Dan and Tracy. And Elaine, I think what I took away from what she said, she talked about automation. She talked about integration. She talked about cloud. Hopefully, that's something that you've taken away from the presentation so far this morning, where we're talking about integrated connected solutions. They talked about the vibrancy of this industry. And hopefully, for the people at least that are here, as they walk the floor of the exhibition, you'll see how vibrant it is and what a great place it is to be. And Tracy, she talked about us having the best brands. I couldn't agree more with her. It's a phenomenal business. So we're sitting here on October 15, and no discussion would be complete without talking a little bit about our preliminary results. As a reminder, these are preliminary. We're still going through a close process, and they are subject to change as we complete our quarter-end procedures. Having said that, we expect sales to be slightly above the midpoint of our previous guidance. When we take it at a segment level, our Enterprise and Fueling Solutions business and our Repair Solutions business is squarely in line with our guidance, right where we expected them to be. Mobility Technologies is at the better end of our expectations or guidance range, and it's off the backs of DRB or our Car Wash Solutions business. Last quarter, when we talked at our Q2 earnings call, I talked about the inflection of the Car Wash business, how we are seeing sequential growth, how we expected another quarter of sequential growth in Q3. And we expected Q4 to be our first quarter of return to year-on-year organic growth. I'm extremely pleased to say that we returned to organic growth in DRB one quarter earlier, and we had low single-digit growth in DRB in Q3. This is off the backs of our Patheon solution, which is a cloud-connected solution, which provides greater integration to the CRM, which provides greater visibility to our customers in terms of reducing churn, increasing revenue and reducing operational costs. We're seeing great market acceptance of that. From an operating profit margin perspective, some small puts and takes between segments, but we'll be at a better end of our guidance on the operating profit margin, which translates from an EPS perspective that we'll be near or at the high end of our guide. More details around our earnings call on the 30th of October. I hope to have you guys on there. But I'd also like to take this opportunity to say that I'm extremely thankful and proud of our teams. This is another quarter of strong execution that they delivered on, and I couldn't be happier with the performance. The technology showcase is centered around convenience retail, which is about 67% of our revenue. When you look at that from a reporting segment perspective, a vast majority of Enterprise and Fueling Solutions and over 60% of mobility technology serves this space. What you've heard today is our convenience retail market is very attractive. It's delivering resilient growth on the backs of industry consolidation, larger footprints with fresh food formats, healthy fuel margins, energy expansion. Vontier is a leading provider in this space with unparalleled depth and breadth of our portfolio and domain expertise. The industry is evolving and our customers require connected integrated solutions. And we are uniquely positioned to deliver and solve the high-value problems for our customers and win in this space. We have significant opportunity to create value with this portfolio and this team, and we're excited about executing on our three-pillar framework. Mark talked about the three-pillar framework. Our goal here is to deliver top quartile returns. We're focused on our Connected Mobility strategy, and we have increased the velocity of new product introduction innovation to drive profitable growth. We have significant margin expansion opportunity in front of us, a deeply embedded culture of the Vontier Business System of continuous improvement, which we supplemented with 80/20 program, and we're diligent around capital deployment where we are making conscious choices around the highest return options to deliver value for our shareholders. Convenience retail is an attractive market. We expect this market to be growing 3% to 4% through a cycle. Our customers are looking for integrated connected solutions to support their revenue yield management and operational efficiency. You've heard multiple examples of our solutions today in this space, whether they range from digital payment and consumer engagement to connected environmental solutions or our energy expansion offerings. This allows Vontier to be strategically positioned to gain share and outgrow the market by about 100 basis points and deliver mid-single-digit revenue growth. A couple of great examples of this is our Payment and Media business, which is gaining real momentum and changing the game from our customers. You heard about simplified payment certification. Payment certification could take 12 to 18 months for our customers. And there's a constant loop of payment certifications. This really helps them. over-the-air updates, not new to our mobile devices, but new to this industry. Enhanced consumer engagement. You heard Elaine talk about Shell and the loyalty program. It's about loyalty. It's about ordering at the pump. It's about revenue steering. The chart depicts two of our parts of our Invenco business that are around payments and consumer engagement, and they're poised for mid-single-digit growth to high single-digit growth over the next three years. There's also significant margin expansion opportunity here as we gain traction around our productivity initiatives and increase our mix of recurring revenue. As you heard from our teams today, an important offshoot of integrated connected solutions is higher recurring revenue. Currently, about 31% of our revenue is recurring in nature. We're seeing good growth in our SaaS, Software-as-a-Service, software maintenance upgrades revenue along with aftermarket parts and service. This is the result of our focus on new product development and furthering the adoption of integrated solutions for our customers. We're still targeting about 40% revenue from recurring sources by 2028. The driver of our performance culture is the Vontier Business System and our focus on continuous improvement. As we discussed at our previous Investor Day, we introduced 80/20 to our VBS toolkit. Internally, we call it the focus and prioritization process or FPP. Over the last three years, we made significant runway with our 80/20 program and VBS and expanded margins despite the roll-off of EMV and the normalization of margins after the COVID or the post-pandemic boom at Repair Solutions. More importantly, we have a significant runway of opportunity in front of us to clearly expand margins over the next years. Looking at a couple of examples. We've set up and streamlined global engineering centers. This has allowed us and enabled us to rapidly expand our software capabilities, including the use of AI. We've increased the velocity of R&D. The number of new product launches has increased tenfold since spin. And we've done this while lowering the average cost of engineering by 20% to 25%. Simplification is another core component of our 80/20 process, and we made significant progress on that. Our global dispenser platforms have gone down from 32% to 14%. We've standardized components, both on the electronics and on the mechanical side and have gone from 1% to 30%. Our number of software platforms is down from 30% to 20%. The even better news is we have significant opportunity to drive this further. We can drive the hardware dispenser platforms down to 8%, the software platforms down to 6%. The standardization should be around 50%. This leads to significant benefits from a manufacturing footprint perspective, significant benefits around procurement, around sustaining cost, around manufacturing cost, and it all creates capacity for profitable growth for us. Since spin, we've generated roughly $2.1 billion, $2.2 billion of cash, and we've deployed approximately 100% of that. We've done that in a balanced way using our disciplined capital allocation policy, which is dynamic in nature. We will always go to the highest return option. Of the $2.1 billion that we've reinvested, we've delivered a 12% ROIC on that investment already. Our capital allocation priorities remain unchanged. We will always go to the highest return option. evaluating buybacks, which remain extremely attractive at our current valuation, along with bolt-on acquisitions. We're focused on building a portfolio that's aligned with our strategy, our core competencies. It's accretive to our financials and positions us to win. Our M&A criteria hasn't changed. We look for markets where we have the right to win, where there are barriers to entry, where we can build a leading market position with sustainable competitive advantage. We're very disciplined around the financial hurdles. We look for double-digit ROIC within three to five years of the acquisition, and we look for the deals to be accretive to our EPS. A great example of this is Sgt. Sudz. It's a leading provider of smart motor controllers. And as Devon talked about, it completes the digital brain of the car wash. It's been five months. The integration is going well. And I'm happy to say after five months, it's actually running ahead of our acquisition case, something you also saw with the Invenco business. Also part of our portfolio optimization is we've divested some noncore assets. The latest one at the end of Q3 was a European service business. This was a highly competitive, fragmented business, low growth, about $60 million of annual revenue that we have divested. Portfolio management is driven with purpose. We're building a business that's focused, scalable and positioned to lead. We remain committed to our investment-grade balance sheet. We've, over the last three years, reduced leverage from 3.3x to under 2.5x. We've built a balance sheet that gives us optionality, optionality to invest, optionality to return capital and to navigate this dynamic world that we live in. Our free cash flow conversion is a real differentiator. We'll generate roughly $450 million of free cash flow this year. And over the next three years after that, we'll generate roughly $1.5 billion of cash with over a 90% free cash flow conversion rate. Our largest market that we talked about today, convenience retail is a relatively niche market which characteristics might not be fully appreciated. But hopefully, for at least the people here, you'll get a better appreciation of the market and how it's a core part of the U.S. and global consumer fabric. We believe our performance compares relatively well to our industrial peers. We've been outgrowing on -- from a growth perspective. Our margins are attractive, but more importantly, there's room for further expansions of margins, and I'm pretty confident over the next years, we'll close the gap. Our free cash flow profile is very attractive. When we look at our free cash flow as a percentage of sales, 12% to 13%. When you look at our free cash flow yield at extremely attractive 7.5%. But we're trailing our peers from a valuation perspective. In short, Vontier is a differentiated industrial company. We're delivering above-market growth, set to expand margins, generating strong free cash flow, and we're doing this at a valuation that offers significant real upside. What you've heard today is a story of transformation of execution and opportunity, both for the broader convenience retail end markets, but for Vontier. We're focused. We have leading market positions. We're accelerating growth, and we're disciplined around execution and capital deployment. We're doing it with a team, a global team that is phenomenal, and I'm really proud to be a part of. That's what excites me every day when I come into work and gives me the optimism about our future. With that, I'll open it up to questions and answers and invite Mark and Ryan back on stage. Thank you.

All right. We're also going to bring Andy Bennett back up. He couldn't get enough the first time. So just in case you wanted to ask him some more questions. And we left off with Nigel last time. So please go ahead.

I've holding this for an hour or so. It's actually a different question. Maybe just on the margin point. You mentioned 35% sustainable margins with upside from simplification. Everything you laid out there suggests that simplification could be significant. So I'm just wondering how do we think about that? How do we quantify the simplification payback potential? And then just on top of that, I know there's been significant investments in Invenco, Driivz. How does that investment spending kind of look over the next few years.

Yes. I'll start off with the second part of your question first. It's a little bit easier. So we've stabilized our R&D percentage of sales. And actually, it could be a little bit of a tailwind going forward. So the investment isn't going to step up anymore. If anything, we'll start seeing some scale benefit as these businesses continue to grow. Yes, you're right. There's significant margin expansion opportunity or opportunity driven from our simplification. We're third innings, fourth innings in our simplification journey, and we're going to continue to drive it. There's obviously the element that part of it will be returned in our results to shareholders. Everyone sitting up here is a shareholder. And then part of it is continued reinvestment in the business. While we aren't updating our longer-term guidance, I think the 30% to 35% incrementals are a little on the conservative side. And I think over the next years, we have opportunities to outdeliver that.

Can I get one more question.

Sure.

So, on the regulatory side, you called out regulation as one of the four big drivers of the business effectively. Can you just maybe highlight maybe top three regulatory drivers over the next few years?

Yes. So one of them is called payment card industry, which is an industry setting body that really regulates North American security of payment, and they're sunsetting version 2. They're currently on version 6, and that will sunset here in the next year plus, which means that, that technology out there will be obsolete. The second one is the underground tank cycle. You may remember us talking that the underground tanks about 30 years ago were replaced lock stock and barrel is a pretty incredible story of the industry really. These were steel-based tanks that were rusting and leaching fuel into groundwater and neighborhoods. I mean, how horrific could that be? And they -- 30 years ago, about they replaced these with resin-based double-walled tanks. The problem now is they're 30 years old and folks are -- have a hard time getting them insured. The infrastructure is currently aging underground. And the good news is that neither of those two regulatory drivers are relevant from a huge upswell in volume. I think it's going to be a constant sort of steady drip of volume that's going to come in, which is exactly the kind of regulatory drivers we like. And then the third one is just the security of payment sort of internationally. I mean we can't get out of a conversation with customers about how do you secure their network, how do you secure their payment. There is constant regulation that is advancing that technology. And you see lots of regulatory drivers from governments being involved in securing that payment. And we talked about it in the fleets example. We're talking about it in our recent offerings in India. I mean it's just pervasive around the world in terms of what we're going after. And that means that folks that are trying to break into networks are constantly at work, and we're constantly trying to keep them out.

Rob's hand right down here.

Yes. Of course, we've heard a lot about the integrated platform strategy articulated today. I guess, Mark, as you think about -- and it makes a lot of strategic sense for sure. As you think about some of just the tactical challenges of your customers to adopt that or adopt it more quickly, what are the top two or three areas that you're trying to fight against from a more of a tactical standpoint?

So there's a couple of areas that customers have to get through, one of which is they want to see somebody else doing it and whether it works. Nobody wants to be the first to adopt new technology and be the guinea pig there. But look, we have some great examples. You've seen customers step forward, roll out some of these technologies at scale. And they're through the hard phase of the growing pains of adopting those new technology, which are normal in any technology. So I think one is that we are now establishing real-world proof points at scale in the industry with adoption of some of this capability. And you hear quite unscripted or on rehearse, they're interested in extending this to beyond what they've currently bought it for into sort of the Phase 2, which is a great sign that we've digested some of those key learnings. The other issue is that folks also not only want to see it out there, they also want to pilot it. And so we have a number of real pedigreed customers out there that are adopting and piloting some of these technologies. And they -- these are not short-cycle sale opportunities. It's much easier for us to sell dispensers, quite honestly, and turn them more quickly. Some of these sales are longer cycle sales. And so folks want to be able to pilot it. And it's kind of like rolling out an ERP system, if you will, for some folks. It's a pretty big investment and needs to be planned for. So these kind of things can make our profile, particularly in early innings, a little bit lumpy, but we're working to even that out as we try to accelerate adoption of some of these technologies. But overall, I think it's pretty clear that these are the kind of things the industry needs. And it really opens our land and expand opportunities of already a deeply embedded set of technologies and capabilities and enhances our portfolio.

All right. Just a reminder as we're getting the next question to the folks on the webcast, feel free to submit any questions on the portal there. I do have my laptop or my iPad, so I'll take those when we can. Katie, I think you were next.

So we talked a little bit about M&A, but I'm curious how you think about the mix of the portfolio evolving over time and where you see the greatest opportunities to allocate capital in terms of those different segments?

Yes. So most of the acquisitions, as you would expect, would be in our mobility technology part of our business. It's really when you start thinking about Connect managed scale, having connected hardware plus software around that space. From an end market perspective, convenience retail is an attractive end market, but so is fleet. As Mark had a slide up and briefly touched on it, that's a high-growth market also. So you could really expect acquisitions in those areas. Again, we are cultivating our pipeline, the markets we like, but we also will remain very diligent in terms of what we pay for these assets. We need to not only have a good strategic fit, we also need to have a good financial return. And with our current stock price, buybacks offer a really good return. So you are always competing on those. Now it doesn't mean we don't do M&A. We just did the Sgt. Sudz. When we're doing Invenco. When we were doing buybacks, we did the Invenco acquisition also. So for the right asset at the right price where it makes both strategic and financial sense, we'll definitely pull the trigger and do M&A.

Andy, down front.

So you guys know Invenco at times has had some chunky wins. So like as you look forward, do you see sort of more of a broadening in terms of like as you're talking about delivering a full solution, obviously, you're comping against strong growth over the last year or so. So how do you get to sort of that more consistent, let's say, mid- to single-digit growth moving forward?

Yes. So we talk a lot in the management team about that to try to line up some of these orders so that we don't have a period where we would lapse into sort of retrenchment. We've had four quarters of 20% growth at a scale business, not the -- we rebranded the Invenco brand into our -- a lot of our retail solutions use that brand. So it's a business, $0.5 billion growing at that rate, which is good. But we don't want to see a quarter where it goes back minus 20%. So there's a lot of conversations with lining up some of these orders where we're going to see more steady growth. So we spend a lot of effort to try to make sure that we try to create that glide. The great news is we've got lots of opportunities in the pipeline. The thing that's a little bit tricky is some of these are longer cycle sales that we spoke about with Rob's question. And so sort of getting the pilots in there, convincing customers that this is a risk we're taking where the returns are absolutely there and very real for them to move forward with their infrastructure is just something that we're getting better at, and that's just something we have to prove out.

I'll add that I think the better way to look at Invenco is going to be on an annual basis. I think on an annual basis, the business can sustainably deliver mid- to high single-digit growth going forward, even coming off the strong comps of this year. Now quarter-to-quarter, half 1 will be probably a little more challenging because of this really strong growth in half 1 this year. Half 2 will be easier comps. And overall, the growth will be mid- to high single digits. But quarter-to-quarter, you can have a little bit of movement here and there. But the businesses, as Mark said, got a lot of strong opportunities, pipeline with pilots going on.

Maybe just one quick one on the near term. Like it seems like you're positively surprised on DRB, at least a little, right? And so DRB and Matco, as you know, more of the interest-sensitive names as you talked about, interest rates are come down. Is it really only self-help for DRB? Or did you see like a little bit of market improvement? And I guess we were kind of worried that macro is going to be worse for longer, but it seems like it's okay. So maybe some comments there.

Well, let me answer that and I'll let Anshooman jump in, too. Look, the DRB story for us, certainly, markets are not catering, excuse me. And that's helpful. And I think what's happened in the industry is that some of the maybe more marginal players that kind of moved in with a bit of a view that car wash is like passive income, like you grab a street corner, put something down, you're going to like print money. I'm being a little bit facetious with that comment, but not too far off base. But the real serious operators are the ones that say, hey, look, we know that it's about running a good car wash. -- and you're going to get much better returns on that street corner and for your whole network of operations if you do that. And those are the people that are really partnering with us, and they've not been superly thrown off by the trend that occurred there. So you've seen the marginal players get out, which is healthy for the industry. And you see the real serious players continue to move forward and consolidate. And these are the folks that need the tools that we have, which are self-help, our innovation that is provided. So it's a little bit of equal footing, I would say. But if we didn't have these new offerings, they wouldn't be buying something to make their businesses better. And so I think it's a really a combination of both. And we still have the tailwind to come of improving interest rates, which could further buoy that market with more tunnel builds, more site builds as construction might come back more into the space, but that's not really what's driving it.

Yes. I'd agree. Our pipeline around Patheon and really the solutions out there is getting larger, and that's where we saw some of the wins. Now on Matco, their results were in line with expectation, but it's still a little early to call any inflection out there. Let's see how the market develops. Obviously, interest rates coming down would help. If inflation stays under control, that would help, but it's a little early to call that inflection.

I do have one from the webcast as we're slowing down here in the room. Looking at the margin opportunity going forward, can you give some sense of contribution from things like simplification versus increasing mix of recurring revenue?

Yes. Simplification is a multimillion dollar opportunity ahead of us that we're going to continue to drive. The other tailwind, obviously, we'll have is as our SaaS businesses scale more, think of Driivz, think of iNFX and others. Those have software-like margins, which also provides a tailwind. Now some of these businesses are relatively small to the overall Vontier revenue, so they don't move the needle that much from an operating profit margin near term. But when you start looking longer term, and I've made this statement before, and I'll repeat it. Longer term, I have conviction that our mobility technology business longer term has the same margin potential as a very strong, very attractive EFS business. There is no reason structurally market portfolio-wise it's why the margin profile should be any different.

All right. Now we're running close to time here. So I think I will turn it back over to Mark for some quick closing remarks. And then as soon as he's done, we are going to lose the folks on the webcast, and I'll come back on and give some logistical information for our booth tour. So, Mark?

Well, folks, thank you for being here. I'm so excited to see you all here. And hopefully, it's been a good learning experience for you with not only how the Vontier portfolio has changed since spin, how it's better positioned, more focused, more resilient with a strong management team and very importantly, a deep rich heritage in the business system. Our Vontier Business System is alive and at work and drives tremendous value. So, for the folks that are going to be with us this afternoon, thank you also for your time and effort. I hope that this is illuminating for you. It's exciting for us to have you, and thank you very much for being here. Have a great day.