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My name is Travis, and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Vontier Corporation's First Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Ryan Edelman, Vice President of Investor Relations. Mr. Edelman, you may begin your conference.

Thank you. Good morning, everyone, and thank you for joining us on the call this morning to discuss our first quarter results. With me today are Mark Morelli, our President and Chief Executive Officer; and Anshooman Aga, our Senior Vice President and Chief Financial Officer. You'll find both our press release as well as our slide presentation that we will refer to during today's call on the Investor Relations section of our website at vontier.com. Please note that during today's call, we will present certain non-GAAP financial measures. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to risks and uncertainties. Actual results might differ materially from any forward-looking statements that we make today, and we do not assume any obligation to update them. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available on our website and in our SEC filings. Before I turn the call over to Mark, I want to take a moment to remind everyone that starting this quarter, we are reporting and discussing our results in line with our updated segmentation. Additional information regarding our segmentation is included in the appendix of today's presentation. With that, I'd like to turn the call over to Mark.

Thanks, Ryan. Good morning, everyone, and thanks for joining us on today's call. Let me kick things off with some high-level commentary beginning on Slide 5. We're off to a strong start in 2023, having delivered Q1 results that are above the guidance we provided and raising our outlook for the full year. We delivered another quarter of strong top line performance in Q1 with all 3 segments exceeding expectations. Core revenue grew 4%. Baseline core revenue, which excludes the year-over-year impact from the EMV sunset grew 11%. Both of these were above the guidance we provided. Anshooman will provide more details later in the call, but at a high level, upside was driven by better-than-expected demand in our U.S. Dispenser business as well as continued strength in our Environmental and aftermarket and our Fueling segment. In Mobility Technologies, DRB continues to outperform along with another solid quarter at RNG or CNG and hydrogen business. And we're seeing nice growth at Matco both on same-store sales as well as net franchisee adds. This strong performance reflects the execution of our connected mobility strategy, which incorporates our ongoing growth initiatives as well as incremental improvements in supply chain conditions, which allowed us to convert higher levels of backlog. Our end markets remain constructive, supported by strong secular drivers, demonstrating the resiliency of our portfolio. Our book-to-bill ended the quarter at 1 despite strong sales growth this quarter. This included nearly $20 million in incremental sales from higher backlog conversion. Our reported operating profit declined versus prior year as expected due to the sunset of EMV, and I'm encouraged by the underlying performance of our businesses. Baseline operating margin expansion of 80 basis points demonstrates solid execution, the benefits of our strategic initiatives and the power of BS to deliver operational excellence. We're in the early innings of a longer-term opportunity to optimize our cost structure, which gives us confidence in the ability to achieve our multiyear margin expansion opportunity. The cost actions we began implementing last quarter continued to gain traction in Q1 and will continue to ramp through the remainder of the year. We continue to make progress on our multiyear portfolio transformation as well. In mid-April, we announced the sale of GTT for $107 million or about 10x 2022 EBITDA. We will redeploy these proceeds to further strengthen our balance sheet and return capital to shareholders through additional share buybacks. These actions are already underway as Anshooman will highlight in a moment. Turning to our outlook for the remainder of the year, strong first quarter results, solid end market demand and conviction in our strategic initiatives provide increased confidence in our outlook and we are raising our adjusted EPS guidance for the full year. While we remain vigilant in the current macro environment, demand across our end markets is supported by the secular drivers we highlighted during our recent Investor Day. This is reinforced by our recent channel checks and customer conversations. We remain optimistic given our strong fundamentals, the momentum with our strategy and our resiliency in our portfolio. We continue to make great progress on our connected mobility strategy, as we shared with you at our recent Investor Day. Our strategy is centered around driving operational excellence, accelerating core growth and transforming our portfolio through greater leverage in adjacent markets. We refer to these as our 3 pillars: optimizing the core, expand core and adjacent markets. In addition to delivering annual margin improvement, Pillar 1, optimize the core, increases our focus on simplifying our business and expand margins. In Pillar 2, expand the core, accelerates profitable growth by focusing on select opportunities, which we've referred to in the past as our profitable growth initiatives. We're also redeploying investments in new product development and sales capabilities in support of expanding organic top line growth. Longer term, these two strategic pillars enhance our ability to leverage adjacent markets, Pillar 3 through both organic and inorganic means to further accelerate growth and transformation. Let's turn to Slide 6 for a quick look at a few strategic developments in the quarter. Two weeks ago, we held our Annual CEO Kaizen event, building 8 teams with the intent of accelerating our connected mobility strategy. These events are a critical part of the VBS culture and bring together dozens of cross-functional and business leaders to collaborate on the company's actionable opportunities. Just as an example of some of the actions we focus on this year, permeant to the optimize the core pillar, we accelerated our product line simplification and SKU rationalization program. We are reducing our number of dispenser platforms from 20 to 15 this year, having already come down from 32. We're also implementing dynamic compound across the Vontier Group factories identifying a path to reduce several million dollars' worth of inventory over the remainder of the year. Under expand the core, the Matco team worked through accelerating initiatives to drive higher franchisee adds by materially improving the conversion rate and reducing time to conversion. The Retail Solutions team implemented process improvements to streamline the setup time for the iNFX software platform by 75% per site. This frees up more capacity internally to scale more effectively to meet our large and growing backlog. As many of you will remember, we acquired Invenco last September to augment our payment solution through both vertical integration and building a stronger offering in microservices. Importantly, we formally launched the iNFX microservices software platform late last year. iNFX is revolutionizing the way our convenience retail customers operate, enabling them to consolidate major forecourt systems into a set of lightweight microservices. It also provides customers with an easily configurable cloud-based solution with standard-based APIs that enable faster deployment on site, significantly improved transaction speeds and differentiated customer offerings address a key secular trend within convenience stores, the need for enhanced end user experiences to drive engagement, traffic and loyalty. Convenience retail is an attractive growth vertical for us, and we have leading positions. Nonfuel retail sales have grown at a 5% CAGR over nearly 20 years and retailers have seen a 20%-plus increase in foot traffic with investments in newer, larger formats, enhanced amenities, expanded offerings in food service and frictionless experiences. All of this is enabled by automation and digitalization, which are our 2 core competencies, and these trends are sustainable even through the energy transition. Industry data shows that c-store retailers with an on-site EV charging capability are seeing a 50% increase in foot traffic into the store to make a purchase. There is real value to be generated for the convenience retailer, and we are competitively advantaged to solve their high-value problems. As an example, we are excited to announce a substantial win for the iNFX software platform, where we are deploying the platform across all of the U.S. sites for a major c-store operator. We also have an attractive pipeline of opportunities going forward to continue rolling out iNFX. At Teletrac Navman, we've launched 9 new feature sets or programs in the first quarter across multiple industries and geographies. This includes Canadian ELD solutions for the transportation industry, asset tracking and management tools for the construction industry and an expanded EV vehicle library across all industries. We have notable momentum around Teletrac's new electric vehicle readiness tool that integrates seamlessly with the TN360 platform. The AI power tools shows fleet operators the feasibility of switching to EVs, calculates the total cost of ownership, calculates the total CO2 and fuel savings and facilitate easy carbon reporting. The tool also recommends the ideal electric vehicles to switch to and advises on the number, type and ideal location for chargers. In sum, we have solved one of our fleet customers' biggest pain points by significantly reducing the complexity in the energy transition planning process. And we now have a comprehensive end-to-end solution for managing sustainable fleets. Lastly, while not listed on this page, we are equally excited to have received SBTi validation of our near-term greenhouse gas emission targets. We are targeting a reduction in absolute Scope 1 and Scope 2 emissions by 45% and a reduction of absolute Scope 3 emissions by 25%, both by 2030. As our Chief Legal and Sustainability Officer, Kay Rowen shared with you at our Investor Day, our strategy is inextricably bound through sustainability. It's about providing smarter, more sustainable solutions to our mobility ecosystem customers, helping them achieve their own sustainability goals and doing our part to ensure a healthy planet. Now I'd like to turn the call over to Anshooman to provide the financial results.

Thanks, Mark, and good morning, everyone. As Ryan mentioned at the start, beginning this quarter, we are reporting results for our 3 operating segments, mobility technologies, Repair Solutions and environmental &fueling solutions. Please turn to Slide 7. Reported revenue of $776 million increased 4% on a core basis or an 11% baseline increase, excluding the impact of the EMV sunset. All of our operating segments saw the benefits of healthy end market demand and improving supply chain conditions, driving the solid year-over-year performance. Adjusted operating profit of $161 million declined slightly versus the prior year and adjusted operating profit margin of 20.8% declined approximately 100 basis points at the better end of our previous guidance range. Baseline margin improved 80 basis points, led by our productivity initiatives and continued cost price performance. Adjusted earnings per share of $0.68 was above our guidance range and relatively flat with the prior year despite an $0.11 headwind from EMV. A year-over-year benefit from share repurchase was offset by higher interest and FX. Adjusted free cash flow in the quarter was $78 million, representing 73% conversion ahead of a normal seasonality and well above prior year levels, resulting from solid working capital management. Turning to the segment performance, starting with Mobility Technologies on Slide 8. Sales increased over 18%, including a full quarter contribution from the Invenco acquisition. Core growth of 12% was broad-based. Demand for our market-leading car wash technologies remains robust, with DRB growing over 20% as we continue to expand share in an attractive market for tunnel car wash. Sales at ANGI, our alternative energy solutions business were up over 30%. ANGI continues to benefit from the increased adoption of lower emission alternative fueling solutions like compressed and renewable natural gas as well as hydrogen systems for large and medium duty commercial vehicles. The turnaround of Teletrac Navman continues to gain speed with annual recurring revenue up high single digits and core sales up low single digits in the quarter. Segment operating profit of $48 million increased 17% versus the prior year, translating to an operating margin of 19.5%, which is down 30 basis points versus the prior year. Invenco profitability is still in the early stages of scaling up, creating a year-over-year mix headwind for us in the first half. Additionally, we continue to invest for growth within this segment, including a full first quarter of Driivz in our results. Excluding the impacts from the Invenco acquisition and a full quarter of Driivz investments, our margin percentage would have increased year-over-year. Turning to Repair Solutions on Slide 9. Revenue increased over 10% to $181 million in Q1. During the quarter, Matco hosted its annual Expo event, which is traditionally the most significant stocking event of the year for our franchisees. Record sales of this event, coupled with easing supply chain conditions allowed our teams to convert backlogs at a faster rate. An increase in net franchisee adds in the quarter further supported our top line growth. Operating profit of $47 million is in line with the prior year results and operating profit margin declined 250 basis points due to timing of year-over-year reserve adjustments related to the finance portfolio. And finally, Environmental &Fueling Solutions on Slide 10. Reported revenues declined approximately 4% to $314 million. Baseline core revenues increased 10%, excluding the year-over-year impact from the sunset of EMV. As noted, U.S. dispenser demand is tracking ahead of our initial expectations, primarily the result of robust new site built and site refresh activity. Sales in both our Environmental Solutions and aftermarket parts businesses increased low double digits in the quarter. Demand for Environmental Solutions continues to benefit from regulations across multiple regions as well as our industry-leading product offerings. And in Aftermarket parts, we continue to leverage our large installed base to drive growth. Additionally, improved supply chain conditions enable GVR to continue converting backlog at higher levels supporting sales outperformance in the quarter. Segment operating profit of $81 million is in line with the prior year results, while operating profit margin expanded 70 basis points to 25.7%. Execution on our previously announced restructuring actions, price cost discipline and proactive supply chain management drove margin expansion. Just a quick note, as you may recall, one of the key initiatives from last year's CEO Kaizen event included focusing our engineering resources to expedite board redesigns ahead of component obsolescence, putting us on a much stronger footing as the broader supply chain conditions continue to recover. I'll now pivot to the balance sheet and free cash flow detail on Slide 11. During the quarter, we repaid $65 million in debt, reducing our 2024 maturity, as you can see at the bottom right-hand side of the slide. Our net leverage ratio continues to decline sequentially, ending Q1 at 3.1x. We maintained our commitment to an investment-grade credit rating and still expect that a leverage will end the year within our targeted range of 2.5 to 3x on a net basis. With over $100 million in proceeds from the divestiture of GTT in April, we now anticipate paying down $200 million to $250 million in debt for the full year, an increase of $50 million compared to our prior assumption announced last quarter. We have already redeployed $50 million of those proceeds to incremental debt paydown over the last 2 weeks. Additionally, we also completed approximately $18 million in share repurchases in Q1, which we mentioned on the fourth quarter call. We have outlined our modeling assumptions for GTT on Slide 12, which includes an approximately $35 million impact to revenue, $10 million of adjusted operating profit or $0.05 of adjusted diluted EPS. Through return-driven redeployment of proceeds for debt and share repurchases, we anticipate mitigating at least $0.03 of this impact by year-end. Over a 12-month period, we expect to fully offset EPS dilution related to this transaction. Turning to our outlook assumptions on Slide 13. We are initiating Q2 guidance for adjusted EPS of $0.61 to $0.66, which assumes a low to mid-single-digit decline in core sales and baseline core growth of mid-single digits. We expect adjusted operating margins to decline between 65 and 105 basis points with baseline operating margin expansion of 170 to 220 basis points. I would also remind everyone that Q2 is typically our seasonally low quarter for free cash flow due to the timing of cash tax and interest payments. Therefore, we expect conversion to be less than 50% in the quarter. For the full year, as Mark mentioned, while we remain vigilant, our end markets remain constructive. Leading indicators like fuel margins, technician health, return on investment on car wash projects remain positive, and the view is supported by our customer conversations. Based on this and our strong first quarter performance, we are increasing our adjusted EPS guidance range to $2.77 to $2.87. Adjusting our prior guide for the $0.05 contribution of GTT, our new guidance increases by $0.09 at the midpoint, which flows through the upside in Q1 and incorporates the benefit from lower interest expense from our debt repayment. We are now assuming a core sales decline of low to mid-single digits, slightly ahead of our original guidance for a mid-single-digit decline, and baseline sales growth of mid-single digits plus. No change to our margin assumptions. Also, I would note that our guidance is based on a share count of approximately 155 million shares and does not include the benefit from additional share repurchases including the $50 million redeployment of GTT proceeds. With that, I will turn the call back over to Mark.

Thanks, Anshooman. I couldn't be more pleased with the progress we continue to make day in and day out further establishing Vontier as a premier industrial technology company. As we shared with you at our Investor Day a little more than a month ago, our unparalleled portfolio breadth uniquely positions Vontier to lead the evolution of the mobility ecosystem. We believe we are the only company capable of providing a full suite of connected hardware and software solutions to connect, manage and scale assets across this $30 billion addressable market. We have a diverse and growing set of customers across the car wash, multi-energy fueling, convenience retail, auto repair, fleet operators and EV charging verticals. These customers are facing common secular trends and common challenges that they trust us to solve. Labor and skill shortages, increasing car part complexity, increasing regulation, increasing focus on decarbonization and sustainability and consumer demands for more personal frictionless experiences are all forcing an evolution of the mobility ecosystem. It's an ecosystem experiencing massive investment tailwinds, and we're right at the center of it. Vontier is a company in motion, transforming and align our portfolio to deliver attractive growth, industry-leading profitability and significant free cash flow. Propelled by market-leading positions in connected automation and multi-energy fueling and robust secular tailwinds sweeping the mobility ecosystem, we are well positioned to strategically invest in our company, execute on our connected mobility strategy and deliver outstanding shareholder returns. Our entire team is energized by our performance, our recent wins and our strategic vision. Our culture of operational excellence and innovation powered by VBS is stronger than ever. Our businesses continue to collaborate and innovate to enable the way the world moves, driving smart, sustainable solutions for our customers, investors and the planet, and we're just getting started. With that, operator, we're ready to open the line for questions.

[Operator Instructions] Our first question comes from Julian Mitchell, Barclays.

Maybe I just wanted to start off with the core sales outlook. So the first quarter, you had double-digit growth in Repair and Mobility, that single digit decline in EFS. Just maybe help us understand what across those 3 is baked into that second quarter sales guide where you've got the sales overall flipping negative year-on-year. And what were the businesses that drove the slightly better core growth outlook for the full year?

Yes. Let me start off, and then I'll turn it over to Anshooman on that one. So first of all, I think to get to the second part of that, we're pretty confident in the outlook that we have because the markets really are healthy. We've got some strong secular tailwinds that are in there. And I think it's broad-based across each of the segments. I think as you heard too on the prepared remarks that we think that DRB and ANG with greater than 20% sales in Mobility Technologies and then the strong Matco Expo with some really record sales as well as excellent bookings there, give us some legs certainly into the rest of the year. And then I'm particularly encouraged, too, by the Environmental &Fueling, which was pretty broad-based, Environmental, aftermarket parts low double digit. But also, too, we're doing better on the U.S. dispenser business. And we think there's upside to that $250 million in full year. And so I think I'll turn it over to Anshooman to give you more color on the beginning part of your question there.

Yes. Thanks, Julian. Just as Mark mentioned, our end markets remain healthy and there's a lot of the leading indicators remain positive. So really, when we think across Q1 broad-based growth across all 3 segments, and we expect that the baseline growths to continue to be broad-based across all 3 segments even going into Q2. Now Q1 on Repair and Technologies, we have our annual Expo event, which is the largest restocking event. So that and the easing supply chain conditions helped and the easing supply chain conditions also helped on the Environmental &Fueling side. But again, we expect good growth in all 3 segments for next quarter.

That's helpful. And then just maybe my second question around the phasing of that $300 million of EV sales headwinds through the year. Now we're 1/3 of the way through the year, you've probably got a pretty good view of how that 300 sort of parses out. Any details you could give on how do we see that through the year, that headwind?

Yes, Julian. So the EMV headwind is more back end -- second half weighted, as I mentioned in the last quarter call. So really, if you think about the second half, about 60% to 65% of the EMV headwinds in the second half; Q3, $85 million to $90 million; Q4, a little above $90 million; Q2 -- I think of about $70 million to $75 million of headwind in Q2.

Our next question comes from Steve Tusa, JPMorgan.

This is [indiscernible] on for Steve Tusa. Could you give us a bit more color on how orders were tracking versus Q4? Any areas that were particularly strong?

Yes. So as we mentioned, our end markets and the leading indicators are all positive, and we had a book-to-bill of 1 in the quarter, and that's despite the fact that we were able to accelerate our backlog deliveries due to easing supply chain conditions. The easing of the backlog -- supply chain conditions helped generate about $20 million of incremental revenue. And despite that, our backlog -- book-to-bill was 1. Also, our backlog remains at elevated levels compared to the pre-pandemic level when you think back to Q1 of 2019, our absolute backlog amount is about 50% higher than it was in Q1 of 2019. So overall, the market conditions remain healthy. When you start thinking of the book-to-bill bookings by segment, Mobility Technologies and Repair Solutions brought to have strong bookings and both showed good growth. Fueling Solutions also when you start thinking of the baseline bookings, excluding the impact of the sunset of EMV, they had a good performance out there. So broad-based strength across all 3 businesses from an end market perspective.

Great. And then organic growth was pretty strong this quarter. How should we think about the breakdown of price versus volume? And do you have any additional price increases planned this year?

Yes. So if you look at our baseline growth, which factors in the sunset of EMV, that was just under 11%, roughly 4%, 4.5% of that gain from price. So about 40% of our growth for the quarter came from price and the 60% of our growth came from actual volume growth. In terms of price, I mentioned we are cost price positive and we're dynamic and look at that every month. So if there is incremental inflations, there will be incremental pricing. We are very dynamic from a cost price perspective and we're very proud of the fact that we have been cost price positive every quarter since we became public.

Our next question comes from Nigel Coe, Wolfe Research.

It's great to see some segments here. So it's definitely helpful. So thanks for that. Yes. So Repair growth of 10% was obviously a big change versus second half of last year, you had some sort of franchisee churn, I think, in the second half of the year. So just wondering what you're seeing in terms of the franchisee momentum. And maybe talk about the impact of bringing in Milwaukee into the offering and whether that's contributing to maybe better growth than perhaps a margin dilution.

Yes, absolutely. Happy to take that one. Look, I think the Matco business is a great business. I think last year, we suffered a little bit from the supply chain issues. I think we've worked through that admirably well. We have a great lineup with Milwaukee as part of our power tools offering, and we're getting really good traction with the offering we have coming out of the Expo. I might also add that our toolbox availability in factories on demand, which is great. We're seeing great demand there. The service technicians out there are at very good wages at full employment. It's a very healthy market for them. And certainly, we're stepping in to capitalize on that. I think one of the things you also brought up with our net franchisees. I think they were down last year. We had a great 2021. 2022 was not so great. We did a little bit of retrenching on that. But I think what we're showing after the first Q1, we put a better focus on that, a lot of learnings and also with a great lineup, we're seeing 20 net adds in Q1 on franchisees, which is really strong. I think it -- so the indications that we see and combined with this net franchisee adds looks like a good year, certainly, and a very good outlook for our Matco business.

Okay. That's helpful. Then switching to what's the called Mobility, I am forgetting the name of Mobility Technologies. DRB 20% growth -- more than 20% growth this quarter, I think, 30% last quarter. I mean people clearly have a preference of clean cars, but maybe just talk about the sustainability of these kind of growth rates. I mean I'm sure we're running into tougher comps. What's the pipeline looking for car wash here? And maybe just talk about the down margins for Mobility this quarter. I thought DRB was a higher profit business. So just maybe talk about that as well.

Yes. So I'll take the outlook on the car wash segment. I'll turn over the margins to Anshooman. The -- this is a question that we've looked out a lot. Like where is the legs to this market for car wash. And we actually have a data analytic capability as well as we do a ton of channel checks here. And we believe that this market is very, very far from being fully penetrated. There's outstanding returns even with an increased interest rate environment. And so folks that are building out the car wash footprint still enjoy with increased interest rates, really strong returns there. And so I think, if anything, there's a fear of missing out. And so I think you're looking at easily at 10 years plus before we feel like the U.S. market is fully penetrated. And then we have international markets, too, that we can go after. So I think there is a long runway here. I think in our guide, we have anticipated some slow into the market because we have a tremendous share gain that's been ongoing here. And I think we're continuing to gain share next week. We're at an international car wash show in Las Vegas, and we also anticipate strong demand there. But I would say that the visibility that we have is certainly well into the back half of this year based on what we see folks doing and building out their footprints and the demand that we've got. So we couldn't be more happy with our business here and the visibility that we have in the outlook as well.

And taking the question on the margins, the margins were down 30 basis points in Mobility Technologies, but a large part of that decline was because of having Invenco in Q1 this year versus Invenco is about $17 million of revenue at no operating profit this year in our results. The Invenco profitability comes in, in the back half of the year as we gain synergies and some of the iNFX shipments start going out. Normalizing for just Invenco, our margins would have been 21%. And then also this quarter, we have Driivz into the full quarter, the partial quarter last year, so the Driivz investments also bring down margin. So just normalizing for those, we would have had strong growth in operating profit margin year-on-year in that segment.

[Operator Instructions] Our next question comes from Guy Hardwick, Credit Suisse.

Apologies if this question has already been answered, I joined the call late. Can you talk about our pricing across your businesses in Q1 and expectations for the full year and especially for Environmental &Fueling Solutions?

So pricing for Q1 was roughly -- 40% of our baseline growth came from price and 60% of our baseline growth of just under 11% came from volume translates to a little over 4% from price. From a full year perspective, the price increases 2% to 3% of our mid-single-digit plus growth from a baseline perspective. But I'd also made a comment earlier that pricing is dynamic. If we see continued inflation, we would look at continued price. We are very focused on price cost, and we've been price/cost positive every quarter since spin.

And is there any sort of mix benefits at all, which is either in Q1 or you expect for the rest of the year?

From a mix perspective, I'd just point out that we did have -- the EMV headwind is more back end loaded, so it was about 60% -- slightly over 60% is the second half the EMV headwind versus first half. Just, however, at the same time, as our portfolio continues to shape up some of the higher-margin elements like DRB, aftermarket parts continue to grow at above fleet average rates.

Yes. Let me jump in there, too, Guy, because I mean, the second question we've gotten sort of a little bit on the timing with the EMV. Look, I think what we're saying on today's call is good confidence in the top line. And I think on the bottom line, too, keep in mind, we've been doing a lot of cost out and restructuring as part of this Pillar 1, where we're doing operational excellence, and there's a lot of legs to that. So I think we're really confident, too, on delivering on the bottom line because there's a lot more to come based on the actions we've taken in the first half of the year. So -- and we feel very confident in our outlook.

Just sorry, since you bring up the cost savings, I think at the Investor Day, you kind of guided there will be another $10 million of [incremental] cost savings in 2024. Is that correct? I'm understanding that correctly?

That's correct. And we're fully on track to deliver our cost savings target. We feel very strongly that we're going to achieve those targets.

Our next question comes from Joseph Donahue, Baird.

Given the cash flow in the quarter, I wanted to dig into inventory, it looks like the growth has slowed down there. Should we expect this quarter, next quarter to be peak inventory and then for that to start getting worked down through the remainder of the year?

That's correct. As the supply chain conditions have normalized, we are managing inventory levels down. And one of the CEO Kaizen events actually this quarter was around a dynamic on one of our manufacturing locations, which will lead to a multimillion-dollar reduction in inventory over the rest of the year. The actual interesting phenomena was our supply chain conditions have eased a lot, we actually saw some early deliveries coming in where our suppliers were actually beating their expected lead times just as all of this has normalized to expect inventory levels to come down over the rest of the year.

Got it. Okay. And then just as a follow-up. You talked about the $20 million that you did in extra shipments. Was that concentrated in Fueling or any one segment?

It was more on the Fueling side but also on Matco and a little bit in Mobility Technologies that really the supply chain conditions, especially around electronics has eased across the board, and we saw a benefit of that mainly in fueling followed by Repair Solutions and then Mobility Technologies.

We have no further questions in the queue at this time. I would now like to turn the call back over to today's speakers.

Yes. Thank you, Travis. This is Mark. Look, before we close, I just want to take a quick second here to thank the teams across Vontier. Our performance and dedication really enabled us to deliver top-tier financial performance and create shareholders for value. So many thanks to the hard work the team is doing. We've got a lot of momentum with the business. And I'd like to thank you all for joining on today's call. We look forward to catching up with many of you soon. Have a good day. Bye now.