Page 4 - 2019 AMETEK Annual Report FINAL

2 Letter to Shareholders

Letter to Shareholders

O verview colleagues, customers and suppliers,

and the communities where we operate.
AMETEK performed
exceptionally well in 2019. Our
businesses delivered outstanding In this report, we highlight the key
elements of the AMETEK Growth
financial results for the year, Model, focusing on the flexibility it
resulting in record performance for affords us in successfully managing our
all key financial metrics including sales, businesses through changing economic
orders, operating income, operating environments. The report also provides
margin, diluted earnings per share, examples of how our businesses
EBITDA, operating cash flow and free are evolving through innovative new
cash flow. Additionally, we completed product development and strategic
the strategic acquisitions of Pacific acquisitions. Together, these elements
Design Technologies and Gatan, our are driving excellent performance
largest acquisition to date. and supporting AMETEK’s mission to
AMETEK’s sales were $5.2 billion, solve our customers’ most complex
up 6% over 2018. Operating income challenges with differentiated
was $1.2 billion, an increase of 9%, technology solutions.
and operating margins were 22.8%,
up 60 basis points year-over-year. Operational Excellence
Earnings per diluted share were $4.19, Operational Excellence is AMETEK’s
an increase of 14%. Earnings before cornerstone strategy. Our Operational
interest, taxes, depreciation and Excellence tools provide a competitive
amortization (EBITDA) was $1.4 billion, advantage as we continually deliver
an increase of 10% compared to improved efficiency and operating
the prior year. Both operating cash performance across our businesses.
flow and free cash flow increased
20% to $1.1 billion and $1.0 billion, Our Operational Excellence initiatives
respectively. We continue to utilize provide tremendous flexibility to react to
our tremendous cash generation to market conditions. Given our asset-light
support our acquisition strategy, with business model, we are agile and
nearly $1.1 billion deployed in 2019. proactive, adapting quickly to changing
environments and unlocking efficiency
These record results were driven by and productivity across the company.
the AMETEK Growth Model, which In 2019, we generated approximately
includes the four growth strategies $95 million in Operational Excellence
of Operational Excellence, New savings.
Product Development, Global and
Market Expansion, and Strategic Over the last two years, we managed
Acquisitions, with a disciplined the direct impacts of tariffs through
focus on cash generation and proactive actions including adjustments
capital deployment. to our global supply chain. Looking
ahead to 2020, while we recognize
These foundational elements the uncertainties of the global macro
— combined with a focus on economy, we remain confident in our
developing world-class talent — Operational Excellence initiatives and
provide long-term, sustainable ability to capture additional efficiency
growth for our shareholders, and productivity gains.