Page 7 - 2019 AMETEK Annual Report FINAL

Letter to Shareholders 5

Cash Flow and Capital Deployment Positioned for Long-Term Success

The combination of solid organic Like all companies, we are dealing
growth, outstanding operating acumen with the COVID-19 (coronavirus)
and an asset-light business model pandemic and are taking appropriate
yields tremendous cash flow generation steps to mitigate the impact of this
from our businesses. This cash gener- widespread and unprecedented event.
ation is key to supporting our growth First and foremost, we are implementing
strategies. 2019 was an outstanding precautionary measures to protect the
year on this front, with our businesses health, safety and well-being of our
generating record levels of operating employees. Additionally, we are utilizing
and free cash flow. our Operational Excellence tools to
proactively manage our businesses and
For the year, operating cash flow and support our customers.
free cash flow grew 20% to $1.1 billion
and $1.0 billion, respectively. This While these are extraordinary times, we
resulted in an excellent free cash remain highly confident in the strength
conversion ratio of 118% of net income. of the AMETEK Growth Model and the
financial strength of our company. Our
Given this level of cash generation businesses’ leading positions in niche
and the strength of our balance sheet, markets across the globe, coupled with
we are well-positioned to support our their innovative technology and ability
growth efforts going forward. Our to navigate through business cycles,
capital deployment strategy remains present a positive outlook for the future.
consistent, with our primary focus
being the acquisition of highly strategic Our management team is experienced,
businesses with market-leading, our culture is strong, and our workforce
differentiated technology. Secondarily, is driven by AMETEK’s core values
we look to return capital to our investors of ethics, integrity, respect for the
by opportunistically repurchasing individual, diversity, teamwork and
shares while paying a consistent social responsibility. We remain focused
dividend. This capital deployment on doing the right thing in all facets of
strategy has been proven over time our business, while delivering long-term
and will continue to drive long-term, value for all of AMETEK’s stakeholders.
sustainable value for our shareholders.
On behalf of the Board of Directors
and the Executive Office, I would like
A Sustainable Future to thank all of my AMETEK colleagues
In addition to delivering outstanding for their hard work and dedication to
financial results in the year, we also our mission. Together, we delivered
published our 2019 sustainability report outstanding performance in 2019
titled “Sustainability at AMETEK.” In and positioned the company for long-
this report, we outlined the essential term success.
elements of our organization that make
sustainability at AMETEK possible: Our We also thank our shareholders for their
Core, Our Strategy, Our People and support and confidence. We are proud
Our Solutions. to deliver these results and highlight the
strength of the AMETEK Growth Model.
Combined, these elements provide a
sustainable future for all of AMETEK’s
shareholders, colleagues, customers
and suppliers, and the communities
where we operate. For more information David A. Zapico
on sustainability at AMETEK, please Chairman of the Board and
visit ametek.com. Chief Executive Officer