Dover Corporation · NYSE:DOV

Dover — Q4 2020 Earnings Presentation

31 slides from Dover's earnings presentation, Jan 28, 2021

  1. Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2020

    Earnings Conference Call Fourth Quarter and Full Year 2020 January 28, 2021 – 9:00am CT Exhibit 99.1

  2. Slide 2: Forward-Looking Statements and Non-GAAP Measures

    2 Forward-Looking Statements and Non-GAAP Measures We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties and risks, including the impacts of the novel coronavirus (COVID-19) on the global economy and on our customers, supplie

  3. Slide 3: Q4 and 2020 Highlights

    3 FY Seg. EBIT Margin(3) up to 16.1% Q4 Revenue flat Y-o-Y at $1.8B FY Free Cash Flow(1) up 24% Y-o-Y FY 2021 Guidance 2020 Order Trends Q4 Bookings(2) up 5% Y-o-Y to $1.9B Organic bookings(2) growth of 2% Book-to-bill(2): 1.09 Organic revenue(1) decline of 2% FY Adj. Segment EBIT Margin(1) up 10 bp

  4. Slide 4: Summary Corporate Q4 and Full Year Results

    4 Summary Corporate Q4 and Full Year Results Q4 2020 FY 2020 Highlights and Comments Revenue change (Y-o-Y) All-in Organic(1) 0% -2% -6% -7%  Q4 Y-o-Y organic growth in DPPS, DRFE  Q4 FX impact: +2%; acquisitions (net of divestitures) +1% Bookings change (Y-o-Y) All-in(2) Organic(2) +5% +2% -4% -5

  5. Slide 5: Segment Revenue and Adjusted EBIT Q4 performance commentary

    5 Segment Revenue ($M) / Organic Change % Adj. EBIT % / bps ∆ Y-o-Y Revenue ($M) / Organic Change % Adj. EBIT % / bps ∆ Y-o-Y Q4 performance commentary DEP $394 -9% 15.5% -220 bps $1,531 -10% 16.3% -110 bps  Strength in aerospace & defense and recovery in industrial automation. Industrial winches a

  6. Slide 6: Q4 2020 Revenue and Bookings Bridges

    6 Q4 2019 Revenue & Bookings Q4 2020 Revenue Change in Organic Revenue(1): -$41M, or -2.3% DII DPPSDFS DRFE FX ACQ./ DISP. (2) Q4 2020 DEPQ4 2019 DFS DPPSDII DRFE FX ACQ./ DISP. (3) Q4 2020 Note: $ in millions. Numbers may not add due to rounding Q4 2020 Bookings(4) Change in Organic Bookings(4): +$

  7. Slide 7: Q4 2020 Adjusted Segment EBIT and Adjusted Net Earnings

    7 Q4 2020 Adjusted Segment EBIT and Adjusted Net Earnings CORP. EXPENSE GAAP EARNINGS RIGHT SIZING SEGMENT EBIT LOSS ON EXT. OF DEBT ADJ. EARNINGS ACQ. AMORT. INT./TAX EXPENSE ADJ. EARNINGS ACQ. AMORT. RIGHT SIZING GAAP EARNINGS Change in Adjusted Net Earnings (3) -$1M 168 14 18 25 226 3 -1 -2 225 -

  8. Slide 8: FY Free Cash Flow

    8 FY Free Cash Flow 12.3% (1) Includes gain on disposition, loss on assets held for sale and extinguishment of debt (2) Includes stock-based compensation and changes in other current and non-current assets and liabilities (3) Non-GAAP measures (reconciliations and definitions in appendix) $M 2020 20

  9. Slide 9: Investments in Four Core Enterprise Capabilities Driving Efficiency and Growth

    9 Investments in Four Core Enterprise Capabilities Driving Efficiency and Growth Dover Digital Operational Excellence Dover Business Services India Innovation Center Efficiency Growth Efficiency Efficiency Efficiency Growth Center-led initiatives drive synergistic value of Dover portfolio 733 2021E2

  10. Slide 10: Modernizing Dover - Digital

    10 Modernizing Dover - Digital (1) Operating Companies using Digital Commerce (2) Operating Companies using Digital Quote Digital Commerce ~$25M cost reduction 2020-2021 45% reduction in servers thru datacenter consolidation and rationalization initiative 30% of legacy web & commerce sites shifted t

  11. Slide 11: Execution Excellence - Operations

    11 Execution Excellence - Operations Modernizing our Operational Approach Covid-19 Protocols rapidly deployed and continually upgraded to support business continuity 20% Reduction in TRIR YOY ’19-20 Enterprise-wide Big Data solution being deployed to improve safety management in real-time (identific

  12. Slide 12: Back Office Efficiency - Dover Business Services

    12 Back Office Efficiency - Dover Business Services 3 consolidated service locations, from 5 in 2018 >$15M cost reduction through 2021 10% reduction in cost per transaction 2019-2021 57% increase in entities supported from 2019 to 2021 350+ FTEs by end of 2021 (72% increase since 2019) Building cont

  13. Slide 13: Efficient Growth Catalyst - India Innovation Center

    13 Efficient Growth Catalyst - India Innovation Center L3 Certified Center Process Rigor – New Product Development, Agile / Scrum methodology, Value Engineering Industry Best Practices – Knowledge Management, Critical Design Review, Project Portfolio Management 40+ Patents (2017 – 2021) Enabling Cro

  14. Slide 14: Dover Strategic Playbook Drives Results and Remains Unchanged

    14 Dover Strategic Playbook Drives Results and Remains Unchanged (1) Non-GAAP measures (definitions and/or reconciliations in appendix). Margin references relate to Adjusted Segment EBIT (2) See performance measures definitions in appendix (3) Acquisitions (net of cash acquired) less proceeds from d

  15. Slide 15: Dover Strategy Delivers Through-Cycle Value Creation

    15 Dover Strategy Delivers Through-Cycle Value Creation $7.0B $7.1B $6.7B 2020 14.8% 20192018 16.6% 16.7% 2021E $7.2 – 7.3B Adj. Segment EBIT Margin (%) Revenue ($B) $4.97 $5.93 $5.67 2021E2018 2019 2020 $6.25-$6.45 +8-9% CAGR (1) Non-GAAP measure (definitions and/or reconciliations in appendix) (2)

  16. Slide 16: 2021 Business Outlook

    16 2021 Business Outlook Segment Organic growth outlook Comments DEP HSD  Strong backlog and bookings in vehicle services and industrial automation; continued strength and visibility in aerospace & defense  Improving order rates in waste handling, fully booked for Q1 ’21 DFS LSD  Growth in softwa

  17. Slide 17: FY2021 Guidance

    17 FY2021 Guidance (1) Non-GAAP measure (definition and/or reconciliation in appendix) EPS and other Cash Flow  Free Cash Flow(1): 11-13% of Revenue  Capex: ~$175 – 200 million  GAAP EPS: $5.42 - $5.62  Adjusted EPS(1): $6.25 - $6.45 Revenue  All-in: 8% - 10%  Organic(1): 5% - 6%  Tax rate: 2

  18. Slide 18: Appendix

    18 Appendix

  19. Slide 19: Q4 2019 to Q4 2020 Revenue and Bookings Bridges by Segment

    19 Q4 2019 to Q4 2020 Revenue and Bookings Bridges by Segment Note: Numbers may not add due to rounding DEP DFS DII DPPS DRFE Total 422 445 274 328 306 1,776 (37) (42) (8) 6 40 (41) 7 6 7 9 5 34 2 - 15 4 (9) 12 394 409 288 347 342 1,780 DEP DFS DII DPPS DRFE Total 457 426 276 318 362 1,841 15 (26) 2

  20. Slide 20: Organic Revenue and Bookings Bridges

    20 Organic Revenue and Bookings Bridges Q4 2020 FY 2020 FY 2019 FY 2018 Q4 2020 FY 2020 -8.8% -10.3% 5.4% 6.6% 3.3% -9.5% -9.4% -8.8% 10.5% 9.9% -6.0% -8.0% -2.9% -7.2% 1.2% 4.6% 0.7% -6.3% 1.8% -2.3% 3.9% 7.4% 10.8% -4.8% 13.2% -3.0% -2.7% -7.9% 5.6% 6.5% -2.3% -6.6% 3.8% 3.7% 2.4% -4.6% 1.2% 1.0%

  21. Slide 21: Reconciliation of Q4 2020 Net Earnings to Adj. EBIT and Adj. EBITDA by Segment

    21 Reconciliation of Q4 2020 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs DEP DFS DII DPPS DRFE Tot

  22. Slide 22: Reconciliation of Q4 2019 Net Earnings to Adj. EBIT and Adj. EBITDA by Segment

    22 Reconciliation of Q4 2019 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment DEP DFS DII DPPS DRFE Total 422 445 274 328 306 1,776 - - - - - 168 - - - - - 40 - - - - - 29 - - - - - 29 - - - - - 24 73 74 57 71 14 290 17.4% 16.6% 20.9% 21

  23. Slide 23: Reconciliation of FY 2020 Net Earnings to Adj. EBIT and Adj. EBITDA by Segment

    23 Reconciliation of FY 2020 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs DEP DFS DII DPPS DRFE Tot

  24. Slide 24: Reconciliation of FY 2019 Net Earnings to Adj. EBIT and Adj. EBITDA by Segment

    24 Reconciliation of FY 2019 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs DEP DFS DII DPPS DRFE Tot

  25. Slide 25: Reconciliation of H2 2020 and H2 2019 DRFE Earnings to Adj. Segment EBIT

    25 Reconciliation of H2 2020 and H2 2019 DRFE Earnings from Continuing Operations to Adj. Segment EBIT and Calculation of Adj. EBIT Margin Q3 2020 Q4 2020 H2 2020 Q3 2019 Q4 2019 H2 2019 368 342 711 370 306 677 40 28 68 35 14 50 10.9% 8.1% 9.5% 9.5% 4.7% 7.3% (1) 1 (0) 1 2 3 1 - 1 - - - 40 28 68 36

  26. Slide 26: Reconciliation of FY 2018 and FY 2017 Earnings to Adj. Segment EBIT

    26 Reconciliation of FY 2018 and FY 2017 Earnings from Continuing Operations to Adj. Segment EBIT and Calculation of Adj. EBIT Margin FY 2018 FY 2017 6,992 6,821 591 747 130 155 122 136 134 129 977 1,167 14.0% 17.1% - (205) - 5 59 33 - (7) 1,036 992 14.8% 14.5% ($ in millions) Revenue Earnings from

  27. Slide 27: Reconciliation of Adjusted Net Earnings and Adjusted Diluted EPS

    27 Reconciliation of Adjusted Net Earnings to Net Earnings and Calculation of Adjusted Diluted EPS under U.S. GAAP ($ in millions, except per share data) Q4 2020 Q4 2019 FY 2020 FY 2019 FY 2018 Net earnings from continuing operations ($) 182 168 683 678 591 Acquisition-related amortization, pre tax

  28. Slide 28: Reconciliation of Free Cash Flow and EPS to Adjusted EPS Range

    28 Reconciliation of Free Cash Flow and EPS to Adjusted EPS Range 2021 Guidance for Earnings per Share (GAAP) $5.42 $5.62 Acquisition-related amortization, net 0.72- Rightsizing and other costs, net 0.11- 2021 Guidance for Adjusted Earnings per Share (Non-GAAP) $6.25 $6.45 Note: Numbers may not add

  29. Slide 29: Non-GAAP Definitions

    29 Non-GAAP Definitions Definitions of Non-GAAP Measures: Adjusted Net Earnings: is defined as net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, gain/loss on dispositions, disposition costs, loss on debt extinguishment, loss on assets held for sal

  30. Slide 30: Performance Measure Definitions

    30 Performance Measure Definitions Definitions of Performance Measures: Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends. Organic Bookings represent total orders receiv

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