Slide 1: Second Quarter 2013 Earnings Conference Call
Second Quarter 2013 Earnings Conference Call July 18, 2013 - 9:00am CT
Slide 2: Forward Looking Statements
Forward Looking Statements We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover by referring to our Forms 10-K and 10-Q for a list of factors that could cause our
Slide 3: Q2 2013 Performance
$0.60 $0.90 $1.20 $1.50 $1.80 Q1* Q2 Q3* Q4* Q1* Q2* Q2 2013 Performance Continuing Earnings Per Share • Strong revenue growth in consumer electronics and refrigeration markets; solid growth in energy and fluids markets • North America markets modestly positive, served China markets are strong, Euro
Slide 4: Revenue Growth Components Q2 and 1H 2013
4 Revenue Q2 2013 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic 11% 5% 4% - 5% Acquisitions - 2% 9% - 4% Currency - -1% - - - Total 11% 6% 13% Flat 9% 1H 2013 Communication Technologies Energy Engineered Systems Printing & Identification Total Dov
Slide 5: Sequential Results – Q1 13 to Q2 13
$664 $777 $238 $251 $373 $401 $561 $573 $204 $227 $0 $350 $700 $1,050 DCT Q1 DCT Q2 DE Q1 DE Q2 DES Q1 DES Q2 DPI Q1 DPI Q2 $755 $785 $237 $259 $379 $422 $621 $526 $224 $213 $0 $350 $700 $1,050 DCT Q1 DCT Q2 DE Q1 DE Q2 DES Q1 DES Q2 DPI Q1 DPI Q2 Sequential Results – Q1 13 → Q2 13 Fluid Solutions ↑
Slide 6: Communication Technologies
6 Communication Technologies • Solid growth in Consumer Electronics markets, particularly smart phones • Samsung drives demand for MEMs mics; other OEMs scheduled to launch new products in 3rd or 4th quarter • Medical Technology, Aerospace/Defense and Telecom/Other markets generally stable • Margin
Slide 7: Energy
7 Energy • Revenue growth across all three markets • Oil prices remain supportive of continued investment in production and international markets are robust • Margin reflects product mix, product development costs, and investments in international growth • Bookings impacted by unusually weak Canadia
Slide 8: Engineered Systems
8 Engineered Systems • Record revenue driven by recent acquisitions, and strong results in the food equipment, fluids and environmental markets • Anthony continues to perform well with strong growth from its close-the-case activity • Margin performance reflects strong execution in fluids and refrige
Slide 9: Printing & Identification
Printing & Identification • Revenue growth in fast moving consumer goods offsets sluggish bar coding activity • Operating margin increase reflects the benefits of prior restructuring and continued focus on productivity • Bookings growth reflects growth in fast moving consumer goods markets •Book-to-
Slide 10: Q2 2013 Overview
Q2 2013 Overview Q2 2013 Net Interest Expense $30 million, $600K higher than last year, in-line with expectations Corporate Expense $38.0 million, up $2 million from last year reflecting spin off costs. Effective Tax Rate (ETR) Q2 normalized rate was 26.7%, excluding $0.36 cents of discrete tax bene
Slide 11: FY 2013 Guidance – Revenue Growth by Segment
FY 2013 Guidance – Revenue Growth by Segment 11 Segment 2012 Revenue Mix 2013F Organic Growth 2013F Acquisition Growth* Total Communication Technologies 19% 9% - 11% - 9% - 11% Energy 27% 3% - 5% ≈ 2% 5% - 7% Engineered Systems 42% 2% - 4% ≈ 8% 10% - 12% Printing & Identification 12% 1% - 2% - 1% -
Slide 12: FY 2013 Guidance
FY 2013 Guidance Revenue: • Organic revenue : ≈ 3% - 5% • Acquisitions: ≈ 4% • Total revenue: ≈ 7% - 9% Corporate expense: ≈ $150 million Interest expense: ≈ $127 million Full-Year Tax Rate: ≈ 27% - 27.5%(a) Capital expenditures: ≈ 3.1% of revenue FCF for full year: ≈ 10% of revenue 12 2
Slide 13: 2013 EPS Guidance Bridge - Continuing Ops
2012 EPS – Continuing Ops $4.53 • Less 2012 tax benefits (1): ($0.09) 2012 Adjusted EPS – Continuing Ops $4.44 • Volume, mix, price (inc. FX): $0.31 - $0.44 • Net benefits of productivity: $0.20 - $0.25 • Acquisitions: $0.13 - $0.15 • Investment / Compensation: ($0.16 - $0.23) • Corporate expens
Slide 14: Appendix – Reconciliations
Appendix – Reconciliations 14 EPS – Continuing Ops $1.70 $2.82 • Discrete tax items: ($0.36) ($0.38) • Knowles spin-off costs: $0.02 $0.02 Adjusted EPS – Continuing Ops $1.36 $2.46 Q2 2013 1H 2013 ADJUSTED EPS FROM CONTINUING OPERATIONS GUIDANCE - EPS FROM CONTINUING OPERATIONS Prior EPS Guida