Dover Corporation · NYSE:DOV
Dover — Q1 2020 Earnings Presentation
23 slides from Dover's earnings presentation, Apr 21, 2020
Slide 1: First Quarter 2020 Earnings Conference Call
April 21, 2020 – 9:00am CT Earnings Conference Call First Quarter 2020
Slide 2: Forward-Looking Statements and Non-GAAP Measures
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, suppliers
Slide 3: Dover Response to the Novel Coronavirus (COVID-19) Pandemic
Dover Response to the Novel Coronavirus (COVID-19) Pandemic . Mobilized a central crisis response team - up and running since February – Virtual situation room: C-suite, HR, Legal, Finance, IT, Operations meet daily to prioritize actions, resolve escalation items, provide guidance to the field – Spe
Slide 4: Summary Corporate Q1 Results and Highlights
Summary Corporate Q1 Results and Highlights Q1 2020 Highlights and Comments . Good performance in DEP, DFS, and DPPS All-in -4% . COVID-19 impact: China and Italy; textiles, auto and foodservice Revenue growth Organic(1) -3% . Majority of Dover portfolio deemed as essential supplier . FX impact: -1%
Slide 5: Q1 2020 Segment Results
Q1 2020 Segment Results Q1 2020 (1) Revenue ($M) Adj. EBIT % Segment / Organic / bps ∆ Comments Change % Y-o-Y . Strength in solid waste handling and aerospace & defense; weakness in automotive, $408 17.0% DEP industrial automation and winches -2% +100 bps . Q1 bookings(2) -3% (-2% organically(2));
Slide 6: Q1 2020 Revenue & Bookings Geographic Detail
Q1 2020 Revenue & Bookings Geographic Detail Revenue Change in Organic Revenue(1): -$47M, or -2.7% Organic Rev Growth(1) OTHER 3% (9)% ASIA 9% (19)% EUROPE 22% (7)% 1,725 -8 -10 -12 -4 -14 -23 2 1,656 ($M) Q1 2019 DEP DFS DII DPPS DRFE FX ACQ./ Q1 2020 DISP. (2) Organic OTHER AMER. 8% (5)% Bookings(
Slide 7: Q1 2020 Adjusted Segment EBIT and Adjusted Net Earnings
Q1 2020 Adjusted Segment EBIT and Adjusted Net Earnings Change in Adjusted Segment EBIT (3) +$13M +5% 19.9% 18.4% 15.9% 14.5% 251 66 317 2 17 -3 6 -11 329 -65 264 ($M) ADJ. EBIT D&A (1) ADJ. EBITDA DEP DFS DII DPPS DRFE ADJ. EBITDA D&A (2) ADJ. EBIT Q1 2019 Q1 2020 Change in Adjusted Net Earnings (3
Slide 8: Q1 Free Cash Flow
Q1 Free Cash Flow $M Q1 ‘20 Q1 ’19 ∆ Net earnings 176 106 +71 Adjustments for (gains) losses(1) (7) 47 -53 D&A 69 68 +1 Change in working capital (112) (138) +25 Change in other(2) (50) (58) +8 Cash flow from operations 76 25 +51 Capex (40) (37) -3 Free cash flow(3) 36 (13) +48 FCF % of revenue(3) 2
Slide 9: Q1 2020: Balance Sheet Update
Q1 2020: Balance Sheet Update ($ in billions) 2.2x 3.0 . Flexible and conservative capital structure in line with long term objective Prudent 1.4 Leverage(1) . Investment grade credit with “margin of safety” Net Debt LTM ADJ. EBITDA 0.7 0.6 0.5 Extended 0.4 . Extended debt duration (at lower interes
Slide 10: Q2 Demand and Operations Status and Outlook
Q2 Demand and Operations Status and Outlook Segment Demand Ops Comments through April . Demand robust in waste handling solutions and microwave products (defense); backlog in waste handling remains strong for built up units and software (SW Q1 sales/bookings 2x Y-o-Y) DEP . Automotive aftermarket an
Slide 11: Actions to offset COVID impact
Actions to offset COVID impact $50M cost take-out on-track; additional cost and balance sheet actions underway Levers Comments 407 381 T&E / Prof. Fees 57 -6% . Non-essential travel cancelled through end of year 37 52 Incentive Comp 19 (expect larger FY $ contribution) (1) 131 128 Other SG&A . Discr
Slide 12: Q2 Conditions and Our Actions
Q2 Conditions and Our Actions Operations . Current forecasts indicate Q2 will be the weakest quarter in 2020 for comparative revenue and earnings change . Despite reasonably healthy backlog Dover will be curtailing operations and/or reducing production capacity across much of the portfolio in Q2 due
Slide 13: FY2020 Guideposts
FY2020 “guideposts” . Revenue change: Expect negative FY revenue change, magnitude uncertain and depends on the depth/duration of the health crisis, governmental responses and associated economic downturn, as well as speed/shape of the recovery . Decremental margin: Target full year ~25-30% all-in w
Slide 14: Appendix
Appendix 14
Slide 15: Q1 2019 to Q1 2020 Revenue and Bookings Bridges by Segment
Q1 2019 to Q1 2020 Revenue and Bookings Bridges by Segment Revenue Bridge by Segment ($ in millions) DEP DFS DII DPPS DRFE Total Q1 2019 Revenue 419 373 268 330 335 1,725 Organic Growth (8) (10) (12) (4) (14) (47) FX (3) (6) (8) (4) (3) (23) Acquisitions / Dispositions - 3 8 (3) (6) 2 Q1 2020 Revenu
Slide 16: Q1 2020 Organic Revenue and Bookings Bridges
Q1 2020 Organic Revenue and Bookings Bridges Q1 2020 Segment Growth Factors Revenue Growth Bookings Growth Organic Engineered Products -1.9% -2.3% Fueling Solutions -2.6% 9.5% Imaging & Identification -4.3% 0.3% Pumps & Process Solutions -1.1% 2.2% Refrigeration & Food Equipment -4.3% -4.2% Total Or
Slide 17: Reconciliation of Q1 2020 Net Earnings to Adj. EBIT and Adj. EBITDA
Reconciliation of Q1 2020 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment Q1 2020 ($ in millions) DEP DFS DII DPPS DRFE Total Revenue 408 360 257 320 312 1,656 Net earnings - - - - - 176 Add back: Corporate expense - - - - - 24 Interest
Slide 18: Reconciliation of Q1 2019 Net Earnings to Adj. EBIT and Adj. EBITDA
Reconciliation of Q1 2019 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment Q1 2019 ($ in millions) DEP DFS DII DPPS DRFE Total Revenue 419 373 268 330 335 1,725 Net earnings - - - - - 106 Add back: Corporate expense - - - - - 31 Interest
Slide 19: Reconciliation of Adjusted Net Earnings to Net Earnings and Adjusted Diluted EPS
Reconciliation of Adjusted Net Earnings to Net Earnings and Calculation of Adjusted Diluted EPS under U.S. GAAP ($ in millions, except per share data) Q1 2020 Q1 2019 Net earnings ($) 176 106 Acquisition-related amortization, pre tax 34 36 Acquisition-related amortization, tax impact (8) (9) Rightsi
Slide 20: Net Debt, Adjusted SG&A and LTM Adjusted EBITDA
Net Debt, Adjusted SG&A and Corporate Last Twelve Months (“LTM”) Adjusted EBITDA LTM Adjusted EBITDA ($ in millions) Q2 '19 Q3 '19 Q4 '19 Q1 '20 LTM Adjusted Segment EBITDA 376 385 371 329 1,461 Less: Corporate expenses (1) (25) (29) (64) (24) (142) Plus: Rightsizing & other costs (1) 1 - 28 1 30 Pl
Slide 21: Non-GAAP Definitions
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, a 2019 loss on assets held for sale and a 2020 gain on disposition. Adjusted Diluted Net Earnings Per Sha
Slide 22: Performance Measure Definitions
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 received
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