Donaldson Company, Inc. · NYSE:DCI
Donaldson — Investor Presentation (January 2005)
49 slides from Donaldson's investor presentation, Jan 5, 2005
Slide 1: Donaldson Company, Inc. Investor Update
— Donaldson Company, Inc. Investor Update New York Stock Exchange January 5, 2005 4 Donaldson. ; Oz
Slide 2: Forward-looking statements
This presentation includes forward-looking statements which reflect the Company’s current views with respect to future events and financial performance, but involve uncertainties that could significantly impact results. 2 Ww
Slide 3: 10 year CAGR
80% 25% 10 year CAGR 20% 15% 10% 5% 0% 82 @ 94 e5 8 a7 2 89 9 Of 2 03 of 05 og me oo on of 02 03 OF Fiscal Year
Slide 4: DCI vs S&P 400
2208 2p01 Te 1241 O77 195 212 245 246 208 228 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 4 -+-DCI ---S&P 400 41 Donalds 4
Slide 5: Opportunity for growth
s Opportunity for growth Sustaining the track record for growth « Leveraging technology * Geographic expansion * Acquisitions 4 Donaldson. 7
Slide 6: Innovation through technology
Innovation through technology Global leader in filtration solutions Diversified portfolio of filtration businesses Consistent, long-term earnings growth 4 Donaldson. 7
Slide 7: Air Intake Systems, Liquid Filtration
Air Intake Systems Liquid Fittration [ Emissions'Exhaust, Replacement Parts. 6-6 Tl Donaldson Share
Slide 8: Industrial Air Filtration
Industrial Air Filtration Ultrafitter I Donaldson share
Slide 9: Gas Turbine
Gas Turbine Har Slr i rine Intake Hl Donaldson share
Slide 10: Sales in $ Millions
$ Millions $1,500 $1415 po® $1,218 (ot 0008619791,126 $1,000 $940 $944 sso $704 604 sion © $500 7 $429, $459 ; $0 l i 1900 ‘8 82 (84 SGT B89 DTD a 4 Dona O7 dson.
Slide 11: Consistent, long-term growth
GonPiatent; long-term
Slide 12: Consecutive years of record earnings growth
15 consecutive years of cord earnings g EPS Growth 40% 20% 24% ‘Year-over-Year Change one 19% 15% 16% 15% 15% 15% 14% 10%) 0%
Slide 13: Margins and returns
20% 21% 21% 0% tex 19% 19% 19% 19% 19% Joy eq, 16% 15% 15% 15% 10% 0%
Slide 14: Consistent dividend growth
Consistent dividend Per Share $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 growth )) 0.05 lo.03 0.04 l 0.08 0.06 9-07 o.o9 9-10 1990 1 92 0.05 l J 99495 "96 ‘798
Slide 15: Shares Outstanding
Shares Outstanding in Miliors 140 120 78-5 444.0 190.3 109.1 100 0 0 40 20 a 990 91 92 93 106.0/4087 101.3 oaeloee | | | | | | 89.3 88.8 878 967 86.1 49596 97 "98990010203 “OF dson.
Slide 16: F05 Q1 change
F05,Q1 change Net sales (millions) $373 14% Gross margin % 31.2% (1.3 pts) Net income (millions) $27 7% EPS $.31 11%
Slide 17: % Increase over prior year
% Increase over Prior Year 50.0% 40.0% # 30.0% 20.0% 10.0% 0.0% a Dec- Jan- Feb- Mar- Apr- May- Jun- Jul Aug- Sep- Oct- Nov- Dec- 03 04 04 04 04 04 04 (04 04 04 04 04 04 4 Donaldson. Ww
Slide 18: Engine Off-Road and Truck
Engine Off-Road and Truck * Combination of price increases and surcharges « Target for completion: February 1 « Shorter time lag in future 4 Donaldson. 7
Slide 19: Engine Aftermarket
Engine Aftermarket * 3 price increases in CY 2004 — May (all products) — September (exhaust products) — November (filters) « All actions complete 4 Donaldson.
Slide 20: Industrial Filtration Solutions
Industrial Filtration Solutions « Multiple product lines, multiple increases « Latest increase: December 2004 * All actions complete 4 Donaldson. 7
Slide 21: Gas Turbine Systems
Gas Turbine Systems « Fixed price selling agreements — CY 2004 ¢ As of January 1, current steel pricing « Re-quote provision for rising steel prices 4 Donaldson. 7
Slide 22: Increasing commodity prices and sales outlook
« Increasing commodity prices « Engine: Low-teens sales growth — Heavy truck build rates increasing — Construction and Ag demand strong — Increasing equipment utilization « Industrial: Low-teens sales growth — Industrial filtration markets continuing to improve — Gas turbine market stable — Disk dri
Slide 23: Growth strategy dimensions
wax Growth strategy ) 3 dimensions « Leverage technology = innovative products « Geographic diversification * Acquisitions 4 Donaldson. 7
Slide 24: Reduced system size, weight and cost
=Reduced system size, weight and cost =Proprietary replacement parts
Slide 25: Ford Super Duty Power Stroke Diesel Pickup
= Ford Super Duty Power Stroke® Diesel Pickup
Slide 26: Hummer H2
= Hummer H2
Slide 27: GMT
=GMT 800
Slide 28: Slide 28
Slide 29: Volvo FL6 Medium Duty Truck (Europe)
=Volvo FL6 Medium Duty Truck (Europe) Vat |
Slide 30: Deere 6000 Series (Europe)
= Deere 6000 Series (Europe)
Slide 31: Case Skid Steer
= Case Skid Steer
Slide 32: PowerCore: Ford ITEC/Blue Diamond Utility Truck
PowerCore™ =Ford ITEC/Blue Diamond Utility Truck
Slide 33: Leverage technology: PowerCore Caterpillar 3500 GenSet
Leverage technology > Innovative products y PowerCore™ =Caterpillar 3500 GenSet a Pe it Providing future growth opportunities a Donaldson,
Slide 34: Slide 34
Slide 35: Diesel emissions opportunities
3 opportunities =Retrofit =Trucks =Off-Road
Slide 36: Retrofit
Retrofit = Cost-effective solution = Broadest portfolio of solutions
Slide 37: Retrofit sales expected to double
Retrofit Expect sales to double to $10M
Slide 38: Trucks: emissions regulations
Trucks ==2007: Diesel particulate reduction (90%) == 2010: NOX reduction (90%)
Slide 39: Trucks: integrate cores into muffler
Trucks = Integrate cores into muffler = 5x — 8x revenue gain over standard muffler
Slide 40: Diesel Emissions: Off-road
Leverage technology > Innovative products /, Diesel Emissions Off-road == 2011: Diesel particulate reduction (90%) == 2014: NOX reduction (90%) 2 ek Sc ena ae ealiememieansaae |
Slide 41: Slide 41
Slide 42: Wuxi, China
Wuxi, China Dati) | Dy = == ie 4 Donaldson.
Slide 43: Slide 43
Slide 44: Slide 44
Slide 45: Slide 45
Slide 46: Ostiglia, Italy
Ostiglia, Italy 4 Donaldson. ww
Slide 47: Acquisitions
ions * Historically: 1% of growth ¢ Future: 3% of growth « Focus: Bolt-on acquisitions — Fill in product line — Add distribution — Geographic expansion 4 Donaldson. 7
Slide 48: Triboguard acquisition
Triboguard * Sales: U.S. $3.0M « Why: Highly flexible production capability « Expectation: Accretive Year 1 — — [ {| [! i
Slide 49: DCI vs S&P 400
1 1244 977 t7a_195 212 245 ae ey 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 4 -+-DCI ---S&P 400 41 Donalds 4