Dover Corporation · NYSE:DOV

Dover — Q4 2018 Earnings Presentation

25 slides from Dover's earnings presentation, Jan 29, 2019

  1. Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2018

    January 29, 2019 – 9:00am CT Earnings Conference Call Fourth Quarter and Full Year 2018 1

  2. 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. We caution everyone to be guided in their analysis of Dover Corporation by referring to the documents we file f

  3. Slide 3: Q4 2018 - Highlights

    Q4 2018 - Highlights Revenue increases 3% to $1.8B Bookings up 8% to $1.9B Organic growth of 6% Organic growth of 10% Adjusted earnings from continuing Adjusted diluted EPS from continuing operations(1) increases 17% to $211M operations(2) at $1.43, up 25% Earnings from continuing operations on a GA

  4. Slide 4: Q4 and FY 2018 – Financial Summary

    Q4 and FY 2018 – Financial Summary US GAAP from continuing operations Q4 2018 Q4 2017 ∆ FY2018 FY2017 ∆ Revenue ($M) 1,809 1,753 3% 6,992 6,821 3% Earnings ($M) 158 290 (45%) 591 747 (21%) Diluted EPS ($) 1.07 1.83 (42%) 3.89 4.73 (18%) Non-GAAP(1) from continuing operations Adjusted EBIT – Segment

  5. Slide 5: Q4 2018 - Revenue & Bookings

    Q4 2018 - Revenue & Bookings Revenue Split Revenue Change in Organic Revenue: +$109M, or 6.2% 5% 13% -2% 7% -2% -1% By 2% 50% Region 23% 9% 1,753 30 118 -39 -37 -17 1,809 ($M) US OTHER AMER. Q4 2017 DES DF DRFE FX ACQ./ Q4 2018 ORG. ORG. ORG. DISP. (1) EUROPE ASIA OTHER Bookings Change in Organic Bo

  6. Slide 6: Q4 2018 – Adj. Segment EBIT & EBITDA Walk, and Earnings Walk

    Q4 2018 – Adj. Segment EBIT & EBITDA Walk, and Earnings &Adj. Earnings Walk – (Continuing Operations basis) Change in Adjusted Segment EBIT(3) +$24M +9% 19.5% 18.9% 15.7% 14.9% 261 70 331 11 32 -22 352 -67 285 ($M) ADJ. EBIT D&A (1) ADJ. EBITDA DES DF DRFE ADJ. EBITDA ADJ D&A (2) ADJ. EBIT Q4 2017 Q

  7. Slide 7: FY 2018 – Free Cash Flow

    FY 2018 – Free Cash Flow ($ in millions) FY 2018 FY 2017 ∆ Net earnings 570 812 (241) Loss (earnings) from disc. ops. 21 (65) 86 D&A 283 283 (1) Gain on disposition 0 (203) 203 Chg. in working capital (62) 62 (124) Chg. in other(1) (23) (150) (12) Cash flow from operations 789 739 50 Capex (171) (17

  8. Slide 8: Segment Information

    Segment Information 8

  9. Slide 9: Engineered Systems – Financial Results

    Engineered Systems – Financial Results Printing & Identification Revenue Bookings ($M)  Organic growth: 4.3%  Organic growth: 12.2% 690 30 -13 -10 697 704 86 -9 -4 777 ($M) Q4 2017 ORG. FX ACQ./ Q4 2018 Q4 2017 ORG. FX ACQ./ Q4 2018 DISP. (2) DISP. (3) Adjusted EBIT, EBITDA & Margin(1) Industrial

  10. Slide 10: Fluids – Financial Results

    Fluids – Financial Results Fueling & Transport Revenue Bookings ($M)  Organic growth: 17.2%  Organic growth: 7.8% 686 118 -21 2 786 687 54 -11 5 735 ($M) Q4 2017 ORG. FX ACQ./ Q4 2018 Q4 2017 ORG. FX ACQ./ Q4 2018 Pumps DISP. (2) DISP. (3) Adjusted EBIT, EBITDA & Margin(1) 21.0% 22.4%  Adjusted E

  11. Slide 11: Refrigeration & Food Equipment – Financial Results

    Refrigeration & Food Equipment – Financial Results Refrigeration Revenue Bookings ($M)  Organic decline: (10.2%)  Organic growth: 7.9% 377 -39 -3 -9 327 320 25 -1 -3 341 ($M) Q4 2017 ORG. FX ACQ./ Q4 2018 Q4 2017 ORG. FX ACQ./ Q4 2018 Food Equipment Food Equipment DISP. (2) DISP. (3) Adjusted EBIT

  12. Slide 12: 2019 FY Guidance

    2019 FY Guidance 12

  13. Slide 13: FY 2019F Guidance

    FY 2019F Guidance Engineered Refrigeration 2019 Systems Fluids & Food Equip Total Organic revenue 3% - 4% 3% - 4% 1% - 3% 2% - 4% Acquisitions - 2% - 1% Dispositions - - - - Currency (1%) (2%) (1%) (2%) Total revenue 2% - 3% 3% - 4% 0% - 2% 2% - 3%  Net interest expense: ≈ $122 million  Tax rate:

  14. Slide 14: Guidance ~17-21% Growth in Adjusted EPS in 2019

    Guidance ~17-21% Growth in Adjusted EPS in 2019 Adjusted EPS ($/share) $5.65-$5.85 $0.15 $0.19-$0.39 $0.02 $0.08 Full year $4.97 $0.37 impact from $0.13 discrete tax items $4.84 ’18 Adj. EPS SG&A Footprint Completed Revenue Growth Shares and ’19F Adj. EPS(1) Rightsizing Consolidation Acquisition / C

  15. Slide 15: 2019 Capex Supports Growth and Productivity

    2019 Capex Supports Growth and Productivity 2018 / 2019 Capex Comparison Comments $ in millions  Significant one-off organic investments drive ~220-240 2019 increase New Colder – $26M greenfield facility at Colder Products to Plant support organic growth – $15M investments in Phase I automation at

  16. Slide 16: Appendix

    Appendix 16

  17. Slide 17: SG&A Rightsizing Largely Complete, on Track to Deliver Target Savings

    SG&A Rightsizing Largely Complete, on Track to Deliver Target Savings SG&A rightsizing projected to yield incremental ~$72M net benefit in 2019 SG&A update $ in millions  Execution largely complete 136 – Select actions remaining in Europe 34  Rightsizing savings ahead of target 102 – $136M expecte

  18. Slide 18: Near-Term Footprint Consolidation Actions Target ~$18M in Benefit

    Near-Term Footprint Consolidation Actions Target ~$18M in Benefit Expected benefits Footprint program update $ in millions 18  Near-term footprint actions – High cash ROI projects across all segments 14  Expect majority of benefits to accrue after 2019 - 4 – Deliberate execution for success and bu

  19. Slide 19: Reconciliation of Q4 2018 Earnings to Adj. EBIT and Adj. EBITDA

    Reconciliation of Q4 2018 Earnings from Continuing Operations to Adj. EBIT and Adj. EBITDA and calculation of Adj. EBIT margin and Adj. EBITDA margin by Segment (U.S. GAAP) (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other

  20. Slide 20: Reconciliation of Q4 2017 Earnings to Adj. EBIT and Adj. EBITDA

    Reconciliation of Q4 2017 Earnings from Continuing Operations to Adj. EBIT and Adj. EBITDA and calculation of Adj. EBIT margin and Adj. EBITDA margin by Segment (U.S. GAAP) 20

  21. Slide 21: Reconciliation of FY 2018 and 2017 Earnings to Adj. EBIT and Adj. EBITDA

    Reconciliation of FY 2018 and 2017 Earnings from Continuing Operations to Adj. EBIT and Adj. EBITDA and calculation ofAdj. EBIT margin and Adj. EBITDA margin by Segment (U.S. GAAP) $ in millions FY 2018 FY 2017 Revenue 6,992 6,821 Earnings from continuing operations 591 747 Add back: Corporate expen

  22. Slide 22: Reconciliation of Adjusted Earnings to Earnings from Continuing Operations

    Reconciliation of Adjusted Earnings from Continuing Operations to Earnings from Continuing Operations and calculation of Adjusted diluted EPS under U.S. GAAP $ in millions Q4 2018 Q4 2017 FY 2018 FY 2017 Earnings from continuing operations 158 290 591 747 Acquisition-related amortization, pre-tax 35

  23. Slide 23: Reconciliation of Free Cash Flow and Adjusted EPS

    Reconciliation of Free Cash Flow; and EPS from Continuing Operations to Adjusted EPS from Continuing Operations Reconciliation Free Cash Flow Reconciliation $ in millions December 31, December 31, 2018 2017 Net Cash provided by Operating Activities 789 739 Capital Expenditures (171) (170) Free Cash

  24. Slide 24: Non-GAAP Definitions

    Non-GAAP Definitions Definitions of Non-GAAP Measures: Adjusted Earnings from Continuing Operations: is defined as earnings from continuing operations adjusted for the effect of acquisition-related amortization, the Tax Cuts and Jobs Act, gains on disposition of businesses, disposition costs, rights

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