Dover Corporation · NYSE:DOV
Dover — Corporate Update (September 2018)
18 slides from Dover's corporate update, Sep 11, 2018
Slide 1: Corporate Update
Exhibit 99.1 September 11, 2018 Corporate Update Rich Tobin, President & Chief Executive Officer
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures 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 from time to time with the SEC, i
Slide 3: Early Observations
Early Observations . Portfolio: Strong set of businesses serving attractive end-markets . Culture: Customer-centric with strengths in product development and innovation . Talent: Driven and engaged team intent on winning . Operations: Uneven execution creates significant margin improvement potential
Slide 4: Post-Apergy Portfolio: Strong Fundamentals, GDP+ Growth Exposure, Less Cyclicality
Post-Apergy Portfolio: Strong Fundamentals, GDP+ Growth Exposure, Less Cyclicality Common Market and Platforms Dover Positions Business Model Attributes ▪ GDP+ long-term growth • Marking & Coding . #2 globally • Digital Printing ▪ Limited cyclicality Engineered . #1 globally in textile Systems • Veh
Slide 5: Augmenting Dover Capabilities With a New Operational System
Augmenting Dover Capabilities With a New Operational System ▪ Strong value-add capabilities shared Dover Value-Add Capabilities across portfolio, supported by talented people and solid processes ▪ Cultural strength in customer facing Growth Operations Supply Chain functions (sales, marketing, NPD) a
Slide 6: Consistently Strong FCF Generation
Consistently Strong FCF Generation Low-Capital, High-FCF Allows Dover to Provide Shareholders Business Model with Meaningful Return of Capital ▪ ‘Light’ Capital Requirements $M 1,500 – Capex 2-4% of Revenue Repurchases – Adjusted Working Capital Dividends 12-15% of Revenue 1,000 ▪ High FCF conversio
Slide 7: Capital Allocation Priorities: Organic Growth, M&A, Return of Capital
Capital Allocation Priorities: Organic Growth, M&A, Return of Capital $3.5B+ Capital Available for Prioritize Growing the Business Over Time, While Deployment in the Next 3 Years Continuing to Return Capital ▪ Priority to high-confidence organic investments – Capacity, footprint improvements Increme
Slide 8: Disciplined Framework for Portfolio Enhancement
Disciplined Framework for Portfolio Enhancement Inorganic strategy Acquisition Criteria ▪ Multi-platform exposure creates optionality GDP+, stable growth supported by secular and runway for capital deployment trends Market ‘Low-turbulence’ environment ▪ Significant pipeline of potential targets,
Slide 9: Margin Improvement Focus Area Through Cost Rightsizing
Margin Improvement Focus Area Through Cost Rightsizing . Compared to multi-industrial peer set, SG&A vs. Gross Margin: Multi-Industrial Peers Dover’s costs are high relative to current gross profit margin profile 30 . Clear improvement needed; opportunity capture within our control 20 . Implementing
Slide 10: Near-Term Focus on SG&A Efficiency and Funding Strategic Investments
Near-Term Focus on SG&A Efficiency and Funding Strategic Investments SG&A Rightsizing Across Portfolio Margin Improvement and Funding for Strategic Initiatives % Mix of $ in millions Key areas for investment Gross Savings 130 ▪ Operational Talent 30 Engineered Non-Headcount ▪ E-commerce and Digital
Slide 11: Dover Near and Medium Term Priorities
Dover Near and Medium Term Priorities 2018 – 1H 2019 2H 2019 and beyond Strengthen Execution, Realize Dover’s Earnings Deliver on Commitments and Growth Potential ▪ Deliver on SG&A rightsizing initiative ▪ Invest behind Dover’s leading businesses to capture growth potential ▪ Improve performance in
Slide 12: Portfolio Performing Well with Areas for Improvement
Portfolio Performing Well with Areas for Improvement Retail Refrigeration ▪ #1 position in the US with strong through-cycle returns Platform ▪ Market is undergoing cyclical challenges Average 25 – Sector reacted to e-commerce threat by slowing or reallocating CapEx 20 – CapEx below replacement level
Slide 13: 2018 Actions Position Dover for Strong Earnings Growth in 19
2018 Actions Position Dover for Strong Earnings Growth in 2019 2019F Adjusted EPS Impact Incremental to 20181 . $1B share repurchase to be + $0.18 Previously completed in 2018 Announced . $100M net SG&A rightsizing initiatives + $0.53 New . Margin improvement in Retail Fueling + $0.11 business New i
Slide 14: Balanced Model to Deliver Sustained Top-Quartile TSR
Balanced Model to Deliver Sustained Top-Quartile TSR Growth Profitability Cash Flow and Capital Allocation GDP+ sustainable organic growth Finalize synergy capture from recent Generate strong FCF deals Invest behind leading businesses Disciplined capital allocation within Dover’s core Drive operatio
Slide 15: Summary
Summary Dover Foundation Unchanged New Emphasis . Good businesses...leading positions . Greater operational focus…deliver in attractive markets, growth exposure margin improvement; optimize businesses . Strong capabilities…customer focus, supply chain, entrepreneurial talent . $3.5bn+ capital deploy
Slide 16: Looking Ahead
Looking Ahead Today Jan. 2019 Sep. 2019 . Share results from initial . Report card on interim . Report on operational business assessment progress progress, including facility consolidation actions . Set near-term priorities . Give 2019 guidance . More holistic view of portfolio strategy, growth . C
Slide 17: Slide 17
Slide 18: Appendix: Basis of Presentation / Terms
Appendix: Basis of Presentation / Terms . SG&A rightsizing initiative – $100M net SG&A rightsizing initiative represents annual savings impact through 2019 (including carryover benefit from initiatives executed in 2018) – Excludes approximately $40M of one-time costs to achieve through 2019 – of whi