Dover Corporation · NYSE:DOV

Dover — Q2 2020 Earnings Presentation

22 slides from Dover's earnings presentation, Jul 22, 2020

  1. Slide 1: Earnings Conference Call Second Quarter 2020

    Earnings Conference Call Second Quarter 2020 July 22, 2020 – 8:00am CT

  2. Slide 2: Forward-Looking Statements and Non-GAAP Measures

    2 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, supplie

  3. Slide 3: Summary Corporate Q2 Results and Highlights

    3 Summary Corporate Q2 Results and Highlights Q2 2020 Highlights and Comments Revenue change (Y-o-Y) All-in Organic(1) -17% -16%  Expectedly slower demand across segments  Material sequential improvement in June  FX impact: -1%; acquisitions offset dispositions Bookings change (Y-o-Y) All-in Orga

  4. Slide 4: Segment Results Q2 2020

    4 Segment Revenue ($M) / Organic Change % Adj. EBIT % / bps ∆ Y-o-Y Comments DEP $342 -20% 15.2% -300 bps  Relative resilience in waste handling and aerospace & defense off strong backlogs, weakness in other Capex-levered industrial businesses  Margin decline due to lower volumes and difficult yea

  5. Slide 5: Revenue & Bookings

    5 Q2 2019 Q2 2020 Revenue & Bookings Revenue Change in Organic Revenue(1): -$289M, or -16.0% DIIDFS DPPS DRFE FX ACQ./ DISP. (2) Q2 2020 Geographic Detail Q2 2019 DEP DFS DII DPPS DRFE FX ACQ./ DISP. (3) Q2 2020 Note: $ in millions. Numbers may not add due to rounding Bookings(4) Change in Organic B

  6. Slide 6: Q2 2020 Adjusted Segment EBIT and Adjusted Net Earnings

    6 Q2 2020 Adjusted Segment EBIT and Adjusted Net Earnings GAAP EARNINGS RIGHT SIZING INT./TAX EXPENSE ACQ. AMORT. CORP. EXPENSE SEGMENT EBIT ADJ. EARNINGS ADJ. EARNINGS ACQ. AMORT. RIGHT SIZING ADJ. ON SALE OF CHINO GAAP EARNINGS Change in Adjusted Net Earnings (3) -$65M 198 5 26 229 -83 -2 20 164 -

  7. Slide 7: Year-to-Date Free Cash Flow

    7 Year-to-Date Free Cash Flow 12.3% (1) Includes gain on disposition and loss on assets held for sale (2) Includes stock-based compensation and changes in other current and non-current assets and liabilities (3) Non-GAAP measures (reconciliation on this slide, definitions in appendix) $M YTD ’20 YTD

  8. Slide 8: Principled Capital Allocation Q2 2020: Balance Sheet Update

    8 Principled Capital Allocation Q2 2020: Balance Sheet Update Note: Numbers may not add due to rounding Prudent Leverage(1) ($ in billions)  Flexible and conservative capital structure in line with long term objective  Investment grade credit with “margin of safety” 2.9 1.3 Net Debt LTM ADJ. EBITD

  9. Slide 9: Demand Outlook for H2 2020

    9 Demand Outlook for H2 2020 Segment H2 Outlook vs. Q2(1) Demand Outlook Comments DEP  Strong backlog and visibility in aerospace & defense (microwave products); improvement in short- cycle businesses (automotive aftermarket, industrial automation)  Orders slowed in waste handling driven by pull-b

  10. Slide 10: FY2020 Guidance

    10 FY2020 Guidance  Negative FY organic revenue(1) change  Sequential improvement from Q2 through Q3 and Q4 Revenue (1) Non-GAAP measure (definition in appendix) EBIT Conversion(1) EPS Corporate Items Cash Flow  20-25% full year decremental margin(1) range  Revising favorably (vs. 25-30% on Q1 c

  11. Slide 11: Appendix

    11 Appendix

  12. Slide 12: Q2 2019 to Q2 2020 Revenue and Bookings Bridges by Segment

    12 Q2 2019 to Q2 2020 Revenue and Bookings Bridges by Segment Note: Numbers may not add due to rounding DEP DFS DII DPPS DRFE Total 430 391 267 339 385 1,811 (86) (58) (37) (30) (78) (289) (2) (6) (9) (4) (2) (24) 1 - 8 4 (12) 1 342 326 228 309 294 1,499 DEP DFS DII DPPS DRFE Total 397 394 264 376 3

  13. Slide 13: Q2 2020 Organic Revenue and Bookings Bridges

    13 Q2 2020 Organic Revenue and Bookings Bridges Note: Numbers may not add due to rounding Q2 2020 Segment Growth Factors Revenue Growth Bookings Growth -20.1% -29.8% -14.8% -18.2% -14.0% -16.5% -8.8% -25.7% -20.2% -11.6% -16.0% -20.6% 0.7% 0.7% -0.7% -0.6% -1.2% -1.7% Total -17.2% -22.2% Q2 2020 Geo

  14. Slide 14: Reconciliation of Q2 2020 Net Earnings to Adj. EBIT and Adj. EBITDA

    14 Reconciliation of Q2 2020 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment Note: Numbers may not add due to rounding (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing

  15. Slide 15: Reconciliation of Q2 2019 Net Earnings to Adj. EBIT and Adj. EBITDA

    15 Reconciliation of Q2 2019 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment Note: Numbers may not add due to rounding DEP DFS DII DPPS DRFE Total 430 391 267 339 385 1,811 - - - - - 198 - - - - - 25 - - - - - 31 - - - - - 52 77 53 55 7

  16. Slide 16: Reconciliation of Free Cash Flow and Net Debt

    16 Reconciliation of Free Cash Flow and Net Debt Note: Numbers may not add due to rounding ($ millions) Q2 2020 Q2 2019 Q2 YTD 2020 Q2 YTD 2019 Net Cash Provided by Operating Activities 272 209 348 233 Capital Expenditures (39) (54) (79) (91) Free Cash Flow 233 155 269 142 Free Cash Flow as a % of E

  17. Slide 17: Reconciliation of Adjusted Net Earnings and Adjusted Diluted EPS

    17 Reconciliation of Adjusted Net Earnings to Net Earnings and Calculation of Adjusted Diluted EPS under U.S. GAAP Note: Numbers may not add due to rounding ($ in millions, except per share data) Q2 2020 Q2 2019 Q2 YTD 2020 Q2 YTD 2019 Net earnings ($) 125 198 301 304 Acquisition-related amortizatio

  18. Slide 18: Reconciliation of LTM Adjusted EBITDA and Decremental Margin

    18 Reconciliation of Corporate Last Twelve Months (“LTM”) Adjusted EBITDA and Decremental Margin Note: Numbers may not add due to rounding Q3 '19 Q4 '19 Q1 '20 Q2 '20 LTM 206 168 176 125 675 29 40 24 27 120 30 29 26 28 113 52 29 37 32 150 - 24 - - 24 317 290 264 212 1,083 3 13 7 15 38 - - (7) 1 (6)

  19. Slide 19: Reconciliation of EPS to Adjusted EPS Range

    19 Reconciliation of EPS to Adjusted EPS Range 2020 Guidance for Earnings per Share (GAAP) $4.16 $4.41 Acquisition-related amortization, net 0.71- Rightsizing and other costs, net 0.16- Gain on disposition, net (0.03) 2020 Guidance for Adjusted Earnings per Share (Non-GAAP) $5.00 $5.25 Note: Numbers

  20. Slide 20: Non-GAAP Definitions

    20 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

  21. Slide 21: Performance Measure Definitions

    21 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 receiv

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