Dover Corporation · NYSE:DOV
Dover — Investor Day (September 2020)
38 slides from Dover's investor day presentation, Sep 14, 2020
Slide 1: Dover Analyst and Investor Meeting
September 14, 2020 Dover Analyst and Investor Meeting Richard Tobin, President and Chief Executive Officer Karl Buscher, President, PSG Janel Wittmayer, President, CPC
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: Today's Speakers
Today’s Speakers Richard Tobin CEO & President Dover Corporation Karl Buscher President Pumps Solutions Group (part of DPPS) Janel Wittmayer President Colder Products Company (part of DPPS) 3
Slide 4: Dover Highlights and Performance Update
Corporate Update Dover Highlights Performance Update Strong Businesses: Premium H1 performance reflects portfolio franchises that partner with customers quality and execution: for innovative equipment and Organic Revenue Decremental components, consumable supplies, Change(1) Margin(1) aftermarke
Slide 5: Performance Update
Performance Update Demand conditions improving but not back to “normal”; order trends continuing upward trajectory from second quarter: August book-to-bill(1) >1 Latest backlog(1) up year-over-year, providing confidence for remainder of 2020 and start of 2021 Trends continue to vary by market;
Slide 6: Delivering on Capital Allocation Priorities
Delivering on Capital Allocation Priorities 2020 Priorities and Results YTD 1 Invest Organically Completed CPC greenfield facility expansion High-confidence organic investments DFR automation project (piloting in Q3) – Capacity for growth – Digitization, e-commerce Capacity and capability ex
Slide 7: Pumps & Process Solutions Performance Stands Out
Pumps & Process Solutions Performance Stands Out Organic Revenue Change(1) LTM(2) LTM(2) Adj. % Recurring Segment Revenue ’17 – ’19(3) H1 ’20 EBIT Margin(1) Revenue (est.) $B Engineered 1.6 6% (11%) 17% ~15% Products Fueling 1.5 7% (9%) 16% ~35% Solutions Imaging & 1.0 3% (9%) 21% ~70% Identificatio
Slide 8: Pumps & Process Solutions Segment Overview
Pumps & Process Solutions Segment Overview Operating Companies Common Characteristics Highly-engineered content serving high-criticality applications Component products with favorable cost-to-value-in-use dynamics Specified applications catering to loyal professional customers; co-development
Slide 9: DPPS Hygienic and Life Sciences Platform
DPPS Hygienic and Life Sciences is a ~$300M Platform within a $2B+ High Growth Market; Other Logical Adjacencies Available Brand and Product Description Key End-Markets Thermal Consumer Biopharma Sanitization mgmt. & Industrial & Medical Sterile connecters, couplings, fittings Non-invasive flowmeter
Slide 10: New Markets and Applications
Multiple Vectors to Grow Organically and Inorganically New Markets (e.g., dialysis, cell and New Markets and Applications gene therapy, thermal Expand Application Set mgmt., semiconductor) with New Technologies (e.g., disposable and single-use pumps for food & beverage) Expand TAM Strengthen the cor
Slide 11: ~$200M Biopharma & Medical Business Built Up Organically and Inorganically
~$200M Biopharma & Medical Business Built Up Organically and Inorganically 2005 2009 2012 2013 2016 2017 2018 2020 Acquired Single-Use Acquired Genderless Integrated EZ-Set New Facility New Facility Connector Connector Pump & Drive Launch Launch Launch Launch Addressing Single-Use Growth Acquired ~$
Slide 12: Biopharma Platform Growth Drivers
Biopharma Platform Growth Drivers Biologics Growing 2x Faster than Single-use Model Growing Share Traditional Pharma within Biopharma Manufacturing Efficacy: Successes with widespread Increasing Adoption: 75% of new diseases (e.g., cancer, diabetes, multiple projects in the industry incorporate
Slide 13: Dover Products Embedded Early Across Manufacturing Value Chain
Dover Products Embedded Early Across Manufacturing Value Chain R&D and Process Clinical Commercial Development Manufacturing Manufacturing Key Components Maintaining cell viability throughout the process dictates strict performance requirements: cleanliness/sterility, gentle transfer, leak-proofing,
Slide 14: Platform Built Around Logical Adjacencies and Customer Needs
Platform Built Around Logical Adjacencies and Customer Needs Quattroflow em-tec Single Use Ultrasonic Pump Heads Flowmeters CPC HFCs Connectors Dover’s biopharma businesses collaborate across sales, marketing, product development and strategic planning to drive customer intimacy and innovation 14
Slide 15: Business Overview: Quattroflow and em-tec
Business Overview: Quattroflow and em-tec 15
Slide 16: em-tec / Quattroflow Video Presentation
em-tec / Quattroflow Video Presentation Watch the video here: https://youtu.be/m-3ETCvdDRk 16
Slide 17: Quattroflow: Overview
Quattroflow: Overview Key Facts Key Products Business Mix Spare parts History Multi-use 7% Founded in 2000 Multi-use pumps Acquired by Dover in 2012 pumps 22% Revenue by HQ Single-use Product 62% Single-use Duisburg, Germany pumps 9% Single-use chambers drives Revenue Growth Technology Unique quater
Slide 18: Quattroflow: Technology Overview and Key Advantages
Quattroflow: Technology Overview and Key Advantages No dead-legs or mechanical seal; full containment Tech Low pulsation, easy flow and pressure control Overview Proportional flow characteristic Self-priming and safe dry run Flexible: Single-use and multi-use applications Scalable: Flow
Slide 19: Quattroflow: Product Overview
Quattroflow: Product Overview Flow Rate Illustrative Product Application (Liters per Hour) Size QF30 x3 R&D and Process QF150 x18 Development QF1200 x120 Clinical QF2500 x250 Manufacturing QF4400 x500 QF10k x1000 Commercial Manufacturing QF20k x1600 Quattroflow works with customers in early developm
Slide 20: Quattroflow: Primary and New Growth Applications
Quattroflow: Overview of Primary and New Growth Applications Primary / Established Applications Secondary / Growing Applications Buffer and Media Chromatography Preparation Inline- buffer dilution Bioreactor / Separator Virus Filtration Column Packing TFF Concentration/ Virus Inactivation / pH Diafi
Slide 21: em-tec: Overview
em-tec: Overview Key Facts Key Products Business Mix History Biopharma / Flow Other Founded in 1989 sensors 31% 33% Acquired by Dover in 2020 Revenue by Heart-Lung Machines HQ Product Flow 8% Finning, Germany controllers Dialysis 28% ECMO Revenue Growth Technology Ultrasonic Transit-Time Method Flow
Slide 22: em-tec: Technology and Product Overview
em-tec: Technology and Product Overview Ultrasonic Transit-Time Flow Method em-tec Product Attributes Clamp-On Transducers Compatible with all common tube designs Reusable and long-lasting Allows for custom calibration Electronic memory for easy changeovers Easily cleaned using common disi
Slide 23: em-tec: Overview of Current Biopharma Applications
em-tec: Overview of Current Biopharma Applications Key Applications Flow measurement on flexible tubes Chromatography/filtration Lab Scale flow monitoring Upstream feed control Fillings Evaluation and upscaling Process equipment control (pumps or valves) Single-use equipment flow measu
Slide 24: Business Overview: CPC
Business Overview: CPC 24
Slide 25: CPC: Overview
CPC: Overview Key Facts Key Products Business Mix History Sterile Non-recurring Founded in 1978 connectors 30% Acquired by Dover in 2005 Revenue Breakdown HQ Couplings 70% Roseville, MN Recurring Revenue Growth Technology Couplings/connectors for 4x flexible tubing for low- Thermal and Other pressur
Slide 26: CPC: Facility Overview and Plant Tour
CPC: Facility Overview and Plant Tour Watch the video here: https://youtu.be/iJe22oFp9O8 26
Slide 27: CPC: History and Evolution of Offerings
CPC: History and Evolution of Offerings Facility expansion; AQL1” launch Plastic couplings Steam-Thru Dover AseptiQuik Class 7 launch launch Acquires launch Cleanroom; LQ6 & AQG launch 1978 1982 1995 2002 2003 2005 2007 2009 2010 2013 2019 2020 Founded Added Suzhou Small order industrial park e-comm
Slide 28: CPC: Product Overview
CPC: Product Overview Key Product Key Applications Sterile Biologics Connectors Vaccines Cell and gene Biopharma therapies Hybrid and Full- Dialysis Line Couplings Lab machines Medical Ventilators Laser surgery Disinfectant systems Leak-free Sealed High-performance Connectors
Slide 29: CPC: Biopharma Offering Overview and Key Attributes
CPC: Biopharma Offering Overview and Key Attributes Tech CPC single-use connectors secure aseptic links Overview in a wide variety of biopharma environments Reliable and Robust: 25+ years of expertise in biopharma connector design and manufacturing Easy Installation and Use: quick and easy set
Slide 30: CPC: Growing Opportunity in Thermal Applications
CPC: Growing Opportunity in Thermal Applications Past (c. 1990s) Present Future Growth of computing Air conditioning no longer Industry rapidly leads to the use of low- effective for certain standardizing led by cloud flow couplings for electronics requiring new computing and social electronic
Slide 31: Questions & Answers
Questions & Answers 31
Slide 32: Appendix
Appendix 32
Slide 33: H1 2020 and Annualized '17-'19 Organic Revenue Bridge
H1 2020 and Annualized ’17-’19 Organic Revenue Bridge 1H '20 Revenue % Organic Engineered Products -11.1% Fueling Solutions -8.9% Imaging & Identification -9.2% Pumps & Process Solutions -5.0% Refrigeration & Food Equipment -12.8% Total Organic -9.5% Acquisitions 0.8% Dispositions -0.7% Currency tra
Slide 34: Reconciliation of LTM Segment Revenue and Decremental Margin
Reconciliation of Last Twelve Months (“LTM”) Segment Revenue and Decremental Margin LTM Revenue by Segment ($ in millions) Q3 '19 Q4 '19 Q1 '20 Q2 '20 LTM Engineered Products 427 422 408 342 1,599 Fueling Solutions 412 445 360 326 1,543 Imaging & Identification 275 274 257 228 1,034 Pumps & Process
Slide 35: Reconciliation of LTM Adjusted Segment EBIT Margin
Reconciliation of Last Twelve Months (“LTM”) Adjusted Segment EBIT Margin LTM Adjusted EBIT ($ in millions) Q3 '19 Q4 '19 Q1 '20 Q2 '20 LTM Net earnings 206 168 176 125 675 Add back: Corporate expense 29 40 24 27 120 Interest expense, net 30 29 26 28 113 Income tax expense 52 29 37 32 150 Loss on ex
Slide 36: Reconciliation of EPS to Adjusted EPS
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 36
Slide 37: 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 38: Performance Measure Definitions
Performance Measure Definitions Definitions of Performance Measures: Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet been satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as