Dover Corporation · NYSE:DOV
Dover — Investor Presentation (January 2017)
23 slides from Dover's investor presentation, Jan 13, 2017
Slide 1: Dover Investor Presentation
Dover Investor Presentation January 12, 2017 Bob Livingston President & Chief Executive Officer
Slide 2: Forward looking statements
2 Forward looking statements 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 by referring to the documents we file from time to time with the SEC, i
Slide 3: Our strategy to create long-term value
3 Our strategy to create long-term value Build platforms in key markets with significant growth potential Capitalize on our expertise by providing a larger suite of products and solutions to customers on a global basis Innovate to launch new products to help customers win in their markets Co
Slide 4: Segments, key platforms, and unique capabilities
4 $1.3 $2.5 $2.2 $1.6 2017F Revenue Refrigeration & Food Equipment • Retail refrigeration • Food equipment • Heat transfer solutions Fluids • Retail fueling • Hygienic & Pharma • Polymer processing equipment • Specialty industrial pumps Engineered Systems • Marking & Coding • Digital Printing • Refu
Slide 5: Select growth markets at a glance - Energy
5 Select growth markets at a glance - Energy Estimated market size $8.0B $4.0B 2017 – 2019 est. market CAGR Key competitors Drilling & Artificial Lift (USS, DAL) Bearings & Compression (Waukesha, Cook) 2017F DOV revenues ~$725M ~$140M high potential growth tied to rig count growth and new well compl
Slide 6: Select growth markets at a glance - Engineered Systems
6 Select growth markets at a glance - Engineered Systems Text Estimated market size $2.0B $3.5B 2017 – 2019 est. market CAGR double- digits Key competitors Digital Printing (MS & JK) Refuse collection, compaction & processing (ESG) $3.0B Auto service equipment (VSG) 2017F DOV revenues ~$835M <$200M
Slide 7: Select growth markets at a glance - Fluids
7 Select growth markets at a glance - Fluids Estimated market size $2B $7B 2017 – 2019 est. market CAGR Key competitors 2017F DOV revenues ~$1.3B ~$250M Retail Fueling (OPW, Wayne,Tokheim, Fairbanks) low-to-mid singles, plus EMV lift mid-to-high singles Key growth drivers Hygenic & Pharma (Hydro, CP
Slide 8: Select growth markets at a glance - Refrigeration & Food Equipment
8 Select growth markets at a glance - Refrigeration & Food Equipment Estimated market size $6.0B $2.5B $11.0B 2017 – 2019 est. market CAGR Key competitors Retail Refrigeration (Hillphoenix & Anthony) 2017F DOV revenues ~$300M ~$1.1B ~$215M Food Equipment (UB & Belvac) low-singles mid-singles mid-sin
Slide 9: Building the Dover Fueling Solutions platform
9 Building the Dover Fueling Solutions platform Pre 2013 • Hanging hardware • Valves • Car wash systems • Fleet fueling systems 2013 • Containment systems • Access & fill covers • European style piping 2016 • Dispensers • Automation & POS systems • Wireless tank gauges • Cloud-based /remote monitori
Slide 10: Dover Fueling Solutions - Wayne Fueling acquisition
10 Dover Fueling Solutions - Wayne Fueling acquisition Dispensers, POS systems and service for global retail fueling markets; strong US position Completes end-to-end global retail fueling solution Full participation in US EMV upgrade cycle Highly synergistic with Tokheim 2017F Revenue: ≈ $
Slide 11: Q4 update
11 Q4 update Solid fourth quarter activity Overall operating performance within previous guidance range – Early cycle oil & gas related end-markets showing sequential improvement – Printing & Identification platform remains strong – Industrial businesses generally performing at/near expectations
Slide 12: 2017 preview
12 2017 preview Organic growth outlook Significant revenue and accretion from 2016 acquisitions Meaningful carryover benefits from prior restructuring and lower 2017 restructuring costs Offsets from compensation & investment, interest and corporate expense, and FX Modest core margin* impro
Slide 13: Revenue drivers in 2017
13 Revenue drivers in 2017 Energy (up 13% to 16%*) – Growth in North American rig count – Capex increases drive well completion activity Engineered Systems (up 1% to 3%*) ‒ Completed acquisitions ‒ Continued adoption of digital printing technology; Strong Printing & Coding markets ‒ Modest indus
Slide 14: 2017 summary
14 2017 summary Fully leverage recovery in North American oil & gas markets Capture significant acquisition growth in Fluids and Engineered Systems Core margin improvement Acquisition integration 14
Slide 15: Capital allocation
15 $- $400 $800 $1,200 $1,600 Acquisitions Capex Dividends Share Repurchase $ in millions 2012 2013 2014 2015 2016E Return to investors Capital allocation Invest in growth; acquisitions and capex ≈ 60% over 5 years Consistently return cash to shareholders; dividends and repurchases ≈ 40% over 5
Slide 16: Key takeaways
16 Key takeaways Our strategy remains consistent. We have great platforms serving markets that offer ample opportunities for growth We are anticipating strong growth and have above market expectations of this portfolio. We continue to expand our capabilities to service our customers with a focus
Slide 17: Slide 17
Slide 18: Appendix
18 Appendix
Slide 19: FY 2016 guidance update
19 FY 2016 guidance update 19 Prior 2016 EPS Guidance – Continuing Ops (GAAP) $3.00 - $3.05 – Plus: Net benefit on disposition(1): ≈$0.31 – Less: Q4 Wayne related acquisition costs(2): ≈($0.05) – Less: Q4 Product recall costs: ≈($0.09) Updated 2016 EPS Guidance – Continuing Ops (GAAP) $3.17 - $3
Slide 20: FY 2017 Guidance – Revenue & margin by segment
20 FY 2017 Guidance – Revenue & margin by segment 2017F Energy Engineered Systems Fluids Refrigeration & Food Equip Total Organic rev. 13% - 16% 1% - 3% 0% - 2% 0% - 2% 3% - 5% Acquisitions - ≈ 7% ≈ 31% - ≈ 10% Dispositions - (1%) - (5%) (1%) Currency (1%) (2%) (2%) (1%) (2%) Total revenue 12% - 15%
Slide 21: FY 2017F Guidance
21 FY 2017F Guidance Revenue – Organic revenue: 3% - 5% – Completed acquisitions: ≈10% – Dispositions: (1%) – FX impact: (2%) – Total revenue: 10% - 12% Corporate expense: ≈ $125 million Net interest expense: ≈ $133 million Full-year tax rate: ≈ 28% Capital expenditures: ≈ 2.3% of revenue
Slide 22: 2017F EPS Guidance – Bridge
22 2017F EPS Guidance – Bridge 2016E EPS – Continuing Ops (GAAP) – Mid-point: $3.19 – Less 2016 gain on dispositions(1): (0.40) – Less 2016 earnings from dispositions(2) : (0.05) – Plus 2016 charges related to expected recall: 0.09 2016E Adjusted EPS $2.83 – Net restructuring(3): 0.08 - 0.10 – P
Slide 23: Energy commentary
23 Energy commentary Segment revenue driven by pace of rig count and capex spending (influenced by oil price dynamics) ‒ Directly impacts drilling, artificial lift and automation markets (two-thirds of segment revenue) Drilling more correlated with rig count Artificial lift and automation more