Slide 1: Dover Technology Day
= DOVER } TECHNOLOGY DAY NEW YORK, NEW YORK | JUNE 4, 2012
Slide 2: Forward Looking Statements
Forward Looking Statements We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover Corporation by referring to our Form 10-K for a list of factors that could cause ou
Slide 3: Today's Agenda
Today’s Agenda 3 Time Topic Presenter Noon – 1:00 Registration, Lunch & Product Fair 1: 00 – 1:10 Opening Comments B. Livingston 1:10 – 1:50 Energy Artificial Lift B. Spurgeon D. Newman 1:50 – 2:50 Engineered Systems Pumps Refrigeration Equipment T. Giacomini D. Douglas B. Johnson 2:50 – 3:45 Workin
Slide 4: Bob Livingston, President & CEO
Technology Day New York, NY - June 4, 2012 Bob Livingston President & Chief Executive Officer
Slide 5: Dover's Business Model Positioning for Growth
Dover’s Business Model 5 Positioning for Growth Maintaining advantaged Dover business model Maintaining advantaged Dover business model Strategic Focus Areas Capturing the Benefits of Common Ownership Disciplined Capital Allocation
Slide 6: Communications Tailwinds – Positioning for Growth
Developing products to meet the needs of developing economies Artificial Lift technology gaining traction outside NA International/ BRIC growth Global energy demand Acquired technology expands Artificial Lift offerings Focus on delivering productivity to energy producers Sustainability Tec
Slide 7: Our Segments & Served End-Markets
2011 Revenue $1.4 Billion 2011 Revenue $3.1 Billion Our Segments & Served End-Markets 7 2011 Revenue $1.6 Billion 2011 Revenue $1.9 Billion Fluid Solutions Industrial Refrigeration & Food Equipment Drilling Production Downstream Handsets Medical & Life Sciences Aerospace/Industrial/Military Fast Mov
Slide 8: Our Growth Spaces
Our Growth Spaces 2011 Revenue Energy Product ID Refrigeration & Food Equip. Comm. Components Fluids 8 $5.9 B We continue to invest in our five growth spaces • Growth spaces represented 74% of 2011 revenue • Today’s presenting companies represent over 40% of growth space revenue • Diverse served e
Slide 9: Growth Through Technology and Innovation
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F Growth Through Technology and Innovation 9 Revenue of Today’s Presenting Companies Note: 2002 – 2012 Organic CAGR ~ 12% $3.5B
Slide 10: Growth Through Technology and Innovation
Growth Through Technology and Innovation 10 Technology and innovation are a key differentiator • Innovation and product development are owned at the company level • Customer needs drive innovation decisions • Mass customization a theme across many companies Strong track record of recognizing eme
Slide 11: Summary
Summary 11 Our track record of success is based on: • Core technological advantages • Leading brands in the markets we serve • Commitment to industry leadership through innovation • Strong focus on the customer Our deep understanding of the customer and our exceptional capabilities in providing
Slide 12: Bill Spurgeon, President & CEO – Dover Energy
Technology Day New York, NY - June 4, 2012 Bill Spurgeon President & CEO – Dover Energy
Slide 13: Dover Energy
Dover Energy DOVER 2011 REVENUE $8.0B Printing & Identification (20%) Energy (24%) 21% 51% 28% Dover Energy Revenue by End Markets Drilling Production Downstream Communication Technologies (17%) Engineered Systems (39%) Key Brands Drilling Production Downstream 13
Slide 14: Market Drivers
Market Drivers 14 ‘20 ‘10 165 Existing Production A dditional Production Oil & Gas Production (Mboed) Emerging markets drive demand growth Aging wells and unconventional plays increase the need for artificial lift Reserve replenishment costs are rising • Increasing role of unconventional oil •
Slide 15: Our Technologies Help Customers Achieve Their Objectives
Our Technologies Help Customers Achieve Their Objectives 15 We continue to invest and advance technologies that add customer value Customer Objectives Our Technologies Recent Acquisitions in bold Artificial Lift Systems Automation High Performance PDC Cutters Extensive Applications Knowledge
Slide 16: Dover Energy Animation
Dover Energy Animation 16
Slide 17: Artificial Lift – Attractive Growth Space In Dover Energy
Artificial Lift – Attractive Growth Space In Dover Energy 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F NA Rig Count 2002-’12 CAGR 8.5% 17 Recent acquisitions: Harbison Fischer, Oil Lift 2011, and PCS 2012 Revenue Note: 2002-2012 Organic CAGR ~16% $1B
Slide 18: Dan Newman, President – Norris Production Solutions
Technology Day New York, NY - June 4, 2012 Dan Newman President – Norris Production Solutions
Slide 19: Key Messages
Key Messages Shale and other unconventional resources are altering energy investment strategies and increasing focus in the Americas. Aging wells around the world are driving demand for artificial lift. Customers increasingly value broader artificial lift solutions and expertise. We are well
Slide 20: Artificial Lift Market Overview
Artificial Lift Market Overview North America 57% South America 10% EurAsia 16% Mid East and Africa 4% Asia Pacific 13% Artificial Lift Market 2011 ($8.7B) Rod Lift/PCP/Plunger/Gas Market ($4.0B) Plunger Lift 3% Gas Lift 4% PCP 8% Other 4% Rod Lift 30% ESP 49% Hydraulic 2% 8-10% Forecast CAGR 2011-2
Slide 21: Artificial Lift Solutions Approach
Artificial Lift Solutions Approach Build broad offering of artificial lift technologies that add customer value Acquire technologies to drive: • International growth • Penetration of new markets Expand automation technology to lower operating costs for customers and improve asset performance 2
Slide 22: Artificial Lift - Business Evolution
Artificial Lift - Business Evolution 22 Coiled Rod Solutions Gas Lift Valves Rod Lift Plunger Lift From Artificial Lift Products to Comprehensive offering with leading brands Coiled Rods Automation & Topside Monitoring Service Rigs Field Service Down Hole Controls Sinker Bar Down Hole PC Pumps Oil a
Slide 23: Broad Offering Of Artificial Lift Technologies
Wireless Monitoring Automatio n Equipment Motor Valve Flow Meter Downhole Equipment Plunge r Arriva l Senso r Liquid Level Monitoring Automatio n Equipment Flow Meter Pressure Monitoring Wellhead Valves Wireless Monitoring Broad Offering Of Artificial Lift Technologies Well Service Equipment & Artif
Slide 24: Technology and Operational Advantage Over Competition
Technology and Operational Advantage Over Competition 24 Our Technology Competition Our Advantage Sucker Rods Weatherford, Tenaris Quality, reliability, performance and availability Strong design and application engineering Downhole Pumps Lufkin – Quinn Pumps, Weatherford Quality, reliability
Slide 25: Solutions for Complete Production Life Cycle of a Well
Solutions for Complete Production Life Cycle of a Well 25 Generate Revenues Through Well’s Production Cycle XSPOC [Theta] RodstarD [Theta] Xrod [Theta] Rod pump System [HF, Norris] PCP [Oil Lift, AOT] Gas Lift [PCS] Plunger Lift [FB, PCS] Surface Equipment [Norriseal, CPSC] Service Equipment [C-Tech
Slide 26: Oil Lift and PCS Acquisitions
Oil Lift and PCS Acquisitions 26 Oil Lift Technologies PCS Technology Top Drives, Progressing Cavity Pump (PCP), Rod Lock BOP Gas Lift, Nitrogen Generation, Plunger Lift, Automation, Products Offering Strategic Rationale Provides an integrated offering in the relatively sizable and fast-growin
Slide 27: Acquired Technology Drives International Growth – Australia
Acquired Technology Drives International Growth Acquired technology (Oil Lift) immediately opened opportunity in Australia Market Opportunity Significant Coal bed methane reserves ~1,500 wells drilled during the last five years with plans to add another 18,000 by 2020 to meet LNG commitments A
Slide 28: Acquired Technology Drives International Growth – Heavy Oil
Acquired Technology Drives International Growth Acquired and existing technologies give access to developing heavy oil markets in Oman and Middle East Market Opportunity Light oil reserves depleting quickly Estimates as high as 971 billion barrels of heavy oil deposits in Middle East Growing h
Slide 29: Acquired Technology Drives Penetration in New Markets
Acquired Technology Drives Penetration in New Markets 29 Nitro2Go™ Nitrogen Generation delivers faster fluid recovery and faster first gas sales. Ideal for kicking off new fracs and unloading wells affected by adjacent fracking Rapid fluid recovery of 2,000+ Barrels per day Quicker and more ec
Slide 30: Gas Lift Technology in New Markets
Acquired Technology Drives Penetration in New Markets 30 Gas lift technology prevalent in shallow offshore, international and shale markets Market Opportunity Gas lift used more prevalently internationally Shallow offshore plays utilize gas lift routinely as artificial lift Our Growth Use our
Slide 31: Automation Reduces Operating Costs
Automation Reduces Operating Costs 31 Smart systems optimize production so customers get the most from wells The 3DSO™ Plunger Arrival Sensor ensures optimal plunger lift operations and optimal production 3-D technology detects the plunger in multiple axes, eliminating false arrivals Long-term d
Slide 32: Automation Reduces Operating Costs – Chemical Injection
Automation Reduces Operating Costs 32 Accurate and reliable chemical injection reduces production costs Economic Case Continuous Injection FB iChem Pump Volume 4 gal / day 4 gal / day Cost $8 / gal $8 / gal Pumping Days 120 days 100 days Injection Points 150 150 Total Chemical Cost per year $576,000
Slide 33: Automation Reduces Operating Costs – Tank Level
Automation Reduces Operating Costs 33 Efficient, dependable tank level measurement for the Oil and Gas industry Economic Case Reduce frequency of fluid hauls from well Tank overflow avoidance Eliminates $23k on average of remediation cost for overflow Environmental benefit Operator Product
Slide 34: Faster Deployment of Automation Solution
Faster Deployment of Automation Solution and reduced operating cost 34 Complete gas well pad automation offering provides maximum well control and optimization capabilities 5. Pad control 1. Plunger Control 2. Gas Measurement 3. Chemical Injection 4. Tank Monitoring Automation Technology Complete ga
Slide 35: Summary
Summary Artificial lift – attractive growth space within energy segment Aging wells and unconventional plays – drive artificial lift growth Broad, integrated technologies help us drive: International Growth Penetration of new markets We are well positioned to deliver global, comprehensiv
Slide 36: Tom Giacomini, President & CEO – Dover Engineered Systems
Technology Day New York, NY - June 4, 2012 Tom Giacomini President & CEO – Dover Engineered Systems
Slide 37: Dover Engineered Systems
Dover Engineered Systems 37 DOVER 2011 REVENUE $8.0B Printing & Identification (20%) Energy (24%) 25% 39% 36% Dover Engineered Systems Revenue by End Markets Fluid Solutions Refigeration & Food Equipment Industrial Communication Technologies (17%) Engineered Systems (39%) Key Brands Fluid Solutions
Slide 38: Our Technologies Help Customers Achieve Their Objectives
Our Technologies Help Customers Achieve Their Objectives Increased Efficiency Sustainability Consumer Product Safety 38 Automation technology: • Smart and Adaptable Industrial Production Equipment • Fast and Mobile Vehicle Lift Technology Broad Portfolio of Pump Technologies and Application Expe
Slide 39: Pumps
Pumps 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 39 Revenue Recent Acquisitions: Neptune 2008, Red Screw 2011 and Quattroflow & Maag 2012 Note: 2002-2012 Organic CAGR ~7% $600M
Slide 40: Refrigeration
Refrigeration 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 40 Revenue Recent Acquisitions: Tyler and Barker 2009, Advansor 2011 Note: 2002-2012 Organic CAGR ~7% $1.2B
Slide 41: Dean Douglas, President – Pump Solutions Group
Technology Day New York, NY - June 4, 2012 Dean Douglas President – Pump Solutions Group
Slide 42: Key Messages
Key Messages The positive displacement (“PD”) pump market is an attractive $8B+ space within the broader pump market PD pumps are a key process technology for transfer of valuable fluids; serving diverse end markets, applications & technologies We have a strong portfolio of leading brands and
Slide 43: Global Pump Market
Global Pump Market 43 Centrifugal Positive Displacement 20% 51% 29% $8.2B Americas 20% Asia 40% EMEA 40% 17% 11% 13% 6% 3% 3% 8% 11% 9% 4% 4% 11% O&G Chemical W/WW Specialty Pump Mining Hygienic Maritime Residential Construction Building Power Gen Metal Mfg. Pulp Paper Other GLOBAL PUMP MARKET $41B
Slide 44: Positive Displacement Pumps
0 20 40 60 80 100% Di ap hr ag m $1.9 PC / Sc re w $1.7 Ge ar $1.4 Pi st on $1.2 Lo be $0.7 Pe ris ta lti c $0.6 Va ne $0.6 Positive Displacement Pumps Positive Displacement market is attractive • Global • Diversified; Energy, Chemical, Hygienic, W/WW • Technology gaining broader acceptance 44 PD
Slide 45: Our Pumps Position
Our Pumps Position A leading designer & manufacturer of positive displacement pumps & systems Diversified Markets: Chemical, Energy, Hygienic, W/WW, Transport, Military/Marine Global Brands: Wilden, Maag, Blackmer Strong margins and lean operations Doing business in more than 100 countries
Slide 46: Where We Are
Where We Are 46 • 8 countries • 15 global locations • 860 channel partners • 7 training centers Headquarters Operations Training Centers Headquarters Downers Grove, USA Grand Rapids, USA Shanghai, China Grand Terrace, USA North Wales, USA Charlotte, USA Norfolk, USA Auxerre, France Kamp-Lintfort, Ge
Slide 47: Successfully Executing Our Strategy
Successfully Executing Our Strategy Ongoing strategic objectives... Build global footprint, emphasizing emerging markets Grow portfolio of PD pump technologies Increase systems and packaging capabilities Capitalize on operating synergies Build best-in-class operations ... with recent successes Bui
Slide 48: Technology Expansion
Technology Expansion 48 Priority for portfolio expansion Technology in current portfolio Opportunity to expand 2 3 4 5 6 7 8 9 Vertical markets size ($B) (2012) 0 20 40 60 80 100 Pump technology share of PD market (%) Vane Screw Diaphragm Peristaltic Gear Lobe Piston Chemicals Others Hygienic Energy
Slide 49: New Technology
New Technology 49 Innovation: Only screw compressor fully integrated into PTO (Power Take off) specially designed for truck transfer Efficient, light weight, compact design Cost Benefit: More loading yield, ease of installation, less maintenance Truck unloading / loading for Dry Bulk transfe
Slide 50: Technology Competitive Advantage
Technology Competitive Advantage 50 Key Market Drivers Key Technology Advantages Large customers in Chemical Industry driving “Green Initiatives” to reduce energy and emissions Example: Dow Chemical globally moving to reduce plant compressed air consumption by 15% New Air Distribution System (
Slide 51: Vertical Market Penetration
Vertical Market Penetration 51 Leverage and tailor application expertise / tech support “Best” technology solution for discrete applications Deep market segmentation, opportunity prioritization Chemical Energy Hygienic PSG product locations Vertical vs. regional channel management Develop
Slide 52: Hygienic Solution Selling
Hygienic Solution Selling 52 From Batch to In-Line Formulation, the “just in time” for toothpaste manufacturing Increase facility production yields worldwide Improved precision of formulation, reducing waste, and process downtime Changed toothpaste production from “batch” manufacturing to “in-
Slide 53: Globalization Emerging Markets
Globalization Emerging Markets 53 Strong Sales growth especially in Asia-Pacific Investing to grow pumps business in emerging markets Maag & Red Screw accelerating China growth Expanding Shanghai manufacturing facility Driving share gain in chemical, energy, hygienic verticals Adding resources
Slide 54: Globalization China
Globalization China 54 Accelerating Growth in China Strengthen Business Development, Engineering, and Marketing capabilities Shanghai facility expansion from 3,600 m2 to 11,200 m2 • Localizing Neptune, Almatec, Blackmer, and Maag product mfg Overview Location • Lingang, Pudong District of Shan
Slide 55: Strengthen Foundation
Strengthen Foundation 55 On-time delivery 90%+ across all facilities Implemented DES Lean Enterprise, Op-Co Lean teams and continuous improvement programs in all facilities Leverage manufacturing footprint to drive margin expansion Lean Enterprise Supply Chain Acquisition Integration Integra
Slide 56: Acquisition Integration
Acquisition Integration 56 • Adds to PSG Technology portfolio Innovative external gear PD pump technology Market leader in Plastics/Polymer and Extrusion segment of Chemical market Cross selling opportunities Strategic Rationale Key Value Drivers Lean implementation Switzerland, Germany, and
Slide 57: Summary
Summary 57 Changing “Shape” of Business Continue to outgrow market organically; while building stable of brands through acquisitions Grow sales outside US & Europe (currently 35%), before acquisitions Shift from 20% to 40% direct sales by 2015 through vertical market strategy Develop more balanced p
Slide 58: Bill Johnson, President – Hill Phoenix
Technology Day New York, NY - June 4, 2012 Bill Johnson President – Hill Phoenix
Slide 59: Key Messages
Key Messages Capitalize on advantaged positions • Refrigerated Systems – Technology • Cases – Scale • Specialty Cases – Merchandising and Flexibility Expand in higher margin domestic segments through our superior customer value proposition • Tuck-in acquisitions in specific spaces or to gain acc
Slide 60: Raising the Bar CO2 Systems
Raising the Bar 60 CO2 Systems
Slide 61: Key Investment Highlights and Growth Opportunities
Key Investment Highlights and Growth Opportunities 61 Broadest range of products and services Best in class products and services Long-standing customer relationships Recognized brand synonymous with superior technology A Leader… …in an Attractive Industry… …with Compelling Growth Opportunit
Slide 62: What's Down the Road?
What’s Down the Road? 62 Customers Facing Margin Pressure and Rising Energy Costs Commercial electricity prices up 4% per year since 2000 Grocery store EBITDA and utilities costs both typically single-digit percent of sales Installing door cases a simple way for grocers to limit refrigeration
Slide 63: Raising the Bar – Glass Door System
Raising the Bar – Glass Door System 63 IP protected, integrated frame design – “heart of energy reduction” benefit Infinity edge “wall of glass” door design – aesthetically pleasing and best in energy (low and medium temperature) 30%+ energy benefit over competitors’ best- in-class offerings
Slide 64: PureView Low Temp Door and Frame System
PureView Low Temp Door and Frame System 64 • Insulation and Integration are over-arching design features for door and frame • Complexity removed from frame to easy access front raceway
Slide 65: PureView Low Temp Frame Elements Designed for Value
PureView Low Temp Frame Elements Designed for Value Unlike traditional cases, our PureView door system consists of insulated frame members integral to the manufacturing process Any component that is in the cold zone is now an insulated member … making us the only manufacturer in the industry who
Slide 66: PureView Low Temp Frame System Designed for Value
PureView Low Temp Frame System Designed for Value Metal door supports (aluminum extrusions) added to exterior of frame No direct contact with refrigerated interior. LED light rods are quick- connect for easy removal Electrical accessories have been removed from the mullions and made easily a
Slide 67: Competitive Advantage – Annual Energy Savings
Competitive Advantage … Annual Energy *Regions and kWH costs as defined by the Bureau of Labor Statistics Competitor A = $121 Competitor B = $157 Competitor C = $173 Competitor A = $86 Competitor B = $113 Competitor C = $124 Competitor A = $92 Competitor B = $120 Competitor C = $132 Competitor A = $
Slide 68: New Refrigeration Products Creating Superior Customer Value
New Refrigeration Products Creating Superior Customer Value 68 Our Total Solution • Low Energy Door • Low Energy Door Frame • ECM Fan motors • Clearvoyant/Other LED’s • NRG High Efficiency Coil As compared to competitor “Best In Class” offering (5-door case example) Regional Retail Store – 56,000 Sq
Slide 69: Medium Temp Door & Frame System Designed for Value
Medium Temp Door & Frame System Designed for Value Over-sized Infinity Edge door More glass, less frame Premium, elegant offering Largest door in the industry Available for all medium temp applications Single or B-swing Same accessible front raceway as Low Temp 69
Slide 70: A Strong Position in Advanced Refrigeration Technology
A Strong Position in Advanced Refrigeration Technology 70 Hill PHOENIX • Key Technology: C02, Secondary Glycol & Direct Expansion Advansor by Hill PHOENIX • Key Technology: C02 Systems • Location: Denmark Second Nature Technology At the forefront in “Green Technology” Systems Lowest Refrigerant
Slide 71: Develop Global Systems Design Platform
Develop Global Systems Design Platform 71 (Hours vs. Weeks) Generate Spec Quote Design Detailed Europe South America India China North America INTEGRA Rules-based design at time of quote --- 15 years cumulative development Value Proposition Limited Global Engineering resources required Local man
Slide 72: The Closed Refrigerant Cycle…Driving CO2 Systems
The Closed Refrigerant Cycle…Driving CO2 Systems HFCs R404A, R134a, R507, R407 HCFCs R22 CFCs R12, R502 Natural refrigerants CO2, NH3, hydrocarbons Kyoto Protocol Global warming Technical issues Local safety Montreal Protocol Ozone depletion Current Day Drivers European Commission plan
Slide 73: CO2 … A Sustainable Solution – HFC Reduction
CO2 … A Sustainable Solution – HFC Reduction 73 Advansor CO2 Booster System 100% HFC HFC Primary Only (60 - 70% HFC Reduction) ZERO HFC SNMT2LX CO2 Cascade System DX SYSTEM
Slide 74: HP Refrigeration Technology Development
HP Refrigeration Technology Development MORE LESS MORE En er gy E ff ic ie nc y Size of Bubble Indicates Relative Total Cost of Ownership GREEN 2010 • LT CO2 DX • MT CO2 Secondary 2009 •CO2 DX Cascade •MT Glycol Secondary 2006 • LT CO2 Secondary • MT Glycol Secondary 2008 • LT CO2 Secondary • MT Com
Slide 75: Advanced Refrigeration Technology
Advanced Refrigeration Technology 75 Significant addition to the Second Nature product family Provides rapid expansion of Transcritical CO2 Booster technology in North America Positions Hill PHOENIX as a global leader in installed CO2 systems
Slide 76: Energy of CO2 Transcritical Booster Systems vs. Conventional HFC Systems
Energy of CO2 Transcritical Booster Systems vs. Conventional HFC Systems 76 CO2 Booster Systems use carbon dioxide as the only refrigerant. CO2 is a “natural refrigerant” and is harmless to the environment. Compared to conventional HFC direct expansion systems, the CO2 booster system is more e
Slide 77: World Energy Map – CO2 Booster Systems
World Energy Map – CO2 Booster Systems 77 CO2 Booster solutions CO2 Subcritical cascade CO2 Booster solutions Enhanced CO2 Booster solutions Current CO2 portfolio covers the world
Slide 78: CO2 Systems in North America
CO2 Systems in North America A Leader in Applied Technology With 50+ CO2 systems installed SNLT2 CO2 LT Secondary installations SNLTX2 & SNMT2LX CO2 Cascade Installations 1st System Installation More projects anticipated 78 LEGEND Installation Locations
Slide 79: Summary … Hill PHOENIX Continues to Build on its Strengths
Summary … Hill PHOENIX Continues to Build on its Strengths 79 Meeting the Dynamic Needs of Today’s World Sustainability Evolving Customer Demands Energy Leadership Distributed Refrigeration Systems Coolgenix™ Case Technology Second Nature® Technologies – CO2 and Secondary Fluids Climate Keeper™ Adva
Slide 80: Summary
Summary 80 Key Message Capitalize on advantaged positions Refrigerated Systems –Technology Cases – Scale Specialty Cases - Merchandising and Flexibility Expand in higher margin domestic segments through our superior customer value proposition Tuck-in acquisitions in specific spaces or to gai
Slide 81: Jeff Niew, President & CEO – Dover Communication Technologies
Technology Day New York, NY - June 4, 2012 Jeff Niew President & CEO – Dover Communication Technologies
Slide 82: In-Ear Audio, Fit For a Smartphone
On stage In-ear Audio, Fit For a Smartphone On the phone Pro audio sound : Designed for the ear : Discrete packaging : Best signal to noise ratio In-ear audio technology designed for musicians, paired with your mobile music MEMS microphones raising the bar on accessories, matching the performance of
Slide 83: Communication Technologies
Communication Technologies 83 Communication Technologies (17%) Printing & Identification (20%) Energy (24%) Engineered Systems (39%) 31% 18% 17% 15% 19% Handsets Life Sciences Aerospace / Industrial Military Telecom / Other Key Brands Revenue by Key Market DOVER 2011 REVENUE $8.0B
Slide 84: Key Messages
Key Messages The smartphone market has, and will continue to, experience high growth Our customers view audio technology as a differentiator Knowles and Sound Solutions have unmatched scale and offer best-in-class audio technologies We are uniquely positioned to meet future audio requirement
Slide 85: Knowles Acoustics and Sound Solutions
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F Knowles Acoustics and Sound Solutions 85 Revenue Sound Solutions acquired in 2011 Note: 2005 – 2012 Organic CAGR ~ 39% $1.2B
Slide 86: Knowles Acoustics & Sound Solutions – Attractive Growth Platform
2005 2006 2007 2008 2009 2010 2011 2012F Knowles Acoustics & Sound Solutions – Attractive Growth Platform 40% 38% 21% Total Acoustic Share KA AAC Other 86 Source: Credit Suisse & Knowles estimates Market Represents: MEMs Mics ECM Mics Speakers Receivers (6)
Slide 87: Knowles & Sound Solutions Key Application Areas
Knowles & Sound Solutions Key Application Areas 87 Consumer Electronics • MP3 players • Navigation • Compact/Video cameras • Portable DVD • Dictaphones Mobile Phones All segments • Basic • Feature • Smartphones Computing • Tablets • Notebooks • Netbooks
Slide 88: Handset Market Overview
Handset Market Overview Market Dynamics • Smartphones fastest growing segment (4X) of the handset market • 3G and smart phone use penetrating emerging markets Growth Drivers • Higher network /data rates (LTE/4G tech) enabling new applications with higher speeds • Combination of carrier push with
Slide 89: Smartphone Market Share
0 200 400 600 800 1,000 1,200 1,400 2012 2013 2014 2015 Other (8+) Apple Samsung Nokia Smartphone Market share (units in millions) 89 Source: Gartner & Knowles estimates Note: Overall handset market will see ~ 7.5% CAGR 2010 - 2015, and grow to over 2.2 billion units annually by 2015
Slide 90: SIRI
SIRI 90
Slide 91: Market Illustrations
Market Illustrations 91 MEMS Microphone MEMS Microphone Balanced Armature Receivers Speaker / Speaker Box Receiver MEMS Microphone
Slide 92: Handset Content Evolution and Rising Component ASP
Handset Content Evolution and Rising Component ASP 92 PAST PRESENT FUTURE ENTRY FEATURE SMART PHONE •1 ECM •1 MFD < $1 •1 ECM •1 RCVR/MFD < $1 •1 SiSonic/ECM •1 MFD/RCVR < $1 •1 SiSonic •1 RCVR •1-2 SiSonic •1 RCVR •1 SPKR •1 ECM •1 MFD < $1 ~ $1 ~ $2 •1 SiSonic •1 RCVR •1 SPKR •1-2 SiSonic •1 RCVR
Slide 93: Supporting Market Opportunities: R&D Spending for Knowles
Supporting Market Opportunities: R&D Spending for Knowles 93 2007 2008 2009 2010 2011 2012E R&D Spend (averaging 6% - 7% of Revenue) * * * Includes Sound Solutions
Slide 94: Sound Solutions Technologies
Sound Solutions Technologies 94
Slide 95: Market Needs and Technology
Market Needs Market Needs and Technology 95 Product Technology N’Bass Silicone Speaker Speaker Box Manufacturing Technology Full Automation High Flex Automation Semi Automation More Output Integrated Design Increased Bass
Slide 96: N'Bass – Enhanced Bass
N’Bass – “Enhanced Bass” A unique sound enhancing technology increasing the acoustic performance in small mobile devices Mobile device designers want: • More audio performance from the same (or smaller) form factor Mobile users want: • More bass • Louder output New Speaker/Receiver Technologie
Slide 97: How N'Bass works
How N’Bass works • N’Bass increases the virtual back volume of a speaker box, generating more low frequency output, without increasing the size With N’Bass, mobile designers benefit from same form factor Mobile users hear more bass New Speaker/Receiver Technologies = + Speaker Back Volume Spea
Slide 98: Silicone Speaker
Silicone Speaker Ultra-high excursion membrane • Louder speakerphone Higher compliance • Better bass Robust and reliable design • Consistent performance over phone lifetime • Water resistant New Speaker/Receiver Technologies 98
Slide 99: Moving Up the Value Chain
Moving Up the Value Chain Speaker Core Speaker Box Integrated Speaker Box w/Technology Enhancement Pe rf or m an ce & V al ue Integration Audio output for the phone Integrated by phone manufacturer Integrated audio package for the phone manufacturer ‘Known’ acoustic performance Reduces pho
Slide 100: Silicone Combined with N'Bass Technology
Silicone combined with N‘Bass™ Technology is the ideal combination for portable audio applications Silicone Speaker N’Bass Speaker Box w/Technology Enhancement Integrated Speaker Box System 100
Slide 101: Manufacturing Concepts: Pre-Acquisition
Manufacturing concepts: Pre-Acquisition High Volume Automation 40M Pcs per line / year 20 employees per line 2M Pcs per employee / year Semi Automated Manufacturing 5M Pcs per line / year 80 employees per line 60k Pcs per employee / year 101 Manufacturing Gap • Modular • Flexible set up • Fast
Slide 102: Manufacturing Concepts: Post-Acquisition
High Flexible Automation Manufacturing Concepts: Post-Acquisition 102 13M Pcs per line / year 40 employees per line 325k Pcs per employee / year High Volume Automation 40M Pcs per line / year 20 employees per line 2M Pcs per employee / year Semi Automated Manufacturing 5M Pcs per line / year
Slide 103: Summary
Summary Sound Solutions has an intimate understanding of “user case” applications and requirements Expert in design of high performance speakers and receivers for use in extremely small spaces Pipeline is full with differentiated next generation speaker and receiver technologies Breadth of m
Slide 104: Micro-Acoustic & Human Interface Products
Micro-Acoustic & Human Interface Products Michael Adell President
Slide 105: MEMS Microphone Technology
MEMS Microphone Technology 105
Slide 106: Innovation Driven by Market and End User Needs
Innovation Driven by Market and End User Needs 106 Voice and VOIP Communication Audio/Video Recording Voice based UI D if fe re nt ia te d In du st ri al D es ig n Small Size High Signal/Noise Ratio High Dynamic Range Packaging MEMS ASIC Market Needs Product Technology Innovation Focused on developi
Slide 107: Improving User Experience Through Multi-microphone Technologies
Improving User Experience Through Multi-microphone Technologies 107 Record in Stereo Enjoy in Stereo Cancel Noise Clearer Signal Noise Reduction Stereo Recording
Slide 108: Innovation
Innovation 108 Increasing performance while reducing cost and size Packaging Innovation MEMS Innovation 3.5X size reduction High Performance ASIC Innovation 5X size reduction • Lower noise • Lower current • High dynamic range
Slide 109: Knowles Unique Position
Knowles Unique Position 109 ASIC MEMS Packaging All in-house/integrated design and manufacturing capability of key components High volume manufacturing capability Rapid conversion of innovation to mass production 3 Billionth SiSonic™ Shipped May 2012 1 Billionth SiSonic™ Shipped August 2009
Slide 110: Competitive Advantage Summary
Competitive Advantage Summary Vertical Integration • MEMS, ASIC, Package Design • We control our Design and IP Scale • 3 Billion Units Shipped to date; Nearest Competitor shipped < 200M • Absolute R&D Spending exceeds rest of the market Rapid improvement in performance while reducing cost and
Slide 111: Integrated Acoustic Solutions
Integrated Acoustic Solutions … to outstanding Acoustic System Solutions From best-in-class stand-alone Acoustic components … 111 Speakers Receivers Microphones Acoustic Design Mechanical Design System Solution “Algorithm”
Slide 112: Integrated Acoustic Solutions – Market and Customer Drivers
Integrated Acoustic Solutions– Market and Customer Drivers Improving user experience drives more demanding acoustic performance – larger acoustic content • Components integrated into acoustic modules with high performance Industrial design (thin, curved, ….) requires component integration Fast
Slide 113: Summary
Summary Smartphone market is strong Audio: a key differentiator Knowles offers scale and best-in-class audio components We are uniquely positioned to deliver the next generation of integrated acoustic solutions 113
Slide 114: Dover Technology Day
= DOVER } TECHNOLOGY DAY NEW YORK, NEW YORK | JUNE 4, 2012
Slide 115: Closing Q & A
Closing 115 Q & A