Slide 1: Investor Meeting December 8, 2014
Investor Meeting December 8, 2014
Slide 2: Dover Day 2014 Agenda
2 Dover Day 2014 Agenda Time Presenter Topic 12:00 – 1:00 Lunch with Dover Executives Paul Goldberg Welcome Bob Livingston Strategy & Overview Soma Somasundaram Energy Andy Fincher Engineered Systems 2:30 – 2:45 Break Bill Spurgeon Fluids Bill Johnson Refrigeration & Food Equipment Brad Cerepak Fina
Slide 3: Forward looking statements
3 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 4: Investor Meeting December 8, 2014 - Bob Livingston
Investor Meeting December 8, 2014 Bob Livingston President & Chief Executive Officer
Slide 5: Our strategy is focused on
5 Our strategy is focused on Expanding our businesses in key markets that offer significant growth potential Capitalizing on our expertise and providing products and solutions globally to customers who value our offerings Innovating to address our customers’ needs and help them win in their ma
Slide 6: Our strategy execution revolves around key objectives
6 Our strategy execution revolves around 5 key objectives To develop, acquire and expand our core technological advantages To grow and acquire leading brands in the markets we serve To pursue industry leadership through innovation and scale To be steadfast in delivering unwavering customer f
Slide 7: We continue to execute on our guiding strategy and objectives
7 We continue to execute on our guiding strategy and objectives Our business profile is more consistent and focused, with sustainable higher margins and returns We have expanded our businesses within our growth areas, resulting in organic and acquisition growth at all segments We have accelera
Slide 8: Our track record of success
8 Our track record of success $0 $3,000 $6,000 $9,000 2004PF 2011 2014E Revenue $ in millions $0 $500 $1,000 $1,500 2004PF 2011 2014E Segment Income $ in millions $0 $300 $600 $900 2004PF 2011 2014E Free Cash Flow* $ in millions $0.00 $0.40 $0.80 $1.20 $1.60 2004 2011 2014E Dividend Per Share S&P: 4
Slide 9: Dover has several levers for shareholder value creation
9 Dover has several levers for shareholder value creation 9 GROWTH 2% - 5% organically, complemented by acquisition growth MARGIN Expand “core” margin 30 to 50 bps per year* CASH FLOW Generate free cash flow in excess of 11% of revenue Substantial growth opportunities Leverage Dover productivity pro
Slide 10: Long-term tailwinds across our businesses
10 Long-term tailwinds across our businesses Emerging economies Sustainability & Productivity Consumer product safety Global energy demand Energy efficiency Environmental regulations Green initiatives Labor inflation Increasing living standards Rising consumer class Automobile ownershi
Slide 11: Broad organic growth opportunities: Energy and Engineered Systems
11 Broad organic growth opportunities Energy Expand in North American artificial lift markets with a highly focused basin-by-basin strategy Provide productivity solutions through ESP offering and our new Automation platform Expand geographic presence and participation in global tenders Enginee
Slide 12: Broad organic growth opportunities: Fluids and Refrigeration
12 Broad organic growth opportunities Fluids Capitalize on emerging regulation in Fluid Transfer Increase NA penetration in chemicals and plastics Expand geographic reach of pump technologies Refrigeration & Food Equipment Deliver innovative solutions that enable our customers to sell more a
Slide 13: Multiple areas for acquisition growth
13 Multiple areas for acquisition growth Fluids Build on our position in select verticals and pump technologies Additional opportunities to expand in Fluid Transfer Engineered Systems Expand verticals served in Printing Selective industrial opportunities Refrigeration & Food Equipment Grow
Slide 14: Dover productivity processes drive margin enhancement
14 Dover productivity processes drive margin enhancement Dover productivity processes – Global supply chain Target $30 - $40 million in annual savings – Focus on continuous improvement (“CI”) and lean Productivity projects expected to be 25% of capex spend – Shared infrastructure in plants and
Slide 15: Capital allocation
15 $- $300 $600 $900 $1,200 Acquisitions Capex Dividends Share Repurchase $ in millions 2012 2013 2014E Return to investors Capital allocation Invest in growth; acquisitions and capex ≈ 52% Consistently return cash to shareholders; dividends and repurchases ≈ 48% Investment spending will remai
Slide 16: Summary
16 Summary We expect solid growth in 2015 through 2017 – Multiple organic growth opportunities across each segment – Prioritized roadmap of acquisition targets driven by strategy Our acquisition integration and restructuring enables higher investment for innovation and growth We remain focused
Slide 17: Energy
Energy Soma Somasundaram President December 8, 2014
Slide 18: Energy
18 3% 81% 6% 10% Asia North America Europe Rest of World Energy 18 73% 17% 10% Drilling & Production Bearings & Compression Automation Energy 25% Engineered Systems 33% Refrigeration & Food Equip. 24% Fluids 18% 2014E Dover Revenue ≈$8.1B 2014E Revenue by End-Market 55% 45% Core Products Recurring &
Slide 19: Long term performance
19 0 700 1,400 2,100 19 Long term performance Superior track record of delivering customer value – solving customer problems and improving productivity Strong organic growth performance driven by product and technology leadership Disciplined acquisition strategy focused on key products and tec
Slide 20: Update Q4 and 2015
20 Update Q4 Core US artificial lift business is performing well, especially in key basins: Permian, Eagle Ford, Bakken – Solid shale activity Drilling remains stable Compression markets modestly improving 2015 Differentiated portfolio will help moderate commodity price – Productivity soluti
Slide 21: Energy market sectors
21 Energy market sectors 21 Drilling & Production Market Size: $18B Bearings & Compression Market Size: $10B+ Automation Market Size: $4B Underlying long-term market fundamentals remain strong – demand growth and accelerating well depletion Increasing global trade of NG; global shale development
Slide 22: Energy long term strategy
22 Energy long term strategy 22 Continue expansion in high growth spaces Accelerate capabilities to drive international growth Transform Energy segment into a fully integrated business Increase investment in innovation and technology to drive customer productivity and cash flow Strong and consistent
Slide 23: Energy revenue exposure to commodity costs
23 Energy revenue exposure to commodity costs 23 D&P Automation B&C D&P US D&P Non-US Production US Drilling US Production Recurring Production Non- Recurring Energy revenue - commodity price exposure Permian (30%) Breakeven: $60-65/bbl Eagle Ford (10%) Breakeven: $55-60/bbl Bakken/Rockies (20%) Bre
Slide 24: Differentiated portfolio
24 Differentiated portfolio 24 DE OFS(1) Avg. EM(2) Avg. Rev Growth (08-13 CAGR) ~ 11% ~ 11% ~ 9% EBIT Growth (08-13 CAGR) ~ 10% 0% ~ 6% EBIT Margin (08-14YTD Avg.) ~ 23% (3) ~ 17% ~ 13% Margin Dispersion (4) (08-14YTD Range) ~ 5% ~ 21% ~ 8% Capital Intensity (08-14YTD Avg. % Rev) 4% 11% 4% Delive
Slide 25: Artificial Lift focused strategy and execution
25 1 9 5 5 1 9 6 2 1 9 6 3 1 9 8 8 2 0 0 0 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 •Sucker Rods •Valves •Sucker Rod Guides •Sinker Bars •Coiled Rod •Automation •Plunger Lift •Well Servicing Tools Artificial Lift – Focused strategy and execution leading to $1B + portfo
Slide 26: Artificial Lift market
26 Artificial Lift market Artificial Lift Competitive Matrix 0 5 10 15 20 2014 F 2017 E Global ALS Market Size Plunger / Hydraulic PCP Gas Lift ESP* SRP $13B $17B SRP ESP PCP Gas Plunger Hydraulic DOV Comp 1 Comp 2 Comp 3 Comp 4 9% CAGR Source: McKinsey & Co and internal analysis. Artificial Lift is
Slide 27: Artificial Lift – ESP
27 Market Fastest growing segment - high adoption in horizontal wells driven by high initial production rates US Shale development driving need for mid-tier ESPs – new players emerging Ability to offer complete system and service support is critical for success Increasing use of ‘rent/lease’
Slide 28: Artificial Lift growth drivers
28 Artificial Lift growth drivers Key Initiatives Strong organic growth programs – Basin by basin growth initiatives – Leverage complete portfolio to deepen and expand relationship with major customers Product technology and innovation – Accelerate evaluation and development of product innovatio
Slide 29: Automation solutions driving productivity for our customers
29 Automation solutions driving productivity for our customers 29 Year Price PCS (Automation)* 2012 Total Capital Deployed: $240M Spirit 2013 Timberline 2014 Wellmark 2014 Strategic Acquisitions 2009 2015F Revenue Growth $250M+ *PCS capital deployment grouped with Artificial Lift Attractive portfo
Slide 30: Automation growth drivers
30 Automation growth drivers 30 Market Trends – Increasing automation adoption by customers – Adoption is high in new wells; significant opportunity to retrofit existing wells – Ability to articulate and demonstrate tangible financial value is critical to success Key Initiatives Focus on ‘end
Slide 31: Productivity improvements and 2015 margin maintenance
31 Productivity improvements and 2015 margin maintenance activity 31 2015 Margin maintenance – Aggressively pursue productivity improvements – Detailed contingency plans with clear triggers and actions – Flexible capacity Operational excellence – key Initiatives – Safety TRIR <1.0 – Rationalized
Slide 32: Path to 2015 growth
32 Path to 2015 growth Market Drivers 2015 Market Growth Rate Comments Drilling and Production Market growth rate Market share International growth (7%) – (5%) North American rig count and commodity price uncertainty Target key accounts Artificial lift growth in international markets Bea
Slide 33: 2015 – A first look
33 2015 – A first look Market 2014E Revenue Mix 2015F Organic Growth 2015F Acq. Growth 2015F FX Impact Total Margin Comments Drilling and Production 73% (5% - 2%) 8% - 11% (≈ 1%) 2% - 8% Bearings and Compression 17% 2% - 4% - (≈ 1%) 1% - 3% Margin improvement Automation 10% 2% - 4% 17% - 19% - 18% -
Slide 34: Energy Outlook
34 - 500 1,000 1,500 2,000 2,500 3,000 2012 2013 2014F 2015F 2016F 2017F Revenue Summary 34 Energy Outlook $ in millions 3-Yr CAGR* 8% 2015 Differentiated portfolio will help moderate commodity price concerns Focus on building international capabilities and Automation Trends toward technology
Slide 35: Engineered Systems
Engineered Systems Andy Fincher President December 8, 2014
Slide 36: Engineered Systems
36 11% 57% 23% 9% Asia North America Europe Rest of World Engineered Systems 36 42% 58% Printing & Identification Industrial Engineered Systems 34% Refrigeration & Food Equip. 24% Fluids 18% 2014E Dover Revenue ≈$8.1B 2014E Revenue by End-market 35% 65% Recurring & Replacement Core Products By Geogr
Slide 37: Long-term performance
37 37 Long-term performance Growth opportunities driven by secular trends, market conversions, and regulation Refocusing innovation and application engineering processes Driving a continuous improvement culture - 500 1,000 1,500 2,000 2,500 3,000 REVENUE $ in millions 10-Yr CAGR 5% Engineered
Slide 38: Update Q4 and 2015
38 Update Q4 Generally solid market conditions in Industrial Printing & Identification market continues to support growth – Strong US activity; recent acquisitions performing well 2015 Increasing demand for Marking and Coding products – Growing consumerism in developing technologies – Health a
Slide 39: Engineered Systems market sectors
39 Engineered Systems market sectors 39 Printing and Identification Market Size: $6.7B Industrial Market Size: $15.4B Growth of fast-moving consumer goods in developing countries Increased requirement for tracking/traceability Analog-to-digital (A2D) conversion Global growth in vehicle sales
Slide 40: Printing and Identification market
40 Printing and Identification market Key Market Verticals Food & Beverage Textiles Pharma Printing and Identification is a $6.7B+ global market with high recurring revenues and exposure to key macro growth trends Traceability & Product Authentication Developing Economies Growth Growing middle class
Slide 41: Marking & Coding: Our leading market position
41 0 500 1,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F Marking & Coding: Our leading market position Strong brand recognition and geographic coverage Broad range of technologies to provide complete solutions to customers, complemented by TIJ & Piezo technologies Recognized for
Slide 42: Marking & Coding: Accelerating innovation
42 2013 2015 Plan 42 Marking & Coding: Accelerating innovation Speed in new product development accelerating – 30% increase in patent filings – 40% growth in new product revenue Global centers of excellence – Dedicated teams for technology development and commercialization Strong pipeline from
Slide 43: Marking & Coding: New product growth
43 Marking & Coding: New product growth Accelerating rate of development through innovation and platform concepts, centered around 3 market trends: Operational Equipment Efficiency Traceability & Product Authentication Emerging Markets’ Needs Networking and OEE software, remote diagnostics Complete
Slide 44: Digital textile printing: Leading the digital conversion trend
44 Digital textile printing: Leading the digital conversion trend Drivers of Digital Conversion Textile Printing Market Dynamics Over 26B linear meters printed globally Market value $186B* CAGR of 4%+ over past 5 years Digital Ink Jet 2% share; expected to reach 5% by 2018 Rotary Screen 42%
Slide 45: Our digital textile printing position
45 Market Size Early Stage Our digital textile printing position Note: Market size and CAGR represent hardware sales only; Source: IT Strategies and company estimates *Market size and growth figures include Industrial Roll-to-Roll Single Pass segment Industrial Roll-to-Roll Single Pass (Apparel Prin
Slide 46: Our MS single pass technology
46 Our MS single pass technology Single “Continuous” pass is the breakthrough technology enabling replacement of analog rotary screen printers Print heads positioned in a “fixed array” line on a stationary cross bar that covers entire width of media More versatile, easier to use, and more reli
Slide 47: Leader in select industrial niches
47 Leader in select industrial niches Focus Market Verticals Waste Processing Vehicle Service Workholding and Positioning We have leading positions in several industrial niche markets totaling $15B. Macro and secular trends drive growth in our focus markets Energy & Resource Efficiency Developing Ec
Slide 48: Leader in select industrial niches: current status
48 Leader in select industrial niches Current status Market leading brands in key areas of focus Technology leaders, with robust innovation process Selective global presence Productivity and durability deliver lowest total cost of ownership for our customers Revenue growth $ in millions Note
Slide 49: Creating value for our customers
49 Creating value for our customers Automated Front Loaders (AFL) are the fastest growing segment in the Waste Collection industry. Our fully featured Odyssey™ AFL brings the best technology together in one unit Clean Energy/ Energy Efficiency Total Cost of Ownership Safety Half/Pack Freedom® desi
Slide 50: Closing the Loop - Waste to Energy
50 Closing the Loop - Waste to Energy Collect Our refuse collection Vehicles collect waste including organics Our RCVs can be powered by CNG Anaerobic Digestion For the organic waste stream Creates renewable energy and saleable compost Diverts organic waste from landfill We partner with Zero Waste™
Slide 51: Operational Excellence – Enterprise wide
51 Operational Excellence – Enterprise wide 51 Organic growth enabler Robust product development Geographic scale and expansion Service capabilities Consistent margin expansion Detailed productivity improvement plans in place Innovation drives higher margins for Dover and value for cus
Slide 52: Path to 2015 growth
52 Path to 2015 growth Market Drivers 2015 Market Growth Rate Comments Printing and Identification Market growth rate Acquisition New products and Geo expansion ≈ 3% Global GDP Full year of MS Printing Continuous InkJet, and Brazil, US, India & China penetration Industrial Market growt
Slide 53: 2015 – A first look
53 2015 – A first look Market 2014E Revenue Mix 2015F Organic Growth 2015F Acq. Growth 2015F FX Impact Total Margin Comments Printing & Identification 42% 4% - 6% - (3% - 2%) 2% - 4% Productivity and leverage on volume, partially offset by pricing and growth investments Industrial 58% 3% - 5% - (1%
Slide 54: Engineered Systems Outlook
54 - 500 1,000 1,500 2,000 2,500 3,000 3,500 2012 2013 2014F 2015F 2016F 2017F Revenue Summary 54 Engineered Systems Outlook $ in millions 3-Yr CAGR 5% 2015 Solid demand for Marking and Coding products – Growing consumerism in developing technologies – Health and safety concerns Increased shift
Slide 55: Fluids
Fluids Bill Spurgeon President December 8, 2014
Slide 56: Fluids
56 13% 52% 19% 16% Asia North America Europe Rest of World Fluids 56 54% 46% Fluid Transfer Pumps Engineered Systems 33% Refrigeration & Food Equip. 24% Fluids 18% 2014E Dover Revenue ≈$8.1B 2014E Revenue by End-Market 29% 71% Recurring & Replacement Core Products By Geography By Product Mix North
Slide 57: Long term performance
57 - 200 400 600 800 1,000 1,200 1,400 1,600 57 Long term performance Three year organic revenue CAGR of 12% driven by strong markets, geographic expansion and expanded technology offering Significantly outpacing long-term global GDP growth of ~ 3 - 4% Quick recovery after global economic down
Slide 58: Update Q4 and 2015
58 Update Q4 Business remains solid across Pumps and Fluid Transfer – Fluid Transfer benefiting from active global retail fueling markets and regulation related to fuel transportation safety concerns – Pumps driven by project activity in plastics and petrochemicals markets 2015 Another year of s
Slide 59: Fluids market sectors
59 Fluids market sectors 59 Pumps* Market Size: $16B Fluid Transfer Market Size: $12B Continued economic recovery in developed countries Rising middle-class in emerging economies drives demand for food and beverage and pharmaceuticals North American chemical market growth driven by low- cost n
Slide 60: Fluids market
60 Fluids market Fluid Transfer Investment in EMEA and Asia Pacific driven by national oil companies and specific countries’ regulatory changes Shale oil and gas drive rapid need for rail cars and loading racks while CNG and LNG are alternative fuels of choice globally Increasing desire for si
Slide 61: Long term strategy
61 Focus on growth in vertical end-markets – Accelerate activity in chemical/plastics, energy, and hygienic markets – Drive customer wins through new products and technology Leverage our leading position in North America and Europe to capture growth in emerging markets, especially China and Indi
Slide 62: Fluids Transfer: Product development supports rail car regulations
62 Crude and ethanol train derailments have driven the need for improved standards for tank cars. The Federal Railway Administration and DOT are determining regulations for requirement beginning 2015. Fluids Transfer: Product development supports rail car regulations OPW is best positioned in indust
Slide 63: Fluid Transfer: Environmental regulations create opportunities
63 Fluid Transfer: Environmental regulations create opportunities Vapor recovery regulations to prevent hydrocarbon vapors from entering the atmosphere require: – New loading arms at bulk petroleum storage facilities – New bottom-loading valves on petroleum trailers – Specialized tank fittings on
Slide 64: Fluid Transfer: Expanding our clean energy presence
64 Fluid Transfer: Expanding our clean energy presence 64 Clean Energy is a fast growing market that includes CNG and LNG. Natural gas supports reduced emissions while offering a lower cost fuel option compared to diesel. Organic Growth Acquisition Growth The market is very fragmented with few maj
Slide 65: Pumps: Developing a plastics processing platform
65 Pumps: Developing a plastics processing platform Basic Chemicals and Intermediates Production Polymer Production Plastics Extrusion Application Unloading, loading, storage, transfer, recirculation Pre-polymer and polymer processing, equipment/machinery lubrication Conveying, feeding, extrusion, t
Slide 66: Pumps: New product development supporting organic growth
66 66 A brand new gear pump portfolio of products delivering up to 50% higher performance and increased versatility. Maag’s 6th Generation series of pumps were redesigned with a new industry-leading price/performance ratio Improved volumetric efficiency will favorably impact production rate, polym
Slide 67: Productivity improvements and 2015 margin expansion
67 Productivity improvements and 2015 margin expansion 67 2015 Margin expansion – Leverage streamlined manufacturing footprints – Employing 2014 capital for 2015 improvements Operational Excellence – Key initiatives – Safety TRIR <1.5 – Consolidated back office and one business system – Producti
Slide 68: Path to 2015 growth
68 Path to 2015 growth Market Drivers 2015F Market Growth Rate Comments Pumps Market growth rate Geographic expansion New products/services ≈ 3% - 5% Global infrastructure growth Strong growth in China & Middle East Enhanced offerings in plastics and hygienics, increased aftermarket acti
Slide 69: 2015 – A first look
69 2015 – A first look 69 Market 2014E Revenue Mix 2015F Organic Growth 2015F Acq. Growth 2015F FX Impact Total Margin Comments Pumps 46% 5% - 7% - (2% - 1%) 4% - 6% Margins improve from volume and productivity gains Fluid Transfer 54% 6% - 8% ≈ 4% (2% - 1%) 9% - 11% Margins improve from volume, pro
Slide 70: Fluids Outlook
70 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2012 2013 2014F 2015F 2016F 2017F Revenue Summary 70 Fluids Outlook 2015 Another year of strong growth for Fluid Transfer – Regulatory environment – Strong global markets in fuel transportation and retail fueling Focus to accelerate growth
Slide 71: Refrigeration & Food Equipment
Refrigeration & Food Equipment Bill Johnson President December 8, 2014
Slide 72: Refrigeration & Food Equipment
72 9% 70% 14% 7% Asia North America Europe Rest of World Refrigeration & Food Equipment 72 23% 77% Food Equipment Refrigeration Engineered Systems 33% Refrigeration & Food Equip. 24% Fluids 18% 2014E Dover Revenue ≈$8.1B 2014E Revenue by End-market 10% 90% Recurring & Replacement Core Products By Ge
Slide 73: Long term performance
73 - 500 1,000 1,500 2,000 2,500 73 Long term performance Consistently have outperformed the market and become the technology and solutions leader in our served markets Strategic acquisitions filled product and technology gaps and accelerated growth Margin expansion driven by scale and product
Slide 74: Update Q4 and 2015
74 Update Q4 Expect to post strong year-over-year growth – Shipments resume on small store format push-outs from Q3 – Delayed capital spending in dollar store market segment remains Completed transition to new Atlanta refrigeration systems manufacturing facility 2015 Expect to outgrow a soft m
Slide 75: Refrigeration & Food Equipment market sectors
75 Refrigeration & Food Equipment market sectors 75 Refrigeration Market Size: $7B Food Equipment Market Size: $6B North American growth driven by government regulations, rising energy costs, and food safety mandates Emerging market growth driven by improving living standards and increased consu
Slide 76: Long term drivers: Macro trends provide powerful tailwinds
76 Long term drivers: Macro trends provide powerful tailwinds Energy efficiency – Government regulation and global demand driving increased cost of energy benefits both Food Equipment and Refrigeration Sustainability – Increasing demand for solutions that minimize environmental impact proving am
Slide 77: Strategy focused on leveraging the portfolio
77 Strategy focused on leveraging the portfolio of leading technologies and products Focused growth Refrigeration and engineered glass – Capitalize on industry merchandising trends via specialty case product differentiation – Extend leading food retail position into higher growth C-Store adjacency
Slide 78: Market leader with broadest supermarket refrigeration offering
78 We are the market leader and have the broadest product offering for supermarket refrigeration in North America Refrigeration cases Refrigeration systems & BPHEs Glass doors & engineered solutions Market Drivers Rising energy cost and government regulation 85% of stores are 4 years or older
Slide 79: Advanced CO2 technology and emerging regulations
79 Our advanced CO2 technology is well positioned to capitalize on emerging government regulations Opportunity overview Global energy regulations are driving retailers to eliminate traditional HFC refrigerants. Studies have proven CO2 as a mainstream all- natural solution to HFC refrigerants Tai
Slide 80: C-Store growth rate is 2x North American supermarkets
80 C-Store growth rate is 2x North American supermarkets Opportunity overview C-Store market is growing as customers are trending towards convenience and “immediacy” vs. traditional grocery store format Our core competencies are well positioned to gain share Tailwinds for growth Shopper prefer
Slide 81: Leader in medium temp applications
81 We are the leader in medium temp applications and momentum is building as retailers accelerate adoption Strategy to win Hillphoenix & Anthony combination provides industry leading customer solutions for both “Close the Case” and new cases w/doors Recently launched Close the Case “ECO Kit” sim
Slide 82: Heat exchangers: Brazed plate technology displacing traditional solutions
82 Heat exchangers: Brazed plate technology displacing traditional solutions, benefiting from energy efficiency trends Customers are converting to BPHEs for: Lower total cost of ownership Improved energy efficiency Smaller physical size Reduced weight vs. BPHE Shell & Tube BPHE technology is
Slide 83: Global footprint and expanded heat exchanger offerings
83 Our global footprint and expanded product offerings in heat exchangers provide an advantaged position Overview The recent launch of new XXL & All-Stainless products have significantly expanded the addressable market Tailwinds BPHEs have significant advantages in weight, footprint, and holdup
Slide 84: Foodservice equipment position to build scale
84 Our foodservice equipment position provides a strong foundation to build scale and drive growth Opportunity overview Foodservice industry contains two primary supplier models: – Category specialists: focus on creating category-specific "pull" from end customers – Broad-line suppliers: create an
Slide 85: Customer design and learning center
85 Recently opened customer design and learning center is unique to the industry Design Center Development of store design and layout Lighting consultation for energy efficiency and improved merchandising Assist with tracking and recording of food temperatures to meet food safety mandates Fu
Slide 86: Levers to drive productivity and margin expansion
86 Multiple levers available to drive productivity and margin expansion Continuous improvement initiatives – CI and lean enterprise – Investments in automation – Facility consolidations Supply chain savings – Leverage Dover supply chain agreements – BCC and localized sourcing – Value Engineering
Slide 87: Path to 2015 growth
87 Path to 2015 growth Market Drivers 2015F Market Growth Rate Comments Refrigeration Market growth rate Regulation / energy efficiency Adjacent market Regionals ↑ Large retailers ↓ 0% - 1% Growth with regional supermarkets expected to be offset by a slowdown in a large retailer’s expansion
Slide 88: 2015 – A first look
88 2015 – A first look Market 2014E Revenue Mix 2015F Organic Growth 2015F Acq. Growth 2015F FX Impact Total Margin Comments Refrigeration ≈ 77% 1% - 2% - (≈ 1%) 0% - 1% Margins expand through rooftop consolidations and productivity gains Food Equipment ≈ 23% 2% - 3% - (≈ 1%) 1% - 2% Opportunity to
Slide 89: Summary
89 Summary 2015 Expect to outgrow a soft market via advantaged positions – Specialty case product differentiation – C-Store focus and share gains – Customer adoption of CO2 systems – Unique medium temp door offerings – Recently introduced heat exchanger products Mid-term Technology and energy le
Slide 90: Financial Review
Financial Review Brad Cerepak Senior Vice President & CFO December 8, 2014
Slide 91: Q4 update
91 Restructuring actions – Over $50 million in annualized benefits; $45 million in one-time costs Free cash flow generation anticipated to be ˃10% of revenue for the full year Capital deployment – Continued to buy back shares in Q4; repurchased $518 million YTD – Closed Accelerated acquisition
Slide 92: 2015 Financial outlook
92 2015 Financial outlook 2015 Guidance Comments Sales growth Organic (%) 1% - 4% FX (%) (≈ 1%) Acquisition (%) ≈ 3% Only includes deals already closed Total growth 3% - 6% Segment margin (%) Up 10 – 30 bps from 2014 Relative to 2014 adjusted margin (excluding impact of restructuring) Interest
Slide 93: 2015 Revenue growth by segment
93 Current assumptions regarding Energy: – Total rig count down 8% from average 2014 level – Horizontal rig count at ≈ 70% of total U.S. rig count FX impact based on average USD/EUR of 1.25 Acquisition growth includes only those deals already completed 2015 Revenue growth by segment 2014E Reve
Slide 94: 2015 EPS Outlook – Continuing Ops
94 2015 EPS Outlook – Continuing Ops 2014 EPS – Continuing Ops (GAAP) $ 4.79 - 4.84 – Less 2014 tax items(1): (0.04) – Less 2014 Q4 restructuring and one time items: (0.20 – 0.18) 2014 Adjusted EPS $ 4.55 - $4.62 – Net restructuring charges and one-time items: 0.16 – 0.18 – Performance including
Slide 95: Three year outlook 2015 - 2017
95 Three year outlook 2015 - 2017 Comments Annual organic sales growth % 2% - 5% Longer term: 3% - 5% Annual acquisition sales growth % As closed Longer term: 4% - 5% Annual core segment margin improvement 30 – 50 bps Sustainable tax rate Slightly below 30% Annual capex spend ≈ 2.5% of revenue Free
Slide 96: Investor Meeting December 8, 2014
Investor Meeting December 8, 2014 Bob Livingston President & Chief Executive Officer
Slide 97: We continue to execute on our guiding strategy and objectives
97 We continue to execute on our guiding strategy and objectives Our business profile is more consistent and focused, with sustainable higher margins and returns We have expanded our businesses within our growth areas, resulting in organic and acquisition growth at all segments We have acceler
Slide 98: Slide 98