Dover : Q4 2020 Earnings Presentation Slides

January 28, 2021 - 9:00am CT

Earnings Conference Call

Fourth Quarter and Full Year 2020

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, employees, operations, business, liquidity and cash flow. We caution everyone to be guided in their analysis of Dover Corporation by referring to the documents we file from time to time with the SEC, including our Annual Report on Form 10-K for 2019 and Quarterly Reports on Form 10-Q, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements.

We would also direct your attention to our website, dovercorporation.com, where considerably more information can be found.

In addition to financial measures based on U.S. GAAP, Dover provides supplemental non-GAAP financial information. Management uses non-GAAP measures in addition to GAAP measures to understand and compare operating results across periods, make resource allocation decisions, and for forecasting and other purposes. Management believes these non-GAAP measures reflect results in a manner that enables, in many instances, more meaningful analysis of trends and facilitates comparison of results across periods and to those of peer companies. These non-GAAP financial measures have no standardized meaning presented in U.S. GAAP and may not be comparable to other similarly titled measures used by other companies due to potential differences between the companies in calculations.

The use of these non-GAAP measures has limitations and they should not be considered as substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP. Reconciliations and definitions are included either in this presentation or in Dover's earnings release and investor supplement for the fourth quarter, which are available on Dover's website.

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Q4 and 2020 Highlights

2020 Order Trends

Monthly Bookings(2)	Backlog(2) (Y-o-Y )
	(% Y-o-Y change)
					YoY backlog change
					$B Backlog
0%			1.6			1.6	1.8
			1.5	21%
			12%			14%
				8%
	Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Q1		Q2	Q3	Q4

FY Seg. EBIT Margin(3) up to 16.1%

FY Adj. Segment EBIT Margin(1) up 10 bps to 16.7%

Q4 Bookings(2) up 5% Y-o-Y to $1.9B

Organic bookings(2) growth of 2%

Book-to-bill(2): 1.09

Q4 Revenue flat Y-o-Y at $1.8B

Organic revenue(1) decline of 2%

FY Free Cash Flow(1) up 24% Y-o-Y

FY FCF(1) up $181M Y-o-Y

FY FCF(1) 14% of Revenue; Q4 21% of Revenue

FY 2021 Guidance

Rev. growth: 8% - 10% (All-in); 5% - 6% (Organic(1))

EPS: $5.42 - $5.62 (GAAP); $6.25 - $6.45 (Adjusted(1))

	(1)	Non-GAAP measures (definitions and reconciliations in appendix)
3	(2)	See performance measures definitions in appendix
(3)	Refer to definition of total segment earnings (EBIT) margin in appendix

Summary Corporate Q4 and Full Year Results

		Q4 2020	FY 2020		Highlights and Comments
Revenue change	All-in	0%	-6%		Q4 Y-o-Y organic growth in DPPS, DRFE
(Y-o-Y)	Organic(1)	-2%	-7%		Q4 FX impact: +2%; acquisitions (net of divestitures) +1%
Bookings change	All-in(2)	+5%	-4%		Q4 Book-to-bill(2): 1.09; bookings up Y-o-Y in four segments
(Y-o-Y)	Organic(2)	+2%	-5%		Backlog(2) remains strong across the portfolio (+21% Y-o-Y)
Segment EBIT	Reported(3)	-10 bps	+50 bps		Q4 volume/pandemic headwinds offset by productivity actions
margin improvement	Adjusted(1)	Flat	+10 bps		Absolute Q4 earnings growth in DPPS and DRFE
(Y-o-Y)					Full-year margin accretion despite volume headwind
Earnings	Reported	$182M	$683M		Q4 Y-o-Y change: Reported +8%; Adjusted ~flat
Adjusted(1)	$225M	$824M		FY Y-o-Y change: Reported +1%; Adjusted -5%
Diluted EPS	Reported	$1.25	$4.70		Q4 Y-o-Y change: Reported +9%; Adjusted +1%
Adjusted(1)	$1.55	$5.67		FY Y-o-Y change: Reported +2%; Adjusted -4%
Free Cash Flow	Revenue	21%	14%		Q4 FCF(1) up 21% Y-o-Y
Adj.
(% of)(1)	167%	114%		FY FCF(1) up 24% Y-o-Y
	Earnings
					2021 guidance:
Guidance and other activities				‒ Revenue growth: 8% - 10% (All-in); 5% - 6% (Organic(1))
					‒ EPS: $5.42 - $5.62 (GAAP); $6.25 - $6.45 (Adjusted(1))

	(1)	Non-GAAP measures (definitions and reconciliations in appendix)
4	(2)	See performance measures definitions in appendix
(3)	Refer to definition of total segment earnings (EBIT) margin in appendix