Record margins and strategic divestments…

Release date: October 24, 2024

For the full transcript of the conference call, please see the full conference call minutes.

• Dover Corp (NYSE:DOV) delivered a record-breaking segment margin performance of 22.6% in the third quarter of 2024.

• The company reported a 5% organic increase in consolidated portfolio bookings, with strong performance in clean energy, external connectors, CO2 systems and biopharma components.

• Adjusted earnings per share from continuing operations increased 6% to $2.27.

• Dover Corp (NYSE:DOV) has completed the divestiture of its Environmental Solutions Group, reducing exposure to the capital goods sector and improving capital deployment options.

• The company has a strong balance sheet that provides significant capital deployment opportunities and shareholder-friendly strategies going forward.

• Aerospace and defense volumes were lower due to shipping timing and difficult comparisons, impacting gross margin.

• The Clean Energy and Fueling segment experienced a 1% organic decline, with vehicle wash and retail fueling equipment volumes declining in Europe and Asia.

• Climate and Sustainability Technologies faced tough competition in beverage can manufacturing equipment and weak demand in the broader HVAC complex.

• China, which accounts for about half of Dover Corp’s (NYSE:DOV) sales base in Asia, posted an organic decline of 17%.

• The Company faced higher corporate costs related to acquisition costs, which impacted its bottom line items.

Q: Can you elaborate on the area of ​​climate and sustainability, particularly in light of the expected increase in materials in 2025? A: Richard Jay Tobin, CEO: The comment was mostly about bookings. We were hoping for an increase in bookings for brazed plate heat exchangers for European heat pumps, but that hasn’t happened. We have adjusted our production accordingly. We expect bookings to develop positively in 2025, particularly for heat pumps and CO2 systems, based on market feedback.

Q: How should we think about the impact of M&A on your 2025 EPS forecast? A: Richard Jay Tobin, CEO: The base model assumes zero organic growth in 2025. If we model organic growth of 3% to 5%, we get an additional EPS of $0.55 to $0.90. We have significant liquidity for potential mergers and acquisitions, and while we expect to deploy capital, the exact impact will depend on the timing and nature of any transactions.

Q: How do you see organic growth and fluctuations between segments for 2025? A: Richard Jay Tobin, CEO: We see no signs that our growth platforms will slow. We expect to absorb headwinds from long-cycle parts such as beverage can manufacturing and polymer processing. We expect a more balanced contribution to growth across all segments.

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