DOV - Earnings call transcript Q4 2019

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Operator

Good morning and welcome to Dover's Fourth Quarter 2019 Earnings Conference Call.

Speaking today are Richard J. Tobin, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and Chief Financial Officer; and Andrey Galiuk, Vice President of Corporate Development and Investor Relations. [Operator Instructions].

Thank you. to call like to now would hand over the Mr. I Galiuk. Andrey ahead, Please go sir.

Andrey Galiuk

morning and Dover's playback welcome Earnings Nicole. of and Thanks, Good be will to and audio which website. included website investor call in for archived information be this supplement Dover call are XX, and our Call. GAAP and provides months. will Fourth our available between adjusted materials, February for through the portion This XXXX Quarter available our on on non-GAAP presentation three reconciliations measures are

guided anticipated no We could Our that their comments by in any to forward-looking referring for contain Dover obligation today XX-K We required law. update or to publicly those factors of cause forward-looking of forward-looking may statement. our revise caution a statements. everyone our any list Form results to be to undertake as statements, analysis by from in except differ

turn that, this call will Rich. to over With I

Richard Tobin

joining Thanks, on Andrey. Good us conference morning's this morning, everyone, and thanks for call.

macro on started key with and we've X%, of fourth and declined Slide end -- XXXX of with our get annual industrial end of guidance, a -- growth throughout revenue that macro highlighting Overall, Let's our year. robust of at as environment QX geographies. some the markets X solid, the growth comp and revenue of X% year XXXX QX was uncertain revenue up despite X high in tough the of our the initial operating segments XXXX. due been highlights delivered quarter to full for organically X

of flat solid approximately were a the book-to-bill Bookings in X.XX. posting quarter year-over-year,

lower at in XXXX XXX our our our than earnings QX posting us our up of cover continuous points, with increased in basis XXXX. Despite X about margin and X% revenue, which higher of of the from aspirations are expanding margins We operations at the giving with presentation. encouraged later strength in segments, out confidence backlog, in we'll is beginning X which the stands

our forging in with margin and in investor presentation our as outlined are We September. ahead productivity improvement efforts

for through and our which full QX flow line, of acquisitions. another strong year-over-year. conversion enhance $X.XX year, earnings performance rates QX delivered a our of for grew organic XXXX Dover. year, Summing full XX% a improved were quality Adjusted organic industry-leading up X%, We continue up, EPS Adjusted X and increase year XX%. for was the cash share and the represents margins for investments bolt-on growth and Dover metrics the portfolio on the diluted the $X.XX materially, expanded top earnings was to

On the full back we margin adjusted announcing a of a share. plans, the and our year execution solid order momentum of $X.XX are to backlog $X.XX guidance and EPS improvement continued of

solid QX Let's segment Engineered a in a X% grew growth Top year. well more software. as in refuse line the the move vehicles was X segment performance. had detail to on strong full on associated continued Products and demand growth as for a collection continued to strong double-digit on our Slide for finish X%. quarter year,

businesses, and OEM also we ADAS Our and digital vehicle calibration we its offering, prospects. about and in excited its a improvement service introduced saw growth European business new are

solid single automotive. a subdued the in bookings as a beginning book-to-bill Segment than quarter result the a backlog earlier higher in remains business of X.XX of weakness and of businesses strong at year. backlog against and were in it cyclical the automation in fourth at XXXX. shipping industrial resulting MPG industrial as in goods digits grew and Demand Our industrial began high built winch our

measures. Our QX margin XXX product adjusted mix on productivity segment points volume, expanded solid basis and

the businesses year strong year in basis a aboveground of segment well America exiting solid XXXX. at point margin with segment the XX% healthy finished set Demand delivered of strong growth QX, we appears XX% segment had in for growth into particularly exemplary broad-based Full improvement, that providing was XX% and Solutions XXX the the to in the range results. for was XX%, target Bookings the Fueling gaining delivered organically year QX, and remained were where X% North up base to XXXX. EMV a in be in yielding momentum. forth and compliance demand

We capital and or meet on have is hurdle. wash into completed platform, return our pace business the integration vehicle invested our to of Belanger exceed the on

with Marking Asia year, year performed & the was in regions and quarter activity Imaging while expected. ended X% Identification growth. throughout coding and slow other as declined the including X% in the organic QX, in

printing textile and digital the of availability on our textile markets. in producing financing and timing lumpy impacted know, Asian by you business tariffs can orders be As and shipments the

contributed these is the software up work is a year-over-year. showing textile prospective of very X% segment but for to we industry solid in workflow pipeline QX our activity, factors combination of momentum Also, A to Backlog a with slower digital orders. growth. the with double-digit continue printing good

XXX commitment improve XXX XXX the -- and points margin basis control line, expanded pricing to and for despite our segment basis by exemplifying cost year QX points top This by slower productivity, basis full in discipline.

into to previously a portfolio global expands leading and the marking Lastly, primarily provider share and traceability service solutions acquisition protection over brand we and software of manufacturers. Markem-Imaje recently coding fits within offering of XX%. to This Systech, pharmaceutical revenue closed our software and logically of announced the

of driving fast-moving about high-value, prospects excited goods growth portfolio. consumer are by We offering expanding this our customer the into

industrial X% in a where a posted as segment tough slowing Solutions levels. inventory the in managing debt shipment and actively pump witnessed distributors comparable Process managed -- as down timing Pumps QX the market steady of faced Maag and a were result quarter decline the an during

strong Within backlog and connectors into double-digit very growth new a the strong business, carries continued pumping biopharma revenue its the year.

trajectory XXXX. expect continue biopharma We to business the its double-digit into

Despite Maag strong year business, in and aforementioned XXXX. but backlog be With attractiveness. to the transportation lull natural the term carries about respect to timing temporary our confident a its long activity differences, slowed we into gas what infrastructure components well in precision a DPC, the order appears buildout, remain ended

all a an point delivered the X%. outstanding Summing XXXX, organic growth this improvement in basis for up, businesses the we the and segment rate year. segment The The full expect but segment in to slower XXX a segment entering industrial pumps growth first off posted in a DPC XXXX with half. yielding to of get XX% backlog that's in higher is start margin year-over-year,

In bookings Refrigeration continuing in continued a on services at to offset systems backlog. sales impacting effect remodels, it's a is unmistakably which year the serves double-digit negatively partially and store businesses. the tough construction case line retail and expand year-over-year, & This and by store including revenue, with primarily new Food our lag Equipment, food, expectations been strong that product segment rate to for

factory this We still automation not in have during positively XXXX. and stood with case contribute earnings unified to set in brands site and to consolidations period

nearly returned Despite exchanger a positive QX. on has a environment our challenging XX% the Overall, higher year-over-year. Belvac's backlog growth compared demand start in businesses backlog to forming XXXX. XXXX note of with and enters in to segment XXXX, a heat doubled can the

the productivity delivering on and operational Our half in initiatives start remain second track results XXXX. of to primarily

here. to it on pass Brad I'll

Brad Cerepak

Good everyone. Rich. Thanks, morning,

organic line decline, point X% by through the million. growth out X. going details $XX on X% revenue headwind continued Rich by will or in provided FX be of color the Let's I to dynamics that segment. Slide reducing start on top a top has on the QX,

subside headwinds to FX We XXXX. in expect

X% the net impacted $X From organically contributed U.S., quarter. year Belanger Acquisitions geographic were and and negatively in was for supported were revenue in up market, full largest dispositions, Finder, principally to acquisitions. our posted solid a and X% XXXX. businesses, and all segments perspective, grew FX million the flat a organic Bookings positively all posting the organically increase where five except Refrigeration, growth. similarly Europe growth by with by

demand were in first grew plastics part the growth. slower organically in marking exchangers with our Asia regulatory strong and China posted and demand for offset the and heat industrial full and markets Strong year America slightly All was a by half. half slower X% new mixed Latin second polymer Asia down for was the fueling coding. a and in of while businesses. Activity and in across year, X% build

Now to Fueling million than offsetting & a growth improvement million, Solutions' driven partially FX. at decline robust improved in retail and reflects grew continued top. mix, $X the despite stronger volume Imaging on acquisition Slide by comparable offset of the EBITDA the Identification and million by earnings million $X Starting was driven $XX fueling was bridges lower combination X. strong headwinds volumes margin from expanded adjusted margin growth, and Process margins. more segment on Belanger. of of in Solutions by lower Engineered $X part, Products' The at Pumps volumes. largely &

volumes the & Lastly, Food Refrigeration in Equipment of lower decline quarter. million $X reflects the in

$XX In discrete The approximately in $XX rate, improved XXXX, bottom debt on reducing the segment on after offset in in tax in we in after approximately increasing from excluding million XXXX lower Adjusted in also tax, debt due earnings loss the expenses, primarily effective extinguishment tax $XX is benefits and the million long-term further providing quarter an Rightsizing XXXX. by Discrete costs $XX X%, million is the refinancing margins quarter, and in chart. treated XXXX. operations resulting a on of million The EPS expense higher driven or were the and mature million and share. costs refinanced higher by $X.XX to approximately the $XX XXXX. This tax confidence tax. other to or as continuing corporate or item per to and costs. interest interest in loss earnings partially quarter tax million results lower $XX in adjustment XX% benefits, quarter. were for Going

cash cash than a basis expenditures. in million year cash in year, year on capital was increase growth last the the $XX in Slide million with resulting increase flow flow as finished $XXX a million and X. a or conversion in We reflecting of Free capital working adjusted more improvement flow flow. $XXX for earnings. strong cash The point discipline percent free including improved very over earnings, exceeded Now XXX

restructuring flow year which year, our of last the were compared Capital below midpoint exclude are a XX.X% our expenditures plan. was million of free to XX.X% above revenue, both for but the to guidance slightly of increased As XX%. or we of annual if the percent cash X% year, cash for original expenses, $XXX

several to projects of related pace into our with While XXXX. over expansion on major timing spill remain will large plan, our payments projects

Lastly, let's earnings increase improvement We margin excess resulting with revenue by per was bridge. in of strong a Slide well as This well conversion finished driven review conversion growth share. in EPS with the margin X year as XXX%. revenue XX% in the activities,

can we a of $X.XX reoccur year-over-year EPS, see -- the As strength which dynamic resulted the a you XXXX. conversion dollar driving in do EPS All revenue in of in negative approximately all, expect healthy growth XXXX FX on on in XX% savings, we of and expect to the chart, the can not same XXXX, into impact operational accretion.

I'll to that, Rich. With back it turn

Richard Tobin

Thanks, Brad.

in at to year Let's the X% of the Slide allowing X%, announced which of look Adjusted $X.XX outlooks forecast solid encouraging majority backlog take to on to across to a result and a with cover demand growth forecasted entering is We're our environment previously EPS initiatives. the a the as revenue X. be markets, I'll our constructive next detail cost of organic on savings a share slide. us $X.XX and conversion

earnings expect of and as half timing to the a in second seasonality growth of levered result We measures. productivity modestly

investment. strong flow capital of XX% spending to adjusted conversion earnings despite higher another net expect of year of cash on XX% We

organically expected cycle is in on of up, business. waste the and picked is X% has upside a strength to potential defense as expected about the to better underground upgrade the to slower strong Solution vehicle years in expect Products U.S. of gain and here. past activity have next handling, in Fueling couple our XXXX off. visibility to China to EMV grow couple compared the Engineered we quarters aerospace rolls continued and X% services in

finally, enters Imaging & printing. in X% on Process grow expected with coding dependent textile ID outlook Pumps to the Solutions year the Asia and towards is the a modestly grow conditions strong very and and geared expected half. to it for And to largely X%, we in marking both Equipment to and Food second is backlog, -- X% XXXX. Refrigeration & to expect with in X% grow

in but macro portfolio our year. backlog, uncertain component software significant calls We and the revenue are to past two strong multi-industrial aftermarket be service to in what caution early deliver years trajectory entering very the of is growth the year with share with expected Overall, continues a environment. of and for healthy the an

advance delivering are very the XX. same plan simple, well, our in to Go Slide against out strategy are tracking Dover's key in laid is XXXX but XXXX. and ambitious. We aspirations strategy those. to priorities We further

our reduction our the target our continue bottom In rightsizing and margin First, operational cash We from with you in business. our with previously retail. our margin improvement healthy performance as line as productivity announced can in food accretion the growth see result well Coupled Dover tailwind. flow. and these program of providing we'll achieved and million XXXX, Fueling a conversion, in continue in cost $XX ongoing programs actions footprint will

XXXX. in reduction R&D our world-class sustained exchanger out in volumes working uncertain on growing all and businesses and conditions. Our and our strong heat and projects productivity, capital can operational into initiatives, we top while And capabilities capabilities. productivity of digital business under in was starting taking and priority various investments deployment capture organic digital and capital has macro several is forming Part reinvestment. initiated We investing competitive growth will growth, in SG&A to upgrade costs growth and and are our continue program the reinvested

Lastly, M&A. we portfolio-enhancing to disciplined committed

last accretive a inevitable priority coronavirus the four M&A portfolio. consummated bolt-on, note, transactions stage I'd as of address developments. at Over pipeline final to into in months, proprietary I The this of early questions like going areas we have our XX XXXX. best remains On can the high-fit active the

with we have experience our guidance been and from SARS period. First policy contact foremost, time have employees our regular in using in-country the issued and

put in also have travel We policies appropriate company-wide.

sites had to remain be a New safety Chinese supplier this to but base Chinese XX our our practice, with measures. in from on Year, we mitigation cover as to are strategies global cantonal-enacted sites planned had and expect Year, working production for Our of through result network January we normal Dover but February to inventory X New most for down XX preparation built down closely actively. potential In period supply as

of thank hard for year And for like and Dover that's and everybody a XXXX. would Q&A. up delivering the you, at Andrey, outlook for hand it setting a I us to work, to it strong good over

Andrey Galiuk

the open Q&A. Nicole, let's

Operator

[Operator Instructions].

The first the Andrew question of line will Citi. with come Kaplowitz from

Andrew Kaplowitz

obviously, Rich, RF&E, in strong now XXXX. leaving backlog

case you last I at bookings and could more said you of think quarter side. system floor the door the you're good that confidence that give

that into So plus mean in growth heat exchangers the can actually did return you growth and visibility have revenue beverage bookings in the organic finally to XXXX? good

Richard Tobin

business, Well, on think the sure. the the And forming, I can of yes. for Refrigeration on case side

really short of terms because to the be that of and doesn't a service systems much no carry On portion, backlog. tends relatively in cycle -- it

think and we pretty door about think about case we we good into exchangers. heat feel think feel feel the backlog Belvac, good that SWEP I the going So the that have year. that I on reasonably we And good I on

Andrew Kaplowitz

And just helpful. a RF&E margin. That's on Okay. follow-up then

the XXXX. about rate the as margin run talked for You exit XX%

quarter, is talked in the the still as you So the overtime automation what shot was rate? better the the good get online. project again and and And that I obviously, an issue. bookings a of in it it Is gives hitting that's that run on track? you margin QX in assume labor you've availability mitigates quarter, about

Richard Tobin

much that we've issues the labor wasn't as had. It

moderated door those think in I production. case

had have the little quarter I orders. We if the we a there. consolidation, shipped, of a the middle bit our during we're think unified was has in any in brands. We that doing but disappointment plant had and performance lumpy been could

automation. And least us back year, some begun of of I has into case leading their rates from seen, door, what I So at got that the we've our shipment gone behind beginning labor at in that -- unified I've issues think up. have brands this think the

okay we're think also. I there So

Andrew Kaplowitz

think here, out you Rich? the hit of the go could mid-teens So do to you year you as end

Richard Tobin

our I Andy. target I margin, yes. is to mean our expectation exit think at that Right,

Operator

The Sprague next come of from with line will Vertical Jeff Research. the question

Jeffrey Sprague

So itself, the on Just get organization on Rich. just of update here is run the two? next Can you're quarter automation kind the to us Like starting cut and right? in point on you beta stress what happens over? kind to this project just where the of or

Richard Tobin

under been months a for this transition case, in will we particular be through has inventory the stress. six of the year. organization But That of building first lot the

working bit then June. the next manufacturing on target of be single is or to off from going view. cutover our be to -- the line units little it's a point month think within I of And product getting in challenged a So beta We'll a capital so. approximately

before, as this inside we're -- operations mentioned not of we But not project automation case running existing assembly door. is the

the working start-up, we build. costs downtime associated including start-up. don't any with the So the It's expect just the to capital have with associated

Jeffrey Sprague

feel And you you kind just of part visibility profitability kind lot for the like, do the itself? your to kind you've SKU thinking the is the -- much to as the real and of exit But hinge about like And will the you're the on that of the backlog, rate right, tried about count on of in a of how mean that factory. execution it that streamline profitability in year? have is backlog a talking the I

Richard Tobin

I than we've have and generate of we in to margins that of confidence what margin exit some guess, I backlog the previously. is got we that our sell off parcel think better visibility and reaching had, in terms have I we should part it. the --

on reduction of and completely it's a content assembly. not So as labor result predicated cost

Operator

the question of Haskett. Gordon next is John line Inch with The from

John Inch

coming way back, about down? implies I just that should obviously rest -- assuming strength, better? X% you R&FE of think the down down and how mean, business called Or out it's down. with and and guide So we the that the been that X% that it's Is it? Or to does Rich, business SWEP that getting are is Belvac case door you always

Richard Tobin

you under to the feet are fact systems the segment some think about that We I it. wait part confident cautious -- to parse a the to when door of we're and of transcript, with particular and that we'll as that read year-over-year. that back its we need good we on Belvac going should because we matter portfolio. quarters -- case that we the SWEP and service being well, -- needs we of feel But of portion we But the the and if listen feel mentioned, We're is I mode then it see. good the you think couple demonstrate of that is and up think go be about I I pieces. getting see feel

John Inch

and margin automation X.X% margin these there been if -- way that I you sense doing The parallel been systems of running where get is where project, any been you this the if haven't quarter, mean, to might a haven't this stuff? have

Richard Tobin

I we've I what to going quarter. just piece. recasting in of of portfolio, you on We're idea to expect the give to just line Refrigeration to to can't both deliver guess the if the we this there But could on of transitions in there of the count, want -- during could costs around right? non-Refrigeration margin good like have because the a portion I we of -- an with and We're not me, it's in it happy think quarter it would of are normalize, well, but time this largely but the don't be up some I out without we have -- give that performance, there's got did is that be, but XXXX take our our we front what be. lumps. take bunch the this sight don't to didn't that's -- UB us that

John Inch

That's fair.

not appear wondering able I now adamant, of about fit have these of going lastly, find bolt-on higher M&A this. as Just thinking done some you at And Have you kind be the the big now portfolio niche ramp without "software" to pretty forward? a companies how you of we're you're add been industrial we other I'm multiple of had what to a some higher pay look to conversation paid. and look up technology, remember value it, and overpaying software nice deals, deals were a where you've to Rich, chase going couple pretty

Richard Tobin

software, that than think kind they're nature, industrial. higher I its valuations, the core by of

not think that the going not it's but torpedoes, that to software was -- right? my a more so chase I comment we And damn were

Brad Cerepak

We're an business. independent of our

Richard Tobin

Independent of business. our

software deals complementary highly the ESG. are done, we've So and our to to that comp both MI

fair I a matter the think but price, of multiple. fact the we a that higher that paid software commands is

Operator

line The Julian next of with from the question Mitchell Barclays. is

Julian Mitchell

how year. Maybe on just thinking seasonality up the following you're the about through

Food you & and mentioned in think Refrigeration particular loaded a quite had year. Pumps and Process back-end I in

just wanted X% to check whether range as So growth you I be spread out save, and just organic also quarter that million a to the of we whole should in $XX sales year. net can through cost each Dover if through X% evenly think that

Richard Tobin

and safest Let's material I the to on the But take be -- the think it terms of because year, -- I second are know To going projects. not in spread it, incredibly question don't would I pumps we earnings. levered QX. through year-over-year Maag in think think, to is first. the the to where evenly it's that we to need million. are that Look, disproportionate on bigger material going change. those be Yes, clearly, get I the But are see projected on I to It's the industrial revenue $XX growth. bet. overall DPC We it's pumps

those there's caution businesses. in some So particular two

and QX, bit we I EMV, think the disappointed go take we is So at -- demand. take back upside if we look in right? a a little The if were

signaled in I quite was pumps It's that think can of industrial as slowing slowed at QX. a the had we bit, QX. see end the you

pretty backlogs versus are healthy that neutralized we and were. we were. DF, disappointment forecasts kind the such Refrigeration. So where in our what on revenue EMV I a earnings think that back-end not kind to an was of because necessarily net we've got overdelivered loaded, the extent But On some of

Julian Mitchell

follow-up that items my each and M&A the to and million of $XXX-ish in look rounding-wise. on were spent million capital at on In if of you cash XXXX, $XXX three those deployment. CapEx, just sort I range buyback And

if CapEx be see would it have spread range provided. as about XXXX But pegged, is thinking XXXX, Just see wondered share can can assumption that you similar the surprised was in 'XX? you we count you you in you're broadly the have when

Richard Tobin

that best time. this I think CapEx our is estimate at the

up that it's towards investment think going to the one on and would down. not spending we're inorganic back return on go go come capital to we I side, to But then prefer if other the side. weighting it

Operator

we Next, America. with have of Bank Andrew Obin

David Ridley-Lane

Ridley-Lane demand confidence Andrew. here as David Pumps heard Process softer around gives is What could definitely in for could the you -- improving XXXX? you be on This first I the & commentary Solutions through half. your it be that go

Richard Tobin

business, expect to Our biopharma we again grow in double digits.

I caution industrial is think our that around pumps.

backlogs good betting bit we in have little growth good basis return that. so Maag, We DPC, feel then second a half. in on a project about And on largely the we're of to

full think we've half got scenario. So glass it's -- I a

backlogs on about they levels We're and in We've businesses on industrial demand those. little until little their going remains stocking got firm, extent a deliver to everything stand a interact to we like. the the some our where see bit with pump that project-related we'll cautious dealers bit our be on and

pump confidence only So that some I of think is growth on terms that that, that gives industrial we're the the in risk the largely side. us taking

David Ridley-Lane

did customers it. question. thoughts demand Is sense of after with would tone be And EMV XXXX shift Got a updated there the on upgrades? EMV any greater urgency? And around the

Richard Tobin

read But the into newspaper to the revenue. once let's lot say, up that an instances getting phasing don't of that action. as can happening what's that, if we the number first QX, we jolts operations. terms into of that move guess have you fraud the be every is, people you of day, of now of look you I kind but retail XXXX. make could argument card allows XXXX, a pulled us And into credit Yes, clearly, at how extrapolates it have in you're could enough data. demand It at

think we that's I So the see. phenomenon that

Operator

the next Coe question Research. with Wolfe The Nigel of comes line from

Nigel Coe

outlook backlog sort to area revenue of how the So that wanted you've build to compare up concern. of that industrial Obviously, the in pumps the XXXX fiscal got? for outlook. kind backlog of sort pumps you that year? kind a into underwritten follow much of have How on is do And normal growth already Rich, does I of just

Richard Tobin

of Well, stream flat, of vast and on got is some business the the towards that. new segment weighted revenue outside the industrial up, the and that of which biopharma absolute sight in tend to be the we've that's majority project-driven, value The through but terms also distribution. of goes is DPC line backlog of is portion so where of Maag,

So pump an industrial as so on I cautious we on amount we of about demand. need need where we saw I going of get QX. we feel we biopharma and quarter earlier, management I to -- we stand, inventory our -- to kind into mentioned a We belt see under that just think good good we're about the But the industrial and think -- think feel Maag backlog. about based to

Nigel Coe

think terms I inventories did helpful you're been of now. investing. at Okay. That's zone. if that know which at sales. in color channel and are I are where peers it's But any to touch on Typically, most -- in multi-industry running just CapEx be I X%. want distributor million, helpful. got on X% over also mean $XXX it'd I X% you've is because running right of you've about your of And

how got preference mentioned when you a levels you've it just for you dialing these and You investment. internal just long remain CapEx I'm back. do curious think see at do

Richard Tobin

for that brand-new to still I site think off. is business spending the biopharma on our roll going we're

before, mentioned CapEx. Brad our underspent as guidance So on we

and building get a up, anything so is part has cold one-timer, One we have Minneapolis reasons like we think to XXXX. rolled we don't of of I that. it into was that me, how underestimated did that spending in stood is the the That, to

our through X big running projects So now. really we X really have or CapEx spending

forward to highlighted XX% them million I spend. is aggregate, Using $XX in in million think that -- We spent in going that probably close XX% of and to XX% we between We're CapEx round XXXX. figures, as XX%. $XXX revenue. XXXX. to come come another says would growth, expect to of project a down on Unless percent to the up CapEx amount of with for roll we that -- building, I based brand-new

Operator

Stanley. we line Josh have Next, Pokrzywinski Morgan question a with of the from

Joshua Pokrzywinski

momentum Rich, just comps. the to I be persistent X% XQ locked fairly would would weakness of coming off generated. there, in phasing the becomes through quarter But a walk on momentum in visibility? us the just build easy weak takes a would long kind start think a be some what of fourth we like you that At it macro maybe it like world. more you some like into just business Can your point doesn't The And look & see to scenario know what in of seem the timing-wise? seems a similar more Are kind it optimism X% time call? ID, normal the to you're from year. time a once what I could Imaging doesn't give better there? all based to it's we of in on

Richard Tobin

Asia Asia. around It's very dependent. just recent news And forget the

portion slowed Asia the particular that talking Printing of in had sector. about business I'm ID progressively & the XXXX. throughout

think I in going thought were that and quite to make 'XX. because of So We printing we're into letters there, we of about relatively credit didn't QX in going some we the make like. deliveries cautious frankly, expectation digital financing,

we to financing the somewhat because the are that rate need to the to some just parcel there. textile growth orders part for believe business out So 'XX that levered and We is on it. of sort on printing

for complementary see probably inflection going whether Asia and QX that just end to say to we what's to mean side ID I think happening in we've we it's say. I that's we're once the invested point. can actually at printing that, revenue a on hard said Having answer Markem-Imaje. stream So the an of a question have in

So going forward. with let's can see do what we that

Joshua Pokrzywinski

a kind still where this step taking lot you on entirety? with to productivity-focused more on the CapEx side the and And has can portfolio, the last obviously, a pieces XXXX noncore of XXXX its some like making Is in couple gaze eyes-down, maybe an to is or year productivity, it. a of your whether Or and going in toward business? examining back, certainly then years the you're of be M&A of start it's shift a investments lot focus Got of just year otherwise. the

Richard Tobin

in 'XX to going not away, I So going a variety to and that's when is team what down quite going efforts other but back grind bit 'XX never why the in we're this, we're digital like efforts management investing out of and the right? office our productivity expectation grind to a things. issue goes And say our and forward. sure our is I'm in

So of the the cost following P&L grind we're years. expectation in in the taking can with out that the we those investing areas productivity

not away. a on actually So a lack time inorganic amount that portfolio. doesn't go but It really it's spent a of translated considerable hasn't trying. into have our activity, lot from of We of

Operator

Sachs. The question line Ritchie the from of Joe Goldman next is with

Joseph Ritchie

in organic XXXX? much your in Fueling in baked Just Solutions growth a underground subsiding here how is of for China guide, headwind

Richard Tobin

I terms, In don't percentage recall.

million it absolute was think $XX less revenue. I more or terms of in

Joseph Ritchie

of bake have on specifically we should And right. are deployment, talked is But baked your guys Okay. All M&A. Cool. And little or buyback? thinking how expectations what I I missed about about capital toggle kind in into you know for we on then may earlier. this XXXX? what bit the a

Richard Tobin

kind a back we going -- XXXX, the if to pile. we weren't to on cash Joe, sit clock, It's we said of reset

Our purchase, preference Obviously, is we million inorganically. did to $XXX the it in total? total, deploy what's

Brad Cerepak

yes. $XXX million,

Richard Tobin

we this But with returns, same. because $XXX 'XX if year high be inorganic efficiently inorganically. million haven't it you the just equity then proportionality deploy it My been investment can't expect deploying back to in preference can would of the we of rise.

Operator

line Next, of we Deane with question RBC. have Dray a from the

Andrew Krill

on just This from seeing on what's for is being you're tariffs? Deane. if any environment still seeing price you you're cost impacts and assumed the comment now for Krill Andrew XXXX then and Can

Richard Tobin

were year-over-year on right think costs I input neutral now. they

think benefit half the inputs in that second the of we think, year-over-year got picked on I XXXX. up, we've I --

pricing our we relatively is should in inflationary inputs, think neutral, expectation be labor, that includes So and goal. of is our really which excess

Andrew Krill

quick Got a just it. then And follow-up.

for So have -- know cost XXXX. takeout you $XX the takeout million we target

size down maybe Just restructuring? savings additional in macro that if more further that? expected, what from there potential is were you any read you just to the slow And could to than can engage

Richard Tobin

Yes.

has with demand nothing that the out think to the what $XX cycle. I we're of taking million do

million the base. $XX core was would we clearly, on action against cost reduction costs. cycle demand that turn just So of our take is us, to If

Operator

with line Steve last the And comes from the JPMorgan. of Tusa question

Charles Tusa

'XX? just mind what can see you how think us remind guys to what kind 'XX, -- in and around that have out you beyond -- trending kind When how of you the of just And EMV, in about keep kind dynamics of front? plays 'XX that we that on

Richard Tobin

Yes.

that we think previous year. have the like on fourth saw get was one as that on argument exit in that, how would to mentioned, may point to if a I and Based quarter peak you got it headwind only during data of because or presentation, the higher in rates. EMV, I our adoption rate more XX% that's under the in But XXXX tailwind made 'XX heard estimates China 'XX demand an we the may a see there's about Our belt but quarter, know have 'XX, a of on that underground reduced a it. have be amount XXXX in would be side. and we've we But they to we'd less the to and quarter be progressively model progressing. We look,

Charles Tusa

sluggish Okay. Refrigeration. kind or -- with about trying business Great. Is that the what kind strategy better? reevaluate little -- you you about the kind that just then the cautious to on of of today stubbornly feel it that operate And a more stage better At performance? sluggish do given of kind do of

Richard Tobin

on is Steve. intervening it base, place, we're the when to this cost Look, committed I the year mean takes and

for So the it year. I that we're going think run to

that where we're strongest. think is I where intervening is backlog our the

production is pieces door. frankly. look case think for that the There the success. quite taking -- us that that kind a we're not not I side gives the tertiary this of to at of that door case are the on of But got side, So Refrigeration pause actively we that some year deliver,

Operator

concludes for you. remarks. will turn over I to now closing back question-and-answer the period. Galiuk Mr. call That our Thank

Andrey Galiuk

concludes next speaking you to we to your and look interest forward This you in our Thanks. Dover, Thank call. for conference quarter.

Richard Tobin

Thank you, everyone.

Operator

Thank you.

You have a wonderful may now disconnect your lines at day. this and time,

Dover (DOV) 30 Jan 202019 Q4 Earnings call transcript