DOV - Earnings call transcript Q1 2022

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Operator

Good morning. And welcome to Dover’s First Quarter 2022 Earnings Conference Call.

Speaking today are Richard J. Tobin, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and Chief Financial Officer; and Jack Dickens, Senior Director, Investor Relations. After the speakers’ remarks, there will be a question-and-answer period. reminder, and gentlemen, recording your call. a is conference of As recorded being participation Instructions] ladies this and call this [Operator implies consensual

you Dickens. my pleasure please turn the these Thank If to And begin. to agree Mr. over this Jack you. now at please time. terms, is it call not do Sir, disconnect with

Jack Dickens

our webcast will and XXth three our thank call. An are months. our and -- a you, Thank are prepare call be of included for will Reconciliations Dover you the Chelsea. our May materials, measures Good morning, joining presentation information. website available between link replay on version and everyone, of be archived through on and adjusted supplement for provides available non-GAAP investor audio which in our website. GAAP

in Our risks include that, will results a events to could current I statements due assume Rich. statements. no uncertainties, from over the on and will update number to make which SEC and obligation our With call based to comments today forward-looking statements discussed filings. those We our differ -- of we turn expectations. Actual forward-looking are

Richard Tobin

morning, on it the quarterly slide U.S. I Jack. shows adjusted everyone. results. GAAP three, and Thanks, detailed Good am

and So at take let’s slide go the to four look a performance highlights.

the operating our of quarter. to robust of the across be a line in with and for continue service management various expectations, did first teams navigating in results quarter were during solid demand the Our and our expectations. challenges products The companies the job portfolio

the production but able significant some headwinds, forecasted which quarter, backlog demand back challenges particularly chain a chain our the performance, of input the supply headwinds geopolitical from return to late strength. robust we inflation through and were supply portfolio offset businesses the in in on pandemic not into these our quarter unexpected largely impacted had We perspective. in China, did appropriately forecast negatively of the Going we destabilization nor and

portfolio. at Organic dampen chain our the in to XX% on weather and older revenue year-over-year impact below levels the remain Backlogs had in chain fully slide. events, on older volume in interruptions the price performance all backlogs volume was next expectation. orders the cost to margins. actions the severe X was controls embedded margin which of X% short the leverage mix Planned book-to-bill supply absorption production were segments. forecasted able and our -- constraints X% Operating in negative of unfavorable and quarter backlogs cost and an constraints effect productivity five quarter up across offsetting of record above the demand of strong businesses. move unscheduled by negatively supply Let’s and costs impacted But were in with caused tight up and sequentially certain year-over-year majority negative and

We year. to the recovered expect this be over balance of the

plan for we to in powered We During to electric quarter waste productivity fully vehicle WasteExpo May. we used portfolio customers to vehicles, collection capacity acquired growth organically invest our one recently in and a intellectual showcase at continued in hybrid refuse operational success. drive municipal property a of electric and the unique revenue which built and expansions initiatives

operating, of deliver tougher commitment that keep we per comps our we the sure macro backlog have rigor. drive Despite demonstrated $X.XX back well-positioned environment which guidance we discus strength to first get our Our noisy, of diversified be in we during at robust share I Q&A. X% results in to mind to are But length the $X.XX the of and businesses of dynamic improvement again X% the performance organic which quarter-to-quarter headwinds, businesses EPS XXXX per performance that are the the through that share. and growth XXXX. am revenue robust and portfolio first half to quarter the adjusted to our face challenges of Due the operational to half a are of as will of full in in continuous will year positioned we

largely slide up organically backlog Products challenges, operating be backlog Engineered of margin revenue continues Let’s much backlog visibility -- but shipped. go the supply production and cost chain was sequentially five. robust a ramped in to quarter. the result result a XX% of have considerable portfolio up we improved, across position. robust a as Demand to and and Comparable older was price of as down performance as

Clean offset EMA continue -- dynamic strong Energy year. the the was was other & of components. below-ground in in businesses by Clean EMV through the components, of fueling portfolio the flat expect expected the retail was businesses. as vehicle North demand We Fueling with Demand to organically balance across particular this of roll-off wash, balance growth Energy fueling and strength of in America

of this conclusions me wrong trajectory projected here an the draw story of performance year. Let the EMV-only the for and make unpack before the the balance margin we margin

to ID as in our Texas. expect software coding gradual constrained our production facilities QX at We absolute quarter across in margins organically business the Imaging X% in reduction business XX% posted more Pumps recovery. we volumes offset geographies. and Process and strong and and acquisitions in core ID as growth. related last projects, than the XXXX. management quarter R&D acquisition volumes down product demand were deliver where its & costs. see we But to quarter, mix, new in we to March remained in a another sidelined XXX-basis-point chain shortages, represented production in rates quarter. aside COVID-XX drug all margins This amortization of robust Demand a vaccines printing revenue lost COVID, in strongly. million roughly to $XX which higher strong QX organic Imaging our therapies strong growth for & Digital biopharma late EMV previewed As lower Solution were businesses biopharma Margin input China back did were main is challenges. quarter & volumes as for all organic that normalization fixed activity year. of on as order during Russia, for came driven and was moderate. our core is growth event accounting, performance driven well components and balance and segment saw segment and results the COVID and robust, by we in at posting favorable in in in component lockdowns and we Climate here. were serialization by result quarter operating headwind performance continued profits the on declined depreciation of weather in in and in input up in robust in the incurred cost pricing. volumes, will major Brad the in volumes, margin from which The cost absorption the and offset I a Technologies mix to dilution acquisition solid price strong production improved Setting & Unfortunately, Clean be to XX% it Sustainability Energy Margins one shortages. pass across of brand as full and costs textile geographies. driven marketing businesses due week strength continued inflation Topline supply of solid Sales and businesses.

Brad Cerepak

Thanks, Rich. everyone. Good morning,

to Going slide six.

to or impact FX quarter. million negative bridge. is organic revenue EPS top $XX X% a of the the headwind was the in X% in growth, the On $X.XX resulting

$XX remainder changes assume the from the headwind our the across offset the Asia in the Our million all partially FX the which exchange performance the creates not acquisitions prevailing Brands by M&A of saw to year prior in half million organically of for $XX in a with organic million geographies rates, product notably for year strong quarter, versus in represents We approximately to guidance. $XX any up forecast a the Asia XX% does contributed China quarter. divestiture. and solid was business from the our growth Americas. Unified of a which topline

on productivity pricing favorable as bridge by rate by EBIT, million Moving down continued quarter, tax or and margin to volumes, the XX.X% headwind. and EBIT period. as and for more benefits initiatives Adjusted strategic year-over-year $X by declined tax points the XXXX quarter segment were than benefits approximately million was comparable of $X.XX inflation, impact. higher higher amortization in basis was $XX acquisition-related for than effective in a Adjusted same The rate. the a tax as cost million production drove $X the driven improved EPS XXX-basis-point discreet earnings stoppages, Discreet well EBIT improved segment as the were input seven. in million slide that tax adjusted quarter XXX excluding AD&A excluding $XX net roughly offset earnings approximately

in as seasonally receivables, our were our shipments Capital as inventory flow businesses. of flow cash and to Now slide capital of was expenditures by to is back in across turn declined working was expectations flow slightly QX driven lowest to our year bit robust I the -- due it post-COVID in negative Free the QX cash quarter quarter an heavy eight. compensation support recovery. a quarter last principally higher and growth in driving outlier for cash March, that, With on higher investments on first am and going several season payments. statement is well Rich.

Richard Tobin

includes on This remainder margin of and Okay. nine. environment by of segment current for slide am outlook, drivers [ph]. our operational slide XXXX view the I demand

with year. and notable new industrial defense in and to QX in new continues as refuse against order strong order software recovery energy, Engineered on timing the bookings. a automation high continue and to rates aligners, in wheel but remain are aerospace ship Orders in accelerate Products resources natural driven trucks well and gains. strength should sustained Momentum within remain remains solutions the share builds, half. in by pushing robust, half record robust, industrial well particularly on with second service of service and of second and winches as vehicle facility replacement will equipment, topline in expect the into based strong, demand, We solid services backlogs in Vehicle to automotive, muted growth for China

expect flip cost of expected, in we As backlogs. price as positive cycle to first it rounds second segment, quarter negative several quarter this the through increases in but in was price the

dampen introduced to margin businesses. in mechanisms improve impact to expect the the Equipment progresses. year volatility We margins of we other sequentially our have Capital All-in, cost also as

Clean growth of Energy as solid growth our vehicle acquisitions more should in Clean to Fueling and the start, demand. full are components, than with robust off year strong EMV off the coupled in solutions, offset fuel post below-ground, to expect software and which wash a roll We for & transport, Energy

improve of incremental incurred volume million XXXX, Excluding to the expected should contribute software Digital and marketing robust shortages textile as are remain and conditions is which ID component expect we and expenses deal-related million were coding protection year positively to in margins $XX and Imaging on brand approximately in $XX backlog. full Serialization in core QX, recovering. amortization Demand & to of mix. solid printing subside. bookings in

and in and Activity increasing in expect processing Order to segment Process robust orders recent gas for stable. this components its aided industrial We Solutions and the polymer OEM margin trajectory uptick is a new much refineries pumps builds. solid be plants, precision compressor remained by petrochemical trends Pumps segment. at and of continues for activity in upward &

Our going perspective Subject biopharma a in this forward. XX%-plus as the lumpy shifts vaccine transition our therapies. customers we margin mix, strong, alternative production new demand from in remains as normal expect business segment but MNRA likely intra-year to year-to-year COVID to from

growth We rates. expect by its backlog double-digit organic post to Technologies Sustainability large order driven year sustained Climate in & this

retail have across in segments. core orders food, New been businesses healthy product

XXXX. food within retail now is business into booking case Our

exchanger heat are packaging and QX equipment well QX end booked across margins seasonally for XXXX on record business through the segment. taking orders also and And are Belvac backlog. are markets. and volumes all order its to positioned XXXX. for and strongest work Our for continues geographies They in quarters rates strong businesses

expect XXXX significantly volume and margins improved cost We positive sequential. on price normalizing dynamics improve to in leverage,

Okay.

slide go. it to subject we this and see by clarity be am segment, has attempt to continues backlog been some and since new Here debated and going I on the can I morning. This to provide this is bookings actively

performance revenue year-over-year months. in backlog is across backlog sequential up growth last the in segments despite all QX. total double-digit XX% XX growth First, All posted segments also robust with during

This our especially portfolio, an and is see five segments Next, guidance. Intuitively, our these was elevated cycle perspective, current and expect year would full as chains great and in ordering with pillar despite we influencing Topline important our very not order rates thing portion to in it’s above of supply persist, two order advanced short factors we patterns. X% is improve. the book-to-bill patterns organic good a But X from QX picture. an growth planning the of quarter. operational X.X, a visibility all in

in it’s pricing. to lock in -- customers while chain expect on stability, to who favorable the remain of supply in ordering reasonable demand assume And will XXXX, robust customers First, supply. favor advance ensure to second, expecting locking inflation cautious that attempt persistent continue want

can despite booking lot on portions time a you cycle spend and view portfolio. into a in driven we this at of As long the conclusive do CapEx not present, of imagine, topic, have XXXX

So tools a product typical exposure am behind operating on which absolutely or market significant them demand as rates present, we flexibility the continuing the a the and eye to model, year has has organically from XXXX to strength. we keen as we on protect scenario capital company to comparative accordingly caution maximize in need invest growth upside operating environment changes portfolio of order on will cycle secular ongoing us would challenges competitive conclusions have areas perspective, that I I to significant and uniquely our the the as we downside and to drawing definitive diversification have end to such, about on and that the careful profitability XXXX. progresses. Dover’s just be keep geopolitical adapt tailwinds, stack. however it are despite working we changes many in manage we and business and approved The in backlogs. scale and at we macro and gives of based the believe all to of confident adapt the

And year. on Q&A. move to year XX, slide to guidance the we reaffirming for let’s Moving full are again,

Operator

[Operator Instructions] with question Our Vertical Partners. from comes Sprague Jeff Research first

Jeff Sprague

everyone. Good you. morning, Thank

Richard Tobin

Jeff. Hi,

Brad Cerepak

Hi. Good morning.

Jeff Sprague

balance Could I bit Rich, a year. mean, first, I -- of a confident on Hi. guess the things. cost couple you sound more over price

older kind elaborate maybe kind just of system. but of said you took residual that, tension handle you a volatility of on backlog You kind could working pretty of the good its have also some imagine way on I forward? mentioned existing the more going bit to a backlog through and on converting you little the on would inputs cost steps you these dampen

Richard Tobin

chasing it the to in cost is things Sure. backlog, one is of let’s high extent. having Jeff, to advance you The of get that, good bad news costs that planning, I are mean, is were year, news is which we last say. good I the certain headwinds, mean, a helpful and price input building if you backlog visibility, chasing a

You you last basically go without -- which we as in are backlog, price negative right? So, saw replacing costs, year. QX

the least significantly back in then are But positive, in QX would was I Products, performance that remember year, have you safe at squeeze the we shipping have that end costs you Engineered the benefit year the much a If what the margin what go performance year been because are attention and of we ever been we our QX older last and the talked flip Dover we and disappointing so remember, if and did if QX next backlog a pretty on QX year, and going we significantly portions would supply price So QX. of about, easier, margin we revenue was at last have back And down into comps have in much the of are would in which to we on. portfolio what of and carried said, as call particular we strangely, price model now to that where backlog, on the significantly it it comparisons, convert this of was, of think, significant year as us we spot you not said would up liked, in I I the was for because QX against are and had your have right? expect think, in three right? we modeling that do I of chain, to highest Clean in our to about some year, is in posted. the Climate, done of have half we Energy, QX, see cost our bet half

of to that year guess comp QX again, this proxy a as of we you have got I one. somebody before asks, I year. tell QX performance last the for is a that, point I would tough So ahead us would

Jeff Sprague

mean Great. a seeing the lack in maybe for confidence backlog? guess. would that Thanks undermine are color any their world from robust. bit line macro of for of do feels weeks. of kind customers kind just and better weeks look anything of that. or the about little the And different term, last eight I obviously, trepidation But deliverability places the your the you kind of I a taking indication, or or six backlog in orders backlogs of But, shifting

Richard Tobin

on this far, to is of I view. to not where been chain is passed news the not COVID to situation how the somewhere we don’t Well, to Guangzhou think of quarter that or of on I navigate has from morning hoping, concerns point we based Look, goes. the pricing on point not have backlog. are supply this the I move but this China that going new view, news top that in that else, a view we a that am detriment so helping my had have here. have

had haven’t offs backlog. we that call So in

our the and again better worse or I supply supply think it chain are customers’ see. does of with point dealing they the biggest will Does for issues. here? We issue from issues the get side labor availability it business. from view, is us of get And chain

door the with the they are them their working to have pull issues. are time, hard because we ready own lot hard got receive customers to working and call our at same dealing are make supply chain really they push out we product of, get with So and you where really the sure of that’s to a are

shipping So constraints backlog here. from our customer it. so right a see own risk now in we taking don’t other we much will don’t as going of and far see of terms than the see We it, our but as

Jeff Sprague

Thank it will I for color. leave you. Great. the there. Thanks

Richard Tobin

Thanks.

Operator

you. thank And

question comes from next Citigroup. Our with Andy Kaplowitz

Andy Kaplowitz

Hi. Good Rich. morning,

Richard Tobin

Andy. Hi,

Andy Kaplowitz

So DPPS, us XXXX lowered that biopharma, it give you on and I and looks revenue called turn think, the you Dover’s normalizing have obviously, slightly forecast versus of down like DPPS tough and some your more The are book-to-bill segment still positive, Can in of did orders lumpy. you point? grow had? ability to overall you COVID-related color about how at on percentage this thinking has what rest and comps DPPS the ultimately, is tailwinds business,

Richard Tobin

Yeah. Think going terms we bit non-COVID through of of therapies of this the to go are little air because therapies. a demand pocket here that COVID function transition from an in to

as we single I place, is this earnings accommodated never where seen our about and good to a believe to this us, I think, on be because -- think an it. to in run, is the far rates an growth for think, be long I’d order believe have use. going that’s Danaher explained our issue don’t I than better feel in in middle the are that year. this reduction going into this going able really intra-year expect We and like that for conversion to we thank to is are before of revenues takes drop COVID-related we forecast market again. they the that But we transition position do it it’s But to year air pocket

Andy Kaplowitz

color that the Thanks DCST, how see strong mid-teens for and you do into how And business initiatives Belvac, the still the this possible then in give your some segment hitting segment improvement your SWEP, are? quarter. systems, point add for that, obviously, added target COX it at Rich. in growth do that us was margin much growth they more year? you revenue quantify in to then see this you Is could to much

Richard Tobin

now the The in is The two-year on CAGR XXs. two-year CAGR exchangers on is in Belvac the heat XXs.

-- So not get refrigeration. to we before it’s

growing which big is about the way. the being portion the segment, are business margin and fastest accretive it’s to business. have on the by refrigeration portfolio, got systems the widespread So XX.X, you drivers, The two CAGR two-year XX, principal across

to we all and the the could we are are to get not we before, will trying case all there. running take we we out As have and that the system are the taking trying discussed business we business -- business. profitability on that’s maximize Meaning

So, be so but assembly supply processes, these so margins QX of issues, far, should complicated and lot still a chain good, QX interesting. because are

Andy Kaplowitz

leave I at Rich. guess I will Thanks, it that.

Operator

you. thank And

next question from J.P. Tusa comes Our Morgan. Steve with

Steve Tusa

Hi, guys. morning. Good

Richard Tobin

Good morning.

Brad Cerepak

Good morning.

Steve Tusa

look you last a you so in it you pretty mean big said XQ Can step-up year. lot last I just do the think was that? What’s -- XQ just a XQ over in going to like maybe XQ, growth organic year, is

Richard Tobin

at but say can top that that from to I Yeah. that, I Look, the it’s here I it the If I right? mean, growth. to calculate I’d don’t to of one about point, my of should look data similar the have organic going at colleagues into of extrapolate I have QX. ask know similar trying I you go a think, you end my be to day. head. tell that can

Steve Tusa

Got it.

Okay.

Trying little days, Sorry. there. for less work do a looking to help these

Richard Tobin

Right.

Steve Tusa

And in of X% are year? guess, XX% so X%? range the kind incremental somewhere imply, the I looking And would X% means XX% the back to a if -- for the of number, I you that don’t that half right that’s of back to at, half the like, know, that

Richard Tobin

that. going mean, the incrementals operational Well, difficulties back all that year, comps the had the the be we we significant, of lap with because year, all half I the are last

Steve Tusa

Right?

Richard Tobin

we negative down volumes, and and shutting absorption. price are negative facilities had the reduced costs. of everything We absorption, We had else, negative beginnings

particularly year, all Engineered Climate in if macro and and from Clean our be should chain here, Energy half and the in being the the back robust? in mean in worse So of get doesn’t and things incrementals yeah, I Products supply equal, the

Brad Cerepak

add would guess… I Yeah. I to that,

Richard Tobin

Yeah.

Brad Cerepak

material to implications, that, include about the to forecast as would goes think say, we our where impacted the add price commodities. we on would But say, guess, I will price. now macro I back see and the I half

that itself good feel under think we in backlog’s price place. the cleaning I and about have that out scenario we increases the the So

for that’s think good half. back So I news the

Steve Tusa

Okay.

can big how One saying of Sorry. I million remind on kind one-time-ish more of recall $XX These $XX two then chain and those, that million half? a a that detail, the supply more those second of you of there of in was -- costs expect would to us do be how much kind it items you to cost price type little guys to spread kind precision related be you great?

Richard Tobin

I to that mean, going Well, clearly, headwind plus. be it’s

up So on comp the all plus volume. you on the basis, headwind a mop you get margin normalized incremental

Steve Tusa

is Yeah. How big that? remind Can me? you

Richard Tobin

told never you. I

to you there. So there’s nothing remind

Steve Tusa

Thanks Okay. the lot. a Appreciate color.

Richard Tobin

All right.

Operator

And you. thank

question will Our Scott from with Research. Melius next Davis come

Scott Davis

Good morning, guys.

Richard Tobin

Hi, Scott.

Scott Davis

I was of a use? there’s should think are as on of just facilities, are they When hoping them. ton could all biopharma to that say, -- mean, biosimilars walked is me, those it I shit one a the more out, that, educate -- you the us coming these the you guess, business. of predecessor bit or have -- question little If just I asset would intensity I similar and mean, the like single into I kind of product? use I

Richard Tobin

such, and production Danaher, say of better supplier. in and they skid that that, as understanding I Well, subcomponent therapeutic grew and skid, the was different this I a we we But a will What is articulated for are COVID. think listen uses tried boy. you like to avenue, Oh, coming biopharma was very is production technology as got that what is much we -- we chosen are knew because type before, right? mRNA now of tell and far our I therapies production. to a chosen of variety growth component to supplier It these have because

Scott Davis

garbage be able then -- specks just off to density you to than battery expect we few from I a being are making truck, am Can super massive to these are miles. to That’s XX it? the actually, things to picturing, helpful. up, be able right. make on years can I has the don’t drive more -- back these this you share All the Okay. is electric And things, money

not? So help just market any color understand there that can that’s a or if to real you

Richard Tobin

it. can a I don’t WasteExpo not… at and know. look Maybe are go take go I you Xth to May and we on down Look,

Scott Davis

that, pass Rich. a on take will I

Richard Tobin

I there. will you meet

Scott Davis

Let’s put it that way.

Richard Tobin

We so a Yeah. plane don’t Nonetheless… can’t have I you up. pick here,

Scott Davis

Yeah.

Richard Tobin

we builder. are a remember, chassis … not

this So is…

Scott Davis

Yeah.

Richard Tobin

about the if a this … drives compactor the think back a pack basically you that of hybrid, that the a on is battery sits truck.

theory, in use electric So a full the vehicle. is,

So get truck it also and sitting business this the on describe so for guys -- have a electric hate trying to with could technology a this an but you you with to diesel run the full are back, compactor, electric a with electric hybrid going have basically that me chassis an you benefit.

here So an going fleet, of a are have as fact work and to material they if to money we the going somebody a on electric electric we taxpayer product go the they and have intent. to supplier, for fleet, to the its to But make an at That’s it? is, money offering. decides matter are got municipalities, want go to

Scott Davis

sense. All Thank it guys. I right. you, on. will Makes Yeah. pass

Richard Tobin

Thanks.

Operator

you. thank And

Ritchie come Our Joe from next with will question Goldman Sachs.

Joe Ritchie

everyone. Good Thanks. morning,

Richard Tobin

Joe. Hi,

Joe Ritchie

quick XQ a comment. clarification just Rich, on Hey. just the

up, So It’s to obviously, XQ? basis so right, a be talking like-for-like we year-over-year EPS, about on down going organic growth? margins are

Richard Tobin

I what’s Yeah. and ignored all dilutive it’s know, is I there we effect mean, about price have Look, margins. cost Even discussions on the these at price dilutive to cost. neutrality,

the the piece were way across been going math are works you portfolio absolutely the the end to day. pricing of That’s of the That’s neutral the and we So robust. math. it even at if entire get has that

margins an get little depending was QX much the point else. over It’s we bit my is and portfolio everything XXXX. right our am place and years because profit absolute of peak commodity diverse. a view, so on how -- to going exposure now, I have I all Now, in From businesses think, certain for

Joe Ritchie

right. That’s

Richard Tobin

the and profit, Even careful a is I’d about proxy. margin. dilutive absolute with that But QX effect be

Joe Ritchie

on makes a out follow & guess ton Fueling want to No. I of Energy there kind this is the really, I Yeah. quarter. That sense. margin of parse the Clean

of to one And the second know I are -- be question, amortization talked of bit rest to kind Is questions. like two you guys going the year? I AD&A, One, the and throughout production in the the see just guess then linear out XXX basis we a that maybe QX? Is we parse little think, week points. in more, so depreciation in come clearly, down that So, business. help the going being

And of can how ex-AD&A, come can margins how so quickly see quickly that back? kind

Richard Tobin

to linearity. the going Yeah. we I on with deal AD&A am else questions colleagues. circle and I to my leave will can everything the back

Brad Cerepak

that question, million -- amount I roughly the a half linear $X answer The amortization mean, well, quarter. to back at a to goes

second So thinking you into the as it. said for as the rolls it it’s XX about and squeeze the of first, quarter as could off we make and because the if and the the can inventory simple I second quarter, second do year, quarter, as was high that’s so math you are the not

Richard Tobin

Okay.

the hurricane. That’s taking in facility guess. of our above-ground the of the we will And understands is remove QX, we -- lowest were We forward, much. $XX the one to that main because out of COVID. look, our weren’t March AD&A no rushed quarter margin we as no hell at the want one I and a orders year. to Energy was year January, seasonality. in It actually But which write should at basically could like our a lost pretty we don’t QX in and million have pace, bad I endeavor back our of main week one. we where pump we facilities, to Their just production much We and production as then of Clean balance for AD&A weren’t doing Nonetheless, dispensers production from actual profit and the where happened on going business, good understandably understood mess. a in segments go revisit life.

the that can can business backlog the that those seasonality. we margins we actually to prior see very year because So is see and of dilutive but trajectory for revenue good, is

view. and all all booked here, is well to our Clean doing is from profitable things that is being point very accretive of chain is very margins which equal, below-ground our business, and and coming supply So, supply a from -- backlog Energy that’s

I despite door, performance the be get the we EMV. long am absolute robust out will can full confident as that year profit So as and product margins

Joe Ritchie

both. you Got it. Thank Thanks. Super helpful.

Richard Tobin

Thanks.

Operator

And thank you.

with next from comes of America. Our Obin question Andrew Bank

Andrew Obin

morning. Good

Richard Tobin

Thanks. Hi.

Andrew Obin

Well, it’s was just to get up X% better. pricing QX, question pricing. volume it sounds versus and on going a In

look So a pricing, growth if if the with sort implies volume second in we powered the look half. relatively at sort organic of flat guidance half, it of we into second

robust orders to growth trying volumes Given in understand gauge about backlog the how seemingly flattish Just given the robust cost between and this price guys half? to think is, and just to are second profitability, like, second to trying very you optimize the uncertainty half in being backlog you how dynamic backlog? wondering

Richard Tobin

Yeah.

accretion one inventory that the margin positive the seen say could the pricing flip linear because of QX think that you Meaning second I if the year valuation, me. and over that in so, of balance is, have that… you in you remains because follow half

Andrew Obin

Yeah.

Richard Tobin

…pricing is in.

flips it out slightly As and positive all we gets have is QX you in valued from positive cycle the the there. door older get neutrality, higher, and we product all -- dilutive. to then assuming it the got inventory QX was things, It that

somewhere of the the could So here, growth you the But in is rate quite of X% diversity is portfolio volume. balance the likely. to the as year, X% assume and because the price-related mix be going different full being for know, one

Andrew Obin

robust less and we of XXXX? maybe plan sort you. banking be in the you. North sequentially, Ukraine, and -- between growth And sort world? news quarter the given your growth America then Got on and question, and changed growth the second second how Thank in the all of North this view European half? for rest And mix also just Asia maybe Europe has So on how broadly, European a are of was surprisingly specific your American

Richard Tobin

in is some looking challenge shipped getting get going and look, the And strength the for side chain as what’s Yeah. tell that is are on prepared copout in dollar Look, a but business-by-business to -- environment happen economic they year, in we of Ukraine can of Europe But be, believe think us now, but as they for to from order we I XXX our making Europe? and The working product and for adopts a in rates Asia. going that North sure productivity the with it Andrew, expectations kind good work perspective that only we to us how risk. here. we the in are we that expectation continued good can our crazy. mean, the will happen be the over watch and from with up see up backlogs in whether apart going worse in we would other tap forecast and and to America, here. COVID in Russia, reasons this from comments, clearly, that in demand is -- said down trading right, anything profitably this skis versus like currencies. don’t in year. my in too us rates that, as terms to still But get things high Europe remain goes. the order the I Europe here, if are not from we else But a function are do I Right of that mean, we off to meet think news one early our are we or a is tearing ship are it’s scenario to to that Europe it, assuming capital I we good We the What’s our we of could it’s to different is here. of would not our supply

Andrew Obin

the season. appreciate also Well, a I lot. Thanks appreciate early I earnings great. the [ph] bookings that. in

Richard Tobin

Thanks.

Operator

And thank you.

Our question will Mitchell Barclays. next come Julian with from

Julian Mitchell

guide & had been growth versus to think sales off start division yet, Maybe Good other down has that much took QX don’t morning. as Imaging businesses. the touched ID, actually but with order good slightly, very in Hi. I wanted you on just

your ago, on that on what year perhaps remarks to that. Also, around may any understand start shortages the around more us think, sales. kind six months than be there in help maybe so just the we So think shortages that three about as would of months around flipping color heard there margins those I DII soft prepared ease? have revenue And we much conversation be how how outlook, to component in is do

Richard Tobin

take I last one the Well, first. will

that be lockdowns which quarter. bad that circuit the on the stable we did going partially I we the on -- due sourced us. are said our was QX, in that have to in we think is during factory margins Shanghai fact shut the Shanghai full in year. so production and that we Asia board Asia, And by had Look, shortages those from

of as we certain extent, that levered in more the up we Europe. production out on pick a So will To consumer there. much can as is business mix geographical towards

want also. that’s So we are again, function, I being it part again, up in and, demand don’t this to but translation issue a cautious bring bit the of

choppy a the single-digit So, this margins and a mean, expectation margins, much of over at low-to-mid it’s for this give chain. is digits overall, pretty grows kind flow. driven margins up base the team nicely, a management year, on that probably single I growth have little of they lot that years, will macro excellent But cash couple going constant our although healthy performance, low supply and business at last be credit, I

Julian Mitchell

had their one own I QX. high, very what delta on Rich. inventories a does flow quickly multi-industry more a are distributed headwind, Brad today That’s was helpful. reverse? and inventories free guess, companies lot own in one But, the then working of that you cash Dover? customer from inventories, Maybe that hear understand Thank for How big And soft regarding then Dover’s bottom. you their question you, see maybe inventories, how help Rich, rock us for maybe we is And you. are often sky capital for

Richard Tobin

Okay.

me to want first? take it You

Brad Cerepak

Go ahead. Sure.

Richard Tobin

Yeah. All right.

inventories. what through pretty out believe reflective we door of ship our kind much are inventories comment, the passes portfolio network we distribution. a As do of that not Meaning our distribution

high, so Our look inventories those but that we inventories clearly, the is is. So our at backlog, right? are way

Before capital, -- about nice raising we on backlog, inventory about value very of at talking of account significantly. And and into something inventory need because every physical impact the that’s moderate. ship which that those extent an year-over-year needs that that that taken gone working inflation everything into that everybody’s has you absolute we intention inventory inventories in account be before to of will right? has am we you the I absolute when else. just also take into talking prices dollar So up else. that to get that doing But value look change But inventories, it’s to have

Brad Cerepak

and of thing I sequence from year years cash the quarter off had QX balance pace flow January. But, into have liquidation comments, as March high said, past, some will very again, like Rich where cash been see progressively add the is will in think, coming is in being only we QX. it’s our a we is flow we I the I in would said And of high low of of highest quarter the in shipments we and flow the prepared fourth free to will more which -- the sheet because sense through cash of we increase our think it receivables

will into down over inventory ship collection I and course to of have falls come quarter the which as So then wise, time also period the second you the we continue, the backlog. across year just think, the

Julian Mitchell

you. Thank perfect. That’s

Richard Tobin

Thanks.

Operator

And thank you.

from Josh come Pokrzywinski will question Stanley. Morgan next with Our

Josh Pokrzywinski

guys. morning, Good Hey.

Richard Tobin

morning. Good

Brad Cerepak

Hi.

Josh Pokrzywinski

particularly you you think the where there’s some in year, Rich, aside, price need know on more XX I need over to days. any like do like you of this lumpiness past are maybe freight some But surcharge the things costs, you freight will be price? been guys input

Richard Tobin

Yeah.

should hear You that and on sometimes yelling around the screaming pricing here. about goes

Josh Pokrzywinski

to the listen plenty. I calls, there’s

Richard Tobin

don’t Yeah. so. think I

if infrastructure hard on what we way bad the news, the looks moderating, be look pricing is fact be plus American think, of the does that inflation’s got surcharge a way. coming to And Rescue Plan say see. what that news that we our to trillion inflation inflation, what is I tell watch and good points. it, is the be will now. have balance in that’s price. we except right I one me any of mean? at It’s from of the and you side, going that going mean, the here, capital trajectory the mean, especially goods mean, think year. of not But over I absolute I I

of view? certain I is, good the where right, to like CapEx. have are news is, from of there. it that’s that of portfolio point does off Yes, tied that portion business because inflation our got think, mean an is point good All that in demand the big does -- from ours? we bets a What view it’s

to dynamic. surcharge don’t, from selective I it’s and be question I price guess interesting we likely to are here your very an based. So if answer that driven, it’s going is, it’s commodity think to be so I

Josh Pokrzywinski

Got here, to it. were deck. cadence coming especially the from full commentary to Super helpful. And you change the either the kind Relative expectations margin then where some we how of fourth out any quarter, traffic slide DP nuisance with the see light the or in in or DPPS? on of year

Richard Tobin

perhaps, I that like, light. going bit was look, probably biopharma in, Well, to a DPPS, demand is be mean, intra-year

order rates So think are some. balance The if out I portfolio nobody should of there chairs picking of quite their fall is actually nicely. order that go rates down that up

not extent going but we to people biopharma, margins. to are over to that dilutive saying historical where slightly and that’s back the Now we go are earning to

I’d the normal that, transcript, new plus is back you So XX% take I look go say a if and here. think at

take So and back I a and -- to absorb we where are be and it looking Where should able it. are for when we go sense we XXXX looking in look will will make the year, absolute the and Energy of we where Climate are Engineered into XXXX for at the business. versus Clean performance, of looking calendarization Products, earnings profit last side you is

principle a or more We year-over-year frankly, but the are going other through businesses profit two because, from sailed for those two of quite be some, not to lot XXXX. that’s not be going There’s incremental the looking less segments. driver,

Josh Pokrzywinski

it. Got

Okay. Thanks.

Richard Tobin

Thanks.

Operator

And thank you.

with Research. Nigel Coe from comes question final Our Wolfe

Nigel Coe

everyone. morning, Good Thanks.

But apologize here. XQ off best margin if But margin am Clean since -- of I minutes, your I the So so dropped the segment. new questions margins, -- any for I XXXX. XX the remember configuration repeating sorry, can’t since I name

year maybe you segment. significant So, that margin curious expansion this talked have about in

Just the full going mid-teens zone wondering, for do are to year? be you think we in

Richard Tobin

Sure. the segment? Oh! For

Nigel Coe

Yeah.

I, there. quick but the and answer the sorry, And now, shouldn’t Clean... then know Okay. to should And by Fuel, back then -- I turning nice these

Richard Tobin

Yeah. Yeah. I know what you are talking Go. about.

Nigel Coe

and mix a the headwind You significant impact production facility. weather as there, called obviously, out on the

RegO low-XXs I of thought were I EBITDA margins, acquisitions and Acme, the mean, Given Rich. they

So mix just was elsewhere contribution to there or the businesses impact those more from than is acquisitions? that those any wondering, seasonality offsetting

Richard Tobin

Yes, question. is actually the the QX quarter. the answered businesses. acquired seasonality you there margin in Well, is lowest

that profits second the half else the and comp a everything our basically significantly revenue in the and is shipping is in through and QX, acquired chain which we of of accretive, weak. year fact and what offset margin year, EMV the the aside through demand and that year vehicle we start against but underground which demand supply peak COVID and So where then business expect of probably rollout some QX, wash in the issues was last -- over we last EMV the is for that’s and the for balance it year

Nigel Coe

across question shifting more, you U.S. just we and amount, getting the maybe a for it’s one And your CapEx U.S. -- CapEx just into more maybe Okay. just to Brad. relative are within a Are question elsewhere? a the are but group. you not Dover CapEx for then budgets, fair

Brad Cerepak

you businesses, growth-oriented is. have where significantly, the although our in about if the about is we that are Not think growth ones No. CapEx higher that’s talking CapEx -- the profiles,

Nigel Coe

Okay.

Operator

first And quarter question-and-answer Dover’s earnings period call. XXXX thank you. our concludes conference and This

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

Richard Tobin

Thanks.

Dover (DOV) 21 Apr 222022 Q1 Earnings call transcript