DOV - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to Dover's Second Quarter 2024 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. [Operator Instructions] As a reminder this conference call is being recorded, and your participation implies consent to our recording of this call.

If you do not agree with these terms, please disconnect at this time. you. Thank like call now to turn to would over the Mr. . I please go Dickens, ahead, Jack sir.

Jack Dickens

Good and be call morning, joining Jamie. of August you, Thank everyone, replay a XX An on website link version days. XX, available and our webcast thank audio of for be this will will the our through archived call. for you

and based from Our comments number uncertainties, could Actual differ those results our due expectations. are SEC of today will which risks on include in discussed and current forward-looking a statements statements to filings. events

to assume no to our We that, With I turn obligation over update call forward-looking statements. the will Rich.

Richard Tobin

Jack. Thanks, X. on I'm Slide

our solid, were order revenue geographic exposures the end Second were confidence cost year-over-year, last driven was Bookings quarter X our excellent XXX organically trajectory with X the proactive performance book. out production results up posting and basis organic leverage, Margin XX.X%, performance and by growth, XX% rigorous the organic of top points mix, our revenue actions. line prior excellent, for productivity quarter. against across market shipment Strong segments was and by broad-based X% up volume half in bolstering inorganic and performance up driven over and continuing outlook. quarters several to second year management their upward over our was

evolution actions. results portfolio operational ongoing strong by Our complemented were

energy components global applications expanding we week, our last into manufacturing strategically new adding have completed our X platform, the our regions. clean acquisitions, highly Over markets and bolt-on attractive strategic in reach expanding end base enhancing

of portfolio have exposure year, the our our performance improved operating while of higher for we margin $X in ] opportunities. attractive materially to have Environmental our organic reduce where methodically and to exit capital migrating transaction, multiples toward the We growth unit [ billion business together these at sale we businesses stake monetized also goods, intention This recently of the our this Group announced in reflects sale cash. with Services March

We healthy the second of the sustained half demand The is is year and by are our constructively. market rates. approaching supported underlying end order

solid quarter raising volume X% $X.XX and energy component Energy to We large in volume through and handling and see momentum on on the aerospace our we conversion to quoting the vehicle strong projects Products Slide quarter, mix particularly activity we're parts tied growth therefore, applications. Clean favorable XXXX. improved of starting are, and conversion, EPS volumes $X.XX. I'll defense. organically productivity. and guidance waste in market had performance, in and solid European grew to volumes production another X. driven and was cryogenic aftermarket of robust up strong to from in hydrogen in remain Volumes order was skip rate Fueling adjusted Margin robust performance segment expect for Engineered conditions to where the clean strong quarter to & components recovering

from as posted sequentially data improved of cooling quarter as polymer significant these our AI centers processing on mix. was business also quarter components. flat and and expected, partially recovery, lower Imaging headwinds still offsetting and software cost well the [ performance a should and offset to quarter long-cycle in ] strong and and ID principally as liquid were positive consumables retail applications positively Pumps its curtailment aftermarket connectors and higher and were a new shipments coding mix growth bookings proactive thermal in in an tied continued were inflect solid aftermarket for were subdued, and and Process Printer SG&A organically shipments Margin precision fueling in -- exemplary consumables second excellent leverage chip shipments due in Volumes software Solutions as down was shipments. Margins U.S.. half. in shipments in to and serialization on parts. above-ground in solid volumes particularly the growth and the marking systems

the and which exchanger in exceptional and pumps, post-COVID most the sustainability in nearly execution. destocking and making biopharma residential in up heat orders in in to shipments have to plate on HVAC an of were Both quarter food estimates capital complex, technologies on of slowdown European impact single-use performance segment operational retail our brazed components year-over-year Top and line sequentially mix investment climate notably due internal business. Margins recovery. offset grew and broader can outperformed European an heat headwinds beverage our continuing the

with particularly pump-related by persist in third was greater second quarter a which on margin COX conversion and food the in the in of quarter. to troughing the Margin mix record heat performance strong systems posted retail, headwinds shipments. these shipments expect driven volume half, We exceptional all-time

Brad pass I'll it to here.

Brad Cerepak

our within in was acquisition-related X% on organically largest while Slide in million, base I'm revenue Seco more our due primarily in [ a X%, revenue Europe headwind on food by China, in -- and the and X% which Okay. our of geographic activity million. all market, ] was down closed retail. on polymer the revenue of down X. quarter broad-based handling X% the bridge the offset timing and From FX top perspective, respectively. shipment solid up Asia processing. approximately and of March quarter, waste XX, XX% strength Asia shows which $X The represents to of organic growth was U.S., with $XX was was particular than sale, half a

in of impacted Below-the-line interest a by corporate due in bookings as Of were costs net were elevated our an items rate On expenses. higher marginally chart, deal on to earnings the also orders part of tax as note, well driven higher basis up quarter, sequentially bottom up the negatively the year-over-year. organic quarter-to-quarter.

the higher balances timing well as X. versus paid are nonoperational XX% Now essentially prior on in flow revenue investments up free to statement, of rates. quarter, million in came flat Adjusting flow in the cash in our as is cash bookings Slide strong period DE-STA-CO, flow gain which investments inventory due shipment capital nature, on Year-to-date, working adjusted taxes $XX despite the our receivable year-over-year. driving for due in free to at cash

We expect over our year guidance XX% deliver balances to of and to revenue. year second to cash the materially of are our XX% the adjusted half flow of working full on free capital track liquidate

I'll back to turn Rich. it

Richard Tobin

Brad. Thanks, I'm on Slide X.

continue we markets. Excelsior towards recently migration advantaged that provide Marshall, both divestiture clean of cyclical higher purposeful Here, energy away Demaco. the component of and some acquisitions into components from These businesses growth the the capital contribution and in portfolio margin, higher portfolio visibility the end providers, ESG gross less transactions secular goods our and serve closed

our and the strategic enhancing acquisitions through to and been approach patient in methodical disciplined portfolio have our We in divestitures.

and of details which on We now. valuations ESG and that closed date, the of The our year March are due in X guidance our above divestitures in DE-STA-CO, ESG left pleased achieved both with XXx recent Products, for timing the EBITDA goods capital of on the Monday page multiples trailing premiums announced transaction Engineered significant uncertainty the closing for full the are to assets. signing we have within ESG

at financials recast ESG report, historical move and discontinued we'll our to expect in QX time. that guidance ops and earnings We

any shown including a many unique are benefit The that attractive exits that deployment. areas priority are not a we to And opportunity equity-owned the assets we're on XX- entering overdue ESG our profile of page. buying for We capital is represents inorganic including private value-added proceeds of believe toward XX-month highest businesses earnings the for transaction importantly, period expansion. in

front sheet the ESG us divestiture in foot balance well on attractive deployment flow current the of positioned Our proceeds strength and to reinforced opportunities. capital remain forecast by cash of the pursuit

businesses [ cryogenics, provide across clean color control and Let's for industrial applications. in components innovation more energy go on commonality energy gas favorable highly businesses and to to growing sustainability, and there our critical that that for broader and engineered significant ] gas, industrial applications tailwinds gas These demanding wanted provide safety for a product businesses emissions provide I safety collection industrial natural These loyalty clean reduction opportunities is and are and there expand Slide requirements process and pumps create so clean solutions of and our us. the and dynamics components both business serve in energy and X. that little flow complexes models. fueling segments,

attractive drive like hydrogen uses these application large property technological and with bases recognized expertise intellectual to and markets LNG. reoccurring by supported replacement that demand in high-growth positions exposure Our strong and as installed and are as well

to have space mid- active area in been investing remains years. the should portfolio growth We run, margins this a the consolidated investments several last priority over our us at the acquirers moving forward. roughly these for billion high investment We accretive to high-digit over $X long generate believe

in platforms. of to the now revenue, and with the scale of readdress disclosures our current critical future segment our our structure of $X growth divestitures, add light reaching to component intend around we billion focus In recent near platform this

XX to Energy platforms into transport significant businesses Marshall a [ an and ] our week. expand cross-selling. energy valves X color applications, our more ] Excelsior, cost that clean and digital cryogenic portfolio several larger providing Integrating last MAX expansion severe little including provide other the existing our Mackin the in participation in in we've acquisition provides in and should cryogenic support [ monitoring hired remote duty functions centralized [ excellent controls the Slide bit broadens and valves components ] and on of the for savings. opportunity

XXs a applications supplying run the about and to synergies across rate broad dispensing nozzles, gas [ capture We're of value single-digit margin applications. a year ] like [indiscernible] for Taking valves, safety-critical ROIC in We the equipment norms, loading production high of high scope components from X. back, within chain variety of variety high, regulators, consumption. expect a to driving $XX offering by to our million and handling the shows whole gas energy step clean MEK

We spending. serve investment oxygen handled, strong molecules nitrogen, by from LNG, both government propane, and industrial others, multiple and gas and global we're applications gas including hydrogen gas with momentum majors infrastructure benefiting and among liquefied

us deal global While was also providing of us, for closed and a Demaco growth our last a manufacturing week, important very European enhance scale. base to smaller

long-term XX performance of Slide shows the on portfolio. Finally, the

improvement capital organic execution growth our operational strategies deployment deliver over to to portfolio on continued top growth, combination of methodically time. through returns We and productive earnings through improve a line margin

strong divestiture second half balance Our of the further ESG and of sheet the be year. enhanced in will the proceeds by the position

leverage markets. levers levels, can We year number flexible respond expect have our deployment approximately dynamic with to business to changes we the a and capital half quickly second of in of cash reasonable $X deliver model available firepower end to the in from billion that the

I'd created like Dover entire value Carroll the tenure. to for Pat they by for ESG end shareholders management President, team thanking and their under his

With that, Q&A. go to let's

Operator

We'll with Andy first [Operator Kaplowitz Instructions] Citi go Group. to

Andrew Kaplowitz

okay? me hear you Can

Richard Tobin

here Andy. We can you, Go ahead.

Andrew Kaplowitz

the for quarter talk the year? Do Xx forward? you're Rich, bookings as know, still rest during sure about And the and thinking you about cadence at market of best. book-to-bill maybe I'm place you the then see small going growth how bookings could short-cycle you over over

what unique And a say really improvement? is are of outperformance versus a macro-wise? that lot So exposures you you would result of Dover's Dover's macro seeing

Richard Tobin

be I to expect Yes, over would it X.

the our of you It's order As I I the in bit know, year to either a half that from comps little lumpy, an think have say. second are Intra-quarter. been basis.

. The for So our goes, the but again. to out, how expectation at of if we led I forecast of of the probably and balance in else. mean, And see year terms our day, year. -- in I it we'll out-performance think we and full growth a leading look the I it X that's reflected you take at we're is be look, in, think everything led over end the revenue

discussed months turn. which think have like have that XX to of and I COX performing or inventory some like very systems, nicely. connectors that that and of the well are the the positions platforms have growth that a placed we We we previously, our as previous suffered thermal markets add top So on over making exposure we've are of some

I it's -- from macro. our just I'll think think rest the portfolio. step competitors I the don't So it's I of in to our away unique

Andrew Kaplowitz

heat versus it the end for COX mentioned in in us comment, But more a segment? on in original give weakness outperformance. trending your to DCST? in color than upside exchangers food how you general what's the in food retail that Maybe last little going the just Does line can actually Rich, you systems, up is Obviously, year. the notifications the on is driving up retail more just strength following offset continued

Richard Tobin

our think plans. I was known that well when Look, of was and going into year, the Yes. part that Belvac

I think mixed signals there heat was a lot around of exchangers.

the actually a order we've That's hopefully rates clearly end think lot QX, work there. of confident to into of the pretty would expect I think trough call why and that QX, we done QX. up I move at we're in to but

is I I the through has COX planned pretty on that than the think business, as the of as doing I food performance quarter. much better exemplary just the that margin business what's think planned, doing been retail think

why but during did, the to which don't that's that expected So offset consolidated when excellent. deletion margin at we the you heat I exchanges, would results, food think the been look has from it quarter, retail

Operator

We'll go Partners. now Research with Jeff Sprague to Vertical

Jeffrey Sprague

Thank Slide you're and on things. other kind also stitching characterizing components. I gas XX thinking together kind margins it you. about and But Good and of in good with get like everyone. very, some just everything here very looks everything, that morning, Rich, strategy, it some of a you're component-driven it and you've cryo are automation often as and

$X want to Or vectors it thinking another here billion capital kind sort of just kind other about about? there maybe are got in to we is be the deploy, of about same anything, what ZIP all M&A in or So else, to need code? of think do as if we've you talk

Richard Tobin

and Yes. a couple my that I'm before going going -- I'm to give because more presentation. I say intention. next say think the we're area to to it's we're hesitant from some make investor of we early year, this end we're heard that, in or some to of Jeff. an year to When very interested we're here. whether you the visibility well, comments resegment intending things, do, gotten has loath do to What

previous that a we've years couple over in where been So an last buyer. area the of

in this competition space. Now some we've got

I'll pass do guess I'm like because more on any not the interested interest to I we'd in what take future I So a attracting saying in there.

Jeffrey Sprague

one here? your be of Or here, then sort flow an these do M&A-driven competencies can Antidote other you organically turn things you of the a strategy? though, expand there is of kind stakes the put ground it with of kind up mean And would seen we've scope Rich, you also organically. in it to when is and lot I your mostly

Richard Tobin

It's X here. -- strategies there's

get be as which think think that can cluster comments, believe through, in already a of we I this mid-XXs performing And within I the but will mentioned up margin. entire we here, number EBITDA it's we entire of into some cluster the are growing XX area. months, businesses, one,

all playbook So to going our there. think that back-office integration get the know But volume things we're some put on leverage you Dover I once about. and we

drive up XX, the segment there. within XX that think I months, we can entire

Jeffrey Sprague

on this whole And pump heap Okay. quick just one question. a

whole You're the lag in about the sort been the whole Europe, talking to your out? specifically broadly, has business business, equation, then bottom bottom your of lead business that it's everybody customers' kind trying or

Richard Tobin

Well, matter spent in components of market. relatively we the total inventory that European is the the of proportionately trying end believe the the -- -- the we've aligned America unfortunate between comments, the majority said that's volume I to on small. vast in we Heat the were of the it's pumps But mostly balance of North all the that Yes. and and world Yes. like a time because the pumps first manufacturers the lot determine is fact of then We heat chain. in it's place. never

So of will to that we and based been in on in inventory customers, terms positive have flushed we trough has think our back and QX. our volume we in orders QX discussions go that expectation

Operator

Steve go Tusa to JPMorgan. with We'll now

C. Stephen Tusa

can minutes I them us And seasonality concerned, said in we quarter? you off you of some of fourth are how expect orders trend then some the as just the have expect to far should so the this, missed may you on first sequentially? as color that but call So just call, give the normal

Richard Tobin

balance year. on of think the remain that I or book-to-bill higher for the Look, should

order I handle did got terms I the that that think growth, and have we in rates drove than a better that's think shipment, we little the production the actually would metric, have bit at good expected -- think that's I I we've but and and in X% changes a that of it organic on. performance why

think said proxy QX. I easier think outlook as the going I macro [ balance in going have into QX to should for I of generally ]. But before, the the on all will comps a in finally year. of like we're we end turn stay that something the contribute roll and is think than have biopharma, QX, to of SWEP COX X above that positive above And at not momentum everybody's in I staying to some momentum XX% the if be we thermal we X.

C. Stephen Tusa

you that's guys said nitpicking, you guys held a that but orders, the X that for you I that Okay. quarter, flat things bit. back what sequentially, bit? in know I were And of in know just a was just down X the kind had little slower or then

Richard Tobin

it. and [ follow previous comparable somebody I'd have up. I it. Steve to dig I'm orders of took Brad sure to have QX some go to outsized go that in the through through get big ] I'll

Brad Cerepak

What it up Yes. organically, sequentially marginally. we said was

which So take timing the you expected the of than the quarter acquisition within and disposition in into the was got Steve. higher also to FX, effect DE-STA-CO, we . quarter,

Operator

to now Bank Obin go of America. We'll Andrew with

Andrew Obin

of a question sort just acquisitions. Again, about

sort these of been not least think projects orders, is exposure a a green are at But of sense your these over have pushed for regulations. that of increasing lot You're energy. just to being out our orders now, lot I

clearly, at is talked our definitely very, York, it's on Sort in of event an activity on I robust. think taxes, very visibility And that we New visibility in I informed about funding. mean, bet. quotation May

it Just but tend seeing give that And to think about makes it term, what capital things? some sector. talk clear, to make commit about these months you near of just excited seem we're XX us that over you push you're there to does quite out? view you your it, Can are to the it is because about XX sort the next

Richard Tobin

mean, Andrew, end Yes. to the take at the I it. late look, basically you some buy too right? can't you anything, So day, -- there, think you has is when I behind secular it's need the growth of got what market mean, to bets

the a -- the stream thematic decades. whole of think chasing of So in day, there's if the had we sector gas for presence We're end about meaningfully I mean, a we've at electrification. not that

customers, the it we So the around everything regulatory environment know else. we and know

to the, we're the be gas big are from of end the there. come contributor somewhere, believers total important installed electricity going complex in has and large day. we're that got an at So base is we're big What believers buying to the

So ] the applications continues certain components do extent we paying expand, to them on buying it. things were would of in businesses we're and expand. that gas not and cryogenic But [ We're capacity kind we as cryogenic we're top of a piping past, expanding comp to to vacuum the extent. but niche jacketed on the these

day, if a I get -- little of end view, at So -- the point be timing pretty confident we're doing. but think we it so of the a what of off bit, the from secular we're

Andrew Obin

All I maybe biopharma. on you. And highlighting DPPS. sort think bit then Right? what thermal about on connections. right. Got clearly, color you're in growth you're seeing a And of more You're year-over-year of talking little sort

business the year-over-year? thermal -- we about XX -- actually we think do over growth growth kind next And we think this actually when double start growing about question. So of X-part What biopharma, connections? kind of can on months? can second Can what just

Richard Tobin

think some about way. before to Because numbers and of that's all target and news. up the day, but the talking think foot good then the at -- probably the expect grow we're considering at that on back earnings the the production going to on right QX everybody I we small to and end -- this between for are is And end and I bookings base, so front we total question QX you should thermal, what hype that to we're right? to mid be bottomed interesting, revenue at lag the look, the on significantly, The the tracking would thermal end of period, it's when year, gave I your our we of late capacity. of Well, in be XXXX a of year-over-year it

get think I by of going able think the us a that which have we've year, capacity, should to got are that I separate clean be room for production try the going that to lot into this XXX% traceability to to end we're business. of people

at call coming down Industrial was of precision now, So cycled we've but the offset back has that if that X-year thermal after got it, in knew components, I step run a biopharma and the Maag mix into part I would been right DPPS really pumps we X-, is, total, connectors. up. not robust the effect and by both exposure of which complex gas is that

Operator

to We'll next Research. go Melius Scott with Davis

Scott Davis

Are Or of Jeff's at under to, what synergies actually I Are Brad, on it on bringing back get... wanted there of is Slide this some relative there to tangible are you the page, all one there second and that you to I commonality segment? think, tangible Rich of the look just assets channel go them Assuming really when -- just benefits question markets? XX. and end are together synergies do synergies? kind

Richard Tobin

Yes. I 'XX. ] Acme mean RegO of bought [ end the and at we

an So Maag to to those basically prior overlap acquisitions. that period -- adjacency is

about inbound businesses. opportunity we and These there, reverse is new So a just footprint manufacturing There clearly, the a global it's under footprint. footprint think -- that both are synergy already adding a have. products bunch just on of

did reason provider. you the North Demaco is I'm part So American just can't of that a say we

European You have need when you're a have have -- you Linde, presence. to companies to with like dealing

kind purchased of we presence why at end make our that's So larger day. in Demaco the to of Europe the

kind of kind very ability and an A it's just A requirements we're that we they're lot and of lot of times, customer. the the those components have. of building times, but to common, they're adjacencies, are safety same the what build the regulatory so And

Scott Davis

both? last this was more following I it I commentary a comments, direction, in just mean quarter trending valuation is M&A or And or too. Okay. bullish on asset up, think your availability

Richard Tobin

to it coming More hearing was for assets going supposed think terms is well, ] it than that it's exit. an of look, to I rate see about PE, helpful be been I asset beginning helpful ] buying, now supposed -- process 'XX not to and we're mean, terms it's is 'XX. was out [ to is have our From [ accelerate And expectation but for of a been been availability. the view. kind the be we've equity mean flex everybody waiting it. PE to of of doing in but interest in relatively I has cut of point us to markets

waiting a to We're we've that for kind So start drawing of if been not like couple a we're this opportunity drunk -- monetization ESG, front buyer. of the but of think to we're around opportunity sellers, of and And going foot we the for get think right? going a kind years think them cash that forward. now, we'll of of we and there's that now lot see we're I going I money bullish done, on be with

puts a spot. that in us good So

Operator

next from Mizuho. We'll Linzey with Brett hear

Brett Linzey

to divestiture. wanted the to ESG come just I back Just,

dollar the adjusted dilution out to Slide called you on So X. of EPS

with here. couple think a How you in offset thinking of Do backfill? Or more are balance You've you should line of announced M&A? of to than deals a have we about about M&A? repo sight the

Richard Tobin

nothing our cash news think time. period the sit we cash. rewind for years ago, would years a ago, think on that don't yield If got we've of off is couple our got you've towards a good X The for M&A. be of it. -- history unlike we prolonged back But of actually get clock a I bias we now some I cash

just So X% so. now bad. call yields cash right that's on or not let's balances, it,

if we coming to be So we lot be can going question, of the you little last a more think bit opportunity And will. heard you patient, M&A a me if forward. there's answer

a our probably So M&A it's bias repurchase share lot is to over than more towards X been years. X think previous I than the

Brett Linzey

then And cash follow-up a flow. Great. on free just Okay.

recurring should out, the buying and you're flow these as the portfolio about How into of think you the flow? composition cash more free more businesses recurring So we margin of about thinking ESG evolve cash mix. some

Richard Tobin

be gross the actually capital good like view I So mean, up. Well, so from bringing up, is benefit margin, a the of profitability -- on gross in a working ESG performer. point we're right? the would so what But pretty margin

So dollar better, the be should swap of like-for-like be the yes. from revenue of cash should

Operator

Mitchell we'll with Next, from hear Julian Barclays.

Julian Mitchell

a that very little the is on second One margin a QX. half of performance good year get turnaround segment front, sales doesn't happened on impressive year-on-year suppose a of bookings, airtime QX from revenue but in And had DII, this and year. organic what growth, last it I into

was in I'm understand that comps the the in trying pretty just bookings sales So on there. And drivers and and half the are again, to easy second growth growth good QX.

mix, trying just So And to with should second half? a growth we I in back to of at but in incrementals the very be exceptional that the understand kind again degree how could the see strong realize half? are least strong incrementals

Richard Tobin

the end dilute than effect a because printer end actually have hard QX, think of mean of being consumables pretty you margins strong the I right? of say, mix shipments the day. kind I day, average in at to That's higher right, the at of Yes. proportionately

revenue So down really less I efficiency more long through run Look, comes of a great think the per little more bit. margin we're or over dollars is has the a than else. per shipment value moving dollar margin higher, a performance. with the happy business up margin is job but the steady the the, management eddy This done anything

printer move second continue. the you I if consumables. proportionally half, margin So . But the we'd that wouldn't be bit especially saw shipments expect in surprised up to little a of dilution to if

Julian Mitchell

then And has year. quarterly the cabins earnings, know And give the -- color much you I confusing the in seasonality of but just understandable, sort we're don't you years. of halfway recent don't on give much through been

up of down then sequentially So sequentially, sequentially the like, I and bit wondered Is a third quarter in total and is sort we think to it earnings of Dover that if when QX sort fourth you it? QX? just earnings about on about way think

Richard Tobin

on on or is whether way order and what that, Well, QX sequential and of up we to we're our [ is think QX QX. and really . be a I QX build in cash, would performance forecast. flex usually into it And for about rates it drive ] the we this kind Yes. is think to depends that's then quarter, QX, we've inventory hold going bullish we year. tend whether I for and not and 'XX that built

Operator

now go Joe Ritchie Goldman with We'll Sachs. to

Joseph Ritchie

I of going just was surprised I one was to what thought I start I'm you ESG decision you over guess guys of it term? I'm up thought selling on the went only that asset kind long because as being good the return the business. that as evaluating Rich, a maybe into good ended curious So business. -- was I type that about margin, that

Richard Tobin

Joe, goods don't know, the performance thought capital that of here. we fielding improve of had I been And questions said the initially I been our could as least I've at the portfolio on we business. portion as we've long that think that we

come So that . I basis, to that sure if it, we goods. a, on QX the there's were we to it. we be that for interested but we know of mean from that a lots someone EBITDA. what make to different exit paid paid, wait call going wait LTM about is I And appropriately got patient was I XXx and calculations bottom were are capital going it in were we line

on they multiple the in X basis. goods Deere PACCAR, capital and So and premier Caterpillar and States trade EBITDA are United look an companies where the

the it, capital team gross business we view, monetize can a should in of performance is one that from in multiple to businesses of point bottom point, we it's a at there. goods I management of a that We the line the of lowest but want the think day, So we summer parts job our at business. because that portfolio. It's our end that of of don't down talk phenomenal margin one in the to the did terms because get

So extent mix over we're the up to we appropriately. need of and time, to that kind paid

look I at the think that it. way that's we

Joseph Ritchie

about maybe of And cycle and follow-up That's just of super portfolio. just some I the kind pieces helpful. my talking then question guess your longer other of

it is businesses this for to what what's businesses Belvac thinking and So could early kind start those And embedded for too SWEP, talking growth the into I'm expectation do? and XXXX Maag, guidance about those maybe of year?

Richard Tobin

heat SWEP that It's great death think exchange It's excited. at very subsidize exposure been has -- subsidized. not pump I they're so beaten this think point. The great heat when subsidized. with to they're got Everybody debate, problem I not when [indiscernible] Look, products. or to having

going to with that. we're So just have to deal

So component actually don't I we think business. away I just that, if that's We take time, that is looked that, cyclical SWEP long-cycle at a parts a that over think business Europe seize an going not that a when went pumps market just of the in adoption that on to kind market. heat the we're there, legislation through was you for through apologize rate and

business asset a the there's think good it's been I in going not being say done actually opening of So of just parts once the here. portfolio. that's spare bit and big the is terms wag management likely Belvac more but dog. there. forward little noncyclical team I pretty because is going cyclical be will our a I in to Maag period, installed we than what bit from Maag has up little that is not a driven CapEx tail is that more in a driven. think CapEx that, Belvac always the we It's this sell, QX less wood that's be back past to that which to a the hopefully whole vectors at job cyclical, large get be really to going end just will knock through a would go

Operator

with Lauren Baird. from We'll Mike hear now

Unknown Analyst

this. X of me, for part one Just [indiscernible]

So through think indicators markets leading you're about are categories you're those acceleration? any concern some of patterns choppiness signs or thinking if secondarily, trends, just talked as excuse inversely Maybe about the talk short-cycle in product you then short-cycle seeing about there end the me, the conversely, how where of order trends? And you about in or -- quarter. the signs

Richard Tobin

just -- don't through the choppy all to been in portfolio. That's want year cycle. entire march I It's short

North not America, distribution higher period today of a out it's been great was is time. digesting I think GDP of good, least still for print costs. for Europe interest at The

of demand. is what for of a the of uncertainty there's So lot kind catalyst

I you of So over growing place. still like earlier all the when let mentioned kind -- comments, out rates order tide But the we're here intra-quarter week-over-week because of we around think heart it attacks flexes line. my top I the like have go in volatility

got on cyclical I think that a are down we've the that areas handle that. trends, that we know in

see like fueling I'd to better. do

by would first in to is expectation that, comps our We're the for and a in because we that's the second the that the order second got on rate slower through I we've think large, half than going is half. half. hurdle easier been close eye bit little have expected keep going orders a rates And there Herculean. into

Operator

Deane to RBC now go Dray Markets. Capital We'll with

Deane Dray

this I are But in you a Thank color a goods your really the question, the ESG capital gave curve, into reveal like but then that goods. the answer divestiture going moving exactly Joe, of that there, And to of cost lots away Joe's did still components you. you're seeing kind not you're capital into. there Rich, know critical technology you as of pivot up these some areas higher characterize to are project. you lower from -- the exposures pivoting I And typically portfolio.

So you lots line? improvements. draw of made the What's where timing? You've the do margin

You just said given draw kind in line? change gating much take do the can a the how organization -- where factor. point you was at that time? But And the of

Richard Tobin

asset. ESG the Deane, I ESG capital great, Because sell terrific. There's invested been we we improvement didn't to return nothing if has an that right? older sell, -- to look And right? and earnings on have either, in been the It's it's on and earnings have go

be So time. ROIC to depreciated long always you base careful a of because asset got has with period been over its

there. sum doing gets inordinate want repeat little here time spend on myself, don't But of own of every portfolio. an we our this it to flatter bit parts of piece a I amount but So

what make So the rates and points. hurdle XX up to a gross value, portfolio things clear intrinsic But the understanding we've at by got address below sell at to go are not going basis just monetization. margin we're to for win

to that in the on meaning That's that We'll we think then see is just issue I here. tell timing. I we up lot of delever M&A can have got that we what by the of when to monetization. going over go about not an important have, and optionality you that lever we firepower people don't can't did So what we've to understand a there, be patient. front terms And

but I were that just forward. opportunistic, think something that's we is quiver more an arrow our in going

Deane Dray

then or some That's about any just of be half? in about we then what specifics? And really for Can working thinking should half. second for you what the -- expectation us an a color There's question there And capital helpful. give improvements buybacks second the Brad.

Brad Cerepak

Well, I think, of Rich, question I part take first. the that second

I to already Rich of around priority capital assets the think second we we M&A, into half conditions here market move answered sense is deployment especially available our a that see. with that as in that

So positive thing for as year. move I the us a that's think we through

capital with In working when really, year. of cash on no we're the it's trajectory than on flow, different last the mean it. terms mean about year you think and I I prior pace

all half pattern year. receivables, it's We highly have saw of we in back good last the achievable to and inventory of that need terms and the what same in in we around sight line do

So confidence. good we have pretty

this ] confidence have the in to at [ We XX% stage. XX%

Operator

Nigel take Coe we'll our from today Research. question Wolfe with final And

Nigel Coe

kind attention. questions deal got the out, really strategy. looks there's Thanks, of been lot cryogenic the kind my interesting. XX of market of the ] of a points But look, I that know And synergies Celsia called on [ you

think the what can you just don't deal? is maybe expect the what to us I X businesses, just the margin next sort gain market entry do years. kind maybe and to market? outgrow compound of So the of of to can share this, -- you know you tell but if this us, that cluster out With X remind And do Rich for Marshal growth for you

Richard Tobin

I about remind rate gave don't Okay. have growth one. I we because ever don't you you Well, think the to

Nigel Coe

Okay.

Richard Tobin

Look, synergy we we we're you period, of accelerated we we're that may then of because has that a we've missed give own that, And been growth between long-term profile it our to else. into we XX% you at outlook and to is it it what have growth, get XX-month give and the intention I going platform, I when to think can a the you buying tell platform. think to everything around beginning, this you think I its EBITDA margin. presentation can margin going value -- and -- like XX% been resegment built do within

So that's ]. kind of the economics [ pit

Nigel Coe

Yes.

there be of the cost? well? or is first so is XX detail. the cost missed And some as it synergy part that call, missed I the would ready primarily I Sorry, that points, Or exclusively

Richard Tobin

that before No this consolidation in us We all legacy revenue businesses. we here case. that's a things presentations actually all about synergy. -- in our got from you've make It's and the We've those think some footprint integration we've place backward back-office system have. seen got opportunity whole particular

are those X So really the big pieces.

Nigel Coe

just for then And ESG. on details the just Okay. Brad, some

discontinuation, do leakage tax Or you it back first that go you So the that for basis, And second then half on and will is the discontinue on the have impact? deal? on do so well? have to -- half is sense the be a as go-forward yet a any

Brad Cerepak

Yes.

ops, it periods all So would discontinued be to prior relates as it presented.

we a probably dropped everything. to they So we'll we time quarter, here all at see third and we'll be look hard time, advance. get and in the restate a Once that in filed restatements in that point point taking at really the you'll in later

in tax So that we year. possible rate, it's DE-STA-CO or U.S. that, data just And type -- so the on a tax of advance. tax you leakage normalized cash in leakage, goes that this out should is XX% have assume unlike very

So we're well. as looking timing at that

Nigel Coe

guide, the would be... flow, wouldn't that be for free cash in But your that right, Okay.

Brad Cerepak

by No, we'll handle handle cash same DE-STA-CO free flow. we the adjusting the way

Operator

period XXXX question-and-answer our concludes Dover's That Quarter everyone. Earnings you, Second and Call. Conference Thank

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

Dover (DOV) 25 Jul 242024 Q2 Earnings call transcript