Dover (DOV) investor relations material

Portfolio strategy and vision

• Focused on strategic portfolio exits and additions, emphasizing return on invested capital and sum-of-parts valuation rather than internal business comparisons.

• Recent disposals included an automation business and a garbage truck body business, both monetized at favorable multiples in 2024.

• M&A activity targets markets with long-term growth potential and favorable competitive dynamics, especially in Pumps and Process Solutions and Fueling Solutions.

• Not afraid to enter small total addressable markets (TAMs) where scale can drive outsized profits, as seen with Secora.

• Portfolio is bucketed into growers, changers, and profitability harvesters, with opportunistic sales based on market conditions.

Capital allocation and financial flexibility

• Executed a $500 million buyback, reducing available firepower from $7 billion to $6.5 billion, but balance sheet remains strong.

• M&A environment in 2024 has been dominated by large transactions with high valuations, making stock buybacks more attractive.

• All M&A since 2018 has been self-financed through operating cash flow and disposals, maintaining stable leverage.

• Liquidity is high due to recent asset sales, supporting both buybacks and future acquisitions.

Margin structure and cost management

• Business model emphasizes extracting synergy value across the portfolio, with $40 million in cost actions announced for 2024 that will carry into 2025.

• Consistent annual cost takeout of $30–50 million, driving non-revenue related profit and margin expansion.

• Four out of five growth platforms are margin accretive, with the fifth expected to be accretive by late 2026 or mid-2027.

• Margin expansion since 2018 has reduced the need for top-line growth to drive earnings, with incremental margins now above previous 25–35% targets.