Dover Corp at JPMorgan Industrials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Steve Tusa - JPMorgan - Analyst : <_ALACRA_META_ABSTRACT>I know how much you love March this time of year in New York. It's beautiful, and seeing everybody. Maybe just to kick it off with a bit of a state of affairs in the near term. I think you had said at a recent conference that the order rates in the first quarter -- I guess, what happened in the fourth quarter flowed into the first quarter from an order rate perspective, I believe, was the comment. Maybe just update us on what you're seeing out there given everybody is a little nervous about the macro.

Question: Steve Tusa - JPMorgan - Analyst : All right. Great. Any questions? No, just kidding. So on -- just on the businesses, maybe we can delve into just starting with maybe the refrigeration -- the food and refrigeration segment, a bit of a tale of two cities over the last year. Maybe talk about the growth business there and then the ones that are lagging and what you're seeing in that segment as a start.

Question: Steve Tusa - JPMorgan - Analyst : And I guess on the refrigeration side, is that an area where you'd think you'd see potential deferrals and things from customers given the uncertain environment? Which one of those businesses --

Question: Steve Tusa - JPMorgan - Analyst : And when it comes to the other businesses there, Belvac and -- which is the can-making equipment, as well as European heat exchangers with the SWEP business, those were two of the weak ones last year. Are you seeing any signs of life, stability? Any risk of downside in those?

Question: Steve Tusa - JPMorgan - Analyst : So in this segment, it's feels like this is emblematic of where you guys are. With the growth businesses like the CO2 business continuing, I would assume you have some pretty good visibility on pretty strong growth there this year, double-digit growth in CO2?

Question: Steve Tusa - JPMorgan - Analyst : Right. So the growth business is growing and some of the other businesses, more stable and less of a drag. Similarly, at the pump -- on the pump side, this business has gotten a lot of attention over the years given the high margins. What are you seeing on the -- at colder just to start off on the growth side?

Question: Steve Tusa - JPMorgan - Analyst : And how are you seeing that business ebb and flow? You've talked about the lead times. You've got visibility on the construction of these things, but the lead times of the actual equipment that's purchased can be pretty short. What are you seeing there?

Question: Steve Tusa - JPMorgan - Analyst : And then on the polymer processing side, the Maag business, that's also been a headwind. So similar to the other segment, you have a pretty nice growth business and then one that was down last year. Are you seeing any risk there? Or is that pretty stable?

Question: Steve Tusa - JPMorgan - Analyst : And then moving on to clean energy. This is the retail fueling side as well as your cryo business. Again, another segment where there's, I guess, probably a bit more growth than the others. There's not the drag businesses you had last year, at least. Maybe talk about those two segments and what you're expecting and seeing there. Any signs of risk of CapEx on this side of the house outside of car wash?

Question: Steve Tusa - JPMorgan - Analyst : And the growth drivers there, any risk in this segment from -- or opportunities, frankly, from the change in administration and whether the IRA gets cut or these EV mandates? Any influence on your business that you're watching? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 1:00PM, DOV.N - Dover Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : And so that business is still -- the cryo business still has a nice growth trajectory in front of it, double digit?

Question: Steve Tusa - JPMorgan - Analyst : You're not seeing any major like air pockets or risk there or anything like that?

Question: Steve Tusa - JPMorgan - Analyst : And then just for Engineered Products, what's left of Engineered Products, this would seem to be probably a bit more of a cyclical segment. What are you guys seeing there for this year?

Question: Steve Tusa - JPMorgan - Analyst : And so all of these somewhat within this 3% to 5% range in any of these segments outliers as you look out to '25 and as you evaluate the order rates that have come in so far in the first quarter?

Question: Steve Tusa - JPMorgan - Analyst : Yes.

Question: Steve Tusa - JPMorgan - Analyst : And to the extent that you have these orders continuing here into the first quarter, are you confident enough if the orders hold up that you'd start to talk about the higher end of the range on growth? Because you have -- you've insinuated in the last call, you've talked about how you probably could have raised the guide, but there were some ForEx headwind and things like that. So --

Question: Steve Tusa - JPMorgan - Analyst : And are you seeing any elongated delivery requests or anything like that? I mean 3M was just in here talking about that. You guys obviously have a very different type of business. But anything like that, that you saw through the end of February here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 1:00PM, DOV.N - Dover Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : And can we just talk a bit about tariffs?

Question: Steve Tusa - JPMorgan - Analyst : What's your exposure? And are you -- how are you reacting?

Question: Steve Tusa - JPMorgan - Analyst : And where would that, the -- as far as having an advantage, where do you think you're --

Question: Steve Tusa - JPMorgan - Analyst : And any impact that you guys have from a federal funding perspective? Anything you'd look at and say, we're exposed to a market that could get pared back?

Question: Steve Tusa - JPMorgan - Analyst : DOGE.

Question: Steve Tusa - JPMorgan - Analyst : Right. So you guys had talked also a couple of weeks ago about your incremental margins. Historically, 25% to 35% was, I think the algorithm you guys had guided to. But you clipped off the low end of that range, and you're now talking probably more like 30% to 35%. You're doing 40% on a core basis this year. What was the driver of that change? And maybe just talk about the building blocks for that algorithm.

Question: Steve Tusa - JPMorgan - Analyst : And as far as the pricing aspect of that, what do you assume in there every year?

Question: Steve Tusa - JPMorgan - Analyst : When it comes to portfolio, you guys have been active on both sides. You have a pretty significant opportunity to deploy a few billion of capital over time. I think it's four-plus if you add up some appropriate leverage. What's the current state of affairs in the M&A pipeline, just to start?

Question: Steve Tusa - JPMorgan - Analyst : You're talking about the deal?

Question: Steve Tusa - JPMorgan - Analyst : And as far as that decision to either do a deal or buy back stock, I mean, your stock has pulled back a decent amount. Are you -- does that get more attractive here? And historically, you've been pretty aggressive and done ASRs. What's the mindset around buybacks?

Question: Steve Tusa - JPMorgan - Analyst : Okay. And as far as divestitures are concerned?

Question: Steve Tusa - JPMorgan - Analyst : And I guess, in your view, is that portfolio churn necessary to get yourself to a bit higher multiple over time?

Question: Steve Tusa - JPMorgan - Analyst : How much of the portfolio do you think is stuff that you would -- if I gave you a good price for it today, you'd be willing to part ways --

Question: Steve Tusa - JPMorgan - Analyst : You know what I mean, but --

Question: Steve Tusa - JPMorgan - Analyst : Got it. Okay. Any questions out there? Yes, right here first and then back there now. Unidentified Participant Just on the heat pump side, do you have a sense of how much the IRA tax credits pulled forward demand and what the other side of that could be if those tax credits were taken away?

Question: Steve Tusa - JPMorgan - Analyst : It was question one through six. Are you -- what your take is a steamed business leader in this country? What's your take on what's going on out there? And how do you and your Board discuss a playbook? Or just how are you approaching all this?

Question: Steve Tusa - JPMorgan - Analyst : So I guess from that perspective, it feels to me like less confidence near term because of just all the uncertainty. But like as a capital allocator and decision-maker, you do have some, for lack of a better term, faith, which you think it's the right move, you think things will work out. And so you're probably less apt to like really turn the screws and cut things today and see how it plays out, which is the feedback loop that people are worried about. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 1:00PM, DOV.N - Dover Corp at JPMorgan Industrials Conference

Question: Steve Tusa - JPMorgan - Analyst : Great. I think that's it. Rich, thanks a lot.