Dover Diversified. Bill Spurgeon - President

Transcription

1 Dover Diversified Bill Spurgeon - President 1

2 June 05 YTD June 04 YTD % Sales $438,807 $ 354,635 24% Operating Earnings $ 49,884 $42,736 17% Operating Margin 11.4% 12.1% Sales Six months ended June 30, 2005 Operational Earnings Six months ended June 30, 2005 Process Industrial Equipment Equipment 39% 61% Process Equipment 39% Industrial Equipment 61% 2

3 End-Markets Geographic Markets Powersports 15% Construction Equipment 25% Energy 7% Aerospace 21% Diversified Mfg. 33% North America 65% Europe 26% Rest of World 2% Asia 7% 3

4 Aerospace Components Cabs and Enclosures Motorsports Components 4

5 HVAC System District Heating Station Steam Turbine Printing Press 5

6 Portfolio Management Acquired Avborne (1/2005) Aerospace Component Repair Services Located in Miami, Florida (major MRO hub) Airlines look to outsource MRO activities Doubled the number of production shops for component overhaul support Strategic Divestitures Van Dam (06/2004), L&E (06/2004), Tranter Radiator (12/2004)» Long-term performance and market concerns Opportune Divestiture Hydratight Sweeney» Healthy company meeting Dover s metrics» Business had improved due to strong oil & gas market» Actuant had already started consolidating the market» Price was attractive for Dover shareholders 6

7 Operational Excellence Enterprise-Wide Lean Activities Six Sigma Supply Chain Low Cost Sourcing / Manufacturing Manufacturing Sites: - Mexico - Malaysia - India - China - Slovakia Product Development Printing automation in newspaper market Jumbo brazed heat exchanger Commercialization of magnetic bearings Advanced materials 7

8 World Aircraft Fleet (Passenger + Cargo) Commercial Aircraft Production 22,000 1,400 21,000 20,000 19,000 18,000 17,000 16,000 15,000 1,200 1, , , ,040 1, , ,000 13, , E 2006E 2007E 2008E E 2006E 2007E 2008E Airbus Boeing RJs Commercial aircraft production valued at $2.1 Trillion; 25,700 aircraft over 20 years Engine production (OEM + spares) valued at $550 Billion; 96,000 engines US military spending (procurement & RDT&E) at $145 Billion growing at ~4% per year Source: Airline Monitor 8

9 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MRO Expenditure Breakdown ($36B) Engine 38% Other Parts Repair Labor Materials Airframe HM 15% Components 23% Line 24% 20% 20% 40% 40% 60% 60% 80% 80% 100% Source: Company Mgmt Global MRO spending $96B $52B Military $36B Commercial $8B Business & General Aviation The MRO market forecast to grow at 5.6% annually Airline outsource 50% with increases potential Engines and components represent 61% of MRO costs Both material intensive Avborne focuses on component MRO 9

10 Expand Existing Platform SARGENT Organic Growth Acquisition Growth ENGINE GROUP AFTERMARKET GROUP SYSTEMS & COMPONENT GROUP POTENTIAL GROUPS Avionics, Interiors, Electronics, Structures Seek OEM opportunities that are engineered, profitable, long-term and provide aftermarket opportunities Design & Manufacture Highly Engineered Sole Source LONG TERM PROFITABILITY Full Service Broad Component Support End Use Knowledge 10

11 U.S. Specialty Automotive Market Sales $ at the Mfg Level U.S. Powersports Unit Sales , Sales $ (Billions) Units (Thousands) 2,000 1,500 1, ,036 1, E E ATV On-Road Motorcycles Off-Road Motorcycles Source: SEMA Year 7% CAGR for U.S. Specialty Automotive Market over past 10 years. Categories within Specialty Automotive Accessories & Appearance 58% Racing & Performance 18% Wheels, Tires, & Suspension 24% Source: Motorcycle Industry Council ATVs are the largest segment within powersports market. CAGR over past 10 years ATV 14% Off-Road Motorcycles 15% On-Road Motorcycles 17% 11

12 Powersports Market Structure Technology & Brand Influence Professional Racers Sportsman Racers Pricing Enthusiasts General Replacement 12

13 Handlebars Grips Exhaust Front Suspension Bundling of Rotating Components Pistons Connecting Rods Crankshafts Rings Cylinder Liners Bushings Sprockets Chains Additional opportunities in High Demand Aftermarket Components 13