Dover Corporation

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 Serapak, Senior Vice President and Chief Financial Officer, and Jack Dickens, Senior Director, Investor Relations. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, please press star and then the number one on your telephone keypad. If you would like to withdraw your question, please press star 2. As a reminder, ladies and gentlemen, 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. Thank you. I would now like to turn the call over to Mr. Jack Dickens. Please go ahead, sir.

Thank you, Jamie. Good morning, everyone, and thank you for joining our call. An audio version of this call will be available on our website through August 15th and a replay link of the webcast will be archived for 90 days. Our comments today will include forward-looking statements based on current expectations. Actual results and events could differ from those statements due to a number of risks and uncertainties which are discussed in our SEC filings. We assume no obligation to update our forward-looking statements. With that, I will turn the call over to Rich.

Thanks, Jack. I'm on slide three. Second quarter results were solid, driven by excellent production. and shipment performance against our order book. Strong revenue performance was broad based across our end market and geographic exposures with four out of five segments posting top line growth. Organic revenue was up 5% for the quarter. Bookings were up 16% organically year over year, continuing their upward trajectory over the last several quarters and bolstering our confidence in our second half outlook. Margin performance was excellent, up 200 basis points over the prior year to 22.1%, driven by volume leverage, organic and inorganic mix, proactive cost management, and rigorous productivity actions. Our strong operational results were complemented by ongoing portfolio evolution actions. Over the last week, we have completed two strategic bolt-on acquisitions, enhancing our clean energy components platform, adding applications in highly attractive end markets, expanding our global reach, and strategically expanding our manufacturing base into new regions. We also recently announced the sale of our Environmental Services Group business unit for $2 billion in cash. This transaction, together with the sale of the stake in March of this year, reflects our intention to reduce our exposure to capital goods. We have monetized these businesses where we have material improved operating performance at attractive exit multiples, while methodically migrating our portfolio toward higher organic growth and margin opportunities. We are approaching the second half of the year constructively. The underlying end market demand is healthy and is supported by our sustained order rates. We are therefore raising our adjusted EPS guidance to $9.05 to $9.20. I'll skip to slide four. Engineered products at another robust quarter driven particularly strong volume growth and conversion waste handling and aerospace and defense. Volumes of vehicle aftermarket grew on recovering European market conditions and improved production performance. We expect volumes to remain strong for the segment through 2024. Margin performance was solid in the quarter on strong volume conversion, favorable mix and productivity. Clean energy and fueling was up 2% organically in the quarter on solid volumes and clean energy components, where we're starting to see robust coating activity and order rate momentum from component parts tied to large projects in hydrogen and cryogenic applications. Volumes were also solid in software systems, and above-ground retail fueling continued its positive recovery, particularly in the U.S. Margins were flat in the quarter as proactive cost curtailing per talent, offset volumes, and mix. Imaging and ID posted an excellent quarter on growth in serialization software and strong shipments from marketing and coding consumables and aftermarket parts. Printer shipments were still subdued, improved sequentially, and should inflect positively in the second half. Margin performance was exemplary on SG&A leverage and a higher mix of consumables and aftermarket shipments. Pumps and process solutions was down organically as expected principally due to lower shipments in our long cycle polymer processing business. Partially offsetting these headwinds were significant growth in shipments and new bookings for thermal connectors tied to AI chip liquid cooling applications and data centers as well as solid quarter in precision components. Both orders and shipments of single-use biopharma components grew sequentially and year-over-year, continuing the post-COVID recovery. Margins in the segment were up on mix and operational execution. Top-line performance in climate and sustainability technologies outperformed our internal estimates due to an exceptional quarter in food retail which nearly offset the capital investment slowdown in beverage can making and impact of destocking headwinds in the broader HVAC complex, most notably in European residential heat pumps on our European braze plate heat exchanger business. We expect these headwinds to persist in the second half with heat pump related shipments troughing in the third quarter. Margin performance was exceptional. driven particularly by food retail, which posted all-time record margin in the quarter on strong volume conversion and a greater mix of CO2 systems shipments. I'll pass it to Brad here.