gabelli41st annual automotive · •diversified portfolio of technology and products ... 1990 2017...

Gabelli 41st Annual Automotive Aftermarket Symposium

Tod CarpenterPresident and CEO

Safe Harbor Statement

This presentation includes forward‐looking statements which reflect the Company’s current views with respect to future events and financial performance, but involve risks and uncertainties that could significantly impact results.

Overview of Donaldson

Donaldson Company

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• Technology leader in our markets

• Diversified portfolio of global businesses

We are a filtration company

Value Proposition To Our Customers

Technology Advantages• Higher efficiency

• Small system size

• Longer filter life

• Reduced operating and maintenance costs

Better Aftermarket Retention

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Value Proposition To Our Shareholders

• Diversified portfolio of technology and products

• Global sales, production and distribution footprint

• Committed to growth & financial performance

• Disciplined capital deployment

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Diversified Product Assortment: Engine

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Diversified Product Assortment: Industrial

8

Strategic Growth Plans

Strategic Growth Plans

10

Acquisitions

Geography

ExpandCoreDONALDSON 

CORE

Expand core products & technologies

Expand geographies

Execute acquisitions

Sales Growth Model

CreateHoles

Sell Replacements

Reinvest

Growth

Use Innovative Technology

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Innovative Product to Improve Retention

0%

20%

40%

60%

80%

100%

Yr 0 Yr 2 Yr 5 Yr 8 Yr 10 Yr 15

LegacyProducts

Innovative Products

Aftermarket retention rate of innovative products is higher than legacy products over time

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Innovative Air Filtration

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PowerCore DownFlo Evolution

Innovative Liquid Filtration

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• Designed for new diesel fuels, higher fuel injector pressure

• Higher efficiency and extended filter life

Capital Deployment

Capital Deployment Priorities

• Invest in our company

• Pay a dividend

• Repurchase our shares

Fiscal 2018 Strategic Investment Priorities

• Technology development• Grow our capabilities with new filtration technologies to 

further expand into adjacent markets.

• Capacity expansion• Increase our manufacturing capacity for innovative air and 

liquid products, and add distribution capacity to better serve our customers while enhancing productivity.

• Customer engagement• Launch our e‐commerce platform to make it easier for new 

and existing customers to buy from Donaldson.

Reinvesting in the Business Over Time

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• Organic Growth Investments• Development of new and innovative products• Lab upgrades and IT investments• Production capacity and distribution expansion

• Acquisitions• Completed five bolt‐on acquisitions in three years

Consistent Dividend Growth

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$0.02

$0.70

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

1990 2017

Per Share

16% CAGR

• Paid quarterly dividend for 60+ years• Increased annually for 20+ years

Consistent Share Repurchase

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0

50

100

150

200

250

1990 2017

Shares Outstandingin Millions

-2% CAGR

• Goal is to at least offset annual dilution of ~1%

Value Proposition To Our Shareholders

• Diversified portfolio of technology and products

• Global sales, production and distribution footprint

• Committed to growth & financial performance

• Disciplined capital deployment

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Thank You