Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q1 FY2015 Earnings Presentation
26 slides from Parker-hannifin's earnings presentation, Oct 28, 2014
Slide 1: 1st Quarter Fiscal Year 2015 Earnings Release
1st Quarter Fiscal Year 2015 Earnings Release Parker Hannifin Corporation October 28, 2014 Exhibit 99.2
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures Safe Harbor
Forward-Looking Statements and Non-GAAP Financial Measures Safe Harbor Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks
Slide 3: Agenda
Agenda 3 • CEO Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 4: Highlights 1st Quarter FY2015
Highlights 1st Quarter FY2015 • Record first quarter Sales of $3.3B • Adjusted Organic Growth of 4% • Orders increased 5% and positive across all segments • Segment Operating Margins 15.9% • 150 basis point increase YOY • Adjusted Segment Operating Margins 16.1% • Benefiting from restructuring cost
Slide 5: Diluted Earnings Per Share FY2015
Diluted Earnings Per Share FY2015 5 * EPS Adjusted for Restructuring Activities $1.85 $1.61 FY15 Q1 FY14 Q1 As Reported EPS $1.89 $1.67 FY15 Q1* FY14 Q1* Adjusted EPS*
Slide 6: Influences on Adjusted Earnings Per Share
Influences on Adjusted Earnings Per Share 1st Quarter FY2015 vs. 1st Quarter FY2014 6 * EPS Adjusted for Restructuring Activities
Slide 7: Sales & Segment Operating Margin Total Parker
Sales & Segment Operating Margin Total Parker 7 Restructuring Amounts exclude amounts reported in Other Expense FY15 $1.9M, FY14 $1.1M $ in millions 1st Quarter Full Year As Reported Adjusted for Joint Venture As Reported FY2015 % Change FY2014 FY2015 % Change FY2014 Sales As Reported 3,270$ 1.4 % 3
Slide 8: Sales & Segment Operating Margin Diversified Industrial North America
Sales & Segment Operating Margin Diversified Industrial North America 8 $ in millions 1st Quarter FY2015 % Change FY2014 Sales As Reported 1,472$ 6.0 % 1,388$ Acquisitions 3 0.2 % Currency (6) (0.4)% Organic Sales 1,475$ 6.2 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported
Slide 9: Sales & Segment Operating Margin Diversified Industrial International
Sales & Segment Operating Margin Diversified Industrial International 9 $ in millions 1st Quarter FY2015 % Change FY2014 Sales As Reported 1,263$ (0.6)% 1,271$ Acquisitions - - % Currency (17) (1.3)% Organic Sales 1,280$ 0.7 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported
Slide 10: Sales & Segment Operating Margin Aerospace Systems
Sales & Segment Operating Margin Aerospace Systems 10 $ in millions 1st Quarter Full Year As Reported Adjusted for Joint Venture As Reported FY2015 % Change FY2014 FY2015 % Change FY2014 Sales As Reported 535$ (5.8)% 567$ 535$ 3.1 % 518$ Acquisitions - - % - - % Currency - (0.1)% - (0.1)% Organic Sa
Slide 11: Order Rates
Sept 2014 June 2014 Sept 2013 June 2013 Total Parker 5 %+ 4 %+ 5 %+ 0% Diversified Industrial North America 6 %+ 6 %+ 3 %+ 5 %- Diversified Industrial International 2 %+ 4 %- 5 %+ 3 %+ Aerospace Systems 12 %+ 17 %+ 11 %+ 3 %+ Order Rates 11 Excludes Acquisitions, Divestitures & Currency 3-month year
Slide 12: Balance Sheet Summary
Balance Sheet Summary • Cash • Working capital • Accounts receivable • Inventory • Accounts payable 12
Slide 13: Cash Flow from Operating Activities
$261 $283 FY15 Q1 FY14 Q1 Cash Flow from Operating Activities 13 1st Quarter Full Year FY 2015 % of Sales FY 2014 % of Sales As Reported Cash Flow From Operating Activities 261 8.0% 283 8.8%
Slide 14: FY2015 Guidance
Adjusted Sales Growth vs. Prior Year Diversified Industrial North America 3% - 7% Diversified Industrial International (4%) - (1%) Aerospace Systems 2% - 3% Total Parker 0% - 3% Adjusted Segment Operating Margins Diversified Industrial North America 16.9% - 17.3% Diversified Industrial International
Slide 15: FY2015 Guidance Reconciliation to Prior Guidance
FY2015 Guidance Reconciliation to Prior Guidance 15 * EPS Adjusted for Restructuring Activities
Slide 16: [LISTED ]
[LISTED ] NYSE
Slide 17: Appendix
Appendix • Consolidated Statement of Income • Reconciliation of EPS to Adjusted EPS • Business Segment Information By Industry • Reconciliation of Net Sales to Adjusted Net Sales • Reconciliation of Segment Operating Margin • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Supple
Slide 18: Consolidated Statement of Income
Consolidated Statement of Income 18 (Unaudited) Three Months Ended September 30, (Dollars in thousands except per share amounts) 2014 2013 Net sales 3,269,932$ 3,226,144$ Cost of sales 2,459,865 2,476,409 Gross profit 810,067 749,735 Selling, general and administrative expenses 400,840 406,930 Inter
Slide 19: Reconciliation of EPS
Reconciliation of EPS 19 (Unaudited) Three Months Ended September 30, 2014 2013 Earnings per diluted share 1.85$ 1.61$ Adjustments: Restructuring charges 0.04 0.06 Adjusted earnings per diluted share 1.89$ 1.67$
Slide 20: Business Segment Information By Industry
Business Segment Information By Industry 20 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2014 2013 Net sales Diversif ied Industrial: North America 1,471,812$ 1,387,875$ International 1,263,497 1,270,795 Aerospace Systems 534,623 567,474 Total 3,269,932$ 3,226,144$ Segment ope
Slide 21: Reconciliation of Net Sales
Reconciliation of Net Sales 21 (Unaudited) Three Months Ended September 30, % 2014 2013 Change Total net sales 3,269,932$ 3,226,144$ 1.4% Adjustments: Sales related to GE joint venture - 49,510 Adjusted total net sales 3,269,932$ 3,176,634$ 2.9% Aerospace Systems net sales 534,623$ 567,474$ (5.8%) A
Slide 22: Reconciliation of Segment Operating Margin
Reconciliation of Segment Operating Margin 22 (Unaudited) Operating income Margin As reported segment operating income 519,390$ 15.9% Adjustments: Restructuring charges 5,849 0.2% Adjusted segment operating income 525,239$ 16.1% September 30, 2014 Three Months Ended
Slide 23: Consolidated Balance Sheet
Consolidated Balance Sheet 23 (Unaudited) (Unaudited) September 30, June 30, September 30, (Dollars in thousands) 2014 2014 2013 Assets Current assets: Cash and cash equivalents 1,092,137$ 1,613,555$ 1,945,623$ Marketable securities 945,431 573,701 - Trade accounts receivable, net 1,711,798 1,858,17
Slide 24: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 24 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2014 2013 Cash flows from operating activities: Net income 280,171$ 244,320$ Depreciation and amortization 81,768 85,580 Stock incentive plan compensation 40,559 48,998 Gain on sale of busines
Slide 25: Reconciliation of Forecasted EPS
Reconciliation of Forecasted EPS 25 (Unaudited) (Amounts in dollars) Fiscal Year 2015 Forecasted earnings per diluted share $7.20 to $7.80 Adjustments: Restructuring charges .25 Adjusted forecasted earnings per diluted share $7.45 to $8.05
Slide 26: Supplemental Sales Information Global Technology Platforms
Supplemental Sales Information Global Technology Platforms 26 (Unaudited) Three Months Ended Sept 30, (Dollars in thousands) 2014 2013 Net sales Diversif ied Industrial: Motion Systems 947,264$ 934,188$ Flow and Process Control 1,055,885 1,025,689 Filtration and Engineered Materials 732,160 698,793