Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q3 2009 Earnings Presentation
30 slides from Illinois Tool Works's earnings presentation, Oct 20, 2009
Slide 1: ITW Conference Call Third Quarter
ITW Conference Call Third Quarter Exhibit 99.2
Slide 2: Agenda
ITW Agenda 1. Introduction…………………...….. John Brooklier/David Speer 2. Financial Overview…………..….. Ron Kropp 3. Reporting Segments………....…. John Brooklier 4. 2009 Fourth Quarter Forecast…… Ron Kropp 5. Q & A………………......……...…... John Brooklier/Ron Kropp/David Speer
Slide 3: Forward-Looking Statements
ITW Forward - - Looking Statements This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding operating performance, revenue growth, diluted income per share from continuing o
Slide 4: Conference Call Playback
Conference Call Playback Replay number: 203-369-1074 No pass code necessary Telephone replay available through midnight of November 3, 2009 Webcast / PowerPoint replay available at itw.com website
Slide 5: Operating Revenues
Operating Revenues Operating Income % of Revenues Income from Continuing Operations Income Amount Income Per Share-Diluted Net Income Income Amount Income Per Share-Diluted Free Operating Cash Flow 2008 2009 F(U) Last Year Q3 Q3 Amount % 4,464.6 3,580.4 (884.2) 19.8% 671.0 483.6 (187.4) -27.9% 15.0%
Slide 6: Quarterly Operating Analysis
ITW Quarterly Operating Analysis
Slide 7: Operating Income
Operating Income Interest Expense Other Income Income from Continuing Operations-Pretax Income Taxes % to Pretax Income Income from Continuing Operations Loss from Discontinued Operations Net Income F(U) Last Year 2008 2009 Q3 a3 ‘Amount 671.0 483.6 (187.4) (38.3) (45.6) (7.3) 16.8 14 (6.7) 649.5 44
Slide 8: Trade Receivables
Trade Receivables Days Sales Outstanding Inventories Months on Hand Prepaids and Other Current Assets Accounts Payable & Accrued Expenses Operating Working Capital % to Revenue(Prior 4 Qtrs.) Net Plant & Equipment Investments Goodwill and Intangibles Net Assets Held for Sale Other, net Invested Capi
Slide 9: Total Capital
Total Capital Short Term Debt Long Term Debt Total Debt Stockholders’ Equity Total Capital Less: Cash Net Debt & Equity Debt to Total Capital Shares outstanding at end of period 9/30/08 6/30/09 9/30/09 2,197.1 180.5 67.5 1,398.2 2,855.8 2,869.4 3,595.3. 3,036.3 2,936.9 9,108.3 7,926.1 «8,242.3 12,70
Slide 10: Net Income and Cash Flow
Net Income Adjust for Non-Cash Items Changes in Operating Assets & Liabi Net Cash From Operating Activities Additions to Plant & Equipment Free Operating Cash Flow Stock Repurchases Acquisitions Proceeds from Divestitures Dividends Proceeds (Repayments) from Debt Proceeds from Investments Other Net
Slide 11: Annual Revenues Acquired
Annual Revenues Acquired Purchase Price Cash Paid Number of Acquisitions 2008 2009 Qi Q2. Q3- 4 Qi Q2. Q3 230 308 847 154 75 54 6 223 439° «4745 = 190 65 35 3 16 10 14 10 6 5 2
Slide 12: Industrial Packaging Quarterly Analysis
Industrial Packaging Quarterly Analysis
Slide 13: Industrial Packaging Key Points
Industrial Packaging Key Points • Total segment base revenues show modest signs of improvement: - -23.3% for Q3 ’09 vs. -26.1% for Q2 ’09 as industrial production metrics became less negative • Total North American industrial packaging business: -27.0% in Q3 ’09 vs. -31.9% in Q2 ’09 – End markets as
Slide 14: Power Systems and Electronics Quarterly Analysis
Power Systems and Electronics Quarterly Analysis
Slide 15: Power Systems and Electronics Key Points
Power Systems and Electronics Key Points • Total segment base revenues appear to have bottomed: -34.2% in Q3 ’09 vs. -36.5% in Q2 ’09 • In Q3, Welding’s worldwide base revenues: -36.2% – Q3 North America base revenues:-40.0% – Q3 International base revenues:-26.7% • PC board base revenues improved i
Slide 16: Transportation Quarterly Analysis
Transportation Quarterly Analysis
Slide 17: Transportation Key Points
Transportation Key Points • Total segment base revenues (-7.9% in Q3 ’09 vs. -23.7% in Q2 ’09) improved quarter to quarter as auto builds ramped up • Auto OEM/Tiers: – North American Auto Q3 base revenues: -14.3% vs. -39.5% in Q2 ’09 • North American auto builds increase to 2.4 million units in Q3 ’
Slide 18: Food Equipment Quarterly Analysis
Food Equipment Quarterly Analysis
Slide 19: Food Equipment Key Points
Food Equipment Key Points • Total segment base revenues: -6.3% in Q3 ’09 vs. -8.5% in Q2 ’09; best performing segment throughout • Service revenues: flat in Q3 ’09 vs. -1.1% in Q2 ’09 • International Q3 base revenues: -4.9% in Q3 ’09 vs. -10.2% in Q2 ‘09 • North America Q3 base revenues: -8.0% vs. -
Slide 20: Construction Products Quarterly Analysis
Construction Products Quarterly Analysis
Slide 21: Construction Products Key Points
Construction Products Key Points • Total segment base revenues: -16.5% in Q3 ’09 vs. -22.1% in Q2 ’09 • North America Q3 base revenues: -27.3% vs. -34.0% in Q2 ‘09 – Q3 Residential: -30.4% base revenues vs. -43.2% in Q2 ’09; new housing starts continue to improve to near 600,000 units – Q3 Commercia
Slide 22: Polymers and Fluids Quarterly Analysis
Polymers and Fluids Quarterly Analysis
Slide 23: Polymers and Fluids Key Points
Polymers and Fluids Key Points • Total segment base revenues: -13.9% in Q3 ’09 vs. -15.1% in Q2 ’09 as industrial production /MRO demand modestly improves • Worldwide Fluids: -11.9% in Q3 ’09 vs. -15.9% in Q2 ’09 – Both North America and International show improvement vs. Q2 ’09 • Worldwide Polymers
Slide 24: Decorative Surfaces Quarterly Analysis
Decorative Surfaces Quarterly Analysis
Slide 25: Decorative Surfaces Key Points
Decorative Surfaces Key Points • Total segment base revenues: -15.6% in Q3 ’ 09 vs. -16.0% in Q2 ’09 • North America laminate Q3 base revenues: -20.6% in Q3 ’ 09 vs. -20.0% in Q2 ’09 – Weak commercial construction environment puts pressure on demand for high pressure laminate • International Q3 base
Slide 26: All Other Quarterly Analysis
All Other Quarterly Analysis
Slide 27: All Other Key Points
All Other Key Points • Total segment base revenues: -18.9% in Q3 ’09 vs. -20.0% in Q2 ’09 – Q3 worldwide consumer packaging base revenues: -11.7% in Q3 vs. -12.9% in Q2 ’09; Hi-Cone and Zip-Pak units had strong revenue performance in the quarter – Q3 industrial/appliance base revenues: -21.8% Q3 ’09
Slide 28: 4th Quarter 2009 Forecast
ITW 4th Quarter 2009 Forecast
Slide 29: 4th Quarter 2009 Forecast Key Assumptions
ITW 4th Quarter 2009 Forecast Key Assumptions • Exchange rates hold at current levels • Restructuring costs of $25 to $40 million (versus $31 million in 3rd quarter 2009) • Net nonoperating expense, including interest expense and other nonoperating income, of $35 to $45 million (versus $35 million i
Slide 30: Q & A
ITW Conference Call Q & A Third Quarter