Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q1 2011 Earnings Presentation
22 slides from Illinois Tool Works's earnings presentation, 2011
Slide 1: ITW Conference Call First Quarter 2011
ITW Conference Call First Quarter 2011 1 Q1 2011 Conference Call
Slide 2: Agenda
ITW Agenda 1. Introduction…………………...….. John Brooklier/David Speer 2. Financial Overview…………..….. Ron Kropp 3. Reporting Segments………....…. John Brooklier 4. 2011 Forecasts…………………… Ron Kropp 5. Q & A………………......……...…... John Brooklier/Ron Kropp/David Speer 2 Q1 2011 Conference Call
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 net income per share, restructuring
Slide 4: Conference Call Playback
Conference Call Playback Replay number: 402-220-6528 No pass code necessary Telephone replay available through midnight of May 10, 2011 Webcast / PowerPoint replay available at www.itw.com 4 Q1 2011 Conference Call
Slide 5: Quarterly Highlights
ITW Quarterly Highlights $ in Millions 2010 2011 F(U) Last Year Q1 Q1 Amount % Operating Revenues 3,737.6 4,387.6 650.0 17.4% Operating Income 541.5 682.6 141.1 26.0% % of Revenues 14.5% 15.6% 1.1% Net Income Income Amount 333.8 623.1 289.3 86.7% Income Per Share-Diluted 0.66 1.24 0.58 87.9% Free Op
Slide 6: Quarterly Operating Analysis
ITW Quarterly Operating Analysis % F(U) Prior Year Operating Operating Operating Revenues Income Margins Base Manufacturing Business Operating Leverage 11.7% 34.0% 2.9% Changes in VM & OH costs - -15.0% -2.0% Total 11.7% 19.0% 0.9% Acquisitions/Divestitures 4.2% 1.3% -0.4% Translation 1.6% 2.3% 0.1%
Slide 7: Non Operating & Taxes
ITW Non Operating & Taxes $ in Millions 2010 2011 F(U) Last Year Q1 Q1 Amount % Operating Income 541.5 682.6 141.1 26.0% Interest Expense (44.3) (44.0) 0.3 Other Income 4.6 5.5 0.9 Net Income - Pretax 501.8 644.1 142.3 28.4% Income Taxes 168.0 21.0 147.0 Tax Rate 33.5% 3.3% 30.2 pts Net Income 333.8
Slide 8: Invested Capital
ITW Invested Capital $ in Millions 3/31/10 12/31/10 3/31/11 Tra de Receivable s 2,483.1 2,581.6 2,981.2 Days Sales Outstanding 59.8 57.9 61.2 Inventorie s 1,432.5 1,634.9 1,824.1 Months on Hand 1.8 1.8 1.9 Pre paids a nd Other Current Assets 285.5 266.2 394.9 Accounts Payable & Accrued Ex penses (2,
Slide 9: Debt & Equity
ITW Debt & Equity $ in Millions 3/31/10 12/31/10 3/31/11 Short Term Debt 329.1 326.2 750.8 Long Term Debt 2,799.1 2,542.1 2,597.3 Total Debt 3,128.2 2,868.3 3,348.1 Stockholders' Equity 8,843.6 9,572.0 10,379.3 Total Capital 11,971.8 12,440.3 13,727.4 Less: Cash (1,501.4) (1,186.3) (1,084.5) Net Deb
Slide 10: Cash Flow
ITW Cash Flow $ in Millions 2010 2011 Q1 Q1 Net Income 333.8 623.1 Adjust for Non-Cash Items 155.7 (92.2) Changes in Trade Receivables (182.1) (320.6) Changes in Inventories (110.7) (81.8) Changes in all other Operating Assets & Liabilities 78.1 16.1 Net Cash From Operating Activities 274.8 144.6 Ad
Slide 11: Acquisitions
ITW Acquisitions $ in Millions 2010 2011 Q1 Q2 Q3 Q4 Total Q1 Annual Revenues Acquired 26 253 120 131 530 329 Purchase Price Cash Paid 27 199 145 160 531 556 Number of Acquisitions 4 7 5 8 24 6 11 Q1 2011 Conference Call
Slide 12: Transportation Quarterly Analysis Q1 2011
Transportation Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: +15.1% vs. Q1 ’10 Revenues Income Margins 2010 Q1 610.6 92.3 15.1% • Auto OEM/Tiers: Worldwide base revenue growth of 15.7% in Q1 ’11 vs. Q1 ’10 driven 2011 Q1 754.8 12
Slide 13: Industrial Packaging Quarterly Analysis Q1 2011
Industrial Packaging Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: Revenues Income Margins +14.2% reflected strong industrial production activity worldwide 2010 Q1 542.2 57.5 10.6% – Total Q1 ’11 North American industrial 2011 Q1
Slide 14: Power Systems and Electronics Quarterly Analysis Q1 2011
Power Systems and Electronics Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: +16.4% due to strong contributions from Revenues Income Margins welding and PC board fabrication units 2010 Q1 572.9 111.6 19.5% • In Q1 ’11, worldwide w
Slide 15: Food Equipment Quarterly Analysis Q1 2011
Food Equipment Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic Revenues Income Margins revenues: +6.4% vs. Q1 ’10 as 2010 Q1 434.2 56.5 13.0% equipment sales improved 2011 Q1 472.4 67.3 14.3% • North America Q1 ’11 base $ Inc(Dec) 38.2 10.8
Slide 16: Construction Products Quarterly Analysis Q1 2011
Construction Products Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: +8.4% due to improving European and Revenues Income Margins North American construction 2010 Q1 385.5 32.4 8.4% environment 2011 Q1 463.3 45.6 9.9% • Internation
Slide 17: Polymers and Fluids Quarterly Analysis Q1 2011
Polymers and Fluids Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: Revenues Income Margins +5.2% reflected improved industrial demand for products in North 2010 Q1 257.0 43.0 16.7% American and international end markets 2011 Q1 31
Slide 18: Decorative Surfaces Quarterly Analysis Q1 2011
Decorative Surfaces Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic Revenues Income Margins revenues: +7.4% vs. Q1 ’10 2010 Q1 247.5 27.5 11.1% 2011 Q1 267.2 33.9 12.7% • North America laminate $ Inc(Dec) 19.7 6.4 1.6% Q1 ’11 base revenues:
Slide 19: All Other Quarterly Analysis Q1 2011
All Other Quarterly Analysis Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: +11.5% vs. Q1 ’10 Revenues Income Margins 2010 Q1 709.8 120.8 17.0% • Q1 ’11 worldwide test and measurement base revenues: 2011 Q1 813.5 157.5 19.4% +19.2% vs. Q1 ’10; equip
Slide 20: 2011 Forecast
ITW 2011 Forecast Mid Low High Point 2nd Quarter 2011 Total Revenues 17.0% 20.0% 18.5% Diluted Income per Share $0.99 $1.05 $1.02 % F(U) 2nd Quarter 2010 22% 30% 26% Full Year 2011 Total Revenues 16.0% 18.0% 17.0% Diluted Income per Share $4.16 $4.34 $4.25 % F(U) 2010 39% 45% 42% 20 Q1 2011 Conferen
Slide 21: 2011 Forecast Key Assumptions
ITW 2011 Forecast Key Assumptions • Exchange rates hold at current levels • Acquired revenues in the $800 million to $1 billion range for the year • Restructuring costs of $30 to $40 million for the full year • Tax rate range of 28.5% to 29.5% for Q2 and full year (excludes the impact of the Q1 Aust
Slide 22: Conference Call Q&A
ITW Conference Call Q&A First Quarter 2011 22 Q1 2011 Conference Call