Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q4 2019 Earnings Presentation
13 slides from Illinois Tool Works's earnings presentation, Jan 31, 2020
Slide 1: Fourth Quarter 2019 Earnings Conference Call
FOURTH QUARTE R 20 19 EAR NIN GS CON FE RE NCE CALL JANUARY 31, 2020 1
Slide 2: Forward-Looking Statement / Safe Harbor Statement
F O RWA R D - L O O K I N G S TAT E M E N T SAFE HARBOR STATEMENT This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding the expected impact of tariffs and raw material in
Slide 3: Q4 2019 Financial Performance
Q4 2019 FINANCIAL PERFORMANCE COMMENTARY GAAP EPS $1.83 $1.99 +9% GAAP EPS of $1.99 - Includes $0.11 divestiture gains and $(0.06) of headwinds from higher restructuring and foreign currency translation Total revenue declined (3.1)% - Organic revenue (1.6)%, Foreign currency (1)%, Divestitures (
Slide 4: Q4 2019 Operating Margin
Q 4 2 0 1 9 O P E R AT I N G M A R G I N KEY MARGIN DRIVERS Q4'19 +10 bps ex. restructuring 24.1% Enterprise Initiatives +130 bps 24.0% Restructuring 23.7% Price/Cost +30 Higher Restructuring Expenses (40) Negative Volume Leverage (30) Inventory Revaluation (30) Q4'18 Q4'19 Non-repeat of Q4’18 favor
Slide 5: Segment Performance
SEGMENT PERFORMANCE FY’19 ORGANIC REVENUE AUTOMOTIVE OEM 2018 2019 Change (7)% (40) bps Automotive OEM flat (5)% (5)%-pts $777 21.6% $725 21.2% Food Equipment 3 1 (2) T&M / Electronics 4 ~flat (4) Q4'18 Q4'19 Q4'18 Q4'19 Welding 10 (1) (11) Total Revenue Operating Margin Polymers & Fluids 1 ~flat (1
Slide 6: Q4 2019 Segment Performance: Food Equipment, Test & Measurement/Electronics
Q4 2019 SEGMENT PERFORMANCE FOOD EQUIPMENT TEST & MEASUREMENT/ELECTRONICS +1% +90 bps +3% +330 bps 28.1% $567 $571 27.5% $552 26.6% $538 24.8% Q4'18 Q4'19 Q4'18 Q4'19 Q4'18 Q4'19 Q4'18 Q4'19 Total Revenue Operating Margin Total Revenue Operating Margin Organic revenue 2% Organic revenue 4% - Tou
Slide 7: Q4 2019 Segment Performance: Welding, Polymers & Fluids
Q4 2019 SEGMENT PERFORMANCE WELDING POLYMERS & FLUIDS (6)% (150) bps (3)% +150 bps $414 26.9% $422 23.0% 25.4% $408 21.5% $387 Q4'18 Q4'19 Q4'18 Q4'19 Q4'18 Q4'19 Q4'18 Q4'19 Total Revenue Operating Margin Total Revenue Operating Margin Organic revenue (4)% Organic revenue (2)% - Tough compariso
Slide 8: Q4 2019 Segment Performance: Construction Products, Specialty Products
Q4 2019 SEGMENT PERFORMANCE CONSTRUCTION PRODUCTS SPECIALTY PRODUCTS (3)% (270) bps (5)% (90) bps $397 24.9% $469 25.4% $384 24.5% 22.2% $446 Q4'18 Q4'19 Q4'18 Q4'19 Q4'18 Q4'19 Q4'18 Q4'19 Total Revenue Operating Margin Total Revenue Operating Margin Organic revenue (1)% Organic revenue (3)%
Slide 9: 2019 Financial Performance
2019 FINANCIAL PERFORMANCE COMMENTARY GAAP EPS $7.60 $7.74 +2% GAAP EPS of $7.74 - Includes $0.09 divestiture gains and $(0.32) of headwinds from higher restructuring and foreign currency translation Total revenue declined (4.5)% - Organic revenue (1.9)%, Foreign currency (2.3)%, Divestitures (0
Slide 10: 2019 Organic Growth by Segment vs. Market
2019 ORGANIC GROWTH BY SEGMENT VS. MARKET Segment ex-PLS Market Growth Segment Growth PLS Impact vs. Market Automotive OEM ~(6)% (5)% (1)% ~2%-pts. Food Equipment ~flat 1 - ~1 T&M / Electronics ~(1) ~flat (0.5) ~1.5 Welding ~(3) (1) (0.5) ~2.5 Polymers & Fluids ~(1) ~flat (0.5) ~1.5 Construction Pro
Slide 11: 2020 Financial Guidance
2020 FINANCIAL GUIDANCE COMMENTARY GAAP EPS $7.74 $7.65 to $8.05 Total Revenue (2) to 0% at current levels of demand - Organic growth of 0 to 2% offset by foreign currency translation impact (1)% and ’19 divestitures (1)% - PLS impact ~(50) bps $13.8B REVENUE $14.1B to $14.1B Operating margin of
Slide 12: 2020 Organic Growth Forecast
2020 ORGANIC GROWTH FORECAST Automotive Food Polymers Construction Specialty T&ME Welding OEM Equipment & Fluids Products Products 2019 (5)% 1% ~flat (1)% ~flat (1)% (4)% 2020E (2) – 2% 2 – 4% 1 – 3% (2) – 2% (1) – 3% (1) – 3% (2) – 2% USING CURRENT LEVELS OF DEMAND 2020 ORGANIC GROWTH FORECAST IS F
Slide 13: Q&A
Q&A 13