Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q1 FY2007 Earnings Presentation
19 slides from Parker-hannifin's earnings presentation, Oct 18, 2006
Slide 1: Discussion Agenda
Discussion Agenda CEO 1 st quarter highlights Key performance measures & outlook Questions & answers CEO closing comments
Slide 2: First Quarter Highlights
First Quarter Highlights Sales increased 21% to $2.6 billion for the quarter 8% organic growth Segment operating income margins improved from 13.8% last year to 14.9%, including the effects of acquisitions Repurchased 2.6 million shares with available cash
Slide 3: Financial Highlights: EPS – 1st Quarter
$1.19 $1.75 $ .24 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 Q1 FY07 Q1 FY06 Financial Highlights EPS – 1st Quarter Earnings from continuing operations Earnings from discontinued operations
Slide 4: Influences on Earnings
Influences on Earnings Increased volume Win Strategy - Gross profit up 200 bps Repurchased shares Lower “Other” expense - Litigation - Pensions
Slide 5: Financial Highlights: Sales – 1st Quarter
Financial Highlights Sales – 1st Quarter Dollars in millions FY2007 FY2006 Sales 2,552 $ 2,114 $ % change 21% Sales from acquisitions Sales w/o acquisitions 2,324 2,114 % change 10% Currency effects Sales without acquisitions & currency 2,284 $ 2,114 $ % change 8% 1st Quarter
Slide 6: Influences on Sales
Influences on Sales Continued Industrial end market strength Distributors OEM Emerging markets Acquisitions Aerospace Commercial
Slide 7: Segment Reporting: Industrial North America
Segment Reporting Industrial North America Dollars in millions FY2007 FY2006 Sales As reported 1,001 $ $ % change 8 % Acquisitions Without acquisitions % change 3 % Currency effects Without acquisitions & currency $ $ % change 3 % Operating Margin As reported $ $ % of Sales 15 % 15 % 1st Quarter
Slide 8: Segment Reporting: Industrial International
Segment Reporting Industrial International Dollars in millions FY2007 FY2006 As reported $ $ % change 41 % Acquisitions Without acquisitions % change 16 % Currency effects Without acquisitions & currency $ $ % change 11 % As reported $ $ % of Sales 15 % 13 % 1st Quarter Sales Operating Margin
Slide 9: Segment Reporting: Aerospace
Segment Reporting Aerospace Dollars in millions FY2007 FY2006 As reported $ $ % change 15 % Acquisitions Without acquisitions % change 14 % Currency effects Without acquisitions & currency $ $ % change 13 % As reported $ $ % of Sales 17 % 16 % 1st Quarter Sales Operating Margin
Slide 10: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls Dollars in millions FY2007 FY2006 As reported $ $ % change 26 % Acquisitions Without acquisitions % change 13 % Currency effects Without acquisitions & currency $ $ % change 12 % As reported $ $ % of Sales 11 % 9 % 1st Quarter Sales Operating Margin
Slide 11: Parker New Order rates
Parker New Order rates Excludes Acquisitions & Currency Year over year comparisons Aerospace is calculated using a 12-month moving average FY07 FY06 FY05 Total Parker 10 % + 6 % + -- Industrial North America 7 % + 8 % + 18 % + Industrial International 17 % + 4 % + 12 % + Aerospace 18 % + 8 % + 19 %
Slide 12: Balance Sheet Summary
Balance Sheet Summary Cash Working capital Inventory Accounts receivable
Slide 13: Strong Cash Flow – Cash From Operations
Strong Cash Flow – Cash From Operations $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 4.0% 6.0% 8.0% 10.0% 12.0% FY 07 YTD - $115 $111 pension contribution Dollars in millions
Slide 14: Financial Leverage
Financial Leverage Debt to Debt Equity 23.6% 16.0% 18.0% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 Not to exceed 37% over the cycle
Slide 15: FY 2007 Earnings Outlook Assumptions: Segment Sales & Operating Income
FY 2007 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2007 Sales change versus FY 2006 Industrial North America 3.8 % -- 4.5 % Industrial International 19.4 % -- 20.0 % Aerospace 7.1% -- 7.7 % Climate & Industrial Controls 5.0 % -- 5.6 % FY 2007 Operating margin percentages Indust
Slide 16: FY 2007 Earnings Outlook Assumptions below Operating Margin
FY 2007 Earnings Outlook Assumptions below Operating Margin Corporate Admin + 5.0% to + 8.0% vs. FY 2006 Interest Expense - 7.0% to - 8.0% vs. FY 2006 Other Exp. (Income) - 6.0% to - 7.0% vs. FY 2006 Tax Rate 30.0%
Slide 17: Earnings Outlook – FY07
Earnings Outlook – FY07 Low High EPS from continuing operations 6.05 $ 6.45 $
Slide 18: anythingmstes
anythingmstes Possible:
Slide 19: Income Statement – 1st Quarter
Income Statement – st Quarter Dollars in millions % of Sales % of Sales Net Sales 2,551.6 $ 100.0 % 2,113.6 $ 100.0 % Cost of sales 1,947.4 76.3 % 1,655.8 78.3 % Gross profit 604.2 23.7 % 457.8 21.7 % S, G & A 292.0 11.4 % 237.0 11.2 % Interest expense 17.2 .7 % 16.5 .8 % Other (income) expense (6.6