Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q3 FY2015 Earnings Presentation
24 slides from Parker-hannifin's earnings presentation, Apr 28, 2015
Slide 1: 3rd Quarter Fiscal Year 2015 Earnings Release
3rd Quarter Fiscal Year 2015 Earnings Release Parker Hannifin Corporation April 28, 2015 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 Comments • Results & Outlook • Questions and Answers
Slide 4: Highlights 3rd Quarter FY2015
Highlights 3rd Quarter FY2015 • Second Quarter Sales of $3.2B • Significantly Impacted by Currency Rates • Segment Operating Margins 14.2% • Adjusted Segment Operating Margins 14.4% • As Reported Earnings per Share of $2.02 • Adjusted Earnings per Share of $2.06 • Orders Declined to -4% • Share Repu
Slide 5: Diluted Earnings Per Share 3rd Quarter FY2015
Diluted Earnings Per Share 3rd Quarter FY2015 5 * FY 15 EPS Adjusted for Restructuring Activities * FY 14 EPS Adjusted for Restructuring Activities * $2.02 $1.60 FY15 Q3 FY14 Q3 As Reported EPS $2.06 $1.88 FY15 Q3* FY14 Q3** Adjusted EPS*
Slide 6: Influences on Adjusted Earnings Per Share
Influences on Adjusted Earnings Per Share 3rd Quarter FY2015 vs. 3rd Quarter FY2014 6 * FY 15 EPS Adjusted for Restructuring Activities * FY 14 EPS Adjusted for Restructuring Activities
Slide 7: Sales & Segment Operating Margin Total Parker
$ in millions 3rd Quarter FY2015 % Change FY2014 Sales As Reported 3,162$ (5.8)% 3,358$ Acquisitions 3 0.1 % Currency (205) (6.1)% Organic Sales 3,364$ 0.2 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported 448$ 14.2 % 434$ 12.9 % Restructuring 8 60 Adjusted 456$ 14.4 % 494$
Slide 8: Sales & Segment Operating Margin Diversified Industrial North America
$ in millions 3rd Quarter FY2015 % Change FY2014 Sales As Reported 1,442$ (0.9)% 1,455$ Acquisitions - - % Currency (16) (1.1)% Organic Sales 1,458$ 0.2 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported 236$ 16.3 % 243$ 16.7 % Restructuring 1 0 Adjusted 237$ 16.4 % 243$ 16.7
Slide 9: Sales & Segment Operating Margin Diversified Industrial International
$ in millions 3rd Quarter FY2015 % Change FY2014 Sales As Reported 1,148$ (15.4)% 1,357$ Acquisitions 3 0.2 % Currency (185) (13.6)% Organic Sales 1,330$ (2.0)% FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported 139$ 12.1 % 127$ 9.4 % Restructuring 7 59 Adjusted 146$ 12.7 % 186
Slide 10: Sales & Segment Operating Margin Aerospace Systems
$ in millions 3rd Quarter FY2015 % Change FY2014 Sales As Reported 572$ 4.9 % 546$ Acquisitions - - % Currency (4) (0.8)% Organic Sales 576$ 5.7 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported 73$ 12.8 % 64$ 11.7 % Restructuring 1 0 Adjusted 74$ 12.9 % 64$ 11.7 % Sales & S
Slide 11: Order Rates
Order Rates 11 Excludes Acquisitions, Divestitures & Currency 3-month year-over-year comparisons of total dollars, except Aerospace Systems Aerospace Systems is calculated using a 12-month rolling average Mar 2015 Dec 2014 Mar 2014 Dec 2013 Total Parker 4 %- 4 %+ 7 %+ 5 %+ Diversified Industrial Nor
Slide 12: Cash Flow From Operating Activities FY2015 YTD
Full Year FY 2015 % of Sales FY 2014 % of Sales As Reported Cash Flow From Operating Activities 791 8.3% 817 8.4% Discretionary Pension Plan Contribution 75 Adjusted Cash Flow From Operating Activities 791 8.3% 892 9.2% $791 $892 FY15 FY14 Cash Flow from Operating Activities FY2015 YTD 12
Slide 13: FY2015 Guidance
Adjusted Sales Growth vs. Prior Year Diversified Industrial North America 1% - 2% Diversified Industrial International (12%) - (11%) Aerospace Systems 3% - 5% Total Parker (4%) - (3%) Adjusted Segment Operating Margins Diversified Industrial North America 16.8% - 16.9% Diversified Industrial Interna
Slide 14: FY2015 Q4 Guidance
FY2015 Q4 Guidance Revised Q4 Guidance vs Prior Q4 Guidance 14 * FY 15 Q4 EPS Adjusted for Restructuring Expenses and Voluntary Retirement Program
Slide 15: [LISTED ]
[LISTED ] NYSE
Slide 16: Appendix
Appendix • Consolidated Statement of Income • Reconciliation of Net Income & EPS • Business Segment Information By Industry • Reconciliation of Segment Operating Income & Segment Operating Margin • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Reconciliation of Forecasted EPS •
Slide 17: Consolidated Statement of Income
(Unaudited) Three Months Ended March 31, Nine Months Ended March 31, (Dollars in thousands except per share amounts) 2015 2014 2015 2014 Net sales 3,162,311$ 3,358,406$ 9,567,236$ 9,690,556$ Cost of sales 2,373,016 2,605,893 7,234,465 7,502,273 Gross profit 789,295 752,513 2,332,771 2,188,283 Sellin
Slide 18: Reconciliation of Net Income & EPS
Reconciliation of Net Income & EPS 18 (Unaudited) Three Months Ended March 31, Nine Months Ended March 31, (Dollars in thousands except per share amounts) 2015 2014 2015 2014 Net income 285,462$ 242,518$ 832,968$ 740,242$ Adjustments: Restructuring charges 6,023 42,516 18,166 60,830 Asset w ritedow
Slide 19: Business Segment Information By Industry
(Unaudited) Three Months Ended March 31, Nine Months Ended March 31, (Dollars in thousands) 2015 2014 2015 2014 Net sales Diversif ied Industrial: North America 1,441,625$ 1,455,212$ 4,302,644$ 4,168,489$ International 1,148,248 1,357,513 3,599,145 3,905,159 Aerospace Systems 572,438 545,681 1,665,4
Slide 20: Reconciliation of Segment Operating Income & Segment Operating Margin
Reconciliation of Segment Operating Income & Segment Operating Margin 20 Nine Months Ended March 31, 2015 Operating Income % of Sales Operating Income % of Sales Total segment operating income As reported 448,323$ 14.2% 1,397,943$ 14.6% Restructuring 7,766 22,699 Adjusted 456,089$ 14.4% 1,4 0, 42$ 1
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet 21 (Unaudited) March 31, June 30, March 31, (Dollars in thousands) 2015 2014 2014 Assets Current assets: Cash and cash equivalents 1,017,013$ 1,613,555$ 2,095,989$ Marketable securities and other investments 1,013,692 573,701 - Trade accounts receivable, net 1,701,017 1,85
Slide 22: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 22 (Unaudited) Nine Months Ended March 31, (Dollars in thousands) 2015 2014 Cash flows from operating activities: Net income 832,968$ 740,242$ Depreciation and amortization 237,232 253,150 Stock incentive plan compensation 74,830 84,647 Goodw ill and intangible a
Slide 23: Reconciliation of Forecasted EPS
(Unaudited) Fiscal Year (Amounts in dollars) 2015 Forecasted earnings per diluted share $7.25 to $7.45 Adjustments: Restructuring .17 Voluntary retirement program .13 Adjusted forecasted earnings per diluted share $7.55 to $7.75 Reconciliation of Forecasted EPS 23
Slide 24: Supplemental Sales Information Global Technology Platforms
(Unaudited) Three Months Ended Mar 31, Nine Months Ended Mar 31, (Dollars in thousands) 2015 2014 2015 2014 Net sales Diversif ied Industrial: Motion Systems 893,765$ 999,742$ 2,736,690$ 2,862,396$ Flow and Process Control 996,092 1,097,427 3,036,989 3,124,482 Filtration and Engineered Materials 700