Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q1 FY2014 Earnings Presentation
24 slides from Parker-hannifin's earnings presentation, Oct 18, 2013
Slide 1: 1st Quarter Fiscal Year 2014 Earnings Release
1st Quarter Fiscal Year 2014 Earnings Release Parker Hannifin Corporation October 18, 2013 Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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. All statements regarding future performanc
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation reconciles (a) sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions & divestitures made within the prior four quarters and the effects of currency exchange rates, (b) cash flow from operating
Slide 4: Agenda
Agenda 4 • CEO 1st Quarter Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 5: Highlights 1st Quarter FY2014
Highlights 1st Quarter FY2014 Sales & Orders • Sales of $3.2B • Contribution from acquisitions offset divestitures • Global economy still uncertain • Orders rates turned positive Earnings & Margins • Segment Operating Margins of 14.4% • Achieved Net Income of $244m or $1.61 earnings per diluted shar
Slide 6: Diluted Earnings Per Share 1st Quarter FY2014
Diluted Earnings Per Share 1st Quarter FY2014 6 $1.61 $1.57 FY14 Q1 FY13 Q1
Slide 7: Influences on Earnings 1st Quarter FY2014 vs. 1st Quarter FY2013
Influences on Earnings 1st Quarter FY2014 vs. 1st Quarter FY2013 7
Slide 8: Sales & Operating Margin 1st Quarter FY2014 - Total Parker
Sales & Operating Margin 1st Quarter FY2014 - Total Parker 8 $ in millions FY2014 % Change FY2013 Sales As reported 3,226$ 1.6 % 3,215$ Acquisitions 60 1.9 % Divestitures - % 40$ Currency (3) (0.1)% Adjusted Sales 3,169$ (0.2)% 3,175$ Operating Margin As reported 465$ 463$ % of Sales 14.4 % 14.4 % 1
Slide 9: Sales & Operating Margin - Diversified Industrial North America
Sales & Operating Margin 1st Quarter FY2014 – Diversified Industrial North America 9 $ in millions FY2014 % Change FY2013 Sales As reported 1,388$ (0.8)% 1,425$ Acquisitions 39 2.8 % Divestitures - % 26$ Currency (4) (0.3)% Adjusted Sales 1,353$ (3.3)% 1,399$ Operating Margin As reported 234$ 244$ %
Slide 10: Sales & Operating Margin - Diversified Industrial International
Sales & Operating Margin 1st Quarter FY2014 – Diversified Industrial International 10 $ in millions FY2014 % Change FY2013 Sales As reported 1,271$ 2.9 % 1,249$ Acquisitions 21 1.7 % Divestitures - % 14$ Currency - - % Adjusted Sales 1,250$ 1.2 % 1,235$ Operating Margin As reported 173$ 157$ % of Sa
Slide 11: Sales & Operating Margin - Aerospace Systems
Sales & Operating Margin 1st Quarter FY2014 – Aerospace Systems 11 $ in millions FY2014 % Change FY2013 Sales As reported 567$ 4.9 % 541$ Acquisitions - - % Divestitures - % Currency 1 0.2 % Adjusted Sales 566$ 4.7 % 541$ Operating Margin As reported 57$ 62$ % of Sales 10.1 % 11.4 % 1st Quarter
Slide 12: Order Rates
Order Rates 12 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 Sep 2013 Jun 2013 Sep 2012 Jun 2012 Total Parker 5 %+ 0 %+ 6 %- 1 %- Diversified Industrial Nor
Slide 13: Balance Sheet Summary
Balance Sheet Summary • Cash • Working capital • Accounts receivable • Inventory • Accounts payable 13
Slide 14: Cash Flow from Operating Activities 1st Quarter FY2014
$358 $219 FY14 Q1 FY13 Q1 Cash Flow from Operating Activities 1st Quarter FY2014 14 Cash Flow From Operating Activities 1st Quarter Total Year FY2014 FY2013 As Reported 283$ (7)$ As Reported % Sales 8.8% -0.2% Discretionary Pension Plan Contribution 75$ 226$ Adjusted Cash From Operating Activities 3
Slide 15: FY2014 Guidance Assumptions: Sales & Segment Operating Margins
FY2014 Guidance Assumptions Sales & Segment Operating Margins 15 FY 2014 Sales Change versus FY 2013 Total Parker 0% - 3% Diversified Industrial North America 0% - 4% Diversified Industrial International 1% - 4% Aerospace Systems (3)% - (1)% FY 2014 Segment Operating Margin Percentages Total Parker
Slide 16: FY2014 Guidance Assumptions
FY2014 Guidance Assumptions • Sales Growth, Flat to +3% • Segment Operating Margins, 13.7% to 14.1% • Below Segment Operating Margin Line (+/- 1.0%) • Corporate Admin, Interest and Other Expense (Income) • $75M at Midpoint including expected GE Aviation JV gain • Expected Pre-Tax gain of $411M from
Slide 17: Revised FY2014 Guidance
Revised FY2014 Guidance Reconciliation to prior guidance 17 Low Midpoint High Diluted EPS 7.78$ 8.08$ 8.38$ Diluted EPS - Excluding Expected JV Gain 6.10$ 6.40$ 6.70$
Slide 18: [LISTED ]
[LISTED ] NYSE
Slide 19: Appendix
Appendix • Consolidated Statement of Income • Business Segment Information By Industry • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Supplemental Sales Information – Global Technology Platforms
Slide 20: Consolidated Statement of Income (Unaudited)
Consolidated Statement of Income 20 (Unaudited) Three Months Ended September 30, (Dollars in thousands except per share amounts) 2013 2012 Net sales 3,226,144$ 3,214,935$ Cost of sales 2,476,409 2,477,447 Gross profit 749,735 737,488 Selling, general and administrative expenses 406,930 381,122 Inter
Slide 21: Business Segment Information By Industry (Unaudited)
Business Segment Information By Industry 21 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2013 2012 Net sales Diversif ied Industrial: North America 1,387,875$ 1,425,279$ International 1,270,795 1,248,573 Aerospace Systems 567,474 541,083 Total 3,226,144$ 3,214,935$ Segment ope
Slide 22: Consolidated Balance Sheet (Unaudited)
Consolidated Balance Sheet 22 (Unaudited) September 30, June, 30 September, 30 (Dollars in thousands) 2013 2013 2012 Assets Current assets: Cash and cash equivalents 1,945,623$ 1,781,412$ 436,131$ Accounts receivable, net 1,968,490 2,062,745 1,982,590 Inventories 1,465,431 1,377,405 1,489,748 Prepai
Slide 23: Consolidated Statement of Cash Flows (Unaudited)
Consolidated Statement of Cash Flows 23 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2013 2012 Cash flows from operating activities: Net income 244,320$ 239,948$ Depreciation and amortization 85,580 81,172 Stock incentive plan compensation 48,998 31,261 Net change in receivabl
Slide 24: Supplemental Sales Information Global Technology Platforms
(Unaudited) Three Months Ended September 30, (Dollars in thousands) 2013 2012 Net sales Diversif ied Industrial: Motion Systems 934,188$ 995,146$ Flow and Process Control * 1,025,689 1,032,862 Filtration and Engineered Materials 698,793 645,844 Aerospace Systems 567,474 541,083 Total 3,226,144$ 3,21