Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q2 2015 Earnings Presentation
13 slides from Illinois Tool Works's earnings presentation, Jul 22, 2015
Slide 1: Second Quarter 2015 Conference Call
Second Quarter 2015 Conference Call E. Scott Santi, Chairman & CEO Michael M. Larsen, Senior Vice President & CFO Aaron H. Hoffman, Vice President, Investor Relations July 22, 2015
Slide 2: Forward Looking Statements
Forward Looking Statements 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 and timing of strategic initiatives and related
Slide 3: Second Quarter 2015 Highlights
Second Quarter 2015 Highlights ● Solid execution and performance in a challenging capital spending environment – Record operating margin of 21.3%, an increase of 80 basis points – 7% EPS growth to $1.30 … EPS up 17% excluding a $(0.12) impact from currency – After-tax return on invested capital (ROI
Slide 4: Q2 2015 Financial Summary
Q2 2015 Financial Summary Q2 2015 Actuals Highlights EPS +7% ● $1.30 EPS up 7%, +17% excluding $(0.12) of currency impact $1.30 ● Record operating margin of 21.3%; Enterprise Initiatives EPS $1.21 contributed 100 basis points $3.7B $3.4B ● Organic revenue up 0.2%; ~(1)% impact from product line simp
Slide 5: Q2 2015 Organic Revenue Growth
Q2 2015 Organic Revenue Growth Growth by Geography Highlights ● North America up 0.4% Organic revenue – Construction +15%, Food Equipment +7%, Automotive OEM +5% up 0.2%* – Welding, Test & Measurement and Electronics, Specialty (5)% 2% ● International up 0.1% 0.4% 0.1% (3)% – EMEA up 2% North Inter-
Slide 6: Q2 2015 Operating Margin
Q2 2015 Operating Margin Operating Margin Key Drivers 21.3% 20.5% Q2 2015 Enterprise Initiatives +100 bps Q2‘14 Q2‘15 OM% V bps Price/Cost +20 Automotive OEM 24.5% +80 Volume - T&M and Electronics 16.1 +90 Food Equipment 22.0 +250 Other (40) Polymers & Fluids 20.9 +130 Margin Expansion +80 bps Weldi
Slide 7: Q2 2015 Segment Results
Q2 2015 Segment Results ($’s in millions) Year-to-Date Automotive OEM Organic +6% Organic Total (3)% +80 bps Revenue 24.5% $671 $649 23.7% 1H’15 Automotive OEM +6% T&M and Electronics (3) Q2‘14 Q2‘15 Q2‘14 Q2‘15 Total Revenue Operating Margin Food Equipment +4 Highlights Polymers & Fluids (1) ● Orga
Slide 8: Q2 2015 Segment Results
Q2 2015 Segment Results ($’s in millions) Test & Measurement and Electronics Food Equipment Organic (5)% Organic +4% +90 bps +250 bps Total (11)% Total (4)% 22.0% 16.1% $558 $537 $496 15.2% $518 19.5% Q2‘14 Q2‘15 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Total Revenue Operating Margin Total Revenue Operat
Slide 9: Q2 2015 Segment Results
Q2 2015 Segment Results ($’s in millions) Polymers & Fluids Welding Organic (2)% Organic (6)% +130 bps (20) bps Total (12)% Total (9)% 20.9% 26.3% $506 26.1% 19.6% $470 $426 $446 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Total Revenue Operating Margin Total Revenue Operating Margin Highlights
Slide 10: Q2 2015 Segment Results
Q2 2015 Segment Results ($’s in millions) Construction Products Specialty Products Organic +6% Organic (3)% +170 bps (70) bps Total (6)% Total (10)% 19.9% 24.2% 18.2% $540 23.5% $444 $486 $419 Q2‘14 Q2’15 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Q2‘14 Q2‘15 Total Revenue Operating Margin Total Revenue Operating Marg
Slide 11: 2015 Financial Guidance
2015 Financial Guidance 2015 Q3 2015 EPS +10% EPS +6% at midpoint at midpoint $5.07 - $5.23 $1.32 - $1.40 EPS $4.67 EPS $1.28 $14.5B Organic ~1% $3.7B Organic Flat to +1% Total ~(6)% Total (6) to (7)% Total Total Revenue Revenue 2014 2015F Q3’14 Q3’15F Operating Operating Margin 19.9% 21%+ Margin 20
Slide 12: Questions
Questions ITY
Slide 13: Appendix - Additional Segment Detail
Appendix - Additional Segment Detail Q2 2015 vs. Q2 2014 Favorable / (Unfavorable) Automotive T&M and Food Polymers & Construction Specialty Total Total Revenue OEM Electronics Equipment Fluids Welding Products Products ITW Organic 6.0% (4.9)% 4.2% (1.6)% (6.0)% 5.8% (3.4)% 0.2% Divestitures (0.3) -