Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q4 2006 Earnings Presentation
20 slides from Parker-hannifin's earnings presentation, Aug 1, 2006
Slide 1: Discussion Agenda
Discussion Agenda CEO 4 th quarter and fiscal 2006 comments Key performance measures & outlook Questions & answers CEO closing comments
Slide 2: Fiscal Year Highlights
Fiscal Year Highlights Sales increased 16% to $9.4 billion for the year 8% organic growth Record year of acquisitions - nearly $1 billion in annual revenues Segment operating income margins improved from 12.5% last year to 13.4%, including the effects of acquisitions Record cash flow from operations
Slide 3: Financial Highlights
Financial Highlights EPS – 4th Quarter and Total Year FY2006 FY2005 FY2006 FY2005 EPS as reported 1.59 $ 1.34 $ 5.57 $ 5.02 $ Discontinued operations (.04) (.04) (.29) (.59) EPS from continuing operations as reported 1.55 1.30 5.28 4.43 Loss on sale of Thermoplastics .08 EPS from continuing operatio
Slide 4: Influences on Earnings
Influences on Earnings Increased volume Win Strategy Restructuring costs Increased effective tax rate Aerospace sales mix Aerospace product development costs
Slide 5: Sales
Sales 4th Quarter and Total Year Dollars in millions FY2006 FY2005 FY2006 FY2005 Sales 2,617 $ 2,172 $ 9,386 $ 8,069 $ % change 20% 16% Sales from acquisitions Sales w/o acquisitions 2,418 2,172 8,687 8,069 % change 11% 8% Currency effects (38) Sales without acquisitions & currency 2,390 $ 2,172 $ 8
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 FY2006 FY2005 FY2006 FY2005 Sales As reported 1,072 $ $ 3,993 $ 3,517 $ % change 14 % 14 % Acquisitions Without Acquisitions 1,016 3,760 3,517 % change 8 % 7 % Currency effects Without Acquisitions & Currency 1,011 $ $ 3,742 $ 3,517 $ %
Slide 8: Segment Reporting: Industrial International
Segment Reporting Industrial International Dollars in millions FY2006 FY2005 FY2006 FY2005 As reported $ $ 2,903 $ 2,398 $ % change 29 % 21 % Acquisitions Without Acquisitions 2,538 2,398 % change 12 % 6 % Currency effects (54) Without Acquisitions & Currency $ $ 2,592 $ 2,398 $ % change 8 % 8 % As
Slide 9: Segment Reporting: Aerospace
Segment Reporting Aerospace Dollars in millions FY2006 FY2005 FY2006 FY2005 As reported $ $ 1,505 $ 1,359 $ % change 15 % 11 % Acquisitions Without Acquisitions 1,502 1,359 % change 15 % 11 % Currency effects (4) Without Acquisitions & Currency $ $ 1,506 $ 1,359 $ % change 15 % 11 % As reported $ $
Slide 10: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls Dollars in millions FY2006 FY2005 FY2006 FY2005 As reported $ $ $ $ % change 30 % 24 % Acquisitions Without Acquisitions % change 18 % 12 % Currency effects Without Acquisitions & Currency $ $ $ $ % change 17 % 11 % As reported $ $ $ $ % of Sales 10.5
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 2006 2005 2004 Industrial North America 7 % + 5 % + 24 % + Industrial International 8 % + 7 % + 21 % + Aerospace 15 % + 7 % + 15 % + Climate & Industrial Control
Slide 12: Balance Sheet Summary
Balance Sheet Summary Cash Working capital Inventory Accounts receivable Capital expenditures Shareholders equity
Slide 13: Strong Cash Flow
Strong Cash Flow – Cash From Operations Fiscal 2006 - $955 Dollars in millions $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 4.0% 6.0% 8.0% 10.0% 12.0%
Slide 14: Financial Leverage
Financial Leverage Debt to Debt Equity 21.1% 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 Not to exceed 37% over the cycle
Slide 15: FY 2007 Earnings Outlook Assumptions
FY 2007 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2007 Sales change versus FY 2006 Industrial North America 4.6 % -- 5.4 % Industrial International 17.7 % -- 18.6 % Aerospace 5.9 % -- 6.6 % Climate & Industrial Controls 5.3 % -- 6.2 % FY 2007 Operating margin percentages Indus
Slide 16: FY 2007 Earnings Outlook Assumptions
FY 2007 Earnings Outlook Assumptions below Operating Margin Corporate Admin + 4.0% to + 6.0% vs. FY 2006 Interest Expense - 10.0% to - 7.0% vs. FY 2006 Other Exp. (Income) - 4.0% to - 1.0% vs. FY 2006 Tax Rate 30.0%
Slide 17: Earnings Outlook
Earnings Outlook – FY07 Low High Income from continuing operations 5.80 $ 6.30 $
Slide 18: anythingmstes
anythingmstes Possible:
Slide 19: Income Statement - Quarter
Income Statement – th Quarter Dollars in millions % of Sales % of Sales Net Sales 2,616.7 $ 100.0 % 2,172.5 $ 100.0 % Cost of sales 2,054.0 78.5 % 1,708.1 78.6 % Gross profit 562.7 21.5 % 464.4 21.4 % S, G & A 277.1 10.6 % 232.8 10.7 % Interest expense 18.7 .7 % 16.4 .8 % Other expense 1.7 .1 % .3 .
Slide 20: Income Statement - Total Year
Income Statement – Total Year Dollars in millions % of Sales % of Sales Net Sales 9,385.9 $ 100.0 % 8,068.8 $ 100.0 % Cost of sales 7,367.6 78.5 % 6,391.5 79.2 % Gross profit 2,018.3 21.5 % 1,677.3 20.8 % S, G & A 1,036.6 11.0 % 860.3 10.7 % Interest expense 75.8 .8 % 66.9 .8 % Other expense 5.9 .1