Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q2 FY2016 Earnings Presentation
24 slides from Parker-hannifin's earnings presentation, Jan 26, 2016
Slide 1: 2nd Quarter Fiscal Year 2016 Earnings Release
2nd Quarter Fiscal Year 2016 Earnings Release Parker Hannifin Corporation January 26, 2016 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 • Chairman and CEO Comments • Questions and Answers • Results and Outlook
Slide 4: Highlights 2nd Quarter FY2016
Highlights 2nd Quarter FY2016 4 Responding Well in a Challenging Environment Solid Decremental Margin (17.2% Adjusted MROS) Second Quarter Sales of $2.7B Declined 14% (4% Currency, 10% Organic) Adjusted Segment Operating Margins 13.5% (12.2% As Reported) Restructuring and Simplification
Slide 5: Diluted Earnings Per Share 2nd Quarter FY2016
Diluted Earnings Per Share 2nd Quarter FY2016 5 *Adjusted for Business Realignment Charges
Slide 6: Influences on Adjusted Earnings Per Share
Influences on Adjusted Earnings Per Share 2nd Quarter FY2016 vs. 2nd Quarter FY2015 6 *Adjusted for Business Realignment Charges
Slide 7: Sales & Segment Operating Margin Total Parker
Sales & Segment Operating Margin Total Parker 7 $ in millions 2nd Quarter FY2016 % Change FY2015 Sales As Reported 2,706$ (13.7)% 3,135$ Acquisitions 10 0.3 % Currency (139) (4.4)% Organic Sales 2,835$ (9.6)% FY2016 % of Sales FY2015 % of Sales Segment Operating Margin As Reported 331$ 12.2 % 430$ 1
Slide 8: Sales & Segment Operating Margin Diversified Industrial North America
Sales & Segment Operating Margin Diversified Industrial North America 8 $ in millions 2nd Quarter FY2016 % Change FY2015 Sales As Reported 1,161$ (16.4)% 1,389$ Acquisitions 2 0.1 % Currency (18) (1.3)% Organic Sales 1,177$ (15.2)% FY2016 % of Sales FY2015 % of Sales Segment Operating Margin As Repo
Slide 9: Sales & Segment Operating Margin Diversified Industrial International
Sales & Segment Operating Margin Diversified Industrial International 9 $ in millions 2nd Quarter FY2016 % Change FY2015 Sales As Reported 993$ (16.4)% 1,188$ Acquisitions 8 0.7 % Currency (119) (10.0)% Organic Sales 1,104$ (7.1)% FY2016 % of Sales FY2015 % of Sales Segment Operating Margin As Repor
Slide 10: Sales & Segment Operating Margin Aerospace Systems
Sales & Segment Operating Margin Aerospace Systems 10 $ in millions 2nd Quarter FY2016 % Change FY2015 Sales As Reported 552$ (1.1)% 558$ Acquisitions - - % Currency (2) (0.4)% Organic Sales 554$ (0.7)% FY2016 % of Sales FY2015 % of Sales Segment Operating Margin As Reported 82$ 14.8 % 67$ 12.0 % Bu
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 Dec 2015 Sep 2015 Dec 2014 Sep 2014 Total Parker 12 %- 11 %- 4 %+ 5 %+ Diversified Industrial N
Slide 12: Adjusted Cash Flow from Operating Activities
Adjusted Cash Flow from Operating Activities FY2016 YTD 12 As Reported Cash Flow From Operating Activities Discretionary Pension Plan Contribution Adjusted Cash Flow From Operating Activities FY 2016 % of Sales FY 2015 % of Sales 347 6.2% 538 8.4% 200 547 9.8% 538 8.4% *Adjusted for discretionary pe
Slide 13: FY2016 Guidance
FY2016 Guidance Adjusted EPS held at $6.10 Midpoint 13 Sales Growth vs. Prior Year Diversified Industrial North America (15.6%) - (11.6%) Diversified Industrial International (14.7%) - (11.7%) Aerospace Systems (0.3%) - 1.7% Total Parker (12.6%) - (9.3%) Adjusted Segment Operating Margins Diversifie
Slide 14: FY2016 Guidance Reconciliation to Prior Guidance at Midpoint
FY2016 Guidance Reconciliation to Prior Guidance at Midpoint 14 *Adjusted for Business Realignment Charges
Slide 15: ALY
PH ALY
Slide 16: Appendix
Appendix Consolidated Statement of Income Reconciliation of Net Income & EPS Business Segment Information Reconciliation of Segment Operating Margin Consolidated Balance Sheet Consolidated Statement of Cash Flows Reconciliation of Forecasted EPS Supplemental Sales Information – Globa
Slide 17: Consolidated Statement of Income
Consolidated Statement of Income 17 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2015 2014 2015 2014 Net sales 2,705,590$ 3,134,993$ 5,574,938$ 6,404,925$ Cost of sales 2,140,624 2,401,584 4,341,528 4,861,449 Gross profit 5
Slide 18: Reconciliation of Net Income & EPS
Reconciliation of Net Income & EPS 18 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2015 2014 2015 2014 Net income 183,137$ 267,335$ 378,163$ 547,506$ Adjustments: Business realignment charges 25,463 6,450 41,015 11,962 Adju
Slide 19: Business Segment Information By Industry
Business Segment Information By Industry 19 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2015 2014 2015 2014 Net sales Diversif ied Industrial: North America 1,160,774$ 1,389,207$ 2,447,104$ 2,861,019$ International 992,464 1,187,400 2,030,911 2,45
Slide 20: Reconciliation of Segment Operating Margin
20 Reconciliation of Segment Operating Margin (Unaudited) Operating income Margin Operating income Margin As reported segment operating income 330,712$ 12.2% 746,758$ 13.4% Adjustments: Business realignment charges 34,800 56,588 Adjusted segment operating income 365,512$ 13.5% 803,346$ 14.4% Three M
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet 21 (Unuaudited) December 31, June 30, December 31, (Dollars in thousands) 2015 2015 2014 Assets Current assets: Cash and cash equivalents 1,047,494$ 1,180,584$ 1,075,307$ Marketable securities and other investments 820,682 733,490 886,879 Trade accounts receivable, net 1,4
Slide 22: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 22 (Unaudited) Six Months Ended December 31, (Dollars in thousands) 2015 2014 Cash flows from operating activities: Net income 378,163$ 547,506$ Depreciation and amortization 156,093 160,625 Stock incentive plan compensation 39,026 52,217 Gain on sale of business
Slide 23: Reconciliation of Forecasted EPS
Reconciliation of Forecasted EPS 23 (Unaudited) (Amounts in dollars) Fiscal Year 2016 Forecasted earnings per diluted share $5.40 to $5.80 Adjustments: Business realignment charges .50 Adjusted forecasted earnings per diluted share $5.90 to $6.30
Slide 24: Supplemental Sales Information Global Technology Platforms
Supplemental Sales Information Global Technology Platforms 24 (Unaudited) (Dollars in thousands) September 30, 2015 December 31, 2015 September 30, 2015 December 31, 2015 Net sales Diversif ied Industrial: Motion Systems 802,495$ 754,923$ 802,495$ $ 1,557,418 Flow and Process Control 881,911 805,611