Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q1 FY2017 Earnings Presentation
25 slides from Parker-hannifin's earnings presentation, Oct 21, 2016
Slide 1: 1st Quarter Fiscal Year 2017 Earnings Release
1st Quarter Fiscal Year 2017 Earnings Release Parker Hannifin Corporation October 21, 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 & CEO Comments • Results & Outlook • Questions & Answers
Slide 4: Chairman and CEO Comments 1st Quarter FY2017
Chairman and CEO Comments 4 1st Quarter FY2017 Recordable Accident Reduction of 35% in the First Quarter First Quarter Sales of $2.74B, Orders Turn Positive As Reported Earnings per Share of $1.55 ($1.61 Adjusted) Impressive Margin & Decremental MROS and Cash Flow Performance Full Year FY201
Slide 5: Diluted Earnings Per Share 1st Quarter FY2017
Diluted Earnings Per Share 1st Quarter FY2017 5 *Adjusted for Business Realignment Charges
Slide 6: Influences on Adjusted Earnings Per Share 1st Quarter FY2017 vs. FY2016
Influences on Adjusted Earnings Per Share 1st Quarter FY2017 vs. 1st Quarter FY2016 6 *Adjusted for Business Realignment Charges
Slide 7: Sales & Segment Operating Margin Total Parker
Sales & Segment Operating Margin Total Parker 7 $ in millions 1st Quarter FY2017 % Change FY2016 Sales As Reported 2,743$ (4.4)% 2,869$ Acquisitions 9 0.3 % Currency (4) (0.1)% Organic Sales 2,738$ (4.6)% FY2017 % of Sales FY2016 % of Sales Segment Operating Margin As Reported 411$ 15.0 % 416$ 14.5
Slide 8: Sales & Segment Operating Margin Diversified Industrial North America
Sales & Segment Operating Margin Diversified Industrial North America 8 $ in millions 1st Quarter FY2017 % Change FY2016 Sales As Reported 1,167$ (9.3)% 1,286$ Acquisitions - - % Currency (4) (0.3)% Organic Sales 1,171$ (9.0)% FY2017 % of Sales FY2016 % of Sales Segment Operating Margin As Reported
Slide 9: Sales & Segment Operating Margin Diversified Industrial International
Sales & Segment Operating Margin Diversified Industrial International 9 $ in millions 1st Quarter FY2017 % Change FY2016 Sales As Reported 1,015$ (2.3)% 1,038$ Acquisitions 9 0.9 % Currency - - % Organic Sales 1,006$ (3.2)% FY2017 % of Sales FY2016 % of Sales Segment Operating Margin As Reported 137
Slide 10: Sales & Segment Operating Margin Aerospace Systems
Sales & Segment Operating Margin Aerospace Systems 10 $ in millions 1st Quarter FY2017 % Change FY2016 Sales As Reported 561$ 3.1 % 545$ Acquisitions - - % Currency - - % Organic Sales 561$ 3.1 % FY2017 % of Sales FY2016 % of Sales Segment Operating Margin As Reported 73$ 13.1 % 74$ 13.6 % Business
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 Sep 2016 Jun 2016 Sep 2015 Jun 2015 Total Parker 2 %+ 1 %- 11 %- 9 %- Diversified Industrial No
Slide 12: Cash Flow from Operating Activities FY2017 Q1
Cash Flow from Operating Activities FY2017 Q1 12 *Adjusted for Discretionary Pension Plan Contribution 1st Quarter Full Year FY 2017 % of Sales FY 2016 % of Sales As Reported Cash Flow From Operating Activities 114$ 4.2% 20$ 0.7% Discretionary Pension Plan Contribution 220$ 200$ Adjusted Cash Flow F
Slide 13: FY2017 Guidance
FY2017 Guidance EPS Midpoint: $6.50 As Reported, $6.75 Adjusted 13 Expected FY17 Adjusted Segment Operating Margins exclude FY17 Business Realignment Charges Expected FY17 Adjusted Earnings Per Share excludes FY17 Business Realignment Charges Sales Growth vs. Prior Year Diversified Industrial North
Slide 14: FY2017 Guidance Reconciliation to Prior Guidance
FY2017 Guidance Reconciliation to Prior Guidance 14 *Adjusted for Business Realignment Charges
Slide 15: ALY
PH ALY
Slide 16: Appendix
Appendix • Consolidated Statement of Income • Reconciliation of EPS • Business Segment Information • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Reconciliation of Cash Flow from Operations to Adjusted Cash Flow from Operations • Reconciliation of Net Income and MROS • Reconci
Slide 17: Consolidated Statement of Income (Unaudited)
Consolidated Statement of Income 17 (Unaudited) Three Months Ended September 30, (Dollars in thousands except per share amounts) 2016 2015 Net sales 2,743,131$ 2,869,348$ Cost of sales 2,106,006 2,200,904 Gross profit 637,125 668,444 Selling, general and administrative expenses 322,969 370,214 Inter
Slide 18: Reconciliation of EPS (Unaudited)
Reconciliation of EPS 18 (Unaudited) (Amounts in dollars) Three Months Ended September 30, 2016 2015 Earnings per diluted share 1.55$ 1.41$ Adjustments: Business realignment charges 0.06 0.11 Adjusted earnings per diluted share 1.61$ 1.52$
Slide 19: Business Segment Information (Unaudited)
Business Segment Information 19 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2016 2015 Net sales Diversif ied Industrial: North America 1,166,971$ 1,286,330$ International 1,014,923 1,038,447 Aerospace Systems 561,237 544,571 Total 2,743,131$ 2,869,348$ Segment operating incom
Slide 20: Consolidated Balance Sheet (Unaudited)
Consolidated Balance Sheet 20 (Unaudited) September 30, June 30, September 30, (Dollars in thousands) 2016 2016 2015 Assets Current assets: Cash and cash equivalents 1,393,850$ 1,221,653$ 974,268$ Marketable securities and other investments 746,708 882,342 815,483 Trade accounts receivable, net 1,49
Slide 21: Consolidated Statement of Cash Flows (Unaudited)
Consolidated Statement of Cash Flows 21 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2016 2015 Cash flows from operating activities: Net income 210,238$ 195,026$ Depreciation and amortization 75,333 78,222 Stock incentive plan compensation 35,818 35,381 Gain on sale of plant a
Slide 22: Reconciliation of Cash Flow from Operations to Adjusted Cash Flow from Operations
Reconciliation of Cash Flow from Operations to Adjusted Cash Flow from Operations 22 (Unaudited) (Dollars in thousands) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 Percent of sales Percent of sales As reported cash flow from operations 113,932$ 4.2% 19,939$ 0.7% Discr
Slide 23: Reconciliation of Net Income and MROS
Reconciliation of Net Income and MROS 23 (Unaudited) (Dollars in thousands) Three Months Ended September 30, 2016 2015 As Reported Net Income 210,238$ 195,026$ Business Realignment Charges 7,844 15,552 Adjusted Net Income 218,082$ 210,578$ Net Sales 2,743,131$ 2,869,348$ As Reported S gment Operatin
Slide 24: Reconciliation of Forecasted Segment Operating Margins and EPS
Reconciliation of Forecasted Segment Operating Margins and EPS 24 (Unaudited) (Amounts in dollars) Fiscal Year 2017 Forecasted earnings per diluted share $6.15 to $6.85 Adjustments: Business realignment charges .25 Adjusted forecasted earnings per diluted share $6.40 to $7.10 (Unaudited) Fiscal Year
Slide 25: Supplemental Sales Information Global Technology Platforms
Supplemental Sales Information Global Technology Platforms 25 (Unaudited) Three Months Ended Sept 30, (Dollars in thousands) 2016 2015 Net sales Diversif ied Industrial: Motion Systems 741,650$ 802,495$ Flow and Process Control 824,314 881,911 Filtration and Engineered Materials 615,930 640,371 Aero