Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q3 FY2013 Earnings Presentation
24 slides from Parker-hannifin's earnings presentation, Apr 25, 2013
Slide 1: 3rd Quarter FY2013 Earnings Release
3rd Quarter FY2013 Earnings Release Parker Hannifin Corporation April 25, 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 sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions made within the prior four quarters and the effects of currency exchange rates. This presentation also reconciles cash flow fro
Slide 4: Agenda
Agenda 4 • CEO 3rd Quarter FY2013 Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 5: Highlights
Highlights 3rd Quarter FY2013 Sales • Slightly down year over year • Organic revenues decreased 6% • Acquisitions contributed 4% • Signs global economy bottoming out Earnings & Margins • Achieved $257m or $1.68 per diluted share • Decreased International volume • Acquisition, divestiture & integrati
Slide 6: Diluted Earnings Per Share
Diluted Earnings Per Share 3rd Quarter FY2013 6 $1.68 $2.01 $4.46 $5.49 0.00 1.00 2.00 3.00 4.00 5.00 6.00 Q3 FY13 Q3 FY12 YTD FY13 YTD FY12
Slide 7: Influences on Earnings vs. 3rd Quarter FY2012
2.01 0.03 0.02 0.05 0.05 0.24 1.68 1 2 2 FY12 Q3 Actual Share Impact Corp G&A Other Expense Tax Segment Operating Income * FY13 Q3 ActualInfluences on Earnings 3rd Quarter FY2013 vs. 3rd Quarter FY2012 * Segment Operating Income decline mainly due to Industrial International 7
Slide 8: Sales & Operating Margin - Total Parker
Sales & Operating Margin 3rd Quarter FY2013 - Total Parker 8 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 3,307$ (2.5)% 3,394$ 9,588$ (1.5)% 9,734$ Acquisitions 134 3.9 % 344 3.5 % Currency (24) (0.7)% (134) (1.4)% Adjusted Sales 3,197$ (5.7)% 9,378$ (3.6)% Operating
Slide 9: Sales & Operating Margin - Industrial North America
Sales & Operating Margin 3rd Quarter FY2013 - Industrial North America 9 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 1,284$ (2.4)% 1,315$ 3,748$ 1.2 % 3,703$ Acquisitions 72 5.5 % 170 4.6 % Currency (1) (0.1)% 1 0.0 % Adjusted Sales 1,213$ (7.8)% 3,577$ (3.4)% Opera
Slide 10: Sales & Operating Margin - Industrial International
Sales & Operating Margin 3rd Quarter FY2013 - Industrial International 10 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 1,241$ (3.5)% 1,287$ 3,587$ (5.5)% 3,795$ Acquisitions 62 4.8 % 174 4.6 % Currency (22) (1.7)% (128) (3.4)% Adjusted Sales 1,201$ (6.6)% 3,541$ (6.7
Slide 11: Sales & Operating Margin - Aerospace
Sales & Operating Margin 3rd Quarter FY2013 - Aerospace 11 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 578$ 6.5 % 543$ 1,648$ 7.2 % 1,537$ Acquisitions - - % - - % Currency - - % (3) (0.1)% Adjusted Sales 578$ 6.5 % 1,651$ 7.3 % Operating Margin As reported 80$ 66$
Slide 12: Sales & Operating Margin - Climate & Industrial Controls
Sales & Operating Margin 3rd Quarter FY2013 - Climate & Industrial Controls 12 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 204$ (18.0)% 249$ 605$ (13.5)% 699$ Acquisitions - - % - - % Currency (1) (0.3)% (4) (0.6)% Adjusted Sales 205$ (17.7)% 609$ (12.9)% Operating
Slide 13: Order Rates
Order Rates 13 Excludes Acquisitions, Divestitures & Currency 3-month year-over-year comparisons of total dollars, except Aerospace Aerospace is calculated using a 12-month rolling average Mar 2013 Dec 2012 Mar 2012 Dec 2011 Total Parker 7 %- 2 %- 2 %+ 3 %+ Industrial North America 10 %- 6 %- 7 %+ 8
Slide 14: Balance Sheet Summary
Balance Sheet Summary • Cash • Working capital • Accounts receivable • Inventory • Accounts payable 14
Slide 15: Cash Flow from Operating Activities
Cash Flow from Operating Activities 3rd Quarter FY2013 15 3rd Quarter Total Year FY2013 FY2012 FY2013 FY2012 As Reported 371$ 443$ 719$ 1,006$ As Reported % Sales 11.2% 13.1% 7.5% 10.3% Discretionary Pension Plan Contribution -$ -$ 226$ -$ Adjusted Cash From Operating Activities 371$ 443$ 945$ 1,006
Slide 16: Guidance Assumptions: Sales & Segment Operating Margins
Guidance Assumptions Sales & Segment Operating Margins 16 FY 2013 Sales Change versus FY 2012 Total Parker (1.7)% -- 0.7% Industrial North America (0.1)% -- 1.9 % Industrial International (4.3)% -- (1.5)% Aerospace 7.1 % -- 9.1 % Climate & Industrial Controls (14.8)% -- (12.4)% FY 2013 Segment Opera
Slide 17: Guidance Assumptions Below Segment Operating Income
Guidance Assumptions Below Segment Operating Income Items (+/- 1.3%) • Corporate Admin, Interest and Other Expense (Income) • $471M at Midpoint • Tax Rate • 28.0% • Shares Outstanding • 152.2M 17
Slide 18: FY13 Full Year Guidance Maintained at Midpoint
6.45 0.03 0.03 6.45 FY13 Full Year Guidance @Q2 Segment Operating Income Other Items (Below the Line) FY13 Full Year Guidance @Q3 Maintained Midpoint of FY2013 Guidance Range Narrowed 18 Low Midpoint High Diluted Earnings Per Share 6.25$ 6.45$ 6.65$
Slide 19: NYSE Listed
[LISTED ] NYSE
Slide 20: Appendix
Appendix • Consolidated Statement of Income • Business Segment Information By Industry • Consolidated Balance Sheet • Consolidated Statement of Cash Flows
Slide 21: Consolidated Statement of Income (Unaudited)
Consolidated Statement of Income 21 (Unaudited) Three Months Ended March 31, Nine Months Ended March 31, (Dollars in thousands except per share amounts) 2013 2012 2013 2012 Net sales 3,307,041$ 3,393,563$ 9,587,471$ 9,734,276$ Cost of sales 2,569,189 2,590,315 7,468,608 7,386,079 Gross profit 737,85
Slide 22: Business Segment Information By Industry (Unaudited)
Business Segment Information By Industry 22 (Unaudited) Three Months Ended March 31, Nine Months Ended March 31, (Dollars in thousands) 2013 2012 2013 2012 Net sales Industrial: North America 1,283,649$ 1,315,357$ 3,747,401$ 3,703,526$ International 1,241,464 1,286,751 3,587,315 3,794,678 Aerospace
Slide 23: Consolidated Balance Sheet (Unaudited)
Consolidated Balance Sheet 23 (Unaudited) March 31, June, 30 March 31, (Dollars in thousands) 2013 2012 2012 Assets Current assets: Cash and cash equivalents 1,677,319$ 838,317$ 773,459$ Accounts receivable, net 2,017,126 1,992,284 2,061,501 Inventories 1,473,072 1,400,732 1,429,014 Prepaid expenses
Slide 24: Consolidated Statement of Cash Flows (Unaudited)
Consolidated Statement of Cash Flows 24 (Unaudited) Nine Months Ended March 31, (Dollars in thousands) 2013 2012 Cash flows from operating activities: Net income 677,654$ 853,190$ Depreciation and amortization 250,574 244,403 Stock incentive plan compensation 65,516 64,102 Net change in receivables,