Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q2 FY2013 Earnings Presentation
26 slides from Parker-hannifin's earnings presentation, Jan 18, 2013
Slide 1: 2nd Quarter FY2013 Earnings Release
2nd Quarter FY2013 Earnings Release Parker Hannifin Corporation Exhibit 99.2 January 18, 2013
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 2nd Quarter FY2013 Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 5: Highlights
Highlights 2nd Quarter FY2013 Sales • Essentially flat year over year • Weakness continues in all regions of Industrial International • Organic revenues decreased 4% • Acquisitions contributed 4% • $246m annualized revenue acquired in Q2 Net Income & EPS • Achieved $181m or $1.19 per diluted share •
Slide 6: Diluted Earnings Per Share
Diluted Earnings Per Share 2nd Quarter FY2013 6 $1.19 $1.56 $2.77 $3.47 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Q2 FY13 Q2 FY12 YTD FY13 YTD FY12
Slide 7: Influences on Earnings vs. 2nd Quarter FY2012
$1.56 $0.02 $0.05 $0.34 $1.19 Q2 FY12 Share Impact Tax Segment Operating Income Q2 FY13 Influences on Earnings 2nd Quarter FY2013 vs. 2nd Quarter FY2012 Driving Influences • Industrial International weakness -$0.15 • Industrial North America weakness -$0.05 • International Acquisition/Integration ex
Slide 8: Sales & Operating Margin - Total Parker
Sales & Operating Margin 2nd Quarter FY2013 - Total Parker 8 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 3,066$ (1.3)% 3,106$ 6,281$ (1.0)% 6,340$ Acquisitions 120 3.9 % 209 3.3 % Currency (19) (0.6)% (110) (1.7)% Adjusted Sales 2,965$ (4.6)% 6,182$ (2.6)% Operating
Slide 9: Sales & Operating Margin - Industrial North America
Sales & Operating Margin 2nd Quarter FY2013 - Industrial North America 9 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 1,198$ 1.2 % 1,183$ 2,464$ 3.2 % 2,388$ Acquisitions 61 5.1 % 98 4.1 % Currency 3 0.3 % 2 0.1 % Adjusted Sales 1,134$ (4.2)% 2,364$ (1.0)% Operating
Slide 10: Sales & Operating Margin - Industrial International
Sales & Operating Margin 2nd Quarter FY2013 - Industrial International 10 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 1,169$ (4.1)% 1,219$ 2,346$ (6.5)% 2,508$ Acquisitions 59 4.8 % 111 4.4 % Currency (22) (1.8)% (106) (4.3)% Adjusted Sales 1,132$ (7.1)% 2,341$ (6.6
Slide 11: Sales & Operating Margin - Aerospace
Sales & Operating Margin 2nd Quarter FY2013 - Aerospace 11 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 529$ 6.5 % 496$ 1,070$ 7.6 % 994$ Acquisitions - -- % - -- % Currency (1) (0.1)% (3) (0.2)% Adjusted Sales 530$ 6.6 % 1,073$ 7.8 % Operating Margin As reported 52$
Slide 12: Sales & Operating Margin - Climate & Industrial Controls
Sales & Operating Margin 2nd Quarter FY2013 - Climate & Industrial Controls 12 $ in millions FY2013 % Change FY2012 FY2013 % Change FY2012 Sales As reported 170$ (18.3)% 208$ 401$ (11.0)% 450$ Acquisitions - -- % - -- % Currency 1 0.2 % (3) (0.8)% Adjusted Sales 169$ (18.5)% 404$ (10.2)% Operating M
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 Dec 2012 Sept 2012 Dec 2011 Sept 2011 Total Parker 2 %- 6 %- 3 %+ 9 %+ Industrial North America 6 %- 11 %- 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 2nd Quarter FY2013 15 2nd Quarter Total Year FY2013 FY2012 FY2013 FY2012 As Reported 354.3$ 253.9$ 347.3$ 563.4$ As Reported % Sales 11.6% 8.2% 5.5% 8.9% Discretionary Pension Plan Contribution -$ -$ 225.6$ -$ Adjusted Cash From Operating Activities 354.3$ 253.9$
Slide 16: Financial Leverage
Financial Leverage Debt to Debt Equity 16 35.2% 28.9% 24.7% 26.1% 27.5% FY09 FY10 FY11 FY12 Q2 YTD FY13 Net Debt 22.2%
Slide 17: Earnings Outlook Assumptions: Sales & Operating Margins
FY 2013 Sales Change versus FY 2012 Industrial North America (.7)% -- 2.3 % Industrial International (4.7)% -- (1.6)% Aerospace 6.6 % -- 9.6 % Climate & Industrial Controls (14.5)% -- (11.5)% FY 2013 Operating Margin Percentages Industrial North America 16.5 % -- 16.9 % Industrial International 12.5
Slide 18: Earnings Outlook Assumptions
Earnings Outlook Assumptions Below Operating Income (+/-2.4%) • Expenses Below Segment Operating Income* • $466M at Midpoint • Tax Rate • 28.0% *Corporate Admin, Interest and Other Expense (Income) 18
Slide 19: Revised FY2013 EPS Guidance at Midpoint
$6.45 $0.08 $0.04 $0.04 $0.16 $6.45 FY13 Prior Guidance at Midpoint Other Expense Tax Share Impact Segment Operating Income FY13 Revised Guidance at Midpoint Revised FY2013 EPS Guidance at Midpoint 19 Low Midpoint High Diluted Earnings Per Share 6.15$ 6.45$ 6.75$
Slide 20: Questions and Answers
Parker Hannifin Corporation The Global Leader in Motion & Control Technologies 20 • Questions and Answers
Slide 21: Thank You
Thank You PH NYSE ENGINEERING YOUR SUCCESS.
Slide 22: Appendix
Appendix • Consolidated Statement of Income • Business Segment Information By Industry • Consolidated Balance Sheet • Consolidated Statement of Cash Flows
Slide 23: Consolidated Statement of Income (Unaudited)
Consolidated Statement of Income 23 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2012 2011 2012 2011 Net sales 3,065,495$ 3,106,832$ 6,280,430$ 6,340,713$ Cost of sales 2,421,972 2,381,322 4,899,419 4,795,764 Gross profit 6
Slide 24: Business Segment Information By Industry (Unaudited)
Business Segment Information By Industry 24 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2012 2011 2012 2011 Net sales Industrial: North America 1,197,705$ 1,183,352$ 2,463,752$ 2,388,169$ International 1,168,961 1,218,812 2,345,851 2,507,927 Aeros
Slide 25: Consolidated Balance Sheet (Unaudited)
Consolidated Balance Sheet 25 (Unaudited) December 31, June, 30 December 31, (Dollars in thousands) 2012 2012 2011 Assets Current assets: Cash and cash equivalents 497,635$ 838,317$ 487,984$ Accounts receivable, net 1,802,405 1,992,284 1,828,117 Inventories 1,515,325 1,400,732 1,452,664 Prepaid expe
Slide 26: Consolidated Statement of Cash Flows (Unaudited)
Consolidated Statement of Cash Flows 26 (Unaudited) Six Months Ended December 31, (Dollars in thousands) 2012 2011 Cash flows from operating activities: Net income 421,062$ 540,501$ Depreciation and amortization 163,827 164,131 Stock incentive plan compensation 46,527 44,462 Net change in receivable