Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q3 2014 Earnings Presentation
11 slides from Illinois Tool Works's earnings presentation, Oct 21, 2014
Slide 1: Third Quarter 2014 Conference Call
Third Quarter 2014 Conference Call E. Scott Santi, President & CEO Michael M. Larsen, Senior Vice President & CFO John Brooklier, Vice President, Investor Relations Aaron Hoffman, Vice President, Investor Relations October 21, 2014 FORWARD LOOKING STATEMENTS Safe Harbor Statement This conference cal
Slide 2: Q3 2014 Financial Summary
Q3 2014 Financial Summary Q3 2014 Actuals Highlights ● Enterprise initiatives contribute 120 bps of EPS +42% margin expansion $1.28 EPS $0.90 ● All time record … $772M quarterly operating Total $3.7B income $3.6B Revenue ● Total and organic revenue up 3.5% … -1% drag from product line simplification
Slide 3: Q3 2014 Organic Revenue Growth
Q3 2014 Organic Revenue Growth Growth by Geography Highlights Organic revenue +3.5% ● North America up 4% – Welding +10%, Automotive OEM +8%, Test & Measurement and Electronics +6% and Food 5% Equipment +6% 4% 3% 3% 1% ● International up 3% – Europe up 3% driven by Automotive OEM +9% and Food Equipm
Slide 4: Q3 2014 Operating Margins
Q3 2014 Operating Margins Operating Margins Key Drivers 20.9% 19.0% Q3 Enterprise Initiatives +120 bps Q3‘13 Q3‘14 Volume +80 OM% V bps Automotive OEM 23.4% +230 Price/Cost +10 T&M and Electronics 18.7 +240 Food Equipment 23.1 +320 Other (20) Polymers & Fluids 20.2 +210 Margin Expansion +190 bps Wel
Slide 5: Q3 2014 Segment Results: Automotive OEM
Q3 2014 Segment Results ($’s in millions) By Segment Automotive OEM Organic +8% Total +7% +230 bps Total Operating Revenue Income $631 23.4% $589 21.1% Q3'14 VPY% Q3‘14 VPY% Automotive OEM $631 7% $148 19% T&M and Electronics 586 6% 110 21% Q3‘13 Q3‘14 Q3‘13 Q3‘14 Total Revenue Operating Margin Food
Slide 6: Q3 2014 Segment Results: Test & Measurement and Food Equipment
Q3 2014 Segment Results ($’s in millions) Test & Measurement and Electronics Food Equipment Organic +5% Organic +5% Total +6% +240 bps Total +6% +320 bps 18.7% 23.1% $586 $575 $555 $542 19.9% 16.3% Q3‘13 Q3’14 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Total Revenue Operating Margin Total Revenue Operating
Slide 7: Q3 2014 Segment Results: Polymers & Fluids and Welding
Q3 2014 Segment Results ($’s in millions) Polymers & Fluids Welding Organic -2% Organic +5% Total -3% +210 bps Total +5% +80 bps 20.2% 26.2% $459 25.4% $504 $490 18.1% $438 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Total Revenue Operating Margin Total Revenue Operating Margin Dynamics Dynamics
Slide 8: Q3 2014 Segment Results: Construction and Specialty Products
Q3 2014 Segment Results ($’s in millions) Construction Products Specialty Products Organic +2% Organic Flat Total +1% +270 bps Total +1% +20 bps 18.9% $513 21.1% 21.3% $445 $510 $440 16.2% Q3‘13 Q3‘14 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Q3‘13 Q3‘14 Total Revenue Operating Margin Total Revenue Operating Margin D
Slide 9: 2014 Financial Guidance
2014 Financial Guidance Q4 2014 Guidance 2014 Guidance EPS +21% EPS +27% at mid-point at mid-point $1.07 - $1.15 $4.57 - $4.65 EPS $0.92 EPS $3.63 Organic: 2-3% Organic: 2-3% Total: 2-3% $3.6B Total: ~Flat $14.1B Total Total Revenue Revenue Q4’13 Q4’14F 2013 2014F ● Initiatives contribute ~100 bps o
Slide 10: Appendix
Appendix IT 10
Slide 11: Segment Results Q3 2014 vs. Q3 2013
Segment Results Q3 2014 vs. Q3 2013 Favorable / (Unfavorable) Automotive T&M and Food Polymers & Construction Specialty Total Revenue OEM Electronics Equipment Fluids Welding Products Products Organic 7.6% 5.2% 5.3% (2.0%) 5.0% 2.1% - Divestitures (0.1%) - - - - (1.4%) - Translation (0.4%) 0.4% 0.7%