Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q2 2015 Earnings Presentation
24 slides from Parker-hannifin's earnings presentation, Jan 27, 2015
Slide 1: 2nd Quarter Fiscal Year 2015 Earnings Release
2nd Quarter Fiscal Year 2015 Earnings Release Parker Hannifin Corporation January 27, 2015 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 • Key Performance Measures & Outlook • Chairman Closing Comments • Questions and Answers
Slide 4: Highlights 2nd Quarter FY2015
Highlights 2nd Quarter FY2015 • Record Second Quarter Sales of $3.1B • Record As Reported Earnings per Share of $1.80 • Record Adjusted Earnings per Share of $1.84 • Organic Growth of 4.2% • Orders increased 4% and Positive Across all Segments • Segment Operating Margins 13.7% • 150 basis point incr
Slide 5: Leadership Transition
Leadership Transition Tom Williams Chief Executive Officer Lee Banks, President & Chief Operating Officer
Slide 6: Diluted Earnings Per Share 2nd Quarter FY2015
Diluted Earnings Per Share 2nd Quarter FY2015 6 * FY 15 EPS Adjusted for Restructuring Activities * FY 14 EPS Adjusted for Restructuring Activities, Gain on JV with GE Aviation and Asset Write Downs $1.80 $1.66 FY15 Q2 FY14 Q2 As Reported EPS $1.84 $1.30 FY15 Q2* FY14 Q2** Adjusted EPS* *
Slide 7: Influences on Adjusted Earnings Per Share
Influences on Adjusted Earnings Per Share 2nd Quarter FY2015 vs. 2nd Quarter FY2014 7 * FY 15 EPS Adjusted for Restructuring Activities * FY 14 EPS Adjusted for Restructuring Activities, Gain on JV with GE Aviation and Asset Write Downs
Slide 8: Sales & Segment Operating Margin Total Parker
Sales & Segment Operating Margin Total Parker 8 $ in millions 2nd Quarter FY2015 % Change FY2014 Sales As Reported 3,135$ 0.9 % 3,106$ Acquisitions 6 0.2 % Currency (108) (3.5)% Organic Sales 3,237$ 4.2 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported 430$ 13.7 % 380$ 12.2
Slide 9: Sales & Segment Operating Margin Diversified Industrial North America
Sales & Segment Operating Margin Diversified Industrial North America 9 $ in millions 2nd Quarter FY2015 % Change FY2014 Sales As Reported 1,389$ 4.8 % 1,325$ Acquisitions 4 0.3 % Currency (10) (0.7)% Organic Sales 1,395$ 5.2 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported
Slide 10: Sales & Segment Operating Margin Diversified Industrial International
Sales & Segment Operating Margin Diversified Industrial International 10 $ in millions 2nd Quarter FY2015 % Change FY2014 Sales As Reported 1,188$ (7.0)% 1,277$ Acquisitions 2 0.2 % Currency (96) (7.5)% Organic Sales 1,282$ 0.3 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Report
Slide 11: Sales & Segment Operating Margin Aerospace Systems
Sales & Segment Operating Margin Aerospace Systems 11 $ in millions 2nd Quarter FY2015 % Change FY2014 Sales As Reported 558$ 10.8 % 504$ Acquisitions - - % Currency (2) (0.4)% Organic Sales 560$ 11.2 % FY2015 % of Sales FY2014 % of Sales Segment Operating Margin As Reported 67$ 12.0 % 45$ 8.9 % Res
Slide 12: Order Rates
Order Rates 12 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 2014 Sept 2014 Dec 2013 Sept 2013 Total Parker 4 %+ 5 %+ 5 %+ 5 %+ Diversified Industrial N
Slide 13: Cash Flow from Operating Activities
Cash Flow from Operating Activities FY2015 YTD 13 FY 2015 % of Sales FY 2014 % of Sales As Reported Cash Flow From Operating Activities 538 8.4% 540 8.5% Discreti nary Pension Plan Contribution 75 Adjusted Cash Flow From Operating Activities 538 8.4% 61 9.7% $538 $615 FY15 FY14
Slide 14: FY2015 Guidance
FY2015 Guidance Adjusted EPS Increased to $8.10 Midpoint 14 FY15 Adjusted Sales Growth %’s calculated from FY14 Sales adjusted for JV with GE Aviation FY15 Adjusted Segment Operating Margins exclude FY15 Restructuring expenses Adjusted Sales Growth vs. Prior Year Diversified Industrial North America
Slide 15: FY2015 Guidance Reconciliation to Prior Guidance at Midpoint
FY2015 Guidance Reconciliation to Prior Guidance at Midpoint 15 * FY 15 EPS Adjusted for Restructuring Activities
Slide 16: [LISTED ]
[LISTED ] NYSE
Slide 17: Appendix
Appendix • Consolidated Statement of Income • Reconciliation of Net Income & EPS • Business Segment Information By Industry • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Supplemental Sales Information – Global Technology Platforms • Reconciliation of Forecasted EPS
Slide 18: Consolidated Statement of Income
Consolidated Statement of Income 18 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2014 2013 2014 2013 Net sales 3,134,993$ 3,106,006$ 6,404,925$ 6,332,150$ Cost of sales 2,401,584 2,419,971 4,861,449 4,896,380 Gross profit 7
Slide 19: Reconciliation of Net Income & EPS
Reconciliation of Net Income & EPS 19 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2014 2013 2014 2013 Net income 267,335$ 253,404$ 547,506$ 497,724$ Adjustments: Restructuring charges 6,450 9,565 11,962 18,134 Asset w rite
Slide 20: Business Segment Information By Industry
Business Segment Information By Industry 20 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2014 2013 2014 2013 Net sales Diversif ied Industrial: North America 1,389,207$ 1,325,402$ 2,861,019$ 2,713,277$ International 1,187,400 1,276,851 2,450,897 2,
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet 21 (Unaudited) December 31, June 30, December 31, (Dollars in thousands) 2014 2014 2013 Assets Current assets: Cash and cash equivalents 1,075,307$ 1,613,555$ 2,139,522$ Marketable securities and other investments 886,879 573,701 - Trade accounts receivable, net 1,572,864
Slide 22: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 22 (Unaudited) Six Months Ended December 31, (Dollars in thousands) 2014 2013 Cash flows from operating activities: Net income 547,506$ 497,724$ Depreciation and amortization 160,625 170,090 Stock incentive plan compensation 52,217 75,370 Goodw ill and intangible
Slide 23: Reconciliation of Forecasted EPS
Reconciliation of Forecasted EPS 23 (Unaudited) Fiscal Year (Amounts in dollars) 2015 Forecasted earnings per diluted share $7.70 to $8.10 Adjustments: Restructuring .20 Adjusted forecasted earnings per diluted share $7.90 to $8.30
Slide 24: Supplemental Sales Information Global Technology Platforms
Supplemental Sales Information Global Technology Platforms 24 (Unaudited) Three Months Ended Dec 31, Six Months Ended Dec 31, (Dollars in thousands) 2014 2013 2014 2013 Net sales Diversif ied Industrial: Motion Systems 895,661$ 928,466$ 1,842,925$ 1,862,654$ Flow and Process Control 985,012 1,001,36