Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q2 2005 Earnings Presentation
28 slides from Parker-hannifin's earnings presentation, Jan 18, 2005
Slide 1: Quarterly Earnings Release 2nd Quarter FY 2005
Exhibit 99.2 Parker Hannifin Corporation Quarterly Earnings Release 2nd Quarter FY 2005 January 18, 2005
Slide 2: Forward Looking Statements
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
Slide 3: Non-GAAP Financial Measure
Non-GAAP Financial Measure This presentation reconciles sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions and divestitures made within the prior four quarters as well as the effects of currency exchange rates on sales. The effects of
Slide 4: Discussion Agenda
Discussion Agenda Financial Highlights Influences on Sales & Earnings WIN Strategy Balance Sheet & Cash Flow Trends Outlook Questions & Answers
Slide 5: Financial Highlights: EPS
Financial Highlights EPS - 2nd Quarter and YTD as of Dec 31, 2004 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2Q FY 05 2Q FY 04 YTD FY 05 YTD FY 04 $1.41 $0.47 $2.52 $0.95 - 2Q FY 05 includes $0.47 from discontinued operations. - 2Q FY 04 includes $0.02 from discontinued operations. - YTD FY 05 includ
Slide 6: Financial Highlights: Sales
Financial Highlights Sales – 2nd Quarter and YTD through December 31 2nd Quarter YTD FY05 FY04 FY05 FY04 Sales $1,942.9 $1,593.3 $3,862.9 $3,155.4 % change 21.9% 22.4% Sales from acquisitions & divestitures $112.3 $11.2 $166.7 $21.7 Sales without acquisitions & divestitures $1,830.6 $1,582.1 $3,696.
Slide 7: Significant Influences on Sales
Significant Influences on Sales Continued Industrial End Market Strength Aerospace Commercial Defense Globalization Trends
Slide 8: Parker New Order Rates: Industrial North America
Parker New Order Rates Industrial North America 30 20 10 0 -10 -20 -30 -40 J O J 9 6 A J O J 9 7 A J O J 9 8 A J O J 9 9 A J O J 0 0 A J O J 0 1 A J O J 0 2 A J O J 0 3 A J O J A 0 4 J O Current month vs. prior year
Slide 9: Parker New Order Rates: Industrial R.O.W.
Parker New Order Rates Industrial R.O.W. 30 25 20 15 10 5 0 -5 -10 -15 J O J 9 6 A J O J 9 7 A J O J 9 8 A J O J 9 9 A J O J 0 0 A J O J 0 1 A J O J 0 2 A J O J 0 3 A J O J 0 4 A J O Current month vs. prior year
Slide 10: Parker New Order Rates: Climate & Industrial Controls
Parker New Order Rates Climate & Industrial Controls 30 25 20 15 10 5 0 -5 -10 -15 -20 J O J 0 2 A J O J 0 3 A J O J 0 4 A J O Current month vs. prior year
Slide 11: Parker New Order Rates: Aerospace
Parker New Order Rates Aerospace 30 20 10 0 -10 -20 -30 J O J 9 6 A J O J 9 7 A J O J 9 8 A J O J 9 9 A J O J 0 0 A J O J 0 1 A J O J 0 2 A J O J 0 3 A J O J 0 4 A J O Average last 12 months orders to previous 12 months orders
Slide 12: Influences on Earnings
Influences on Earnings Increased Volume Win Strategy Restructuring/Move to Low Cost Countries Sales Mix – Aerospace
Slide 13: Segment Reporting: Industrial North America
Segment Reporting Industrial North America FY2005 FY2004 2nd Qtr YTD 2nd Qtr YTD Sales As reported $819.2 $1,651.6 $685.4 $1,353.2 % change 19.5% 22.1% Acquisitions & Divestitures $37.8 $52.8 $5.3 $9.9 without Acquisitions & Divestitures $781.4 $1,598.8 $680.1 $1,343.3 % change 14.9% 19.0% Currency
Slide 14: Segment Reporting: Industrial Rest of World
Segment Reporting Industrial Rest of World FY 2005 FY 2004 2nd Qtr YTD 2nd Qtr YTD Sales As reported $583.2 $1,132.2 $441.4 $863.3 % change 32.1% 31.2% Acquisitions & Divestitures $43.5 $82.9 without Acquisitions & Divestitures $539.7 $1,049.3 $441.4 $863.3 % change 22.3% 21.5% Currency effects $46.
Slide 15: Segment Reporting: Aerospace
Segment Reporting Aerospace FY 2005 FY 2004 2nd Qrt YTD 2nd Qrt YTD Sales As reported $327.0 $658.1 $289.8 $574.4 % change 12.8% 14.6% Acquisitions & Divestitures without Acquisitions & Divestitures $327.0 $658.1 $289.8 $574.4 % change 12.8% 14.6% Currency effects $1.7 $3.2 without Acquisitions, Cur
Slide 16: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls FY 2005 FY 2004 2nd Qtr YTD 2nd Qtr YTD Sales As reported $176.5 $342.0 $144.7 $300.6 % change 22.0% 13.8% Acquisitions & Divestitures $31.0 $31.0 without Acquisitions & Divestitures $145.5 $311.0 $144.7 $300.6 % change 0.6% 3.5% Currency effects $4.1
Slide 17: Segment Reporting: Other
Segment Reporting Other FY 2005 FY 2004 2nd Qtr YTD 2nd Qtr YTD Sales As reported $37.0 $79.0 $32.0 $63.9 % change 15.5% 23.6% Acquisitions & Divestitures $5.9 $11.8 without Acquisitions & Divestitures $37.0 $79.0 $26.1 $52.1 % change 41.8% 51.6% Currency effects $3.5 $6.8 without Acquisitions, Dive
Slide 18: Balance Sheet Summary
Balance Sheet Summary Cash Working Capital Inventory Accounts Receivable PP & E Shareholders Equity
Slide 19: Financial Leverage
Financial Leverage Debt to Debt Equity 38.0% 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 20.0% Target 24.0% FY99 FY00 FY01 FY02 FY03 FY04 Q2 FY05
Slide 20: Strong Cash Flow
Strong Cash Flow FY05 YTD $352 Operating Cash Flow $800 $700 $600 $500 $400 $300 $200 $100 $0 12.0% 10.0% 8.0% 6.0% 4.0% % to Sales FY 99 FY 00 FY 01 FY 02 FY 03 FY 04
Slide 21: FY 2005 Earnings Outlook Assumptions: Segments
FY 2005 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2005 Sales change vs. FY 2004 NA Industrial 15.5% - 17.0% Industrial ROW 14.0% - 15.5% Aerospace 8.0% - 9.5% CIC 18.0% - 19.0% Other 21.0% - 23.0% FY 2005 Change in Operating Margin percentage vs. Basis points FY 2004 NA Indust
Slide 22: FY 2005 Earnings Outlook Assumptions below Operating Margin
FY 2005 Earnings Outlook Assumptions below Operating Margin Corporate Admin. Interest Expense Other Exp. (Income) Tax Rate 5% to 6% vs. FY 2004 -7% to -9% vs. FY 2004 +150% to +170% vs. FY 2004 30.0%
Slide 23: Earnings Outlook
Earnings Outlook Fiscal Year 2005 3rd Quarter EPS Range $1.10 - $1.30 Fiscal Year 2005 EPS Range $4.75 - $5.15 (Includes $0.49 From Discontinued Operations)
Slide 24: Forecast Risks
Forecast Risks Raw Material Price Increases Interest Rates Aerospace Recovery Semiconductor Industry Heavy Duty Truck Stability
Slide 25: Questions & Answers...
Questions & Answers... anythingmens Possible: Possible:
Slide 26: Appendix
Appendix FY 2005 Income Statements
Slide 27: Income Statement – 2nd Quarter
Income Statement – 2ndQuarter FY 2005 FY 2004 % of Sales % of Sales Net sales $1,942.9 100.0% $1,593.3 100.0% Cost of sales 1,546.4 79.6% 1,313.8 82.5% Gross profit 396.5 20.4% 279.5 17.5% S, G & A 220.8 11.4% 183.5 11.5% Interest expense (17.3) -0.9% (17.3) -1.1% Interest & other income 1.6 0.1% (0
Slide 28: Income Statement – YTD
Income Statement – YTD FY 2005 FY 2004 % of Sales % of Sales Net sales $3,862.9 100.0% $ 3,155.4 100.0% Cost of sales 3,056.8 79.1% 2,596.7 82.3% Gross profit 806.1 20.9% 558.8 17.7% S, G & A 418.0 10.8% 358.4 11.4% Interest expense (33.5) -0.9% (39.0) -1.2% Interest & other income (9.2) -0.2% (2.4)