Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q4 2023 Earnings Presentation
11 slides from Illinois Tool Works's earnings presentation, Feb 1, 2024
Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 February 1, 2024 Earnings Conference Call
Slide 2: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement This presentation and related conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding global supply chain chal
Slide 3: Q4'23 Financial Performance
Q4’23 Financial Performance GAAP EPS $2.95 $2.38 HIGHLIGHTS - Ex. one-time items** $2.34 $2.42 • Revenue growth of 0.3% in a challenging demand environment $4.0B $4.0B - Organic growth of (0.5)%, divestiture & FX impact of +0.8% - Customer/channel partner inventory reduction and automotive industry
Slide 4: Q4'23 Segment Performance: Free Cash Flow and Automotive OEM
Q4’23 Segment Performance FREE CASH FLOW PERFORMANCE* AUTOMOTIVE OEM +9% +210 bps $814M 19.2% (160) bps 80/20 FTB $745M 17.1% Restructuring $908M 17.6% $856M $705M $615M Q1’23 Q2’23 Q3’23 Q4’23 Q4'22 Q4'23 Q4'22 Q4'23 Total Revenue Operating Margin % to Net 86% 94% 111% 127% Income • Organic revenue
Slide 5: Q4'23 Segment Performance: Food Equipment, Test & Measurement/Electronics
Q4’23 Segment Performance FOOD EQUIPMENT TEST & MEASUREMENT/ELECTRONICS +4% 27.6% (60) bps $732M $731M ~flat $655M 27.0% 26.9% $631M 25.3% (160) bps Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Total Revenue Operating Margin Total Revenue Operating Margin • Organic revenue 3% • Organic revenue (1
Slide 6: Q4'23 Segment Performance: Welding, Polymers & Fluids
Q4’23 Segment Performance WELDING POLYMERS & FLUIDS 31.6% (200) bps $481M (6)% 29.6% (3)% +270 bps $455M $440M 28.5% $451M 25.8% Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Total Revenue Operating Margin Total Revenue Operating Margin • Organic revenue (7)% • Organic revenue (2)% • Equipment (8)
Slide 7: Q4'23 Segment Performance: Construction and Specialty Products
Q4’23 Segment Performance CONSTRUCTION PRODUCTS SPECIALTY PRODUCTS $470M $459M (2)% 26.9% +140 bps $462M (5)% +90 bps $437M 26.6% 25.5% 25.7% Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Total Revenue Operating Margin Total Revenue Operating Margin • Organic revenue (4)% • Organic revenue (5)%; d
Slide 8: 2023 Financial Performance
2023 Financial Performance HIGHLIGHTS GAAP EPS $9.77 $9.74 - Ex. divestiture gains $9.17 +6% • Delivered solid organic growth of +2% in a challenging macro demand environment with best-in-class operating margins and return on capital $15.9B $16.1B +1% +2% • Executed with discipline and generated rec
Slide 9: 2024 Financial Guidance
2024 Financial Guidance HIGHLIGHTS GAAP EPS $9.74 $10.00 - $10.40 +3 - 7% • Projecting revenue growth of 2 to 4% $16.4 - $16.7B - Based on current levels of demand $16.1B +1 - 3% - Positive foreign currency translation impact of ~1% Organic • Operating margin expansion of ~100 bps at mid-point REVEN
Slide 10: 2024 Organic Growth Rate Projections by Segment
2024 Organic Growth Rate Projections by Segment Automotive Food Polymers Construction Specialty T&M / E Welding OEM Equipment & Fluids Products Products 2024E 3 to 5% 3 to 5% 2 to 4% 3 to 5% 3 to 5% (3) to (1)% (3) to (1)% 2023 9% 8% ~flat ~flat ~flat (3)% (5)% 2022 12% 23% 9% 16% 11% 14% ~flat 10 N
Slide 11: Q&A
Q&A