Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q3 2018 Earnings Presentation
13 slides from Illinois Tool Works's earnings presentation, Oct 24, 2018
Slide 1: Third Quarter 2018 Earnings Conference Call
Third Quarter 2018 Earnings Conference Call October 24, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements NON-GAAP MEASURES The company uses certain non-GAAP measures in discussing the company’s performance. The reconciliation of those measures to the most comparable GAAP measures is detailed in ITW’s press release for the third quarter of 2018, which is available at www.itw.c
Slide 3: ITW 2018 Investor Day - Save the Date
ITW 2018 Investor Day SAVE THE DATE Friday, December 7 9:00 a.m., EST InterContinental Hotel 300 West 44th St New York, NY Register on our website: Investor.itw.com Q3'18 EARNINGS CALL | 3
Slide 4: Q3 2017 Legal Settlement Impact
Q3 2017 Legal Settlement Impact As previously disclosed, the company entered into a confidential legal settlement in 2017, resulting in a favorable pre-tax impact of $80 million on the third quarter 2017 results. The following schedule illustrates the impact of this item on the company’s reported fi
Slide 5: Q3 2018 Financial Performance (Ex. 2017 Legal Settlement)
Q3 2018 Financial Performance (Ex. 2017 Legal Settlement) Financial Results Highlights +11% EPS +11% to $1.90 vs. guidance $1.80 to $1.90 $1.90 $1.71 − EPS +13% ex. $(0.03) EPS impact from foreign currency translation EPS Organic growth +2% − North America +4%, International (1)% REVENUE $3.6B $
Slide 6: Q3 2018 Operating Margin (Ex. 2017 Legal Settlement)
Q3 2018 Operating Margin (Ex. 2017 Legal Settlement) Operating Margin Key Margin Drivers Q3'18 +30 bps Year-over-year Enterprise Initiatives +100 bps 24.6% 24.3% 24.1% Volume +20 Price/Cost (60) Other (30) Q1'18 Q2'18 Q3'18 Margin Expansion +30 bps Enterprise +110 bps +110 bps +100 bps Initiatives P
Slide 7: Q3 2018 Segment Performance
Q3 2018 Segment Performance International Organic Growth Automotive OEM (2)% (10) bps Q2’18 Q3’18 $795 $781 21.6% 21.5% Automotive OEM 4% (5)% Food Equipment 1 3 T&M and Electronics 3 5 Q3'17 Q3'18 Q3'17 Q3'18 Total Revenue Operating Margin Welding 1 12 Q3 Performance Polymers & Fluids ~flat (5) O
Slide 8: Q3 2018 Segment Performance
Q3 2018 Segment Performance Food Equipment Test & Measurement/Electronics +3% (70) bps +2% +60 bps $567 27.3% 26.6% $549 $536 24.1% 24.7% $525 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Total Revenue Operating Margin Total Revenue Operating Margin Q3 Performance Q3 Performance Organic growth
Slide 9: Q3 2018 Segment Performance
Q3 2018 Segment Performance Welding Polymers & Fluids $414 +9% 28.2% +160 bps (4)% +110 bps $378 26.6% $434 22.1% $415 21.0% Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Total Revenue Operating Margin Total Revenue Operating Margin Q3 Performance Q3 Performance Organic growth of 10% Organic r
Slide 10: Q3 2018 Segment Performance
Q3 2018 Segment Performance Construction Products Specialty Products (2)% +40 bps (5)% (90) bps $498 27.7% $440 $431 25.8% 26.8% 25.4% $475 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Total Revenue Operating Margin Total Revenue Operating Margin Q3 Performance Q3 Performance Organic growth of
Slide 11: Price/Cost and Tariff Update
Price/Cost and Tariff Update Ongoing pricing actions more than offset 3% raw material cost inflation on a dollar for dollar basis – Overall, price increases are beginning to catch up to raw material cost inflation (typically a one quarter lag due to notice periods/provisions) – Margin dilution imp
Slide 12: 2018 Guidance
2018 Guidance Financial Guidance 2018 Highlights +15% Narrowed 2018 GAAP EPS guidance: $7.55 to $7.65 − 15% EPS growth at the mid-point (no change) $7.55 - $7.65 EPS $6.59* Solid demand in North America, International mixed − Total revenue growth of 3 - 4%, organic growth of 2 - 3% $14.7 to $14.
Slide 13: ITW Q&A
TW Q&A