Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q2 2025 Earnings Presentation
27 slides from Parker-hannifin's earnings presentation, Jan 30, 2025
Slide 1: Fiscal 2025 Second Quarter Earnings Presentation
Parker Hannifin Corporation Fiscal 2025 Second Quarter Earnings Presentation January 30, 2025
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures 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. Often but
Slide 3: Operational Excellence Delivers Record Performance
Operational Excellence Delivers Record Performance § Top quartile safety performance FY25 Q2 Highlights § Strength of our balanced portfolio 19% $4.7B Reduction in Sales Recordable (1.6%) Reported Incidents +0.7% Organic1 § Continued strong Aerospace aftermarket 25.6% 26.8% § Record Adjusted Segment
Slide 4: Our Business System Drives Operational Excellence
Our Business System Drives Operational Excellence 4
Slide 5: The Parker Lean System is Fundamental to our Culture
The Parker Lean System is Fundamental to our Culture 5
Slide 6: The Win Strategy Drives Performance through the Cycle
The Win Strategy Drives Performance through the Cycle Background Win Strategy Execution FY25 YTD Results § A North American Filtration § Safety division example § The Parker Lean 1st Quartile (MSD%) § Diverse exposure across System Safety Sales Growth industrial market verticals § Simple by Design §
Slide 7: A Transformed Portfolio: Strong Long-Cycle Orders
A Transformed Portfolio: Strong Long-Cycle Orders Parker Order Rates § Order rates increased across all reported businesses § Aerospace order strength continued in both Aftermarket and OEM 5% 5% § Industrial North America orders turned 3% 3% 2% 2% 2% positive on long-cycle strength 1% 1% 0% FY23 Q2
Slide 8: FY25 Sales Growth Forecast by Key Market Verticals
FY25 Sales Growth Forecast by Key Market Verticals Previous Current Current vs. % of Key Market Verticals FY25 Commentary FY25 Previous Sales Guidance Guidance Guidance Aerospace & § Aftermarket strength continues 33% ~10% ~11% Defense § Gradual OEM rate increase In-Plant & § Continued delays in exp
Slide 9: Summary of Fiscal 2025 2nd Quarter Highlights
Summary of Fiscal 2025 2nd Quarter Highlights
Slide 10: FY25 Q2 Financial Summary
FY25 Q2 Financial Summary $ Millions, except per share amounts FY25 Q2 FY25 Q2 FY24 Q2 YoY Change As Reported Adjusted¹ Adjusted¹ Adjusted Sales $4,743 $4,743 $4,821 (1.6%) Segment Operating Margin 22.1% 25.6% 24.5% +110 bps EBITDA Margin 31.5% 26.8% 25.7% +110 bps Net Income $949 $853 $802 +6.3% EP
Slide 11: FY25 Q2 Adjusted Earnings per Share Bridge
FY25 Q2 Adjusted Earnings per Share Bridge $0.03 $0.03 $0.17 ($0.03) ($0.02) $0.20 $6.53 $5.96 $6.13 $6.15 $5.16 $4.74 FY24 Q2 Segment Interest Income Other Corp G&A Share FY25 Q2 Adjusted Operating Expense Tax Expense Count Adjusted EPS¹ Income EPS¹ 1. FY24 Q2 As Reported EPS of $5.23. FY25 Q2 As R
Slide 12: FY25 Q2 Segment Performance
FY25 Q2 Segment Performance Segment Segment Sales Operating Operating As Reported $ Margin Margin Order Organic %1 As Reported Adjusted 1 Rates2 Commentary Diversified Industrial § Record adjusted segment operating margins North America $1,928M 22.1% 24.6% +3% § Continued softness in transportation
Slide 13: FY25 Q2 YTD Cash Flow Performance
FY25 Q2 YTD Cash Flow Performance Cash Flow Highlights Cash Flow from Operations Free Cash Flow1 $1.7B 17.4% 17.4% 15.2% Cash Flow from Cash Flow from Operations Operations 14.0% 11.9% +24.2% growth Margin $1.5B 15.2% $1.7B $1.5B Free Cash Flow1 Free Cash Flow $1.4B $1.1B +27.4% growth Margin1 $1.5B
Slide 14: FY25 Guidance Update
FY25 Guidance Update EPS Midpoint: $24.76 As Reported, $26.70 Adjusted FY25 Q3 Guidance Metric FY25 Full Year Full Year Assumptions Midpoint § Currency unfavorable (~1%) Reported Sales (2%) - 1% ~$4.9B § Divestitures impact (~1.5%) § Raised Aerospace organic growth to 11% Organic Sales Growth1 ~2% ~
Slide 15: What Drives Parker
What Drives Parker § Safety, Engagement, Ownership § Living up to Our Purpose § Top Quartile Performance § Great Generators & Deployers of Cash 15
Slide 16: Upcoming Event Calendar
Upcoming Event Calendar FY25 Q3 Earnings Release May 1, 2025 FY25 Q4 Earnings Release August 7, 2025
Slide 17: Appendix
Appendix § FY25 Guidance Details § Reconciliation of Organic Growth § Adjusted Amounts Reconciliation – Consolidated Statement of Income § Adjusted Amounts Reconciliation – Segment Operating Income § Reconciliation of North American Filtration Division Margin to North American Filtration Division Ad
Slide 18: FY25 Guidance Details
FY25 Guidance Details Sales Growth vs. Prior Year As Reported Organic1 Additional Items As Reported Adjusted1 Diversified Industrial Segment Corporate G&A ~$215M ~$215M North America Businesses (8%) – (5%) (4%) – (1%) Interest Expense ~$405M ~$405M International Businesses (4%) – (1%) (1.5%) – 1.5%
Slide 19: Reconciliation of Organic Growth
Reconciliation of Organic Growth (Dollars in thousands) (Unaudited) Quarter-to-Date As Reported Adjusted As Reported Net Sales December 31, 2024 Currency Divestitures December 31, 2024 December 31, 2023 Diversified Industrial $ 3,252,806 $ 46,362 $ 67,385 $ 3,366,553 $ 3,514,473 Aerospace Systems 1,
Slide 20: Adjusted Amounts Reconciliation Consolidated Statement of Income
Adjusted Amounts Reconciliation Consolidated Statement of Income (Dollars in thousands, except per share data) (Unaudited) Quarter-to-Date FY 2025 Acquired Business Meggitt As Reported Intangible Asset Realignment Costs to Gain on Adjusted December 31, 2024 % of Sales Amortization Charges Achieve Di
Slide 21: Adjusted Amounts Reconciliation Segment Operating Income
Adjusted Amounts Reconciliation Segment Operating Income (Dollars in thousands) (Unaudited) Quarter-to-Date FY 2025 Acquired Business Meggitt As Reported Intangible Asset Realignment Costs to Gain on Adjusted December 31, 2024 % of Sales Amortization Charges Achieve Divestitures December 31, 2024 %
Slide 22: Reconciliation of North American Filtration Division Margin
Reconciliation of North American Filtration Division Margin to North American Filtration Division Adjusted Margin (Unaudited) (Amounts in percentages) 6 Months 6 Months ended ended 12/31/23 12/31/24 North Am erican Filtration Division Margin 22.3% 22.5% Adjustments: Acquisition-related intangible as
Slide 23: Reconciliation of EBITDA to Adjusted EBITDA
Reconciliation of EBITDA to Adjusted EBITDA (Dollars in thousands) Three Months Ended (Unaudited) December 31, 2024 % of Sales 2023 % of Sales Net sales $ 4,742,593 100.0% $ 4,820,947 100.0% Net income $ 948,649 20.0% $ 682,057 14.1% Income taxes 217,208 4.6% 186,108 3.9% Depreciation 87,697 1.8% 85
Slide 24: Reconciliation of Free Cash Flow Margin
Reconciliation of Free Cash Flow Margin (Unaudited) Six Months Ended December 31, (Dollars in thousands) 2024 2023 Net Sales $ 9,646,577 $ 9,668,435 Cash Flow from Operations $ 1,678,733 $ 1,351,987 Capital Expenditures (216,493) (204,117) Free Cash Flow $ 1,462,240 $ 1,147,870 Free Cash Flow Margin
Slide 25: Supplemental Sales Information
Supplemental Sales Information Global Technology Platforms (Unaudited) Three Months Ended December 31, (Dollars in thousands) 2024 2023 Net sales Diversified Industrial: Motion Systems $ 804,462 $ 917,966 Flow and Process Control 1,059,614 1,122,400 Filtration and Engineered Materials 1,388,730 1,47
Slide 26: Reconciliation of Q3 FY25 Guidance
Reconciliation of Q3 FY25 Guidance RECONCILIATION OF FORECASTED EARNINGS PER SHARE (Unaudited) (Amounts in dollars) Q3 Fiscal Year 2025 Forecasted earnings per diluted share ~$5.71 Adjustments: Business realignment charges 0.10 Costs to achieve 0.03 Acquisition-related intangible asset amortization
Slide 27: Reconciliation of FY25 Guidance
Reconciliation of FY25 Guidance RECONCILIATION OF ORGANIC GROWTH RECONCILIATION OF FORECASTED EARNINGS PER SHARE (Unaudited) (Unaudited) Fiscal Year 2025 (Amounts in dollars) Fiscal Year 2025 (Amounts in percentages) Forecasted Net Adjusted Forecasted Forecasted earnings per diluted share $24.46 to