Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q4 2009 Earnings Presentation
32 slides from Illinois Tool Works's earnings presentation, Jan 27, 2010
Slide 1: ITW Conference Call Fourth Quarter
ITW Conference Call Fourth Quarter Exhibit 99.2
Slide 2: Agenda
ITW Agenda 1. Introduction…………………...….. John Brooklier/David Speer 2. Financial Overview…………..….. Ron Kropp 3. Reporting Segments………....…. John Brooklier 4. 2010 Forecasts…………………… Ron Kropp 5. Q & A………………......……...…... John Brooklier/Ron Kropp/David Speer
Slide 3: Forward-Looking Statements
ITW Forward - - Looking Statements This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding operating performance, revenue growth, diluted income per share from continuing o
Slide 4: Conference Call Playback
Conference Call Playback Replay number: 402-220-3450 No pass code necessary Telephone replay available through midnight of February 10, 2010 Webcast / PowerPoint replay available at itw.com website
Slide 5: Operating Revenues and Income, Q4
Operating Revenues Operating Income % of Revenues Income from Continuing Operations Income Amount Income Per Share-Diluted Net Income Income Amount Income Per Share-Diluted Free Operating Cash Flow 2008 2009 F(U) Last Year Q4 Q4 Amount % 3,954.0 3,757.4 (196.6) 5.0% 454.5 476.3 21.8 48% 11.5% 12.7%
Slide 6: Quarterly Operating Analysis
ITW Quarterly Operating Analysis
Slide 7: Operating Income to Net Income, Q4
Operating Income Interest Expense Other Income (expense) Income from Continuing Operations-Pretax Income Taxes % to Pretax Income Income from Continuing Operations Income (Loss) from Discontinued Operations Net Income F(U) Last Year 2008 2009 a4 a4 Amount 454.5 476.3 21.8 (42.2) (43.8) (1.6) (15.2)
Slide 8: Operating Revenues, Full Year
Operating Revenues Operating Income % of Revenues Income from Continuing Operations Income Amount Income Per Share-Diluted Net Income Income Amount Income Per Share-Diluted Free Operating Cash Flow 2008 2009 F(U) Last Year Amount te 17,100.3 13,877.1 (3,223.2) 18.8% 2,501.3 1,386.0 (1,115.3) 44.6% 1
Slide 9: Full Year Operating Analysis
ITW Full Year Operating Analysis
Slide 10: Invested Capital and ROIC
Trade Receivables Days Sales Outstanding Inventories Months on Hand Prepaids and Other Current Assets Accounts Payable & Accrued Expenses Operating Working Capital % to Revenue(Prior 4 Qtrs.) Net Plant & Equipment Investments Goodwill and Intangibles Net Assets Held for Sale Other, net Invested Capi
Slide 11: Total Capital
Total Capital Short Term Debt Long Term Debt Total Debt Stockholders’ Equity Total Capital Less: Cash Net Debt & Equity Debt to Total Capital Shares outstanding at end of period 12/31/08 9/30/09 12/31/09 2,434.0 67.5 213.7 1,247.9 2,869.4 2,914.9 3,681.9 2,936.9 3,128.6 7,675.1 8,242.3 8,817.9 11,35
Slide 12: Cash Flow, Free Operating Cash Flow
Net Income Adjust for Non-Cash Items Changes in Operating Assets & Liabilities Net Cash From Operating Activities Additions to Plant & Equipment Free Operating Cash Flow Stock Repurchases Acquisitions Proceeds (Loss) from Divestitures Dividends Proceeds (Repayments) from Debt Proceeds from Investmen
Slide 13: Annual Revenues Acquired
Annual Revenues Acquired Purchase Price Cash Paid Number of Acquisitions 2008 Qi Q2. Q3. 4 230 308 847 154 223 439° «4745 = 190 16 10 14 10
Slide 14: Transportation Quarterly Analysis
Transportation Quarterly Analysis
Slide 15: Transportation Key Points
Transportation Key Points • Total segment base revenues (+6.3% in Q4 ’09 vs. -7.9% in Q3 ’09) improved sequentially as Q4 auto builds significantly ramped up in Europe and North America • Auto OEM/Tiers: Worldwide base revenues +8.8% in Q4 ’09 vs. -9.7% in Q3 ’09 – European Q4 builds: 5.1 million ve
Slide 16: Industrial Packaging Quarterly Analysis
Industrial Packaging Quarterly Analysis
Slide 17: Industrial Packaging Key Points
Industrial Packaging Key Points • Total segment base revenues continued to show signs of improvement: - -16.3% in Q4 ’09 vs. -23.3% in Q3 ’09 as industrial production metrics in U.S. and Europe became less negative • Total North American industrial packaging business: -12.4% in Q4 ’09 vs. -27.0% in
Slide 18: Food Equipment Quarterly Analysis
Food Equipment Quarterly Analysis
Slide 19: Food Equipment Key Points
Food Equipment Key Points • Total segment Q4 base revenues: -12.5% vs. -6.3% in Q3 ’09 due to soft equipment sales • North America Q4 base revenues: -14.6% vs. -8.0% in Q3 ’09 as customers continue to delay equipment purchases • North America Q4 service revenues continue to be bright spot: - -0.8% v
Slide 20: Power Systems and Electronics Quarterly Analysis
Power Systems and Electronics Quarterly Analysis
Slide 21: Power Systems and Electronics Key Points
Power Systems and Electronics Key Points • Total segment base revenues improve sequentially: -21.6% in Q4 ’09 vs. -34.2% in Q3 ’09 • In Q4, Welding’s worldwide base revenues: -24.9% vs. -36.2% in Q3 ’09 – Q4 North America base revenues:-25.6% vs. -40.0% in Q3 ’09 – Q4 International base revenues:-23
Slide 22: Construction Products Quarterly Analysis
Construction Products Quarterly Analysis
Slide 23: Construction Products Key Points
Construction Products Key Points • Total segment base revenues: -5.5% in Q4 ’09 vs. -16.5% in Q3 ’09 • North America Q4 base revenues: -9.0% vs. -27.3% in Q3 ‘09 – Q4 Residential base revenues: -7.2% vs. -30.4% in Q3 ’09; Q4 new housing starts at 554,000 units (16% y/o/y decrease) – Q4 Renovation ba
Slide 24: Polymers and Fluids Quarterly Analysis
Polymers and Fluids Quarterly Analysis
Slide 25: Polymers and Fluids Key Points
Polymers and Fluids Key Points • Total segment base revenues: -4.7% in Q4 ’09 vs. -13.9% in Q3 ’09 • Q4 Worldwide Fluids: +0.6% vs. -11.9% in Q3 ’09 – Improved North America business performance linked to increased demand for hygiene and MRO products • Q4 Worldwide Polymers: -6.9% vs. -16.8% in Q3 ‘
Slide 26: Decorative Surfaces Quarterly Analysis
Decorative Surfaces Quarterly Analysis
Slide 27: Decorative Surfaces Key Points
Decorative Surfaces Key Points • Total segment base revenues: -10.3% in Q4 ’ 09 vs. -15.6% in Q3 ’09 • North America laminate Q4 base revenues: -15.9% vs. -20.6% in Q3 ’09 – Due to North America and commercial construction mix, demand for high pressure laminate remained constrained • International Q
Slide 28: All Other Quarterly Analysis
All Other Quarterly Analysis
Slide 29: All Other Key Points
All Other Key Points • Total segment base revenues: -11.9% in Q4 ’09 vs. -18.9% in Q3 ’09 – Q4 industrial/appliance base revenues: -2.6% vs. -21.8% in Q3 ’09; improvement largely due to energy efficiency initiatives in appliance sector – Q4 worldwide consumer packaging base revenues: -8.5% vs. -11.7
Slide 30: 1st Quarter and Full Year 2010 Forecast
1st Quarter 2010 Total Revenues Diluted Income per Share - Continuing % F(U) 1st Quarter 2009 * Full Year 2010 Total Revenues Diluted Income per Share - Continuing % F(U) 2009 * Based on ‘1st quarter 2009 diluted income of .21 cents per share excluding im pairment & tax charges. Low 14% $0.48 129% 1
Slide 31: 2010 Forecast Key Assumptions
ITW 2010 Forecast Key Assumptions • Exchange rates hold at current levels • Acquired revenues in the $300 to $500 million range for the year • Restructuring costs of $50 to $100 million for the full year • Tax rate range of 28.75% to 29.25% for the 1st quarter and the full year
Slide 32: Q & A
ITW Conference Call Q & A Fourth Quarter