Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q2 2012 Earnings Presentation
19 slides from Illinois Tool Works's earnings presentation, Jul 24, 2012
Slide 1: ITW Conference Call Second Quarter 2012
ITW Conference Call Second Quarter 2012 July 24, 2012 100 YEARS STRONG
Slide 2: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding strategic initiatives and related benefits, operating performance,
Slide 3: Conference Call Playback
Conference Call Playback • Replay number: 888-566-0396; No pass code necessary • Telephone replay available through midnight of August 7, 2012 • Webcast / PowerPoint replay available at www.itw.com • Supplemental financial and investor information will be available on the ITW website under the “Inve
Slide 4: Key Long-Term Initiatives
Key Long-Term Initiatives • ITW is committed to shareholder value-adding initiatives: business structure simplification, strategic sourcing and portfolio management • These initiatives will enable our decentralized management to better leverage ITW’s core competitive advantages globally and will enh
Slide 5: Total revenue growth of 0.9%, with organic and acquired revenues offset
• Total revenue growth of 0.9%, with organic and acquired revenues offset by currency impact, primarily weaker Euro • Strong North America (US) demand drives organic performance • Operating margins of 16.5%; 110 bps of improvement versus prior year • Q2 2012 tax rate: 29.0% * See the Appendix for th
Slide 6: Organic revenue growth: 2.3%, led by US
• Organic revenue growth: 2.3%, led by US • Price / cost margin impact: +60 bps • Acquisition operating margins excluding amortization: 14.4% • Currency negatively impacted EPS by $0.04 primarily due to weaker Euro • Restructuring expense of $14M, $1M higher than last year PROFITABLE GROWTH, STRONG
Slide 7: Free Operating Cash Flow improved in Q2; Further increase in 2nd half expected
Free Operating Cash Flow improved in Q2; Further increase in 2nd half expected * See the Appendix for the reconciliation from GAAP to non-GAAP measurements. PROFITABLE GROWTH, STRONG RETURNS 7
Slide 8: Capital Allocation Priorities
Capital Allocation Priorities • Organic investments continue to focus on key growth platforms and emerging market opportunities • $526M of share repurchases in Q2; $1B YTD • $105M annualized revenues acquired in Q2; $88M in growth platforms and Share Repurchases Acquisitions emerging markets $1B YTD
Slide 9: Organic growth by region
• North America (US) drives organic growth • European performance modestly negative • Asia Pacific performance reflects flat performance in China and better than expected growth in India •South American performance driven by softer Brazilian economy Excludes impact of currency PROFITABLE GROWTH, STR
Slide 10: Profitable Growth, Strong Returns
* See the Appendix for the reconciliation from GAAP to non-GAAP measurements. PROFITABLE GROWTH, STRONG RETURNS 10
Slide 11: Profitable Growth, Strong Returns
PROFITABLE GROWTH, STRONG RETURNS 11
Slide 12: Profitable Growth, Strong Returns
(1) (1) Q1 2011 excludes a $166 million tax benefit, or $0.33 per share, associated with an Australian tax matter. PROFITABLE GROWTH, STRONG RETURNS 12
Slide 13: Q&A
Q&A 100 YEARS STRONG PROFITABLE GROWTH, STRONG RETURNS 13
Slide 14: Appendix: GAAP to Non-GAAP Reconciliations & Segment Tables
Appendix: GAAP to Non-GAAP Reconciliations & Segment Tables 100 YEARS STRONG PROFITABLE GROWTH, STRONG RETURNS 14
Slide 15: ROIC
For further information on ROIC, see the Company’s annual report on Form 10-K for 2011. PROFITABLE GROWTH, STRONG RETURNS 15
Slide 16: Free operating cash flow
For further information on free operating cash flow, see the Company’s annual report on Form 10-K for 2011. PROFITABLE GROWTH, STRONG RETURNS 16
Slide 17: Total debt to EBITDA
For further information on total debt to EBITDA, see the Company’s annual report on Form 10-K for 2011. PROFITABLE GROWTH, STRONG RETURNS 17
Slide 18: Profitable Growth, Strong Returns
PROFITABLE GROWTH, STRONG RETURNS 18
Slide 19: Segment restatement note
The Company periodically makes changes to its management reporting structure to better align its businesses with Company objectives and operating strategies. In the first quarter of 2012, the Company made certain changes in its management reporting structure that resulted in changes in some of the r