Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q4 2020 Earnings Presentation
13 slides from Illinois Tool Works's earnings presentation, Feb 5, 2021
Slide 1: Fourth Quarter 2020 Earnings Conference Call
FOURTH QUARTER 2020 EARNINGS CONFERENCE CALL FEBRUARY 5, 2021
Slide 2: Forward-Looking Statement / Safe Harbor Statement
F O RWA R D - L O O K I N G S TAT E M E N T 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 the pot
Slide 3: Managing Through the Global Pandemic
M A N A G I N G T H R O U G H T H E G L O B A L PA N D E M I C ITW’s Response: • Protect and support our people • Continue to serve our customers with excellence • “Win the Recovery” • Sustain investments supporting the execution of our long-term Enterprise Strategy Enabled By Eight Years of Progres
Slide 4: Q4'20 Financial Performance
Q4’20 FINANCIAL PERFORMANCE COMMENTARY GAAP EPS $1.99 $2.02 +2% • Solid recovery progress as revenue was up 5% vs. Q3 - Excl. Divestiture gains $1.88 +7% - Total revenue +0.2% vs. (4.9)% in Q3 • Operating income of $883M, an increase of 7% $3.5B $3.5B REVENUE • Operating margin of 25.4%, an improvem
Slide 5: Strong Recovery / Response by Segment
S T R O N G R E C O V E RY / R E S P O N S E B Y S E G M E N T ORGANIC REVENUE OPERATING MARGIN Q2’20 Q3’20 Q4’20 Q2’20 Q3’20 Q4’20 Automotive OEM (53)% (5)% +8% Automotive OEM (7.8)% 20.8% 23.9% Food Equipment (38)% (20)% (19)% Food Equipment 9.2% 19.6% 22.3% T&M / Electronics (11)% (2)% (3)% T&M /
Slide 6: Q4'20 Segment Performance: Automotive OEM, Food Equipment
Q4’20 SEGMENT PERFORMANCE AUTOMOTIVE OEM FOOD EQUIPMENT $800 +10% +270 bps (17)% (520) bps $725 $571 27.5% 23.9% 21.2% $471 22.3% Q4’19 Q4’20 Q4’19 Q4’20 Q4’19 Q4’20 Q4’19 Q4’20 Total Revenue Operating Margin Total Revenue Operating Margin • Organic revenue 8% • Organic revenue (19)% • North America
Slide 7: Q4'20 Segment Performance: Test & Measurement/Electronics, MTS Acquisition
Q4’20 SEGMENT PERFORMANCE TEST & MEASUREMENT/ELECTRONICS ACQUISITION OF MTS T&S BUSINESS • Highly complementary to Test & Measurement / (3)% +50 bps Electronics, positions ITW in new industry verticals $552 28.6% $534 28.1% - FY’19 revenue of $559 million, operating margin of 6%* • Tight strategic f
Slide 8: Q4'20 Segment Performance: Welding, Polymers & Fluids
Q4’20 SEGMENT PERFORMANCE WELDING POLYMERS & FLUIDS (5)% +350 bps +7% +240 bps 28.9% $437 25.4% $387 25.4% $408 23.0% $368 Q4’19 Q4’20 Q4’19 Q4’20 Q4’19 Q4’20 Q4’19 Q4’20 Total Revenue Operating Margin Total Revenue Operating Margin • Organic revenue (2)% • Organic revenue 7% • Equipment flat, Consu
Slide 9: Q4'20 Segment Performance: Construction Products, Specialty Products
Q4’20 SEGMENT PERFORMANCE CONSTRUCTION PRODUCTS SPECIALTY PRODUCTS +12% +400 bps (2)% +250 bps 26.2% $430 $446 $439 27.0% $384 22.2% 24.5% Q4’19 Q4’20 Q4’19 Q4’20 Q4’19 Q4’20 Q4’19 Q4’20 Total Revenue Operating Margin Total Revenue Operating Margin • Organic revenue 8% • Organic revenue (3)% • North
Slide 10: 2020 Financial Performance
2020 FINANCIAL PERFORMANCE COMMENTARY GAAP EPS $7.74 $6.63 (14)% • Total revenue (11)% - Organic revenue (10)%, divestitures (1)% • Operating income of $2.9B $14.1B $12.6B REVENUE • Operating margin of 22.9% - Enterprise Initiatives contributed 120 bps 2019 2020 • After-tax ROIC* of 26.2% OPERATING
Slide 11: 2021 Financial Guidance
2021 FINANCIAL GUIDANCE COMMENTARY GAAP EPS $6.63 $7.60 to $8.00 • Total revenue growth of 9% to 12% - Organic growth of 7% to 10% $13.7B - Foreign currency +2%, PLS impact of (50) bps to $14.1B $12.6B REVENUE • GAAP EPS growth of 15% to 21% • Operating margin of 24% to 25% - Enterprise Initiatives
Slide 12: 2021 Organic Growth Projections by Segment
2021 ORGANIC GROWTH PROJECTIONS BY SEGMENT Assuming current levels of demand, adjusted for typical seasonality Automotive Food Polymers Construction Specialty T&M / E Welding OEM Equipment & Fluids Products Products 2020 (16)% (21)% (5)% (12)% (1)% +2% (8)% 2021E 14% - 18% 8% - 12% 5% - 9% 5% - 9% 4
Slide 13: Q&A
Q&A 13