Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q3 2015 Earnings Presentation
13 slides from Illinois Tool Works's earnings presentation, Oct 21, 2015
Slide 1: Third Quarter 2015 Conference Call
Third Quarter 2015 Conference Call E. Scott Santi, Chairman & CEO Michael M. Larsen, Senior Vice President & CFO Aaron H. Hoffman, Vice President, Investor Relations October 21, 2015
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 the expected impact and timing of strategic initiatives and related
Slide 3: Third Quarter 2015 Highlights
Third Quarter 2015 Highlights • ITW delivers solid financial performance despite difficult conditions in key industrial end markets - Achieved $1.39 EPS, up 9% versus prior year; up 18% excluding $(0.12) of currency headwinds - Strong execution on Enterprise Initiatives contributed 110 basis points
Slide 4: Q3 2015 Financial Summary
Q3 2015 Financial Summary Q3 2015 Actuals Highlights EPS +9% ● $1.39 EPS up 9%; +18% excluding $(0.12) of currency impact $1.39 ● Record operating margin of 22.7% as Enterprise Initiatives EPS $1.28 contribute 110 basis points $3.7B $3.4B ● Organic revenue down (1.7)% due to more challenging end mar
Slide 5: Q3 2015 Organic Revenue Growth
Q3 2015 Organic Revenue Growth Growth by Geography Highlights ● North America down (2)% Organic revenue – Construction +7%, Food Equipment +6%, Automotive OEM +5% down (1.7)%* – Test & Measurement/Electronics (14)% and Welding (8)% ● International down (2)% North Inter- Asia – EMEA down (1)% America
Slide 6: Q3 2015 Operating Margin
Q3 2015 Operating Margin Operating Margin Key Drivers 22.7% 20.9% Q3 2015 Enterprise Initiatives +110 bps Q3‘14 Q3‘15 OM% V bps Price/Cost +20 Automotive OEM 25.4% +200 bps Volume (40) T&M/Electronics 16.6% (210) Food Equipment 26.3% +320 Other (primarily lower restructuring) +90 Polymers & Fluids 1
Slide 7: Q3 2015 Segment Results
Q3 2015 Segment Results ($’s in millions) Year-to-Date Automotive OEM Organic +5% Total (3)% +200 bps Operating Margin 25.4% OM% V bps $631 $612 23.4% Automotive OEM 25.0% +150 bps T&M/Electronics 15.8% +30 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Total Revenue Operating Margin Food Equipment 23.7% +320 Highlights P
Slide 8: Q3 2015 Segment Results
Q3 2015 Segment Results ($’s in millions) Test & Measurement/Electronics Food Equipment Organic (11)% Organic +3% (210) bps +320 bps Total (16)% Total (4)% 18.7% 26.3% $586 16.6% $575 $490 $551 23.1% Q3‘14 Q3‘15 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Total Revenue Operating Margin Total Revenue Operati
Slide 9: Q3 2015 Segment Results
Q3 2015 Segment Results ($’s in millions) Polymers & Fluids Welding Organic (3)% Organic (10)% (120) bps (140) bps Total (14)% Total (14)% $490 20.2% 19.0% $459 26.2% $423 $396 24.8% Q3‘14 Q3‘15 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Total Revenue Operating Margin Total Revenue Operating Margin Highlig
Slide 10: Q3 2015 Segment Results
Q3 2015 Segment Results ($’s in millions) Construction Products Specialty Products Organic +4% Organic flat +420 bps +270 bps Total (8)% Total (7)% 23.1% 24.0% 18.9% $513 21.3% $445 $479 $409 Q3‘14 Q3’15 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Q3‘14 Q3‘15 Total Revenue Operating Margin Total Revenue Operating Margi
Slide 11: 2015 Financial Guidance
2015 Financial Guidance 2015 Q4 2015 $5.05 - $5.15 $1.15 - $1.25 EPS $4.67 EPS $1.18 $14.5B Organic (1)% to flat $3.5B Organic (1)% to (2)% Total ~(8)% Total ~(7)% Total Total Revenue Revenue 2014 2015F Q4’14 Q4’15F Operating Operating Margin 19.9% 21%+ Margin 19.6% ~21% ● Expect organic revenue to
Slide 12: Q&A
Q&A ITY
Slide 13: Appendix - Additional Segment Detail
Appendix - Additional Segment Detail Q3 2015 vs. Q3 2014 Favorable / (Unfavorable) Automotive T&M and Food Polymers & Construction Specialty Total Total Revenue OEM Electronics Equipment Fluids Welding Products Products ITW Organic 5.2% (11.3)% 3.1% (3.0)% (10.3)% 3.7% (0.1)% (1.7)% Divestitures (0.