Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q1 FY2013 Earnings Presentation
27 slides from Parker-hannifin's earnings presentation, Oct 19, 2012
Slide 1: 1st Quarter FY2013 Earnings Release
1st Quarter FY2013 Earnings Release Parker Hannifin Corporation October 19, 2012 Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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. All statements regarding future performanc
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation reconciles sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions made within the prior four quarters and the effects of currency exchange rates. This presentation also reconciles cash flow fro
Slide 4: Agenda
Agenda 4 • CEO 1st Quarter FY2013 Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 5: Highlights
Highlights 1st Quarter FY2013 • Sales • Industrial North American strength offset Industrial International softness • Total annual sales of $243m acquired in Q1 • Operating Margins • Achieved operating margins of 14.4% despite headwinds 5
Slide 6: Diluted Earnings Per Share
Diluted Earnings Per Share 1st Quarter FY2013 6 $1.57 $1.91 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 Q1 FY13 Q1 FY12 $ per share
Slide 7: Influences on Earnings
Influences on Earnings 1st Quarter FY2013 Diluted Earnings Per Share of $1.57 at the low end of guidance • Industrial International • Integration & Acquisition Related Costs • Aerospace • OEM vs. MRO mix • Nonrecurring Engineering Costs 7
Slide 8: Sales & Operating Margin - Total Parker
Sales & Operating Margin 1st Quarter FY2013 - Total Parker 8 $ in millions FY2013 % Change FY2012 Sales As reported 3,215$ (0.6)% 3,234$ Acquisitions 89 2.8 % Currency (91) (2.8)% Adjusted Sales 3,217$ (0.6)% Operating Margin As reported 463$ 520$ % of Sales 14.4 % 16.1 % 1st Quarter
Slide 9: Sales & Operating Margin - Industrial North America
Sales & Operating Margin 1st Quarter FY2013 - Industrial North America 9 $ in millions FY2013 % Change FY2012 Sales As reported 1,266$ 5.1 % 1,205$ Acquisitions 37 3.1 % Currency (1) (0.1)% Adjusted Sales 1,230$ 2.1 % Operating Margin As reported 227$ 223$ % of Sales 17.9 % 18.5 % 1st Quarter
Slide 10: Sales & Operating Margin - Industrial International
Sales & Operating Margin 1st Quarter FY2013 - Industrial International 10 $ in millions FY2013 % Change FY2012 Sales As reported 1,177$ (8.7)% 1,289$ Acquisitions 52 4.0 % Currency (84) (6.5)% Adjusted Sales 1,209$ (6.2)% Operating Margin As reported 152$ 208$ % of Sales 12.9 % 16.2 % 1st Quarter
Slide 11: Sales & Operating Margin - Aerospace
Sales & Operating Margin 1st Quarter FY2013 - Aerospace 11 $ in millions FY2013 % Change FY2012 Sales As reported 541$ 8.8 % 498$ Acquisitions - -- % Currency (2) (0.3)% Adjusted Sales 543$ 9.1 % Operating Margin As reported 62$ 69$ % of Sales 11.4 % 13.8 % 1st Quarter
Slide 12: Sales & Operating Margin - Climate & Industrial Controls
Sales & Operating Margin 1st Quarter FY2013 - Climate & Industrial Controls 12 $ in millions FY2013 % Change FY2012 Sales As reported 231$ (4.8)% 242$ Acquisitions - -- % Currency (4) (1.6)% Adjusted Sales 235$ (3.2)% Operating Margin As reported 22$ 20$ % of Sales 9.4 % 8.2 % 1st Quarter
Slide 13: Order Rates
Order Rates Three Month Rolling at Period End 13 Excludes Acquisitions & Currency 3-month year-over-year comparisons of total dollars, except Aerospace Aerospace is calculated using a 12-month rolling average Sept 2012 Jun 2012 Sept 2011 Jun 2011 Total Parker 6 %- 1 %- 9 %+ 15 %+ Industrial North Am
Slide 14: Balance Sheet Summary
Balance Sheet Summary • Cash • Working capital • Accounts receivable • Inventory • Accounts payable 14
Slide 15: Cash Flow from Operating Activities
Cash Flow from Operating Activities 1st Quarter FY2013 15 1st Quarter FY2013 FY2012 As Reported (7.0)$ 309.5$ As Reported % Sales -0.2% 9.6% Discretionary Pension Plan Contribution 225.6$ -$ Adjusted Cash From Operating Activities 218.7$ 309.5$ Adjusted % Sales 6.8% 9.6%
Slide 16: Financial Leverage: Debt to Debt-Equity
35.2% 28.9% 24.7% 26.1% 25.7% 0% 5% 10% 15% 20% 25% 30% 35% 40% FY09 FY10 FY11 FY12 Q1 FY13 Net Debt 20.7% Financial Leverage Debt to Debt Equity 16
Slide 17: Earnings Outlook Assumptions: Segment Sales & Operating Margins
Earnings Outlook Assumptions Segment Sales & Operating Margins 17 FY 2013 Sales Change versus FY 2012 Industrial North America (4.3)% -- (1.3)% Industrial International (4.4)% -- (1.3)% Aerospace 5.8 % -- 8.8 % Climate & Industrial Controls (14.3)% -- (11.3)% FY 2013 Operating Margin Percentages Ind
Slide 18: Earnings Outlook Assumptions: Below Operating Income
Earnings Outlook Assumptions Below Operating Income (+/-2.4%) • Expenses Below Segment Operating Income* • $480M at Midpoint • Tax Rate • 28.5% *Corporate Admin, Interest and Other Expense (Income) 18
Slide 19: Revised FY2013 EPS Guidance at Midpoint
Revised FY2013 EPS Guidance at Midpoint 19 Low Midpoint High Diluted Earnings Per Share 6.15$ 6.45$ 6.75$ $7.50 $0.04 $0.05 $0.05 $1.09 $6.45 6 6 7 7 7 7 8 8 8 FY13 Prior Guidance at Midpoint Share Impact Expenses Below Segment Operating Income Tax Segment Operating Income FY13 Revised Guidance at M
Slide 20: Questions and Answers
Parker Hannifin Corporation The Global Leader in Motion & Control Technologies 20 • Questions and Answers
Slide 21: CEO Closing Comments
CEO Closing Comments 21 • Thank you to our Global Team • Continue to Execute Win Strategy • Manage Costs, Balance Sheet & Growth
Slide 22: Thank You
Thank You PH NYSE ENGINEERING YOUR SUCCESS. October 19, 2012
Slide 23: Appendix
Appendix • Consolidated Statement of Income • Business Segment Information By Industry • Consolidated Balance Sheet • Consolidated Statement of Cash Flows
Slide 24: Consolidated Statement of Income
Consolidated Statement of Income 24 (Unaudited) Three Months Ended September 30, (Dollars in thousands except per share amounts) 2012 2011 Net sales 3,214,935$ 3,233,881$ Cost of sales 2,477,447 2,414,442 Gross profit 737,488 819,439 Selling, general and administrative expenses 381,122 386,466 Inter
Slide 25: Business Segment Information By Industry
Business Segment Information By Industry 25 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2012 2011 Net sales Industrial: North America 1,266,047$ 1,204,817$ International 1,176,890 1,289,115 Aerospace 541,083 497,492 Climate & Industrial Controls 230,915 242,457 Total 3,214,93
Slide 26: Consolidated Balance Sheet
Consolidated Balance Sheet 26 (Unaudited) September 30, June, 30 September 30, (Dollars in thousands) 2012 2012 2011 Assets Current assets: Cash and cash equivalents 436,131$ 838,317$ 424,354$ Accounts receivable, net 1,982,590 1,992,284 1,881,303 Inventories 1,489,748 1,400,732 1,456,078 Prepaid ex
Slide 27: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 27 (Unaudited) Three Months Ended September 30, (Dollars in thousands) 2012 2011 Cash flows from operating activities: Net income 239,948$ 298,158$ Depreciation and amortization 81,172 84,832 Stock incentive plan compensation 31,261 27,898 Net change in receivabl