Slide 1: Third Quarter 2016 Conference Call
Third Quarter 2016 Conference Call October 20, 2016
Slide 2: Forward Looking Statement & Non-GAAP Measures
Q3 2016 Forward Looking Statement & Non-GAAP Measures 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 of product line simp
Slide 3: Q3 2016 Highlights
Q3 2016 Highlights ● ITW delivered another strong quarter of earnings growth – GAAP EPS of $1.50 (+8%). Currency translation reduced EPS by $0.02. ● Record quarterly margin, income and return performance – Quarterly operating margin of 23.1% … 23.9% excluding EF&C acquisition dilution – Record quart
Slide 4: Financial Results
Q3 2016 Financial Results Q3 Results Highlights ● GAAP EPS of $1.50 +8%, currency translation ($0.02) EPS +8% $1.50 ● Total revenue growth +4%, Organic revenue +2% GAAP EPS $1.39 – North America +1%, EMEA +3%, China +13% $3.5B $3.4B – ~1% negative PLS impact ● Operating margin of 23.1%, 23.9% exclud
Slide 5: Operating Margin Performance
Q3 2016 Operating Margin Performance Q3 Operating Margin Key Margin Drivers Q3'16 +120 bps Ex. EF&C 23.9% Enterprise Initiatives +120 bps EF&C Dilution +40 bps Price/Cost +10 23.1% As Reported 22.7% Volume/Other (10) Margin Expansion +120 bps EF&C Acquisition Margin Dilution (80) Q3'15 Q3'16 Total M
Slide 6: Segment Performance
Q3 2016 Segment Performance Q3 Operating Margin Automotive OEM $765 +25% (360) bps 25.4% $612 21.8% OM% V bps 25.5% Automotive OEM 21.8%* (360) bps excl. EF&C Food Equipment 27.4 +110 Q3'15 Q3'16 Q3'15 Q3'16 T&M and Electronics 21.0 +440 Revenue Operating Margin Welding 26.5 +170 Highlights Polymers
Slide 7: Segment Performance
Q3 2016 Segment Performance Food Equipment Test & Measurement/Electronics (1)% +110 bps +5% +440 bps 27.4% $516 21.0% $551 $544 26.3% $490 16.6% Q3'15 Q3'16 Q3'15 Q3'16 Q3'15 Q3'16 Q3'15 Q3'16 Revenue Operating Margin Revenue Operating Margin Highlights Highlights ● Organic revenue +1% … North Ameri
Slide 8: Segment Performance
Q3 2016 Segment Performance Welding Polymers & Fluids (9)% +170 bps $423 $422 Flat +200 bps $396 $361 26.5% 21.0% 24.8% 19.0% Q3'15 Q3'16 Q3'15 Q3'16 Q3'15 Q3'16 Q3'15 Q3'16 Revenue Operating Margin Revenue Operating Margin Highlights Highlights ● Organic revenue (9)% … Equipment (8)%, Consumables (
Slide 9: Segment Performance
Q3 2016 Segment Performance Construction Products Specialty Products +2% (50) bps (1)% +210 bps $479 $477 26.1% $409 $415 23.1% 22.6% 24.0% Q3'15 Q3'16 Q3'15 Q3'16 Q3'15 Q3'16 Q3'15 Q3'16 Revenue Operating Margin Revenue Operating Margin Highlights Highlights ● Organic revenue +2% ● Organic revenue
Slide 10: 2016 Financial Outlook
Q3 2016 2016 Financial Outlook 2016 Guidance Highlights EPS +9% ● Raising GAAP EPS guidance to $5.56 to $5.66, +9% at mid-point $5.56 - $5.66 – Assuming current foreign exchange rates GAAP EPS $5.13 ● Organic revenue growth of 1 to 2% including ~1% PLS impact ~$13.7B – Assuming Q3 exit run rates for
Slide 11: Q&A
WTVA/ Q&A