Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Investor Day (December 2008)
114 slides from Illinois Tool Works's investor day presentation, Dec 8, 2008
Slide 1: Welcome to ITW's Annual Investor Meeting
Welcome to ITW’s Annual Investor Meeting New York City December 8, 2008
Slide 2: Today's Agenda
Today’s Agenda • 8:00am – 8:50am Breakfast buffet • 8:50am – 9:00am John Brooklier, Vice President of Investor Relations Welcome and Today’s Topics • 9:00am – 9:45am Ron Kropp, Senior Vice President and CFO Capital Structure • 9:45am – 10:45am Scott Santi, Vice Chairman John McDonough, President, Fo
Slide 3: Today's Presenters: Ron Kropp
Today’s Presenters Ron Kropp, Senior Vice President and Chief Financial Officer • 15-year tenure with ITW • Named SVP and CFO in 2006 • Previously held role of vice president & controller controller, financial reporting
Slide 4: Today's Presenters: Scott Santi
Today’s Presenters Scott Santi, Vice Chairman • 25-year tenure with ITW • Responsible for ITW’s ITW s worldwide Welding, Electronic Component Co po e t Fabrication, ab cat o , Aircraft Ground Support, and Food Equipment businesses • Named executive vice president in 2004 and vice chairman in Decembe
Slide 5: Today's Presenters: John McDonough
Today’s Presenters John McDonough, President, Food Equipment North America • 17-year tenure with ITW • Responsible for North American operations of such brands b a ds as Hobart, oba t, Traulsen, au se , Vulcan, Wolf, Stero, Somat and Kairak • Named to this position in 2006
Slide 6: Today's Presenters: David Speer
Today’s Presenters David Speer, Chairman and Chief Executive Officer • 30-year tenure with ITW • Named president of ITW in 2004 and chief executive officer o ce in 2005 005 • Assumed additional responsibilities p as chairman in 2006 • Managed an assortment of construction businesses earlier in caree
Slide 7: ITW Forward-Looking Statements
ITW Forward - Looking Statements Forward F d - Looking L ki St Statements t t This meeting contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, including without limitation limitation, statements regarding operating performance, re
Slide 8: Forecast & Capital Structure
Forecast & Capital Structure Ron Kropp New York City December 8, 2008
Slide 9: 4th Quarter 2008 Forecast
4th Q Quarter 2008 Forecast
Slide 10: 4th Quarter 2008 – Economic data
4th Quarter 2008 – Economic data • Underlying U d l i macro data d t ffor N North th A America i anddEEurope trending down significantly • North America: • Industrial production (ex: tech) -6.1% in September and October vs. -3.2% in August • ISM Index: 36.2% in November (Under 50% “declining declini
Slide 11: Revised 4th Quarter 2008 Forecast
Revised 4th Quarter 2008 Forecast Mid Low High Point 4th Quarter Total Revenues -7% -9% -8% Diluted Income per Share - Continuing $0.44 $0.52 $0.48 % F(U) 2007 -46% -37% -41% Full Year T l Revenues Total R 6% 7% 66.5% 5% Diluted Income per Share - Continuing $2.94 $3.02 $2.98 % F(U) 2007 -5% -2% -3%
Slide 12: Revised 4th Quarter 2008 Forecast Key Assumptions
Revised 4th Quarter 2008 Forecast Key y Assumptions p • Base revenue decline of between 9% and 11% • Exchange rates through November 30 • Acquired i revenues in i the $1.5 $ billion i i to $1.6 $ billion i i range • Share repurchases of $1.3 billion to $1.4 billion for the year (previous: $1.0 to $1
Slide 13: Reconciliation to Prior Forecast/Year
Revised 4th Quarter 2008 Forecast Reconciliation to Prior Forecast/Year Vs. Prior Vs. Prior Forecast Year Prior forecast/year EPS $ 0.78 $ 0.82 Base (0.20) (0.25) Currency translation (0.04) (0.04) Restructuring (0.02) (0.04) Acquisitions (0.02) - Nonoperating (0.02) (0.02) Taxes - (0.03) Shares - 0
Slide 14: Questions
Questions ??
Slide 15: Capital Structure
Capital Structure
Slide 16: Capital Structure
Capital Structure 1998-2007 • Target debt-to-capital range of 20-30% – Current debt-to-capital ratio at 28% – Would go above target range for larger a ge acqu acquisitions sto s • Primary uses of free operating cash flow: – Dividends Dividends – Acquisitions Acquisition Investments – Share rep
Slide 17: Primary Uses of Free Cash Flow
Primary Uses of Free Cash Flow • Dividends – Guideline of 25-35% of trailing two years net income – Increased annual dividend rate from $1.12 to $1.24 (11% increase) in August 2008 • Acquisitions: – Preferred use of free operating cash flow – 2008 range: annualized revenues of $1.5 to $1.6 billion •
Slide 18: Debt Capacity by Type
Debt Capacity by Type $5,440 (in millions) Debt outstanding at 9/30/08: Euro Fixed $1 100 $1,100 US$ bonds $ 940 Euro bonds 1,100 Commercial paper 1,493 1 493 $3,000 Other 64 US$ Variable $3,595 Debt-to-capital % 28.3% $940 US$ Fixed $350 Euro Variable $50 Other Oth
Slide 19: Liquidity
Liquidity • Primary sources of liquidity are strong free cash flow and credit facilities • Credit facilities recently increased from $2.0 billion to $3.0 billion • Credit facilities used to backstop commercial paper program – No issues with placing commercial paper – “Flight to quality” - rated A1+/
Slide 20: Free Cash Flow 1998-2007
Free Cash Flow 1998-2007 CAGR Net Income = 11% Free Cash = 15% Recession Free Cash Net Income Linear (Free Cash)
Slide 21: Capital Structure Summary
Capital Structure Summary • Strong conservative balance sheet with strong credit ratings • Have historically generated strong cash flow in downturns do tu s • No liquidity issues • Ample short short-term term debt capacity • Readily accessible debt capital markets
Slide 22: Questions
Questions ??
Slide 23: Food Equipment: A Growth Platform
Food Equipment: A Growth Platform Scott Santi, Vice Chairman John McDonough, President, Food Equipment North America December 8, 2008
Slide 24: Today's Topics
Today’s Topics • Business Overview • Major End Markets • Core Product Lines • Key Growth Strategies •Q&A
Slide 25: Business Overview
Business Overview
Slide 26: ITW Food Equipment Group: 13% of total ITW revenues
ITW Food Equipment Group 13% of total ITW revenues—2008(F) Industrial Packaging 20% 16% Power Systems & Electronics 15% Transportation 8% Construction Products 13% 15% Food Equipment 13% Polymers & Fluids All Other
Slide 27: ITW Food Equipment Group
ITW Food Equipment Group • Commercial Food Equipment and Related Services • 55 businesses in 22 countries represent $2 $2.1 1 billion in total revenues • 2007 Revenues: +27% • 2008(F) Revenues: +10%
Slide 28: Revenue by Category
ITW Food Equipment Group • Revenue by Category 11% Food Service Service 30% 59% Food Retail
Slide 29: Revenue by Region
ITW Food Equipment Group • Revenue by Region
Slide 30: Major End Markets
Major End Markets
Slide 31: Revenue by End Market
ITW Food Equipment Group • Revenue by End Market Institutions 18% Food Retail 7% Food Service 47% Chains 12% I d Restaurants Ind. R Other Food Service 16%
Slide 32: Institutions
Institutions • Colleges/Universities • Schools • Healthcare • Lodging/Casinos • Canteens/Catering Cos. • Government
Slide 33: Food Service Chains
Food Service Chains • Full Service restaurants – Family Style – Ethnic – Seafood – Steak • Quick Serve Chains – Burger – Chicken – Sandwich – Ethnic – Bakery Cafes • Pubs P b &T Taverns
Slide 34: Independent Restaurants
Independent Restaurants • Independents • Restaurant Groups
Slide 35: Other Food Service
Other Food Service • Air Catering • Marine – Cruise – Offshore – Shipyards • Transportation Marine • Misc./Other
Slide 36: Food Retail
Food Retail • Supermarkets • Mass Merchandisers • Membership Clubs • Hyper Marches • Convenience Stores • Petroleum / Convenience • Grocers G
Slide 37: Core Product Lines
Core Product Lines
Slide 38: Revenue by Product Line
ITW Food Equipment Group • Revenue by Product Line 3% 13% Service 30% W Warewash h 14% Cooking/Baking Food Processing Refrigeration 19% 21% Other
Slide 39: Warewash
Warewash • North America • International
Slide 40: Cooking/Baking
Cooking/Baking • North America • International
Slide 41: Food Processing
Food Processing • North America • International
Slide 42: Refrigeration
Refrigeration • North America • International
Slide 43: Service
Service • North America • Billed Services • Service Contracts • Parts P t (OTC) • Installations • Other • International
Slide 44: Performance Since Premark Acquisition
ITW Food Equipment Group Performance Since Premark Acquisition Total Op. Revenues $2,500 Margins $2,000 20% $1,500 15% $1,000 10% $500 5% $0 0% (($500)) 2000 2001 2002 2003 2004 2005 2006 2007 2008 Base Revenues New Acquisitions
Slide 45: ITW Toolbox Impact - Hobart Germany
ITW Toolbox Impact - Hobart Germany 80/20 USa MRD Innovation 2000 2008 PLS In-Lining Segmentation Operating Margins: ~20.0% Operating Margins: <5.0 % • ITW Tool Box Implementation Drives: – Significant Core Business Profitability Improvement – Customer Driven Innovation/Organic Growth
Slide 46: ITW Toolbox Impact - Hobart France
ITW Toolbox Impact - Hobart France 80/20 USa MRD 2000 2008 PLS In-Lining Segmentation Operating Margins: 14% Operating Margins: (5.0%) • 80% reduction in SKUs • Refocused on “80” products and geographies • Streamlined St li d sales l and d admin d i processes • Segmented business by core served mark
Slide 47: Key Growth Strategies
Key Growth Strategies
Slide 48: Key Growth Strategies
Key Growth Strategies • Customer-Driven Innovation • Service as a Growth Platform • Geographic Expansion/Emerging Market Growth • Targeted Product Category Additions
Slide 49: Customer-Driven Innovation: MBM/Hobart Combi
Customer-Driven Innovation: MBM/Hobart Combi • The Opportunity: • Operators focused on production efficiencies » Simplicity p y of operation p / ease of replication p » Process solutions vs. discrete pieces of equipment • Often used with other “vertical” platforms » Combi » Chiller » Holding/transpo
Slide 50: Customer-Driven Innovation: 3000 Series Slicer
Customer-Driven Innovation: 3000 Series Slicer • The Opportunity: • A core industry product with long-unmet needs – True ease off use and T d ease off cleaning l i – Reliable slice quality (chain specification) – Improved yield (shrink management) – Operator productivity • The User-Driven Solution:
Slide 51: Customer-Driven Innovation: Somat eCorect
Customer-Driven Innovation: Somat eCorect • The Opportunity: • Escalating waste management costs » Weight and/or volume fees vary by municipality • Demand for cost effective sustainability solutions cost-effective » Majority of foodservice waste is compostable »Food waste; cardboard; compostable dis
Slide 52: Service as a Growth Platform
Service as a Growth Platform Service Progression (2000-2008) – Created separate business units to provide focus – Identified core Hobart equipment and service customers » Focused on service quality and field efficiencies » Targeted field operations against this profile of accounts » Built in-depth t
Slide 53: Building a Global Service Platform
Service as a Growth Platform • Building a Global Service Platform • Current Status – Expanding International footprint: » US, Canada, Mexico, Brazil; Puerto Rico; Columbia » UK, France, Germany, Benelux » Australia, Japan, Hong Kong, China, Korea – U Unique que Value a ue Proposition opos t o » Fact
Slide 54: Service Growth Opportunities Going Forward
Service as a Growth Platform • Service Growth Opportunities Going Forward: • Currently serve less than 20% of ITW-installed ITW installed base – Additional share of ITW-installed base – Active trials of full-kitchen service in select accounts underway – Evaluate coverage of non-ITW-installed base •
Slide 55: Emerging Markets
Emerging Markets • History: • Have been successfully selling US/European equipment to Western-style hotels, large restaurants, institutions and employee dining facilities for years • Have an established manufacturing and service presence to support these activities • Targeted Growth Initiatives • Cu
Slide 56: Recent Acquisitions: Horis
Recent Acquisitions: Horis • Revenue @ acquisition: $225 million • Acquisition closed January 2007 • Strategic St t i Attraction Att ti • Complementary positions with Hobart France » Cooking, Refrigeration » Restaurants and Institutions » New projects focus vs. Renewals (replacements) • Attractive d
Slide 57: Recent Acquisitions: Avery Berkel
Recent Acquisitions: Avery Berkel • Revenue @ Acquisition: $80 million • Scales; Slicers; Wrappers • 95% revenues emanate from Europep • Acquisition closed September 2007 • Strategic Attraction • Strong brand recognition • Attractive direct service business • Well positioned range of premium to valu
Slide 58: Food Equipment: A Growth Platform
Food Equipment: A Growth Platform • Significant Future Growth Potential: – Relatively small existing ITW share position • Global G Food Equipment market estimate: $22 $ - $26 $ billion • Market still highly fragmented – Lots of Room to Grow: • Customer Driven Innovation • Service as a Growth Platfor
Slide 59: Questions
QUESTIONS
Slide 60: Break
Welcome to ITW’s Annual g Investor Meeting BREAK New York City December 8, 2008
Slide 61: ITW Overview: End Market Perspectives
ITW Overview: End Market Perspectives David Speer New York City December 8, 2008
Slide 62: Today's Agenda
Today’s Agenda • Revenue Diversification and Acquisitions • Review of Economic Trends and ITW Segments • Today’s Key Takeaways • Questions
Slide 63: Revenue Diversification and Acquisitions
Revenue Diversification and Acquisitions
Slide 64: Revenue Diversification
Revenue Diversification • ITW’s 2008 revenue mix continues to shift toward broader variety of end markets and geographies • Acquisitions continue to play a meaningful role in expanding both our geographic and end market diversification
Slide 65: Revenue Diversification: ITW Revenues by End Markets
Revenue Diversification: ITW Revenues by End Markets Automotive OEM General Industrial 17% 23% 13% Food Institutional/Service General Industrial 21% 12% Auto OEM/Tiers Commercial Construction 7% Commercial Construction 10% Food & Beverage Food & Beverage 6% 9% 6% Residential Cons
Slide 66: Revenue Diversification: ITW Revenues by Geography
Revenue Diversification: R ITW Revenues b Geography by G h North America 45% 50% 64% 30% EMEA 36% 26% 25% Asia/Pacific and Other 10% 14% 1997 2008(F) 2012(F)
Slide 67: Growth Through Acquisitions: Current Economic Environment
Growth Through Acquisitions: C Current tEEconomic i EEnvironment i t • Valuations are lower than before due to falling market values and the economy’s impact on business outlook • Creates opportunity to acquire businesses previously overpriced for ITW • ITW’s strong cash flow and sound balance sheet
Slide 68: ITW Acquisition Criteria
ITW Acquisition Criteria • Products that provide value add to customers • Strong market position • Well known brand name • Improve financial metrics - double below average margins in three to five years • Retain key management at acquired companies • Utilize management talent to implement ITW Toolbo
Slide 69: 10-Year Historical Acquisition Summary
10-Year Historical Acquisition Summary 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (11-7-08) # Deals 32 45 29 21 28 24 22 53 52 44 Acquired Revenues $3800 $1000 $556 $195 $347 $624 $584 $1714 $995 $1450 (in millions) Avg. Size $119 $22 $19 $9 $12 $26 $27 $32 $19 $33 Acquisition # Business Unit
Slide 70: Acquisitions – Historical Look
Acquisitions – Historical Look A Acquired i d in i 2000-2007 2000 2007 25% 20% 15% 10% 5% 0% Year 1 Year 2 Year 3 Year 4 Year 5 Margin Revenue Growth ROI
Slide 71: Acquisitions – Historical Look
Acquisitions – Historical Look • Reviewed performance of larger acquisitions from 2000 – 2007 – Revenues > $20 million – Businesses which remained discrete for five years • 73 Acquisitions with $4.2 million of first year revenue (70% of total) • Conclusions: – Revenue growth only 0.2% in 2nd full ye
Slide 72: Review of Economic Trends and ITW Segments
Review of Economic Trends and ITW Segments
Slide 73: Review of Economic Trends
Review of Economic Trends Underlying macro data for North America and Europe is negative U it d States United St t Euro Zone Industrial Production (ex. tech): Industrial production: • 2007 +0.7% • 2007 +3.4% vs. •Oct. O t 2008 -6.1% 6 1% • Oct. 2008 -2.2% ISM: PMI: • Jan. 2008 50.7% • Jan. Jan 2008
Slide 74: ITW Reporting Segments
ITW Reporting Segments • Industrial Packaging • Power Systems & Electronics • Transportation • Construction Products • Food Equipment • Polymers P l & Fluids Fl id • All Other
Slide 75: Industrial Packaging
Industrial Packaging 20% 16% 8% 15% 13% 15% 13% 16% of total ITW revenues—2008(F)
Slide 76: Industrial Packaging
Industrial Packaging • Steel, plastic and paper products used for bundling, shipping and protecting transported goods • 108 businesses in 45 countries represent $2.6 $ 6bbillion o oof revenues e e ues • 2007 revenues: +11% • 2008(F) revenues: +9%
Slide 77: Industrial Packaging Revenues 2008(F)
Industrial Packaging W ld id Revenues Worldwide R 2008(F) Primary Metals 25% 42% North America General Industrial 22% Food & Beverage 13% Europe 13% Consumer Durables 41% 10% Construction 17% Other Asia/Pacific and Other 17% By End Markets By Geography
Slide 78: Industrial Packaging 2008 Trends
Industrial Packaging 2008 T Trends d • North America primary metals markets decrease 12% during Q3 vs vs. year year-earlier earlier periods • North America building materials market declines 25% to 30% for first nine months vs. p prior-year y periods p • Base revenues in Europe and Asia grew in the
Slide 79: Industrial Packaging 2009 Growth Assumptions
Industrial Packaging 2009 G Growth th Assumptions A ti • Worldwide base revenues: -4% to -8% in 2009 • Developed markets (North America and Western Europe) forecasted to contract 5% to 10% as metals, construction and general industrial markets continue to sag • Emerging g g markets ((Asia Pacific/La
Slide 80: Power Systems & Electronics
Power Systems & Electronics 20% 16% 8% 15% 13% 15% 13% 15% of total ITW revenues—2008(F)
Slide 81: Power Systems & Electronics
Power Systems & Electronics • Designer and manufacturer of arc welding equipment, consumables, and accessories for a wide array of industrial and commercial applications • 96 businesses in 25 countries represent $2 4 billion of revenues $2.4 • 48% Capital Equipment, 52% Consumables & Accessories • 2
Slide 82: Power Systems & Electronics Revenues 2008(F)
Power Systems & Electronics Worldwide Revenues 2008(F) General G l Industrial I d ti l 26% Electronics 67% North America 21% Construction 9% Fabrication 7% Shipbuilding 6% Ground 6% G d Power P Europe MRO 12% 5% 5% Energy Asia/Pacific and Other Other 21% 15% By End Markets By
Slide 83: Power Systems & Electronics 2008 Trends
Power Systems & Electronics 2008 Trends • Welding Businesses: – +6% YTD through September • North America : Flat, equipment slows while consumables continue modest growth g • International : +18%, Europe slows during Q3 while Asia continues strong +20% – Flat in October • North America slows dramati
Slide 84: Power Systems & Electronics 2009 Growth Assumptions
Power Systems & Electronics 2009 G Growth th Assumptions A ti • Worldwide segment base revenues expected to be down 4% to 6% in 2009 vs. 2008 • Welding Businesses down 4% to 6% – North America: Down 5% to 8% overall on declining general industrial and construction markets, offset partially by relati
Slide 85: Transportation
Transportation 20% 16% 8% 15% 13% 15% 13% 15% of total ITW revenues—2008(F)
Slide 86: Transportation
Transportation • Components, fasteners, fluids and polymers for transportation-related p applications pp • 85 businesses in 22 countries represent $2.4 billion of revenues • 2007 revenues: +13% ( ) revenues: +7% • 2008(F)
Slide 87: Transportation Revenues 2008(F)
Transportation W ld id Revenues Worldwide R 2008(F) 55% North America 65% Auto OEM/Tiers Europe E rope 23% Auto Aftermarket 38% Commercial Truck Aftermarket 6% Asia/Pacific and Other 6% Other 7% End Market Geography
Slide 88: Transportation 2008 Trends
Transportation 2008 T Trends d • Penetrated new global platforms with Honda, Hyundai, R Renault/Nissan, lt/Ni D Daimler, i l GM & F Ford ddduring i 2008 • Revenues for businesses located in Asia/Pacific approaching $200 million in 2009 • Product development activities begun in emerging markets with
Slide 89: Transportation 2009 Growth Assumptions
Transportation 2009 G Growth th Assumptions A ti • Base revenues: -8% to -12% for full year 2009 • North America will continue to show weakeningg automotive market – +/- 11 million vehicle builds – Detroit 3: -16% to -20% – New domestics: -4% to -6% • International auto builds also decline in 2009 –
Slide 90: Construction Products
Construction Products 20% 16% 8% 15% 13% 15% 13% 13% of total ITW revenues—2008(F)
Slide 91: Construction Products
Construction Products • Designer and manufacturer of construction fastening systems and truss products for the commercial, residential and remodeling/rehab sectors • 94 autonomous businesses in 29 countries represent $2.0 billion of revenues • 2007 revenues: +9% • 2008(F) revenues: -3%3%
Slide 92: Construction Products Revenues 2008(F)
Construction Products W ld id R Worldwide Revenues 2008(F) 38% Residential 35% North America 29% Commercial 38% Europe 29% Renovation Asia/Pacific and Other 27% 4% Other End Markets Geography
Slide 93: Construction Products 2008 Trends
Construction Products 2008 Trends • U.S. new residential housing starts drop from 1.15 million at end of Q4 2007 to forecasted 785,000 starts at end of Q4 2008 (32% decline) and Europe housing declines 13% • Non-residential construction awards in U.S. drop nearly 20% and Europe falls over 6% • North
Slide 94: Dodge Construction Potentials Bulletin
Construction Products Dodge Construction Potentials Bulletin 2008 YTD/Sq. Ft % Change U.S. Summary y in thousands ((Oct. 2008)) vs. YTD 2007 Total Non-Residential 1,166,838 -19% Commercial 660,969 -28% Stores and Food Service, Warehouse (ex. mfr. owned) Office and Bank Buildings Buildings, Hotels &
Slide 95: Construction Products 2009 Growth Assumptions
Construction Products 2009 Growth Assumptions • Worldwide construction base revenues: -6% to -10% • North America (2009 forecast) – Residential: Further decline of 20% to 25% with 2009 starts between 700,000 and 750,000 (NAHB) – Renovation: HIRI projects renovation activity to increase 1% to 2% in 2
Slide 96: Construction Products 2009 Growth Assumptions (cont.)
ITW Construction Products 2009 G Growth th Assumptions A ti ((cont.) t) • Asia/Pacific (2009 forecast) – Australian/New Zealand housing starts: Flat to +2% – Australian/New Zealand commercial construction activity (square meters): Flat to +2% – Australian and New Zealand renovation : +4% – Southeast
Slide 97: Food Equipment
Food Equipment 20% 16% 8% 15% 13% 15% 13% 13% of total ITW revenues—2008(F)
Slide 98: Food Equipment
Food Equipment • Commercial food equipment and related service • 55 businesses in 22 countries represent $2.1 billion of revenues • 2007 revenues: +27% • 2008(F) revenues: +10%
Slide 99: Food Equipment Revenues 2008(F)
Food Equipment W ld id Revenues Worldwide R 2008(F) Food Institutional/ 49% North America 59% Restaurants 30% Service 4 % 45% EMEA Food Retail 11% 6% Asia/Pacific and Other By Category By Geography
Slide 100: Food Equipment 2008 Trends
Food Equipment 2008 Trends • Expect to finish 2008 with base revenues +3% – North America: • Food service / food retail chains pulled back new store construction and deferred rollouts early in the year • Institutional base began g to slow in late summer • Channels conserving cash, burning off invent
Slide 101: Food Equipment 2009 Growth Assumptions
Food Equipment 2009 Growth Assumptions • Worldwide base revenues expected to be in a range of -4% to -8% • Broad Broad-based based slowdown in North America expected to last through 2009 • Continued softening in European institutional base and independent restaurants • Latin America to largely mirro
Slide 102: Polymers & Fluids
Polymers & Fluids 20% 16% 8% 15% 13% 15% 13% 8% of total ITW revenues—2008(F)
Slide 103: Polymers & Fluids
Polymers & Fluids • Adhesives, sealants, lubrication and cutting fluids, and janitorial and sanitation supplies • 94 business units in 32 countries represent $1.3 billion of revenues • 2007 revenues: +24% 24% • 2008(F) revenues: +32%
Slide 104: Polymers & Fluids Revenues 2008(F)
Polymers & Fluids Worldwide Revenues by Geography 2008(F) General Industrial North America 35% 31% Construction 14% MRO 13% Electronics/Consumer 47% Europe Durables/Primary Metals 11% Auto Aftermarket 8% 23% Other Asia/Pacific and Other 18% By End Market By Geography
Slide 105: Polymers & Fluids 2008 Trends
Polymers & Fluids 2008 T Trends d • General Industrial markets – Wind,, solar,, rail and petrochemical p industries continue to demonstrate growth – Maintenance and repair markets demonstrating continued strength – OEM market (recreational marine, transportation) is lackluster • Construction end mar
Slide 106: Polymers & Fluids 2009 Growth Assumptions
Polymers & Fluids 2009 G Growth th Assumptions A ti • Worldwide base revenues expected to expected to be in ranges g of -5% to flat in 2009 • Increased market penetration, new products and lower raw material costs will allow stabilization of margins in base business • Utilization of ITW Toolbox offe
Slide 107: All Other
All Other 16% 20% 8% 15% 13% 15% 13% 20% of total ITW revenues—2008(F)
Slide 108: All Other Businesses
All Other Businesses • All other operating segments include equipment and related software for test and measurement, paint spray equipment, finishing equipment, q p ,pplastic reclosable p packaging, g g, pplastic consumables,, plastic and metal fasteners • End markets include general industrial, fin
Slide 109: All Other Revenues 2008(F)
All Other Worldwide Revenues by Geography 2008(F) General Industrial 23% Consumer Durables 57% North America 21% 18% Food & Beverage Electronics 6% 5% Auto OEM/Tiers Europe E rope 34% Other 27% Asia/Pacific and Other 9% By End Market By Geography
Slide 110: All Other 2008 Trends
All Other 2008 Trends • Test T t & Measurement: M t – Base revenues: +6% for full-year 2008, with double-digit growth coming from Asia – Three 2008 acquisitions (QSA, Sonotech and Avery Weigh-Tronix) drive Test & Measurement annualized revenues to nearly $900 million • Consumer Packaging: – Base rev
Slide 111: All Other 2009 Growth Assumptions
All Other 2009 G Growth th Assumptions A ti • Total segment revenues: -4% to -7% • Test T t & Measurement: M t – Base revenues: -3% to flat in 2009, with majority of growth again emanating from Asia – Acquisition opportunities expected to push platform revenues to over $1 billion in 2009 • Consumer
Slide 112: Today's Key Takeaways
Today’s Today s Key Takeaways
Slide 113: Today's Key Takeaways
Today’s Key Takeaways • Newly-reduced Q4 forecast reflects slowing end markets both in North America and internationally as well as significantly i ifi tl llower currency contributions t ib ti • ITW’s balance sheet, cash flow and credit ratings remain strong g • Food Equipment is a growing business
Slide 114: Questions
Questions ??