Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q1 2011 Earnings Presentation
22 slides from Illinois Tool Works's earnings presentation, Apr 26, 2011
Slide 1: ITW Conference Call First Quarter 2011
Exhibit 99.2 ITW Conference Call First Quarter 2011 1 Q1 2011 Conference Call
Slide 2: Agenda
ITW Agenda g 1. Introduction…………………...….. John Brooklier/David Speer 2. Financial Overview…………..….. Ron Kropp 3. Reporting Segments………....…. John Brooklier 4. 2011 Forecasts…………………… Ron Kropp 5. Q & A………………......……...…... John Brooklier/Ron Kropp/David Speer 2 Q1 2011 Conference Call
Slide 3: Forward-Looking Statements
ITW Forward - Looking g Statements This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding operating performance performance, revenue growth growth, diluted net income per
Slide 4: Conference Call Playback
Conference Call Playback Replay number: 402-220-6528 No p pass code necessary y Telephone replay available through midnight of Mayy 10,, 2011 Webcast / PowerPoint replay available at www.itw.com 4 Q1 2011 Conference Call
Slide 5: Quarterly Highlights
ITW Quarterly Q y Highlights g g $ in Millions 2010 2011 F(U) Last Year Q1 Q1 Amount % Operating Revenues 3,737.6 4,387.6 650.0 17.4% Operating Income 541.5 682.6 141.1 26.0% % of Revenues 14.5% 15.6% 1.1% Net Income Income Amo Amount nt 333.8 333 8 623.1 623 1 289.3 289 3 86.7% 86 7% Income Per Sha
Slide 6: Quarterly Operating Analysis
ITW Quarterly y Operating p g Analysis y % F(U) Prior Year Operating Operating Operating Revenues Income Margins Base Manufacturing Business Operating Leverage 11.7% 34.0% 2.9% Changes in VM & OH costs - -15.0% -2.0% Total 11 7% 11.7% 19 0% 19.0% 0 9% 0.9% Acquisitions/Divestitures 4.2% 1.3% -0.4% T
Slide 7: Non Operating & Taxes
ITW Non Operating p g & Taxes $ in Millions 2010 2011 F(U) Last Year Q1 Q1 Amount % Operating Income 541 5 541.5 682 6 682.6 141 1 141.1 26 0% 26.0% Interest Expense (44.3) (44.0) 0.3 Other Income 4.6 5.5 0.9 N t IIncome - Pretax Net P t 501 8 501.8 644 1 644.1 142 3 142.3 28 4% 28.4% Income Taxes 1
Slide 8: Invested Capital
ITW Invested Capital $ in Millions 3/31/10 12/31/10 3/31/11 Trade Receivables 2,483.1 2,581.6 2,981.2 Days Sales Outstanding 59.8 57.9 61.2 Inventories 1,432.5 1,634.9 1,824.1 Months on Hand 1.8 1.8 1.9 Prepaids and Other Current Assets 285.5 266.2 394.9 Accounts Payable y & Accrued Expenses p ((2,0
Slide 9: Debt & Equity
ITW Debt & Equity q y $ in Millions 3/31/10 12/31/10 3/31/11 Short Term Debt 329.1 326.2 750.8 Long Term Debt 2,799.1 2,542.1 2,597.3 Total Debt 3,128.2 2,868.3 3,348.1 Stockholders' Equity 8,843.6 9,572.0 10,379.3 Total Capital 11,971.8 12,440.3 13,727.4 Less: Cash (1,501.4) (1,186.3) (1,084.5) Net
Slide 10: Cash Flow
ITW Cash Flow $ in Millions 2010 2011 Q1 Q1 Net Income 333.8 623.1 Adjust for Non-Cash Items 155.7 (92.2) Changes in Trade Receivables (182.1) (320.6) Changes in Inventories (110 7) (110.7) (81 8) (81.8) Changes in all other Operating Assets & Liabilities 78.1 16.1 Net Cash From Operating Activities
Slide 11: Acquisitions
ITW Acquisitions $ in Millions 2010 2011 Q1 Q2 Q3 Q4 Total Q1 Annual Revenues Acquired 26 253 120 131 530 329 Purchase Price Cash Paid 27 199 145 160 531 556 Number of Acquisitions 4 7 5 8 24 6 11 Q1 2011 Conference Call
Slide 12: Transportation Quarterly Analysis
Transportation Quarterly y Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment g Q1 ’11 organic g revenues: +15.1% vs. Q1 ’10 R Revenues I Income M Margins i 2010 Q1 610.6 92.3 15.1% • Auto OEM/Tiers: Worldwide base revenue growth of 15.7% in Q1 ’11 vs. Q1 ’10 driven
Slide 13: Industrial Packaging Quarterly Analysis
Industrial Packaging Quarterlyy Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment g Q1 ’11 organic g revenues: Revenues Income Margins +14.2% reflected strong industrial production activity worldwide 2010 Q1 542.2 57.5 10.6% – Total Q1 ’11 North American industrial
Slide 14: Power Systems and Electronics Quarterly Analysis
Power Systems and Electronics Quarterly y Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment g Q1 ’11 organic g revenues: +16.4% due to strong contributions from Revenues Income Margins welding and PC board fabrication units 2010 Q1 572.9 111.6 19.5% • In Q1 ’11, wor
Slide 15: Food Equipment Quarterly Analysis
Food Equipment Quarterly y Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment S t Q1 ’11 organic i Revenues Income Margins revenues: +6.4% vs. Q1 ’10 as 2010 Q1 434.2 56.5 13.0% equipment sales improved 2011 Q1 472.4 67.3 14.3% $ IInc(Dec) (D ) 38 2 38.2 10 8 10.8 1
Slide 16: Construction Products Quarterly Analysis
Construction Products Quarterlyy Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: +8.4% 8 4% d due tto iimproving i European E and d Revenues Income Margins North American construction 2010 Q1 385.5 32.4 8.4% environment 2011 Q1 463.3 45.6
Slide 17: Polymers and Fluids Quarterly Analysis
Polymers and Fluids Quarterly y Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic revenues: Revenues Income Margins +5.2% reflected improved industrial demand for products in North 2010 Q1 257.0 43.0 16.7% American and international end markets 2011 Q
Slide 18: Decorative Surfaces Quarterly Analysis
Decorative Surfaces Quarterly y Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment Q1 ’11 organic Revenues Income Margins revenues: +7.4% vs. Q1 ’10 2010 Q1 247.5 27.5 11.1% 2011 Q1 267.2 33.9 12.7% • North America laminate $ IInc(Dec) (D ) 19 7 19.7 64 6.4 1 6% 1.6%
Slide 19: All Other Quarterly Analysis
All Other Quarterly y Analysis y Q1 2011 Key Points $ in Millions Operating Operating Operating • Segment g Q1 ’11 organic g revenues: +11.5% vs. Q1 ’10 Re en es Revenues Income Margins 2010 Q1 709.8 120.8 17.0% • Q1 ’11 worldwide test and measurement base revenues: 2011 Q1 813.5 157.5 19.4% +19.2%
Slide 20: 2011 Forecast
ITW 2011 Forecast Mid Low High Point 2nd Quarter 2011 Total Revenues 17.0% 20.0% 18.5% Diluted Income per Share $0.99 $1.05 $1.02 % F(U) 2nd Quarter 2010 22% 30% 26% Full Year 2011 Total Revenues 16.0% 18.0% 17.0% Diluted Income per Share $4 16 $4.16 $4 34 $4.34 $4 25 $4.25 % F(U) 2010 39% 45% 42% 2
Slide 21: 2011 Forecast Key Assumptions
ITW 2011 Forecast Key Assumptions • Exchange rates hold at current levels • Acquired revenues in the $800 million to $1 billion range for the year • Restructuring costs of $30 to $40 million for the full year • Tax rate range of 28.5% to 29.5% for Q2 and full year (excludes the impact of the Q1 Aust
Slide 22: ITW Conference Call Q&A
ITW Conference Call Q&A First Quarter 2011 22 Q1 2011 Conference Call