Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Investor Presentation (2005)
19 slides from Illinois Tool Works's investor presentation, Nov 25, 2005
Slide 1: ITW: A Tradition of Excellence
ITW: A Tradition of Excellence
Slide 2: A Differentiated Operating Strategy
A Differentiated Operating Strategy • Decentralized, close to customer business model • 80/20 business process touches everything • Dedicated focus on margin improvement • Proven track record for integrating value-added acquisitions • Constant innovation of products and broadening of end markets
Slide 3: 70% of 2004 revenues from leading market positions
70% of ITW’s $11.7 billion in 2004 operating revenues came from products where we hold a leading market position
Slide 4: ITW: Both Product And Process
ITW: Both Product And Process • Engineered Components (40%): highly engineered components which are part of other’s products • Specialty Systems (40%): machinery and consumables that are part of other’s production processes • Specialty Products (20%): food equipment is best example
Slide 5: Acquisitions Are Undertaken To Add Value Rather Than Manage The Portfolio
Acquisitions Are Undertaken To Add Value Rather Than Manage The Portfolio 1997 1998 1999 2000 2001 2002 2003 2004 No. of Deals 28 36 32 45 29 21 28 24 Acquired Revenues $420 $818 $3,800$1,000 $556 $195 $347 $624 ($ in millions) Business Units 368 412 488 592 614 603 622 650
Slide 6: Better Balance in Key End Markets
Better Balance in Key End Markets • Since the 1990s, ITW improves channel and geographic diversification in existing construction and auto end markets…and adds Food Equipment as a new platform in 1999
Slide 7: Diversified End Markets
Diversified End Markets 1998 2004 20% 26% 26% 22% 18% 16% 4% 12% 6% 17% 6% 9% 18% Construction Food/Beverage Automotive Consumer Durable Food/Retail Other General Industrial
Slide 8: ITW Global Construction
ITW Global Construction • Designer and manufacturer of construction fastening systems for commercial, new housing and remodeling/rehab sectors • 60 autonomous businesses in 20 countries represent $1.6 billion of revenues
Slide 9: ITW Construction 2004 Revenues by Geography
ITW Construction 2004 Revenues by Geography Total revenues: $1.6 billion 45% North America Europe 25% Asia Pacific 30%
Slide 10: Better Construction Mix Through Growing Renovation Channel
Better Construction Mix Through Growing Renovation Channel 29% New Housing 29% New Housing 70% Commercial 33% 38% Remodeling Commercial & Rehab 1% Remodeling & Rehab 1990 2004
Slide 11: ITW Global Automotive
ITW Global Automotive • Designer and manufacturer of metal and plastic fasteners/components for auto industry • Direct sell to OEM’s and Tier 1 and Tier 2 suppliers • 53 business units in 17 countries represent $1.5 billion of revenues
Slide 12: ITW Global Automotive 2004 Revenues by Geography
ITW Global Automotive 2004 Revenues by Geography Total revenues: $1.5 billion 3% North America 56% Europe Asia Pacific & South America 41%
Slide 13: 2004 Global Automotive Revenues by Channel
2004 Global Automotive Revenues by Channel Total revenues: $1.5 billion 60% Tier 1 & 2 40% OEM
Slide 14: Auto Market Trends
Auto Market Trends 2004 (A) 2005 (F) North American auto builds -4% 0% European auto builds 0% +2% • 2005 FY N.A. auto production estimate (Big 3 light vehicles) forecasted at 11.1 million units • 2004 FY Intl. auto production estimate forecasted at 14.7 million units in Europe
Slide 15: ITW Food Equipment
ITW Food Equipment • Designer and manufacturer of commercial food equipment for food service and food retail customers • 40 businesses in 23 countries represent $1.4 billion of revenues
Slide 16: ITW Food Equipment Group 2004 Revenues by Geography
ITW Food Equipment Group 2004 Revenues by Geography Total revenues: $1.4 billion 3% North America 30% 67% Europe Asia Pacific & South America
Slide 17: Food Equipment Group 2004 Revenues by Channel
Food Equipment Group 2004 Revenues by Channel Total revenues: $1.4 billion 17% 55% Food Service (restaurants/institutions) Food Retail (supermarkets) 28% Parts & Service
Slide 18: Financial Results: 2004 4th Quarter
Financial Results: 2004 4th Quarter Yr. over Yr. Dollars/% Change Revenues: $3.1 billion +16% Income from cont. ops.: $359.2 million +30% Operating margins: 17.5% +110 bp’s
Slide 19: 25 Year Revenue / Income
25 Year Revenue / Income $12,000 $2,200 CAGR $2,000 $10,000 Revenue -----------------------15% $1,800 EPS ----------------------------- 13% $1,600 ROIC ---------------------------- 15% $8,000 $1,400 Shareholder Return = 20% $1,200 $6,000 $1,000 $800 $4,000 $600 $2,000 $400 $200 $0 $0