Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q4 FY2014 Earnings Presentation
27 slides from Parker-hannifin's earnings presentation, Aug 6, 2014
Slide 1: 4th Quarter & Fiscal Year 2014 Earnings Release
4th Quarter & Fiscal Year 2014 Earnings Release Parker Hannifin Corporation August 6, 2014 Exhibit 99.2
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures Safe Harbor
Forward-Looking Statements and Non-GAAP Financial Measures Safe Harbor 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
Slide 3: Agenda
Agenda 3 • CEO Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 4: Highlights FY2014
Highlights FY2014 • Record Sales of $13.2B • Segment Operating Margins of 13.5% • Adjusted Segment Operating Margins of 14.3% • Earnings Per Share of $6.87 • Adjusted Earnings Per Share of $6.94 • 10% Increase in EPS and Adjusted EPS • $1.4B in Operating Cash Flow • 13th Consecutive Year greater tha
Slide 5: Highlights 4th Quarter FY2014
Highlights 4th Quarter FY2014 • Record Sales of $3.5B • Segment Operating Margins of 14.5% • Adjusted Segment Operating Margins of 15.0% • Earnings Per Share of $1.98 • Adjusted Earnings Per Share of $2.06 • Record Operating Cash Flow of $570M, 16.2% of sales 5
Slide 6: Diluted Earnings Per Share FY2014
Diluted Earnings Per Share FY2014 6 * EPS Adjusted for Restructuring Activities, Joint Venture Gain and Asset Write Downs $1.98 $1.78 $6.87 $6.26 FY14 Q4 FY13 Q4 FY14 FY13 EPS - As Reported $2.06 $1.80 $6.94 $6.33 FY14 Q4* FY13 Q4* FY14* FY13* EPS - Adjusted
Slide 7: Influences on Adjusted Earnings Per Share FY2014 vs. FY2013
Influences on Adjusted Earnings Per Share FY2014 vs. FY2013 7
Slide 8: Influences on Adjusted Earnings Per Share 4th Quarter FY2014 vs. 4th Quarter FY2013
Influences on Adjusted Earnings Per Share 4th Quarter FY2014 vs. 4th Quarter FY2013 8
Slide 9: Sales & Segment Operating Margin Total Parker
Sales & Segment Operating Margin Total Parker 9 $ in millions 4th Quarter Full Year As Reported Adjusted for Joint Venture As Reported Adjusted for Joint Venture FY2014 % Change FY2013 FY2014 % Change FY2013 FY2014 % Change FY2013 FY2014 % Change FY2013 Sales As Reported 3,525$ 2.8 % 3,428$ 3,525$ 4
Slide 10: Sales & Segment Operating Margin Diversified Industrial North America
Sales & Segment Operating Margin Diversified Industrial North America 10 $ in millions 4th Quarter Full Year FY2014 % Change FY2013 FY2014 % Change FY2013 Sales As Reported 1,525$ 4.0 % 1,466$ 5,693$ 1.0 % 5,638$ Acquisitions 3 0.0 % 52 0.9 % Currency (6) (0.4)% (27) (0.5)% Organic Sales 1,528$ 4.4
Slide 11: Sales & Segment Operating Margin Diversified Industrial International
Sales & Segment Operating Margin Diversified Industrial International 11 $ in millions 4th Quarter Full Year FY2014 % Change FY2013 FY2014 % Change FY2013 Sales As Reported 1,383$ 3.1 % 1,342$ 5,288$ 3.5 % 5,110$ Acquisitions - - % 22 0.4 % Currency 26 2.0 % - - % Organic Sales 1,357$ 1.1 % 5,266$ 3
Slide 12: Sales & Segment Operating Margin Aerospace Systems
Sales & Segment Operating Margin Aerospace Systems 12 $ in millions 4th Quarter Full Year As Reported Adjusted for Joint Venture As Reported Adjusted for Joint Venture FY2014 % Change FY2013 FY2014 % Change FY2013 FY2014 % Change FY2013 FY2014 % Change FY2013 Sales As Reported 618$ (0.3)% 620$ 618$
Slide 13: Order Rates
Jun 2014 Mar 2014 Jun 2013 Mar 2013 Total Parker 4 %+ 7 %+ 0% 7 %- Diversified Industrial North America 6 %+ 6 %+ 5 %- 10 %- Diversified Industrial International 4 %- 5 %+ 3 %+ 7 %- Aerospace Systems 17 %+ 16 %+ 3 %+ 0 %+ Order Rates 13 Excludes Acquisitions, Divestitures & Currency 3-month year-ove
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 15 4th Quarter Full Year FY 2014 % of Sales FY 2013 % of Sales FY 2014 % of Sales FY 2013 % of Sales As Reported Cash Flow From Operating Activities 570 16.2% 472 13.8% 1,388 10.5% 1,191 9.1% Discreti nary Pension Plan Contribution 75 226 Adjusted Cash Flow From O
Slide 16: FY2015 Guidance
FY2015 Guidance Adjusted EPS Initiated at $7.65 Midpoint 16 Adjusted Sales Growth vs. Prior Year Diversified Industrial North America 3% - 7% Diversified Industrial International 1% - 4% Aerospace Systems 2% - 3% Total Parker 2% - 5% Adjusted Segment Operating Margins Diversified Industrial North Am
Slide 17: Influences on Adjusted Earnings Per Share FY2015 vs. FY2014
Influences on Adjusted Earnings Per Share FY2015 vs. FY2014 17
Slide 18: [LISTED ]
[LISTED ] NYSE
Slide 19: Appendix
Appendix • Consolidated Statement of Income • Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS • Business Segment Information By Industry • Reconciliation of Net Sales to Adjusted Net Sales • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Supplemental
Slide 20: Consolidated Statement of Income
Consolidated Statement of Income 20 Three Months Ended June 30, Year Ended June 30, (Dollars in thousands except per share amounts) 2014 2013 2014 2013 Net sales 3,525,415$ 3,428,233$ 13,215,971$ 13,015,704$ Cost of sales 2,685,954 2,618,067 10,188,227 10,086,675 Gross profit 839,461 810,166 3,027,7
Slide 21: Reconciliation of Net Income & EPS
(Unaudited) Three Months Ended June 30, Year Ended June 30, 2014 2013 2014 2013 Net income 301,176$ 271,130$ 1,041,418$ 948,784$ Adjustments: Restructuring charges 12,854 3,392 73,684 10,048 Asset w ritedow ns - - 192,188 - Gain related to joint venture agreement - - (255,652) - Adjusted net income
Slide 22: Business Segment Information by Industry
Three Months Ended June 30, Year Ended June 30, (Dollars in thousands) 2014 2013 2014 2013 Net sales Diversif ied Industrial: North America 1,525,038$ 1,466,568$ 5,693,527$ 5,637,657$ International 1,382,757 1,341,715 5,287,916 5,110,332 Aerospace Systems 617,620 619,950 2,234,528 2,267,715 Total 3,
Slide 23: Reconciliation of Net Sales
Reconciliation of Net Sales 23 (Unaudited) Three Months Ended June 30, % Year Ended June 30, % 2014 2013 Change 2014 2013 Change Total net sales 3,525,415$ 3,428,233$ 2.8% 13,215,971$ 13,015,704$ 1.5% Adjustments: Sales related to GE joint venture - 51,247 49,510 175,306 Adjusted total net sales 3,5
Slide 24: Consolidated Balance Sheet
Consolidated Balance Sheet 24 June 30, June 30, (Dollars in thousands) 2014 2013 Assets Current assets: Cash and cash equivalents 1,613,555$ 1,781,412$ Marketable securities 573,701 - Trade accounts receivable, net 1,858,176 1,840,820 Non-trade and notes receivable 388,437 221,925 Inventories 1,371,
Slide 25: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows 25 Year Ended June 30, (Dollars in thousands) 2014 2013 Cash flows from operating activities: Net income 1,041,418$ 948,784$ Depreciation and amortization 336,702 335,624 Stock incentive plan compensation 103,161 84,996 Goodw ill and intangible asset impairment 1
Slide 26: Supplemental Sales Information Global Technology Platforms
(Unaudited) Three Months Ended June 30, Year Ended June 30, (Dollars in thousands) 2014 2013 2014 2013 Net sales Diversif ied Industrial: Motion Systems 1,036,565$ 996,735$ 3,898,961$ 3,898,212$ Flow and Process Control 1,128,107 1,100,614 4,252,589 4,177,185 Filtration and Engineered Materials 743,
Slide 27: Reconciliation of Forecasted EPS
(Unaudited) (Amounts in dollars) Fiscal Year 2015 Forecasted earnings per diluted share $7.00 to $7.80 Adjustments: Restructuring charges .25 Adjusted forecasted earnings per diluted share $7.25 to $8.05 Reconciliation of Forecasted EPS 27