Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q1 FY2005 Earnings Presentation
27 slides from Parker-hannifin's earnings presentation, Oct 19, 2004
Slide 1: Quarterly Earnings Release 1st Quarter FY 2005
Exhibit 99.2 Parker Hannifin Corporation Quarterly Earnings Release 1st Quarter FY 2005 October 19, 2004
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-Looking Statements: 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. All statements
Slide 3: Non-GAAP Financial Measure
Non-GAAP Financial Measure This presentation reconciles sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions and divestitures made within the prior four quarters as well as the effects of currency exchange rates on sales. The effects of
Slide 4: Discussion Agenda
Discussion Agenda Financial Highlights Influences on Sales & Earnings WIN Strategy Balance Sheet & Cash Flow Trends Outlook Questions & Answers
Slide 5: Financial Highlights: EPS – 1st Quarter
Financial Highlights EPS – 1st Quarter $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 $1.11 $0.48 1Q FY05 1Q FY04 Note: FY05 1Q EPS was reduced by $0.07 for an investment write down and a pension curtailment loss.
Slide 6: Financial Highlights: Sales – 1st Quarter
Financial Highlights Sales – 1st Quarter 1st Quarter FY05 FY04 Sales $1,947.2 $1,586.9 % change 22.7% Sales from acquisitions & divestitures $54.4 $10.5 Sales without acquisitions & divestitures $1,892.8 $1,576.4 % change 20.1% Currency effects $43.8 Sales without acquisitions, divestitures, & curre
Slide 7: Significant Influences on Sales
Significant Influences on Sales Continued Industrial End Market Strength Aerospace Commercial Defense Globalization Trends
Slide 8: Parker New Order Rates: Industrial North America
Parker New Order Rates Industrial North America -10 -20 -30 -40 J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J 9 9 9 9 0 0 0 0 0 6 7 8 9 0 1 2 3 4 Current month vs. prior year
Slide 9: Parker New Order Rates: Industrial R.O.W.
Parker New Order Rates Industrial R.O.W. -5 -10 -15 J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J 9 9 9 9 0 0 0 0 0 6 7 8 9 0 1 2 3 4 Current month vs. prior year
Slide 10: Parker New Order Rates: Climate & Industrial Controls
Parker New Order Rates Climate & Industrial Controls -5 -10 -15 -20 J O J A J O J A J O J A J 0 0 0 2 3 4 Current month vs. prior year
Slide 11: Parker New Order Rates: Aerospace
Parker New Order Rates Aerospace -10 -20 -30 J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J O J A J 9 9 9 9 0 0 0 0 0 6 7 8 9 0 1 2 3 4 Average last 12 months orders to previous 12 months orders
Slide 12: Influences on Earnings
Influences on Earnings Increased Volume Win Strategy Restructuring/Move to Low Cost Countries Sales Mix – Aerospace Pension Curtailment Loss & Investment Write Off
Slide 13: Segment Reporting: Industrial North America
Segment Reporting Industrial North America FY 2005 1st Qtr FY 2004 1st Qtr Sales As reported $832.3 $667.8 % change 24.6% Acquisitions & Divestitures $15.0 $4.6 without Acquisitions & Divestitures $817.3 $663.2 % change 23.2% Currency effects $1.6 without Acquisitions, Divestitures, & Currency $815.
Slide 14: Segment Reporting: Industrial Rest of World
Segment Reporting Industrial Rest of World FY 2005 1st Qtr FY 2004 1st Qtr Sales As reported $549.0 $421.8 % change 30.1% Acquisitions & Divestitures $39.4 without Acquisitions & Divestitures $509.6 $421.8 % change 20.9% Currency effects $34.0 without Acquisitions, Divestitures, & Currency $475.6 $4
Slide 15: Segment Reporting: Aerospace
Segment Reporting Aerospace FY 2005 1st Qtr FY 2004 1st Qtr Sales As reported $331.1 $284.6 % change 16.3% Acquisitions & Divestitures without Acquisitions & Divestitures $331.1 $284.6 % change 16.3% Currency effects $1.5 without Acquisitions, Divestitures, & Currency $329.6 $284.6 % change 15.8% Op
Slide 16: Segment Reporting: Climate & Industrial Controls
Segment Reporting Climate & Industrial Controls FY 2005 1st Qtr FY 2004 1st Qtr Sales As reported $165.5 $156.0 % change 6.1% Acquisitions & Divestitures without Acquisitions & Divestitures $165.5 $156.0 % change 6.1% Currency effects $2.1 without Acquisitions, Divestitures & Currency $163.4 $156.0
Slide 17: Segment Reporting: Other
Segment Reporting Other FY 2005 FY 2004 1st Qtr 1st Qtr Sales As reported $69.3 $56.7 % change 22.2% Acquisitions & Divestitures $5.9 without Acquisitions & Divestitures $69.3 $50.8 % change 36.4% Currency effects $4.6 without Acquisitions& Divestitures, & Currency $64.7 $50.8 % change 27.2% Operati
Slide 18: Balance Sheet Summary
Balance Sheet Summary Cash Working Capital Inventory Accounts Receivable PP & E Shareholders Equity
Slide 19: Financial Leverage
Financial Leverage Debt to Debt Equity 38.0% 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 20.0% Target 24.1% FY99 FY00 FY01 FY02 FY03 FY 04 Q1 FY05
Slide 20: Strong Cash Flow
Strong Cash Flow FY05 Q1 $160 Operating Cash Flow $800 $700 $600 $500 $400 $300 $200 $100 $0 459 538 529 631 557 662 12.0% 10.0% 8.0% Sales% to 6.0% 4.0% FY 99 FY 00 FY 01 FY 02 FY 03 FY 04
Slide 21: FY 2005 Earnings Outlook Assumptions: Segment Sales & Operating Income
FY 2005 Earnings Outlook Assumptions Segment Sales & Operating Income FY 2005 Sales change vs. FY 2004 NA Industrial 14.0% - 15.0% Industrial ROW 13.5% - 14.0% Aerospace 8.0% - 9.0% CIC 18.0% - 19.0% Other 8.0% - 9.0% FY 2005 Operating Margin percentage change vs. FY 2004 Basis points NA Industrial
Slide 22: FY 2005 Earnings Outlook Assumptions below Operating Margin
FY 2005 Earnings Outlook Assumptions below Operating Margin Corporate Admin. -1% to 1% vs. FY 2004 Interest Expense -7% to -9% vs. FY 2004 Other Exp. (Income) +150% to +170% vs. FY 2004 Tax Rate 31.0%
Slide 23: Earnings Outlook
Earnings Outlook Fiscal Year 2005 2nd Quarter EPS Range $0.85 - $1.05 Fiscal Year 2005 EPS Range $4.30 - $4.70
Slide 24: Forecast Risks
Forecast Risks Raw Material Price Increases Interest Rates Aerospace Recovery Semiconductor Industry Heavy Duty Truck Stability
Slide 25: Questions & Answers
Questions & Answers anything Possible
Slide 26: Appendix: FY 2005 1st Quarter Income Statement
Appendix FY 2005 1st Quarter Income Statement
Slide 27: Income Statement – 1st Quarter
Income Statement – 1stQuarter FY 2005 FY 2004 % of Sales Investment w/d, Pension Curtail % of Sales Net sales $1,947.2 100.0% $1,586.9 100.0% Cost of sales 1,528.3 78.5% $3.7 1,298.8 81.8% Gross profit 418.9 21.5% (3.7) 288.1 18.2% S, G & A 203.3 10.4% 0.9 180.2 11.4% Goodwill impairment loss Other