Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q2 2010 Earnings Presentation
30 slides from Illinois Tool Works's earnings presentation, Jul 20, 2010
Slide 1: ITW Conference Call Second Quarter
ITW Conference Call Second Quarter Exhibit 99.2
Slide 2: Agenda
ITW Agenda 1. Introduction…………………...….. John Brooklier/David Speer 2. Financial Overview…………..….. Ron Kropp 3. Reporting Segments………....…. John Brooklier 4. 2010 Forecasts…………………… Ron Kropp 5. Q & A………………......……...…... John Brooklier/Ron Kropp/David Speer
Slide 3: Forward-Looking Statements
ITW Forward - Looking 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, revenue growth, diluted income per share from continuing ope
Slide 4: Conference Call Playback
Conference Call Playback Replay number: 203-369-1871 No pass code necessary Telephone replay available through midnight of August 3, 2010 Webcast / PowerPoint replay available at itw.com website
Slide 5: Operating Revenues
Operating Revenues Operating Income % of Revenues Income from Continuing Operations Income Amount Income Per Share-Diluted Net Income Income Amount Income Per Share-Diluted Free Operating Cash Flow 2009 2010 F(U) Last Year Q2 Q2 Amount te 3,392.9 4,076.3 683.4 20.1% 334.8 652.7 317.9 94.9% 9.9% 16.0
Slide 6: Quarterly Operating Analysis
ITW Quarterly Operating Analysis
Slide 7: Operating Income
Operating Income Interest Expense Other Income (expense) Income from Continuing Operations-Pretax Income Taxes % to Pretax Income Income from Continuing Operations Loss from Discontinued Operations Net Income F(U) Last Year 2009 2010 Q2 Qa Amount 334.8 652.7 317.9 (43.9) (43.7) 0.2 (19.8) 58 25.6 24
Slide 8: Trade Receivables
Trade Receivables Days Sales Outstanding Inventories Months on Hand Prepaids and Other Current Assets Accounts Payable & Accrued Expenses Operating Working Capital % to Revenue(Prior 4 Qtrs.) Net Plant & Equipment Investments Goodwill and Intangibles Other, net Invested Capital ROIC - excluding 1Q10
Slide 9: Total Capital
Total Capital Short Term Debt Long Term Debt Total Debt Stockholders’ Equity Total Capital Less: Cash Net Debt & Equity Debt to Total Capital Shares outstanding at end of period 6/30/09 3/34/10 ~—-/30/10 180.5 324.4 305.9 2,855.8 2,807.2 2,724.3, 3,036.3. 3,131.6 3,030.2 7,926.1 8,743.0 8,731.9 10,9
Slide 10: Net Income
Net Income Adjust for Non-Cash Items Changes in Operating Assets & Liabi Net Cash From Operating Activities Additions to Plant & Equipment Free Operating Cash Flow Acquisitions Proceeds from Divestitures Dividends Net Repayments of Debt Proceeds from Investments Other Net Cash Decrease 2009 176.6 16
Slide 11: Annual Revenues Acquired
Annual Revenues Acquired Purchase Price Cash Paid Number of Acquisitions 2009 2010 Qi Q2 Q3 4 Qi Q2 75 54 6 155 26 253 65 = 33 3 185 25 «198 6 5 2 7 4 re
Slide 12: Transportation Quarterly Analysis
Transportation Quarterly Analysis
Slide 13: Transportation Key Points
Transportation Key Points • Transportation segment benefited from strong auto builds and improved auto aftermarket performance • Auto OEM/Tiers: Worldwide base revenues +34.5% in Q2 ’10 vs. Q2 ’09 – North American Q2 ’10 auto builds: 3.1 million vehicles vs. 1.8 million vehicles in Q2 ’09 – European
Slide 14: Industrial Packaging Quarterly Analysis
Industrial Packaging Quarterly Analysis
Slide 15: Industrial Packaging Key Points
Industrial Packaging Key Points • Total segment base revenues continued to improve as industrial production metrics/diversified end markets perform better • Total North American industrial packaging base revenues: +22.5% in Q2 ’10 vs. Q2 ’09 – North American strapping base revenues: +28.7% in Q2 ’10
Slide 16: Food Equipment Quarterly Analysis
Food Equipment Quarterly Analysis
Slide 17: Food Equipment Key Points
Food Equipment Key Points • Total segment Q2 ’10 base revenues: -0.2% vs. Q2 ’09 • North America Q2 ’10 base revenues: -3.7% vs. Q2 ’09 as customers continue to delay equipment purchases – Equipment base revenues: -7.8% in Q2 ’10 vs. Q2 ’09 – Service base revenues: +2.8% in Q2 ’10 vs. Q2 ’09 • Inter
Slide 18: Power Systems and Electronics Quarterly Analysis
Power Systems and Electronics Quarterly Analysis
Slide 19: Power Systems and Electronics Key Points
Power Systems and Electronics Key Points • Total Q2 ’10 segment base revenues increase as welding and PC board fabrication contribute to growth • In Q2 ’10, worldwide welding base revenues: +13.5% vs. Q2 ’09 – Q2 ’10 North America welding base revenues: +20.6% vs. Q2 ’09 – Q2 ’10 International weldi
Slide 20: Construction Products Quarterly Analysis
Construction Products Quarterly Analysis
Slide 21: Construction Products Key Points
Construction Products Key Points • Total segment base revenue growth comes from both North American and international locales • North America Q2 ’10 base revenues: +17.2% vs. Q2 ‘09 – Q2 ’10 residential base revenues: +14.2% vs. Q2 ’09; Q2 new housing starts at 600,000 units – Q2 ’10 renovation base
Slide 22: Polymers and Fluids Quarterly Analysis
Polymers and Fluids Quarterly Analysis
Slide 23: Polymers and Fluids Key Points
Polymers and Fluids Key Points • Total Q2 ’10 segment base revenues helped by expanding industrial production and MRO surge • Q2 ’10 base revenues for worldwide polymers: +16.1% vs. Q2 ‘09 – International base revenues grew 17.5% in Q2 ’10; North America base revenues increased 11.6% in Q2 ’10 • Q2
Slide 24: Decorative Surfaces Quarterly Analysis
Decorative Surfaces Quarterly Analysis
Slide 25: Decorative Surfaces Key Points
Decorative Surfaces Key Points • Total Q2 ’10 segment base revenues: +1.5% vs. Q2 ’09 • North America laminate Q2 ’10 base revenues: +4.1% vs. Q2 ’09 due to Wilsonart brand strength and resiliency as well as less negative commercial construction environment • International Q2 ’10 base revenues: -0.5
Slide 26: All Other Quarterly Analysis
All Other Quarterly Analysis
Slide 27: All Other Key Points
All Other Key Points • Total Q2 ’10 segment base revenues: +14.2% vs. Q2 ’09 • Q2 ’10 worldwide test and measurement base revenues: +10.4% vs. Q2 ’09; first positive base revenue comparison since Q4 ’08 • Q2 ’10 worldwide consumer packaging base revenues: +7.6% vs. Q2 ’09 due to recovery in graphics
Slide 28: 3rd Quarter and Full Year 2010 Forecast
3rd Quarter 2010 Total Revenues Diluted Income per Share - Continuing % F(U) 3rd Quarter 2009 Full Year 2010 Total Revenues Diluted Income per Share - Continuing % F(U) 2009 Low 9% $0.72 20% 11% $2.82 46% High 13% $0.84 40% 13% $3.08 60% Mid Point 11% $0.78 30% 12% $2.95 53%
Slide 29: ITW 2010 Forecast Key Assumptions
ITW 2010 Forecast Key Assumptions • Exchange rates hold at current levels • Acquired revenues in the $500 to $700 million range for the year • Restructuring costs of $50 to $70 million for the full year • Tax rate range of 30.25% to 30.75% for the 3rd quarter and a range of 31.25% to 31.75% for the
Slide 30: ITW Conference Call Q & A
ITW Conference Call Q & A Second Quarter