Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q3 2019 Earnings Presentation
11 slides from Illinois Tool Works's earnings presentation, Oct 25, 2019
Slide 1: Third Quarter 2019 Earnings Conference Call
THIRD Q UARTER 2019 EAR NIN GS CON FE RE NCE CALL OCTOBER 25, 2019 1
Slide 2: Forward-Looking Statement: Safe Harbor Statement
F O RWA R D - L O O K I N G S TAT E M E N T SAFE HARBOR STATEMENT This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding the expected impact of tariffs and raw material in
Slide 3: Save the Date: ITW 2020 Investor Day
SAVE THE DATE ITW 2020 INVESTOR DAY Friday, March 13, 2020 Food Equipment Group – Traulsen Refrigeration Fort Worth, TX ITW Strategy update & site tour 3
Slide 4: Q3 2019 Financial Performance
Q3 2019 FINANCIAL PERFORMANCE COMMENTS +7% Year-over-year GAAP EPS of $2.04 GAAP EPS $1.90 $2.04 - Includes $0.07 / $21M favorable discrete tax item Organic revenue declined 1.7%, 3.2% on an equal-day basis - Modest sequential decline from Q2 which was down 2.8% - Product Line Simplification imp
Slide 5: Q3 2019 Operating Margin
Q 3 2 0 1 9 O P E R AT I N G M A R G I N KEY MARGIN DRIVERS +40 bps Year-over-year Q3'19 25.0% 23.6% 24.1% Enterprise Initiatives +120 bps Price/Cost +20 Volume (40) Other (60) Q1’19 Q2’19 Q3’19 Restructuring - Enterprise +100 bps +110 bps +120 bps Initiatives Total Margin Expansion +40 bps Price/Co
Slide 6: Q3 Segment Performance
Q3 SEGMENT PERFORMANCE Q2 VS. Q3 ORGANIC GROWTH RATE AUTOMOTIVE OEM EQUAL DAYS BASIS (5)% +60 bps Q3 Organic Q3 Q2 Seq. $781 $744 21.5% 22.1% As Reported Organic * Organic Change Automotive OEM (2)% (4)% (7)% +3%-pts Food Equipment (1) (2) 2 (4) Q3'18 Q3'19 Q3'18 Q3'19 T&M / Electronics (3) (5) (1)
Slide 7: Segment Performance: Food Equipment, Test & Measurement/Electronics
Q3 2019 SEGMENT PERFORMANCE FOOD EQUIPMENT TEST & MEASUREMENT/ELECTRONICS (3)% +90 bps (5)% +90 bps $567 $551 27.5% $536 25.6% 26.6% $512 24.7% Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Total Revenue Operating Margin Total Revenue Operating Margin Organic revenue (1)% Organic revenue (3)%
Slide 8: Segment Performance: Welding, Polymers & Fluids
Q3 2019 SEGMENT PERFORMANCE WELDING POLYMERS & FLUIDS (3)% flat +1% +200 bps $414 $402 28.2% 28.2% $415 $418 24.1% 22.1% Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Total Revenue Operating Margin Total Revenue Operating Margin Organic revenue (2)% Organic revenue 3% - Tough comparison as Q3’
Slide 9: Segment Performance: Construction Products, Specialty Products
Q3 2019 SEGMENT PERFORMANCE CONSTRUCTION PRODUCTS SPECIALTY PRODUCTS (4)% (70) bps (7)% (60) bps $431 $416 25.8% $475 26.8% 25.1% 26.2% $441 Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Q3'18 Q3'19 Total Revenue Operating Margin Total Revenue Operating Margin Organic revenue (1)% Organic revenue (5)% N
Slide 10: 2019 Financial Guidance
2019 FINANCIAL GUIDANCE COMMENTS GAAP EPS $7.60 $7.55 - $7.85 Maintaining full-year 2019 EPS guidance range Organic revenue down 1 to 3% - Product Line Simplification impact (70) bps $14.8B $14.0 to $14.2B ~24% operating margin REVENUE - Enterprise Initiatives contribute more than 100 bps - Po
Slide 11: Q&A
Q&A 11