Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q3 2017 Earnings Presentation
11 slides from Illinois Tool Works's earnings presentation, Oct 23, 2017
Slide 1: Third-Quarter 2017 Earnings Conference Call
Third-Quarter 2017 Earnings Conference Call October 23, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements NON-GAAP MEASURES The company uses certain non-GAAP measures in discussing the company’s performance. The reconciliation of those measures to the most comparable GAAP measures is detailed in ITW’s press release for the third quarter of 2017, which is available at www.itw.c
Slide 3: Q3 2017 Legal Settlement Impact
Q3 2017 Legal Settlement Impact As previously disclosed, the company entered into a confidential legal settlement in 2017, resulting in a favorable pre-tax impact of $80 million on the third quarter 2017 results. The following schedule illustrates the impact of this item on the company’s reported
Slide 4: Q3 2017 Financial Performance (Ex. Favorable Legal Settlement)
Q3 2017 Financial Performance (Ex. Favorable Legal Settlement) Financial Results Highlights +14% EPS of $1.71, an increase of 14% $1.71 Total revenue grew 4%, organic growth of 2% EPS $1.50 – 6 of 7 segments with positive organic growth $3.6B Strong progress on key performance metrics REVENUE
Slide 5: Q3 2017 Operating Margin (Ex. Legal Settlement)
Q3 2017 Operating Margin (Ex. Legal Settlement) Operating Margin Key Margin Drivers Q3'17 +130 bps Enterprise Initiatives +110 bps 24.4% Volume +60 23.1% Price/Cost (40) Margin Expansion +130 bps Q3'16 Q3'17 STRONG OPERATING MARGIN PERFORMANCE 5
Slide 6: Segment Performance
Segment Performance Q3’17 YTD Performance Automotive OEM Organic Growth Operating Margin FY’16 Q3’17 YTD FY’16 Q3’17 YTD Change +4% (20) bps $795 $765 21.8% 21.6% Automotive OEM 5% 5% 24.1% 22.7%* (140)* bps Food Equipment 3 1 25.4 26.3 +90 T&M and 2 4 18.9 22.1 +320 Q3'16 Q3'17 Q3'16 Q3'17 Electron
Slide 7: Q3 2017 Segment Performance
Q3 2017 Q3 2017 Segment Performance CONFERENCE CALL Food Equipment Test & Measurement/Electronics +1% (10) bps +2% +310 bps $544 $549 27.4% 27.3% $525 24.1% $516 21.0% Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Total Revenue Operating Margin Total Revenue Operating Margin Q3 Performance Q3 Perf
Slide 8: Q3 2017 Segment Performance
Q3 2017 Q3 2017 Segment Performance CONFERENCE CALL Welding Polymers & Fluids $378 +5% +10 bps +3% - bps $361 26.5% 26.6% $434 $422 21.0% 21.0% Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Total Revenue Operating Margin Total Revenue Operating Margin Q3 Performance Q3 Performance Organic growth
Slide 9: Q3 2017 Segment Performance
Q3 2017 Q3 2017 Segment Performance CONFERENCE CALL Construction Products Specialty Products +6% +280 bps +5% +160 bps $440 25.4% $498 27.7% $415 22.6% $477 26.1% Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Total Revenue Operating Margin Total Revenue Operating Margin Q3 Performance Q3 Performan
Slide 10: Full-Year and Fourth-Quarter 2017 Guidance
Q3 2017 Full-Year and Fourth-Quarter 2017 Guidance CONFERENCE CALL 2017 Guidance Highlights GAAP EPS guidance raised by $0.25 at the mid-point +17% − $0.09 Q3’17 “beat” + $0.02 margins + $0.14 legal settlement $6.62 to $6.72 Organic revenue growth of 2 to 3% GAAP EPS $5.70 − ~1.3%-pt. improvemen
Slide 11: Q&A
Q&A