Illinois Tool Works Inc. · NYSE:ITW
Illinois Tool Works — Q2 2014 Earnings Presentation
11 slides from Illinois Tool Works's earnings presentation, Jul 29, 2014
Slide 1: Second Quarter 2014 Conference Call
Second Quarter 2014 Conference Call E. Scott Santi, President & CEO Michael M. Larsen, Senior Vice President & CFO John Brooklier, Vice President Investor Relations July 29, 2014 FORWARD LOOKING STATEMENTS Safe Harbor Statement This conference call contains forward-looking statements within the mean
Slide 2: Q2 2014 Financial Summary
Q2 2014 Financial Summary Q2 2014 Actuals Highlights ● Q2 EPS from continuing ops $1.21 up 32% EPS +32% ● Record operating margin of 20.5% … $1.21 EPS $0.92 Enterprise initiatives contribute 120 bps ● Total revenue up 4%; organic revenue grew $3.7B Total $3.6B 1.4% in a mixed environment Revenue ● C
Slide 3: Q2 2014 Organic Revenue Growth
Q2 2014 Organic Revenue Growth Highlights Growth by Geography ● North America up 1% Organic revenue – Automotive OEM +8%, Food Equipment +4%, +1.4% Welding +4%, and Test & Measurement +4% 7% ● International growth +2% on tougher comps ● Europe up 1% 1% 2% 1% – Automotive OEM +9% and Test & Measureme
Slide 4: Q2 2014 Operating Margins
Q2 2014 Operating Margins Operating Margins Key Drivers 20.5% 17.5% Q2 Enterprise Initiatives +120 bps Q2‘13 Q2‘14 Volume +40 OM% V bps Automotive OEM 23.7% +310 Price/Cost +10 T&M and Electronics 15.2 +150 Food Equipment 19.5 +80 Other (incl. ’13 pension settlement) +130 Polymers & Fluids 19.6 +130
Slide 5: Q2 2014 Segment Results: Automotive OEM
Q2 2014 Segment Results ($’s in millions) By Segment Automotive OEM Total +9% Organic +8% +310 bps Total Operating Revenue Income $671 23.7% $614 20.6% Q2'14 VPY% Q2‘14 VPY% Automotive OEM $671 9% $158 26% T&M and Electronics 558 3% 85 14% Q2‘13 Q2‘14 Q2‘13 Q2‘14 Total Revenue Operating Margin Food
Slide 6: Q2 2014 Segment Results: T&M and Electronics, Food Equipment
Q2 2014 Segment Results ($’s in millions) Test & Measurement and Electronics Food Equipment Total +3% Total +10% +150 bps +80 bps Organic +1% Organic +3% $542 $558 $537 19.5% 15.2% $491 18.7% 13.7% Q2‘13 Q2’14 Q2‘13 Q2‘14 Q2‘13 Q2‘14 Q2‘13 Q2‘14 Total Revenue Operating Margin Total Revenue Operating
Slide 7: Q2 2014 Segment Results: Polymers & Fluids, Welding
Q2 2014 Segment Results ($’s in millions) Polymers & Fluids Welding Total -4% Total -2% Organic -3% +130 bps Organic -2% -20 bps 26.5% 26.3% $525 $480 $470 $506 18.3% 19.6% Q2‘13 Q2‘14 Q2‘13 Q2‘14 Q2‘13 Q2‘14 Q2‘13 Q2‘14 Total Revenue Operating Margin Total Revenue Operating Margin Dynamics Dynamics
Slide 8: Q2 2014 Segment Results: Construction and Specialty Products
Q2 2014 Segment Results ($’s in millions) Construction Products Specialty Products Total ~Flat Total +7% Organic ~Flat +450 bps Organic ~Flat +180 bps $540 24.2% 18.2% $506 22.4% $446 $444 13.7% Q2‘13 Q2‘14 Q2‘13 Q2‘14 Q2‘13 Q2‘14 Q2‘13 Q2‘14 Total Revenue Operating Margin Total Revenue Operating Ma
Slide 9: 2014 Financial Guidance
2014 Financial Guidance Q3 2014 Guidance 2014 Guidance EPS +37% EPS +26% at mid-point at mid-point $1.19 - $1.27 $4.50 - $4.62 EPS $0.90 $3.63 EPS Up 3-4% Up 3-4% $3.6B $14.1B Total Total Revenue Revenue Q3’13 Q3’14F 2013 2014F ● 2-3% organic revenue growth ● 2-3% organic revenue growth ● Initiative
Slide 10: Appendix
Appendix I TW
Slide 11: Segment Results Q2 2014 vs. Q2 2013
Segment Results Q2 2014 vs. Q2 2013 Favorable / (Unfavorable) Automotive T&M and Food Polymers & Construction Specialty Total Revenue OEM Electronics Equipment Fluids Welding Products Products Organic 7.8% 1.4% 3.4% (3.0%) (1.8%) 0.4% - Acquisitions/Divestitures - (0.1%) 4.1% - - (0.8%) 5.5% Transla