Parker Hannifin : Raymond James’ 46th Annual Institutional Investors Conference

Published: 2025-03-03 17:28:13 ET PH

Parker Hannifin Corporation

Raymond James 46th Annual Institutional Investors Conference

Todd Leombruno

Chief Financial Officer

March 3, 2025

Parker Hannifin at-a-Glance

Engineering Customer Success in Motion & Control Industry for over 100 years

~$20B FY25G Revenue

Diversified

Aerospace

Industrial

Systems

International

31%

28%

Businesses

DiversifiedIndustrial

NorthIndustrialAmerica

North America

41%

Motion Systems

Aerospace

Motion

Systems

16%

Systems

31%

16%

Technology

Platforms

Flow & Process

Filtration &

Control

Engineered

23%

Materials

30%

▪

The Win StrategyTM ▪

A technology powerhouse of

▪

Interconnected solutions

Global distribution network ▪

Decentralized operating structure

#1 Position in Motion & Control Industry

>90% of Sales Comes from 6 Market Verticals

~$145B Market Size

Other 5%

HVAC/R 4%

Energy 8%

Aerospace &

▪ Interconnected technologies and solutions

across market verticals

Defense 33%

~$20B

▪ 2/3's of our revenue comes from customers

Off Highway 15%

who buy 4 or more technologies

Sales

▪ Growth focused on faster growing, longer

cycle markets and secular trends

Transportation 15%

In-plant & Industrial

Equipment 20%

Note: Sales and market sizes as of FY24. Aerospace & Defense market includes sales reported both in the Aerospace Systems seg ment and Diversified Industrial segment.

Why We Win

Strong Competitive Advantages

Parker's

Innovative

Application

Interconnected

Distribution

Business System

Products

Engineering

Technologies

Network

Decentralized structure,

Deep customer

Technical expertise

Enables

Serving global

strategic positioning &

partnership to

creates competitive

comprehensive

aftermarket & small

operational excellence

uncover unmet needs

advantage

solutions for customers

to mid-sized OEMs

Our People, Strategy & Portfolio Drive Performance

A More Resilient Transformed Parker

Revenue

Adjusted Operating

Adjusted EPS1

Free Cash Flow1

Margin1

~$26.70

~$3.2B

~$19.8B

~25.8%

$15.9B

$18.72

$2.2B

22.3%

FY22

FY25G

FY22

FY25G

FY22

FY25G

FY22

FY25G

+8%

+350 bps

+13%

Revenue

Adjusted Operating

Adjusted EPS1

Free Cash Flow1

CAGR

Margin1 Expansion

CAGR

1. Adjusted numbers include certain non-GAAP adjustments and financial measures. See Appendix for additional details and reconciliations.

Note: FY22 As reported: Operating Margin of 20.1%, EPS of $10.09, Cash Flow from Operations: $2.4B. FY25G As reported: Operating Margin of 22.7%, EPS of $24.76, Cash Flow from Operations: $3.6B.

FY29 Targets

Increased Margin & Cash Flow Targets

Organic

Adjusted

Free Cash

Adjusted EPS

Growth CAGR

Operating Margin

EBITDA Margin

Flow Margin

Growth CAGR

4-6% 27% 28%

17% 10%+

+200bps

+300bps

+100bps

From previous target

Reconciliation of FY22 Financials

RECONCILIATION OF OPERATING INCOME TO ADJUSTED OPERATING INCOME

RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW

RECONCILIATION OF EPS TO ADJUSTED EPS

*Amounts have been adjusted to reflect the change in inventory accounting method. **Totals may not foot due to rounding

Reconciliation of FY25 Guidance

RECONCILIATION OF ORGANIC GROWTH

(Unaudited)

Fiscal Year 2025

(Amounts in percentages)

Forecasted Net

Adjusted Forecasted

Sales

Currency

Divestitures

Net Sales

Diversified Industrial

North America Businesses

(8.0%) to (5.0%)

~0.5%

~3.5%

(4.0%) to (1.0%)

International Businesses

(4.0%) to (1.0%)

~2.5%

(1.5%) to 1.5%

Aerospace Systems

9.5% to 12.5%

~0.0%

9.5% to 12.5%

Parker

(2.0%) to 1.0%

~1.0%

~1.5%

0.5% to 3.5%

RECONCILIATION OF OPERATING INCOME TO ADJUSTED OPERATING INCOME

(Unaudited)

Fiscal Year 2025

(Amounts in percentages)

Forecasted

Business

Acquisition-Related

Adjusted Forecasted

Segment Operating

Realignment

Costs to

Intangible Asset

Segment Operating

Margin

Charges

Achieve

Amortization Expense

Margin

Diversified Industrial

North America Businesses

~23.2%

~0.2%

~2.0%

~25.4%

International Businesses

~21.9%

~0.6%

~1.6%

~24.1%

Aerospace Systems

~22.8%

~0.3%

~4.9%

~28.0%

Parker

~22.7%

~0.2%

~0.1%

~2.8%

~25.8%

RECONCILIATION OF FORECASTED EARNINGS PER SHARE

(Unaudited)

(Amounts in dollars)

Fiscal Year 2025

Forecasted earnings per diluted share

$24.46 to $25.06

Adjustments:

Business realignment charges

0.39

Costs to achieve

0.15

Acquisition-related intangible asset amortization expense

4.22

Net gain on divestitures

(1.91)

Gain on sale of building

(0.08)

Tax effect of adjustments

(0.83)

Adjusted forecasted earnings per diluted share

$26.40 to $27.00

RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW

(Unaudited)

(Dollars in millions)

Fiscal Year 2025

Cash flow from operations

$3,400 to $3,700

Less: Capital Expenditures

~(400)

Free cash flow

$3,000 to $3,300

1. This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre -tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

*Totals may not foot due to rounding

Disclaimer

Parker Hannifin Corporation published this content on March 03, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 03, 2025 at 22:27:41.645.