Illinois Tool Works : Q4 2024 Earnings Webcast Presentation
ITW
Fourth Quarter 2024 Earnings Conference Call
February 5, 2025
Q4'24 Financial Performance
GAAP EPS
$2.38
$2.54
+7%
$4.0B
$3.9B
(1.3)%
(0.5)%
Organic
Revenue
Q4'23
Q4'24
Operating Margin
24.8%
26.2%
+140 bps
Free Cash Flow*
$0.9B
$1B
+10%
COMMENTARY
SOLID EXECUTION AND RESULTS TO FINISH THE YEAR
3
* See ITW's Q4'24 press release for the reconciliation from GAAP to non-GAAP measures.
Product line simplification ("PLS")
Never stronger. Never better positioned for the future.
Q4'24 Segment Performance
FREE CASH FLOW PERFORMANCE*
AUTOMOTIVE OEM
$494M
$996M
$783M
$571M
$814M
(4)%
$785M
19.8%
+220 bps
17.6%
Q1'24
Q2'24
Q3'24
Q4'24
% to Adj
68%
75%
102%
133%
Net Income
Q4'23
Q4'24
Revenue
Q4'23
Q4'24
Operating Margin
* See ITW's Q4'24 press release for the reconciliation from GAAP to non-GAAP measures.
4
Never stronger. Never better positioned for the future.
Q4'24 Segment Performance
FOOD EQUIPMENT
TEST & MEASUREMENT/ELECTRONICS
+3%
$655M
$672M
Q4'23
Q4'24
Revenue
27.0%
27.2%
+20 bps
Q4'23
Q4'24
Operating Margin
$731M $747M
Q4'23 Q4'24
Revenue
+2%
27.0%
+170 bps
25.3%
Q4'23
Q4'24
Operating Margin
5
Never stronger. Never better positioned for the future.
Q4'24 Segment Performance
WELDING
31.2%
+160 bps
POLYMERS & FLUIDS
$451M
(1)%
29.6%
$447M
Q4'23
Q4'24
Q4'23
Q4'24
Revenue
Operating Margin
$440M
(2)%
$430M
Q4'23
Q4'24
Revenue
28.5%
27.9%
(60) bps
Q4'23
Q4'24
Operating Margin
6
Never stronger. Never better positioned for the future.
Q4'24 Financial Performance
CONSTRUCTION PRODUCTS
SPECIALTY PRODUCTS
$459M
(5)%
$438M
Q4'23
Q4'24
Revenue
+110 bps
26.9%
28.0%
Q4'23
Q4'24
Operating Margin
$437M
(5)%
$416M
Q4'23
Q4'24
Revenue
+180 bps
26.6%
28.4%
Q4'23
Q4'24
Operating Margin
7
Never stronger. Never better positioned for the future.
2024 Financial Performance
GAAP EPS
$9.74
$11.71
+20%
- Ex. one-time items**
$10.15
+4%
$16.1B
$15.9B
(1.3)%
Total Revenue
(0.7)%
Organic
2023
2024
Operating Margin
25.1%
26.8%
+170 bps
- Ex. one-time item
26.1%
+100 bps
After-tax ROIC*
30.4%
31.2%
+80 bps
COMMENTARY
SOLID OPERATIONAL EXECUTION AND RECORD RESULTS IN 2024
8 accounting change ($117M pre-tax; EPS $0.30). LIFO had a favorable impact of 70 bps on operating margin.
Never stronger. Never better positioned for the future.
Customer-Back Innovation (CBI)
Solid progress on CBI, the key driver of our ability to consistently grow above-market
CBI CONTRIBUTION TO GROWTH ("YIELD")
STRONG MOMENTUM GOING INTO 2025
3%+
2.3 - 2.5%
2.0%
~1%
Pre-COVID
2024
2025E
2030
Target
ON TRACK TO BUILD ABOVE-MARKET ORGANIC GROWTH FUELED BY CUSTOMER-BACK INNOVATION INTO A DEFINING ITW STRENGTH
9
Never stronger. Never better positioned for the future.
2025 Financial Guidance
COMMENTARY
GAAP EPS
$11.71
$10.15 - $10.55
+5% ex FX
• Organic growth of 0 to 2%; 1 to 3% ex PLS reduction of 1%
- Ex. one-time items
$10.15
- Based on current levels of demand ("run rate")
$15.9B
$15.4 - $15.7B
(3) - (1)%
- FX revenue impact of ~(3)% at current rates
Total Revenue
0 - 2%
• FX EPS headwind of ~$(0.30); $10.65 mid-point ex FX
Organic
represents 5% growth
- Effective tax rate of 24 to 24.5%
• Strong execution delivering margin expansion of ~100 bps
2024
2025E
- Enterprise initiatives contribution of ~100 bps
Operating Margin
26.8%
26.5 - 27.5%
+100 bps
• Free cash flow conversion of 100%+ of net income
- Ex. one-time item
26.1%
After-tax ROIC*
31.2%
31%+
• Share repurchases of $1.5B
WELL-POSITIONED TO OUTPERFORM END MARKETS AND EXPAND MARGINS IN 2025
10 * See ITW's Q4'24 press release for the reconciliation from GAAP to non-GAAP measures.
Never stronger. Never better positioned for the future.
Disclaimer
Illinois Tool Works Inc. published this content on February 05, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 05, 2025 at 16:09:04.835.