Slides
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Second Quarter 2025 Earnings Conference Call July 30, 2025
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Never stronger. Never better positioned for the future. Forward-Looking Statements 2 Safe Harbor Statement This presentation and related conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding the potential impact of tariffs, the Company’s projected pricing actions, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, statements regarding diluted earnings per share, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, and the Company’s 2025 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that could cause actual results to differ materially from the Company’s expectations include those that are detailed in ITW’s Form 10-K for 2024 and subsequent reports filed with the SEC. Non-GAAP Measures The Company uses certain non-GAAP measures in discussing the Company’s performance. The reconciliation of those measures to the most directly comparable GAAP measures is detailed in ITW’s press release for the second quarter of 2025, which is available at www.itw.com, together with this presentation. The estimated guidance of free cash flow to net income conversion rate and after-tax return on average invested capital are based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measures and a reconciliation of these forward-looking estimates to their most directly comparable GAAP estimates have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of availability of reliable forward-looking cash flow and operating information.
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Never stronger. Never better positioned for the future. Q2’25 Financial Performance * See ITW’s Q2’25 press release for the reconciliation from GAAP to non-GAAP measures. COMMENTARY 3 Revenue Operating Margin 26.2% $4.0B 26.3% $4.1B Q2'24 Q2'25 $2.54 +10 bps +1% ~flat Organic GAAP EPS $2.58 +2% Operating Income $1.05 $1.07B +1% RESILIENT FINANCIAL PERFORMANCE •Top-line outpaced underlying end markets - Revenue growth of +1%, FX impact of +1% - Encouraging sequential growth of +6% •Solid execution on all elements within our control - Enterprise initiatives contribution of +130 bps - Pricing actions offset tariff cost impact •Record second quarter financial performance - GAAP EPS, Operating Margin, and Operating Income •Free cash flow* of $449M with conversion of 59% –Share repurchases of $375M
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Never stronger. Never better positioned for the future. Q2’25 Financial Performance AUTOMOTIVE OEM $815M $845M Q2'24 Q2'25 Revenue Operating Margin 19.4% Q2'24 Q2'25 +4% •Organic revenue 2% •North America (7)% •Europe 1% •China 22% 21.3% +190 bps 44 SEQUENTIAL IMPROVEMENT Revenue Operating Margin 24.8% $3.8B 26.3% $4.1B Q1’25 Q2'25 $2.38 +150 bps +6% GAAP EPS $2.58 +8% Operating Income $951M $1,068M +12%
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Never stronger. Never better positioned for the future. Q2’25 Segment Performance 5 TEST & MEASUREMENT/ELECTRONICSFOOD EQUIPMENT $667M $680M Q2'24 Q2'25 Revenue Operating Margin 27.1% Q2'24 Q2'25 +2% •Organic revenue 1% •Equipment flat, Service 3% •North America 5% •International (5)% +60 bps27.7% $678M $686M 23.5%+1% •Organic revenue (1)% •Test & Measurement (3)% •Electronics 4% (70) bps22.8% Revenue Operating Margin Q2'24 Q2'25 Q2'24 Q2'25
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Never stronger. Never better positioned for the future. Q2’25 Segment Performance 6 POLYMERS & FLUIDSWELDING $466M $479M Q2'24 Q2'25 Operating Margin 32.9% Q2'24 Q2'25 +3% •Organic revenue 3% •Equipment 4%, Consumables 1% •North America 1% •International 11% +20 bps33.1% $454M $438M 28.2% (3)% •Organic revenue (4)% •Polymers (5)% •Fluids (3)% •Automotive Aftermarket (3)% (50) bps27.7% Revenue Operating Margin Q2'24 Q2'25 Q2'24 Q2'25 Revenue
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Never stronger. Never better positioned for the future. Q2’25 Financial Performance 7 SPECIALTY PRODUCTSCONSTRUCTION PRODUCTS $504M $473M Q2'24 Q2'25 Operating Margin 29.4% Q2'24 Q2'25 (6)% •Organic revenue (7)% •North America (7)% •Europe (5)% •Australia/New Zealand (10)% +140 bps30.8% $449M $455M Q2'24 Q2'25 31.9% Q2'24 Q2'25 +1% •Organic revenue flat •North America 1% •International (1)% +70 bps32.6% Revenue Operating MarginRevenue
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Never stronger. Never better positioned for the future. 2025 Financial Guidance 8 Revenue Operating Margin - Ex. one-time item* 26.8% 26.1% $15.9B 26.0 – 27.0% 2024 2025E After-tax ROIC** 31.2% 31%+ $10.35 - $10.55 +2 – 4% GAAP EPS - Ex. one-time items* $11.71 $10.15 $16.0 – $16.4B * 2024 GAAP results include the favorable impact of Q3 2024 sale of Wilsonart resulting in EPS of $1.26 and a one-time LIFO inventory accounting change resulting in EPS of $0.30 and operating margin improvement of 70 basis points. ** See ITW’s Q2’25 press release for the reconciliation from GAAP to non-GAAP measures. 1 - 3% 0 - 2% Organic COMMENTARY •Continuing to outperform underlying end markets - Top-line guidance based on current levels of demand adjusted for incremental pricing associated with tariffs - Solid progress on Customer-Back Innovation •Strong execution on all elements within our control - Enterprise initiatives contribute more than 100 bps - Pricing actions offset tariff cost impact, EPS neutral •Raising GAAP EPS guidance by $0.10 and narrowing range •Free cash flow conversion of 100%+ of net income •Share repurchases of $1.5B RESILIENT FINANCIAL PERFORMANCE IN AN UNCERTAIN ENVIRONMENT
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Q&A