Slides
Page 1
Jenny Parmentier | Chairman & Chief Executive Officer | September 10 th, 2025 PARKER HANNIFIN CORPORATION Morgan Stanley Laguna Conference
Page 2
2 Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “should,” “could,” “expects,” “targets,” “is likely,” “will,” or the negative of these terms and similar expressions, and may also include statements regarding future performance, orders, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance may differ materially from expectations, including those based on past performance. Among other factors that may affect future performance are: changes in business relationships with and orders by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms, changes in contract costs and revenue estimates for new development programs; changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions, including the acquisition of Curtis Instruments, Inc; ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination and ability to successfully undertake business realignment activities and the expected costs, including cost savings, thereof; ability to implement successfully business and operating initiatives, including the timing, price and execution of share repurchases and other capital initiatives; availability, cost increases of or other limitations on our access to raw materials, component products and/or commodities if associated costs cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developments and other government actions, including related to environmental protection, and associated compliance costs; supply chain and labor disruptions, including as a result of tariffs and labor shortages; threats associated with international conflicts and cybersecurity risks and risks associated with protecting our intellectual property; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; effects on market conditions, including sales and pricing, resulting from global reactions to U.S. trade policies; manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and economic conditions such as inflation, deflation, interest rates and credit availability; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in the tax laws in the United States and foreign jurisdictions and judicial or regulatory interpretations thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should also consider forward-looking statements in light of risk factors discussed in Parker’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and other periodic filings made with the SEC. This presentation contains references to non-GAAP financial information including adjusted earnings per share, adjusted earnings per share growth, adjusted segment operating margin, adjusted segment operating margin growth, free cash flow, and free cash flow growth. As used in this presentation, free cash flow is defined as cash flow from operations less capital expenditures. Although adjusted earnings per share, adjusted earnings per share growth, adjusted segment operating margin, adjusted segment operating margin growth, free cash flow, and free cash flow growth are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating Parker’s performance for the periods presented. Detailed reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures have been included in the appendix to this presentation. Please visit investors.parker.com for more information. Forward-Looking Statements and Non-GAAP Financial Measures
Page 3
3 Industrial North America 41% Businesses Motion Systems 17% Technology Platforms ▪ Decentralized operating structure ▪ A technology powerhouse of Interconnected solutions ▪ Global distribution network▪ The Win StrategyTM ~$20B FY25 Revenue Filtration & Engineered Materials 29% Aerospace Systems 31% Flow & Process Control 23% Motion Systems 17% Diversified Industrial International 28% Aerospace Systems 31% Diversified Industrial North America 41% Parker Hannifin at-a-Glance Engineering Customer Success in Motion & Control Industry for over 100 years
Page 4
4 ~$20B Sales #1 Position in Motion & Control Industry >90% of Sales Come from 6 Market Verticals • Interconnected technologies and solutions across market verticals • 2/3’s of our revenue comes from customers who buy 4 or more technologies • Growth focused on faster growing, longer cycle markets and secular trends In-plant & Industrial Equipment 20% Other 6% HVAC/R 4% Energy 7% Aerospace & Defense 35% Off Highway 13% Transportation 15% ~$145B Market Size Note: Sales and market sizes as of FY25. Aerospace & Defense market includes sales reported both in the Aerospace Systems seg ment and Diversified Industrial segment.
Page 5
5 Why We Win Strong Competitive Advantages Interconnected Technologies Enables comprehensive solutions for customers Application Engineering Technical expertise creates competitive advantage Innovative Products Deep customer partnership to uncover unmet needs Distribution Network Serving global aftermarket & small to mid-sized OEMs Decentralized structure, strategic positioning & operational excellence Parker’s Business System
Page 6
6 Our People, Strategy & Portfolio Drive Performance A More Resilient Transformed Parker Adjusted Segment Operating Margin 1 Revenue Adjusted EPS 1 Free Cash Flow 1 $15.9B $19.9B 22.3% $18.72 26.1% $27.33 $2.2B $3.3B FY22 FY25 +8% Revenue CAGR +380 bps Adjusted Segment Operating Margin1 Expansion +13% Adjusted EPS1 CAGR +15% Free Cash Flow1 CAGR 1. Adjusted numbers include certain non-GAAP adjustments and financial measures. See Appendix for additional details and reconciliations. Note: FY22 As reported: Segment Operating Margin of 20.1%, EPS of $10.09, Cash Flow from Operations: $2.4B. FY25 As reported: Segment Operating Margin of 23.0%, EPS of $27.12, Cash Flow from Operations: $3.8B. FY22 FY25 FY22 FY25 FY22 FY25
Page 7
7 • Safety, Engagement, Ownership • Living up to Our Purpose • Top Quartile Performance • Great Generators & Deployers of Cash What Drives Parker
Page 9
9 APPENDIX
Page 10
10 Reconciliation of FY22 Financials 1. This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. **Totals may not foot due to rounding RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW RECONCILIATION OF EPS TO ADJUSTED EPS
Page 11
11 Reconciliation of FY25 Financials RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW RECONCILIATION OF EPS TO ADJUSTED EPS RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW (Unaudited) (Dollars in millions) 2025 2024 Net Sales 19,850$ 19,930$ Cash Flow from Operations 3,776$ 3,384$ Capital Expenditures (435) (400) Free Cash Flow 3,341$ 2,984$ Cash Flow from Operations Margin 19.0% 17.0% Free Cash Flow Margin 16.8% 15.0% Twelve Months Ended June 30, Twelve Months Ended June 30, 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 RECONCILIATION OF SEGMENT OPERATING INCOME TO ADJUSTED OPERATING INCOME