Illinois Tool Works Inc (NYSE:ITW) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 10:00 am ET

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Illinois Tool Works Inc (NYSE:ITW) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. My name is Julienne, and I will be your conference operator today. At this time, I would like to welcome everyone to the conference call. [Operator Instructions] Thank you. Karen Fletcher, Vice President of Investor Relations, you may begin your conference.

Executive
Karen Fletcher

Okay. Thank you, Julienne. Good morning, and welcome to ITW's Second Quarter 2020 Conference Call. I'm joined by our Chairman and CEO, Scott Santi; and Senior Vice President and CFO, Michael Larsen. During today's call, we will discuss ITW's second quarter 2020 financial results and provide an update on our strategy for managing through the global pandemic. slide two is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2019 Form 10-K and subsequent reports filed with the SEC for more detail about important risks that could cause actual results to differ materially from our expectations, including the potential effects of the COVID-19 pandemic on our business. This presentation uses certain non-GAAP measures and a reconciliation of those measures to the most comparable GAAP measures is contained in the press release. Please turn to slide three, and it's now my pleasure to turn the call over to our Chairman and CEO, Scott Santi.

Executive
E. Scott Santi

Thank you, Karen. Good morning, everyone. While things are far from normal for any of us or our businesses at present, I'm extremely proud of how the ITW team is managing through the unprecedented and challenging circumstances brought about by the pandemic. I want to begin by sincerely thanking my ITW colleagues around the world for the effort, dedication and selflessness that they continue to demonstrate daily and protecting the health and safety of their colleagues while continuing to serve our customers with excellence. As I have said many times, the power of the ITW business model and of our decentralized entrepreneurial culture are never more valuable than during times of significant and rapid change. And we are leveraging both to position the company to participate across a wide range of recovery scenarios while continuing to execute on our long-term strategy to achieve and sustain ITW's full potential performance. Over the last seven years, we have made significant progress in executing our strategy to take full advantage of our unique strengths to clearly establish ITW as one of the world's best-performing, highest-quality and most respected industrial companies, and in doing so, building a company that has both the enduring competitive advantages and the resiliency necessary to deliver consistent upper tier performance in any economic environment.

Well, needless to say, the resilience component of that equation is now being tested in ways that were hard for many of us to even imagine six to seven months ago. And as evidenced by our second quarter results, this company and our team of over 45,000 dedicated professionals are arising to the challenge. In the second quarter, in the face of an unprecedented 29% decline in revenues, ITW delivered $449 million in operating income, $681 million in free cash flow and operating margins of