01—Abstract
Summary
Summary of the 10-K filed February 14, 2025. Cited figures are marked; the original filing is the authoritative source.
Illinois Tool Works Inc. (ITW) reported its annual results for the fiscal year ended December 30, 2024.
The company demonstrated resilience and strategic execution, with operating revenue of $15.9 billiona. Despite a slight revenue dip of 1.3% primarily due to foreign currency impacts and a 0.7% decrease in organic revenue, ITW achieved a significant 5.5% increase in operating income to $4.3 billion. This growth was driven by strong operating margin expansion of 170 basis points to 26.8%, aided by enterprise initiatives and favorable price/cost dynamics.
The company also returned substantial capital to shareholders through dividends and share repurchases. The 'Next Phase' of ITW's strategy (2024-2030) emphasizes building organic growth into a core strength, leveraging its well-established ITW Business Model, including the 80/20 Front-to-Back process and customer-back innovation.
The company operates across seven diverse segments, including Automotive OEM, Food Equipment, and Test & Measurement and Electronics, which together provide a diversified revenue base and operational resilience. ITW continues to focus on portfolio discipline and operational excellence to drive long-term value for its shareholders.
02—Key points
Key Highlights
- Operating revenue for the year ended December 31, 2024, was $15.9 billion, a slight decrease of 1.3% compared to the prior year, primarily attributed to foreign currency impacts and a 0.7% organic revenue decline.
- Operating income saw a robust increase of 5.5% to $4.3 billion, reflecting strong operational execution.
- Operating margin expanded significantly by 170 basis points to 26.8%, driven by enterprise initiatives and favorable price/cost factors.
- Diluted earnings per share (EPS) increased by 20.2% to $11.71, benefiting from operational improvements and the sale of Wilsonart.
- The company returned $1.5 billion to shareholders through share repurchases, with $3.5 billion remaining under its current repurchase program, and increased its quarterly dividend to $1.50 per share.
- ITW continues to refine its portfolio, with past divestitures and recent non-material acquisitions in the Test & Measurement and Electronics segment supporting its strategic focus.
- The company reported no material cybersecurity incidents in 2022, 2023, or 2024, and its cybersecurity framework is robust and regularly updated.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Illinois Tool Works Inc kept $0.22.
- Revenue$15.90B100.0%
- Cost of revenue−$8.86B55.7%
- Gross profit$7.04B44.3%
- Operating costs−$2.78B17.5%
- Operating income$4.26B26.8%
- Interest, other & tax−$776.0M4.9%
- Net income$3.49B21.9%
Where FY2024 revenue went
$15.90B- Cost of revenue: $8.86B, 56% of revenue
- Net income: $3.49B, 22% of revenue
- Other operating costs: $2.48B, 16% of revenue
- R&D: $292.0M, 1.8% of revenue
- Interest, other & tax: $776.0M, 4.9% of revenue
Kept 22% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 14, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $15.90B$16.11B | −1.3% |
| Cost of Revenue | $8.86B$9.32B | −4.9% |
| Gross Profit | $7.04B$6.79B | +3.7% |
| R&D Expenses | $292.00M$284.00M | +2.8% |
| Operating Income | $4.26B$4.04B | +5.5% |
| Net Income | $3.49B$2.96B | +18.0% |
| EPS (Basic) | $11.75$9.77 | +20.3% |
| EPS (Diluted) | $11.71$9.74 | +20.2% |
| Shares Outstanding (Basic) | 296.80M302.60M | −1.9% |
| Shares Outstanding (Diluted) | 297.80M303.60M | −1.9% |
05—Questions
Frequently Asked Questions
What was ITW's overall financial performance in 2024?
In 2024, ITW reported operating revenue of $15.9 billion, a slight decrease of 1.3% year-over-year, impacted by foreign currency headwinds and a minor decline in organic revenue. However, the company achieved a substantial 5.5% increase in operating income to $4.3 billion, with operating margins improving by 170 basis points to 26.8%. This performance was driven by effective execution of its enterprise initiatives and favorable price/cost dynamics.
How is ITW positioning itself for future growth?
ITW's strategy for 2024-2030, termed 'Our Next Phase,' focuses on building organic growth into a core strength comparable to its financial and operational capabilities. This involves sustaining the core ITW Business Model, emphasizing Customer-Back Innovation (CBI) to solve critical customer pain points, and maintaining portfolio discipline by focusing on businesses with long-term competitive advantages. The company also continues to re-apply its 80/20 Front-to-Back process for operational excellence.
What is ITW's approach to capital allocation?
ITW's capital allocation priorities include internal investments to support organic growth, the payment of an attractive dividend to shareholders, and selective strategic acquisitions. The company also actively engages in share repurchases, having repurchased $1.5 billion in 2024 and retaining approximately $3.5 billion authorization under its current program. The quarterly dividend was increased to $1.50 per share.
Which segments performed strongest in terms of operating income growth?
The Automotive OEM segment showed a strong 11.4% increase in operating income due to enterprise initiatives, lower restructuring expenses, and favorable price/cost. The Specialty Products segment also saw a significant 17.6% increase in operating income, driven by enterprise initiatives, operating leverage, and favorable price/cost, despite a divestiture.
06—Continue