10-KPeriod: FY2024

ILLINOIS TOOL WORKS INC Annual Report, Year Ended Dec 31, 2024

Filed February 14, 2025For Securities:ITW

Summary

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 billion. 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.

Financial Highlights

52 data points
Beta

Revenue

$15.90B

44.3% Gross Margin

Net Income

$3.49B

21.9% Net Margin

EPS (Diluted)

$11.71

Total Assets

$15.07B

Cash & Equivalents

$948.00M

Free Cash Flow

$2.84B

Financial Statements
Beta
Revenue$15.90B
Cost of Revenue$8.86B
Gross Profit$7.04B
R&D Expenses$292.00M
Operating Income$4.26B
Net Income$3.49B
EPS (Basic)$11.75
EPS (Diluted)$11.71
Shares Outstanding (Basic)296.80M
Shares Outstanding (Diluted)297.80M

Key Highlights

  • 1Operating 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.
  • 2Operating income saw a robust increase of 5.5% to $4.3 billion, reflecting strong operational execution.
  • 3Operating margin expanded significantly by 170 basis points to 26.8%, driven by enterprise initiatives and favorable price/cost factors.
  • 4Diluted earnings per share (EPS) increased by 20.2% to $11.71, benefiting from operational improvements and the sale of Wilsonart.
  • 5The 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.
  • 6ITW continues to refine its portfolio, with past divestitures and recent non-material acquisitions in the Test & Measurement and Electronics segment supporting its strategic focus.
  • 7The company reported no material cybersecurity incidents in 2022, 2023, or 2024, and its cybersecurity framework is robust and regularly updated.

Frequently Asked Questions

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.

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.

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.

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.