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Illinois Tool Works (ITW) Announces Performance Goals from 2018 to 2022

December 1, 2017 10:23 AM EST

Illinois Tool Works Inc. (NYSE: ITW) today provided an update on the company’s strategy which is focused on leveraging ITW’s highly differentiated and proprietary Business Model to deliver consistent above-market organic growth with best-in-class margins and returns, and positioning the company as a highly valued core holding for long-term oriented investors.

Through the continued execution of its successful strategy, ITW is targeting the following annual performance goals for the five-year period from 2018 to 2022:

  • 25+% operating margin;
  • 20+% after-tax Return on Invested Capital;
  • Organic growth of 3 to 5%;
  • 35% incremental margin;
  • 8 to 10% Earnings Per Share (EPS) growth;
  • Free cash flow of 100+% of net income; and
  • Dividend payout of approximately 50% of free cash flow by 2020 (vs. 43% currently)

“The combination of our powerful business model, diversified high quality business portfolio, and the ITW team’s proven ability to execute have the company well-positioned to continue to deliver differentiated performance over the next five years, as reflected in our 2018 to 2022 annual performance goals,” said Chairman and CEO, E. Scott Santi.

ITW also initiated 2018 guidance at the event and expects 2018 GAAP EPS to be in the range of $7.05 to $7.25, organic revenue growth of 3 to 4%, and operating margin of 25 to 25.5%. Additionally, the company reaffirmed its 2017 full-year GAAP EPS guidance of $6.62 to $6.72, a year-over-year increase of 17% at the mid-point.



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