Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Illinois Tool Works (ITW) is prepared for foreign currency translations and divestitures to dilute its revenues by a percentage point in 2020 even though it has projected an overall growth of 2pc for the year.


In its 2020 guidance, ITW product line simplification will also moderate by 50 basis points, the company said in its Q4 earnings report.



The company’s total revenue in 2019 totaled $14.1bn, but declined 4.5pc from 2018, with organic revenue also declining 1.9pc. During Q4 2019, the company’s total revenue totaled $3.5bn, down 3.1pc from Q4 2018. Organic revenue decreased by 1.6pc during the fourth quarter. 


Scott Santi, ITW’s chairman and chief executive officer, lauded the company for growing company shares 5pc in an environment that includes global auto builds declining by 6pc. The company’s Automotive OEM segment reported a total revenue of $3.06bn in 2019.


The impact of unfavorable currency translation amounted to 2.3pc. ITW posted an operating margin of 24.1pc and after-tax return on capital of 28.7pc in 2019. The company also reported $2.7bn free cash flow, which is up 9pc over 2018. The company reported free cash flow of $692mn during Q4 with a 114pc conversion rate. 



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