Illinois Tool Works Inc. Business Report FY ended Dec. 2019

Recent Years

Financial Overview

(in million USD)

	FY ended Dec. 31, 2019	FY ended Dec. 31, 2018	Rate of change (%)	Factors
Overall
Net Sales	14,109	14,768	(4.5)	1)
Operating Income	3,402	3,584	(5.1)	2)
Automotive OEM Segment
Net Sales	3,063	3,338	(8.2)	3)
Operating Income	659	751	(12.2)	-

Factors
1) Net Sales
-The Company’s net sales in the fiscal year ended December 31, 2019 totaled USD 14,109 million, a decrease of 4.5% from the previous year. The primary factors for the decrease in sales include negative effects from foreign currency translation, decreased organic sales, and divestiture effects. The Company’s organic sales decreased by 1.9% during the fiscal year due to declines in the Automotive OEM, Specialty Products, Welding and Construction Products segments.

2) Operating Income
-The Company had an operating income of USD 3,402 million in the fiscal year ended December 31, 2019, a decrease of 5.1% from the previous year. The decrease in operating income was due to unfavorable foreign currency translation effects, increased restructuring expenses and decreased organic sales.

3) Automotive OEM Segment sales
-Sales in the Company’s Automotive OEM segment totaled USD 3,063 million in the fiscal year ended December 31, 2019, a decrease of 8.2% over the previous year. Decreased organic revenue combined with negative foreign currency translation effects were the primary drivers for the declining sales. Organic sales in North America decreased by 7.8% due to customer mix as well as unexpected customer shutdowns. Similarly, organic sales in Europe and the Asia Pacific region declined by 4.5% and 2.2%, respectively.

Outlook

-The Company expects that its sales in the fiscal year ending December 31, 2020 will be between USD 13.8 and 14.1 billion, compared to sales of USD 14.1 billion in the fiscal year ending December 31, 2019.

R&D Expenditure

(in million USD)

	FY ended Dec. 31, 2019	FY ended Dec. 31, 2018	FY ended Dec. 31, 2017
Total	221	233	225

Patents

-As of December 31, 2019, the Company owns approximately 3,600 unexpired U.S. patents and 8,700 foreign patents covering articles, methods and machines. The Company also has approximately 1,500 applications for patents pending in the U.S. Patent Office and 4,300 applications pending in foreign patent offices.

-As of December 2019, the Company’s Automotive OEM segment has 2,916 patents and patent applications pending.