Illinois Tool Works Inc. has recently released its 10-K report, providing a detailed overview of its business operations and financial performance. The company, founded in 1912 and based in Glenview, Illinois, operates through seven segments: Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products, and Specialty Products. These segments cater to various industries including automotive OEM and tiers, MRO, commercial food equipment, construction, general industrial, industrial capital goods, consumer durables, automotive aftermarket end, and other markets.
In 2024, the company employed approximately 44,000 people and reported operating revenue, operating income, operating margin, variable cost of revenue, overhead expenses, number of months on hand in inventory, days sales outstanding in accounts receivable, past due receivables, and return on invested capital as key measurements monitored by management.
The company's business model is centered around its 80/20 Front-to-Back process, which focuses on identifying and capitalizing on the most profitable opportunities while eliminating costs and complexities associated with less profitable ones. Additionally, customer-back innovation and a decentralized, entrepreneurial culture are key components of the business model.
Since 2012, the company has been implementing its enterprise strategy, including portfolio management, business structure simplification, strategic sourcing, and the re-application of its 80/20 Front-to-Back process. The strategy has resulted in meaningful incremental improvement in margins and returns, as evidenced by the company's operating margin and after-tax return on invested capital.
In terms of divestitures and acquisitions, the company divested businesses in the Polymers & Fluids, Food Equipment, and Specialty Products segments, while also completing the acquisition of businesses in the Test & Measurement and Electronics segment. Furthermore, the company entered into a purchase agreement for the sale of its noncontrolling equity interest in Wilsonart International Holdings LLC.
The company's financial results are described using terms such as organic business, operating leverage, price/cost, and product line simplification. Additionally, the 10-K report provides insights into the impact of geopolitical events, such as the Russian military invasion of Ukraine, on the company's subsidiaries.
As a result of these announcements, the company's shares have moved -0.6% on the market, and are now trading at a price of $258.52. If you want to know more, read the company's complete 10-K report here.
