Illinois Tool Works Inc. (NYSE:ITW) Q2 2023 Earnings Call Transcript

Michael Larsen: Well, so Julian, I wouldn’t agree with how you characterize this in terms of no volume gains year-to-date. I think we have a lot of confidence that we continue to take market share not just as we talked about through the pandemic. But on an ongoing basis, I mean, I think if you look at our organic growth rates relative to peers in these – in some of these segments, you’ve got some good comps. You can certainly take a look at that. And I think we’re continuing to invest here in all of our organic growth strategies and efforts, including headcount to continue to take market share. So we have a high degree of confidence that we continue to take share.

Scott Santi: And it’s not something you measure in a quarter or two.

Julian Mitchell: No, I think these…

Scott Santi: I think the long view, we’ve committed to organic growth in our organic growth goals in our – in the Investor Day we just did, and those are organic growth goals that are going to be well above underlying market growth at 4 to 5 and in that case by definition we will continue to take share.

Michael Larsen: Yes. And I think the other thing, I mean, the biggest driver as we talked about at Investor Day, Julian, I think you were there is going to be our customer-back innovation efforts. We’re signing a bright light on our CBI efforts, and we’re – the whole company is focused on continuing to drive up the contribution to organic growth from our innovation efforts. And so you put all of that together we’re highly confident we can deliver our long-term kind of 4% plus organic, which is given our high levels of profitability, that’s all we need to grow, EPS kind of high-single digit, low-double digit. You add an attractive dividend yield on top of that, and you’re getting that 11 to 13 TSR over the long-term, not every year, this year, yes, but not every year. That’s what you should expect from ITW. And it’s much more about that than it is a quarterly market share number, which is, I think, what you’re asking about.

Julian Mitchell: That’s very helpful. Thank you.

Michael Larsen: Sure. You’re welcome.

Operator: And thank you for participating in today’s conference call. All lines may now disconnect at this time.