Illinois Tool Works Inc. (ITW) stands as a beacon of industrial excellence, a Fortune 300 global multi-industry manufacturing leader that has carved a niche through innovation, operational prowess, and a customer-centric approach. With a revenue of $15.9 billion in 2024, ITW operates through seven industry-leading segments, leveraging a unique business model to deliver solid growth, best-in-class margins, and unparalleled returns.
Table of Contents
Detailed Company Profile
Illinois Tool Works Inc. (ITW), listed on the New York Stock Exchange under the ticker ITW, is a global industrial company headquartered at 155 Harlem Avenue, Glenview, Illinois 60025. With approximately 44,000 dedicated colleagues worldwide, ITW excels in delivering highly innovative, customer-focused solutions across diverse markets. The company’s success is anchored in its proprietary ITW Business Model, which emphasizes operational excellence, customer-back innovation, and disciplined capital allocation to drive above-market growth and best-in-class financial performance.
In 2024, ITW achieved record financial results, including $15.9 billion in revenue, a record operating income of $4.3 billion (up 6%), and a record operating margin of 26.8% (up 170 basis points). The company’s after-tax Return on Invested Capital (ROIC) reached 31.2%, and its GAAP Earnings Per Share (EPS) hit $11.71, a 20% increase from the previous year. ITW invested $800 million in its core businesses, raised its dividend by 7% per share for the 61st consecutive year, and returned $3.2 billion to shareholders through dividends and share repurchases.
The company’s Next Phase Enterprise Strategy (2024–2030) focuses on achieving 4%+ annual organic growth, fueled by Customer-Back Innovation (CBI), with a target of 3%+ CBI contribution to revenue growth by 2030. ITW aims to maintain a 30% operating margin, achieve 9–10% average annual EPS growth, and deliver 100%+ free cash flow conversion, positioning itself to generate 11–13% average annual Total Shareholder Return (TSR) over the long term. With a robust portfolio of approximately 21,000 patents and a diversified business model, ITW is uniquely positioned to deliver reliable, predictable performance in any economic environment.
Business Segments
ITW operates through seven business segments, each tailored to specific markets and leveraging the ITW Business Model to deliver innovative solutions, high margins, and strong returns. Below is a detailed breakdown of each segment, including their 2024 revenue and percentage contribution to total revenue.
| Segment | Description | 2024 Revenue ($M) | Revenue Breakup (%) |
|---|---|---|---|
| Automotive OEM | Provides components and fastening systems for automotive manufacturers. | 3,188 | 20.05% |
| Food Equipment | Offers commercial kitchen equipment for foodservice and institutional markets. | 2,647 | 16.65% |
| Test & Measurement and Electronics | Supplies equipment and software for testing and electronics manufacturing. | 2,818 | 17.72% |
| Welding | Delivers value-added welding equipment and consumables for various applications. | 1,851 | 11.64% |
| Polymers & Fluids | Produces specialized adhesives, lubricants, and additives for industrial and consumer markets. | 1,764 | 11.09% |
| Construction Products | Supplies fastening solutions for residential and commercial construction. | 1,909 | 12.00% |
| Specialty Products | Provides innovative solutions for consumer packaging and niche applications. | 1,743 | 10.96% |
| Total Segments | 15,920 | 100.00% | |
| Intersegment Revenue | Adjustments for intersegment transactions. | (22) | -0.14% |
| Total Operating Revenue | 15,898 | 100.00% |
Segment Details
- Automotive OEM: This segment focuses on original equipment manufacturers in the automotive industry, offering components and fastening systems that enhance vehicle performance and safety. With $3,188 million in revenue, it accounts for the largest share (20.05%) of ITW’s portfolio, driven by strong demand for innovative fastening solutions.
- Food Equipment: Catering to foodservice and institutional markets, this segment provides advanced kitchen equipment, including ovens, dishwashers, and refrigeration systems. It generated $2,647 million (16.65%) in 2024, benefiting from global demand for efficient food processing solutions.
- Test & Measurement and Electronics: This segment supplies precision equipment and software for testing and electronics manufacturing, serving industries like aerospace and semiconductors. It contributed $2,818 million (17.72%) to revenue, reflecting robust demand for high-tech solutions.
- Welding: Offering welding equipment and consumables for commercial, industrial, and infrastructure applications, this segment earned $1,851 million (11.64%) in 2024. Its high operating margin of 29.3% underscores its efficiency.
- Polymers & Fluids: This segment delivers specialized adhesives, lubricants, and additives for industrial and consumer applications, contributing $1,764 million (11.09%) to revenue with a 29.0% operating margin.
- Construction Products: Focused on fastening solutions for construction, this segment generated $1,909 million (12.00%) in 2024, supporting contractor productivity and building quality.
- Specialty Products: This segment provides innovative solutions for consumer packaging and niche applications, contributing $1,743 million (10.96%) with a high operating margin of 30.3%.
Each segment aligns with ITW’s business portfolio criteria, targeting end markets that value sustainable differentiation, offer above-market growth potential, and leverage the ITW Business Model for best-in-class margins and returns.
Products and Services Offered
ITW’s product and service offerings are diverse, tailored to meet customer needs across its seven segments. Below is a detailed list of key products and services, along with their respective segment revenue contributions.
| Segment | Products/Services | 2024 Revenue ($M) | Revenue Breakup (%) |
|---|---|---|---|
| Automotive OEM | Components, fastening systems, and engineered solutions for automotive manufacturers. | 3,188 | 20.05% |
| Food Equipment | Commercial kitchen equipment (ovens, dishwashers, refrigeration systems). | 2,647 | 16.65% |
| Test & Measurement and Electronics | Testing equipment, software, and electronics manufacturing solutions. | 2,818 | 17.72% |
| Welding | Welding equipment, specialty consumables, and related accessories. | 1,851 | 11.64% |
| Polymers & Fluids | Adhesives, lubricants, additives, and coatings for industrial and consumer markets. | 1,764 | 11.09% |
| Construction Products | Fastening solutions (nails, screws, anchors) for construction applications. | 1,909 | 12.00% |
| Specialty Products | Consumer packaging solutions, product branding, and niche application products. | 1,743 | 10.96% |
| Total Operating Revenue | 15,898 | 100.00% |
Comprehensive Details
- Automotive OEM: ITW’s offerings include advanced fastening systems and components that enhance vehicle durability and performance, critical for automotive manufacturers worldwide.
- Food Equipment: Products include high-efficiency ovens, dishwashers, and refrigeration systems designed for commercial kitchens, ensuring reliability and compliance with food safety standards.
- Test & Measurement and Electronics: This segment provides precision instruments and software for testing material properties and manufacturing electronics, vital for industries requiring high accuracy.
- Welding: ITW offers a range of welding equipment and consumables, including electrodes and welding torches, tailored for industrial and infrastructure applications.
- Polymers & Fluids: The segment produces specialized adhesives, lubricants, and additives that improve product performance in industrial and consumer applications, such as automotive coatings and industrial sealants.
- Construction Products: ITW supplies fastening solutions like nails, screws, and anchors, enhancing productivity and quality in residential and commercial construction.
- Specialty Products: This segment focuses on innovative packaging solutions, such as food and beverage containers, and niche products for branding and specialty applications.
ITW’s Customer-Back Innovation framework ensures that these products are developed in close collaboration with customers, addressing their most critical challenges and driving above-market growth.
Company History
Founded in 1912, Illinois Tool Works Inc. has evolved from a modest industrial operation into a global manufacturing leader. Over its century-long journey, ITW has transformed through strategic innovation, acquisitions, and a relentless focus on operational excellence.
- Early Years (1912–1950s): ITW began as a tool manufacturing company, focusing on metalworking and industrial tools. Its early innovations laid the foundation for its reputation as a problem-solver for industrial clients.
- Expansion and Diversification (1960s–1980s): ITW expanded through acquisitions, diversifying into automotive components, welding equipment, and construction products. The development of the ITW Business Model, emphasizing decentralized operations and customer focus, began to take shape.
- Globalization and Growth (1990s–2000s): ITW expanded its global footprint, establishing operations in Europe, Asia Pacific, and South America. The company’s focus on high-margin, innovative products strengthened its competitive position.
- Enterprise Strategy (2012–2024): Launched in 2012, ITW’s Enterprise Strategy transformed the company from a “middle-of-the-pack” industrial player to one of the highest-performing industrial companies globally. By 2024, ITW’s revenue stood at $15.9 billion, down from $17.9 billion in 2012 due to strategic divestitures, but operating income grew 54% to $4.3 billion, and operating margin improved from 15.9% to 26.8%. EPS grew 3.6x to $11.71, and market capitalization increased 3.3x to $75 billion.
- Next Phase Strategy (2024–2030): In 2024, ITW launched its Next Phase Enterprise Strategy, aiming to achieve 4%+ organic growth, 30% operating margins, and 11–13% annual TSR by 2030. The strategy emphasizes Customer-Back Innovation, with a goal of 3%+ CBI contribution to revenue growth.
Key milestones include raising dividends for 61 consecutive years, achieving a robust patent portfolio of 21,000, and maintaining a diversified portfolio that mitigates economic risks. ITW’s commitment to “Do What We Say” execution has solidified its reputation as a reliable, high-performing industrial leader.
Brands
ITW’s brands are integral to its success, with many protected by its extensive patent portfolio. While the report does not provide a detailed list of individual brands, it notes that certain trademarks are owned or licensed by ITW or its wholly-owned subsidiaries. Below is an overview of key product categories under each segment, with revenue contributions serving as a proxy for brand performance.
| Segment | Key Product Categories (Brands) | 2024 Revenue ($M) | Revenue Breakup (%) |
|---|---|---|---|
| Automotive OEM | Fastening systems, components | 3,188 | 20.05% |
| Food Equipment | Commercial kitchen equipment (ovens, dishwashers, refrigeration) | 2,647 | 16.65% |
| Test & Measurement and Electronics | Testing equipment, software solutions | 2,818 | 17.72% |
| Welding | Welding equipment, consumables (electrodes, torches) | 1,851 | 11.64% |
| Polymers & Fluids | Adhesives, lubricants, additives, coatings | 1,764 | 11.09% |
| Construction Products | Fastening solutions (nails, screws, anchors) | 1,909 | 12.00% |
| Specialty Products | Packaging solutions, branding products | 1,743 | 10.96% |
| Total Operating Revenue | 15,898 | 100.00% |
Comprehensive Details
ITW’s brands are not explicitly named in the report, but its product categories are synonymous with its market-leading offerings. Over half of ITW’s revenues in 2024 were protected by patents or trade secrets, with patent filings increasing by 18% in 2024, a key indicator of innovation strength. The company’s decentralized approach ensures that each division develops branded solutions tailored to customer needs, enhancing market differentiation and competitive advantage.
Geographical Presence
ITW’s global operations span multiple regions, with revenue generated based on customer locations. The company maintains a significant presence in North America, Europe, the Middle East, Africa, Asia Pacific, and South America.
| Region | 2024 Revenue ($M) | Revenue Breakup (%) |
|---|---|---|
| United States | 7,374 | 46.37% |
| Canada/Mexico | 1,156 | 7.27% |
| Total North America | 8,530 | 53.65% |
| Europe, Middle East, and Africa | 4,101 | 25.79% |
| Asia Pacific | 2,961 | 18.62% |
| South America | 306 | 1.92% |
| Total Operating Revenue | 15,898 | 100.00% |
Comprehensive Details
- United States: The U.S. is ITW’s largest market, contributing 46.37% of revenue. Approximately 44% of ITW’s net plant and equipment is located in the U.S., reflecting significant operational infrastructure.
- Canada/Mexico: These markets add 7.27% to revenue, supporting ITW’s strong North American presence (53.65% total).
- Europe, Middle East, and Africa (EMEA): EMEA accounts for 25.79% of revenue, driven by demand for automotive, welding, and construction products.
- Asia Pacific: Contributing 18.62% of revenue, Asia Pacific is a key growth region, with 16% of ITW’s net plant and equipment located in China.
- South America: This region contributes 1.92% to revenue, with a smaller but strategic presence.
ITW’s diversified geographical footprint mitigates economic risks, ensuring stable performance across global markets.
Financial Performance
ITW’s financial performance in 2024 reflects its operational excellence and disciplined capital allocation. Below are the consolidated Profit & Loss (P&L), Balance Sheet, and Cash Flow Statement for 2024, 2023, and 2022, presented in tables.
Consolidated Statement of Income
| In Millions | 2024 | 2023 | 2022 |
|---|---|---|---|
| Operating Revenue | 15,898 | 16,107 | 15,932 |
| Variable Cost of Revenue | 7,604 | 7,944 | 8,136 |
| Overhead Expenses | 4,101 | 4,107 | 3,924 |
| Operating Income | 4,264 | 4,040 | 3,790 |
| Interest Expense | (283) | (266) | (203) |
| Other Income (Expense) | 441 | 49 | 255 |
| Income Before Taxes | 4,422 | 3,823 | 3,842 |
Consolidated Statement of Financial Position
| In Millions | 2024 | 2023 | 2022 |
|---|---|---|---|
| Assets | |||
| Automotive OEM | 2,578 | 2,615 | 2,447 |
| Food Equipment | 1,188 | 1,193 | 1,188 |
| Test & Measurement and Electronics | 3,186 | 3,230 | 3,289 |
| Welding | 857 | 838 | 933 |
| Polymers & Fluids | 1,673 | 1,762 | 1,819 |
| Construction Products | 1,172 | 1,230 | 1,370 |
| Specialty Products | 1,566 | 1,627 | 1,696 |
| Total Segment Assets | 12,220 | 12,495 | 12,742 |
| Corporate Assets | 2,847 | 3,023 | 2,680 |
| Total Assets | 15,067 | 15,518 | 15,422 |
Consolidated Statement of Cash Flows
| In Millions | 2024 | 2023 | 2022 |
|---|---|---|---|
| Plant and Equipment Additions | |||
| Automotive OEM | 209 | 224 | 181 |
| Food Equipment | 55 | 54 | 41 |
| Test & Measurement and Electronics | 32 | 43 | 49 |
| Welding | 43 | 41 | 43 |
| Polymers & Fluids | 28 | 27 | 23 |
| Construction Products | 34 | 31 | 33 |
| Specialty Products | 36 | 35 | 42 |
| Total Additions | 437 | 455 | 412 |
Financial Highlights
- Revenue: $15.9 billion in 2024, slightly down from $16.1 billion in 2023 due to strategic portfolio adjustments.
- Operating Income: Increased 6% to $4.3 billion, driven by a 170-basis-point improvement in operating margin to 26.8%.
- Free Cash Flow: ITW targets 100%+ free cash flow conversion, supporting investments and shareholder returns.
- Capital Allocation: ITW invested $800 million in core businesses, returned $3.2 billion to shareholders, and raised dividends by 7% per share.
Subsidiaries, Wholly-Owned Subsidiaries, and Associates
ITW operates through numerous subsidiaries and affiliates, with a full list filed as Exhibit 21 in its 2024 Form 10-K. While specific revenue contributions for each subsidiary are not detailed, the report indicates that these entities operate within ITW’s seven segments. Below is a summary of ITW’s subsidiary structure.
| Segment | Subsidiaries/Affiliates | Ownership | Revenue Contribution ($M) | Revenue Breakup (%) |
|---|---|---|---|---|
| Automotive OEM | Various subsidiaries | 100% | 3,188 | 20.05% |
| Food Equipment | Various subsidiaries | 100% | 2,647 | 16.65% |
| Test & Measurement and Electronics | Various subsidiaries | 100% | 2,818 | 17.72% |
| Welding | Various subsidiaries | 100% | 1,851 | 11.64% |
| Polymers & Fluids | Various subsidiaries | 100% | 1,764 | 11.09% |
| Construction Products | Various subsidiaries | 100% | 1,909 | 12.00% |
| Specialty Products | Various subsidiaries | 100% | 1,743 | 10.96% |
Comprehensive Details
- ITW’s subsidiaries are wholly-owned and operate under the parent company’s decentralized structure, allowing each division to tailor solutions to specific markets.
- The report does not list specific subsidiary names but confirms that all are fully integrated into ITW’s segment operations.
- No associate companies (less than 100% ownership) are mentioned, indicating that ITW maintains full control over its operational entities.
Physical Properties
ITW’s physical assets include offices, manufacturing plants, and other facilities supporting its global operations. The report provides limited details but highlights the distribution of net plant and equipment.
| Region | Net Plant and Equipment (% of Total) | Details |
|---|---|---|
| United States | 44% | Major manufacturing and R&D facilities. |
| China | 16% | Significant production hubs in Asia Pacific. |
| Other Countries | <10% per country | Scattered facilities across EMEA and South America. |
Comprehensive Details
- United States: Hosts 44% of ITW’s net plant and equipment, including its headquarters in Glenview, Illinois, and multiple manufacturing facilities.
- China: Accounts for 16% of net plant and equipment, reflecting ITW’s investment in Asia Pacific’s growth markets.
- Global Footprint: No single country outside the U.S. and China exceeds 10% of net plant and equipment, indicating a distributed network of smaller facilities.
Board of Directors
ITW’s Board of Directors comprises experienced leaders with diverse backgrounds. Below is a detailed list of the 2025 Board members.
| Name | Title/Background |
|---|---|
| Daniel J. Brutto | Retired President, UPS International; Retired Senior Vice President, United Parcel Service, Inc. |
| Susan Crown | Chairman and Chief Executive Officer, Owl Creek Partners, LLC |
| Darrell L. Ford | Executive Vice President and Chief Human Resources Officer, UPS International |
| Kelly J. Grier | Retired US Chair and Managing Partner (CEO), Ernst & Young LLP |
| James W. Griffith | Retired President and Chief Executive Officer, The Timken Company |
| Jay L. Henderson | Retired Vice Chairman, Client Service, PricewaterhouseCoopers LLP |
| Jaime Irick | Former Chief Executive Officer, The Pittsburgh Paints Company |
| Richard H. Lenny | Non-Executive Chairman, Conagra Brands, Inc. |
| Christopher A. O’Herlihy | President and Chief Executive Officer, Illinois Tool Works Inc. |
| E. Scott Santi | Non-Executive Chairman of the Board, Illinois Tool Works Inc. |
| David B. Smith Jr. | Executive Vice President for Policy & Legal Affairs and General Counsel, Mutual Fund Directors Forum |
| Pamela B. Strobel | Retired Executive Vice President and Chief Administrative Officer, Exelon Corporation |
Comprehensive Details
- The Board provides strategic oversight, ensuring alignment with ITW’s Next Phase Enterprise Strategy.
- Christopher A. O’Herlihy and E. Scott Santi also serve in executive roles, ensuring continuity between management and governance.
- The diverse expertise of directors, spanning logistics, finance, consumer goods, and legal affairs, strengthens ITW’s governance framework.
Investment Details
ITW’s investment strategy focuses on organic growth, dividends, acquisitions, and share repurchases. In 2024:
- Internal Investments: $800 million was invested in core businesses to support long-term profitable growth.
- Dividends: ITW raised its dividend by 7% per share, marking 61 consecutive years of increases.
- Share Repurchases: Part of the $3.2 billion returned to shareholders.
- Acquisitions: ITW prioritizes high-quality acquisitions to supplement organic growth, though no specific 2024 acquisitions are detailed.
No passive investment details (e.g., minority stakes in other companies) are provided in the report.
Future Investment Plan
ITW’s Next Phase Enterprise Strategy (2024–2030) outlines a disciplined capital allocation approach:
- Organic Growth: Invest in core businesses to achieve 4%+ annual organic growth, with a focus on Customer-Back Innovation (3%+ CBI contribution by 2030).
- Dividends: Continue growing dividends in line with earnings, maintaining a critical component of TSR.
- Acquisitions: Pursue high-quality acquisitions to enhance organic growth potential and generate attractive returns.
- Share Repurchases: Allocate surplus capital to an active share repurchase program.
- Financial Goals: Achieve 30% operating margin, 9–10% EPS growth, and 100%+ free cash flow conversion, driving 11–13% annual TSR.
Conclusion
Illinois Tool Works Inc. embodies industrial excellence, leveraging its proprietary business model, diversified portfolio, and global presence to deliver best-in-class performance. With a clear strategy for 2024–2030, ITW is poised to achieve high-quality organic growth, maintain industry-leading margins, and deliver consistent double-digit TSR. Its commitment to innovation, operational efficiency, and shareholder value makes ITW a standout in the global industrial landscape.
