Michael M. Larsen
Senior Vice President and Chief Financial Officer at Illinois Tool Works
Thank you, Scott, and good morning, everyone. In Q1, demand was strong across the board and supported by our advantaged supply position, ITW grew revenue by 11.2% to more than $3.9 billion. Organic growth was 10.6%, and the MTS acquisition contributed about $100 million or 2.8% to revenue. Foreign currency translation reduced revenue by 2.2%. GAAP EPS of $2.11 tied last year's Q1 record. Foreign currency translation reduced GAAP EPS by $0.05.
By geography, North America grew 13%, international grew 7%, with organic growth of 7% in Europe and China grew 1%. six of seven segments delivered positive combined organic growth of 14%, while Automotive OEM was down less than 1%. Orders remained strong across the board. And while we're doing significantly better than many of our competitors in terms of lead times and delivery performance, we grew backlogs again in the first quarter. Sequentially, from Q4 to Q1, organic revenue grew 6% on a sales per day basis, as compared to our historical sequential of minus 1%.
And while we're on the topic of sequential improvement, GAAP EPS of $2.11 grew 9% relative to Q4 '21. Operating margin was 22.7%, 23.4%, excluding 70 basis points of margin dilution from the recent MTS acquisition. Enterprise Initiatives contributed 90 basis points. And as we always do, our business teams reacted appropriately to higher cost inflation by adjusting selling prices. And as a result, we remain positive on a dollar-for-dollar basis. Price/cost was still dilutive to operating margin by 250 basis points.
After-tax ROIC was 27.6%, 29.8% excluding the impact of the MTS acquisition. Free cash flow was $249 million with a conversion rate of 38%, which is below our typical 80% to 85% in the first quarter. As we've talked about before, the lower conversion rate is due to intentional working capital investments that support our strong growth momentum, mitigate supply chain risk and sustained service levels to our key customers. And down the road, once supply conditions begin to normalize, so will our working capital needs resulting in our typical strong cash flow performance.
As planned, we repurchased $375 million of our shares in the first quarter and the effective tax rate was 23.1%, 70 basis points higher than Q1 last year. So overall for Q1, an excellent start to the year, characterized by strong broad-based demand, supported by our differentiated supply position, as we delivered organic growth of 11%, operating margin of 23% and GAAP EPS of $2.11. Moving to slide four. We're including an analysis of our current operating margin performance.
Reported Q1 operating margin was 22.7%, but there are three factors pressuring our margins in the near term, starting with 250 basis points of margin dilution impact from price cost. At some point in the future, when raw material costs begin to normalize, we expect the margin impact from price/cost to turn positive and that we will fully recover the margin differential. Second, Q1 was also the first full quarter of the recent MTS acquisition, which, as expected, diluted margins by 70 basis points.
As we've talked about before, it will take us a few years to fully implement the ITW business model on MTS and get the business growing organically at ITW caliber margins and returns. Finally, we had slightly higher restructuring associated with 80/20 front-to-back projects, which impacted margins by 20 basis points. And the point here is that our core operating margins are currently running around 26%-plus, which is closer to what we would expect from ITW in a normal environment and not far from our prepandemic target of 28%-plus and also further evidence of our continued progress on enterprise strategy driven structural margin improvement through the pandemic.
If you recall, 2019 prepandemic margins were right around 24% versus 26% on a core run rate basis here in Q1. And as we've said before, we have full confidence in our ability to deliver sustained above-market organic growth at 30% to 40% incremental margins. And as a result, we will continue to expand operating margins as we grow. Moving on. Automotive OEM was the only segment that didn't grow this quarter with organic revenue down a little less than 1%, much improved compared to being down 16% in Q4 '21.
By geography, North America grew 3%, Europe was down 11% and China grew 12%. You'll remember that the segment is up against a pretty tough comp of plus 8% organic growth in Q1 last year, as the impact on auto production from chip shortages didn't fully materialize until Q2. At this point and for guidance purposes, we do not expect an improvement in the chip shortage situation until 2023. As a result, our guidance assumes that automotive production and our associated automotive OEM revenues are essentially capped at current Q1 levels through the balance of the year.
Turning to slide five for Food Equipment, which led the way with the highest organic growth rate this quarter at 28%. North America was up 23% with Equipment up 24% and Service up 21%. Restaurants were up over 40% with strength across the board and institutional growth was almost 10% led by education and lodging. International growth was strong at 36%, with Europe up 45% and Asia Pacific up 4%. Both Equipment and Service revenues increased around 36%.
In Test & Measurement and Electronics, organic growth was 8%, with Test & Measurement up 10% and Electronics up 6%. Strong demand for semiconductor-related equipment continued to drive organic growth in the mid-teens, while demand for capital equipment also remained strong with Instron, for example, up 6%. Finally, as expected, the MTS acquisition diluted operating margin by about 400 basis points. Excluding the MTS impact, margins were 26% versus 26.4% in Q4 '21.
Moving to slide six. Welding organic revenue grew 13%, with Equipment up 10% and Consumables up 17%. Industrial grew 14% and the Commercial business grew almost 10%. North America was up 12% and International growth was 17%, including 18% growth in oil and gas. Europe was up 20%, and Asia Pacific was up 15%. Due to strong operating leverage and a solid contribution from enterprise initiatives, Welding operating margin was a record 30.8%, an all-time quarterly record for an ITW segment and another proof point that as we deliver organic growth, with best-in-class margins, there's plenty of room for further margin expansion in all seven segments.
In Polymers & Fluids, organic growth was 13%, as Automotive aftermarket grew 17%. Polymers was up 11% with continued strength in MRO and heavy industry applications. Fluids grew 6%. On a geographic basis, North America grew 15%, and International was up 9%. On to slide seven. Construction delivered strong organic revenue growth of 21%, as North America grew 32%, with Residential up 36% and Commercial up 15%. Europe grew 16%, and Australia and New Zealand was up 10%.
While construction margins were impacted by rising steel costs, operating margin was still a solid 24.7%, with strong volume leverage and a meaningful contribution from enterprise initiatives. Specialty organic growth was 1% with North America up 7%, while International was down 9%. With that, let's turn to slide eight for an updated view of our full year 2022 guidance. And based on our Q1 results and projecting current levels of demand through the balance of the year as per our standard approach to guidance, we are now projecting organic growth of 7% to 10% and total revenue growth of 8.5% to 11.5%.
Due to the higher revenue growth projections, we're raising GAAP EPS by $0.10 to a range of $9 to $9.40, and the midpoint of $9.20 represents 14% earnings growth and puts the company on track for another year of record financial performance. Operating margin guidance is unchanged with strong volume leverage and 100 basis points of contribution from enterprise initiatives. When it comes to price cost, our operating teams will continue to more than cover inflation on a dollar-for-dollar basis.
And as usual, our guidance includes all known costs and price increases as we sit here today. We expect strong free cash flow growth of 10% to 20% year-over-year with a conversion rate of 85% to 95% of net income. As we've talked about before, this is below our target of 100%-plus. Because of our decision to invest in the working capital necessary to support the company's strong growth, mitigate supply chain risk and sustained service levels to our key customers.
Finally, we are on pace to repurchase 1.5 billion of our shares, and we continue to expect an effective tax rate of 23% to 24%. So in summary, Q1 was another quarter of high-quality execution in a very challenging environment. And as a result, we're off to a solid start on raising both our organic growth and EPS guidance for the full year.
So with that, Karen, I'll turn it back to you.
