Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q3 2019 Earnings Presentation
21 slides from Rockwell Automation's earnings presentation, Jul 25, 2019
Slide 1: Fiscal Year 2019 Third Quarter Conference Call
Rockwell Automation Fiscal Year 2019 Third Quarter Conference Call July 25, 2019 Copyright © 2019 Rockwell Automation, Inc. All rights reserved.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT THIS PRESENTATION INCLUDES STATEMENTS RELATED TO THE EXPECTED FUTURE RESULTS OF THE COMPANY AND ARE THEREFORE FORWARD- LOOKING STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTIONS DUE TO A WIDE RANGE OF RISKS AND UNCERTAINTIES, INCLUDING THOSE THAT ARE LISTED
Slide 3: Fiscal 2019 Third Quarter Results and Full Year Outlook
Fiscal 2019 Third Quarter Results and Full Year Outlook Q3 Results ▪ Organic sales up 0.5% YOY – Double-digit growth in oil and gas, pulp and paper, mining, and life sciences – Shorter-cycle weakness: automotive, semiconductor, food and beverage – Logix decline of (3)%; Process growth of 3% – Contin
Slide 4: Key Financial Information: Third Quarter
Key Financial Information: Third Quarter (in millions, except per share amounts) Q3 2019 Q3 2018 * YOY B/(W) Sales $ 1,665 $ 1,699 (2.0) % Segment Operating Earnings $ 396 $ 383 3.4 % Segment Operating Margin 23.8 % 22.5 % 130 bps General Corporate - Net $ 24 $ 33 $ 9 Adjusted EPS $ 2.40 $ 2.16 11.1
Slide 5: Architecture & Software
Architecture & Software Sales Segment Operating Margin ($ millions) $2,500 $2,276 $2,241 40% $2,000 30.4% 29.8% 29.9% 29.9% 30% $1,500 20% $1,000 $784 $748 10% $500 $0 0% Q3 YTD Q3 YTD 2018* 2019 2018 * 2019 YOY Sales % Change Q3 2019 YTD ▪ Segment operating margin contracted (60) bps in Q3. Organic
Slide 6: Control Products & Solutions
Control Products & Solutions Sales Segment Operating Margin ($ millions) $3,000 $2,724 20% 18.9% $2,661 16.7% $2,500 15.7% 15.1% 15% $2,000 $1,500 10% $1,000 $915 $917 5% $500 $0 0% Q3 YTD Q3 YTD 2018 * 2019 2018 * 2019 YOY Sales % Change ▪ Segment operating margin expanded Q3 2019 YTD 320 bps in Q3
Slide 7: Regional Sales
Regional Sales (in millions, except percentages) Q3 2019 YTD Third Quarter * Organic Organic ▪ In North America, pulp and paper Region Sales % Change Sales % Change and oil and gas grew double- digits; automotive, North America $ 1,008 (0.2)% $ 2,994 2.5% semiconductor, food and beverage declined EM
Slide 8: Revised Fiscal 2019 Guidance
Revised Fiscal 2019 Guidance Guidance does not include impacts of Sensia joint venture July Guidance April Guidance Sales ~ $6.6B ~ $6.8B Organic Growth ~ 1.5% 3.7% to 5.3% Currency Translation ~ (2)% ~ (2)% Segment Operating Margin ~ 22% ~ 22% Adjusted Effective Tax Rate ~ 18.5% ~ 19.0% Adjusted EP
Slide 9: Appendix
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures Copyright © 2019 Rockwell Automation, Inc. All rights reserved.
Slide 10: Third Quarter Results: Summary
Third Quarter Results: Summary (in millions, except per share amounts) Q3 2019 Q3 2018 Total sales $ 1,665.1 $ 1,698.7 Total segment operating earnings $ 395.9 $ 382.6 Purchase accounting depreciation and amortization (4.1) (4.3) General corporate - net (23.8) (33.0) Non-operating pension and postre
Slide 11: Fiscal 2019 Reporting Changes
Fiscal 2019 Reporting Changes Revenue ▪ Adopted ASC 606 (revenue recognition) in Q1 Reporting ▪ U.S. & Canada revenues combined and reported as North America region ▪ Segment P&L: Realigned certain business activities between A&S and CP&S Segment reporting segments Reporting ▪ $48M of FY18 revenue m
Slide 12: Fiscal 2019 Reporting Changes: Statement of Operations Impact on Q3 FY18
Fiscal 2019 Reporting Changes: Statement of Operations Impact on Q3 FY18 (in millions, except per share amounts) Fiscal Year 2018 - Quarter 3 Originally Pension/ Reported Postretirement Recast Sales $ 1,698.7 $ — $ 1,698.7 Cost of sales (957.0) 3.0 (954.0) Gross profit 741.7 3.0 744.7 Selling, gener
Slide 13: Fiscal 2019 Reporting Changes: Segment P&L Impact on Q3 FY18
Fiscal 2019 Reporting Changes: Segment P&L Impact on Q3 FY18 (in millions, except per share amounts and percentages) Fiscal Year 2018 - Quarter 3 Originally Segment Pension/ Interest Reported Realign. Postretirement Income Recast Sales Architecture & Software (a) $ 795.7 $ (12.0) $ — $ — $ 783.7 Con
Slide 14: Free Cash Flow
Free Cash Flow (in millions) Q3 2019 YTD Net Income $ 261.4 $ 687.7 Depreciation/Amortization 36.9 112.2 Retirement Benefits Expense 17.2 51.6 Receivables/Inventory/Payables (10.0) (149.6) Compensation and Benefits 16.8 (73.7) Pension Contributions (6.9) (22.0) Income Taxes1 0.4 (66.3) Change in fai
Slide 15: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended June 30, 2019 2018 Sales Effect of Excluding Sales Sales Organic Changes in Changes in Effect of Organic Effect of Excluding Growth Growth Sales(a) Currency Currency Acquisitions Sales(b) Sales(c)
Slide 16: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended June 30, 2019 2018 Sales Effect of Excluding Sales Sales Organic Changes in Changes in Effect of Organic Effect of Excluding Growth Growth Sales(a) Currency Currency Acquisitions Sales(b) Sales(c)
Slide 17: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Segment Operating Margin (in millions, except percentages) Three Months Ended Nine Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Sales Architecture & Software (a) $ 747.9 $ 783.7 $ 2,240.7 $ 2,275.8 Control Products & Solutions (b) 917.2 915
Slide 18: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate (in millions, except per share amounts) Three Months Ended Nine Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net Income $ 261.4 $ 198.6 $ 687.7 $ 189.6 Non-operating pension and
Slide 19: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Return On Invested Capital (in millions, except percentages) Twelve Months Ended June 30, 2019 2018 (a) Return Net income $ 1,033.6 $ 394.2 Interest expense 90.4 73.3 Income tax provision 292.7 728.4 Purchase accounting depreciation and amortization 16.7 17.8 Retu
Slide 20: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Logix and Process Sales Growth Three Months Ended Nine Months Ended June 30, 2019 June 30, 2019 Logix Logix reported growth (6)% (3)% Effect of currency translation 3% 3% Logix organic growth (3)% —% Process Process reported growth (1)% 3% Effect of currency trans
Slide 21: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Fiscal 2019 Guidance (in billions, except percentages and per share amounts) Organic Sales July Guidance April Guidance Organic sales growth ~ 1.5% 3.7% to 5.3% Foreign currency impact ~ (2)% ~ (2)% Reported sales growth ~ (0.5)% 1.7% to 3.3% Segment Operating Mar