Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q3 2018 Earnings Presentation
19 slides from Rockwell Automation's earnings presentation, Jul 25, 2018
Slide 1: Fiscal Year 2018 Third Quarter Conference Call
Rockwell Automation Fiscal Year 2018 Third Quarter Conference Call July 25, 2018 Copyright © 2018 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 2018 Third Quarter Results
Fiscal 2018 Third Quarter Results Q3 Results ▪ Organic sales up 5.7% YOY, above expectations – Logix growth of 10% – Process growth of 8% – Double-digit growth in Information Solutions and Connected Services – Growth led by heavy industries ▪ Segment operating margin of 22.5%, up 140 bps YOY ▪ Adjus
Slide 4: Key Financial Information: Third Quarter
Key Financial Information: Third Quarter (in millions, except per share amounts) Q3 2018 Q3 2017 YOY B/(W) Sales $ 1,699 $ 1,599 6.2 % Segment Operating Earnings $ 383 $ 337 13.6 % Segment Operating Margin 22.5 % 21.1 % 140 bps General Corporate - Net $ 28 $ 17 $ (11) Adjusted EPS $ 2.16 $ 1.76 22.7
Slide 5: Architecture & Software
Architecture & Software Sales Segment Operating Margin ($ millions) $2,500 $2,311 35% $2,147 $2,000 30.0% 29.5% 30% $1,500 27.9% 28.1% $1,000 $732 $796 25% $500 $0 20% Q3 YTD Q3 YTD 2017 2018 2017 2018 YOY Sales % Change ▪ Segment operating margin expanded Q3 2018 YTD 210 bps in Q3, primarily due to
Slide 6: Control Products & Solutions
Control Products & Solutions Sales Segment Operating Margin ($ millions) $3,000 20% $2,497 $2,626 15.9% $2,500 15.3% 15.3% 15% 13.9% $2,000 $1,500 10% $867 $903 $1,000 5% $500 $0 0% Q3 YTD Q3 YTD 2017 2018 2017 2018 YOY Sales % Change Q3 2018 YTD ▪ Segment operating margin expanded Organic 4.9% 5.1%
Slide 7: Regional Sales
Regional Sales (in millions, except percentages) Q3 2018 YTD Third Quarter * Organic Organic ▪ U.S. growth led by heavy Region Sales % Change Sales % Change industries and consumer U.S. $ 922 6.2% $ 2,662 5.1% ▪ EMEA emerging markets outperformed mature markets Canada 92 13.3% 269 9.0% ▪ In Asia Pac
Slide 8: Revised Fiscal 2018 Guidance
Revised Fiscal 2018 Guidance July April Guidance Guidance Sales ~ $6.7B ~ $6.7B Organic Growth ~ 5.5% 3.5% to 6.5% Currency Translation ~ 2% ~ 2% Divestiture ~ (1)% ~ (1)% Segment Operating Margin ~ 21.5% ~ 21.5% Adjusted Effective Tax Rate ~ 20.0% ~ 20.5% Adjusted EPS $7.90 - $8.10 $7.70 - $8.00 Fr
Slide 9: Targeting Above-Market Revenue Growth
Targeting Above-Market Revenue Growth Double-digit growth in Q3 Q3 organic growth ~$300M in FY18 Logix 10% Process 8% Grow a point or more per year Gain share in Grow double-digit from acquisitions core platforms in Information Solutions & Connected Services Copyright © 2018 Rockwell Automation, Inc
Slide 10: Executing our Capital Allocation Strategy
Executing our Capital Allocation Strategy Acquisitions and Partnerships Increased Cash Returns to Shareowners ▪ Executing on well-defined priorities: ▪ Increased dividend by 10% in – Information software November 2017 and by 10% in April – Connected services 2018 – Process expertise – Regional share
Slide 11: Appendix
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures Copyright © 2018 Rockwell Automation, Inc. All rights reserved.
Slide 12: Third Quarter Results: Summary
Third Quarter Results: Summary (in millions, except per share amounts) Q3 2018 Q3 2017 Total Sales $ 1,698.7 $ 1,599.2 Total Segment Operating Earnings $ 382.9 $ 337.0 Purchase Accounting Depreciation and Amortization (4.3) (5.6) General Corporate - Net (27.7) (16.5) Non-Operating Pension Costs (5.9
Slide 13: Free Cash Flow
Free Cash Flow (in millions) Q3 2018 YTD Net Income $ 198.6 $ 189.6 Depreciation/Amortization 42.1 124.9 Retirement Benefits Expense 28.2 84.9 Receivables/Inventory/Payables (34.6) (45.1) Compensation and Benefits 59.4 (8.3) Pension Contributions (19.7) (43.2) Income Taxes (13.4) 495.2 Change in fai
Slide 14: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended June 30, 2018 2017 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 15: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended June 30, 2018 2017 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 Segment Operating Margin (in millions, except percentages) Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Sales Architecture & Software (a) $ 795.7 $ 731.9 $ 2,311.0 $ 2,147.3 Contr
Slide 17: 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, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Income from continuing operations $ 198.6 $ 216.9 $ 189.6 $ 621.1 Non
Slide 18: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Return On Invested Capital (in millions, except percentages) Twelve Months Ended June 30, 2018 2017 (a) Return Income from continuing operations $ 394.2 $ 806.3 Interest expense 73.3 74.9 Income tax provision 728.4 194.5 Purchase accounting depreciation and amorti
Slide 19: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Fiscal 2018 Guidance (in billions, except percentages and per share amounts) Organic Sales July Guidance April Guidance Organic sales growth ~ 5.5% 3.5% to 6.5% Foreign currency impact ~ 2% ~ 2% Divestiture impact ~ (1)% ~ (1)% Reported sales growth ~ 6% 4.7% to 7