Emerson Electric Company · NYSE:EMR
Emerson Electric — Q2 2025 Earnings Presentation
22 slides from Emerson Electric's earnings presentation, May 7, 2025
Slide 1: 2025 Q2 Earnings
2025 Q2 Earnings May 7, 2025 EMERSON | 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation and our commentary and responses to questions that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later develop
Slide 3: Exceptional Q2 Macro Outlook – Tariffs & Demand
Exceptional Q2 Macro Outlook – Tariffs & Demand Key Solid underlying orders growth of 4% with all Sustained momentum in process and hybrid regions positive. Process and hybrid businesses markets with discrete recovery. Demand for were up 6%, and T&M turned positive – up 8%. industrial software remai
Slide 4: 2025 Q2 Key Metrics
Results February Guidance ACV Growth 11% Underlying Orders Growth1 4% 2025 Q2 Underlying Sales Growth 2% 1% – 2% Key Metrics Gross Profit Margin 53.5% Adjusted Segment EBITA Margin 28.0% ~26.5% Operating Leverage 180% Adjusted EPS $1.48 $1.38 – $1.42 Free Cash Flow $738M Note: Definition for annual
Slide 5: Discrete Recovery and Confidence in Strong Capital Cycle Support Our 2025 Orders Outlook
Discrete Recovery and Confidence in Strong Capital Cycle Support Our 2025 Orders Outlook Trailing Three-Month Underlying Orders1 Versus Prior Year 12% Process & Hybrid 10% April T3M 8% 7% Emerson 6% 4% 2% 0% (2%) Discrete (4%) Trailing Three-Month (6%) Underlying % Change Q2 Q3E Q4E Process & Hybrid
Slide 6: Favorable Demand Setup Leads to Second Half Acceleration in Underlying Sales
Favorable Demand Setup Leads to Second Half Acceleration in Underlying Sales for All World Areas With Robust Software Growth Americas Europe Asia, Middle East & Africa ~50% of sales ~20% of sales ~30% of sales U/L Sales: H1 +3% | 2025E MSD U/L Sales: H1 (2%) | 2025E ~flat U/L Sales: H1 +3% | 2025E M
Slide 7: 2025 Q2 Performance Summary
2025 Q2 Performance Summary Sales Adjusted Segment EBITA $4.38B $4.43B 28.0% 5 26.0% 30.0% 4 25.0% Process and hybrid businesses grew MSD 20.0% Price-cost, cost reductions 2% 3 200 and segment mix Underlying Price contributed 1.5 pts 15.0% bps Operating leverage: 180% 2 10.0% 1 Backlog1: $7.5B 5.0%
Slide 8: Q2 Adjusted EPS Bridge
1.6 $0.05 ($0.07) $0.14 1.5 $1.48 NCI Buy-in $0.07 FX ($0.05) Interest ($0.02) Pension ($0.02) $1.36 1.4 Software & Control (excl 1.3 AspenTech) $0.04 Q2 Adjusted AspenTech Operations1 $0.07 Intelligent Devices $0.03 9% 1.2 EPS Bridge 1.1 1 0.9 0.8 Q2 2024 Operations Impact of AspenTech Other / Q2 2
Slide 9: Expect to Offset ~$455M Annualized Gross Incremental Tariffs
Expect to Offset ~$455M Annualized Gross Incremental Tariffs 2025E 2025E 1 U.S. Tariffs on Imports – Gross 300 Gross Tariffs Mitigations 2024 Import Value Incremental 2025E Gross1 Annualized 250 ~$245M (~$245M) 1800 ~$1.6B China 1600 ~$150M 200 ~$185M 200 ~$325M ~$320M 1400 EU ~1% incremental 180 12
Slide 10: Solid Execution in a Fluid Environment – Increasing Net Sales and Midpoint of Adjusted EPS Guidance
Solid Execution in a Fluid Environment – Increasing Net Sales and Midpoint of Adjusted EPS 2025 Guidance Sales 6% ~1% (~1%) 5% Holding midpoint of (1.5%) 3% – 5% ~4% flat ~4% underlying guide as 4% Additional price Muted China price offsets pockets of 3% 1.5% – 3.5% actions to expectations offset ta
Slide 11: 2025 Guidance
2025 Guidance 2025 Q3 2025 Full Year Net Sales Growth 4.5% – 5.5% ~4% GUIDANCE ASSUMPTIONS FX ~1 pt flat Underlying Sales Growth 3.5% – 4.5% ~4% Adjusted Segment EBITA ~27% ~27% Returning $2.3B to shareholders through Operating Leverage 60s dividend and share repurchase Adjusted EPS $1.48 – $1.52 $5
Slide 12: Remain Committed to Disciplined Capital Allocation
Remain Committed to Disciplined Capital Allocation Net Debt / Adjusted EBITDA1 ~2.3x Priorities 2025 Guide 2026 – 2027 2.0x Organic Investing for innovation and growth Growth 69th Year of Increased Dividend Continues to be a priority Dividends - $1.2B in 2025 2025E 2026E 2027E Share $1.1B in 2025 Ex
Slide 13: Appendix
Appendix E M E R S O N | 13
Slide 14: Corporate and Other Items
Corporate and Other Items (in millions) 2025 Q2 Results 2025 Q3 Expectations 2025 Expectations Stock Compensation – GAAP ($59) ~($70) ~($250) Integration-Related Stock Compensation Expense $9 ~$25 ~$40 Adjusted Stock Compensation – Non-GAAP ($50) ~($45) ~($210) Pension $27 ~$25 ~$110 Corporate & Oth
Slide 15: Control Systems & Software Historical Results Including AspenTech
Control Systems & Software Historical Results Including AspenTech This information is being provided for investors to see the historical results of Control Systems & Software that now includes AspenTech. 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Q1 2025 Sales $3,648 $932 $965 $1,043 $995 $3,935 $993
Slide 16: Reconciliation of Non-GAAP Measures: Underlying Sales Growth
Reconciliation of Non-GAAP Measures Underlying Sales Growth This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2025 Q3 2025 Underlying Sales Growth 2025 Q2 Guidance Guidance Reported (GAAP) 1% 4.5% - 5.5% ~4% (
Slide 17: Reconciliation of Non-GAAP Measures: Adjusted Segment EBITA
Reconciliation of Non-GAAP Measures Adjusted Segment EBITA This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Adjusted Segment EBITA 2024 Q2 2024 2025 Q2 Net sales $4,376 $17,492 $4,432 Pretax earnings (GAAP) 7
Slide 18: Reconciliation of Non-GAAP Measures: Adjusted EPS
Reconciliation of Non-GAAP Measures Adjusted EPS This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2025 Q3 2025 2024 Q2 2024 2025 Q2 Guidance Guidance Earnings per share (GAAP) $0.95 $2.82 $0.86 $1.04 - $1.08
Slide 19: Reconciliation of Non-GAAP Measures: Free Cash Flow
Reconciliation of Non-GAAP Measures Free Cash Flow This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) $ in billions 2025 2024 Q2 2025 Q2 Guidance Net Sales $4,376 $4,432 ~$18.2 Operating cash flow (GAAP) 733 82
Slide 20: Reconciliation of Non-GAAP Measures: Net Debt / Adjusted EBITDA
Reconciliation of Non-GAAP Measures Net Debt / Adjusted EBITDA This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2025E Net Debt / pretax earnings (GAAP) 3.8x Interest, depreciation, amortization (1.4x) Acquisi
Slide 21: Reconciliation of Non-GAAP Measures: Other
Reconciliation of Non-GAAP Measures Other This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in billions, except per share amounts) December 31, 2024 March 31, 2025 Backlog (GAAP) $8.52 $8.8 AspenTech (1.25) (1.3) Backlog excluding AspenTech (non-GA
Slide 22: Endnotes
Endnotes Annual Contract Value (ACV): ACV is an estimate of the annual value of our portfolio of term license and software maintenance and support (SMS) contracts, the annual value of SMS agreements purchased with perpetual licenses and the annual value of standalone SMS agreements purchased with ce
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