Emerson Electric Company · NYSE:EMR
Emerson Electric — Q3 2023 Earnings Presentation
26 slides from Emerson Electric's earnings presentation, Aug 2, 2023
Slide 1: Emerson 2023 Q3 Earnings
Emerson 2023 Q3 Earnings August 2, 2023
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 Q3 Performance And Attractive Value Creation Opportunities
Exceptional Q3 Performance And Attractive Value Creation Opportunities KEY Q3 MESSAGES VALUE DRIVERS ACCELERATING Resilient End Market Demand Secular Growth Drivers Differentiated portfolio in rapidly growing energy 3% orders growth – process and hybrid markets continue transition, industrial softwa
Slide 4: 2023 Q3 Summary
2023 Q3 Summary Results Prior Guidance Comments High-single-digit growth in process and hybrid partially offset Underlying Orders 3% by discrete and other Both business groups up double digits Underlying Sales Growth 14% 10% – 12% Americas up 11%; Europe up 13%; Asia, Middle East & Africa up 20% Str
Slide 5: Continued Progress On Strategic Priorities
Continued Progress On Strategic Priorities COPELAND 2022 ESG REPORT (Previously Climate Technologies) Released June 13, 2023 Transaction Closed May 31, 2023 Upfront Cash Expected Future Proceeds1 40% common $1.7B equity ownership $9.7B Copeland note ~$8B after-tax $2.25B receivable Net Debt / Adjust
Slide 6: Innovation Engine Creating New Products Aligned To Customer Demand
Innovation Engine Creating New Products Aligned To Customer Demand • 100+ sustainability models aspenONE v14 • Carbon emissions management New AspenTech software offers improved • Commercialization of hydrogen and bioprocesses sustainability offerings and artificial intelligence • Artificial intelli
Slide 7: Strategic Project Funnel Is Robust And Continues To Shift Toward Growth Platforms
Strategic Project Funnel Is Robust And Continues To Shift Toward Growth Platforms NOVEMBER 2022 AUGUST 2023 EV Battery Carbon Capture Carbon Capture Sustainability & Decarbonization: $2.8B Sustainability & Decarbonization: $1.7B Energy Transition: $4.9B Clean Fuels Energy Transition: $3.5B Clean Fue
Slide 8: Continuing To Win New Business As A Trusted LNG Partner Globally
Continuing To Win New Business As A Trusted LNG Partner Globally Recent Wins BECHTEL ENERGY / SEMPRA INFRASTRUCTURE Port Arthur LNG Emerson awarded automation content for large-scale LNG facility Emerson Awarded In Pursuit $10M ~50% $1B+ 3 Automation Project Win Active Project Projects Awarded to Sc
Slide 9: Recent Project Wins Demonstrate Emerson's Differentiated Leadership Throughout The Battery Value Chain
Recent Project Wins Demonstrate Emerson’s Differentiated Leadership Throughout The Battery Value Chain LITHIUM / COPPER LITHIUM REFINING / BATTERY MINING CATHODE PRODUCTION MANUFACTURING Differentiated Technology Differentiated Technology Differentiated Technology Recent Wins Recent Wins Recent Wins
Slide 10: 2023 Q3 Performance Summary
2023 Q3 Performance Summary SALES ADJUSTED SEGMENT ADJUSTED EPS FREE CASH FLOW EBITA $1.29 $769M $3.9B 26.9% $3.5B 23.2% $0.92 $420M 14% Underlying 370 bps 40% 83% 2022 2023 2022 2023 2022 2023 2022 2023 All world areas and both Operating leverage (excluding AspenTech contribution to AspenTech contr
Slide 11: 2022 Q3 To 2023 Q3 Adjusted EPS Bridge
2022 Q3 To 2023 Q3 Adjusted EPS Bridge $0.04 $0.02 $1.29 $0.29 $0.02 Stock Comp ($0.06) Corp / Pension $0.05 $0.92 Tax $0.03 40% 2022 Operations Other / Share Interest From 2023 Non-Operating Count Copeland Note 1 Receivable 1 Included in adjusted EPS post-Copeland transaction close 11
Slide 12: Resilient Environment And Balanced Future Outlook
Resilient Environment And Balanced Future Outlook CURRENT ENVIRONMENT KEY GROWTH DRIVERS Process / Hybrid Strength Energy Transition Leadership Process and hybrid markets continue to exhibit resilient demand – expecting double-digit sales growth in 2023 Leadership in energy transition markets to dri
Slide 13: 2023 Continuing Operations Guidance
2023 Continuing Operations Guidance Original Guidance Prior Guidance Current DETAILS (October 31, 2022) (May 3, 2023) Guidance AspenTech contribution: 2023 Adjusted EPS: ~$0.25 Net Sales Growth 7% – 9% 9% – 10.5% ~10.5% 2023 Free Cash Flow: ~$0.3B Underlying Sales Growth 6.5% – 8.5% 8.5% – 10% ~10%
Slide 14: Appendix
Appendix
Slide 15: Endnotes
Endnotes Operating Leverage, or Incremental Margins, throughout the presentation is defined as the ratio of the change in adjusted segment EBITA for the current period less the prior period, divided by the change in the net sales for the current period less the prior period. 2022 Q3 2023 Q3 Net Sale
Slide 16: 2023 Industry Outlook
2023 Industry Outlook Energy transition spend continues to accelerate PROCESS DD Underlying Sales LNG momentum in North America and Middle East Power & renewables demand momentum in U.S. Reshoring trends driving life sciences activity HYBRID LDD Underlying Sales Lithium and battery metals driving
Slide 17: Corporate And Other Items
Corporate And Other Items (in millions) 2023 Q3 2023 Expectations Stock Compensation ($56) ~($250) Pension $42 ~$165 Copeland Equity Loss ($61) ~($135) Corporate & Other – GAAP ($43) ~($185) Corporate Restructuring and Related Costs $1 ~$12 Acquisition / Divestiture Fees $38 ~$60 NI Investment Gain
Slide 18: 2023 Continuing Operations GAAP EPS To Adjusted EPS Guidance
2023 Continuing Operations GAAP EPS To Adjusted EPS Guidance 2023 GAAP EPS $3.54 – $3.59 Amortization of Intangibles ~$0.61 Restructuring and Related Costs ~$0.16 Russia Exit Costs $0.08 AspenTech Micromine Purchase Price Hedge ($0.02) Acquisition / Divestiture Fees ~$0.10 NI Investment Gain ~($0.07
Slide 19: AspenTech Contribution To Emerson 2023 Q3 Adjusted EBITA
AspenTech Contribution To Emerson 2023 Q3 Adjusted EBITA AspenTech Reported Financials Emerson Reported AspenTech Segment (Millions) 2023 Q3 (Millions) 2023 Q3 Sales $320 AspenTech sales $320 Net income $27 AspenTech segment earnings (EBIT) $27 Income taxes (benefit) ($4) Restructuring --- Income be
Slide 20: AspenTech Contribution To Emerson 2023 Q3 GAAP EPS And Adjusted EPS
AspenTech Contribution To Emerson 2023 Q3 GAAP EPS And Adjusted EPS AspenTech Reported Financials Emerson EPS Contribution (Millions) 2023 Q3 (Millions, except per share) 2023 Q3 Sales $320 Sales $320 Net income $27 Net earnings $24 Interim tax reporting / other ($3) Non-controlling interest1 ($10)
Slide 21: AspenTech Contribution To Emerson 2023 Q3
AspenTech Contribution To Emerson 2023 Q3 Earnings From Non- Net Earnings Diluted Continuous Controlling Common Earnings (Millions) Pre-Tax Earnings Income Taxes Operations Interest1 Stockholders Per Share AspenTech company reported $23 ($4) $27 Interim tax reporting / other ($1) $2 ($3) AspenTech c
Slide 22: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) August May May October Guidance Guidance Guidance Guidance Underlying Sales Change Q3 FY23 FY23E Q3 FY23E FY23E FY23E Repor
Slide 23: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Earnings Per Share Q3 FY22 Q3 FY23 Change Earnings per share (GAAP) $0.38 $1.03 171% Amortization of intangibles 0.12 0.15
Slide 24: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) August May October Guidance Midpoint Guidance Guidance Earnings Per Share FY23E FY22 Change FY23E FY23E Earnings per share
Slide 25: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Backlog June 30, 2023 Backlog (GAAP) $8.2 AspenTech (1.3) Backlog excluding AspenTech (non-GAAP) $6.9 August Guidance May G
Slide 26: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) AspenTech Segment EBITA Margin Q3 FY22 Q3 FY23 Business segment EBIT / margin (GAAP) $57 $27 Amortization of intangibles an
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