Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q2 2021 Earnings Presentation
26 slides from Rockwell Automation's earnings presentation, Apr 28, 2021
Slide 1: Second Quarter Fiscal Year 2021 Conference Call
Second Quarter Fiscal Year 2021 Conference Call April 28, 2021 PUBLIC 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement THIS PRESENTATION INCLUDES GUIDANCE AND OTHER 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, MANY OF WHICH
Slide 3: Q2 FY21 Results Highlights
Q2 FY21 Results Highlights ▪ Record orders of $2B; total backlog up over 30% YOY ▪ Reported sales up 5.6% YOY; acquisitions contributed 1.9% ▪ Organic sales up 1.3% YOY – Information Solutions & Connected Services (IS/CS) orders and sales up double digits YOY, led by strong IS software growth – Stre
Slide 4: Q2 FY21 Organic Industry Segment Performance
Q2 FY21 Organic Industry Segment Performance % of Q2 FY21 Q2 FY21 Sales vs. Q2 FY20 Q2 FY21 vs. Q2 FY20 Semiconductor up ~15% Discrete Automotive down mid single digits ~ 25% Up high single digits e-Commerce up ~70% Hybrid Food & Beverage up ~10% ~ 45% Up high single digits Life Sciences u
Slide 5: Q2 FY21 Organic Sales Growth
Q2 FY21 Organic Sales Growth NORTH AMERICA EMEA +2.3% (7.1)% Q2 HIGHLIGHTS * • North America growth led by Food & Beverage, e-Commerce, and Life Sciences ASIA PACIFIC • EMEA decline driven by Oil & Gas, +15.6% Metals and Auto; strength in Food & Beverage • Asia Pacific saw broad-based growth, led by
Slide 6: FY21 Full Year Outlook Highlights
FY21 Full Year Outlook Highlights ▪ Order strength expected to continue ▪ Anticipated continuation of supply chain constraints ▪ Reported sales of ~$7B, up 10.5% YOY at guidance midpoint; includes ~1.5% for acquisitions ▪ Organic sales up 7% YOY at guidance midpoint – IS/CS sales expected to exceed
Slide 7: FY21 Organic Industry Segment Outlook
FY21 Organic Industry Segment Outlook % of FY21 B/(W) vs. Jan FY21 Sales vs. FY20 Assumptions at Guidance Midpoint Guidance Discrete Automotive up ~10% ~ 25% Up ~15% Semiconductor up mid teens e-Commerce up strong double digits + Hybrid Food & Beverage up ~10% ~ 45% Up ~10% Life Sciences u
Slide 8: Q2 FY21 Key Financial Information
Q2 FY21 Key Financial Information ($ in millions, except per share amounts) Q2 FY21 Q2 FY20 YOY B/(W) Organic Growth +1.3 % Inorganic Growth +1.9 % SALES $1,776 $1,681 Currency Translation +2.4 % Reported Growth +5.6 % SEGMENT OPERATING MARGIN 22.0% 22.1% (10) bps CORPORATE AND OTHER $30 $18 $(12) A
Slide 9: Q2 FY21 Segment Results
Q2 FY21 Segment Results SALES SEGMENT OPERATING SEGMENT ($ in millions; YOY growth %) MARGIN HIGHLIGHTS Organic +5.8 % ▪ Higher segment margin YOY driven by higher sales and Intelligent lower spend, partially offset by reinstatement of Devices Inorganic —% 23.8% $850M Currency +2.5 % +80 bps YOY inc
Slide 10: Q2 FY20 to Q2 FY21 Adjusted EPS Walk
Q2 FY20 to Q2 FY21 Adjusted EPS Walk * * Includes ~$(0.35) impact from reinstatement of incentive compensation and ~$(0.10) from improved FY21 performance PUBLIC| Copyright ©2021 Rockwell Automation, Inc. | 10
Slide 11: Quarterly Product Order Trends: Q1 FY19 – Q2 FY21
Quarterly Product Order Trends: Q1 FY19 – Q2 FY21 Global Daily Average Product Orders $ Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Impact of two large orders booked in September 2020 and March 2021 Note: products represent ~2/3 of total Rockwell business PUBLIC|
Slide 12: Updated FY21 Guidance
Updated FY21 Guidance April January Guidance Guidance Sales Midpoint ~ $7.0B ~ $6.9B Reported Growth Range 9.0% - 12.0% 8.5% - 11.5% Organic Growth Range 5.5% - 8.5% 4.5% - 7.5% Inorganic Growth ~ 1.5% ~ 1.5% Currency Translation ~ 2.0% ~ 2.5% Segment Operating Margin ~ 19.5% ~ 19.5% Adjusted Effect
Slide 13: FY21 January to April Guidance Midpoint Adjusted EPS Walk
FY21 January to April Guidance Midpoint Adjusted EPS Walk PUBLIC| Copyright ©2021 Rockwell Automation, Inc. | 13
Slide 14: Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures 14
Slide 15: New Operating Segments Composition
Former A&S business New Operating Segments Composition Former CP&S business Intelligent Devices Software & Control Lifecycle Services ▪ Drives ▪ Control software & hardware ▪ Consulting ▪ Motion ▪ Visualization software & hardware ▪ Professional services Solutions ▪ Safety ▪ Digital twin & simulat
Slide 16: Annual Recurring Revenue (ARR) Metric
Annual Recurring Revenue (ARR) Metric EXAMPLES • Adopting ARR as our measure for recurring revenue Software SaaS • Provides increased focus on generating subscriptions more predictable revenue streams Perpetual software • ARR added as an element of maintenance incentive compensation plans in FY21 Co
Slide 17: Q2 FY21 Results: Summary
Q2 FY21 Results: Summary ($ in millions, except per share amounts) Q2 2021 Q2 2020 Total Sales $ 1,776.1 $ 1,681.3 Total segment operating earnings $ 390.1 $ 371.5 Purchase accounting depreciation and amortization (13.1) (9.5) Corporate and other (30.4) (17.7) Non-operating pension and postretiremen
Slide 18: Free Cash Flow
Free Cash Flow Three Months Ended Six Months Ended ($ in millions) Q2 2021 Q2 2020 Q2 2021 Q2 2020 Net Income $ 410 $ 130 $ 1,001 $ 445 Depreciation/Amortization 46 42 90 84 Change in fair value of investments1 (191) 145 (581) 74 Retirement Benefits Expense 30 32 60 63 Receivables/Inventory/Payables
Slide 19: Industry Segmentation
Industry Segmentation % of FY20 Sales Discrete Hybrid Process ~10% Automotive ~20% Food & Beverage ~10% Oil & Gas ~5% Semiconductor ~5% Life Sciences ~5% Mining, Aggregates & ~5% Household & Personal Care Cement ~5% General Industries ~5% Tire ~5% Metals • Warehousing & Logistics • Printing & Publis
Slide 20: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales ($ in millions) Three Months Ended March 31, 2021 2020 Reported Acquisition Currency Effect of Sales Growth Growth Growth Organic Growth Effect of Changes in Organic (Decline) (Decline) (Decline) (Decline) Sales(a) Acquisitions(e) Currency(d) Sales(b
Slide 21: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Segment Operating Margin ($ in millions) Three Months Ended March 31, 2021 March 31, 2020 Sales Intelligent Devices (a) $ 850.2 $ 785.0 Software & Control (b) 502.3 448.2 Lifecycle Services (c) 423.6 448.1 Total sales (d) $ 1,776.1 $ 1,681.3 Segment operating earn
Slide 22: 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 March 31, 2021 March 31, 2020 Net Income attributable to Rockwell Automation $ 415.0 $ 132.2 Non-operating pension and postretirement benefi
Slide 23: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Return On Invested Capital ($ in millions) Twelve Months Ended March 31, 2021 2020 (a) Return Net income $ 1,578.6 $ 714.8 Interest expense 97.5 105.7 Income tax provision 263.9 165.0 Purchase accounting depreciation and amortization 46.7 27.7 Return 1,986.7 1,013
Slide 24: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Fiscal 2021 Guidance ($ in billions, except per share amounts) Organic Sales Fiscal 2021 Guidance Organic sales growth 5.5% - 8.5% Inorganic sales growth ~ 1.5% Foreign currency impact ~ 2.0% Reported sales growth 9.0% - 12.0% Segment Operating Margin Total sales
Slide 25: New Definition of Adjusted Income and Adjusted EPS
New Definition of Adjusted Income and Adjusted EPS • Beginning in fiscal 2021, Rockwell is changing its definition of Adjusted Income and Adjusted EPS • New definition will also exclude the impact of purchase accounting depreciation and amortization expense attributable to Rockwell Automation and th
Slide 26: Thank you
Thank you www.rockwellautomation.com 26