Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Investor Day (November 2023)
65 slides from Rockwell Automation's investor day presentation, Nov 8, 2023
Slide 1: Investor Day
INVESTOR DAY NOVEMBER 8, 2023 PUBLIC PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 1
Slide 2: Welcome
Welcome AIJANA ZELLNER Vice President Investor Relations & Market Strategy PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 2
Slide 3: Forward-looking statements
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 in our SEC filings. Th
Slide 4: Blake Moret
Blake Moret Chairman and CEO PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 4
Slide 5: Strategy, What We Do, Why We Win, How We Accelerate
Strategy What We Do Why We Win Execution & Next Horizon Creating the future of Driving simplification to industrial operations make customers more resilient, agile & sustainable How We Financial Update Q&A Accelerate Long-term financial Gaining market share by framework building scale & speed to sol
Slide 6: At a Glance
AT A G L A N C E $9.1B 2023 sales 6% Latin America 21% ~25% ~35% $2.1B $4.1B Discrete Process Lifecycle Intelligent EMEA Services Devices As the world’s largest pure-play industrial 15% Asia automation and digital Pacific transformation company, 58% North ~40% $2.9B Software we are America Hybrid an
Slide 7: Strategy Execution 2019 - 2023
Strategy Execution 2019 - 2023 What we showed you in 2019 PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 7
Slide 8: We delivered
We delivered Building on a strong foundation 1%+ from inorganic growth FY16-FY23 PERFORMANCE Emulate3D, Sensia, Kalypso, ASEM, Avnet, Oylo, Fiix, Plex, AVATA, Cubic, Inorganic Growth KnowledgeLens Contributed 1.4% Financial Framework Priorities: • Information Solutions and Connected Services • 30-35
Slide 9: FY16-23 Performance scorecard
FY16-23 Performance scorecard FY16 FY19 FY23 FY16-23 CAGR REVENUE 5,880 6,695 9,058 6% ADJ. EPS $6.00* $8.78* $12.12 11% ROK SHARE PRICE** $122.34 $164.80 $285.87 13% *Historical adj. EPS was restated to exclude purchase accounting to conform with FY23 adj. EPS **At fiscal year end NOTE: Reconciliat
Slide 10: Next Horizon: New Strategic Growth Framework
Next Horizon: New Strategic Growth Framework Accelerating profitable growth with new ways to win CUSTOMER NEEDS EXAMPLE OF ROK DIFFERENTIATION Faster secular Resiliency Cybersecurity, Augmented Workforce Agility Multi-discipline Logix 3-5% growth Sustainability Energy Transition Capabilities Shoring
Slide 11: Providing new value to our customers
Providing new value to our customers Rockwell is partnering with Procter & Gamble to develop digital transformation solutions that will help optimize the performance of their manufacturing lines through data analytics, while also providing superior run-time information to the operators. We are proud
Slide 12: Largest pure-play automation company
Largest pure-play automation company Serving customers across all industries EV / Battery Semiconductor eCommerce Food & Beverage Life Sciences Tire EcoIndustrial Mining Oil & Gas PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 12
Slide 13: Next Horizon: What we do, why we win, how we accelerate
Next Horizon WHAT WHY HOW we do we win we accelerate PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 13
Slide 14: Future of Production Design & Control
WHAT WE DO: FUTURE OF INDUSTRIAL OPERATIONS Future of Production Design & MATHEUS BULHO Vice President & General Manager, Production Automation CYRIL PERDUCAT Control Senior Vice President, Chief Technology Officer PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 14
Slide 15: Comprehensive industrial software portfolio
Comprehensive industrial software portfolio Industry-leading offerings for on-prem, cloud and hybrid deployment across design – operate – maintain Streamlined automation Simplified operations Asset management and system design management predictive maintenance ON-PREM PUBLIC | Copyright ©2023 Rockwe
Slide 16: Comprehensive industrial software portfolio
Comprehensive industrial software portfolio Industry-leading offerings for on-prem, cloud and hybrid deployment across design – operate – maintain Streamlined automation Simplified operations Asset management and system design management predictive maintenance CLOUD ON-PREM PUBLIC | Copyright ©2023
Slide 17: Automated to Autonomous: Production Design & Control
Automated to Autonomous: Production Design & Control A U T O M AT E D AUTONOMOUS CUS T O ME R VALUE R O K VALUE LAUNCHING NEW Hardware-defined Software-defined Optimize performance, Expanded options for OFFERINGS design design footprint and cost trade- monetization and offs against specific use recu
Slide 18: Judson Althoff
Judson Althoff Executive Vice President and Chief Commercial Officer PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 18
Slide 19: Production Logistics
WHAT WE DO: FUTURE OF INDUSTRIAL OPERATIONS Production Logistics TESSA MYERS Senior Vice President, Intelligent Devices PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 19
Slide 20: Trends in manufacturing driving the need for autonomous technology
Trends in manufacturing driving the need for autonomous technology Labor shortage and cost The world’s workforce is constrained, with major shortages expected in the manufacturing sector Supply chain uncertainty The need for operational resilience is forcing a flight to automation More efficient, pr
Slide 21: Clearpath Robotics, Inc. Overview
Clearpath Robotics, Inc. Overview A leader in autonomous robotics for industrial applications Creating safer, more productive OTTO Motors autonomous mobile Clearpath Robotics autonomous development and more fulfilling workplaces with robots (AMRs) platform autonomous technology Handling pay loads 33
Slide 22: Future of Autonomous Operations
Future of Autonomous Operations With Clearpath, Rockwell is the only end-to-end autonomous production logistics player in market MES: FTPC or PLEX OTTO: Lift AMR PRODUCTION LINE 1 Warehouse OTTO: Case-load AMR OTTO: Pallet-load AMR Palletizing Other Intelligent Devices PRODUCTION LINE 3 OTTO: Piece-
Slide 23: Driving value with data for edge & cloud solutions
WHAT WE DO: FUTURE OF INDUSTRIAL OPERATIONS Driving value with data for edge & BRIAN SHEPHERD cloud solutions Senior Vice President, Software & Control PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 23
Slide 24: Achieving value at scale – edge to cloud
Achieving value at scale – edge to cloud Scaled in the cloud Contextualized data Aggregated in the hub Data Platform Transformed at the edge Edge Platform + Edge Apps Control & Visualization Born at the device Intelligent Devices PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 24
Slide 25: FT Optix – Edge Platform
FT Optix – Edge Platform • Building on FT Optix HMI success Data Platform • Ingests large volumes of data from any OT device and transforms it for immediate actions – close to the source Edge Platform + Edge Apps • Concentrates data to enable cost- effective and streamlined transmission Control & of
Slide 26: FT DataMosaix – Data Platform
FT DataMosaix – Data Platform • SaaS offering provides low total cost of Data ownership and fast time to value Platform • Contextualizes data from various sources – OT, IT, Engineering & Design – into a single Edge Platform + Edge Apps and coherent source of truth for production • Enables scalabilit
Slide 27: FT Hub Industry Solutions + Other Apps
FT Hub Industry Solutions + Other Apps Industry Solutions + Other Apps Optimize energy usage across the enterprise with contextualized Data analytics and dashboards Platform Drive to golden batch goals with Edge Platform near-real time dashboards and + Edge Apps root cause analysis Control & Visuali
Slide 28: Single portal for ROK SaaS offerings
Single portal for ROK SaaS offerings across Design, Operate and Maintain lifecycle of customers’ DX Data Industry Solutions Platform + Other Apps DESIGN – OPERATE – MAINTAIN Edge Platform + Edge Apps Control & Visualization Intelligent Devices PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 28
Slide 29: Manufacturing Lifecycle Management
WHAT WE DO: FUTURE OF INDUSTRIAL OPERATIONS Manufacturing Lifecycle Management MATT FORDENWALT Senior Vice President, Services PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 29
Slide 30: Simplifying how customers' production comes to life
Simplifying how industrial customer’s production comes to life by revolutionizing the orchestration of work • True digital transformation in manufacturing needs to be done across the value chain • While many companies have transformation initiatives, the majority do not have the experience and exper
Slide 31: Simplifying digital thread for production across all industries
Simplifying digital thread for production across all industries Life Sciences example Pre-clinical Product development & tech transfer Full-scale manufacturing Augmented workforce Digital twin, simulation AI technology to efficiently and Flexible and scalable automation, Expert support combined with
Slide 32: Dean Kamen
Dean Kamen Executive Director and Chairman of the Board, ARMI PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 32
Slide 33: Cybersecurity is core to Manufacturing Lifecycle Management
Cybersecurity is core to Manufacturing Lifecycle Management Operational resilience across existing and new facilities Leader in + + industrial Recent cybersecurity acquisition cybersecurity ROK OT cyber Best-in-class Provides real-time visibility expertise, software IT cybersecurity into industrial
Slide 34: Why we win
Why we win BLAKE MORET Chairman and CEO PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 34
Slide 35: Drive Simplification for ROK and our Customers
Drive Simplification for ROK and our Customers Operational Excellence Customer Experience • Evolve operating model to help scale • Seamless end-to-end customer for future growth experience • Pure play – no competing priorities • Single, scalable hardware & software • One sales force & one supply cha
Slide 36: Culture & Talent Development
Culture & Talent Development Our culture is the foundation for all we do Strengthen our commitment Be willing to compare Increase the speed of Have a steady stream to integrity, diversity ourselves to the decision making of fresh ideas and inclusion best alternatives PUBLIC | Copyright ©2023 Rockwel
Slide 37: How we accelerate
How we accelerate SCOTT GENEREUX Senior Vice President, Chief Revenue Officer PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 37
Slide 38: Focus Industries
HOW WE ACCELERATE Focus Industries BARRY ELLIOTT Vice President and General Manager, Power Control Business PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 38
Slide 39: Key growth drivers
Key growth drivers Resiliency, workforce challenges, and cybersecurity are common themes across all industries EV / BATTERY SEMICONDUCTOR FOOD & BEVERAGE LIFE SCIENCES ENERGY TRANSITION • Climate change and • Geopolitical uncertainty • Changing consumer • Pivot to personalized • Energy security, cli
Slide 40: Solving industry challenges with new ways to win
Solving industry challenges with new ways to win Delivering additional value through our new technology and services investments EV / BATTERY SEMICONDUCTOR FOOD & BEVERAGE LIFE SCIENCES ENERGY TRANSITION • Demand for cloud-native • Leverage strengths in • Digital business consulting • Integrated dig
Slide 41: Example EV/Battery Greenfield Project Timeline
Example EV/Battery Greenfield Project Timeline More differentiated offerings throughout the entire project Project Ground Start of Announced Breaking Automation Automation Content Automation Automation Production Production Vendor Ordered FAT SAT Onsite Design Selected Commissioning Machine MES EPC
Slide 42: Americas Growth and Evolution of our Partner Ecosystem
HOW WE ACCELERATE Americas Growth and Evolution of our Partner Ecosystem GINA CLAXTON Regional President Americas PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 42
Slide 43: Generational investment opportunity in the Americas
Generational investment NORTH AMERICA CAPACITY INVESTMENTS* opportunity in the Americas Semiconductor 155 $305B $193B Accelerated Investments we are making EV Battery 136 • Breadth of offerings portfolio - built on open architecture for maximum flexibility and scalability - to implement Energy Trans
Slide 44: Europe & Asia Growth
HOW WE ACCELERATE Europe & Asia Growth SCOTT GENEREUX Senior Vice President, Chief Revenue Officer PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 44
Slide 45: Strong focus on Machine Builders and expanding value in Europe
Strong focus on Machine Builders and expanding value in Europe Machine Process & Hybrid Inorganic Builders Industries Investments Differentiated hardware and software Growing market share in Process Expanding our regional footprint and portfolio targets major machine-builder and Hybrid industries wi
Slide 46: Opportunity to scale in Asia as the Smart Manufacturing leader
Opportunity to scale in Asia as the Smart Manufacturing leader CHINA WHERE WE WIN Consultative approach and industry-focused solutions AREAS OF • Scaling digital services business with FOCUS Kalypso and Knowledge Lens • Strengthen local capabilities to serve unique requirements of Chinese markets IN
Slide 47: Next Horizon: Financial Update
FINANCIAL UPDATE Next Horizon NICK GANGESTAD Senior Vice President, Chief Financial Officer PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 47
Slide 48: Next Horizon: New Strategic Growth Framework
Next Horizon: New Strategic Growth Framework Accelerating profitable growth with new ways to win CUSTOMER NEEDS EXAMPLE OF ROK DIFFERENTIATION LONG-TERM Faster secular Resiliency Cybersecurity, Augmented Workforce FINANCIAL FRAMEWORK Agility Multi-discipline Logix 3-5% growth Sustainability Energy T
Slide 49: Margin Expansion
Margin Expansion Margin Growth Drivers Long-term Range* • Share gain from next gen product launches across core platforms Intelligent Devices • Further synergies from recent acquisitions 22% - 24% • Product cost optimization • Continued share gains in Control Software • Further synergies from recent
Slide 50: Accelerating profitable growth with inorganic investments
Accelerating profitable growth with inorganic investments ~$200M of EBITDA in FY24 from companies acquired FY16-23 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Prior inorganic Process Expertise Information Solutions Market access Advanced priorities / Connected Services in Europe / Asia Material Han
Slide 51: Next Horizon Investments
Next Horizon Investments CUSTOMER NEEDS EXAMPLE OF ROK DIFFERENTIATION INVESTMENTS • Cybersecurity software and services Faster secular Resiliency Cybersecurity, Augmented Workforce • Energy management and decarbonization Agility Multi-discipline Logix growth Sustainability Energy Transition Capabil
Slide 52: FY24 Investment Spend Prioritization
FY24 Investment Spend Prioritization Digital Infrastructure & Supply Chain R&D • Continued investments in digital services • New product introductions across key • Digital infrastructure to scale new business platforms in ITD and SWC models and simplify customer end-to-end • Next-gen software-define
Slide 53: Business Resilience
Business Resilience GROWTH OPERATIONS Recurring revenue growth • Software subscriptions Supply Chain Pay for performance agility compensation • SaaS (Software-as-a-service) • Recurring services Global resource Scalable workforce Diversification deployment • Balanced mix of discrete, hybrid and proce
Slide 54: Capital Deployment Framework
Capital Deployment Framework ORGANIC INVESTMENTS Operating Cash Flow Capital Expenditures ~2 to 2.25% of Sales Free Cash Flow ~100% of Adjusted Income INORGANIC INVESTMENTS Acquisitions Target ~1 pt of growth per year FCF yield > (WACC + risk premium) by years 3-5 EXCESS CASH RETURNED TO SHAREOWNERS
Slide 55: Capital Structure
Capital Structure Estimated 9/30/2022 9/30/2023 9/30/2024 FRAMEWORK Cash & Investments* $0.5B $1.1B ~$0.9B • Maintain “A” credit rating Total Debt $3.8B $3.0B ~$3.0B • ~$400M cash Net Debt $3.3B $1.9B ~$2.1B • Targeting ~2.0X Adjusted Debt / EBITDA Total Debt / Adj. EBITDA** 2.4X 1.5X ~1.4X • Flexib
Slide 56: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance FY23 Results FY24 Guidance Sales Midpoint $9.1B ~ $9.4B Organic Growth Range 16.9% (2.0)% - 4.0% Inorganic Growth 1.2% ~ 1.0% Currency Translation (1.4)% ~ 1.5% Segment Operating Margin 21.3% ~ 21.5% Adjusted Effective Tax Rate 16.4% ~ 17.0% Adjusted EPS Range $12.12 $12.00
Slide 57: More ways to win
More ways to win • Rockwell delivered on our commitment to accelerate profitable growth FY16-FY23 We are creating the future of • Our next horizon will accelerate this industrial operations. profitable growth, well above market rates • Nobody is better positioned than ROK PUBLIC | Copyright ©2023 Ro
Slide 58: Investor Day Appendix
INVESTOR DAY NOVEMBER 8, 2023 APPENDIX PUBLIC PUBLIC | Copyright ©2023 Rockwell Automation, Inc. | 58
Slide 59: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Free Cash Flow (in millions) Q4 2023 FY 2023 Net Income $ 205.7 $ 1,278.0 Depreciation/Amortization 68.4 250.4 Retirement benefits expense 6.8 125.3 Receivables/Inventory/Payables 205.3 (594.4) Compensation and benefits 134.2 209.1 Pension contributions (7.4) (25.
Slide 60: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2023 2022 Reported Currency Effect of Sales Acquisition Growth Organic Reported Less: Effect of Changes in Organic Reported Growth Growth (Decline) Growth Sales(a) Acquisitions(e) Cur
Slide 61: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2023 2022 Effect of Sales Acquisition Currency Organic Reported Less: Effect of Changes in Organic Reported Growth Growth Growth Growth Sales(a) Acquisitions(e) Currency(d) Sales(b) S
Slide 62: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Segment Operating Margin (in millions, except percentages) Three Months Ended Twelve Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Sales Intelligent Devices (a) $ 1,170.7 $ 957.4 $ 4,098.2 $ 3,544.6 Software & Control (b)
Slide 63: 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 Twelve Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net Income attributable to Rockwell Automation
Slide 64: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures The following are reconciliations of Net income attributable to Rockwell Automation and diluted EPS to adjusted income and adjusted EPS, respectively: FY16 FY19 Net income attributable to Rockwell Automation $ 729.7 $ 695.8 Non-operating pension and postretirement
Slide 65: Fiscal 2024 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2024 Guidance (in billions, per share amounts) Organic Sales Fiscal 2024 Guidance Organic sales growth (2.0)% - 4.0% Inorganic sales growth ~1.0% Foreign currency impact ~1.5% Reported sales growth 0.5% - 6.5% Segment Operating Margin Total sales (a) $ ~ 9.