Emerson Electric Company · NYSE:EMR
Emerson Electric — Q3 2024 Earnings Presentation
21 slides from Emerson Electric's earnings presentation, Aug 7, 2024
Slide 1: 2024 Q3 Emerson Earnings
2024 Q3 Emerson Earnings August 7, 2024 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: Key Messages
Current End-Market Demand Solid Q3 Performance 3% underlying orders growth in Q3 – Operating leverage, adjusted EPS and free process and hybrid up MSD and discrete cash flow all exceeded Q3 expectations down LSD with orders and sales in line with guidance Key Expecting LSD growth in H2 and for the f
Slide 4: 2024 Q3 Key Metrics
Results Prior Guidance Underlying Orders Growth1 3% Underlying Sales Growth 3% 3% – 4.5% 2024 Q3 Key Gross Profit Margin 52.8% Metrics Operating Leverage2 67% Mid 30s Adjusted EPS $1.43 $1.38 – $1.42 Free Cash Flow $975M 1 Excludes AspenTech EMERSON | 4 2 Excludes Test & Measurement
Slide 5: Sustained Strength in Large Projects
Sustained Strength in Large Projects PROJECT WINS Sustainability & Decarbonization PROJECT FUNNEL Traditional LNG Energy EV Battery Carbon Capture Sustainability & Decarbonization: $3.1B Energy Transition: $5.5B Metals & Mining ~$350M Growth Platforms: $7.2B Clean Fuels Life Traditional Sciences Ene
Slide 6: Breakthrough Innovation and Portfolio Management Simplification
Breakthrough Innovation Software- defined automation Updated Ovation Automation Platform to include software- defined architecture to help customers better leverage data, new technologies and artificial intelligence (AI) Portfolio Management Simplification Announced definitive agreement to sell rema
Slide 7: 2024 Q3 Performance Summary
2024 Q3 Performance Summary Sales Adjusted Segment EBITA $4.4B 30.0% 26.9% 27.1% $3.9B 4.5 4 25.0% Sales growth led by process Price-cost and cost reductions and hybrid businesses 3.5 drove margin expansion 20.0% 3 2.5 3% Price contributed 2 pts 15.0% 20 Operating leverage2: 67% 2 Underlying bps 1.5
Slide 8: Q3 Adjusted EPS Bridge
1.6 1.5 $0.16 ($0.02) $1.43 1.4 $1.29 Q3 Adjusted 1.3 1.2 EPS Bridge 1.1 11% 1 0.9 0.8 Q3 2023 Operations Other / Q3 2024 Non-Operating EMERSON | 8
Slide 9: 2024 Continuing Operations Guidance
2024 Continuing Operations Guidance 2024 Net Sales Growth ~15% FX ~(0.5 pts) Acquisitions (NI) ~9.5 pts Share repurchase: ~$300M Divestitures ~0 pts Underlying Sales Growth ~6% Dividend payments: $1.2B Operating Leverage1 Mid to High 40s Adjusted EPS $5.45 – $5.50 Tax rate: ~22% Test & Measurement C
Slide 10: Appendix
Appendix E M E R S O N | 10
Slide 11: Corporate and Other Items
Corporate and Other Items (in millions) 2024 Q3 2024 Expectations Stock Compensation – GAAP ($56) ~($260) Integration-Related Stock Compensation Expense $9 ~$55 Adjusted Stock Compensation – Non-GAAP ($47) ~($205) Pension $38 ~$145 Corporate & Other – GAAP ($38) ~($605) Restructuring and Related Cos
Slide 12: Sale of Remaining Copeland Interest and Note Receivable
Sale of Remaining Copeland Interest and Note Receivable Agreements Entered June 6, 2024 SUMMARY OF TRANSACTIONS $3.5B Transaction Value including pretax cash proceeds and net release of future indemnity obligations ~$2.9B After-Tax Proceeds which is intended to be used to pay off existing debt oblig
Slide 13: Reconciliation of Non-GAAP Measures: Underlying Growth
Reconciliation of Non-GAAP Measures Underlying Growth This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2024 Underlying Sales Growth 2024 Q3 Guidance Reported (GAAP) 11% ~15% (Favorable) / Unfavorable FX 1% ~0
Slide 14: 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 2023 Q3 2024 Q3 Net sales $3,946 $4,380 Pretax earnings (GAAP) 822 455 Pretax
Slide 15: Reconciliation of Non-GAAP Measures: Adjusted Earnings
Reconciliation of Non-GAAP Measures Adjusted Earnings This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2023 Q1 2023 Q2 2023 Q3 2023 Q4 FY2023 2024 Q1 2024 Q2 2024 Q3 Net Earnings to Common Stockholders $2,331
Slide 16: 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) 2024 2023 Q1 2023 Q2 2023 Q3 2023 Q4 FY2023 2024 Q1 2024 Q2 2024 Q3 Guidance Net Earnings to Common Stockholde
Slide 17: 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 9 Months Ended 9 Months Ended 2024 2023 Q3 2024 Q3 June 30, 2023 June 30, 2024 Guidance Operat
Slide 18: Reconciliation of Non-GAAP Measures: Test & Measurement
Reconciliation of Non-GAAP Measures Test & Measurement (T&M) This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2024 Earnings Per Share 2024 Q3 Guidance Earnings per share - T&M contribution (GAAP) ($0.15) ($0.
Slide 19: Reconciliation of Non-GAAP Measures: AspenTech
Reconciliation of Non-GAAP Measures AspenTech This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2024 Earnings Per Share 2024 Q3 Guidance Earnings per share (GAAP) $0.05 ($0.06) - ($0.04) Amortization of intang
Slide 20: 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) June 30, 2024 Backlog (GAAP) $8.7 AspenTech (1.3) Backlog excluding AspenTech (non-GAAP) $7.4 E M E R S O N | 20
Slide 21: Endnotes
Endnotes Continuing Operations: With the June 6, 2024 definitive agreement to completely exit its remaining interests in the Copeland joint venture, Emerson will report financial results for the Copeland equity ownership as discontinued operations for all periods presented, beginning in Q3 2024. The
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