Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q2 2022 Earnings Presentation
28 slides from Rockwell Automation's earnings presentation, May 3, 2022
Slide 1: Q2 Fiscal 2022 Earnings Presentation
Q2 Fiscal 2022 Earnings Presentation May 3, 2022 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 FY22 Results Highlights
Q2 FY22 Results Highlights ▪ Total orders up 37% YOY and up sequentially • Strong demand across all business segments and regions ▪ Reported sales up 1.8% YOY; acquisitions contributed 2.3% • First half revenue up 9% YOY ▪ Organic sales up 1.3% YOY, below expectations due to worse-than-expected semi
Slide 4: Strong market dynamics for automation
Strong market dynamics for automation Multi-year capital projects; higher automation and digital transformation intensity PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 4
Slide 5: Q2 FY22 Organic Growth
Q2 FY22 Organic Growth NORTH AMERICA EMEA Orders +55% Orders +26% Sales +5.9% Sales (3.2)% Q2 HIGHLIGHTS * • All regions continue to see strong broad based demand ASIA PACIFIC Orders +69% • NA sales performance driven by Sales +9.3% higher Intelligent Devices mix • Expecting strong sales growth in a
Slide 6: Orders, Sales & Backlog
Orders, Sales & Backlog Robust orders and backlog are the foundation for strong sales in FY2022 and beyond Q1 Q2 Q3 Q4 Q1 Q2 Q3 Forecast Q4 Forecast FY2021 FY2022 Cancellation % ~1% ~1% ~1% ~2% ~1% <1% BACKLOG ORDERS* SALES PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 6 *Net of Cancellations
Slide 7: Resiliency Actions
Resiliency Actions ▪ Re-engineering of existing products to increase component supply resiliency ▪ Capacity investments, with redundant manufacturing lines (Twinsburg and Singapore) and additional electronic assembly equipment ▪ Qualification of additional suppliers to diversify our supplier base ▪
Slide 8: FY22 Full Year Outlook Highlights
FY22 Full Year Outlook Highlights ▪ Orders approaching $10B ▪ Total sales growth range of 11-15% ▪ Acquisitions to contribute ~2.5 pts of growth; currency impact of ~(1.5) pts ▪ IS/CS expected to grow double digits; sales expected to reach $800M ▪ ARR expected to grow double digits ▪ Expected segmen
Slide 9: Q2 FY22 Key Financial Information
Q2 FY22 Key Financial Information ($ in millions, except per share amounts) Q2 FY22 Q2 FY21 YOY B/(W) Organic Growth +1.3 % Inorganic Growth +2.3 % SALES $1,808 $1,776 Currency Translation (1.8) % Reported Growth +1.8 % SEGMENT OPERATING MARGIN 15.7% 22.0% (630) bps CORPORATE AND OTHER $25 $30 $5 AD
Slide 10: Price vs Input Cost
Price vs Input Cost • Price actions of 17% yielding ~$400 million on an annualized basis • Price benefit to improve in 2H FY22 and into FY23 as customer agreements renew • Prepared to take further price actions if inflation forecasts worsen Price/Cost positive in 2H with implemented price actions PU
Slide 11: Q2 FY22 Segment Results
Q2 FY22 Segment Results SALES SEGMENT OPERATING SEGMENT ($ in millions; YOY growth %) MARGIN HIGHLIGHTS Organic (3.0)% Intelligent ▪ Lower segment margin YOY driven by higher input costs, Devices $809M Inorganic —% 14.6% higher investment spend, and lower sales Currency (1.9)% (920) bps YOY ▪ Expect
Slide 12: Q2 FY21 to Q2 FY22 Adjusted EPS Walk
Q2 FY21 to Q2 FY22 Adjusted EPS Walk PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 12
Slide 13: Fiscal Year Guidance
Fiscal Year 22 Guidance April January Guidance Guidance Sales Range $7.8B - $8.0B $8.1B - $8.3B Organic Growth Range 10% - 14% 14% - 17% Inorganic Growth ~ 2.5% ~ 2.0% Currency Translation ~ (1.5)% ~ 0% Segment Operating Margin ~ 20.0% ~ 21.5% Adjusted Effective Tax Rate ~ 17% ~ 17% Adjusted EPS Ran
Slide 14: FY22 January to April Guidance Midpoint Adjusted EPS Walk
FY22 January to April Guidance Midpoint Adjusted EPS Walk PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 14
Slide 15: Q2 Fiscal 2022 Earnings Presentation
Q2 Fiscal 2022 Earnings Presentation May 3, 2022 PUBLIC 15
Slide 16: Appendix
APPENDIX 16
Slide 17: Q2 FY22 Organic Industry Segment Performance
Q2 FY22 Organic Industry Segment Performance % of Q2 FY22 Q2 FY22 Sales vs. Q2 FY21 Q2 FY22 vs. Q2 FY21 Discrete Semiconductor up low single digits ~ 25% Down ~5% Automotive down high single digits e-Commerce down high single digits Hybrid Food & Beverage flat ~ 45% Up ~5% Life Sciences up
Slide 18: FY22 Organic Industry Segment Outlook
FY22 Organic Industry Segment Outlook % of FY22 B/(W) vs. Jan FY22 Sales vs. FY21 Assumptions at Guidance Midpoint Guidance Discrete Automotive up high single digits ~ 25% Up ~10% Semiconductor up ~10% e-Commerce up high teens Hybrid Food & Beverage up low teens ~ 45% Up ~10% Life Sciences
Slide 19: Industry Segmentation
Industry Segmentation % of FY21 Sales Discrete Hybrid Process ~10% Automotive ~20% Food & Beverage ~10% Oil & Gas ~5% Semiconductor ~5% Life Sciences ~5% Mining ~5% Warehousing & E-commerce ~5% Household & Personal Care ~5% Metals ~5% General Industries ~5% Tire ~5% Chemicals • Printing & Publishing
Slide 20: Q2 FY22 Results: Summary
Q2 FY22 Results: Summary ($ in millions, except per share amounts) Q2 2022 Q2 2021 Total Sales $ 1,808.1 $ 1,776.1 Total segment operating earnings $ 283.4 $ 390.1 Purchase accounting depreciation and amortization (26.1) (13.1) Corporate and other (24.6) (30.4) Non-operating pension and postretireme
Slide 21: Free Cash Flow
Free Cash Flow Three Months Ended Six Months Ended ($ in millions) Q2 2022 Q2 2021 Q2 2022 Q2 2021 Net Income $ 49 $ 410 $ 288 $ 1,001 Depreciation/Amortization 63 46 121 90 Change in fair value of investments1 141 (191) 133 (581) Retirement Benefits Expense 42 30 58 60 Receivables/Inventory/Payable
Slide 22: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales ($ in millions) Three Months Ended March 31, 2022 2021 Effect of Effect of Reported Sales Less: Effect of Changes in Organic Sales Reported Less: Effect of Changes in Organic Growth Acquisitions Currency Growth Sales(a) Acquisitions(e) Currency(d) Sa
Slide 23: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Segment Operating Margin ($ in millions) Three Months Ended March 31, 2022 March 31, 2021 Sales Intelligent Devices (a) $ 808.6 $ 850.2 Software & Control (b) 534.9 502.3 Lifecycle Services (c) 464.6 423.6 Total sales (d) $ 1,808.1 $ 1,776.1 Segment operating earn
Slide 24: 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, 2022 March 31, 2021 Net Income attributable to Rockwell Automation $ 53.9 $ 415.0 Non-operating pension and postretirement benefit
Slide 25: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Return On Invested Capital ($ in millions) Twelve Months Ended March 31, 2022 2021 (a) Return Net income $ 631.9 $ 1,578.6 Interest expense 108.4 97.5 Income tax provision 9.5 263.9 Purchase accounting depreciation and amortization 82.5 46.7 Return 832.3 1,986.7 (
Slide 26: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Fiscal 2022 Guidance ($ in billions, except per share amounts) Organic Sales Fiscal 2022 Guidance Organic sales growth 10% - 14% Inorganic sales growth ~ 2.5% Foreign currency impact ~ (1.5)% Reported sales growth 11% - 15% Segment Operating Margin Total sales (a)
Slide 27: Performance Metric Definition
Performance Metric Definition Organic ARR Growth Annual recurring revenue (ARR) is a key metric that enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is
Slide 28: Thank you
Thank you www.rockwellautomation.com 28