Rockwell Automation, Inc. · NYSE:ROK

Rockwell Automation — Investor Day (November 2024)

73 slides from Rockwell Automation's investor day presentation, Nov 20, 2024

Slide 1: Investor Day
Investor Day NOV 20, 2024 | ANAHEIM, CA, USA
Slide 3: Forward-looking statements and non-GAAP information
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: Strategy: Perform and Transform
Strategy Differentiated Operational Perform and Transform Growth Excellence Accelerating the Future of ROK Operating Model Industrial Operations Margin Q&A Expansion Long-term Financial Framework PUBLIC | Copyright ©2024 Rockwell Automation, Inc. | 4
Slide 6: At a Glance
AT A G L A N C E $8.3B 2024 sales 8% Latin America 18% ~25% ~40% $2.3B $3.8B Discrete Process Lifecycle Intelligent EMEA Services Devices As the world’s largest pure-play industrial 13% Asia automation and digital Pacific transformation company, 61% North ~35% $2.2B Software we are America Hybrid an
Slide 7: Largest Pure-Play Automation Company
Largest Pure-Play Automation Company Deep domain expertise across a diverse set of end markets Auto / EV / Battery Semiconductor eCommerce Food & Beverage Life Sciences Tire Energy Mining Chemicals PUBLIC | Copyright ©2024 Rockwell Automation, Inc. | 7
Slide 8: Accelerating Profitable Growth with New Ways to Win
Accelerating Profitable Growth with New Ways to Win Strategic growth framework CUSTOMER NEEDS EXAMPLE OF ROK DIFFERENTIATION Faster secular Resiliency Cybersecurity, Augmented Workforce Agility Multi-Discipline Logix 3-5% growth Sustainability Energy Transition Capabilities Share growth Shoring / St
Slide 9: Accelerating Profitable Growth with New Ways to Win – Progress
Accelerating Profitable Growth with New Ways to Win – Progress Strategic growth framework • Double-digit growth in Cybersecurity Services with expanding customer base Faster secular • Growth in Process applications with multi-discipline Logix, including Process safety / HA growth • Energy end market
Slide 10: Market Leader in North America
Market Leader in North America • We are winning at a high rate • OEMs outside of the U.S. want to work with ROK as the leader in the Americas • A substantial amount of mega projects are in our core verticals • Still in early innings of multi-year investment We have the highest share, largest install
Slide 12: Differentiated Growth framework
Differentiated Growth Production Design & Control Production Logistics Edge & Cloud Solutions Operational Margin Excellence Expansion Manufacturing Lifecycle Management ACCELERATING THE FUTURE OF INDUSTRIAL OPERATIONS PUBLIC | Copyright ©2024 Rockwell Automation, Inc. | 12
Slide 13: Production Design & Control
Production Design & Control Differentiated growth SVP, Software SVP & Chief VP, AI and Control Technology Officer and Autonomy PUBLIC | Copyright ©2024 Rockwell Automation, Inc. | 13
Slide 14: Transforming Production Design and Control
Transforming Production Design and Control Modern DevOps Cloud-native Plantwide multi- Software defined AI-powered workflows managed solutions discipline control automation productivity Continuous integration, CAPEX to OPEX model One plant-wide platform Automation Improve worker deployment, and to e
Slide 15: Transforming Production Design
Transforming Production Design Modern DevOps Cloud-native AI-powered workflows managed solutions productivity • Deliver a full digital twin of the entire • Cloud-native solutions with proven Industrial co-pilot Uses simulation as production system to identify and SaaS benefits helps generate a train
Slide 16: Bringing Production Design to Life
Bringing Production Design to Life Novo Nordisk • Started using Emulate3D digital-twin technology in 2020 to make more (& bolder) changes during shutdowns • Connected the digital twin to their MES and business system (SAP) for full system testing • Allows pre-tested, planned upgrades without tying u
Slide 17: Transforming Production Control
Transforming Production Control Plantwide Software defined AI-powered multi-discipline automation autonomous control Software-defined everything Logix One automation platform for the entire plant Hardware agnostic Hardware and OS Embeds learning Brings machine vision design of production agnostic da
Slide 18: Revolutionizing Manufacturing with AI
Revolutionizing Manufacturing with AI Use case: Filling Optimization U S E C A S E F I L L I N G O P T I M I Z A T I O N • 500g mayonnaise jars • Largest filling line (35% of dressing volume) • High-speed production C H A L L E N G E S O L U T I O N R E S U L T S Rising raw material costs and consum
Slide 19: No one is better positioned to transform production design and control
Transforming Production Design and Control No one is better positioned to transform production design and control systems Logix Echo™ Logix Modern DevOps Cloud-native Plantwide Software-defined AI-powered workflows managed solutions multi-discipline control automation productivity PUBLIC | Copyright
Slide 21: Trends in Manufacturing Driving the Need for Autonomous Technology
Trends in Manufacturing Driving the Need for Autonomous Technology LABOR COST FLEXIBILITY The world’s workforce Manufacturers expect Continued need is constrained, substantial cost to handle the with major shortages productivity in ever-increasing variety expected in the operations post-covid of pro
Slide 22: Enabling End-to-End Autonomous Execution and Optimization
Enabling End-to-End Autonomous Execution and Optimization OTTO integration with ROK K E Y P R O D U C T I O N L O G I S T I C S C A P A B I L I T I E S Advanced Material Operations & Fleet Consulting & Handling Management Software Lifecycle Services Integrated robotics Independent Cart Plex MES & OT
Slide 23: Deploying Autonomous Mobile Robots (AMRs) at Rockwell
Deploying Autonomous Mobile Robots (AMRs) at Rockwell • Streamlining material movement to improve • Leveraging our own technology and expertise efficiency and reduce costs • Plans for all production plants • Combined with our FactoryTalk MES, this will allow for orchestrated material flow to, • Twin
Slide 24: Partnering on Production Logistics
Partnering on Production Logistics 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 t
Slide 26: Transforming Production Systems with Edge and Cloud
Transforming Production Systems with Edge and Cloud E D G E C L O U D Cloud Highly scalable Deploy and manage + Design and emulate Improve start up time by 50% compute, enterprise- DESIGN – OPERATE – MAINTAIN at the edge a production system Reduce downtime by 20% wide benchmarking & Mitigate cyber r
Slide 27: Industry Leading Quality Management Capabilities
Industry Leading Quality Management Capabilities Quality is the #1 driver for customer investments based on Smart Manufacturing Survey CLOUD Quality Management (QMS) Industry-leading QMS capabilities such as audit management, corrective, and preventive action and compliance in the Cloud EDGE Vision
Slide 28: Differentiated Asset Management Capabilities
Differentiated Asset Management Capabilities Asset performance is a top priority for customers in process industries CLOUD Fiix integrates data from the Edge and provides predictive maintenance and enterprise asset management in the Cloud EDGE Real-time predictions leveraging contextualized data fro
Slide 29: ROK at Oxy: Edge Control and Closed Loop Analytics
ROK at Oxy: Edge Control and Closed Loop Analytics Oxy is collaborating with Rockwell Automation to build out an edge and cloud architecture for process control and optimization that will enable buildout of Direct Air Capture technology at scale. PUBLIC | Copyright ©2024 Rockwell Automation, Inc. |
Slide 31: The Future of Industrial Operations
The Future of Industrial Operations Manufacturing Lifecycle Management Autonomous Operations Bringing the right domain expertise and technology to help automate, connect, Edge and cloud solutions protect, and optimize our customers’ operations Production logistics Production design, control and inte
Slide 32: Comprehensive Suite of End-to-End Services
Comprehensive Suite of End-to-End Services Professional Services Managed & Support Services • Production Automation • Access to technical experts Deep 24x7 in over 20 languages Professional Managed domain • Digital Operations services services expertise • Industrial Cybersecurity • Scalable model of
Slide 33: Comprehensive Suite of End-to-end Services
Comprehensive Suite of End-to-end Services Professional Services Managed & Support Services • Production Automation • Access to technical experts Deep 24x7 in over 20 languages Professional Managed • Digital Operations • 20,000+ Customers domain services services expertise 2,000+ Customers • Industr
Slide 34: Margin Expansion Progress – Lifecycle Services
Margin Expansion Progress – Lifecycle Services 13% - 15% LONG-TERM MARGIN TARGET Annual Streamlined Sensia Recurring Revenue Organization Joint Venture • Double-digit growth through the cycle • Global professional services • Double-digit topline growth • Expands and protects ROK installed base • Dec
Slide 37: Operational Excellence
Operational Excellence ROK Operating Model Differentiated Margin Growth Expansion ACCELERATING THE FUTURE OF INDUSTRIAL OPERATIONS PUBLIC | Copyright ©2024 Rockwell Automation, Inc. | 37
Slide 39: ROK Operating Model
ROK Operating Model Share growth Price discipline Expanded market with Annual productivity new ways to win and cost improvements Resilient revenue streams Synergies from with increasing ARR recent M&A Strategic acquisitions Disciplined capital allocation Strong partner ecosystem Innovative New Produ
Slide 40: Strong Financial Planning and Consistent Forecastability
Strong Financial Planning and Consistent Forecastability Focus on Operational Excellence Metrics Quarterly and Full Year • End-to-end integrated financial and business forecast accuracy planning processes with data-driven analytics and AI predictive modeling Precision in product and project costing
Slide 41: Supply Chain Agility
Supply Chain Agility Focus on Operational Excellence Metrics • SKU optimization to reduce complexity Number of active SKUs • Business continuity and resiliency programs in High-value products resiliency product design, supplier base, supply chain index capacity, cybersecurity, and workforce Direct l
Slide 42: Continuous Improvement
Continuous Improvement Focus on Operational Excellence Metrics • Continuous Improvement as an Enterprise focus Continuous Improvement through expanding expertise, tools, governance, certified belts and incentives driving lowest cost to deliver • ROK on ROK, integrating our technology Productivity of
Slide 44: Margin Expansion
Margin Expansion Long-term Differentiated Operational Financial Framework Growth Excellence ACCELERATING THE FUTURE OF INDUSTRIAL OPERATIONS PUBLIC | Copyright ©2024 Rockwell Automation, Inc. | 44
Slide 46: Accelerating Profitable Growth with New Ways to Win
Accelerating Profitable Growth with New Ways to Win Strategic growth framework 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 Transition Capabili
Slide 47: 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 48: Margin Expansion and Productivity
Margin Expansion and Productivity • Drive synergies from recent acquisitions • Productivity in HQ functions SG&A Cost Reduction • Streamline sales operations Enterprise Scale • Leverage CoEs in low-cost locations Incremental YOY Benefit and Efficiency Process Efficiency Leverage technology to redesi
Slide 49: Margin Expansion and Productivity – Early Wins
Margin Expansion and Productivity – Early Wins • Drive synergies from recent acquisitions • Productivity in HQ functions SG&A Cost Reduction • Streamline sales operations Addressing $500M in direct material spend by Enterprise Scale • Leverage CoEs in low-cost locations executing targeted contract r
Slide 50: Prioritizing Investments in High-Growth Areas
Prioritizing Investments in High-Growth Areas Strategic growth investments R&D as % of sales • Next-gen Independent Cart and AMR Intelligent • Next-gen Motor Control Mid-single digits Devices • Expanded connectivity and data enablement across device portfolio • Next-gen software-defined architecture
Slide 51: Capital Deployment Framework
Capital Deployment Framework ORGANIC INVESTMENTS Operating Cash Flow Capital Expenditures ~2 to 3% of Sales Free Cash Flow ~100% of Adjusted Income INORGANIC INVESTMENTS Acquisitions Target ~1 pt of growth per year EXCESS CASH RETURNED TO SHAREOWNERS Dividends Maintain “A” credit rating Share Repurc
Slide 52: Fiscal Year 2025 Guidance
Fiscal Year 2025 Guidance FY24 Results FY25 Guidance Sales Midpoint $8.3B ~ $8.2B Organic Growth Range (10)% (4.0)% - 2.0% Inorganic Growth 1% - Currency Translation - - Segment Operating Margin 19.3% ~ 19% Adjusted Effective Tax Rate 15.1% ~ 17% Adjusted EPS Range $9.71 $8.60 - $9.80 Free Cash Flow
Slide 53: Capital Structure
Capital Structure Estimated 9/30/2024 9/30/2025 FRAMEWORK Cash & Investments* $0.5B ~$0.4B • Maintain “A” credit rating Total Debt $3.6B ~$3.5B • ~$400M cash Net Debt $3.1B ~$3.1B • Targeting ~2.0X Adjusted Debt / EBITDA Total Debt / Adj. EBITDA** 2.3X ~2.1X • Flexibility to temporarily increase lev
Slide 55: More ways to win
More ways to win • We continue to gain share We are creating the future of • Our diversification and productivity enable a more resilient company industrial operations. • Nobody is better positioned than ROK PUBLIC | Copyright ©2023 ©2024 Rockwell Automation, Inc. | 55
Slide 57: Investor Day
Investor Day NOV 20, 2024 | ANAHEIM, CA, USA
Slide 59: FY24 Organic Industry Segment Performance
FY24 Organic Industry Segment Performance % of FY24 FY24 FY24 Sales vs. FY23 vs. FY23 Automotive down ~25% ~25% Down ~15% Semiconductor down mid teens e-Commerce & Warehouse Automation* up ~10% DISCRETE Food & Beverage down high teens ~ 35% Down ~15% Life Sciences down low teens Tire dow
Slide 60: Industry Segmentation
Industry Segmentation % of FY24 Sales ~25% ~35% ~40% of sales of sales of sales ~10% Automotive ~20% Food & Beverage ~15% Energy** ~5% Semiconductor ~5% Life Sciences ~5% Mining ~5% e-Commerce & Warehouse ~5% Household & Personal Care ~5% Metals Automation* ~5% Tire ~5% Chemicals ~5% General Industr
Slide 61: FY23 to FY24 Adjusted EPS Walk
FY23 to FY24 Adjusted EPS Walk ~ $(4.65) ~ $1.80 ~ $(0.25) ~ $0.25 ~ $(0.25) ~ $0.15 ~ $(0.21) ~ $0.75 $3.04 $12.12 $9.71 FY 2023 Core Benefits from Incentive Acquisitions Clearpath FX Tax Rate Shares / Int / All FY 2024 Cost Reductions Compensation Earnout Other Adjusted EPS excludes FY24 2nd half
Slide 62: FY25 Organic Industry Segment Outlook
FY25 Organic Industry Segment Outlook % of FY25 Assumptions at FY24 vs. FY24 Guidance Midpoint Sales Automotive down low single digits Semiconductor down low single digits ~25% Down low single digits DISCRETE e-Commerce & Warehouse Automation up mid single digits Food & Beverage down low sin
Slide 63: Q4 FY24 Results: Summary
Q4 FY24 Results: Summary (in millions, except per share amounts) Q4 2024 Q4 2023 Total sales $ 2,035.5 $ 2,562.9 Total segment operating earnings 409.1 571.7 Purchase accounting depreciation and amortization, and impairment (35.6) (184.6) Corporate and other (39.0) (39.1) Non-operating pension and p
Slide 64: Reconciliation to Non-GAAP Measures: Free Cash Flow
Reconciliation to Non-GAAP Measures Free Cash Flow (in millions) Q4 2024 FY 2024 Net Income $ 238.2 $ 947.3 Depreciation/Amortization 81.2 317.4 Retirement benefits expense 4.4 17.9 Receivables/Inventory/Payables 159.9 246.0 Compensation and benefits 42.2 (254.9) Pension contributions (9.6) (28.3) I
Slide 65: Reconciliation to Non-GAAP Measures: Organic Sales
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2024 2023 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 66: Reconciliation to Non-GAAP Measures: Organic Sales
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2024 2023 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 67: Reconciliation to Non-GAAP Measures: Segment Operating Margin
Reconciliation to Non-GAAP Measures Segment Operating Margin (in millions, except percentages) Three Months Ended Twelve Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Sales Intelligent Devices (a) $ 946.0 $ 1,170.7 $ 3,804.1 $ 4,098.2 Software & Control (b)
Slide 68: Reconciliation to Non-GAAP Measures: Adjusted Income and EPS
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, September 30, September 30, September 30, 2024 2023 2024 2023 Net Income attributable to Rockwell Automation
Slide 69: Reconciliation to Non-GAAP Measures: Pension Cost
Reconciliation to Non-GAAP Measures Non-operating pension and postretirement benefit cost Three Months Ended Twelve Months Ended September 30, September 30, September 30, September 30, (in millions) 2024 2023 2024 2023 Interest cost $ 37.3 $ 36.2 $ 149.1 $ 151.9 Expected return on plan assets (42.6)
Slide 70: Reconciliation to Non-GAAP Measures: Return On Invested Capital
Reconciliation to Non-GAAP Measures Return On Invested Capital ($ in millions) Twelve Months Ended September 30, 2024 2023 (a) Return Net income $ 947.3 $ 1,278.0 Interest expense 154.6 135.3 Income tax provision 151.8 330.5 Purchase accounting depreciation and amortization, and impairment 143.9 264
Slide 71: Fiscal 2025 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2025 Guidance ($ in billions) Reported and Organic Sales Fiscal 2025 Guidance Organic sales growth (4)% to 2% Inorganic sales growth ~ —% Foreign currency impact ~ —% Reported sales growth (4)% to 2% Segment Operating Margin Total sales (a) $ ~ 8.2 Total se
Slide 72: Free Cash Flow Conversion
Reconciliation to Non-GAAP Measures Free Cash Flow Conversion ($ in billions) Fiscal 2025 Guidance Net income attributable to Rockwell Automation at the mid-point $ ~ 0.9 Non-operating pension and postretirement benefit credit, net of tax ~ — Purchase accounting depreciation and amortization, and im
Slide 73: Performance Metric Definitions
Performance Metric Definitions Total ARR Total 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 defined as a revenue stream

Rockwell Automation — Investor Day (November 2024) on 6ix

Rockwell Automation — Investor Day (November 2024)

Slide 1: Investor Day

Slide 2: Welcome

Slide 3: Forward-looking statements and non-GAAP information

Slide 4: Strategy: Perform and Transform

Slide 5: Strategy

Slide 6: At a Glance

Slide 7: Largest Pure-Play Automation Company

Slide 8: Accelerating Profitable Growth with New Ways to Win

Slide 9: Accelerating Profitable Growth with New Ways to Win – Progress

Slide 10: Market Leader in North America

Slide 11: Differentiated Growth

Slide 12: Differentiated Growth framework

Slide 13: Production Design & Control

Slide 14: Transforming Production Design and Control

Slide 15: Transforming Production Design

Slide 16: Bringing Production Design to Life

Slide 17: Transforming Production Control

Slide 18: Revolutionizing Manufacturing with AI

Slide 19: No one is better positioned to transform production design and control

Slide 20: Production Logistics

Slide 21: Trends in Manufacturing Driving the Need for Autonomous Technology

Slide 22: Enabling End-to-End Autonomous Execution and Optimization

Slide 23: Deploying Autonomous Mobile Robots (AMRs) at Rockwell

Slide 24: Partnering on Production Logistics

Slide 25: Edge & Cloud Solutions

Slide 26: Transforming Production Systems with Edge and Cloud

Slide 27: Industry Leading Quality Management Capabilities

Slide 28: Differentiated Asset Management Capabilities

Slide 29: ROK at Oxy: Edge Control and Closed Loop Analytics

Slide 30: Manufacturing Lifecycle Management

Slide 31: The Future of Industrial Operations

Slide 32: Comprehensive Suite of End-to-End Services

Slide 33: Comprehensive Suite of End-to-end Services

Slide 34: Margin Expansion Progress – Lifecycle Services

Slide 35: Differentiated Growth

Slide 36: Differentiated Growth

Slide 37: Operational Excellence

Slide 38: Operational Excellence

Slide 39: ROK Operating Model

Slide 40: Strong Financial Planning and Consistent Forecastability

Slide 41: Supply Chain Agility

Slide 42: Continuous Improvement

Slide 43: Margin Expansion

Slide 44: Margin Expansion

Slide 45: Margin Expansion

Slide 46: Accelerating Profitable Growth with New Ways to Win

Slide 47: Margin Expansion

Slide 48: Margin Expansion and Productivity

Slide 49: Margin Expansion and Productivity – Early Wins

Slide 50: Prioritizing Investments in High-Growth Areas

Slide 51: Capital Deployment Framework

Slide 52: Fiscal Year 2025 Guidance

Slide 53: Capital Structure

Slide 54: Summary

Slide 55: More ways to win

Slide 56: Questions

Slide 57: Investor Day

Slide 58: Appendix

Slide 59: FY24 Organic Industry Segment Performance

Slide 60: Industry Segmentation

Slide 61: FY23 to FY24 Adjusted EPS Walk

Slide 62: FY25 Organic Industry Segment Outlook

Slide 63: Q4 FY24 Results: Summary

Slide 64: Reconciliation to Non-GAAP Measures: Free Cash Flow

Slide 65: Reconciliation to Non-GAAP Measures: Organic Sales

Slide 66: Reconciliation to Non-GAAP Measures: Organic Sales

Slide 67: Reconciliation to Non-GAAP Measures: Segment Operating Margin

Slide 68: Reconciliation to Non-GAAP Measures: Adjusted Income and EPS

Slide 69: Reconciliation to Non-GAAP Measures: Pension Cost

Slide 70: Reconciliation to Non-GAAP Measures: Return On Invested Capital

Slide 71: Fiscal 2025 Guidance

Slide 72: Free Cash Flow Conversion

Slide 73: Performance Metric Definitions