Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q2 2019 Earnings Presentation
22 slides from Rockwell Automation's earnings presentation, Apr 25, 2019
Slide 1: Rockwell Automation Fiscal Year 2019 Second Quarter Conference Call
Rockwell Automation Fiscal Year 2019 Second Quarter Conference Call April 25, 2019 Copyright © 2019 Rockwell Automation, Inc. All rights reserved.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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
Slide 3: Fiscal 2019 Second Quarter Results and Full Year Outlook
Fiscal 2019 Second Quarter Results and Full Year Outlook Q2 Results ▪ Organic sales up 3.6% YOY – Accelerating growth in Information Solutions and Connected Services – Process growth of 10% – Growth led by heavy industries and consumer – Weak automotive sales impacted product sales; Logix down 2% ▪
Slide 4: Update on Key Initiatives
Update on Key Initiatives ▪ Gaining momentum ▪ Announced in February 2019 ▪ Trained over 1,500 commercial and ▪ Announcement has been well- technical resources across the globe received by target customers ▪ Added several hundred new deals to ▪ JV formation activities under way the opportunity pipel
Slide 5: Key Financial Information: Second Quarter
Key Financial Information: Second Quarter (in millions, except per share amounts) Q2 2019 Q2 2018 * YOY B/(W) Sales $ 1,657 $ 1,651 0.4 % Segment Operating Earnings $ 354 $ 345 2.6 % Segment Operating Margin 21.3 % 20.9 % 40 bps General Corporate - Net $ 27 $ 25 $ (2) Adjusted EPS $ 2.04 $ 1.89 7.9
Slide 6: Architecture & Software
Architecture & Software Sales Segment Operating Margin ($ millions) $1,800 40% $1,492 $1,493 28.7% 28.4% 29.6% 29.9% $1,400 30% $1,000 20% $757 $740 $600 10% $200 0% Q2 YTD Q2 YTD 2018* 2019 2018 * 2019 YOY Sales % Change Q2 2019 YTD ▪ Segment operating margin contracted (30) bps in Q2. Organic 1.2%
Slide 7: Control Products & Solutions
Control Products & Solutions Sales Segment Operating Margin ($ millions) $2,000 20% $1,746 $1,807 15.7% 15.6% 14.3% 14.8% $1,600 15% $1,200 10% $895 $918 $800 5% $400 0% Q2 YTD Q2 YTD 2018 * 2019 2018 * 2019 YOY Sales % Change ▪ Segment operating margin expanded Q2 2018 YTD 140 bps in Q2, primarily
Slide 8: Regional Sales
Regional Sales (in millions, except percentages) Q2 2019 YTD Second Quarter * Organic Organic ▪ North America growth led by Region Sales % Change Sales % Change heavy industries and consumer, partially offset by automotive North America $ 987 1.9% $ 1,986 4.0% weakness EMEA 331 5.5% 626 2.6% ▪ EMEA
Slide 9: Revised Fiscal 2019 Guidance
Revised Fiscal 2019 Guidance Guidance does not include impacts of Sensia joint venture April Guidance January Guidance Sales ~ $6.8B ~ $6.9B Organic Growth 3.7% to 5.3% 3.7% to 6.7% Currency Translation ~ (2)% ~ (1.5)% Segment Operating Margin ~ 22% ~ 22% Adjusted Effective Tax Rate ~ 19.0% ~ 19.5%
Slide 10: Appendix
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures Copyright © 2019 Rockwell Automation, Inc. All rights reserved.
Slide 11: Second Quarter Results: Summary
Second Quarter Results: Summary (in millions, except per share amounts) Q2 2019 Q2 2018 Total sales $ 1,657.2 $ 1,651.2 Total segment operating earnings $ 353.8 $ 344.9 Purchase accounting depreciation and amortization (4.3) (4.5) General corporate - net (26.7) (24.8) Non-operating pension and postr
Slide 12: Fiscal 2019 Reporting Changes
Fiscal 2019 Reporting Changes Revenue ▪ Adopted ASC 606 (revenue recognition) in Q1 Reporting ▪ U.S. & Canada revenues combined and reported as North America region ▪ Segment P&L: Realigned certain business activities between A&S and CP&S Segment reporting segments Reporting ▪ $48M of FY18 revenue m
Slide 13: Fiscal 2019 Reporting Changes: Statement of Operations Impact on Q2 FY18
Fiscal 2019 Reporting Changes: Statement of Operations Impact on Q2 FY18 (in millions, except per share amounts) Fiscal Year 2018 - Quarter 2 Originally Pension/ Reported Postretirement Recast Sales $ 1,651.2 $ — $ 1,651.2 Cost of sales (950.4) 3.1 (947.3) Gross profit 700.8 3.1 703.9 Selling, gener
Slide 14: Fiscal 2019 Reporting Changes: Segment P&L Impact on Q2 FY18
Fiscal 2019 Reporting Changes: Segment P&L Impact on Q2 FY18 (in millions, except per share amounts and percentages) Fiscal Year 2018 - Quarter 2 Originally Segment Pension/ Interest Reported Realign. Postretirement Income Recast Sales Architecture & Software (a) $ 768.4 $ (11.9) $ — $ — $ 756.5 Con
Slide 15: Free Cash Flow
Free Cash Flow (in millions) Q2 2019 YTD Net Income $ 346.0 $ 426.3 Depreciation/Amortization 39.4 75.3 Retirement Benefits Expense 17.2 34.4 Receivables/Inventory/Payables (49.9) (139.6) Compensation and Benefits (5.1) (90.5) Pension Contributions (9.0) (15.1) Income Taxes1 (78.9) (66.7) Change in
Slide 16: Reconciliation to Non-GAAP Measures: Organic Sales by Region
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended March 31, 2019 2018 Sales Effect of Excluding Sales Sales Organic Changes in Changes in Effect of Organic Effect of Excluding Growth Growth Sales(a) Currency Currency Acquisitions Sales(b) Sales(c)
Slide 17: Reconciliation to Non-GAAP Measures: Organic Sales by Segment
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended March 31, 2019 2018 Sales Effect of Excluding Sales Sales Organic Changes in Changes in Effect of Organic Effect of Excluding Growth Growth Sales(a) Currency Currency Acquisitions Sales(b) Sales(c)
Slide 18: Reconciliation to Non-GAAP Measures: Segment Operating Margin
Reconciliation to Non-GAAP Measures Segment Operating Margin (in millions, except percentages) Three Months Ended Six Months Ended March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Sales Architecture & Software (a) $ 739.7 $ 756.5 $ 1,492.8 $ 1,492.1 Control Products & Solutions (b) 917.5
Slide 19: 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 Six Months Ended March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Net Income $ 346.0 $ 227.4 $ 426.3 $ (9.0) Non-operating pension a
Slide 20: Reconciliation to Non-GAAP Measures: Return On Invested Capital
Reconciliation to Non-GAAP Measures Return On Invested Capital (in millions, except percentages) Twelve Months Ended March 31, 2019 2018 (a) Return Net income $ 970.8 $ 412.5 Interest expense 80.1 75.9 Income tax provision 285.8 734.4 Purchase accounting depreciation and amortization 16.9 19.1 Retur
Slide 21: Reconciliation to Non-GAAP Measures: Logix and Process Sales Growth
Reconciliation to Non-GAAP Measures Logix and Process Sales Growth Three Months Ended Six Months Ended March 31, 2019 March 31, 2019 Logix Logix reported growth (6)% (1)% Effect of currency translation 4% 3% Logix organic growth (2)% 2% Process Process reported growth 6% 4% Effect of currency transl
Slide 22: Reconciliation to Non-GAAP Measures: Fiscal 2019 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2019 Guidance (in billions, except percentages and per share amounts) Organic Sales April Guidance January Guidance Organic sales growth 3.7% to 5.3% 3.7% to 6.7% Foreign currency impact ~ (2)% ~ (1.5)% Reported sales growth 1.7% to 3.3% 2.2% to 5.2% Segmen