Emerson Electric Company · NYSE:EMR
Emerson Electric — Q1 2022 Earnings Presentation
28 slides from Emerson Electric's earnings presentation, Feb 2, 2022
Slide 1: Emerson Q1 Earnings Conference Call
Emerson Q1 Earnings Conference Call February 2, 2022
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: Recent Accomplishments
Recent Accomplishments Mita-Teknik Acquisition Emerson Named 2022 Emerson Recognized As Strengthens Emerson Presence ‘Industrial IoT Company ‘Best Places To Work For In Wind Energy Sector Of The Year’ LGBTQ+ Equality’ 3
Slide 4: Q1 Results
Q1 Results y. EMERSON.
Slide 5: Emerson Trailing Three Month Underlying Orders Versus Prior Year
Emerson Trailing Three Month Underlying Orders Versus Prior Year Oct Nov Dec Automation Solutions 15% 16% 19% 60% 55% Commercial & Residential Solutions 13% 15% 13% 50% EMERSON 14% 15% 17% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% (5%) (10%) (15%) (20%) (25%) 5
Slide 6: Emerson Remains Committed to Helping Customers With Their Sustainability Initiatives
Emerson Remains Committed to Helping Customers With Their Sustainability Initiatives Emerson Analytical Technology Emerson Control Solutions And Emerson Automation Technologies Helps Reduce Emissions To Meet Software Drive Energy Efficiency To Be Used On World’s First Environmental Targets At Europe
Slide 7: 2022 Q1 Performance Summary
2022 Q1 Performance Summary Sales Adjusted Segment EBITA* Free Cash Flow* Adjusted EPS* $4.2B $4.5B $0.7B $1.05 19.7% 20.5% $0.93 $0.4B 8% Underlying* 80 bps 41% 13% 2021 2022 2021 2022 2021 2022 2021 2022 • Continued strength in all world areas and • Driven by volume, leverage, continued •
Slide 8: 2021 Q1 to 2022 Q1 Adjusted EPS Bridge
2021 Q1 to 2022 Q1 Adjusted EPS* Bridge $0.10 $0.02 $1.05 Share Repurchase $0.93 ($0.04) $0.04 Operations FX $0.03 Pension $0.01 Gains ($0.01) Stock Comp $0.03 Tax ($0.06) 2022 2021 Adjusted EPS* Adjusted EPS* +13% YoY Non-Operating Operations and Balance Sheet $0.00 $0.12 8
Slide 9: Emerson Continues to Mitigate Supply Chain and Logistics Challenges
Emerson Continues to Mitigate Supply Chain and Logistics Challenges S TA B I L I Z AT I O N O F E L E C T R O N I C L E A D T I M E S LABOR Average Component Lead Time (Days) • Effectively managing through labor dynamics 300 and COVID-related absenteeism 250 • Updating hiring practices and wages to
Slide 10: Q2 and Full Year 2022 Outlook
Q2 and Full Year 2022 Outlook y. EMERSON.
Slide 11: 2022 Outlook
2022 Outlook A U T O M AT I O N S O L U T I O N S ENVIRONMENT / Underlying Sales Growth* 2022 Underlying Sales Growth* KEY ASSUMPTIONS 7% – 9% 5% – 7% • Backlog strength and order rates Process: MSD-HSD support continued second half growth 5% Hybrid: MSD-HSD • Strong underlying demand continues
Slide 12: 2022 Guidance
2022 Guidance ADJUSTED EPS BRIDGE November 2021 February 2022 Guidance Guidance Net Sales Growth 5% – 7% 6% – 8% GAAP EPS $4.71 – $4.86 Acquisitions ~0 pts ~0 pts FX (~1 pt) (~1 pt) Restructuring / Related Costs ~$0.20 Underlying Sales Growth* 6% – 8% 7% – 9% Automation Solutions 6% – 8% 7% – 9% Com
Slide 13: 2022 Q2 Guidance
2022 Q2 Guidance ADJUSTED EPS BRIDGE Net Sales Growth 4% – 6% GAAP EPS $0.98 – $1.03 Underlying Sales Growth* 6% – 8% Restructuring / Related Costs ~$0.04 Automation Solutions 5% – 7% Amortization of Intangibles ~$0.10 Commercial & Residential Solutions 9% – 11% Gain on Subordinated Interest --- GAA
Slide 14: Q&A
Q&A § EMERSON.
Slide 15: Appendix
Appendix y. EMERSON.
Slide 16: 2022 Q1 P&L Summary
2022 Q1 P&L Summary ($M, EXCEPT EPS) 2021 2022 Change Sales $4,161 $4,473 8% Gross profit $1,723 $1,822 % of sales 41.4% 40.7% (70 bps) SG&A expense ($998) ($1,011) % of sales 24.0% 22.6% (140 bps) EBIT* $603 $1,213 % of sales* 14.5% 27.1% 1260 bps Adjusted EBITA* $757 $878 % of sales* 18.2% 19.6% 1
Slide 17: 2022 Q1 Earnings & Cash Flow
2022 Q1 Earnings & Cash Flow ($M) 2021 2022 Change Adjusted Segment EBITA* $819 $918 12% % of sales* 19.7% 20.5% 80 bps Stock compensation ($64) ($41) $23 Corporate pension and OPEB $24 $26 $2 Adjusted corporate and other* ($22) ($25) ($3) Interest expense, net ($40) ($38) $2 Adjusted pretax earning
Slide 18: 2022 Q1 World Area Underlying Sales Growth
2022 Q1 World Area Underlying Sales Growth Automation Commercial & Solutions Residential Solutions Emerson Americas 7% 17% 11% Europe Flat 13% 3% Asia, Middle East & Africa 7% 4% 6% China 17% Flat 12% 5% 13% 8% 18
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Comm & Res Q1 2022 Underlying Sales Change Auto Solns Solns Emerson Reported (GAAP) 4% 13% 8% (Favorable
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Comm & Res FY 2022E Underlying Sales Change Auto Solns Solns Emerson Reported (GAAP) 5% - 7% 8% - 10% 6%
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) EBIT Q1 FY21 Q1 FY22 Pretax earnings (GAAP) $ 563 $ 1,175 Interest expense, net 40 38 Earnings before in
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Q1 FY22E Q1 Earnings Per Share Q1 FY21 Q1 FY22 Change Nov Guidance Earnings per share (GAAP) $ 0.74 $ 1.
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Business Segment EBIT Q1 FY21 Q1 FY22 Change Pretax earnings (GAAP) $ 563 $ 1,175 109% Corp. items and i
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Pretax Earnings Q1 FY21 Q1 FY22 Change Pretax earnings (GAAP) $ 563 1,175 109% Restructuring and related
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Pretax Margin Q1 FY21 Q1 FY22 Change Pretax margin (GAAP) 13.5% 26.3% 1280 bps Restructuring and related
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures (denoted with a *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Q1 Cash Flow Q1 FY21 Q1 FY22 Change Operating cash flow (GAAP) $ 808 $ 523 (35)% Capital expenditures (1
Slide 27: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed transaction between Emerson Electric Co. (“Emerson”) and Aspen Technology, Inc. (“AspenTech”), a subsidiary of Emerson, Emersub CX, Inc. (“new AspenTech”), will prepare and file with the Securities and Exchange Commission (t
Slide 28: Additional Information and Where to Find It
Additional Information and Where to Find It Caution Concerning Forward-Looking Statements This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by t
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