Emerson Electric Company · NYSE:EMR
Emerson Electric — Q2 2022 Earnings Presentation
28 slides from Emerson Electric's earnings presentation, May 4, 2022
Slide 1: Emerson Q2 Earnings Conference Call
Emerson Q2 Earnings Conference Call May 4, 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: Upcoming Investor Events
Upcoming Investor Events Event: Investor Conference Date: Nov. 29, 2022 Location: New York City 3
Slide 4: Q2 Results
Q2 Results y. EMERSON.
Slide 5: Emerson Trailing Three-Month Underlying Orders Versus Prior Year
Emerson Trailing Three-Month Underlying Orders Versus Prior Year JAN FEB MAR Automation Solutions 19% 20% 17% 60% 55% Commercial & Residential Solutions 14% 12% 7% 50% EMERSON 17% 17% 13% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% (5%) (10%) (15%) (20%) (25%) 5
Slide 6: Emerson Is Well Positioned to Benefit From Ongoing Energy Dynamics
Emerson Is Well Positioned to Benefit From Ongoing Energy Dynamics “TRANSITION” ENERGY – LIQUEFIED NATURAL GAS CLEAN FUELS / RENEWABLES Early stages of next LNG “wave” – driven by U.S. / Middle East projects and Europe demand Acceleration of alternative fuels / energy investments due to improved eco
Slide 7: 2022 Q2 Performance Summary
2022 Q2 Performance Summary Sales Adjusted Segment EBITA* Free Cash Flow* Adjusted EPS* $4.8B $1.29 $4.4B 20.9% 21.1% $0.7B $1.07 $0.3B 10% Underlying* 20 bps 53% 21% 2021 2022 2021 2022 2021 2022 2021 2022 • Growth in all world areas led by the • Driven by volume, leverage, continued cost •
Slide 8: 2021 Q2 to 2022 Q2 Adjusted EPS Bridge
2021 Q2 to 2022 Q2 Adjusted EPS* Bridge $0.03 $1.29 $0.11 Share Repurchase $0.08 $1.07 Operations FX $0.01 Tax $0.08 Pension / Stock Comp $0.03 Prior Year Gains ($0.04) 2022 2021 Adjusted EPS* Adjusted EPS* +21% YoY Non-Operating Operations and Balance Sheet $0.08 $0.14 8
Slide 9: Q3 and Full Year 2022 Outlook
Q3 and Full Year 2022 Outlook y. EMERSON.
Slide 10: Supply Chain Challenges Continue, Exacerbated by Geopolitical Environment and China COVID-19 Lockdowns
Supply Chain Challenges Continue, Exacerbated by Geopolitical Environment and China COVID-19 Lockdowns COMMODITIES ELECTRONICS North American Cold-Rolled Steel Pricing Average Component Lead Times • Stabilization and slight • Steel pricing reversed course as Ukraine conflict began improvement in 202
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% 7% – 9% • Order strength and backlog support 7% Process: HSD second half growth 5% Hybrid: MSD-HSD • Supply chain constraints persist; Discrete: HSD-LD
Slide 12: 2022 Guidance
2022 Guidance ADJUSTED EPS BRIDGE February 2022 May 2022 Guidance Guidance Net Sales Growth 6% – 8% 8% – 10% GAAP EPS $4.77 – $4.92 Acquisitions ~0 pts ~0 pts FX (~1 pt) (~1 pt) Restructuring / Related Costs ~$0.20 Underlying Sales Growth* 7% – 9% 9% – 11% Automation Solutions 7% – 9% 7% – 9% Commer
Slide 13: 2022 Q3 Guidance
2022 Q3 Guidance ADJUSTED EPS BRIDGE Net Sales Growth 7% – 9% GAAP EPS $1.00 – $1.05 Underlying Sales Growth* 9% – 11% Restructuring / Related Costs ~$0.05 Automation Solutions 7% – 9% Amortization of Intangibles ~$0.10 Commercial & Residential Solutions 13% – 15% AspenTech Transaction Costs ~$0.10
Slide 14: Q&A
Q&A § EMERSON.
Slide 15: Appendix
Appendix y. EMERSON.
Slide 16: 2022 Q2 P&L Summary
2022 Q2 P&L Summary ($M, EXCEPT EPS) 2021 2022 Change Sales $4,431 $4,791 8% Gross profit $1,862 $1,952 % of sales 42.0% 40.7% (130 bps) SG&A expense $1,054 $1,049 % of sales 23.8% 21.9% (190 bps) EBIT* $775 $863 % of sales* 17.5% 18.0% 50 bps Adjusted EBITA* $888 $967 % of sales* 20.0% 20.2% 20 bps
Slide 17: 2022 Q2 Earnings & Cash Flow
2022 Q2 Earnings & Cash Flow ($M) 2021 2022 Change Adjusted segment EBITA* $929 $1,011 9% % of sales* 20.9% 21.1% 20 bps Stock compensation ($61) ($50) $11 Corporate pension and OPEB $23 $25 $2 Adjusted corporate and other* ($3) ($19) ($16) Adjusted interest expense, net* ($38) ($34) $4 Adjusted pre
Slide 18: 2022 Q2 World Area Underlying Sales Growth
2022 Q2 World Area Underlying Sales Growth Commercial & Automation Residential Solutions Solutions Emerson Americas 13% 15% 14% Europe (3%) 14% 2% Asia, Middle East & Africa 6% 11% 7% China 17% (6%) 11% 7% 14% 10% 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) Commercial Automation & Residential Q2 2022 Underlying Sales Change Solutions Solutions Emerson Reported
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) Commercial Automation & Residential FY 2022E May 2022 Guidance Underlying Sales Change Solutions Solutio
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 Q2 FY21 Q2 FY22 Pretax earnings (GAAP) $ 737 $ 811 Interest expense, net 38 52 Earnings before inte
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) Q2 FY22E Q2 Earnings Per Share Q2 FY21 Q2 FY22 Change Feb Guidance Earnings per share (GAAP) $ 0.93 $ 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 Q2 FY21 Q2 FY22 Change Pretax earnings (GAAP) $ 737 $ 811 10% Corp. items and inte
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 Q2 FY21 Q2 FY22 Change Pretax earnings (GAAP) $ 737 811 10% Restructuring and related co
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 Q2 FY21 Q2 FY22 Change Pretax margin (GAAP) 16.6% 16.9% 30 bps Restructuring and related c
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) Q2 Cash Flow Q2 FY21 Q2 FY22 Change Operating cash flow (GAAP) $ 807 $ 442 (45)% 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, Emersub CX, Inc. (“New AspenTech”), has filed with the Securities and Exchange Commission (“SEC”), and the SEC has declared effective on April 18, 2022, a registration statement on Form S-4 (File No. 333-262106)
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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