Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Investor Day (November 2008)
50 slides from Rockwell Automation's investor day presentation, Nov 19, 2008
Slide 1: 2008 Investor Conference
Copyright © 2008 Investor Conference Keith Nosbusch Chairman and CEO November 19, 2008 Exhibit 99
Slide 2: Rockwell Automation Today
Leading global provider of industrial power, control and information solutions Rockwell Automation Today • Annual Sales: $5.7B – 50% outside the US • Two Operating Segments – Architecture & Software – Control Products & Solutions • Employees: ~21,000 • Serving customers in 80+ countries • Trading Sy
Slide 3: Architecture & Software
Slide 4: Architecture & Software products
Slide 5: $2.4B 2008 Revenues . . . Leading Global Market Positions
$2.4B 2008 Revenues . . . Leading Global Market Positions Copyright © Architecture & Software Automation Components Safety Sensing Motion Logix Family Small Controllers Production Management Asset Management Data Management Performance & Visualization Control & Information Platforms, Software Applic
Slide 6: Control Products & Solutions
Slide 7: Control Products & Solutions
Slide 8: Solutions and services markets
Slide 9: Solutions and services markets
Slide 10: Revenue mix
Slide 11: Another Strong Year in a Challenging Environment
Another Strong Year in a Challenging Environment Full Year 2008 Results: Summary Q4 Full Year Revenue Growth (Excluding Currency Translation) 6% 9% Segment Operating Margin (1) 18% 18% Diluted EPS (1) $1.08 $4.11 Free Cash Flow $197.2M $458.3M ROIC 24.0% 24.0% Stock Repurchased 2.5M shares 6.7M shar
Slide 12: Balance of Growth and Productivity Key to RA Future
Balance of Growth and Productivity Key to RA Future Revenue Reinvestment Intellectual Capital Long-Term Growth and Performance Strategy Sustained secular, organic growth - Expanded served market - Enhanced market access - Acquisitions as catalysts Generate 3-4% annual cost productivity & maintain op
Slide 13: Track Record of Delivering Superior Results
Track Record of Delivering Superior Results Long Term Goal: Multiple of Global GDP Long Term Goal: Double Digit EPS Growth Long Term Goal: >20% ROIC Long-Term Financial Goals $3.6 $4.1 $4.6 $5.0 $5.7 Consolidated Revenue ($B) 12% 19% 22% 24% 24% Return on Invested Capital (1) Excluding special items
Slide 14: FY09 will be a More Challenging Year
FY09 will be a More Challenging Year Real GDP Industrial Production Nominal Cap Ex - Mfg Global Manufacturing PMI Global Environment Y/Y Change (%) Y/Y Change (%) Y/Y Change (%) Index Source: IMF World Economic Outlook (October 2008). Note: Regional aggregates compiled by Rockwell Automation based o
Slide 15: Differentiated, Strong, Durable . . . Positioned to Gain Share Through the Cycle
Differentiated, Strong, Durable . . . Positioned to Gain Share Through the Cycle Why RA is Well-Positioned • Strong Global Market Positions • Technology . . . Focused on Innovation – Logix evolution – Manufacturing convergence • Diversified Revenue Base – Expanded served markets/channels – Stronger
Slide 16: Product & Technology Proliferation: Integrated Architecture
Product & Technology Proliferation: Integrated Architecture December 2004: Integrated Architecture The Best is Yet to Come
Slide 17: Integrated Architecture evolution
EthernetiIP Integrated Machine S~.ety A EEE CompactLogix (Scaling ”-own) OEM Machine Builders
Slide 18: Integrated Architecture scope
Integrated Process Safety Advanced Process Control Network Infrastructure Plant Information Continuous Frocess Batch Hybrid EthernetiIP Integrated Machine S-.ety CompactLogix (Scaling Jown) OEM Machine Builders Integrated Motion Ovi gix (Scaling Up)
Slide 19: Integrated Architecture: Logix Evolution
With an Installed Base >$3B and Planned Developments . . . the best is still yet to come Copyright © Integrated Architecture: Logix Evolution Installed Installed Base Base
Slide 20: Process
Source:??? Revenue 2008 Highlights Strategy Market Opportunity Core Investments + Acquisitions Building Process Leadership and Depth $700 Process • Taking share from traditional DCS players • Building upon scalable Logix platform (Multiple Control Discipline Core) • Extending into process safety, ad
Slide 21: Information: Large, Growing, Highly Fragmented Market
Market Opportunity Strategy 2008 Highlights Large, Growing, Highly Fragmented Market . . . Positioning for the Future • Deliver comprehensive suite (integrated, modular and scalable) • Leverage RA manufacturing knowledge and installed base • Deliver complete solutions for customers’ aging business s
Slide 22: RA and Cisco: Unique, Game-Changing Relationship
RA & Cisco Response Market Trends RA and Cisco: Unique, Game- Changing Relationship RA & Cisco Response Market Trends Network Convergence Broad adoption of Ethernet throughout the Production Environment • Opportunities: Simplified, Open, Plant-wide Infrastructure High performance, cost effective, se
Slide 23: Improve Customers' Energy Efficiency and Asset Utilization
Improve Customers’ Energy Efficiency and Asset Utilization Market Trends Strategy 2008 Highlights Revenue 53% 47% $2,000 Traditional Intelligent Intelligent Motor Control • Differentiated Intelligent Motor Control approach - Motor & process performance - Motor protection & reliability - Premier inte
Slide 24: Solutions & Services Becoming a Larger Portion of Revenue Base
Solutions & Services Becoming a Larger Portion of Revenue Base Market Opportunity Revenue Strategy 2008 Highlights $2,000 Solutions & Services • Leverage solutions and services to achieve greater customer intimacy • Lead with consulting and assessments to build recurring services revenues • Build re
Slide 25: Domain Expertise to Deliver Industry-Specific Applications
Domain Expertise to Deliver Industry-Specific Applications Repeatable Solutions for Industry Specialty Chemical • Formulation & Mixing • Chemical Synthesis Mining & Cement • Material Handling • Raw Mill & Kiln Control • Waste Fuel Control Consumer Packaged Goods • Tracking & Tracing • Production Man
Slide 26: Solutions Success Story: Oil & Gas Compressor Station
Demonstrates the Strength of Integrated Architecture Combined with Safety Technology and Domain Expertise Solutions Success Story A top three global Oil & Gas company selects Rockwell Automation to upgrade controls on turbo machinery driven compressor station • Customer sought to take advantage of i
Slide 27: Solutions Success Story: FedEx Contract
Demonstrates the Power of a Broad Portfolio of Products, Solutions and Services Rockwell Automation earned largest-ever order with a $37.1M contract from FedEx, spanning products, solutions and services • Upgrade of existing package handling systems at the Tennessee superhub with the latest RA contr
Slide 28: Collaborating with Customers to Solve Business Challenges
Collaborating with Customers to Solve Business Challenges Expanding Services Portfolio Lifecycle Parts Management • Complete Life Cycle Parts Services (e.g. Storeroom Management) Maintenance Services • Reliability & Maintenance Programs (e.g. Condition Monitoring) System Support & Optimization • Pro
Slide 29: Cleaner . . . Safer . . . More Energy Efficient
Cleaner . . . Safer . . . More Energy Efficient Sustainable Production • Environment – Recovery and recycling – Raw material reduction and process optimization – Emissions monitoring and optimization – Responsible product and package design • Safety – Worker and machine safety – Community and proces
Slide 30: Catalytic Acquisition Expands Process Capabilities
Catalytic Acquisition Expands Process Capabilities Pavilion Improves Manufacturing Processes Enhance Profitability • Increase Production – Unlock capacity – Maximize throughput • Reduce Manufacturing Costs – Use less energy per unit of output – Use less raw materials in production • Improve Product
Slide 31: Sustainability Success Story: Coca-Cola
Supports Coca-Cola’s Commitment to Growing its Business Without Growing its Carbon Footprint Sustainability Success Story Coca-Cola retains Rockwell Automation for Project esKO Energy Monitoring System • Objective is to reduce energy consumption and CO emissions. • Project focuses on establishing a
Slide 32: Well-Positioned to Extend Safety Market Leadership
Market Opportunity Revenue Strategy 2008 Highlights Well-Positioned to Extend Safety Market Leadership $500 • Leverage Logix platform to deliver integrated machine and process safety solutions • Leverage ICS Triplex safety solutions to expand RA opportunities in process • Expand product portfolio an
Slide 33: Slide 33
Slide 34: Globalization – Latin America
Drive to Market Share Similar to U.S. Market Overview 2008 Results Revenue 2009 Outlook $450 Globalization – Latin America • Q1 forecast solid; beyond Q1 less certain – Expect growth but lower than 2008 • Execute on strategic initiatives • Realize revenue synergies from ICS Triplex and Pavilion • $4
Slide 35: Globalization – Asia Pacific
Localizing Core Business Functions Market Overview Revenue 2008 Results 2009 Outlook $800 China,India,SE Asia Other Asia Globalization – Asia Pacific • Economies will continue to expand, but at a slower pace in 2009 • Opportunity rich region across multiple industries • Focus on optimizing core busi
Slide 36: Globalization – China
Poised to Gain Market Share Market Overview 2008 Results 2009 Outlook Revenue $250 Globalization – China • Strong backlog going into 2009 • Increased Logix penetration and adoption • Taking market share in process industries and with OEMs • Continued investment in infrastructure and market access •
Slide 37: ies triplex |@ProsGon | PAVILION) CEDES | Susi Asa
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Slide 38: A Superior Long-Term Investment
A Superior Long-Term Investment Why Rockwell? • Long-term sustainable growth – Automation markets have grown in excess of GDP growth – Expanding addressable market…Process, Safety, Information and Services – Emerging markets today…and as they transition to consumer economies • Diversification – Expa
Slide 39: Investor Conference: Ted Crandall, SVP and CFO
Investor Conference Ted Crandall, SVP and CFO November 19, 2008
Slide 40: Another Strong Year in a Challenging Environment
Another Strong Year in a Challenging Environment Full Year 2008 Results: Summary Q4 Full Year Revenue Growth (Excluding Currency Translation) 6% 9% Segment Operating Margin (1) 18% 18% Diluted EPS (1) $1.08 $4.11 Free Cash Flow $197.2M $458.3M ROIC 24.0% 24.0% Stock Repurchased 2.5M shares 6.7M shar
Slide 41: 2008 Growth by Region
2008 Growth by Region Region Adj. for Currency U.S. 2,850.8 $ 6% 6% Canada 396.4 16% 6% EMEA 1,319.0 25% 13% Asia Pacific 717.2 22% 16% Latin America 414.4 25% 14% TOTAL 5,697.8 $ 14% 9% Sales As Reported Reported Increase vs. 2007
Slide 42: Strong Balance Sheet / Solid Liquidity
6.70% 6.25% 5.20% 5.65% 37% Total Debt 63% Shareowners’ Equity Strong Balance Sheet / Solid Liquidity • First long term maturity is in 2017 • A-1, P-1 commercial paper rating • 90% of debt is at fixed interest rates Capital Structure $100 $250 $250 $250 $200 CP Maturities At 9/30/08 Debt / Capital A
Slide 43: FY09 will be a More Challenging Year
FY09 will be a More Challenging Year Real GDP Industrial Production Nominal Cap Ex - Mfg Global Manufacturing PMI Global Environment Y/Y Change (%) Y/Y Change (%) Y/Y Change (%) Index Source: IMF World Economic Outlook (October 2008). Note: Regional aggregates compiled by Rockwell Automation based o
Slide 44: 2009 Headwinds/Tailwinds
Headwinds Tailwinds 2009 Headwinds/Tailwinds • Credit market environment • Global economic slowdown • Currency • Business mix • Currency • Inflation • Emerging market growth • Productivity • Q4 restructuring • Share count
Slide 45: 2009 Guidance
2009 Guidance Note: As of November 11, 2008 Revenue Growth Excluding Currency Translation Currency Translation Segment Operating Margin (1) Diluted EPS (1) Free Cash Flow (2) (1) 2008 results exclude the impact of special charges (2) includes cash outflow related to the Q4 FY08 restructuring charges
Slide 46: Appendix: Reconciliation to Non-GAAP Measures
Appendix Reconciliation to Non- GAAP Measures
Slide 47: Revenue Growth Excluding Currency
Revenue Growth Excluding Currency ($ in millions) Sales Effect of Excluding Changes in Changes in Sales(a) Currency Currency(b) Sales(c) United States 730.7 $ (0.2) $ 730.5 $ 709.9 $ 3% 3% Canada 99.8 (0.3) 99.5 96.4 4% 3% Europe, Middle East, Africa 338.2 (21.6) 316.6 292.2 16% 8% Asia-Pacific 198.
Slide 48: Reconciliation to Non-GAAP Measures cont'd
Reconciliation to Non-GAAP Measures cont’d Earnings Per Share from Continuing Operations Excluding Special Charges ($ in millions except per share amounts) Quarter Ended September 30, Income from continuing operations 125.6 $ 577.6 $ 569.3 $ 529.3 $ 447.7 $ 316.1 $ Special charges, net of tax 30.4 3
Slide 49: Reconciliation to Non-GAAP Measures cont'd
Reconciliation to Non-GAAP Measures cont’d Return On Invested Capital ($ in millions) (a) Return Income from continuing operations before accounting change 577.6 $ 569.3 $ 529.3 $ 447.7 $ 316.1 $ Income from Power Systems discontinued operating activities - 42.3 98.8 70.7 38.0 Interest expense (1) 6
Slide 50: Reconciliation of revenue growth excluding currency and EBITDA
The following is a reconciliation of revenue growth excluding changes in currency to revenue growth for our fiscal year 2008 results and our fiscal year 2009 outlook. Revenue growth excluding changes in currency 9% - 1% to - 5% Currency translation 5% - 5% Revenue growth 14% - 6% to - 10% Fiscal Yea