Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q4 2018 Earnings Presentation
21 slides from Rockwell Automation's earnings presentation, Nov 7, 2018
Slide 1: Fiscal Year 2018 Fourth Quarter Conference Call
Rockwell Automation Fiscal Year 2018 Fourth Quarter Conference Call November 7, 2018 Copyright © 2018 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 2018 Fourth Quarter and Full Year Results
Fiscal 2018 Fourth Quarter and Full Year Results Q4 Results ▪ Organic sales up 7.3% YOY – Growth across a very broad range of industries – Consumer and heavy industries strong, transportation weaker than expected – Logix growth of 7%; Process growth of 11% ▪ Adjusted EPS of $2.11, up 25% ▪ Free cash
Slide 4: Key Financial Information: Fourth Quarter
Key Financial Information: Fourth Quarter (in millions, except per share amounts) Q4 2018 Q4 2017 YOY B/(W) Sales $ 1,730 $ 1,668 3.7 % Segment Operating Margin 20.8 % 17.0 % 1 380 bps General Corporate - Net $ 14 $ 24 $ 10 Gain on Sale of Business $ — $ 61 $ (61) Adjusted EPS $ 2.11 $ 1.69 2 24.9 %
Slide 5: Key Financial Information: Full Year
Key Financial Information: Full Year (in millions, except per share amounts) FY 2018 FY 2017 YOY B/(W) Sales $ 6,666 $ 6,311 5.6 % Segment Operating Margin 21.6 % 19.5 % 1 210 bps General Corporate - Net $ 76 $ 76 $ — Gain on Sale of Business $ — $ 61 $ (61) Adjusted EPS $ 8.11 $ 6.76 2 20.0 % Adjus
Slide 6: Architecture & Software
Architecture & Software Sales Segment Operating Margin ($ millions) $3,500 35% $3,098 $2,899 27.9% 29.1% $3,000 30% 27.0% $2,500 25% 23.7% $2,000 20% $1,500 15% $1,000 $752 $787 10% $500 5% $0 0% Q4 FY Q4 FY 2017 2018 2017 2018 YOY Sales % Change ▪ Fourth quarter segment operating margin expanded 42
Slide 7: Control Products & Solutions
Control Products & Solutions Sales Segment Operating Margin ($ millions) $4,000 $3,568 20% $3,412 14.8% 15.2% $3,000 15% 13.2% 11.5% $2,000 10% $916 $942 $1,000 5% $0 0% Q4 FY Q4 FY 2017 2018 2017 2018 YOY Sales % Change ▪ Fourth quarter segment operating margin expanded 330 bps, primarily due to hi
Slide 8: Regional Sales
Regional Sales (in millions, except percentages) Q4 2018 FY 2018 Fourth Quarter * Organic Organic ▪ U.S. grew across a wide Region Sales % Change Sales % Change range of industries U.S. $ 941 7.5% $ 3,603 5.7% ▪ EMEA soft; growth in consumer offset by Canada 92 8.7% 361 8.9% weakness in automotive ▪
Slide 9: Fiscal 2019 Guidance
Fiscal 2019 Guidance Full Year Outlook Sales Midpoint ~ $7.0B Organic Growth Range1 3.7% - 6.7% Currency Translation ~ (1)% Segment Operating Margin ~ 22% Adjusted Effective Tax Rate ~ 19.5% Adjusted EPS1 $8.85 - $9.25 Free Cash Flow as a % of Adjusted Income ~ 100% Note: As of November 7, 2018 1Inc
Slide 10: Fiscal 2018 to Fiscal 2019 Midpoint Adjusted EPS Walk
Fiscal 2018 to Fiscal 2019 Midpoint Adjusted EPS Walk ~ 0.50 ~ $9.10 ~ (0.05) $9.05 ~ 0.15 ~ (0.20) ~ 0.65 ~ (0.10) ~ (0.00) $8.11 Adj. EPS Core Currency Incentive Net Interest Tax Rate* Shares ASC 606 FY 2019 FY 2018 Compensation Midpoint *Adjusted Effective Tax Rate Copyright © 2018 Rockwell Autom
Slide 11: Appendix: Supplemental Financial Information and Reconciliations to Non-GAAP Measures
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures Copyright © 2018 Rockwell Automation, Inc. All rights reserved.
Slide 12: Fourth Quarter Results: Summary
Fourth Quarter Results: Summary (in millions, except per share amounts) Q4 2018 Q4 2017 Total Sales $ 1,729.5 $ 1,667.5 Total Segment Operating Earnings $ 359.1 $ 283.5 Purchase Accounting Depreciation and Amortization (4.2) (4.6) General Corporate - Net (13.9) (23.5) Non-Operating Pension Costs (6.
Slide 13: Free Cash Flow
Free Cash Flow (in millions) Q4 2018 FY 2018 Net Income $ 345.9 $ 535.5 Depreciation/Amortization 39.7 164.6 Retirement Benefits Expense 29.1 114.0 Receivables/Inventory/Payables (16.8) (61.9) Compensation and Benefits 30.7 22.4 Pension Contributions (7.1) (50.3) Income Taxes 102.0 597.2 Change in f
Slide 14: Reconciliation to Non-GAAP Measures: Organic Sales
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2018 2017 Effect of Sales Sales Organic Changes Excluding Sales Growth Growth in Changes in Effect of Organic Effect of Excluding (Decline) (Decline) Sales(a) Currency Currency Acquis
Slide 15: Reconciliation to Non-GAAP Measures: Organic Sales
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2018 2017 Sales Sales Sales Organic Effect of Excluding Excluding Growth Growth Changes in Changes in Effect of Organic Effect of Divestitures (Decline) (Decline) Sales(a) Currency Cu
Slide 16: 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, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Sales Architecture & Software (a) $ 787.2 $ 752.0 $ 3,098.2 $ 2,899.3 Control Products & S
Slide 17: Reconciliation: Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate
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, 2018 2017 2018 2017 Income from continuing operations $ 345.9 $ 20
Slide 18: Reconciliation to Non-GAAP Measures: Non-Operating Pension Costs
Reconciliation to Non-GAAP Measures Non-Operating Pension Costs (in millions) Three Months Ended Twelve Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Interest cost $ 38.7 $ 38.2 $ 155.3 $ 151.6 Expected return on plan assets (60.9) (56.6) (244.8) (225.2) Am
Slide 19: 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 September 30, 2018 2017 (a) Return Income from continuing operations $ 535.5 $ 825.7 Interest expense 73.0 76.2 Income tax provision 795.3 211.7 Purchase accounting depreciation and a
Slide 20: Reconciliation to Non-GAAP Measures: Logix and Process Sales Growth
Reconciliation to Non-GAAP Measures Logix and Process Sales Growth Three Months Ended Twelve Months Ended September 30, 2018 September 30, 2018 Logix Logix reported growth 4 % 8 % Effect of currency translation 3 % (1) % Logix organic growth 7 % 7 % Process Process reported growth 8 % 10 % Effect of
Slide 21: Reconciliation to Non-GAAP Measures: Fiscal 2019 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2019 Guidance (in billions, except percentages and per share amounts) Fiscal 2019 Organic Sales Guidance Organic sales growth 3.7% - 6.7% Foreign currency impact ~ (1)% Reported sales growth 2.7% - 5.7% Segment Operating Margin Total sales (a) $ ~ 7.0 Total