Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q4 2017 Earnings Presentation
19 slides from Rockwell Automation's earnings presentation, Nov 8, 2017
Slide 1: Fiscal Year 2017 Fourth Quarter Conference Call
Rockwell Automation Fiscal Year 2017 Fourth Quarter Conference Call November 8, 2017 Copyright © 2017 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 2017 Fourth Quarter and Full Year Results
Fiscal 2017 Fourth Quarter and Full Year Results Q4 Results ▪ Organic sales up 5.6% YOY, slightly above expectations – Broad-based growth across all regions – Transportation and food and beverage strong – Heavy industries growth led by semiconductor; meaningful growth in oil and gas – Logix growth o
Slide 4: Key Financial Information: Fourth Quarter
Key Financial Information: Fourth Quarter (in millions, except per share amounts) Q4 2017 Q4 2016 YOY B/(W) Sales $ 1,668 $ 1,539 8.4 % Segment Operating Margin1 17.0 % 19.8 % (280) bps General Corporate - Net $ 24 $ 25 $ 1 Gain on Sale of Business $ 61 $ — $ 61 Adjusted EPS2 $ 1.69 $ 1.52 11.2 % Ad
Slide 5: Key Financial Information: Full Year
Key Financial Information: Full Year (in millions, except per share amounts) FY 2017 FY 2016 YOY B/(W) Sales $ 6,311 $ 5,880 7.3 % Segment Operating Margin1 19.5 % 20.2 % (70) bps General Corporate - Net $ 76 $ 80 $ 4 Gain on Sale of Business $ 61 $ — $ 61 Adjusted EPS2 $ 6.76 $ 5.93 14.0 % Adjusted
Slide 6: Architecture & Software
Architecture & Software Sales Segment Operating Margin ($ millions) $3,000 $2,899 35% $2,635 $2,500 30% 26.4% 27.0% 25.8% 25% 23.7% $2,000 20% $1,500 15% $1,000 $696 $752 10% $500 5% $0 0% Q4 FY Q4 FY 2016 2017 2016 2017 YOY Sales % Change ▪ Fourth quarter segment operating margin contracted 210 bps
Slide 7: Control Products & Solutions
Control Products & Solutions Sales Segment Operating Margin ($ millions) $4,000 20% $3,244 $3,412 14.8% 15.2% $3,000 15% 13.2% 11.5% $2,000 10% $842 $916 $1,000 5% $0 0% Q4 FY Q4 FY 2016 2017 2016 2017 YOY Sales % Change ▪ Fourth quarter segment operating margin contracted 330 bps, primarily due to
Slide 8: Regional Sales
Regional Sales (in millions, except percentages) Q4 2017 FY 2017 Organic Organic Region Sales % Change Sales % Change Fourth Quarter * U.S. $ 889 5.7% $ 3,459 5.2% ▪ U.S. and Canada growth was broad-based across industries Canada 93 13.5% 343 7.7% ▪ EMEA growth led by food and EMEA 325 4.9% 1,194 3.
Slide 9: Fiscal 2018 Guidance
Fiscal 2018 Guidance Full Year Outlook Sales Midpoint ~ $6.7B Organic Growth Range 3.5% to 6.5% Currency Translation ~ 2.5% Divestiture ~ (1)% Segment Operating Margin ~ 21.5% Adjusted Effective Tax Rate ~ 24.5% Adjusted EPS $7.20 - $7.50 Free Cash Flow as a % of Adjusted Income ~ 100% Note: As of N
Slide 10: Fiscal 2017 to Fiscal 2018 Midpoint Adjusted EPS Walk
Fiscal 2017 to Fiscal 2018 Midpoint Adjusted EPS Walk ~ 0.20 ~ (0.05) ~ (0.35) ~ 0.10 ~ 0.70 ~ 0.05 $7.35 $6.76 (0.28) 0.24 $6.72 FY 2017 Gain on Sale Q4 Core Incentive Currency Divested Tax Rate* Shares and FY 2018 Restructuring Compensation Business Pension Midpoint *Adjusted Effective Tax Rate Co
Slide 11: Appendix: Supplemental Financial Information and Reconciliations
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures Copyright © 2017 Rockwell Automation, Inc. All rights reserved.
Slide 12: Fourth Quarter Results: Summary
Fourth Quarter Results: Summary (in millions, except per share amounts) Q4 2017 Q4 2016 Total Sales $ 1,667.5 $ 1,538.6 Total Segment Operating Earnings $ 283.5 $ 304.3 Purchase Accounting Depreciation and Amortization (4.6) (4.5) General Corporate - Net (23.5) (25.2) Non-Operating Pension Costs (23
Slide 13: Free Cash Flow
Free Cash Flow (in millions) Q4 2017 FY 2017 Net Income $ 204.6 $ 825.7 Depreciation/Amortization 44.9 168.9 Retirement Benefits Expense 46.8 176.0 Receivables/Inventory/Payables 23.7 (2.3) Compensation and Benefits 19.0 124.7 Pension Contributions (214.1) (254.9) Income Taxes 34.0 11.6 Gain on Sale
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, 2017 2016 Sales Sales Organic Effect of Excluding Growth Growth Changes in Changes in Effect of Organic (Decline) (Decline) Sales(a) Currency Currency Acquisitions Sales(b) Sales(c) (
Slide 15: Reconciliation to Non-GAAP Measures: Organic Sales by Segment
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2017 2016 Sales Sales Organic Effect of Excluding Growth Growth Changes in Changes in Effect of Organic (Decline) (Decline) Sales(a) Currency Currency Acquisitions Sales(b) Sales(c) (
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 Three Months Ended Twelve Months Ended Twelve Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Sales Architecture & Software (a) $ 752.0 $ 696.4 $
Slide 17: Reconciliation to Non-GAAP Measures: Adjusted Income, EPS, 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 Three Months Ended Twelve Months Ended Twelve Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Income f
Slide 18: 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, 2017 2016 (a) Return Income from continuing operations $ 825.7 $ 729.7 Interest expense 76.2 71.3 Income tax provision 211.7 213.4 Purchase accounting depreciation and a
Slide 19: Reconciliation to Non-GAAP Measures: Fiscal 2018 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2018 Guidance (in billions, except percentages and per share amounts) Fiscal 2018 Organic Sales Guidance Organic sales growth 3.5% to 6.5% Foreign currency impact ~ 2.5% Divestiture impact ~ (1)% Reported sales growth 5% to 8% Segment Operating Margin $ ~ 6