Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q1 2019 Earnings Presentation
20 slides from Rockwell Automation's earnings presentation, Jan 29, 2019
Slide 1: Fiscal Year 2019 First Quarter Conference Call
Rockwell Automation Fiscal Year 2019 First Quarter Conference Call January 29, 2019 Copyright © 2019 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 2019 First Quarter Results and Full Year Outlook
Fiscal 2019 First Quarter Results and Full Year Outlook Q1 Results ▪ Organic sales up 5.7% YOY – Logix growth of 7% – Process growth of 5% – Double-digit growth in Information Solutions and Connected Services – Growth led by consumer and heavy industries; transportation down ▪ Segment operating marg
Slide 4: Key Financial Information: First Quarter
Key Financial Information: First Quarter (in millions, except per share amounts) Q1 2019 Q1 2018 * YOY B/(W) Sales $ 1,642 $ 1,587 3.5 % Segment Operating Earnings $ 375 $ 355 5.5 % Segment Operating Margin 22.8 % 22.4 % 40 bps General Corporate - Net $ 22 $ 24 $ 2 Adjusted EPS $ 2.21 $ 1.96 12.8 %
Slide 5: Architecture & Software
Architecture & Software Sales Segment Operating Margin ($ millions) $800 $736 $753 40% 30.5% 31.5% 30% $600 20% $400 10% $200 0% Q1 Q1 2018* 2019 2018* 2019 YOY Sales % Change ▪ Segment operating margin expanded Q1 2019 100 bps in Q1, primarily due to higher Organic 4.6% sales, partially offset by h
Slide 6: Control Products & Solutions
Control Products & Solutions Sales Segment Operating Margin ($ millions) $1,000 20% $889 $851 15.5% 15.4% $800 15% $600 10% $400 5% $200 0% Q1 Q1 2018* 2019 2018* 2019 YOY Sales % Change ▪ Segment operating margin expanded Q1 2019 10 bps in Q1, primarily due to higher Organic 6.6% sales, partially o
Slide 7: Regional Sales
Regional Sales (in millions, except percentages) Q1 2019 First Quarter * Organic ▪ North America growth led by Region Sales % Change consumer and heavy industries North America $ 999 6.2% ▪ In EMEA, consumer growth was offset by decline in heavy EMEA 294 (0.7)% industries ▪ Broad-based growth in Asi
Slide 8: Revised Fiscal 2019 Guidance
Revised Fiscal 2019 Guidance January November Guidance Guidance Sales ~ $6.9B ~ $7.0B Organic Growth 3.7% to 6.7% 3.7% to 6.7% Currency Translation ~ (1.5)% ~ (1)% Segment Operating Margin ~ 22% ~ 22% Adjusted Effective Tax Rate ~ 19.5% ~ 19.5% Adjusted EPS $8.85 - $9.25 $8.85 - $9.25 Free Cash Flow
Slide 9: Fiscal 2019 Reporting Changes
Fiscal 2019 Reporting Changes Revenue ▪ Adopted ASC 606 (revenue recognition) in Q1 Reporting ▪ U.S. & Canada revenues combined and reported as North America region ▪ Segment P&L: Realigned certain business activities between A&S and CP&S Segment reporting segments Reporting ▪ $48M of FY18 revenue m
Slide 10: Fiscal 2019 Reporting Changes: Statement of Operations Impact on Q1 FY18
Fiscal 2019 Reporting Changes: Statement of Operations Impact on Q1 FY18 (in millions, except per share amounts) Fiscal Year 2018 - Quarter 1 Originally Pension/ Reported Postretirement Recast Sales $ 1,586.6 $ — $ 1,586.6 Cost of sales (889.5) 3.1 (886.4) Gross profit 697.1 3.1 700.2 Selling, gener
Slide 11: Fiscal 2019 Reporting Changes: Segment P&L Impact on Q1 FY18
Fiscal 2019 Reporting Changes: Segment P&L Impact on Q1 FY18 (in millions, except per share amounts and percentages) Fiscal Year 2018 - Quarter 1 Originally Segment Pension/ Interest Reported Realign. Postretirement Income Recast Sales Architecture & Software (a) $ 746.9 $ (11.3) $ — $ — $ 735.6 Con
Slide 12: Appendix
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures Copyright © 2019 Rockwell Automation, Inc. All rights reserved.
Slide 13: First Quarter Results: Summary
First Quarter Results: Summary (in millions, except per share amounts) Q1 2019 Q1 2018 Total sales $ 1,642.3 $ 1,586.6 Total segment operating earnings $ 374.9 $ 355.4 Purchase accounting depreciation and amortization (4.1) (4.4) General corporate – net (21.9) (24.0) Non-operating pension and postre
Slide 14: Free Cash Flow
Free Cash Flow (in millions) Q1 2019 Net Income $ 80.3 Depreciation/Amortization 35.9 Retirement Benefits Expense 17.2 Receivables/Inventory/Payables (89.7) Compensation and Benefits (85.4) Pension Contributions (6.1) Income Taxes 12.2 Change in fair value of investments 212.7 Other 34.9 Cash Flow f
Slide 15: Reconciliation to Non-GAAP Measures: Organic Sales
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended December 31, 2018 2017 Sales Effect of Excluding Sales Sales Organic Changes in Changes in Effect of Organic Effect of Excluding Growth Growth Sales(a) Currency Currency Acquisitions Sales(b) Sales
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 December 31, 2018 December 31, 2017 Sales Architecture & Software (a) $ 753.1 $ 735.6 Control Products & Solutions (b) 889.2 851.0 Total sales (c) $ 1,642.3 $ 1,586.6
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 December 31, 2018 December 31, 2017 Net Income $ 80.3 $ (236.4) Non-operating pension and postretirement benefit (credit) cost (2.6) 5.8 Tax ef
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 December 31, 2018 2017 (a) Return Net income $ 852.2 $ 374.6 Interest expense 73.7 77.5 Income tax provision 301.6 703.0 Purchase accounting depreciation and amortization 17.1 20.2 Re
Slide 19: Reconciliation to Non-GAAP Measures: Logix and Process Sales Growth
Reconciliation to Non-GAAP Measures Logix and Process Sales Growth Three Months Ended December 31, 2018 Logix Logix reported growth 4% Effect of currency translation 3% Logix organic growth 7% Process Process reported growth 2% Effect of currency translation 3% Process organic growth 5% Copyright ©
Slide 20: Reconciliation to Non-GAAP Measures: Fiscal 2019 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2019 Guidance (in billions, except percentages and per share amounts) Organic Sales January Guidance November Guidance Organic sales growth 3.7% to 6.7% 3.7% to 6.7% Foreign currency impact ~ (1.5)% ~ (1)% Reported sales growth 2.2% to 5.2% 2.7% to 5.7% Seg