Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q3 FY2021 Earnings Presentation
30 slides from Rockwell Automation's earnings presentation, Jul 27, 2021
Slide 1: Third Quarter Fiscal Year 2021 Conference Call
Third Quarter Fiscal Year 2021 Conference Call July 27, 2021 PUBLIC 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement THIS PRESENTATION INCLUDES GUIDANCE AND OTHER 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, MANY OF WHICH
Slide 3: Q3 FY21 Results Highlights
Q3 FY21 Results Highlights ▪ Record orders of over $2B, up over 50% YOY ▪ Reported sales up 32.6% YOY; acquisitions contributed 1.1% – Quarterly sales above fiscal year 2019 levels, setting a new record ▪ Organic sales up 26.4% YOY – Information Solutions & Connected Services (IS/CS) orders and sale
Slide 4: Accelerating FactoryTalk as a Service
Accelerating FactoryTalk as a Service Streamlined automation Simplified, cloud-native Asset management and system design operations management predictive maintenance organic investments acquisitions PUBLIC | Copyright ©2021 Rockwell Automation, Inc. | 4
Slide 5: Q3 FY21 Organic Industry Segment Performance
Q3 FY21 Organic Industry Segment Performance % of Q3 FY21 Q3 FY21 Sales vs. Q3 FY20 Q3 FY21 vs. Q3 FY20 Semiconductor up ~35% Discrete Automotive up ~50% ~ 25% Up ~40% e-Commerce up ~65% Hybrid Food & Beverage up ~30% ~ 45% Up ~30% Life Sciences up ~40% Tire up ~60% O&G up low single d
Slide 6: Q3 FY21 Organic Sales Growth
Q3 FY21 Organic Sales Growth NORTH AMERICA EMEA +29.2% +21.0% Q3 HIGHLIGHTS * • North America saw strong double digit growth in all three industry segments; strength in packaging and material handling ASIA PACIFIC +23.0% • EMEA growth driven by strength in Food & Beverage and Tire • Asia Pacific str
Slide 7: FY21 Full Year Outlook Highlights
FY21 Full Year Outlook Highlights ▪ Reported sales forecasted at $7.1B, up ~12% YOY – Includes ~1.5% for acquisitions ▪ Organic sales expected to grow ~8% YOY – IS/CS sales at ~$500M and projected to grow double digits – Anticipating continued supply chain constraints and uncertainty around impact o
Slide 8: FY21 Organic Industry Segment Outlook
FY21 Organic Industry Segment Outlook % of FY21 B/(W) vs. Apr FY21 Sales vs. FY20 Assumptions at Guidance Midpoint Guidance Discrete Automotive up ~10% ~ 25% Up ~15% Semiconductor up high teens e-Commerce up ~60% = Hybrid Food & Beverage up ~15% ~ 45% Up ~15% Life Sciences up ~20% Tire u
Slide 9: Q3 FY21 Key Financial Information
Q3 FY21 Key Financial Information ($ in millions, except per share amounts) Q3 FY21 Q3 FY20 YOY B/(W) Organic Growth +26.4 % Inorganic Growth +1.1 % SALES $1,848 $1,394 Currency Translation +5.1 % Reported Growth +32.6 % SEGMENT OPERATING MARGIN 19.9% 16.5% 340 bps CORPORATE AND OTHER $29 $26 $(3) A
Slide 10: Q3 FY21 Segment Results
Q3 FY21 Segment Results SALES SEGMENT OPERATING SEGMENT ($ in millions; YOY growth %) MARGIN HIGHLIGHTS Organic +28.8 % Intelligent ▪ Higher segment margin YOY mainly due to higher sales Devices Inorganic —% 21.9% $883M Currency +5.0 % +500 bps YOY ▪ Orders grew ~65% YOY Reported +33.8 % Organic +31
Slide 11: Q3 FY20 to Q3 FY21 Adjusted EPS Walk
Q3 FY20 to Q3 FY21 Adjusted EPS Walk ~$1.65 ~$(0.10) ~$0.05 ~$(0.55) ~$(0.05) $2.31 $1.32 FY20 Q3 Core Non-Recurring FX Incentive Comp & Acquisitions FY21 Q3 Accelerated Investments Reversal of Temporary Actions PUBLIC| Copyright ©2021 Rockwell Automation, Inc. | 11
Slide 12: Quarterly Product Order Trends: Q1 FY19 – Q3 FY21
Quarterly Product Order Trends: Q1 FY19 – Q3 FY21 Global Daily Average Product Orders $ Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Impact of large orders booked in the quarter Note: product orders represent ~2/3 of total business and includes both softwar
Slide 13: Updated FY21 Guidance
Updated FY21 Guidance July April Guidance Guidance Sales Midpoint ~ $7.1B ~ $7.0B Reported Growth Range ~ 12% 9.0% - 12.0% Organic Growth Range ~ 8% 5.5% - 8.5% Inorganic Growth ~ 1.5% ~ 1.5% Currency Translation ~ 2.5% ~ 2.0% Segment Operating Margin ~ 20.0% ~ 19.5% Adjusted Effective Tax Rate ~ 14
Slide 14: FY21 April to July Guidance Midpoint Adjusted EPS Walk
FY21 April to July Guidance Midpoint Adjusted EPS Walk ~$0.30 ~$0.05 ~$(0.15) ~$(0.15) $9.20 $9.15 FY21 April Guidance Core FX Incentive Pending FY21 July Guidance at Midpoint Compensation Plex Acquisition* at Midpoint *Assuming the acquisition of Plex Systems closes on August 31, 2021 PUBLIC| Copyr
Slide 15: Estimated Impact of Plex Systems Acquisition
Estimated Impact of Plex Systems Acquisition • Reported within the Software Q4 FY21 FY21 FY22 FY23 & Control segment Sales1 ~$15M ~$15M ~$160M ~$225M • Expansion of our Information & Solutions / Connected Segment operating earnings ~$-M ~$-M ~$20M ~$70M Services portfolio Adjusted EPS2 ~$(0.15) ~$(0
Slide 16: Appendix
Appendix Supplemental Financial Information and Reconciliations to Non-GAAP Measures 16
Slide 17: Estimated FY21 Impact of Plex in July Guidance
Estimated FY21 Impact of Plex in July Guidance One-Time Deferred Transaction Revenue Interest Total Operations Adjustment & Integration Expenses Expense Reported Sales1 ~$15M ~$(2)M ~$15M Segment operating earnings1 ~$5M2 ~$(2)M ~$(1)M ~$-M Corporate and other ~$(20)M ~$(20)M Interest Expense – net
Slide 18: Estimated FY22 Impact of Plex
Estimated FY22 Impact of Plex Deferred One-Time & Revenue Interest Total Operations Adjustment Integration Reported Expenses Expense Sales1 ~$185M ~$(15-35)M ~$160M Segment operating earnings1 ~$55M2 ~$(15-35)M ~$(10)M ~$20M Corporate and other Interest Expense – net ~$(25)M ~$(25)M Adjusted EPS3 ~$
Slide 19: FY20 to FY21 July Guidance Adjusted EPS Walk
FY20 to FY21 July Guidance Adjusted EPS Walk ~$2.80 ~$(0.20) ~$(1.60) ~$0.15 ~$(0.10) ~$(0.15) ~$0.45 $9.20 $7.87 FY20 Actuals Core Non-Recurring Incentive Comp FX Tax Rate Acquisitions Legal Settlement FY21 July Accelerated & Reversal of Guidance Investments Temporary at Midpoint Actions PUBLIC| Co
Slide 20: New Operating Segments Composition
Former A&S business New Operating Segments Composition Former CP&S business Intelligent Devices Software & Control Lifecycle Services ▪ Drives ▪ Control software & hardware ▪ Consulting ▪ Motion ▪ Visualization software & hardware ▪ Professional services Solutions ▪ Safety ▪ Digital twin & simulat
Slide 21: Q3 FY21 Results: Summary
Q3 FY21 Results: Summary ($ in millions, except per share amounts) Q3 2021 Q3 2020 Total Sales $ 1,848.2 $ 1,394.0 Total segment operating earnings $ 368.7 $ 229.4 Purchase accounting depreciation and amortization (12.9) (10.6) Corporate and other (29.2) (26.4) Non-operating pension and postretireme
Slide 22: Free Cash Flow
Free Cash Flow Three Months Ended Nine Months Ended ($ in millions) Q3 2021 Q3 2020 Q3 2021 Q3 2020 Net Income $ 269 $ 314 $ 1,270 $ 760 Depreciation/Amortization 46 44 136 128 Change in fair value of investments1 (43) (176) (625) (102) Retirement Benefits Expense 58 32 118 95 Receivables/Inventory/
Slide 23: Industry Segmentation
Industry Segmentation % of FY20 Sales Discrete Hybrid Process ~10% Automotive ~20% Food & Beverage ~10% Oil & Gas ~5% Semiconductor ~5% Life Sciences ~5% Mining, Aggregates & ~5% Household & Personal Care Cement ~5% General Industries ~5% Tire ~5% Metals • Warehousing & Logistics • Printing & Publis
Slide 24: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales ($ in millions) Three Months Ended June 30, 2021 2020 Reported Acquisition Currency Effect of Sales Growth Growth Growth Organic Growth Effect of Changes in Organic (Decline) (Decline) (Decline) (Decline) Sales(a) Acquisitions(e) Currency(d) Sales(b)
Slide 25: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Segment Operating Margin ($ in millions) Three Months Ended June 30, 2021 June 30, 2020 Sales Intelligent Devices (a) $ 882.9 $ 659.9 Software & Control (b) 509.6 364.7 Lifecycle Services (c) 455.7 369.4 Total sales (d) $ 1,848.2 $ 1,394.0 Segment operating earnin
Slide 26: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate ($ in millions, except per share amounts) Three Months Ended June 30, 2021 June 30, 2020 Net Income attributable to Rockwell Automation $ 271.3 $ 317.8 Non-operating pension and postretirement benefit
Slide 27: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Return On Invested Capital ($ in millions) Twelve Months Ended June 30, 2021 2020 (a) Return Net income $ 1,533.4 $ 767.6 Interest expense 94.5 104.3 Income tax provision 288.1 125.3 Purchase accounting depreciation and amortization 49.0 34.2 Return 1,965.0 1,031.
Slide 28: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Fiscal 2021 Guidance ($ in billions, except per share amounts) Organic Sales Fiscal 2021 Guidance Organic sales growth ~ 8% Inorganic sales growth ~ 1.5% Foreign currency impact ~ 2.5% Reported sales growth ~ 12.0% Segment Operating Margin Total sales (a) $ ~ 7.1
Slide 29: New Definition of Adjusted Income and Adjusted EPS
New Definition of Adjusted Income and Adjusted EPS • Beginning in fiscal 2021, Rockwell is changing its definition of Adjusted Income and Adjusted EPS • New definition will also exclude the impact of purchase accounting depreciation and amortization expense attributable to Rockwell Automation and th
Slide 30: Thank you
Thank you www.rockwellautomation.com 30
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