Emerson Electric Company · NYSE:EMR

Emerson Electric — Q3 2010 Earnings Presentation

14 slides from Emerson Electric's earnings presentation, Aug 3, 2010

  1. Slide 1: Third Quarter 2010 Earnings Conference Call

    Third Quarter 2010 Earnings Conference Call August 3, 2010 Safe Harbor Statement Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the remainder of the year, and Emerson undertakes no obligation to update any such statement to reflect la

  2. Slide 2: Third Quarter 2010 Highlights

    Third Quarter 2010 Highlights  Third quarter sales up 11% to $5.6 billion with increases in all five segments – Underlying sales* growth of 7% -- U.S. and Europe resume growth  Strong operating profit margin* improvement of 330 basis points to 18.0% -- a modern day record for Emerson  Business Se

  3. Slide 3: Emerson Third Quarter Results

    Emerson Third Quarter Results ($Mil excl. EPS) 2009 2010 Sales $5,091 $5,641  Up 11% • Underlying* up 7%; Acq. +3 pts; FX +1 pt. Operating Profit* $749 $1,017  Up 36% OP%* 14.7% 18.0% • Driven by cost reduction benefits and volume leverage • Investments in new products and technologies paying off,

  4. Slide 4: Underlying Sales Analysis Third Quarter Results

    Underlying Sales Analysis Third Quarter Results United States 11% Europe 9% Asia 3% Latin America 7% Canada 0% Middle East/Africa (8%) Total International 4% Underlying Sales* 7% Currency + 1 pt Acquisitions + 3 pts Consolidated Sales 11% China up 7% in the quarter – still expected to be up 12-15% f

  5. Slide 5: Emerson Third Quarter Detail

    Emerson Third Quarter Detail ($Mil) 2009 2010 Gross Profit $1,838 $2,211  Up 20% • Driven by aggressive cost GP% 36.1% 39.2% containment programs, volume leverage, restructuring benefits, SG&A% 21.4% 21.2% acquisitions, and favorable mix, including new products Operating Profit* $749 $1,017  Up 36

  6. Slide 6: Third Quarter Cash Flow & Balance Sheet

    Third Quarter Cash Flow & Balance Sheet ($Mil) 2009 2010 Operating Cash Flow $916 $703  Down 23% versus an extremely strong Q3 2009  Operating working capital liquidation of over $400M in Q3 2009 Capital Expenditures ($116) ($122)  Expect capital expenditures of ~$475M for fiscal year 2010 Free C

  7. Slide 7: Business Segment Earnings Third Quarter Results

    Business Segment Earnings Third Quarter Results ($Mil) 2009 2010 Business Segment EBIT* $647 $988  Up 53% or 460 basis points – Benefits from cost reductions, Margin* 12.3% 16.9% volume leverage, and lower restructuring costs. Diff. In Accounting Methods $48 $52  Up $4 million Corporate & Other ($

  8. Slide 8: Process Management Third Quarter Results

    Process Management Third Quarter Results ($Mil) 2009 2010 Sales $1,481 $1,511  Up 2% – Underlying* down 1%; Acq. +2 pts; FX +1 pt. • U.S. up 12%, Asia down 10%, Europe down 2%, Middle East/Africa down 19% – Order rates rebounding globally – MRO spending driving sales growth; project quoting activit

  9. Slide 9: Industrial Automation Third Quarter Results

    Industrial Automation Third Quarter Results ($Mil) 2009 2010 Sales $813 $956  Up 18% – Underlying* up 16%; Acq. +2 pts. • U.S. up 12%, Europe up 20%, Asia up 20% – Growth broad-based across businesses and geographies – Global power generation orders coming back very strongly EBIT $47 $122  Up 165%

  10. Slide 10: Network Power Third Quarter Results

    Network Power Third Quarter Results ($Mil) 2009 2010  Up 7% Sales $1,330 $1,418 – Underlying* down 1%; Avocent Acq. +7 pts; FX +1 pt. • U.S. up 5%, Asia down 3%, Europe flat – Material supply shortages constraining sales in the embedded computing and power businesses EBIT $137 $182  Up 31% Margin

  11. Slide 11: Climate Technologies Third Quarter Results

    Climate Technologies Third Quarter Results ($Mil) 2009 2010 Sales $859 $1,106  Up 29% – Underlying* up 28%; Acq. +1 pt. • U.S. up 23%, Europe up 22%, Asia up 49% • Broad-based strength across Asian end markets. Strength in EU refrigeration and U.S. residential, refrigeration and commercial end mark

  12. Slide 12: Appliance and Tools Third Quarter Results

    Appliance and Tools Third Quarter Results ($Mil) 2009 2010 Sales $771 $850  Up 10% – Underlying* up 8%; Acq. +2 pts. – U.S. up 8%, Europe up 23%, Asia down 2% – Growth in the tools, motors and appliance solutions businesses partially offset by a decline in the residential storage business EBIT $108

  13. Slide 13: Summary and Outlook

    Summary and Outlook  Strong quarter – good momentum as we finish out FY2010 – Underlying sales* growth resumes – up 7% – Underlying order trends remain positive across all five business segments, which points towards 2 or 3 quarters of solid sales growth in front of us – Strong operating profit mar

  14. Slide 14: Reconciliation of Non-GAAP Financial Measures

    Emerson Business Summary Reconciliation of Non-GAAP Financial Measures Forecast Third Quarter Cash Flow Q3 2010 Net Sales FY2010 Operating Cash Flow $703 Underlying Sales* ~ (1)% to 0% Capital Expenditures (122 ) Currency Translation +2 pts Free Cash Flow* $581 Completed Acquisitions +3 pts Net Sale

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