Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q4 2022 Earnings Presentation
34 slides from Rockwell Automation's earnings presentation, Nov 2, 2022
Slide 1: Q4 Fiscal 2022 Earnings Presentation
Q4 Fiscal 2022 Earnings Presentation November 2, 2022 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: Q4 FY22 Results Highlights
Q4 FY22 Results Highlights ▪ Orders continued to outpace shipments ▪ Reported sales up 17.6% YOY; Organic sales up 20.5% YOY • Price contributed ~4.5 pts to growth, Volume contributed ~16 pts to growth • Acquisitions contributed 1.9% • Currency reduced sales (4.8)% ▪ Information Solutions & Connecte
Slide 4: Q4 FY22 Organic Industry Segment Performance
Q4 FY22 Organic Industry Segment Performance % of Q4 Q4 FY22 FY22 Sales vs. Q4 FY21 Q4 FY22 vs. Q4 FY21 Discrete Automotive up ~25% ~25% Up ~20% Semiconductor up ~30% e-Commerce & Warehouse Automation up high single digits Hybrid Food & Beverage up ~20% ~ 45% Up ~25% Life Sciences up over
Slide 5: Q4 and Full Year FY22 Organic Sales Growth
Q4 and Full Year FY22 Organic Sales Growth North America EMEA Q4: +20.1% Q4: +24.1% FY: +10.7% FY: +11.8% Asia Pacific Q4: +17.8% FY: +10.8% Latin America Q4: +20.0% FY: 15.8% Double-digit growth across all regions PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 5
Slide 6: Orders, Sales & Backlog
Orders, Sales & Backlog Record backlog and supply chain stabilization set the stage for strong FY2023 Cancellation % ~1% ~1% ~1% ~2% ~1% <1% ~2% ~3% BACKLOG ORDERS* SALES PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 6 *Net of Cancellations
Slide 7: Full Year FY22 Highlights
Full Year FY22 Highlights ▪ Record orders over $10B, up over 20% YOY ▪ Reported sales up 10.9% YOY; Organic sales up 11.3% YOY • Acquisitions contributed 2.3% • Currency reduced sales (2.7)% ▪ IS/CS over $800M of revenue; IS/CS up strong double digits ▪ ARR up 14% YOY; ARR over 8% of total revenue ▪
Slide 8: Full Year FY23 Outlook Highlights
Full Year FY23 Outlook Highlights ▪ Total sales growth of ~9.5% YOY at the guidance midpoint ▪ Organic sales growth of 11% YOY at the guidance midpoint • Price to contribute ~4 pts, Volume to contribute ~7 pts ▪ Acquisitions expected to contribute ~1 pt of growth ▪ Currency expected to reduce sales
Slide 9: Q4 FY22 Key Financial Information
Q4 FY22 Key Financial Information ($ in millions, except per share amounts) Q4 2022 Q4 2021 YOY B/(W) Organic Growth +20.5 % Inorganic Growth +1.9 % SALES $2,126 $1,808 Currency Translation (4.8) % Reported Growth +17.6 % SEGMENT OPERATING MARGIN 23.3% 17.9% 540 bps CORPORATE AND OTHER $35 $33 $(2)
Slide 10: Q4 FY22 Segment Results
Q4 FY22 Segment Results SALES SEGMENT OPERATING SEGMENT ($ in millions; YOY growth %) MARGIN HIGHLIGHTS Organic +16.3 % Intelligent Devices Inorganic —% 22.3% ▪ Higher segment margin YOY driven by higher sales and $957M Currency (4.6)% +290 bps YOY positive price/cost, partially offset by unfavorabl
Slide 11: Q4 FY21 to Q4 FY22 Adjusted EPS Walk
Q4 FY21 to Q4 FY22 Adjusted EPS Walk PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 11
Slide 12: Q4 FY22 Guidance Midpoint to Q4 FY22 Adjusted EPS Walk
Q4 FY22 Guidance Midpoint to Q4 FY22 Adjusted EPS Walk PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 12
Slide 13: Full Year FY22 Key Financial Information
Full Year FY22 Key Financial Information (in millions, except per share amounts) 2022 2021 YOY B/(W) Organic Growth +11.3 % Inorganic Growth +2.3 % SALES $7,760 $6,997 Currency Translation (2.7) % Reported Growth +10.9 % SEGMENT OPERATING MARGIN 19.9% 19.9% 0 bps CORPORATE AND OTHER $105 $121 $16 AD
Slide 14: Backlog by Segment
Backlog by Segment ~$5B Lifecycle Services Software and Control Backlog $ Intelligent Devices ~$1B FY19 FY22 Record backlog includes benefits of higher pricing PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 14
Slide 15: Fiscal Year 23 Guidance
Fiscal Year 23 Guidance Full Year Outlook Sales Midpoint ~ $8.5B Organic Growth Range 9% - 13% Inorganic Growth(1) ~ 1% Currency Translation ~ (2.5)% Segment Operating Margin ~ 20.5% Adjusted Effective Tax Rate ~ 18.0% Adjusted EPS $10.20 - $11.00 Free Cash Flow as a % of Adjusted Income ~ 95% Note:
Slide 16: FY23 Tailwinds/Headwinds
FY23 Tailwinds/Headwinds TAI LW I NDS HEADWINDS • Record high backlog entering FY23 • Supply chain volatility • Low cancellation rate • Macroeconomic environment S A L E S • Cumulative benefit of multiple price increases • Foreign currency rate impact • Resiliency from product redesign and capacity
Slide 17: FY22 Actuals to FY23 Guidance Adjusted EPS Walk
FY22 Actuals to FY23 Guidance Adjusted EPS Walk PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 17
Slide 18: Capital Deployment Framework
Capital Deployment Framework ORGANIC INVESTMENTS Operating Cash Flow Capital Expenditures ~2 to 2.25% of Sales Free Cash Flow ~100% of Adjusted Income INORGANIC INVESTMENTS Acquisitions Target > 1 pt of growth per year FCF yield > (WACC + risk premium) by years 3-5 EXCESS CASH RETURNED TO SHAREOWNER
Slide 19: Save the Date: Investor Day
SAVE THE DATE • INVESTOR DAY NOV 15 & 16 • CHICAGO, ILLINOIS PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 19
Slide 20: Appendix
APPENDIX 20
Slide 21: FY22 Organic Industry Segment Performance
FY22 Organic Industry Segment Performance % of FY22 FY22 Sales vs. FY21 FY22 vs FY21 Discrete Automotive up high single digits Up high ~25% Semiconductor up ~15% single digits e-Commerce & Warehouse Automation up mid single digits Hybrid Food & Beverage up ~10% ~ 40% Up low teens Life Scie
Slide 22: FY21 to FY22 Adjusted EPS Walk
FY21 to FY22 Adjusted EPS Walk PUBLIC | Copyright ©2022 Rockwell Automation, Inc. | 22
Slide 23: FY23 Organic Industry Segment Outlook
FY23 Organic Industry Segment Outlook % of FY23 FY22 Sales vs. FY22 Assumptions at Guidance Midpoint Discrete Automotive up low teens ~25% Up ~10% Semiconductor up mid teens e-Commerce & Warehouse Automation up low teens Hybrid Food & Beverage up ~10% ~ 40% Up ~10% Life Sciences up low tee
Slide 24: Industry Segmentation
Industry Segmentation % of FY22 Sales Discrete Hybrid Process ~10% Automotive ~20% Food & Beverage ~10% Oil & Gas ~5% Semiconductor ~5% Life Sciences ~5% Mining ~5% e-Commerce & Warehouse ~5% Household & Personal Care ~5% Metals Automation ~5% Tire ~5% Chemicals ~5% General Industries ~5% Eco Indust
Slide 25: Q4 FY22 Results: Summary
Q4 FY22 Results: Summary (in millions, except per share amounts) Q4 2022 Q4 2021 Total Sales $ 2,126.3 $ 1,807.8 Total Segment Operating Earnings $ 494.9 $ 323.2 Purchase Accounting Depreciation and Amortization (25.8) (17.4) Corporate and other (35.1) (33.0) Non-operating pension and postretirement
Slide 26: Reconciliation to Non-GAAP Measures: Free Cash Flow
Reconciliation to Non-GAAP Measures Free Cash Flow (in millions) Q4 2022 FY 2022 Net Income $ 336.0 $ 919.1 Depreciation/Amortization 60.7 238.9 Retirement Benefits Expense 14.7 76.4 Receivables/Inventory/Payables (122.6) (536.4) Compensation and Benefits 36.7 (78.2) Pension Contributions (30.5) (53
Slide 27: Reconciliation to Non-GAAP Measures: Organic Sales by Region
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2022 2021 Reported Sales Currency Organic Effect of Growth Acquisition Growth Growth Reported Less: Effect of Changes in Organic Reported (Decline) Growth (Decline) (Decline) Sales(a)
Slide 28: 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, 2022 2021 Sales Currency Organic Effect of Growth Acquisition Growth Growth Reported Less: Effect of Changes in Organic Reported (Decline) Growth (Decline) (Decline) Sales(a) Acquisit
Slide 29: 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, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Sales Intelligent Devices (a) $ 957.4 $ 857.1 $ 3,544.6 $ 3,311.9 Software & Control (b) 6
Slide 30: Reconciliation to Non-GAAP Measures: Adjusted Income and EPS
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, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net Income attributable to Rockwell Automation
Slide 31: Reconciliation to Non-GAAP Measures: Return On Invested Capital
Reconciliation to Non-GAAP Measures Return On Invested Capital ($ in millions) Twelve Months Ended September 30, 2022 2021 (a) Return Net income $ 919.1 $ 1,344.3 Interest expense 123.2 94.6 Income tax provision 154.5 181.9 Purchase accounting depreciation and amortization 103.9 55.1 Return 1,300.7
Slide 32: Reconciliation to Non-GAAP Measures: Fiscal 2023 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2023 Guidance (in billions, per share amounts) Organic Sales Fiscal 2023 Guidance Organic sales growth 9% - 13% Inorganic sales growth ~ 1.0% Foreign currency impact ~ (2.5)% Reported sales growth 7.5% - 11.5% Segment Operating Margin Total sales (a) $ ~ 8.
Slide 33: Performance Metric Definition
Performance Metric Definition Organic ARR Growth Annual recurring revenue (ARR) is a key metric that enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is
Slide 34: Thank you
Thank you www.rockwellautomation.com 34