Emerson Electric Company · NYSE:EMR
Emerson Electric — Investor Presentation (August 2024)
31 slides from Emerson Electric's investor presentation, August 2024
Slide 1: Emerson Overview
Emerson Overview August 2024 EMERSON | 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation and our commentary and responses to questions that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later develop
Slide 3: Emerson Overview
Emerson Overview EMERSON | 3
Slide 4: Leading the Future of Automation
LIFE RENEWABLES & GREEN Leading the SCIENCES ENERGY STORAGE HYDROGEN Future of Automation 25 of the top 25 life sciences Emerson systems control 60,000 Emerson valves and measurement companies use Emerson software, wind turbines globally devices automate one of the world’s control systems, and intel
Slide 5: Strong Operational Performance Focused on Value Creation
Secular Growth Drivers Differentiated portfolio supporting digital transformation, energy security & affordability, nearshoring and sustainability & decarbonization Strong Operational Innovation Opportunities Wave of new products focused on solving customers’ sustainability and Performance digital c
Slide 6: Global Automation Leader With Diversified End-Market Exposure
Global Automation Leader With Diversified End-Market Exposure $17B >50% ~25% Net Sales Gross Profit Adjusted Segment EBITA ~13% >60% ~$150B Software % Of Sales MRO / Recurring Revenue Installed Base GEOGRAPHY END-MARKET SEGMENT 6% AspenTech 20% 16% 21% 10% Europe Other Test & Measurement Energy 24%
Slide 7: World-class Automation Portfolio for Process, Hybrid and Discrete Industries
World-class Automation Portfolio for Process, Hybrid and Discrete Industries OPTIMIZE SOFTWARE Modeling & AI-Powered software to design, optimize and maintain operations for maximum performance DECIDE CONTROL Control Systems for intuitive and automated plant process control to maximize quality, effi
Slide 8: Emerson's Value Creation Framework
Emerson’s Value Creation Framework THROUGH-THE-CYCLE TARGETS Organic Growth Accelerating innovation and aligning with secular growth trends 4 – 7% Through-The-Cycle Organic Growth ~35% Portfolio Management Incremental Margins Building a higher growth, cohesive automation portfolio Double-Digit Adjus
Slide 9: Why Emerson
Leading technology and software portfolio exposed to critical secular trends and attractive growth markets Track record of strong operational performance and leading margins using differentiated Emerson Management System History of innovation and market disruptions resulting in market-leading soluti
Slide 10: Organic Growth Platforms
Organic Growth Platforms E M E R S O N | 10
Slide 11: Portfolio Is Aligned to Major Macro Trends Supporting Our Growth Platforms
Portfolio Is Aligned to Major Macro Trends Supporting Our Growth Platforms SECULAR TRENDS GROWTH PLATFORMS Expected to grow ~10% through-the-cycle Digital Energy Security Transformation & Affordability Energy Transition Unlocking greater value and Improving the availability of Leadership in energy t
Slide 12: Energy Transition Markets Have a $12B TAM Growing Double Digits
Energy Transition Markets Are Critical to Decarbonization and Have a $12B TAM Growing Double Digits RENEWABLES & CLEAN CARBON LNG NUCLEAR HYDROGEN ENERGY STORAGE FUELS CAPTURE Energy security to Plant extensions Build-out Conversions Power generation, Enabling emissions drive doubling Market Growtho
Slide 13: Industrial Software Will Play a Critical Role Across All End-Markets
Industrial Software World-class portfolio covers the full customer lifecycle Will Play a Critical Role Across All End-Markets DESIGN OPERATE MAINTAIN • Process Design • Advanced Control • Reliability • Simulation • Optimization • Asset Performance • Engineering • Supply Chain • Multivariate Analysis
Slide 14: Differentiated Technology Stack Aligned With Premium Growth in Hybrid & Discrete Markets
Differentiated Technology Stack Aligned With Premium Growth in Priority Hybrid & Discrete Markets FACTORY LIFE METALS & AUTOMATION SCIENCES MINING $80B MSD $7B MSD $10B MSD TAM Market Growth TAM Market Growth TAM Market Growth • Specialty • Continuous • Decarbonization • Machinery manufacturing • El
Slide 15: Organic Growth Through Breakthrough Innovation in Four Critical Technology Areas
RECENT PRODUCT LAUNCHES Organic Growth Through Breakthrough Innovation in Four Critical Technology Areas Disruptive Software-Defined Ovation Green Renewables Software Measurement Automation Technologies Systems High-margin core Dramatic shift to products with Software-defined control software- reocc
Slide 16: The Future of Automation
CLOUD The Future of • Powering complex and enterprise operations and engineering CLOUD Enterprise Operations Platform Automation • Unparalleled analytic computing power • Integrated engineering environment Engineering Fleet Management Analytics Support • Limitless scalability • On-demand, tailored s
Slide 17: Portfolio Management
Portfolio Management E M E R S O N | 17
Slide 18: Emerson's Leading Portfolio Is Poised to Deliver on Long-Term Framework
Emerson Emerson 2020 2023 Sales $17B ~$17B Gross Profit Margin 42% >50% Emerson’s Adjusted 19% ~25% Leading Portfolio Segment EBITA Margin Is Poised to Software % of Sales 6% ~13% Deliver on Long- Term Framework 10% 19% 16% for Value Creation Life Sciences / Medical 3% Other Oil & Gas Other 21% Ener
Slide 19: $36B in Transactions to Drive a Cohesive, Higher Growth Portfolio
$36B in Transactions to Drive a Cohesive, Higher Growth and More Profitable Portfolio ACQUISITIONS ~$18B HSD-LDD Growth Expectations ~75% Estimated Adjusted Gross Profit % ~30% Estimated Adjusted EBITA % Invested in intelligent automation technology and software Gross Adjusted Growth Profit EBITA DI
Slide 20: Majority Ownership of Industrial Software Leader
Majority Ownership of Industrial Software Example Greenfield Synergy Wins Leader Chevron Phillips Chemical and QatarEnergy Golden Triangle Polymers Emerson and AspenTech Scale Through M&A: ability to scale with software platform for M&A selected for world-scale chemical facility Revenue: customer wh
Slide 21: $1.7B NI Acquisition Advances Emerson's Focus Into Test & Measurement
$1.7B ~20% NI Acquisition Advances Emerson’s Global 2023 Net Sales Software % Of Sales Automation Focus Into Test & Measurement Strong Automation Technology SOFTWARE 23% • LabVIEW • TestStand Semiconductor 31% & Electronics • Optimal + • FlexLogger Portfolio (Other) 2023 End CONTROL Market • PXI Con
Slide 22: Operational Excellence
Operational Excellence E M E R S O N | 22
Slide 23: Emerson Management System Drives New Portfolio and Value Creation Framework
Emerson Management System Drives New Portfolio and Value Creation Framework Management Process Culture Increased focus on enterprise, Empowering team agility, balance of to deliver results growth and profit Innovation Commercial Excellence Systematic approach to identify, Comprehensive go-to-market
Slide 24: Established Track Record of Strong Financial and Operational Performance
Established Track Record of Strong Financial and Operational Performance Driven by Emerson Management System Sales Gross Profit Margins $18.0 ~$17.4B1 51.00% $17.0 50.00% 49.0% $15.2B 49.00% $16.0 48.00% $13.8B $15.0 $13.5B 45.7% $12.9B 47.00% $14.0 $12.3B 44.9% 46.00% 44.3% $13.0 43.9% 45.00% $12.0
Slide 25: Committed to Disciplined Capital Allocation
Organic Growth Accelerating innovation through new processes and focus on breakthrough technologies Strategic Acquisitions Committed to Strategic acquisitions to strengthen automation portfolio and diversify end markets Disciplined Capital Allocation Dividend Returning cash to shareholders through a
Slide 26: Appendix
Appendix E M E R S O N | 26
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) 2024 Earnings Per Share 2019 2020 2021 2022 2023 Guidance Earnings per share (GAAP) $2.42 $2.02 $2.35 $3.16 $3.96 $2.82 - $
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Adjusted Segment EBITA 2019 2020 2021 2022 2023 Net Sales $13,535 $12,283 $12,932 $13,804 $15,165 Pretax earnings (GAAP) 1,
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Emerson Acquisitions Adjusted Gross Profit Margin FY23 Acquired businesses gross profit margin (GAAP) ~70% Acquired busines
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures This information reconciles non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts) Emerson Sales in Addition to Annualized Emerson Basis NI FY23 FY23 Sales (GAAP) ~$15B NI Sales on 2023 Emerson fiscal year
Slide 31: Endnotes
Endnotes Continuing Operations: With the June 6, 2024 definitive agreement to completely exit its remaining interests in the Copeland joint venture, Emerson will report financial results for the Copeland equity ownership as discontinued operations for all periods presented, beginning in Q3 2024. The
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