Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q4 2019 Earnings Presentation
28 slides from Rockwell Automation's earnings presentation, Nov 12, 2019
Slide 1: Fiscal Year 2019 Fourth Quarter Conference Call
Fiscal Year 2019 Fourth Quarter Conference Call November 12, 2019 PUBLIC 1
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 Q4 and Full Year Results
Fiscal 2019 Q4 and Full Year Results Q4 HIGHLIGHTS FY 2019 HIGHLIGHTS ▪ Organic sales +1.4% YOY ▪ Organic sales +2.8% YOY – Growth across a broad range of industries – Led by oil & gas, mining, and life sciences, ▪ Led by oil & gas, mining, and life partially offset by automotive and sciences semico
Slide 4: Fiscal 2019 Q4 and Full Year Organic Sales Growth
Fiscal 2019 Q4 and Full Year Organic Sales Growth Fourth Quarter * • North America decline driven by weakness in semiconductor and power generation; offset by North America 59% strength in oil & gas, automotive, and mining Q4: (1.2)% EMEA 19% FY: +1.6% Q4: +4.2% • EMEA strength led by growth in FY:
Slide 5: Key Financial Information: Q4
Key Financial Information: Q4 (in millions, except per share amounts) Q4 2019 Q4 2018 YOY B/(W) 1 Organic Growth +1.4% Inorganic Growth +0.1% SALES $1,730 $1,730 Currency Translation (1.5)% Reported Growth —% SEGMENT OPERATING MARGIN 20.2% 20.8% (60) bps GENERAL CORPORATE - NET $36 $18 $(18) ADJUSTE
Slide 6: Key Financial Information: Full Year
Key Financial Information: Full Year (in millions, except per share amounts) 1 2019 2018 YOY B/(W) Organic Growth +2.8% SALES $6,695 $6,666 Currency Translation (2.4)% Reported Growth +0.4% SEGMENT OPERATING MARGIN 22.0% 21.6% 40 bps GENERAL CORPORATE - NET $109 $100 $(9) ADJUSTED EPS $8.67 $8.10 7%
Slide 7: Fiscal 2019 Q4 Segment Results
Fiscal 2019 Q4 Segment Results SEGMENT OPERATING (in millions) SALES HIGHLIGHTS MARGIN • Organic sales growth across core platforms • Segment operating margin declined 190 bps YOY $781 26.2% driven by lower volume leverage and restructuring ARCHITECTURE +0.9% reported (190) bps • Segment operating m
Slide 8: Fiscal 2020 guidance
Fiscal 2020 guidance Full year outlook Sales Midpoint ~ $7.0B Organic Growth Range (1.5)% - 1.5% Inorganic Growth ~ 4% Currency Translation ~ (0.5)% Segment Operating Margin ~ 21.5% Adjusted Effective Tax Rate1 ~ 16.0% Adjusted EPS2 $8.70 - $9.10 Free Cash Flow as a % of Adjusted Income ~ 100% Note:
Slide 9: Fiscal 2019 to Fiscal 2020 Midpoint Adjusted EPS Walk
Fiscal 2019 to Fiscal 2020 Midpoint Adjusted EPS Walk ~ 0.05 ~ (0.10) ~ 0.25 ~ (0.10) ~ 0.20 ~ (0.10) $8.90 $8.67 FY19 Actual Core Sensia Net Interest Pension & FX Share Count FY20 Guidance (excl. Interest)1 Expense 2 Benefits Mid-point 1 Sensia consists of the incremental operating earnings, intang
Slide 10: Simplified Industry Segmentation
Simplified Industry Segmentation Heavy Process Discrete Industries Consumer Other Auto MAC Other Multi-Ind Food & Bev Metals Pulp & & Other Paper Chem Gen Ind Power Pulp & HPC Paper Semi Chemical Life Sci Tire Oil & Metals Gas Other Mining Tire Food & Eco Ind Bev Oil & Gas Auto HPC Life Sci Other Tr
Slide 11: New Industry Segmentation
New Industry Segmentation % of FY19 Sales Discrete Hybrid Process ~10% Automotive ~20% Food & Beverage ~10% Oil & Gas ~5% Semiconductor ~5% Life Sciences ~5% Mining, Aggregates & ~5% General Industries ~5% Household & Personal Care Cement (MAC) • Warehousing & Logistics ~5% Tire ~5% Metals • Printin
Slide 12: Fiscal 2020 Organic Sales Outlook by Industry Segment
Fiscal 2020 Organic Sales Outlook by Industry Segment % of FY19 FY20 FY19 Sales vs. FY18 vs. FY19 Assumptions at Guidance Mid-Point Discrete Down mid single Down low single x Automotive flat ~ 25% digits digits z Semiconductor down mid single digits Hybrid y Life Sciences up mid single digits ~ 40%
Slide 13: Appendix
Appendix Supplemental Financial Information and Reconcilations to Non-GAAP Measures 13
Slide 14: Fourth Quarter Results: Summary
Fourth Quarter Results: Summary (in millions, except per share amounts) Q4 2019 Q4 2018 Total Sales $ 1,730.2 $ 1,729.5 Total Segment Operating Earnings $ 349.0 $ 358.9 Purchase Accounting Depreciation and Amortization (4.1) (4.2) General Corporate - Net (36.4) (18.2) Non-operating pension and postr
Slide 15: Free Cash Flow
Free Cash Flow (in millions) Q4 2019 FY 2019 Net Income $ 8 $ 696 Depreciation/Amortization 40 152 Retirement Benefits Expense 19 71 Receivables/Inventory/Payables 149 (1) Compensation and Benefits 29 (45) Pension Contributions (9) (31) Income Taxes(1) 19 (48) Change in fair value of investments(2)
Slide 16: 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, 2019 2018 Sales Sales Organic Effect of Excluding Growth Growth Changes in Changes in Effect of Organic (Decline) (Decline) Sales(a) Currency Currency Acquisitions Sales(b) Sales(c) (
Slide 17: 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, 2019 2018 Sales Sales Currency Organic Effect of Excluding Growth Growth Acquisition Growth Changes in Changes in Effect of Organic (Decline) (Decline) Growth (Decline) Sales(a) Curre
Slide 18: 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, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Sales Architecture & Software (a) $ 781.2 $ 774.4 $ 3,021.9 $ 3,050.2 Control Products & S
Slide 19: 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, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net Income $ 8.1 $ 345.9 $ 695.8 $ 535.5 Non-o
Slide 20: 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 September 30, 2019 2018 (a) Return Income from continuing operations $ 695.8 $ 535.5 Interest expense 98.2 73.0 Income tax provision 205.2 795.3 Purchase accounting depreciation and a
Slide 21: Reconciliation to Non-GAAP Measures: Logix and Process Control
Reconciliation to Non-GAAP Measures Logix and Process Control Sales Growth Three Months Ended Twelve Months Ended September 30, 2019 September 30, 2019 Logix Logix reported growth 2 % (2) % Effect of currency translation 1 % 3 % Logix organic growth 3 % 1 % Process Control Process reported growth (4
Slide 22: Reconciliation to Non-GAAP Measures: Fiscal 2020 Guidance
Reconciliation to Non-GAAP Measures Fiscal 2020 Guidance (in billions, except percentages and per share amounts) Organic Sales Fiscal 2020 Guidance Organic sales growth (1.5)% - 1.5% Inorganic sales growth ~ 4% Foreign currency impact ~ (0.5)% Reported sales growth 2% - 5% Segment Operating Margin T
Slide 23: 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 24: Reporting Changes - Statement of Operations Impact on Q4 FY18
Fiscal 2019 Reporting Changes - Statement of Operations Impact on Q4 FY18 (in millions, except per share amounts) Fiscal Year 2018 - Quarter 4 Originally Pension/ Reported Postretirement Recast Sales $ 1,729.5 $ — $ 1,729.5 Cost of sales (996.9) 3.5 (993.4) Gross profit 732.6 3.5 736.1 Selling, gene
Slide 25: Reporting Changes - Segment P&L Impact on Q4 FY18
Fiscal 2019 Reporting Changes - Segment P&L Impact on Q4 FY18 (in millions, except per share amounts and percentages) Fiscal Year 2018 - Quarter 4 Originally Segment Pension/ Interest Reported Realign. Postretirement Income Recast Sales Architecture & Software (a) $ 787.2 $ (12.8) $ — $ — $ 774.4 Co
Slide 26: Reporting Changes - Statement of Operations Impact on FY18
Fiscal 2019 Reporting Changes - Statement of Operations Impact on FY18 (in millions, except per share amounts) Fiscal Year 2018 Originally Pension/ Reported Postretirement Recast Sales $ 6,666.0 $ — $ 6,666.0 Cost of sales (3,793.8) 12.7 (3,781.1) Gross profit 2,872.2 12.7 2,884.9 Selling, general a
Slide 27: Reporting Changes - Segment P&L Impact on FY18
Fiscal 2019 Reporting Changes - Segment P&L Impact on FY18 (in millions, except per share amounts and percentages) Fiscal Year 2018 Originally Segment Pension/ Interest Reported Realign. Postretirement Income Recast Sales Architecture & Software (a) $ 3,098.2 $ (48.0) $ — $ — $ 3,050.2 Control Produ
Slide 28: Thank you
Thank you www.rockwellautomation.com 28