2014 Investor Conference Emerson Overview David N. Farr Chairman and Chief Executive Officer February 13, 2014 Safe Harbor Statement Our commentary and responses to your questions may contain forward-looking statements, including our…
Investor Conference Agenda Thursday, February 13, 2014 Time Title Presenter 9:00 10:30am Emerson Overview David Farr (Charles Peters) 10:30 10:50am Process Management Mike Train 10:50 11:10am Network Power Scott Barbour 11:10…
Investor Conference Emerson Attendees Corporate David Farr Chairman and Chief Executive Officer Frank Dellaquila Executive Vice President and Chief Financial Officer Ed Monser President and Chief Operating Officer Steve Pelch Vice…
2013 Performance Scorecard Highlights (Positives) Headwinds (Negatives) Record GP margin, with 3 of 5 Softer than expected global segments improving profitability macroeconomics especially in fixed investment (capital) Robust cash…
Execution on Key Priorities in 2013 and Implications Moving Forward Pro Forma 2013 Reported 2013 Excl. EC&P* Record operating cash flow in 2013, Y/Y Chg. Y/Y Chg. with some headwinds next year from: Sales 24.7B 1% 23.5B 2% Emerging…
2013 Performance Scorecard Highlights (Positives) Headwinds (Negatives) Record GP margin, with 3 of 5 Softer than expected global segments improving profitability macroeconomics especially in fixed investment (capital) Robust cash…
This slide has been omitted 8
Gross Fixed Investment Forecasts One Year Outlook: 2013-2014E 2012-2013 GFI Growth 3.4% United States 2013-14E 4.0% 1.5% Canada MATURE 2.0% Mature (3.4%) Western Europe 1.5% 3% 0.8% Japan 5.0% 1.2% Australia & New…
Improvement in Asia and Europe Expected to Lift Underlying Sales Growth* to 3-5% in 2014 Canada Excludes EC&P 2012 2013 2014E Europe 9% 4% 2-4% 2012 2013 2014E China (1%) (3%) 0-2% 2012 2013 2014E United States (4%) 2% 6-8% 2012…
Capital Deployment More Balanced in 2014, as Acquisition Investments Accelerate B 4 3.9 Acquisitions 3.5 Repurchase 3 Dividends 1.2B Spent 1.5 YTD 2.1 2.3 2.8 2.2 2 0.2 0.2 1.1 0.9 0.8 0.8 1 0.1 1.0 1.0 1.2 1.2 1.2 0 2010…
Acceleration in Acquisitions in 2014 Provide Strategic Technologies and Growth Opportunities Appleton Group Virgo Engineers Enardo Sales: 520M Sales: 250M Sales: 65M Location: Rosemont, IL Location: Pune, India Location: Tulsa, OK…
With a Foundation Laid During the Recent Low Growth Economy, Better Growth Opportunities Are Now Emerging 2011 was a bounce off the 2008/2009 recession, but it was quickly followed by two slow growth years that were basically…
With a Foundation Laid During the Recent Low Growth Economy, Better Growth Opportunities Are Now Emerging 2011 was a bounce off the 2008/2009 recession, but it was quickly followed by two slow growth years that were basically…
2010 2013 Growth Has Been Slower Than Expected For Typical Recovery, But Still Solid B 2010 2013 Sales Waterfall 25 24.7 24 2013 2% 23 2012 4% 22 6% 21.0 Underlying 2011 CAGR 21 11% 20 19 18 17 16 15 2010 2010 FX…
European Economy Has Been The Biggest Headwind on Emersons Growth For Over Two Years But It Has Turned Europe GFI 2011 2012 2013 2014 5% 4.5% 3.8% 4.1% 2010 Expectation 3.6% 3.2% 3.2% 3.3% 3.4% 3.2% 3.4% 3.3% 3.2% 3.2% 3.3%…
Our Emerging Markets Business Continues to Expand, But Mature Markets Have Felt the Headwinds From the European Recession 2003 - 2008 2008 - 2010 2010 - 2013 CAGR CAGR CAGR Mature Markets 6B 10% (2B) (8%) 2B 5% Emerging…
2010 2013 Emerging Markets Sales Growth vs. GFI Growth 30% Bubble Size Represents Sales Growth 2013 Sales 25% Mexico UAE 2 x GFI 20% Turkey Russia Indonesia GFI +1 15% Saudi Arabia Singapore Brazil Africa Taiwan Malaysia…
2010 2013 Achievements: Emerging Markets and Portfolio Management Growth of Emerging Markets Portfolio Management Groveley U.S. share has declined Virgo Engineers 10 Bolt-On U.S. but will Enardo Acquisitions remain stable…
2010 2013 Achievements: Solid Growth in Service and Solutions and China Mid-Tier Programs Service and Solutions China Mid-Tier of Products 2013 Launched in Mid-Tier Sales B 2012 & 2013 Sales 3.0 Climate 2.5B 9 300M…
Payout Ratio Returning Cash to Shareholders Operating Cash Flow 3.2B 3.1B 3.6B 9.9B 70% Target payout 64% 63% 63% 61% range 60% % of Operating Cash Flow 50% 26% 31% 29% 29% 40% Share Repurchase 30% Dividends 20% 38%…
With a Foundation Laid During the Recent Low Growth Economy, Better Growth Opportunities Are Now Emerging 2011 was a bounce off the 2008/2009 recession, but it was quickly followed by two slow growth years that were basically…
Global GFI Trends Are Improving Slightly and Should Allow Emerson to Drive a Small Growth Premium Avg GFI (1.5%) Avg GFI 3.8% Avg GFI 1.5% Avg GFI 5.6% 15% Avg Sales Avg Sales Avg Sales Avg Sales Growth 8.0% Growth (6.9%) Growth…
Gross Fixed Investment Forecasts One Year and Three Year Outlook: 2013 2016F 3 Year 2012-2013 GFI Growth CAGR 3.4% United States 4.0% 2013-14E 4.5% 2013-16F 2.0% 1.5% Canada MATURE 2.5% Mature 1.5% (3.4%) Western Europe…
Mature Markets Investment Opportunities North America shale oil and gas U.S. residential recovery will continue to production has proven a strong area of support growth at Climate Technologies investment for Process Managements and…
Mature Markets Investment Opportunities Process Management will continue to Industrial Automations mature benefit from investments in natural European channels will benefit from the resources early stage economic recovery Canada…
Emerging Markets Investment Opportunities Emerson will continue to prosper in this Emerson has consistently outpaced region, particularly Process Management, GFI in this region and is poised for Network Power, Climate Technologies,…
Emerging Markets Investment Opportunities Along with Southeast Asia, China will Significant opportunities for key Emerson account for 60+% of Emersons emerging programs such as Service & Solutions, market growth over the next three…
Moving Forward, We See Better Global Growth Opportunities, and an Improving Mix of Business After two and a half years of cost cutting and carefully selecting growth investments, we now face moderate, but improving, global growth --…
We Will Utilize the Solid Foundation Established in 2010-2013 to Invest for Stronger Growth Foundation developed during the 2010 2013 period provides robust platform to capitalize on the economic upturn Record level of growth…
Emersons Near-Term Playbook To Win and Create Shareholder Value in 2014-2016 1. Expand levers that enable premium sales and profit growth Capital investments for global Customer engagement through penetration digital user experiences,…
Emersons Near-Term Playbook To Win and Create Shareholder Value in 2014-2016 2013-2016 2010-2016 2010 20131 2016T CAGR1 CAGR Sales 21.0B 24.7B 27-29B 3-6% 4-6% GP % 39.6% 40.3% 42.3% +200 bps +270bps TARGET EBIT % excl. Charges*…
Emersons Near-Term Playbook To Win and Create Shareholder Value in 2014-2016 1. Expand levers that enable premium sales and profit growth Capital investments for global Customer engagement through penetration digital user experiences,…
Emerging Trends Across Businesses and Industries Present Opportunities to Accelerate Growth and Strengthen Global Franchises Commercial Positive Economic Emerson Process Industrial Network Climate & Residential 2014 Trends Response…
Global Penetration 2010 - 2013: Sizable Capital Investments Geared for Growth and Closeness to Customers Russia Process Minneapolis, Switzerland Management MN Process Process Boulder, CO Management Management Xian Flowmeter…
Global Penetration Selected Key Capital Investments 2013 2016 Sales & Service Network Power Regional HQ China Process Management Global Service Center Louisiana Oil & Gas Center of Excellence United Kingdom Mining Center of…
Global Penetration Capital Investment Profiles Gonzales, LA Service Center InSinkErator Wisconsin Expansion 2014 Increasing disposer production capacity to match customer demand New facility to handle low volume/high mix…
Global Penetration Capital Investment Profiles Middle East Dubai Campus Chile Mining Center of Excellence Opened 2013 Located in Santiago Team of 30+, with members across Emerson businesses Focused on mining projects…
Emerson is Making Major Capacity Global Penetration Investments to Take Advantage of Current Growth Environment Emerging Market Capital Expenditures M Manufacturing Footprint1 900 12.0 850 11.5 Million Square 2014E: 11.0 Feet…
We Will Continue to Invest Global Penetration Globally in Customer Facing People to Increase Sales and Penetration 4,100 4,600 3,600 4,000 500 400 500 700 6,900 8,500 200 1,600 900 1,200 300 2013 2016T Customer…
Global Penetration China Mid-Tier Strategy China Mid-Tier Global High-Tier Price Modified key specs Reduced costs Separate branding Indigenous style Unique sales force Emerson High-Tier and field application Traditional…
Global Penetration China Mid-Tier Phases of Development Mid-Tier Broad Expand to Global 20132016 New 2013 Sales: Under China Specific Mid-Tier Product Launches 800M 75 Development Launch Countries Platform Micro Rosemount…
Process Management Systems and Global Penetration Solutions Has Built A Robust China Mid-Tier Infrastructure Since Introduction in 2010 Market Requirements Engineering Resources Customer input Functionality Price and value Market…
Our Mid-Tier Programs Have Driven Global Penetration Significant Growth in China for Process Management Systems and Solutions Process Management M Systems and Solutions China Sales 250 200 200 175 Mid-Tier 150 110 100…
Global Penetration Climate Technologies China Business M Climate Technologies Key Investments 600 China Sales Residential AC: 540 5HP fixed speed scroll with higher efficiency & multi-refrigerant capabilities Variable speed…
Climate Technologies Sales and Global Penetration Distribution Expansion Moving Into Western China 2010 Distributors 2014E Distributors Tier 3 Tier 2 GDP Growth Tier 1 14% 13% 80 Distributors 80 Customer Facing People…
Technology Development Commitment to Continuous Innovation Through New Product Development 2013 Revenue Core Service & New Service Solutions & Solutions 475 Minor 8% Revision 3% 29% New Products & 27% Core Products Services…
Technology Development Investments in Innovation 2013 Engineering & Engineering & Development Resource Development Spend Deployment 1,000M 841M 696M Sustaining Mature Core Markets Products 46% 49% 2010 2013 2016T New…
Oracle Investments are Critical to Ensure Engagement Customer Continual Progression of Our Customer Experience and Global Franchise Development Oracle Spending Adoption Percentage 2010-13 2014E 2015T 2016T 160M 70M 75M 75M 80%…
Customer Engagement Pan-Emerson Digital Customer Experience Services Model Corporate Marketing Corp. Public Social Todays Industrial Branding Relations Media Customer Expectations Digital Platform Research Emerson.com Business…
Customer Engagement Service & Solutions Evolution Strategy Take-Over of Operation and Trusted Advisor % of Sales Service 2010 2013 2016T Capabilities 9% 10% 12% Evolution Optimize Key Business Franchise Investments:…
We Plan to Open 52 New Service Centers Over The Next 3 Years 2010-2013 Service Centers Increase of: 113 Service Center Locations 2013 2016T 2013-16T We Will Develop Our Service Process Management 390 431 +41 Infrastructure in…
Target Focus Areas of Perfect Execution Customer Engagement To Take Emersons Global Customer Service and Support to the Next Level Design Different Supply Chains to Meet Meet Customer Requested Lead Time on a Unique Customer Needs…
Customer Engagement Transforms Emerson into a Better Global Growth and Customer Driven Company Focus on Growth and Improved All Functions Metrics Connected with Profit & Perfect Execution Common Systems Review UNDERSTAND…
Emersons Near-Term Playbook To Win and Create Shareholder Value in 2014-2016 1. Expand levers that enable premium sales and profit growth Capital investments for global Customer engagement through penetration digital user experiences,…
Emerging Trends Across Businesses and Industries Present Opportunities to Accelerate Growth and Strengthen Global Franchises Commercial Positive Economic Emerson Process Industrial Network Climate & Residential 2014 Trends Response…
Segment Overviews: Process Management 2013 Position Primary Market Dynamics Sales 8.6B Emerging Emerson Employees 36,000 Customer Trend Response Sales by Product Global project Global unconventional Final energy development…
Process Management Franchise Build-out 2013 2016T Customer Deepening Customer Value / Sales 2010 - 2013 Engagement Provide Complete Develop targeted safety, remote management and Solutions reliability solutions 1998 2010 Built…
This slide has been omitted 64
This slide has been omitted 65
Segment Overviews: Industrial Automation Primary Market Dynamics 2013 Position Sales 4.9B Emerging Emerson Customer Trend Response Employees 25,000 More reliable Technology and Sales by Product distributed power service investments…
Industrial Automation Franchise Build-out 2013 2016T Customer Develop a Broader Value / Sales 2000 - 2013 Automation Solution Global Expansion & Create complete discrete Broaden Capabilities control solution 1990 2000 Global…
Industrial Automation Franchise Progression Discrete Current areas of focus Controller I/O and Industrial Networks Human Machine Interface Motion Safety Vision Sensors Controls & Equipment Motion & Power Pre-1990s 1990 -…
This slide has been omitted 69
Segment Overviews: Climate Technologies 2013 Position Primary Market Dynamics Sales 3.9B Emerging Emerson Employees 16,000 Customer Trend Response Sales by Product Energy efficiency and Variable speed & Solutions refrigerant…
Climate Technologies Franchise Build-out 2013 2016T Customer Capitalize on Solutions & Value / Sales 2010 - 2013 Technology Advantage Build Complete Solutions Global launch of variable and Enhance Technology speed and new…
Climate Technologies Total Solution Portfolio Development Leverage system and component intellectual property to deliver 2010 unmatched efficiency, reliability, and Enriched ease of maintenance - and to meet Business global…
Climate Technologies Key Responses to Emerging Opportunities Desire for Increased Efficiency Emerging Market Demand for HVAC Variable Speed Market Opportunity M Sales Forecast MEA North Latin Am. 3% 5% America 60 50+ 13% 40 30…
Segment Overviews: Network Power 2013 Position Primary Market Dynamics Sales 4.9B Emerging Emerson Employees 25,000 Customer Trend Response Sales by Product Demand for Data center DCIM & IT Solutions complete, automated…
Network Power Franchise Growth 2013 2016T Customer Expand Into the Complete Value / Sales Solution Provider 2010 2013 Scaling and roll-out of Develop Systems DCIM solution to global data center customers 2000 2009 Developed…
Network Power Progress Report: 2013 Priorities 2013 Priorities Key Accomplishments 1. Align organization and Added custom air handling to thermal management portfolio offerings for evolving Delivered approximately 100M in…
Network Power Key Messages 2014 is focused on business stabilization and investment for sales growth We are making significant strategic investments to shift the business mix to drive growth and profitability New products,…
Commercial & Residential Solutions: 10-Year Progression and Repositioning 2003 2013 Total Sales: 3.5B Total Sales: 1.9B Professional Appliance 19% Tools Solutions Professional Sales by 24% Product Tools Motors 40% 44% Storage…
Strong Brands and Market Expansion Present Opportunities to Unlock Substantial Growth BUSINESS COMMON Emerson Tool THEMES InSinkErator Ridge Company All rely heavily on consolidated distribution to consumers Distribution…
InSinkErator Growth ProgramsSignificant Growth Grind2Energy U.S. Disposer Penetration Initiative Grind2Energy transforms Total U.S. Households: 130M commercial food waste into a slurry 48% No 52% Disposer Disposer Picked-up in…
Opportunities to Extend Served Market at Ridge and Emerson Tool Company Ridge expands electrical applications and Emerson Tool Company penetration strategy creates collection platform for diagnostics data unlocks 10 billion cleaning…
Creating Stronger Global Franchises to Drive 28B Sales, 4.60 EPS and a 20% ROTC in 2016 Process Climate Industrial Network Power Management Technologies Automation Possess the Necessary Products, Controls, Solutions and…
Improving Economics and Strategic Investment Opportunities Drive More Favorable 3-6% Underlying Sales Growth Outlook: 2013 - 2016 Sales Growth 2013-2016 Through the Cycle 3-6% Growth Range: 5-7% PM 16 Process Management PM CYCLE…
Emersons Near-Term Playbook To Win and Create Shareholder Value in 2014-2016 1. Expand levers that enable premium sales and profit growth Capital investments for global Customer engagement through penetration digital user experiences,…
Acquisitions Are a Growth Lever We Will Use to Help Strengthen Our Global Franchises Customer Technology Transformative Global Penetration Engagement Development Innovation Service and Solutions 12% of Systems, 15% 10% of Sales…
Acquisition and Divestiture Priorities Continue to build-out global franchises with small to medium bolt-on acquisitions Process Management Core process markets that augment our current portfolio and enable us to address customers…
Operating Capital Efficiency Drives Significantly Higher Cash Flow and Returns for Shareholders Sales 20.1B 21.0B 24.2B 24.4B 24.7B 24.8B Average Trade Working Capital1 % to Sales Long Term 4.0B Targets 3.6B 4.3B 4.4B 4.24.3B 4.0B…
Cash Flow Will Remain Robust in 2014 2013 Operating Cash Flow EC&P divestiture will 120M reduce operating cash flow We have three hurdles to overcome in 2014: Strong collections in 2013 100M from elevated receivables in 1. EC&P…
Emersons Near-Term Playbook To Win and Create Shareholder Value in 2014-2016 1. Expand levers that enable premium sales and profit growth Capital investments for global Customer engagement through penetration digital user experiences,…
Senior Level Organizational Updates In addition to serving as a member of the Office of the Chief Executive (OCE), Charles Peters has assumed leadership responsibility for part of our Commercial & Residential Solutions businesses to…
Investment Execution and Portfolio Management Support Continued Sales Expansion B 30 1.5-3.0 27-29B 3-6% Growth 1.0-1.5 25 24.7B (1.2B) 23.5B 20 2013 EC&P 2013 Underlying Additional Acquisitions 2016 Reported Divestiture…
and Drive Further Margin, EPS and ROTC Improvements 2013-2016 2010-2016 2010 20131 2016T CAGR1 CAGR Sales 21.0B 24.7B 27-29B 3-6% 4-6% GP % 39.6% 40.3% 42.3% +200 bps +270bps TARGET EBIT % excl. Charges* 14.9% 16.0% 17.5% +150…
2010 2013 Cash Sources & Uses 100% 10B 10B Dividends 80% 3.4B 34% We returned 63% of cash to our 60% Share shareholders Operating Cash Flow Repurchases 29% 10B 2.8B 40% Acquisitions, 0.2B 2% CapEx 2.0B 20% 20% Net Debt…
2013 2016T Cash Sources & Uses 11B 11B 100% Dividends 80% 4B We will return 60% of cash to our Share shareholders 60% Operating Repurchases Cash Flow 2B - 3B Range 40% 11B 55-64% Acquisitions 2B - 3B 20% CapEx 2B 0% Cash…
Key Messages and Takeaways 1. Over the past three years, Emerson has built a foundation of global capacity and technology investments to leverage for growth once global macroeconomic conditions improved 2. Now, we see building economic…
Key Messages and Takeaways Each of our business segments are uniquely positioning to drive incremental growth and value creation: Process Management - will benefit from strong growth in its core market and is continuing to expand its…
Reconciliation of Non-GAAP Financial Measures 2014E sales % chg. vs PY PM IA NP CT CR&S Total Underlying* 4-5% 2-4% 1-3% 4-6% 3-5% 3-5% Acq/Div/FX 3% 0% (18%) 0% 0% (4%) Reported 7-8% 2-4% (17)-(15%) 4-6% 3-5% (1)-1% Profit margin…
Reconciliation of Non-GAAP Financial Measures Cash flow 2009 2010 2011 2012 2013 2014E Emerson 2013 OCF (in B) 3.1 3.3 3.2 3.1 3.6 3.4 Sales excl. EC&P* 23.5 Capex (in B) (0.5) (0.5) (0.6) (0.7) (0.6) (0.8) EC&P 1.2 FCF* (in B) 2.6…
Loading...
