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PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 1
Bringing The Connected Enterprise to Life with Strong Performance and New PartnershipsJ.P. Morgan Aviation, Transportation, and Industrial Conference | March 7, 2019
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 2
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 IN OUR SEC FILINGS.
THIS PRESENTATION ALSO CONTAINS NON-GAAP FINANCIAL INFORMATION AND
RECONCILIATIONS TO GAAP ARE INCLUDED IN THE APPENDIX. ALL INFORMATION
SHOULD BE READ IN CONJUNCTION WITH OUR HISTORICAL FINANCIAL STATEMENTS.
Safe Harbor Statement
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 3
80+COUNTRIES
23,000$6.7BFISCAL 2018 SALES
Rockwell Automation
EMPLOYEES
OUR STRATEGY IS TO BRING THE CONNECTED ENTERPRISE TO LIFEWe integrate control and information across the enterprise to help industrial
companies and their people be more productive.
at A GLANCE
VALUE CREATIONABOVE-MARKET GROWTH | PRODUCTIVITY | INTELLECTUAL CAPITAL
TOTAL SHAREOWNERRETURN HISTORY S&P 500 Index
0
100
200
300
400
500
600
700
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 4
Q1 SummaryStrong year-over-year growth
Logix growth of 7%
Process growth of 5%
Double-digit growth in Information Solutions and Connected Services
Growth led by consumer and heavy industries; transportation down
A good start to the fiscal year
Adjusted EPS of $2.21 13%
Segment operating margin of 22.8% 40bps
Organic sales 5.7%
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 5
Fiscal 2019 GuidanceAs of January 29, 2019
2019 GUIDANCE
Sales Midpoint ~ $6.9BOrganic Growth Range 3.7% to 6.7%Currency Translation ~ (1.5)%
Segment Operating Margin ~ 22%
Adjusted Effective Tax Rate ~ 19.5%
Adjusted EPS $8.85 - $9.25
Free Cash Flow as a % of Adjusted Income ~ 100%
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 6
What we did
PTC Strategic Partnership
Winning with and without an installed base
ROK and PTC formed a strategic alliance to sell IoT software under common brand
Exclusive relationship
ROK invested $1B
PTC Board of Directors seat
Providing more value to our customers
Created the most comprehensive and innovative software portfolio in the industry
Profitable growth from incremental software and services revenue
We are becoming more important to our customers, which gives us more ways to win
Customer wins across a broad range of industries and geographies
Growing funnel of opportunities
Converging technology roadmaps
Significant progress in cross-training our commercial and technical resources
Accelerating Information Solutions and Connected Services growth
Why we did it Where we are now
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 7
FactoryTalk InnovationSuite - Early WinsDiversity of wins across geographies and industries
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 8
First fully integrated Digital Oilfield Automation solutions provider
The transaction is expected to close in the summer of 2019, subject to regulatory approvals and other customary conditions
Announcing …
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 9
The Oilfield TodayCustomers’ biggest challenges
Well Head, Monitoring
& Artificial Lift
Gathering, Separation & Surface Processing and Process Automation
Terminals & Storage
Custody Transfer
Pipelines
Down Hole Sensing & Measurement
ON AND OFF SHORE
Sub Sea Operations
Offshore Production
Floating Production & Storage
Enterprise
Rockwell Automationassets embedded
throughout the Oilfield Drives Controllers HMII/O …
Many disparate assets
Remote assets are not connected
Many manual processes
Scarcity of technical experts
Increased focus on cost reduction
Project and risk management
Safety and security
Limited resources
C H A L L E N G E S
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 10
Solving Customer ChallengesCreating first fully integrated Digital Oilfield Automation solutions provider
Volatility
Pressure on profit margins
Market consolidation
Optimize / expand capacity while minimizing capital investment
INDUSTRY TRENDS
Faster time to market
Operational productivity
Asset management and reliability
Enterprise risk management
CUSTOMER NEEDS
Measurement and data connectivity for insight & analytics
Artificial Lift – optimization and life extension of oil wells
Integrated process automation
SENSIA CUSTOMER OUTCOMES
Complete lifecycle and process automation solutions from well to terminal
~$5B Upstream PAM for Digital Oilfields
Currently no single end-to-end solution provider or unified technology platform
Market projected to growdouble digits
OPPORTUNITIES FOR GROWTH
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 11
Sensia – creating the industry leader in Digital Oilfield and Automation
Complementary Expertise
Production Optimization Analytics
Complementary Technologies
Well & Reservoir Analysis
Measurement & Instrumentation
Enterprise-Wide Visualization & Analytics
Production ManagementSoftware
Digital Oilfield Domain Expertise
Real-Time Control, Data & Asset Connectivity
Oil & Gas Process Automation
Production Optimization Implementation
Packaged Artificial Lift
Leveraging both companies’ technology and expertise
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 12
Joint Venture Structure
~1,000 employees~$400M initial revenue
HQ Location: Houston, TX>80 countries served
People
Domain Expertise
Technology & Businesses
~$250M PAYMENT AT CLOSING
53% 47%
~500 employees
Oil & Gas
Control & IoT CapabilitiesOil & Gas Solutions & Services Software & AnalyticsArtificial Lift
People
Domain Expertise
Technology & Businesses
~500 employees
Oil & Gas
MeasurementInstrumentation
Software & AnalyticsArtificial Lift
Estimated closing and operations begin in summer 2019
Focused on Solutions
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Sensia’s Differentiated OfferingWill provide an integrated offering vs project-based partnerships
Secure, scalable solutions integrated into one technology platform (cloud or on premise) Integrated process control, safety & information
solutions Single point of responsibility for contract management Committed & fully integrated technology roadmap Deep domain expertise and global footprint
End-to-end solutions – from measurement to production optimization to process automation
MEASUREMENTARTIFICIAL
LIFTPROCESS
AUTOMATIONDATA
MANAGEMENT APPLICATIONS
Maturity Key High Medium Low
Industry’s first Digital Oilfield Automation solutions provider
ROK
SLB
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 14
So How Does it All Work?
Customer Outcomes
Improved visibility to disconnected data Elimination of manual process to drive
production efficiencies Asset optimization and automation Safety and security
(both personnel and assets)
Real-Time Control & Process Automation
Wells & Artificial Lift
Operational Assets &
Equipment
Well Pad
Data Connectivity & Orchestration
Production Optimization
Example of Upstream Oil & Gas Application
Field DevicesAssets
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 15
Sensia’s Estimated Initial Revenue Mix
By StreamBy Region
80%
Upstream
15%
Midstream
5%
Downstream
EMEA
North America
Asia Pacific
41%
27%
19%
13%
LatinAmerica
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 16
Sensia’s Estimated Financial Impact on ROK
Free cash flow yield > 10% in FY22
FY19 estimated EPS impact of ~$(0.05) Includes start-up costs, deal fees, tax benefit Assumes June 30, 2019 close
FY20 incremental sales >$200M
FY20 Sensia EBITDA % at ~ ROK average
FY20 EPS impact expected to be neutral (includes ~$0.10 of intangible amortization and set-up costs)
Financial Return to Rockwell
JV consolidated in ROK’s financial results effective at closing
SLB’s 47% share will be shown as a minority interest
Reported in CP&S Segment
Accelerating profitable sales growth
Accounting
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 17
Acquisitions and Inorganic InvestmentsSensia addresses key areas of focus
INFORMATION SOLUTIONSCONNECTED SERVICES
PROCESS EXPERTISE
EUROPE / ASIA
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Capital StructureMaintaining strong financial flexibility
Maintain “A” credit rating ~$500M cash Targeting ~2.0X Adjusted
Debt / EBITDA Flexibility to temporarily
increase leverage to ~3.5X Adj. Debt/EBITDA for strategic acquisitions
FRAMEWORK
* Cash and cash equivalents, short-term investments, and long-term investments (fixed income securities).** EBITDA = Net Income + Interest Expense + Provision for Income Taxes + Depreciation & Amortization (trailing 12 months). FY19 based on mid-point of guidance as of January 29, 2019.*** Estimate based on Moody’s Investors Service methodology, which treats pension underfunding and leases as debt.
9/30/2017 9/30/2018 9/30/2019E
$2.8B
$1.8B
$(1.0)B
1.4X
2.2X
$1.1B
$1.8B
$0.7B
1.1X
1.9X
~$0.5B
~$2.2B
~$1.7B
~1.4X
~2.0X
Cash & Investments*
Total Debt
Net Debt
Total Debt / EBITDA**
Adj. Debt / EBITDA***
Targeting $1B of Share Repurchases in FY19
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 19
Summary
Good start to the fiscal year
FactoryTalk InnovationSuite – early customer wins
Sensia – creating first fully integrated Digital Oilfield Automation solutions provider
Focus on continued successful execution, including our PTC partnership and Sensia JV
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 20
AppendixReconciliation to Non-GAAP Measures
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 21
21
Fiscal 2019 Guidance(in billions, except percentages and per share amounts)
Organic Sales Fiscal 2019 Guidance
Organic sales growth 3.7% to 6.7%Foreign currency impact ~ (1.5)%Reported sales growth 2.2% - 5.2%
Segment Operating Margin
Total sales (a) $ ~ 6.9
Total segment operating earnings (b) $ ~ 1.5
Costs not allocated to segments ~ 0.2
Income before income taxes (c) $ ~ 1.3
Total segment operating margin (b/a) ~ 22%Pretax margin (c/a) ~ 20%
Reconciliation to Non-GAAP Measures
Adjusted Effective Tax Rate
Effective tax rate ~ 21.0%
Tax effect of non-operating pension and postretirement credit ~ 0%
Tax effect of change in fair value of investments (1.5)%
Adjusted Effective Tax Rate ~ 19.5%
Adjusted EPSDiluted EPS from continuing operations $7.33 - $7.73
Non-operating pension and postretirement credit, net of tax (0.08)
Change in fair value of investments, net of tax 1.60
Adjusted EPS $8.85 - $9.25
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 22
Organic Sales(in millions, except percentages)
Three Months Ended December 31,2018 2017
Sales(a)
Effect ofChanges inCurrency
SalesExcluding
Changes inCurrency
Effect ofAcquisitions
OrganicSales(b) Sales(c)
Effect of Divestitures
Sales Excluding
Divestitures
Sales Growth (a)/(c)
Organic Growth (b)/(c)
North America $ 998.8 $ 3.8 $ 1,002.6 $ — $ 1,002.6 $ 943.9 $ — $ 943.9 5.8% 6.2%EMEA 294.4 10.8 305.2 — 305.2 307.4 — 307.4 (4.2)% (0.7)%Asia Pacific 214.4 9.3 223.7 — 223.7 214.5 — 214.5 —% 4.3%Latin America 134.7 10.1 144.8 — 144.8 120.8 — 120.8 11.5% 19.9%
Total $ 1,642.3 $ 34.0 $ 1,676.3 $ — $ 1,676.3 $ 1,586.6 $ — $ 1,586.6 3.5% 5.7%
Three Months Ended December 31,2018 2017
Sales(a)
Effect ofChanges inCurrency
SalesExcluding
Changes inCurrency
Effect ofAcquisitions
OrganicSales(b) Sales(c)
Effect of Divestitures
Sales Excluding
Divestitures
Sales Growth (a)/(c)
Organic Growth (b)/(c)
Architecture & Software $ 753.1 $ 16.4 $ 769.5 $ — $ 769.5 $ 735.6 $ — $ 735.6 2.4% 4.6%Control Products & Solutions 889.2 17.6 906.8 — 906.8 851.0 — 851 4.5% 6.6%
Total $ 1,642.3 $ 34.0 $ 1,676.3 $ — $ 1,676.3 $ 1,586.6 $ — $ 1,586.6 3.5% 5.7%
Reconciliation to Non-GAAP Measures
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 23
Segment Operating Margin(in millions, except percentages) Three Months Ended Three Months Ended
December 31, 2018 December 31, 2017Sales
Architecture & Software (a) $ 753.1 $ 735.6Control Products & Solutions (b) 889.2 851.0
Total sales (c) $ 1,642.3 $ 1,586.6
Segment operating earningsArchitecture & Software (d) $ 237.0 $ 224.2Control Products & Solutions (e) 137.9 131.2
Total segment operating earnings (f) 374.9 $ 355.4
Purchase accounting depreciation and amortization (4.1) (4.4)General corporate - net (21.9) (24.0)Non-operating pension and postretirement benefit (credit) costs 2.6 (5.8)Costs related to unsolicited Emerson proposals — (11.2)Loss on investments (246.4) —Valuation adjustments related to the registration of PTC securities 33.7 —Interest (expense) income, net (18.0) (12.2)Income before income taxes (g) $ 120.8 $ 297.8
Segment operating margin:Architecture & Software (d/a) 31.5 % 30.5 %Control Products & Solutions (e/b) 15.5 % 15.4 %Total segment operating margin (f/c) 22.8 % 22.4 %
Pretax margin (g/c) 7.4 % 18.8 %
Reconciliation to Non-GAAP Measures
PUBLIC | Copyright ©2019 Rockwell Automation, Inc. 24
Adjusted Income, Adjusted EPS and Adjusted Effective Tax Rate(in millions, except per share amounts) Three Months Ended
December 31, 2018 December 31, 2017Net Income $ 80.3 $ (236.4)
Non-operating pension and postretirement benefit (credit) cost (2.6) 5.8Tax effect of non-operating pension and postretirement benefit (credit) cost 0.3 (1.8)Costs related to unsolicited Emerson proposals — 11.2Tax effect of costs related to unsolicited Emerson proposals — (3.1)Change in fair value of investments 212.7 —Tax effect of the change in fair value of investments (21.7) —Effects of the Tax Act — 479.7
Adjusted Income $ 269.0 $ 255.4
Diluted EPS $ 0.66 $ (1.84)Non-operating pension and postretirement benefit (credit) cost (0.02) 0.06Tax effect of non-operating pension and postretirement benefit (credit) cost — (0.01)Costs related to unsolicited Emerson proposals — 0.09Tax effect of costs related to unsolicited Emerson proposals — (0.02)Change in fair value of investments 1.75 —Tax effect of the change in fair value of investments (0.18) —Effects of the Tax Act — 3.68
Adjusted EPS $ 2.21 $ 1.96
Effective tax rate 33.5 % 179.4 %Tax effect of non-operating pension and postretirement benefit (credit) cost — % 0.3 %Tax effect of costs related to unsolicited Emerson proposals — % 0.3 %Tax effect of the change in fair value of investments (14.8) % — %Effects of the Tax Act — % (161.1) %
Adjusted Effective Tax Rate 18.7 % 18.9 %
Non-operating pension and postretirement benefit costs(in millions) Three Months Ended
December 31, 2018 December 31, 2017Interest cost $ 40.2 $ 39.4Expected return on plan assets (61.2) (61.2)Amortization of prior service credit (1.1) (1.1)Amortization of net actuarial loss 19.7 28.7Settlements (0.2) —Non-operating pension and postretirement benefit (credit) costs $ (2.6) $ 5.8
Reconciliation to Non-GAAP Measures
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Logix and Process Sales Growth
Three Months EndedDecember 31, 2018
LogixLogix reported growth 4%
Effect of currency translation 3%Logix organic growth 7%
ProcessProcess reported growth 2%
Effect of currency translation 3%Process organic growth 5%
Reconciliation to Non-GAAP Measures
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