- Reported and organic sales down (8.4%) year over year
- Total ARR up 17% year over year
- Diluted EPS of $2.02, down (41.4)%; includes a restructuring
charge of $0.46
- Adjusted EPS of $2.71, down (10.0)% year over year
- Updates fiscal 2024 reported sales growth guidance target to ~
(8.5)%; organic sales growth target to ~ (10.0)%
- Updates fiscal 2024 diluted EPS guidance target to ~ $8.32;
adjusted EPS guidance target to ~ $9.60
Rockwell Automation, Inc. (NYSE: ROK) today reported third
quarter fiscal 2024 results.
"Rockwell delivered another quarter of good execution with
sales, margin, and EPS all above our expectations. I’m particularly
pleased with the progress we are making on driving productivity to
support our long-term margin expansion targets. We are already
seeing the benefit from these actions this fiscal year and expect
to drive margin growth and productivity through FY25 and beyond. On
the demand side, we did see additional project delays this quarter,
with customers citing weaker consumer demand, high interest rates,
and policy uncertainty around tax, tariffs, and stimulus incentives
as the main drivers for deferring their investment plans.
Therefore, while we saw progress on inventory de-stocking at our
distributors and machine builders in Q3, our low-single-digit
sequential growth in orders was lower than we expected," said Blake
Moret, Chairman and CEO.
Fiscal Q3 2024 Financial
Results
Fiscal 2024 third quarter sales were $2,051 million, down 8.4%
from $2,239 million in the third quarter of fiscal 2023. Organic
sales decreased 8.4%, currency translation decreased sales by 0.6%,
and acquisitions increased sales by 0.6%.
Fiscal 2024 third quarter Net income attributable to Rockwell
Automation was $232 million or $2.02 per share, compared to $400
million or $3.45 per share in the third quarter of fiscal 2023. The
decreases in Net income attributable to Rockwell Automation and
diluted EPS were primarily due to lower sales volume and lower
pre-tax margin. Fiscal 2024 third quarter adjusted EPS was $2.71,
down 10.0% compared to $3.01 in the third quarter of fiscal 2023
primarily due to lower sales volume and lower segment operating
margin.
Pre-tax margin was 12.4% in the third quarter of fiscal 2024
compared to 21.1% in the same period last year. The decrease in
pre-tax margin was primarily due to lower sales volume, prior year
PTC investment gain, and restructuring charges, partially offset by
lower incentive compensation.
Total segment operating earnings were $427 million in the third
quarter of fiscal 2024, down 9.8% from $473 million in the same
period of fiscal 2023. Total segment operating margin was 20.8%
compared to 21.1% a year ago. The decrease in segment operating
margin was primarily due to lower sales volume and unfavorable mix,
partially offset by positive price/cost, lower incentive
compensation, and the benefits from cost reduction actions.
Cash flow generated by operating activities in the third quarter
of fiscal 2024 was $279 million, compared to $282 million in the
third quarter of fiscal 2023. Free cash flow in the third quarter
of fiscal 2024 was $238 million, compared to $240 million in the
same period last year. Decreases in cash flow provided by operating
activities and free cash flow were primarily due to lower pre-tax
income partially offset by decreases in working capital.
Fiscal Year 2024 Outlook
The table below provides updated guidance for sales growth and
earnings per share for fiscal 2024.
Updated Guidance
Prior Guidance
Reported sales growth
~ (8.5)%
(6.0)% - (4.0)%
Organic sales growth (1)
~ (10.0)%
(8.0)% - (6.0)%
Inorganic sales growth
~ 1.5%
~ 1.5%
Currency translation
~ 0.0%
~ 0.5%
Diluted EPS
~ $8.32
$8.80- $9.80
Adjusted EPS (1)
~ $9.60
$10.00- $11.00
(1) Organic sales growth and Adjusted EPS are non-GAAP measures.
See Other Supplemental Information for detail on these non-GAAP
measures.
"We expect continued sequential order growth in the fourth
quarter and into our next fiscal year, but at a more gradual pace
than we originally expected. We are reducing our fiscal 2024
guidance to reflect this pace. Margins will continue to show the
positive impact of productivity actions and pricing. We believe
Rockwell is an outsized beneficiary of new capacity investments in
our home market of North America, and while manufacturers are
taking a pause in adding capacity, Rockwell and our customers
continue to invest in resilience, agility, and sustainability.
Rockwell’s technology portfolio, domain expertise, and ecosystem
are uniquely positioned to help customers in these areas,” Moret
continued.
Following is a discussion of third quarter results for our
business segments.
Intelligent Devices
Intelligent Devices third quarter fiscal 2024 sales were $957
million, a decrease of 1.1% compared to $968 million in the same
period last year. Organic sales decreased 1.2%, currency
translation decreased sales by 0.6%, and acquisitions increased
sales by 0.7%. Segment operating earnings were $194 million
compared to $163 million in the same period last year. Segment
operating margin increased to 20.2% from 16.8% a year ago. The
increase from prior year was driven by positive price/cost, lower
incentive compensation, and the benefits from cost reduction
actions, partially offset by lower sales volume.
Software & Control
Software & Control third quarter fiscal 2024 sales were $512
million, a decrease of 31.8% compared to $751 million in the same
period last year. Organic sales decreased 31.3% and currency
translation decreased sales by 0.5%. Segment operating earnings
were $121 million compared to $262 million in the same period last
year. Segment operating margin decreased to 23.6% from 34.8% a year
ago, driven by lower sales volume partially offset by positive
price/cost, lower incentive compensation, and the benefits from
cost reduction actions.
Lifecycle Services
Lifecycle Services third quarter fiscal 2024 sales were $581
million, an increase of 11.8% compared to $520 million in the same
period last year. Organic sales increased 11.3%, acquisitions
increased sales by 1.3% and currency translation decreased sales by
0.8%. Segment operating earnings were $112 million compared to
$48.4 million in the same period last year. Segment operating
margin was 19.3% compared to 9.3% a year ago driven by lower
incentive compensation, higher sales volume, strong project
execution, and ongoing savings from the prior year structural
actions.
Supplemental Information
ARR - Total ARR grew 17% and Organic ARR grew 14% compared to
the end of the third quarter of fiscal 2023.
Corporate and other - Fiscal 2024 third quarter Corporate and
other expense was $28.6 million compared to $32.3 million in the
third quarter of fiscal 2023.
Purchase accounting depreciation and amortization - Fiscal 2024
third quarter Purchase accounting depreciation and amortization
expense was $35.6 million, up $8.4 million from the third quarter
of fiscal 2023 primarily related to the acquisitions of Clearpath
Robotics and Verve Industrial Protection.
Restructuring charges - Fiscal 2024 third quarter restructuring
charges were $69.8 million, which relate to actions in conjunction
with an enterprise-wide comprehensive program to optimize cost
structure and expand margins. The charges are primarily related to
severance benefits.
Tax - On a GAAP basis, the effective tax rate in the third
quarter of fiscal 2024 was 9.4% compared to 15.5% in the third
quarter of fiscal 2023. The adjusted effective tax rate for the
third quarter of fiscal 2024 was 13.3% compared to 14.1% in the
prior year. These decreases were primarily due to higher discrete
benefits recognized in the current year.
Share repurchases - During the third quarter of fiscal 2024, the
Company repurchased approximately 0.6 million shares of its common
stock at a cost of $161.2 million. At June 30, 2024, approximately
$0.5 billion remained available under our existing share repurchase
authorization.
Return on Invested Capital (ROIC) - ROIC was 16.0% for the
twelve months ended June 30, 2024, compared to 20.9% for the twelve
months ended June 30, 2023. The decrease is primarily driven by a
lower pre-tax net income.
Definitions
Non-GAAP Measures - Organic sales, total segment operating
earnings, total segment operating margin, adjusted income, adjusted
EPS, adjusted effective tax rate, free cash flow, free cash flow
conversion, and ROIC are non-GAAP measures that are reconciled to
GAAP measures in the attachments to this release.
Total ARR - 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 defined as a revenue stream that is contractual, typically for a
period of 12 months or more, and has a high probability of renewal.
The probability of renewal is based on historical renewal
experience of the individual revenue streams, or management's best
estimates if historical renewal experience is not available. Total
ARR growth is calculated as the dollar change in ARR, adjusted to
exclude the effects of currency, divided by ARR as of the prior
period. The effects of currency translation are excluded by
calculating Total ARR on a constant currency basis. Total ARR
includes acquisitions even if there was no comparable ARR in the
prior period. We believe that Total ARR provides useful information
to investors because it reflects our recurring revenue performance
period over period including the effect of acquisitions. Our
measure of ARR may be different from measures used by other
companies. Because ARR is based on annual contract value, it does
not represent revenue recognized during a particular reporting
period or revenue to be recognized in future reporting periods and
is not intended to be a substitute for revenue, contract
liabilities, or backlog.
Organic ARR - Organic ARR growth is calculated as the dollar
change in ARR, adjusted to exclude the effects of currency
translation and acquisitions, divided by ARR as of the prior
period. The effects of currency translation are excluded by
calculating Organic ARR on a constant currency basis. When we
acquire businesses, we exclude the effect of ARR in the current
period for which there was no comparable ARR in the prior period.
We believe that Organic ARR provides useful information to
investors because it reflects our recurring revenue performance
period over period without the effect of acquisitions and changes
in currency exchange rates. Organic ARR growth is also used as a
financial measure of performance for our annual incentive
compensation.
Conference Call
A conference call to discuss the quarterly results will be held
at 8:30 a.m. Eastern Time on August 7, 2024. The call will be an
audio webcast and accessible on the Rockwell Automation website
(www.rockwellautomation.com/en-us/investors.html). Presentation
materials will also be available on the website prior to the
call.
Interested parties can access the conference call by using the
following numbers: (888) 330-2022 in the U.S. and Canada; (646)
960-0690 for other countries. Use the following passcode: 5499533.
Please call in 10 minutes prior to the start of the call.
Both the presentation materials and a replay of the call will be
available on the Investor Relations section of the Rockwell
Automation website through September 7, 2024.
This news release contains statements (including certain
projections and business trends) that are “forward-looking
statements” as defined in the Private Securities Litigation Reform
Act of 1995. Words such as “believe”, “estimate”, “project”,
“plan”, “expect”, “anticipate”, “will”, “intend”, and other similar
expressions may identify forward-looking statements. Actual results
may differ materially from those projected as a result of certain
risks and uncertainties, many of which are beyond our control,
including but not limited to:
- macroeconomic factors, including inflation, global and regional
business conditions (including adverse impacts in certain markets,
such as Oil & Gas), commodity prices, currency exchange rates,
the cyclical nature of our customers’ capital spending, and
sovereign debt concerns;
- the severity and duration of disruptions to our business due to
pandemics, natural disasters (including those as a result of
climate change), acts of war, strikes, terrorism, social unrest or
other causes, liquidity and financial markets, demand for our
hardware and software products, solutions, and services, our supply
chain, our work force, our liquidity and the value of the assets we
own;
- the availability and price of components and materials;
- the availability, effectiveness, and security of our
information technology systems;
- our ability to attract, develop, and retain qualified
employees;
- our ability to manage and mitigate the risk related to security
vulnerabilities and breaches of our hardware and software products,
solutions, and services;
- the successful integration and management of strategic
transactions and achievement of the expected benefits of these
transactions;
- laws, regulations, and governmental policies affecting our
activities in the countries where we do business, including those
related to tariffs, taxation, trade controls, cybersecurity, and
climate change;
- the successful development of advanced technologies and demand
for and market acceptance of new and existing hardware and software
products;
- our ability to manage and mitigate the risks associated with
our solutions and services businesses;
- the successful execution of our cost productivity
initiatives;
- competitive hardware and software products, solutions, and
services, pricing pressures, and our ability to provide high
quality products, solutions, and services;
- the availability and cost of capital;
- disruptions to our distribution channels or the failure of
distributors to develop and maintain capabilities to sell our
products;
- intellectual property infringement claims by others and the
ability to protect our intellectual property;
- the uncertainty of claims by taxing authorities in the various
jurisdictions where we do business;
- the uncertainties of litigation, including liabilities related
to the safety and security of the hardware and software products,
solutions, and services we sell;
- our ability to manage costs related to employee retirement and
health care benefits; and
- other risks and uncertainties, including but not limited to
those detailed from time to time in our Securities and Exchange
Commission (SEC) filings.
Rockwell Automation, Inc. (NYSE: ROK), is a global leader in
industrial automation and digital transformation. We connect the
imaginations of people with the potential of technology to expand
what is humanly possible, making the world more productive and more
sustainable. Headquartered in Milwaukee, Wisconsin, Rockwell
Automation employs approximately 29,000 problem solvers dedicated
to our customers in more than 100 countries. To learn more about
how we are bringing The Connected Enterprise(R) to life across
industrial enterprises, visit www.rockwellautomation.com.
ROCKWELL AUTOMATION,
INC.
CONDENSED STATEMENT OF
OPERATIONS INFORMATION
(in millions, except
percentages)
Three Months Ended June
30,
Nine Months Ended June
30,
2024
2023
2024
2023
Sales (a)
$
2,050.6
$
2,238.7
$
6,228.7
$
6,495.1
Cost of sales (1)
(1,255.8
)
(1,323.3
)
(3,805.9
)
(3,833.6
)
Gross profit (b)
794.8
915.4
2,422.8
2,661.5
Selling, general and administrative
expenses (2) (c)
(500.6
)
(501.4
)
(1,515.7
)
(1,472.1
)
Change in fair value of investments
(3)
(5.0
)
85.7
0.9
289.3
Other income (expense)
6.8
6.5
30.5
(83.3
)
Interest expense
(41.0
)
(34.4
)
(113.5
)
(104.3
)
Income before income taxes
255.0
471.8
825.0
1,291.1
Income tax provision
(23.9
)
(73.1
)
(115.9
)
(218.8
)
Net income
231.1
398.7
709.1
1,072.3
Net loss attributable to noncontrolling
interests
(0.9
)
(1.5
)
(4.3
)
(12.2
)
Net income attributable to Rockwell
Automation, Inc.
$
232.0
$
400.2
$
713.4
$
1,084.5
Gross profit as percent of sales
(b/a)
38.8
%
40.9
%
38.9
%
41.0
%
SG&A as percent of sales
(c/a)
24.4
%
22.4
%
24.3
%
22.7
%
(1) Cost of sales in the three and nine
months ended June 30, 2024, includes $23.2 million of restructuring
charges.
(2) Selling, general and administrative
expenses in the three and nine months ended June 30, 2024, includes
of $46.6 million of restructuring charges.
(3) Amount in the three and nine months
ended June 30, 2023, primarily relates to the change in fair value
of our previous investment in PTC.
ROCKWELL AUTOMATION,
INC.
SALES AND EARNINGS
INFORMATION
(in millions, except per share
amounts and percentages)
Three Months Ended June
30,
Nine Months Ended June
30,
2024
2023
2024
2023
Sales
Intelligent Devices (a)
$
957.3
$
968.1
$
2,858.1
$
2,927.5
Software & Control (b)
512.1
750.6
1,685.7
2,065.0
Lifecycle Services (c)
581.2
520.0
1,684.9
1,502.6
Total sales (d)
$
2,050.6
$
2,238.7
$
6,228.7
$
6,495.1
Segment operating earnings
Intelligent Devices (e)
$
193.5
$
163.1
$
504.7
$
579.4
Software & Control (f)
120.6
261.5
417.9
678.1
Lifecycle Services (g)
112.4
48.4
263.6
100.6
Total segment operating earnings (1)
(h)
426.5
473.0
1,186.2
1,358.1
Purchase accounting depreciation and
amortization
(35.6
)
(27.2
)
(108.3
)
(79.8
)
Corporate and other
(28.6
)
(32.3
)
(96.8
)
(88.8
)
Non-operating pension and postretirement
benefit credit (cost)
4.9
5.5
14.7
(87.5
)
Change in fair value of investments
(5.0
)
85.7
0.9
289.3
Restructuring charges
(69.8
)
—
(69.8
)
—
Interest expense, net
(37.4
)
(32.9
)
(101.9
)
(100.2
)
Income before income taxes (i)
255.0
471.8
825.0
1,291.1
Income tax provision
(23.9
)
(73.1
)
(115.9
)
(218.8
)
Net income
231.1
398.7
709.1
1,072.3
Net loss attributable to noncontrolling
interests
(0.9
)
(1.5
)
(4.3
)
(12.2
)
Net income attributable to Rockwell
Automation, Inc.
$
232.0
$
400.2
$
713.4
$
1,084.5
Diluted EPS
$
2.02
$
3.45
$
6.19
$
9.34
Adjusted EPS (2)
$
2.71
$
3.01
$
7.25
$
8.48
Diluted weighted average outstanding
shares
114.2
115.6
114.7
115.6
Pre-tax margin (i/d)
12.4
%
21.1
%
13.2
%
19.9
%
Intelligent Devices segment operating
margin (e/a)
20.2
%
16.8
%
17.7
%
19.8
%
Software & Control segment operating
margin (f/b)
23.6
%
34.8
%
24.8
%
32.8
%
Lifecycle Services segment operating
margin (g/c)
19.3
%
9.3
%
15.6
%
6.7
%
Total segment operating margin (1)
(h/d)
20.8
%
21.1
%
19.0
%
20.9
%
(1) Total segment operating earnings and
total segment operating margin are non-GAAP financial measures. We
exclude purchase accounting depreciation and amortization,
corporate and other, non-operating pension and postretirement
benefit credit, change in fair value of investments, restructuring
charges aligned with enterprise-wide strategic initiatives,
interest expense, net, and income tax provision because we do not
consider these items to be directly related to the operating
performance of our segments. We believe total segment operating
earnings and total segment operating margin are useful to investors
as measures of operating performance. We use these measures to
monitor and evaluate the profitability of our operating segments.
Our measures of total segment operating earnings and total segment
operating margin may be different from measures used by other
companies.
(2) Adjusted EPS is a non-GAAP earnings
measure that excludes purchase accounting depreciation and
amortization, non-operating pension and postretirement benefit
credit (cost), change in fair value of investments, restructuring
charges aligned with enterprise-wide strategic initiatives, and net
loss attributable to noncontrolling interests, including their
respective tax effects. See "Other Supplemental Information -
Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate"
section for more information regarding non-operating pension and
postretirement benefit credit (cost) and a reconciliation to GAAP
measures.
ROCKWELL AUTOMATION,
INC.
CONDENSED BALANCE SHEET
INFORMATION
(in millions)
June 30, 2024
September 30,
2023
Assets
Cash and cash equivalents
$
406.7
$
1,071.8
Receivables
1,875.1
2,167.4
Inventories
1,356.4
1,404.9
Property, net
735.6
684.2
Operating lease right-of-use assets
406.0
349.4
Goodwill and intangibles
5,054.1
4,381.6
Other assets
1,354.7
1,244.7
Total
$
11,188.6
$
11,304.0
Liabilities and Shareowners’
Equity
Short-term debt
$
1,124.5
$
103.3
Accounts payable
844.2
1,150.2
Long-term debt
2,559.3
2,862.9
Operating lease liabilities
332.9
285.3
Other liabilities
2,824.3
3,158.9
Shareowners' equity attributable to
Rockwell Automation, Inc.
3,325.7
3,561.6
Noncontrolling interests
177.7
181.8
Total
$
11,188.6
$
11,304.0
ROCKWELL AUTOMATION,
INC.
CONDENSED CASH FLOW
INFORMATION
(in millions)
Nine Months Ended June
30,
2024
2023
Operating activities:
Net income
$
709.1
$
1,072.3
Depreciation and amortization
236.2
182.0
Change in fair value of investments
(1)
(0.9
)
(289.3
)
Retirement benefits expense
13.5
118.5
Pension contributions
(18.7
)
(18.5
)
Receivables/inventories/payables
86.1
(799.7
)
Contract liabilities
15.5
119.8
Compensation and benefits
(297.1
)
74.9
Income taxes
(293.7
)
(49.2
)
Other operating activities
(18.5
)
124.3
Cash provided by operating activities
431.5
535.1
Investing activities:
Capital expenditures
(159.8
)
(97.3
)
Acquisition of businesses, net of cash
acquired
(749.2
)
(168.0
)
Purchases of investments
(10.0
)
(5.2
)
Proceeds from sale of investments
—
355.2
Other investing activities
(1.0
)
3.9
Cash (used for) provided by investing
activities
(920.0
)
88.6
Financing activities:
Net issuance (repayment) of short-term
debt
702.6
(74.1
)
Issuance of short-term debt, net of
issuance costs
18.8
—
Repayment of debt
—
(18.8
)
Cash dividends
(429.3
)
(406.9
)
Purchases of treasury stock
(476.7
)
(257.1
)
Proceeds from the exercise of stock
options
32.4
75.4
Other financing activities
(34.8
)
(27.7
)
Cash used for financing activities
(187.0
)
(709.2
)
Effect of exchange rate changes on
cash
1.8
29.7
Decrease in cash, cash equivalents, and
restricted cash (2)
$
(673.7
)
$
(55.8
)
(1) Amount in the nine months ended June
30, 2023, primarily relates to the change in fair value of our
previous investment in PTC.
(2) Cash, cash equivalents, and restricted
cash at June 30, 2023, and September 30, 2023, includes restricted
cash of $8.6 million recorded in Other assets in the Condensed
Balance Sheet.
ROCKWELL AUTOMATION,
INC.
OTHER SUPPLEMENTAL
INFORMATION
(in millions, except
percentages)
Organic Sales
We translate sales of subsidiaries operating outside of the
United States using exchange rates effective during the respective
period. Therefore, changes in currency exchange rates affect our
reported sales. Sales by acquired businesses also affect our
reported sales. We believe that organic sales, defined as sales
excluding the effects of acquisitions and changes in currency
exchange rates, which is a non-GAAP financial measure, provides
useful information to investors because it reflects regional and
operating segment performance from the activities of our businesses
without the effect of acquisitions and changes in currency exchange
rates. We use organic sales as one measure to monitor and evaluate
our regional and operating segment performance. When we acquire
businesses, we exclude sales in the current period for which there
are no comparable sales in the prior period. We determine the
effect of changes in currency exchange rates by translating the
respective period’s sales using the same currency exchange rates
that were in effect during the prior year. When we divest a
business, we exclude sales in the prior period for which there are
no comparable sales in the current period. Organic sales growth is
calculated by comparing organic sales to reported sales in the
prior year, excluding divestitures. We attribute sales to the
geographic regions based on the country of destination.
The following is a reconciliation of reported sales to organic
sales for the three and nine months ended June 30, 2024, compared
to sales for the three and nine months ended June 30, 2023:
Three Months Ended June
30,
2024
2023
Reported Sales
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales
Reported Sales
North America
$
1,268.4
$
12.0
$
(2.4
)
$
1,258.8
$
1,260.9
EMEA
355.3
0.9
(3.7
)
358.1
494.4
Asia Pacific
260.9
0.4
(7.7
)
268.2
343.5
Latin America
166.0
0.3
(0.6
)
166.3
139.9
Total
$
2,050.6
$
13.6
$
(14.4
)
$
2,051.4
$
2,238.7
Nine Months Ended June
30,
2024
2023
Reported Sales
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales
Reported Sales
North America
$
3,809.1
$
59.6
$
(1.7
)
$
3,751.2
$
3,750.4
EMEA
1,142.5
8.5
17.4
1,116.6
1,353.7
Asia Pacific
806.4
4.5
(18.3
)
820.2
974.2
Latin America
470.7
0.3
16.3
454.1
416.8
Total
$
6,228.7
$
72.9
$
13.7
$
6,142.1
$
6,495.1
The following is a reconciliation of reported sales to organic
sales for our operating segments for the three and nine months
ended June 30, 2024, compared to sales for the three and nine
months ended June 30, 2023:
Three Months Ended June
30,
2024
2023
Reported Sales
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales
Reported Sales
Intelligent Devices
$
957.3
$
7.1
$
(6.4
)
$
956.6
$
968.1
Software & Control
512.1
—
(3.8
)
515.9
750.6
Lifecycle Services
581.2
6.5
(4.2
)
578.9
520.0
Total
$
2,050.6
$
13.6
$
(14.4
)
$
2,051.4
$
2,238.7
Nine Months Ended June
30,
2024
2023
Reported Sales
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales
Reported Sales
Intelligent Devices
$
2,858.1
$
51.6
$
8.2
$
2,798.3
$
2,927.5
Software & Control
1,685.7
—
4.9
1,680.8
2,065.0
Lifecycle Services
1,684.9
21.3
0.6
1,663.0
1,502.6
Total
$
6,228.7
$
72.9
$
13.7
$
6,142.1
$
6,495.1
The following is a reconciliation of reported sales growth to
organic sales growth for the three and nine months ended June 30,
2024, compared to sales for the three and nine months ended June
30, 2023:
Three Months Ended June 30,
2024
Reported Sales Growth
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales Growth
North America
0.6
%
1.0
%
(0.2
)%
(0.2
)%
EMEA
(28.1
)%
0.2
%
(0.7
)%
(27.6
)%
Asia Pacific
(24.0
)%
0.1
%
(2.2
)%
(21.9
)%
Latin America
18.7
%
0.2
%
(0.4
)%
18.9
%
Total
(8.4
)%
0.6
%
(0.6
)%
(8.4
)%
Nine Months Ended June 30,
2024
Reported Sales Growth
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales Growth
North America
1.6
%
1.6
%
—
%
—
%
EMEA
(15.6
)%
0.6
%
1.3
%
(17.5
)%
Asia Pacific
(17.2
)%
0.5
%
(1.9
)%
(15.8
)%
Latin America
12.9
%
0.1
%
3.9
%
8.9
%
Total
(4.1
)%
1.1
%
0.2
%
(5.4
)%
The following is a reconciliation of reported sales growth to
organic sales growth for our operating segments for the three and
nine months ended June 30, 2024, compared to sales for the three
and nine months ended June 30, 2023:
Three Months Ended June 30,
2024
Reported Sales Growth
Less: Effect of
Acquisitions
Effect of Changes
in Currency
Organic Sales Growth
Intelligent Devices
(1.1
)%
0.7
%
(0.6
)%
(1.2
)%
Software & Control
(31.8
)%
—
%
(0.5
)%
(31.3
)%
Lifecycle Services
11.8
%
1.3
%
(0.8
)%
11.3
%
Total
(8.4
)%
0.6
%
(0.6
)%
(8.4
)%
Nine Months Ended June 30,
2024
Reported Sales Growth
Less: Effect
of Acquisitions
Effect of
Changes in
Currency
Organic Sales Growth
Intelligent Devices
(2.4
)%
1.8
%
0.2
%
(4.4
)%
Software & Control
(18.4
)%
—
%
0.2
%
(18.6
)%
Lifecycle Services
12.1
%
1.4
%
—
%
10.7
%
Total
(4.1
)%
1.1
%
0.2
%
(5.4
)%
ROCKWELL AUTOMATION,
INC.
OTHER SUPPLEMENTAL
INFORMATION
(in millions, except per share
amounts and percentages)
Adjusted Income, Adjusted EPS, and
Adjusted Effective Tax Rate
Adjusted income, adjusted EPS, and adjusted effective tax rate
are non-GAAP earnings measures that exclude non-operating pension
and postretirement benefit (credit) cost, purchase accounting
depreciation and amortization attributable to Rockwell Automation,
change in fair value of investments, restructuring charges aligned
with enterprise-wide strategic initiatives, and Net loss
attributable to noncontrolling interests, including their
respective tax effects. In 2024, we updated the definition of our
non-GAAP earnings measures to exclude significant restructuring
charges aligned with enterprise-wide strategic initiatives. In the
three and nine months ended June 30, 2024, we recognized these
restructuring charges in conjunction with an enterprise-wide
comprehensive program to optimize cost structure and expand
margins. We believe the change to our definition provides a more
useful presentation of our operating performance to investors as
these restructuring charges are significant and enterprise-wide
severance actions and not reflective of our ongoing operations. We
did not revise prior years because there were no similar
restructuring actions with significant costs.
We believe that adjusted income, adjusted EPS, and adjusted
effective tax rate provide useful information to our investors
about our operating performance and allow management and investors
to compare our operating performance period over period. Adjusted
EPS is also used as a financial measure of performance for our
annual incentive compensation. Our measures of adjusted income,
adjusted EPS, and adjusted effective tax rate may be different from
measures used by other companies. These non-GAAP measures should
not be considered a substitute for Net income attributable to
Rockwell Automation, diluted EPS, and effective tax rate.
The following are the components of operating and non-operating
pension and postretirement benefit cost (credit):
Three Months Ended June
30,
Nine Months Ended June
30,
2024
2023
2024
2023
Service cost
$
9.4
$
9.6
$
28.2
$
31.0
Operating pension and postretirement
benefit cost
9.4
9.6
28.2
31.0
Interest cost
37.2
35.9
111.8
115.7
Expected return on plan assets
(42.2
)
(44.0
)
(126.9
)
(147.0
)
Amortization of prior service cost
—
0.1
—
0.1
Amortization of net actuarial loss
(gain)
0.1
0.3
0.4
(1.4
)
Settlement charge
—
2.2
—
120.1
Non-operating pension and postretirement
benefit (credit) cost
(4.9
)
(5.5
)
(14.7
)
87.5
Net periodic pension and postretirement
benefit cost
$
4.5
$
4.1
$
13.5
$
118.5
The components of net periodic pension and postretirement
benefit cost other than the service cost component are included in
Other income (expense) in the Condensed Statement of
Operations.
The following are reconciliations of Net income attributable to
Rockwell Automation, diluted EPS, and effective tax rate to
adjusted income, adjusted EPS, and adjusted effective tax rate,
respectively:
Three Months Ended June
30,
Nine Months Ended June
30,
2024
2023
2024
2023
Net income attributable to Rockwell
Automation
$
232.0
$
400.2
$
713.4
$
1,084.5
Non-operating pension and postretirement
benefit (credit) cost
(4.9
)
(5.5
)
(14.7
)
87.5
Tax effect of non-operating pension and
postretirement benefit (credit) cost
1.0
1.2
3.0
(21.6
)
Purchase accounting depreciation and
amortization attributable to Rockwell Automation
32.8
24.1
99.9
70.7
Tax effect of purchase accounting
depreciation and amortization attributable to Rockwell
Automation
(5.6
)
(5.9
)
(17.1
)
(17.3
)
Change in fair value of investments
(1)
5.0
(85.7
)
(0.9
)
(289.3
)
Tax effect of change in fair value of
investments (1)
(1.2
)
20.7
(0.5
)
70.0
Restructuring charges (2)
69.8
—
69.8
—
Tax effect of restructuring charges
(2)
(17.6
)
—
(17.6
)
—
Adjusted income
$
311.3
$
349.1
$
835.3
$
984.5
Diluted EPS
$
2.02
$
3.45
$
6.19
$
9.34
Non-operating pension and postretirement
benefit (credit) cost
(0.04
)
(0.05
)
(0.13
)
0.76
Tax effect of non-operating pension and
postretirement benefit (credit) cost
0.01
0.01
0.02
(0.19
)
Purchase accounting depreciation and
amortization attributable to Rockwell Automation
0.28
0.21
0.87
0.61
Tax effect of purchase accounting
depreciation and amortization attributable to Rockwell
Automation
(0.05
)
(0.05
)
(0.15
)
(0.15
)
Change in fair value of investments
(1)
0.04
(0.74
)
(0.01
)
(2.50
)
Tax effect of change in fair value of
investments (1)
(0.01
)
0.18
—
0.61
Restructuring charges (2)
0.61
—
0.61
—
Tax effect of restructuring charges
(2)
(0.15
)
—
(0.15
)
—
Adjusted EPS
$
2.71
$
3.01
$
7.25
$
8.48
Effective tax rate
9.4
%
15.5
%
14.0
%
16.9
%
Tax effect of non-operating pension and
postretirement benefit (credit) cost
(0.2
)%
(0.1
)%
(0.1
)%
0.5
%
Tax effect of purchase accounting
depreciation and amortization attributable to Rockwell
Automation
0.4
%
0.6
%
0.2
%
0.5
%
Tax effect of change in fair value of
investments (1)
0.3
%
(1.9
)%
0.1
%
(1.7
)%
Tax effect of restructuring charges
(2)
3.4
%
—
%
0.9
%
—
%
Adjusted effective tax rate
13.3
%
14.1
%
15.1
%
16.2
%
(1) Amount in the three and nine months
ended June 30, 2023, primarily relates to the change in fair value
of our previous investment in PTC.
(2) Restructuring charges include $64.7
million for severance benefits and $5.1 million for strategic
advisory services related to the enterprise-wide severance
actions.
Fiscal 2024 Guidance
Diluted EPS (1)
~ $8.32
Non-operating pension and postretirement
benefit credit
(0.17)
Tax effect of non-operating pension and
postretirement benefit credit
0.04
Purchase accounting depreciation and
amortization attributable to Rockwell Automation
1.16
Tax effect of purchase accounting
depreciation and amortization attributable to Rockwell
Automation
(0.20)
Change in fair value of investments
(2)
(0.01)
Tax effect of change in fair value of
investments (2)
—
Restructuring charges
0.61
Tax effect of restructuring charges
(0.15)
Adjusted EPS (1)
~ $9.60
Effective tax rate
~ 15.4%
Tax effect of non-operating pension and
postretirement benefit credit
~ (0.1)%
Tax effect of purchase accounting
depreciation and amortization attributable to Rockwell
Automation
~ 0.1%
Tax effect of change in fair value of
investments (2)
~ —%
Tax effect of restructuring charges
~ 0.6%
Adjusted effective tax rate
~ 16.0%
(1) Fiscal 2024 guidance based on adjusted
income attributable to Rockwell, which includes an adjustment for
SLB's non-controlling interest in Sensia.
(2) The actual year-to-date adjustments
are used for guidance, as estimates of these adjustments on a
forward-looking basis are not available due to variability,
complexity, and limited visibility of these items.
Note: Guidance as of August 7, 2024
ROCKWELL AUTOMATION,
INC.
OTHER SUPPLEMENTAL
INFORMATION
(in millions, except
percentages)
Free Cash Flow
Our definition of free cash flow, which is a non-GAAP financial
measure, takes into consideration capital investments required to
maintain the operations of our businesses and execute our strategy.
In our opinion, free cash flow provides useful information to
investors regarding our ability to generate cash from business
operations that is available for acquisitions and other
investments, service of debt principal, dividends, and share
repurchases. We use free cash flow, as defined, as one measure to
monitor and evaluate our performance, including as a financial
measure for our annual incentive compensation. Our definition of
free cash flow may be different from definitions used by other
companies.
The following table summarizes free cash flow by quarter:
Sep. 30, 2022
Dec. 31, 2022
Mar. 31, 2023
Jun. 30, 2023
Sep. 30, 2023
Dec. 30, 2023
Mar. 31, 2024
Jun. 30, 2024
Cash provided by operating activities
$
399.4
$
66.3
$
187.1
$
281.7
$
839.5
$
32.6
$
119.8
$
279.1
Capital expenditures
(40.8
)
(24.2
)
(31.5
)
(41.6
)
(63.2
)
(67.9
)
(51.2
)
(40.7
)
Free cash flow
$
358.6
$
42.1
$
155.6
$
240.1
$
776.3
$
(35.3
)
$
68.6
$
238.4
Free cash flow conversion (free cash flow as a percentage of
adjusted income) is a non-GAAP financial measure, which reflects
our ability to generate cash from the operations of our business
while considering the capital investments required to maintain
operations and execute our strategy as a ratio of our operating
performance. We believe free cash flow conversion provides useful
information to investors about our ability to convert operating
performance into cash generation. Our measure of free cash flow
conversion may be different from measures used by other
companies.
The table below provides free cash flow conversion for the three
months ended June 30, 2024 and 2023:
Quarter Ended
Jun. 30, 2024
Jun. 30, 2023
Free cash flow (a)
$
238.4
$
240.1
Adjusted income (b)
311.3
349.1
Free cash flow conversion (a/b)
77
%
69
%
Return On Invested
Capital
Our press release contains information regarding ROIC, which is
a non-GAAP financial measure. We believe that ROIC is useful to
investors as a measure of performance and of the effectiveness of
the use of capital in our operations. We use ROIC as one measure to
monitor and evaluate our performance. Our measure of ROIC may be
different from that used by other companies. We define ROIC as the
percentage resulting from the following calculation:
(a) Net income, before Interest expense,
Income tax provision, and purchase accounting depreciation and
amortization, divided by;
(b) average invested capital for the year,
calculated as a five quarter rolling average using the sum of
Short-term debt, Long-term debt, Shareowners’ equity, and
accumulated amortization of goodwill and other intangible assets,
minus Cash and cash equivalents, short-term investments, and
long-term investments (fixed income securities), multiplied by;
(c) one minus the effective tax rate for the
period.
ROIC is calculated as follows (in millions, except
percentages):
Twelve Months Ended
June 30,
2024
2023
(a) Return
Net income
$
914.8
$
1,408.3
Interest expense
144.6
137.1
Income tax provision
227.6
288.6
Purchase accounting depreciation and
amortization
292.9
105.6
Return
$
1,579.9
$
1,939.6
(b) Average invested capital
Short-term debt
$
740.6
$
947.2
Long-term debt
2,747.3
2,986.7
Shareowners’ equity
3,675.6
3,189.6
Accumulated amortization of goodwill and
intangibles
1,293.8
1,049.9
Cash and cash equivalents
(566.4
)
(466.6
)
Short-term and long-term investments
(0.5
)
(6.5
)
Average invested capital
$
7,890.4
$
7,700.3
(c) Effective tax rate
Income tax provision
227.6
288.6
Income before income taxes
$
1,142.4
$
1,696.9
Effective tax rate
19.9
%
17.0
%
(a) / (b) * (1-c) Return On Invested
Capital
16.0
%
20.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807204210/en/
Ed Moreland Media Relations Rockwell Automation 571.296.0391
Aijana Zellner Investor Relations Rockwell Automation
414.382.8510
Grafico Azioni Rockwell Automation (NYSE:ROK)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Rockwell Automation (NYSE:ROK)
Storico
Da Feb 2024 a Feb 2025
