- Fourth quarter net sales were $5.4 billion, up 8 percent from
the year prior; underlying sales1 were up 12 percent
- Full year net sales were $19.6 billion, up 8 percent from the
year prior; underlying sales were up 9 percent
- Fourth quarter GAAP EPS was $1.24, up 12 percent from the year
prior; adjusted EPS2 was $1.53, up 16 percent
- Full year GAAP EPS was $5.41, up 42 percent from the year
prior; adjusted EPS was $5.25, up 16 percent
- InSinkErator divestiture expected to close today
- Completed 66th year of consecutive increased quarterly
dividends per share; declared increase of quarterly cash dividend
to $0.52 per share of common stock payable December 9, 2022 to
stockholders of record November 11, 2022
Emerson (NYSE: EMR) today reported results for its fourth
quarter and fiscal year ended September 30, 2022.
Fourth quarter net sales were up 8 percent and underlying sales
were up 12 percent. The Americas were up 17 percent, Europe was up
3 percent, and Asia, Middle East & Africa was up 7 percent.
China was up 9 percent. Full year net sales were up 8 percent and
underlying sales were up 9 percent. The Americas were up 14
percent, Europe was up 2 percent, and Asia, Middle East &
Africa was up 5 percent. China was up 7 percent.
Fourth quarter pretax margin of 16.9 percent was up 20 basis
points. Adjusted EBITA margin3 was 23.3 percent, up 260 basis
points. Full year pretax margin of 20.8 percent was up 480 basis
points. Adjusted EBITA margin was 21.6 percent, up 180 basis
points.
Fourth quarter earnings per share were $1.24, up 12 percent.
Adjusted earnings per share were $1.53, up 16 percent. Full year
earnings per share were $5.41, up 42 percent. Adjusted earnings per
share were $5.25, up 16 percent.
Fourth quarter operating cash flow was $1.2 billion, up 42
percent, and free cash flow was $1.0 billion, up 63 percent. Full
year operating cash flow was $2.9 billion, down 18 percent, and
free cash flow was $2.4 billion, down 20 percent. Full year cash
flow results reflected higher working capital due to increased
sales and supply chain constraints throughout the year, and $153
million of tax payments on divestiture gains.
“Fiscal 2022 was a transformational year for Emerson. We made
significant progress on our portfolio and culture transformation
while maintaining our world-class operational execution,” said
Emerson President and Chief Executive Officer Lal Karsanbhai.
“Today's announcement to divest the Climate Technologies business
is a critical milestone in positioning Emerson to be a global
pure-play automation leader. We are energized by the growth and
value creation opportunities enabled by our leading capabilities in
intelligent devices, control systems and software.”
“Emerson closed out a strong 2022 with 9 percent growth in
underlying sales and a 16 percent increase in adjusted earnings per
share,” Karsanbhai continued. “Continued strength in automation
demand and our robust backlog give us confidence in our 2023 sales
guidance. Our operational execution will also lead to strong
margins and cash flow conversion. Finally, I would like to thank
our global employees for their hard work throughout 2022 and I look
forward to future success as a global automation leader.”
Business Platform
Results
Automation Solutions4 September trailing three-month
underlying orders5 were up 6 percent and backlog of $5.8 billion
was up 14 percent versus the prior year.
Fourth quarter net sales were up 7 percent, with underlying
sales up 13 percent. The Americas were up 21 percent, Europe was
flat and Asia, Middle East & Africa was up 10 percent. China
was up 14 percent. Full year net sales were up 4 percent, with
underlying sales up 7 percent. The Americas were up 14 percent,
Europe was down 1 percent and Asia, Middle East & Africa was up
5 percent. China was up 11 percent.
Fourth quarter segment EBIT margin increased 290 basis points to
22.3 percent and adjusted segment EBITA6 margin increased 190 basis
points to 24.6 percent. Full year segment EBIT margin increased 270
basis points to 20.0 percent and adjusted segment EBITA margin
increased 190 basis points to 22.2 percent.
Commercial & Residential Solutions September trailing
three-month underlying orders were up 7 percent and backlog of $1.2
billion was up 16 percent versus the prior year.
Fourth quarter net sales increased 2 percent, with underlying
sales up 10 percent. The Americas were up 12 percent, Europe was up
12 percent and Asia, Middle East & Africa was down 2 percent.
China was down 8 percent. Full year net sales increased 9 percent,
with underlying sales up 13 percent. The Americas were up 15
percent, Europe was up 11 percent and Asia, Middle East &
Africa was up 5 percent. China was down 7 percent.
Fourth quarter segment EBIT margin increased 230 basis points to
20.4 percent and adjusted segment EBITA margin increased 250 basis
points to 21.9 percent. Full year segment EBIT margin decreased 60
basis points to 19.9 percent and adjusted segment EBITA margin
decreased 70 basis points to 20.9 percent.
AspenTech7 fourth quarter net sales were $251 million.
Segment EBIT margin was negative 15.2 percent, including $121
million of intangibles amortization, and adjusted segment EBITA
margin was 32.9 percent. Full year net sales were $656 million.
Segment EBIT margin was 1.9 percent and adjusted segment EBITA
margin was 38.0 percent.
2023 Updated Outlook
Following the announcement of its Climate Technologies
divestiture, Emerson will report financial results for Climate
Technologies, InSinkErator and Therm-O-Disc as discontinued
operations for all periods presented, beginning in 2023. The
earnings from discontinued operations for 2023 are expected to be
$10 billion to $11 billion, or $17 to $19 per share, including the
net gains on 2023 divestitures.
The Company's 2023 continuing operations after the Climate
Technologies divestiture (assumed to close March 31, 2023 for the
purposes of guidance) will include interest income from the $2.25
billion note receivable from Climate Technologies and reflect the
45% common equity ownership in the income, or loss, of Climate
Technologies. Emerson will not control Climate Technologies
post-closing and is therefore unable to estimate the amount of its
45% share of Climate Technologies' post-close results. The Company
will exclude the interest income from the note receivable from
Climate Technologies and its share of Climate Technologies'
operations in its calculation of 2023 adjusted earnings per share.
Also excluded from adjusted earnings per share is the interest
income on any undeployed net proceeds. The effect of Emerson's 45%
share of Climate Technologies is expected to be immaterial to
post-closing cash flows.
The 2023 outlook assumes approximately $1.2 billion of dividend
payments and approximately $2 billion to be returned to
shareholders through share repurchases.
The following tables summarize 2022 financials for continuing
operations8 and fiscal year 2023 guidance framework for continuing
operations8. Guidance figures are approximate.
2022 Results
2022 Q1 Reported
2022 Q1 Continuing
Operations8
2022 Reported
2022 Continuing
Operations8
Net Sales
$4,473M
$3,156M
$19,629M
$13,804M
Earnings Per Share
$1.50
$1.25
$5.41
$3.16
Adjusted Earnings Per Share
$1.05
$0.79
$5.25
$3.64
2023 Guidance - Continuing Operations8
2023 Q1
2023
Net Sales Growth
6% - 8%
7% - 9%
Underlying Sales Growth
6% - 8%
6.5% - 8.5%
Earnings Per Share9
$0.67 - $0.71
$3.51 - $3.66
Restructuring / Related Costs
~$0.03
~$0.13
Amortization of Intangibles
~$0.15
~$0.61
Interest on Note Receivable From Climate
Technologies
---
~($0.10)
Interest Income on Undeployed Proceeds
---
~($0.15)
Adjusted Earnings Per Share
$0.85 - $0.89
$4.00 - $4.15
Notes:
1 Underlying sales excludes the impact of
currency translation, and acquisitions and divestitures completed
through September 30, 2022 including Therm-O-Disc, heritage
AspenTech and Emerson's businesses contributed to AspenTech.
2 Adjusted EPS excludes restructuring, a
gain on subordinated interest, first year purchase accounting,
transaction and AspenTech pre-closing costs and charges, a gain
from the Therm-O-Disc divestiture, write-offs associated with
Emerson's announced Russia exit, investment-related gains, an
AspenTech Micromine purchase price hedge and intangibles
amortization expense.
3 Adjusted EBITA margin excludes
restructuring, a gain on subordinated interest, first year purchase
accounting, transaction and AspenTech pre-closing costs and
charges, a gain from the Therm-O-Disc divestiture, write-offs
associated with Emerson's announced Russia exit, investment-related
gains, an AspenTech Micromine purchase price hedge and intangibles
amortization expense.
4 Automation Solutions net sales, backlog,
segment EBIT margin and adjusted segments EBITA margin does not
include Emerson's businesses contributed to AspenTech, which have
been reclassified to the AspenTech segment.
5 Trailing three-month underlying orders
does not include Therm-O-Disc (divested and previously reported in
Commercial & Residential Solutions) or Emerson's businesses
contributed to AspenTech (previously reported in Automation
Solutions).
6 Adjusted segment EBITA margin excludes
restructuring and intangible amortization expense.
7 The AspenTech segment includes the full
year results for Emerson's businesses contributed to AspenTech and
the heritage AspenTech business as of May 16, 2022, the date upon
which the Company acquired its majority equity ownership interest
in AspenTech.
8 Following the announcement of its
Climate Technologies divestiture, Emerson will report financial
results for Climate Technologies, InSinkErator and Therm-O-Disc as
discontinued operations for all periods presented, beginning in
2023. The earnings from discontinued operations for 2023 are
expected to be $10 billion to $11 billion, or $17 to $19 per share,
including the net gains on 2023 divestitures. The Company's 2023
continuing operations after the Climate Technologies divestiture
(assumed to close March 31, 2023 for the purposes of guidance) will
include interest income from the $2.25 billion note receivable from
Climate Technologies and reflect the 45% common equity ownership in
the income, or loss, of Climate Technologies. Emerson will not
control Climate Technologies post-closing and is therefore unable
to estimate the amount of its 45% share of Climate Technologies'
post-close results. The Company will exclude the interest income
from the note receivable from Climate Technologies and its share of
Climate Technologies' operations in its calculation of 2023
adjusted earnings per share. Also excluded from adjusted earnings
per share is the interest income on any undeployed net proceeds.
The effect of Emerson's 45% share of Climate Technologies is
expected to be immaterial to post-closing cash flows.
9 2023 earnings per share guidance from
continuing operations excludes any potential impact from the 45%
common equity ownership in Climate Technologies' income or loss
post-close. Emerson will not control Climate Technologies
post-closing and is therefore unable to estimate the probable
significance or impact on our earnings per share results from the
45% share of Climate Technologies' post-close results. Emerson will
exclude its 45% share of Climate Technologies' post-close
operations from the calculation of its 2023 adjusted earnings per
share.
Upcoming Investor Events
Today, beginning at 7:00 a.m. Central Time / 8:00 a.m. Eastern
Time, Emerson management will discuss the fourth quarter results,
fiscal year results and its Climate Technologies divestiture during
an investor conference call. Participants can access a live webcast
available at www.emerson.com/en-us/investors at the time of the
call. A replay of the call will be available for 90 days.
Conference call slides will be posted in advance of the call on the
company website.
Emerson will hold an in-person and virtual investor conference
on Tuesday, Nov. 29 in New York City. A live webcast of the
investor conference will begin at 8:00 a.m. Central Time / 9:00
a.m. Eastern Time. A link to register and attend the webcast is
available at www.emerson.com/en-us/investors. The webcast will
remain available for 90 days.
Forward-Looking and Cautionary
Statements
Statements in this press release 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 developments. These risks and
uncertainties include the Company's ability to successfully
complete on the terms and conditions contemplated, and the
financial impact of, the proposed Climate Technologies transaction,
the proposed sale of its InSinkErator food waste disposal business,
the scope, duration and ultimate impacts of the COVID-19 pandemic
and the Russia-Ukraine conflict, as well as economic and currency
conditions, market demand, including related to the pandemic and
oil and gas price declines and volatility, pricing, protection of
intellectual property, cybersecurity, tariffs, competitive and
technological factors, inflation, among others, as set forth in the
Company's most recent Annual Report on Form 10-K and subsequent
reports filed with the SEC. The outlook contained herein represents
the Company's expectation for its consolidated results, other than
as noted herein.
(tables attached)
Table
1
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING
RESULTS
(AMOUNTS IN MILLIONS EXCEPT PER
SHARE, UNAUDITED)
Quarter Ended Sept 30
Percent
2021
2022
Change
Net sales
$4,947
$5,360
8%
Cost of sales
2,951
3,043
SG&A expenses
1,054
1,136
Gain on sale of business
—
(3)
Other deductions, net
75
227
Interest expense, net
39
53
Earnings before income taxes
828
904
9%
Income taxes
154
196
Net earnings
674
708
Less: Noncontrolling interests in
subsidiaries
4
(32)
Net earnings common
stockholders
$670
$740
10%
Diluted avg. shares outstanding
600.5
594.5
Diluted earnings per share common
share
$1.11
$1.24
12%
Quarter Ended Sept 30
2021
2022
Other deductions, net
Amortization of intangibles
$77
$134
Restructuring costs
39
36
Other
(41)
57
Total
$75
$227
Table
2
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING
RESULTS
(AMOUNTS IN MILLIONS EXCEPT PER
SHARE, UNAUDITED)
Year Ended Sept 30
Percent
2021
2022
Change
Net sales
$18,236
$19,629
8%
Cost of sales
10,673
11,441
SG&A expenses
4,179
4,248
Gain on subordinated interest
—
(453)
Gain on sale of business
—
(486)
Other deductions, net
318
601
Interest expense, net
154
193
Earnings before income taxes
2,912
4,085
40%
Income taxes
585
855
Net earnings
2,327
3,230
Less: Noncontrolling interests in
subsidiaries
24
(1)
Net earnings common
stockholders
$2,303
$3,231
40%
Diluted avg. shares outstanding
601.8
596.3
Diluted earnings per share common
share
$3.82
$5.41
42%
Year Ended Sept 30
2021
2022
Other deductions, net
Amortization of intangibles
$300
$357
Restructuring costs
150
86
Other
(132)
158
Total
$318
$601
Other for the year end September 30, 2022
includes a charge of $135 related to the Company exiting its
business in Russia, acquisition/divestiture costs of $110 and a
loss of $50 in the fourth quarter related to AspenTech’s Micromine
purchase price hedge.
Table
3
EMERSON AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS,
UNAUDITED)
Quarter Ended Sept 30
2021
2022
Assets
Cash and equivalents
$2,354
$1,804
Receivables, net
2,971
3,008
Inventories
2,050
2,191
Other current assets
1,057
1,503
Total current assets
8,432
8,506
Property, plant & equipment, net
3,738
3,361
Goodwill
7,723
14,662
Other intangible assets
2,877
6,724
Other
1,945
2,419
Total assets
$24,715
$35,672
Liabilities and equity
Short-term borrowings and current
maturities of long-term debt
$872
$2,115
Accounts payable
2,108
2,028
Accrued expenses
3,266
3,634
Total current liabilities
6,246
7,777
Long-term debt
5,793
8,259
Other liabilities
2,753
3,320
Equity
Common stockholders' equity
9,883
10,364
Noncontrolling interests in
subsidiaries
40
5,952
Total equity
9,923
16,316
Total liabilities and equity
$24,715
$35,672
Table
4
EMERSON AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(DOLLARS IN MILLIONS,
UNAUDITED)
Year Ended Sept 30
2021
2022
Operating activities
Net earnings
$2,327
$3,230
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
969
1,039
Stock compensation
224
144
Pension expense
28
2
Pension funding
(41)
(43)
Changes in operating working capital
203
(515)
Gain on subordinated interest
—
(453)
Gain on sale of business
—
(486)
Other, net
(135)
4
Cash provided by operating activities
3,575
2,922
Investing activities
Capital expenditures
(581)
(531)
Purchases of businesses, net of cash and
equivalents acquired
(1,611)
(5,702)
Divestitures of businesses
34
601
Proceeds from subordinated interest
—
438
Other, net
38
(140)
Cash used in investing activities
(2,120)
(5,334)
Financing activities
Net increase in short-term borrowings
(504)
1,241
Proceeds from short-term borrowings
greater than three months
71
1,162
Payments of short-term borrowings greater
than three months
(71)
(1,165)
Proceeds from long-term debt
—
2,975
Payments of long-term debt
(308)
(522)
Dividends paid
(1,210)
(1,223)
Purchases of common stock
(500)
(500)
Other, net
100
80
Cash provided by (used in) financing
activities
(2,422)
2,048
Effect of exchange rate changes on cash
and equivalents
6
(186)
Increase (Decrease) in cash and
equivalents
(961)
(550)
Beginning cash and equivalents
3,315
2,354
Ending cash and equivalents
$2,354
$1,804
Table
5
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS,
UNAUDITED)
Quarter Ended Sept 30
2021
2022
Sales
Measurement & Analytical
Instrumentation
$860
$919
Valves, Actuators & Regulators
961
1,000
Industrial Solutions
610
660
Systems & Software
669
728
Automation Solutions
3,100
3,307
AspenTech
79
251
Climate Technologies
1,289
1,316
Tools & Home Products
486
487
Commercial & Residential
Solutions
1,775
1,803
Eliminations
(7)
(1)
Net sales
$4,947
$5,360
Earnings
Automation Solutions
$601
$738
AspenTech
(6)
(39)
Climate Technologies
234
284
Tools & Home Products
88
85
Commercial & Residential
Solutions
322
369
Stock compensation
(33)
(37)
Unallocated pension and postretirement
costs
23
23
Corporate and other
(40)
(100)
Gain on sale of business
—
3
Interest expense, net
(39)
(53)
Earnings before income taxes
$828
$904
Restructuring costs
Automation Solutions
$29
$19
AspenTech
—
(1)
Climate Technologies
7
5
Tools & Home Products
3
10
Commercial & Residential
Solutions
10
15
Corporate
—
3
Total
$39
$36
The table above does not include $27 and
$17 of costs related to restructuring actions that were reported in
cost of sales and selling, general and administrative expenses for
the three months ended September 30, 2021 and 2022,
respectively.
Depreciation and Amortization
Automation Solutions
$144
$131
AspenTech
24
123
Climate Technologies
47
41
Tools & Home Products
17
13
Commercial & Residential
Solutions
64
54
Corporate and other
17
9
Total
$249
$317
Table
6
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS,
UNAUDITED)
Year Ended Sept 30
2021
2022
Sales
Measurement & Analytical
Instrumentation
$3,071
$3,206
Valves, Actuators & Regulators
3,483
3,604
Industrial Solutions
2,266
2,403
Systems & Software
2,472
2,545
Automation Solutions
11,292
11,758
AspenTech
319
656
Climate Technologies
4,748
5,200
Tools & Home Products
1,905
2,033
Commercial & Residential
Solutions
6,653
7,233
Eliminations
(28)
(18)
Net sales
$18,236
$19,629
Earnings
Automation Solutions
$1,955
$2,356
AspenTech
(7)
12
Climate Technologies
965
1,038
Tools & Home Products
399
402
Commercial & Residential
Solutions
1,364
1,440
Stock compensation
(224)
(144)
Unallocated pension and postretirement
costs
94
99
Corporate and other
(116)
(424)
Gain on subordinated interest
—
453
Gain on sale of business
—
486
Interest expense, net
(154)
(193)
Earnings before income taxes
$2,912
$4,085
Restructuring costs
Automation Solutions
$121
$52
AspenTech
2
—
Climate Technologies
15
10
Tools & Home Products
7
11
Commercial & Residential
Solutions
22
21
Corporate
5
13
Total
$150
$86
The table above does not include $38 and
$43 of costs related to restructuring actions that were reported in
cost of sales and selling, general and administrative expenses for
the twelve months ended September 30, 2021 and 2022,
respectively.
Depreciation and Amortization
Automation Solutions
$537
$514
AspenTech
95
242
Climate Technologies
191
177
Tools & Home Products
76
71
Commercial & Residential
Solutions
267
248
Corporate and other
70
35
Total
$969
$1,039
Table
7
EMERSON AND SUBSIDIARIES
ADJUSTED EBITA & EPS
SUPPLEMENTAL
(AMOUNTS IN MILLIONS EXCEPT PER
SHARE, UNAUDITED)
The following tables, which show results
on an adjusted EBITA basis and diluted earnings per share on an
adjusted basis, are intended to supplement the Company's discussion
of its results of operations herein. The Company defines adjusted
EBITA as earnings excluding interest expense, net, income taxes,
intangibles amortization expense, restructuring expense, first year
purchase accounting related items and transaction fees, and certain
gains, losses or impairments. Adjusted earnings per share excludes
intangibles amortization expense, restructuring expense, first year
purchase accounting related items and transaction fees, and certain
gains, losses or impairments. Adjusted EBITA, adjusted EBITA
margin, and adjusted earnings per share are measures used by
management and may be useful for investors to evaluate the
Company's operational performance.
Quarter Ended Sept 30
2021
2022
Pretax earnings
$828
$904
Percent of sales
16.7%
16.9%
Interest expense, net
39
53
Restructuring and related costs
66
52
Amortization of intangibles
85
174
Gain on sale of business
—
(3)
Russia business exit
—
19
Acquisition/divestiture costs
—
13
AspenTech Micromine purchase price
hedge
—
50
Investment-related gains
—
(14)
OSI first year acquisition accounting
charges
9
—
Adjusted EBITA
$1,027
$1,248
Percent of sales
20.7%
23.3%
Quarter Ended Sept 30
2021
2022
GAAP earnings per share
$1.11
$1.24
Restructuring and related costs
0.08
0.07
Amortization of intangibles
0.11
0.15
Russia business exit
—
0.03
Acquisition/divestiture costs and interest
on AspenTech debt
—
0.02
AspenTech Micromine purchase price
hedge
—
0.04
Investment-related gains
—
(0.02)
OSI first year acquisition accounting
charges
0.02
—
Adjusted earnings per share
$1.32
$1.53
Table
8
EMERSON AND SUBSIDIARIES
ADJUSTED EBITA & EPS
SUPPLEMENTAL
(AMOUNTS IN MILLIONS EXCEPT PER
SHARE, UNAUDITED)
Year Ended Sept 30
2021
2022
Pretax earnings
$2,912
$4,085
Percent of sales
16.0%
20.8%
Interest expense, net
154
193
Restructuring and related costs
188
119
Amortization of intangibles
327
451
Gain on subordinated interest
—
(453)
Gain on sale of business
—
(486)
Russia business exit
—
181
Acquisition/divestiture costs
—
110
AspenTech Micromine purchase price
hedge
—
50
Investment-related gains
(17)
(14)
OSI first year acquisition accounting
charges and fees
50
—
Adjusted EBITA
$3,614
$4,236
Percent of sales
19.8%
21.6%
Year Ended Sept 30
2021
2022
GAAP earnings per share
$3.82
$5.41
Restructuring and related costs
0.24
0.15
Amortization of intangibles
0.41
0.48
Gain on subordinated interest
—
(0.60)
Gain on sale of business
—
(0.72)
Russia business exit
—
0.32
Acquisition/divestiture costs, AspenTech
interest on debt
—
0.19
AspenTech Micromine purchase price
hedge
—
0.04
Investment-related gains
(0.03)
(0.02)
OSI first year acquisition accounting
charges and fees
0.07
—
Adjusted earnings per share
$4.51
$5.25
Table
9
EMERSON AND SUBSIDIARIES
SEGMENT EBITA
(DOLLARS IN MILLIONS,
UNAUDITED)
Quarter Ended Sept 30
2021
2022
Automation
Solutions
Automation Solutions EBIT
$601
$738
Percent of sales
19.4%
22.3%
Restructuring and related costs
52
35
Amortization of intangibles
50
42
Automation Solutions EBITA
$703
$815
Percent of sales
22.7%
24.6%
AspenTech
AspenTech EBIT
$(6)
$(39)
Percent of sales
(7.5%)
(15.2%)
Restructuring and related costs
—
(1)
Amortization of intangibles
22
121
AspenTech EBITA
$16
$81
Percent of sales
20.8%
32.9%
Commercial &
Residential Solutions
Commercial & Residential Solutions
EBIT
$322
$369
Percent of sales
18.1%
20.4%
Restructuring and related costs
11
16
Amortization of intangibles
13
11
Commercial & Residential Solutions
EBITA
$346
$396
Percent of sales
19.4%
21.9%
Table
10
EMERSON AND SUBSIDIARIES
SEGMENT EBITA
(DOLLARS IN MILLIONS,
UNAUDITED)
Year Ended Sept 30
2021
2022
Automation
Solutions
Automation Solutions EBIT
$1,955
$2,356
Percent of sales
17.3%
20.0%
Restructuring and related costs
146
89
Amortization of intangibles
186
167
Automation Solutions EBITA
$2,287
$2,612
Percent of sales
20.3%
22.2%
AspenTech
AspenTech EBIT
$(7)
$12
Percent of sales
(2.3%)
1.9%
Restructuring and related costs
2
—
Amortization of intangibles
89
237
AspenTech EBITA
$84
$249
Percent of sales
26.2%
38.0%
Commercial &
Residential Solutions
Commercial & Residential Solutions
EBIT
$1,364
$1,440
Percent of sales
20.5%
19.9%
Restructuring and related costs
26
24
Amortization of intangibles
52
47
Commercial & Residential Solutions
EBITA
$1,442
$1,511
Percent of sales
21.6%
20.9%
Reconciliations of Non-GAAP Financial
Measures & Other
Table
11
Reconciliations of Non-GAAP measures (denoted by *) with the most
directly comparable GAAP measure (dollars in millions, except per
share amounts). See tables 7 through 10 for additional non-GAAP
reconciliations.
Q4 2022 Underlying Sales Change
Auto Solns
Comm & Res Solns
Emerson
Reported (GAAP)
7 %
2 %
8 %
(Favorable) / Unfavorable FX
6 %
3 %
5 %
Acquisitions
— %
— %
(3) %
Divestitures
— %
5 %
2 %
Underlying*
13 %
10 %
12 %
2022 Underlying Sales Change
Auto Solns
Comm & Res Solns
Emerson
Reported (GAAP)
4 %
9 %
8 %
(Favorable) / Unfavorable FX
3 %
2 %
2 %
Acquisitions
— %
— %
(2) %
Divestitures
— %
2 %
1 %
Underlying*
7 %
13 %
9 %
2023E November Guidance Underlying
Sales Change
Q1 FY23E
FY23E
Reported (GAAP)
6% - 8%
7% - 9%
(Favorable) / Unfavorable FX
~ 6%
~ 3.5%
(Acquisitions) / Divestitures
~ (6)%
~ (4)%
Underlying*
6% - 8%
6.5% - 8.5%
Q4 Earnings Per Share
Q4 FY21
Q4 FY22
Change
Earnings per share (GAAP)
$ 1.11
$ 1.24
12 %
Restructuring and related costs
0.08
0.07
(1) %
Amortization of intangibles
0.11
0.15
2 %
Russia business exit
—
0.03
2 %
Acquisition/divestiture costs
—
0.02
1 %
AspenTech Micromine purchase price
hedge
—
0.04
2 %
Investment-related gains
—
(0.02)
(1) %
OSI purchase accounting items
0.02
—
(1) %
Adjusted earnings per share*
$ 1.32
$ 1.53
16 %
Earnings Per Share
FY21
FY22
Change
Earnings per share (GAAP)
$ 3.82
$ 5.41
42 %
Restructuring and related costs
0.24
0.15
(5) %
Amortization of intangibles
0.41
0.48
(2) %
Gain on subordinated interest
—
(0.60)
(13)%
Gain on sale of Therm-O-Disc
—
(0.72)
(16)%
Russia business exit
—
0.32
7 %
Acquisition/divestiture costs and interest
on pre-acquisition AspenTech debt
—
0.19
4 %
AspenTech Micromine purchase price
hedge
—
0.04
1 %
Investment-related gains
(0.03)
(0.02)
-%
OSI purchase accounting
0.07
—
(2) %
Adjusted earnings per share*
$ 4.51
$ 5.25
16 %
Earnings Per Share
FY23E
Q1 FY23E
Earnings per share (GAAP)
$3.51 - $3.66
$0.67 - $0.71
Restructuring and related costs
0.13
0.03
Amortization of intangibles
0.61
0.15
Interest on note receivable from Climate
Technologies
(0.10)
—
Interest income on undeployed proceeds
(0.15)
—
Adjusted earnings per share*
$4.00 - $4.15
$0.85 - $0.89
EBITA Margin
Q4 FY21
Q4 FY22
Change
Pretax margin (GAAP)
16.7 %
16.9 %
20 bps
Interest expense, net
0.8 %
1.0 %
20 bps
Restructuring and related costs
1.2 %
1.0 %
(20) bps
Amortization of intangibles
1.7 %
3.2 %
150 bps
Gain on sale of Therm-O-Disc
— %
(0.1) %
(10) bps
Russia business exit
— %
0.3 %
30 bps
Acquisition/divestiture costs
— %
0.3 %
30 bps
AspenTech Micromine purchase price
hedge
— %
1.0 %
100 bps
Investment-related gains
— %
(0.3) %
(30) bps
OSI purchase accounting items
0.3 %
— %
(30) bps
Adjusted EBITA margin*
20.7 %
23.3 %
260 bps
EBITA Margin
FY21
FY22
Change
Pretax margin (GAAP)
16.0 %
20.8 %
480 bps
Interest expense, net
0.8 %
1.0 %
20 bps
Restructuring and related costs
1.0 %
0.6 %
(40) bps
Amortization of intangibles
1.8 %
2.3 %
50 bps
Gain on sale of Therm-O-Disc
— %
(2.5) %
(250) bps
Gain on subordinated interest
— %
(2.3) %
(230) bps
Russia business exit
— %
0.9 %
90 bps
Acquisition/divestiture costs
— %
0.6 %
60 bps
AspenTech Micromine purchase price
hedge
— %
0.3 %
30 bps
Investment-related gains
(0.1) %
(0.1) %
- bps
OSI purchase accounting items
0.3 %
— %
(30) bps
Adjusted EBITA margin*
19.8 %
21.6 %
180 bps
Sales - Continuing Operations
FY22
Q1 FY22
Reported sales (GAAP)
$ 19,629
$ 4,473
Divested businesses
(5,825)
(1,317)
Continuing operations sales*
$ 13,804
$ 3,156
Earnings Per Share - Continuing
Operations
FY22
Q1 FY22
Reported earnings per share (GAAP)
$ 5.41
$ 1.50
Divested businesses
(2.25)
(0.25)
Continuing operations earnings per
share*
3.16
1.25
Restructuring and related costs
0.14
0.02
Amortization of intangibles
0.45
0.09
Gain on subordinated interest
(0.60)
(0.60)
Russia business exit
0.32
—
Acquisition/divestiture costs and
pre-acquisition interest on AspenTech debt
0.15
0.03
AspenTech Micromine purchase price
hedge
0.04
—
Investment-related gains
(0.02)
—
Adjusted earnings per share continuing
operations*
$ 3.64
$ 0.79
Q4 Automation Solutions Segment EBIT
Margin
Q4 FY21
Q4 FY22
Change
Automation Solutions Segment EBIT margin
(GAAP)
19.4 %
22.3 %
290 bps
Restructuring and related costs
1.7 %
1.1 %
(60) bps
Amortization of intangibles impact
1.6 %
1.2 %
(40) bps
Automation Solutions Adjusted Segment
EBITA margin*
22.7 %
24.6 %
190 bps
Automation Solutions Segment EBIT
Margin
FY21
FY22
Change
Automation Solutions Segment EBIT margin
(GAAP)
17.3 %
20.0 %
270 bps
Restructuring and related costs
1.3 %
0.8 %
(50) bps
Amortization of intangibles impact
1.7 %
1.4 %
(30) bps
Automation Solutions Adjusted Segment
EBITA margin*
20.3 %
22.2 %
190 bps
Q4 Commercial & Residential
Solutions EBIT Margin
Q4 FY21
Q4 FY22
Change
Commercial & Residential EBIT margin
(GAAP)
18.1 %
20.4 %
230 bps
Restructuring and related costs
0.6 %
0.9 %
30 bps
Amortization of intangibles impact
0.7 %
0.6 %
(10) bps
Commercial & Residential Adjusted
EBITA margin*
19.4 %
21.9 %
250 bps
Commercial & Residential Solutions
EBIT Margin
FY21
FY22
Change
Commercial & Residential EBIT margin
(GAAP)
20.5 %
19.9 %
(60) bps
Restructuring and related costs
0.3 %
0.3 %
- bps
Amortization of intangibles impact
0.8 %
0.7 %
(10) bps
Commercial & Residential Adjusted
EBITA margin*
21.6 %
20.9 %
(70) bps
AspenTech EBIT Margin
FY22
Q4 FY22
AspenTech EBIT margin (GAAP)
1.9 %
(15.2) %
Restructuring and related costs
— %
(0.2) %
Amortization of intangibles impact
36.1 %
48.3 %
AspenTech Adjusted EBITA margin*
38.0 %
32.9 %
Q4 Cash Flow
Q4 FY21
Q4 FY22
Change
Operating cash flow (GAAP)
$ 855
$ 1,217
42 %
Capital expenditures
(231)
(196)
21 %
Free cash flow*
$ 600
$ 1,021
63 %
Year-To-Date Cash Flow
FY21
FY22
Change
Operating cash flow (GAAP)
$ 3,575
$ 2,922
(18) %
Capital expenditures
(581)
(531)
(2) %
Free cash flow*
$ 2,994
$ 2,391
(20) %
Note 1: Underlying sales and orders
exclude the impact of acquisitions, divestitures and currency
translation.
Note 2: All fiscal year 2023E figures are
approximate, except where range is given.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221030005028/en/
Investor contact: Colleen Mettler 314-553-2197 Media contact:
Charlotte Boyd 952-994-8607
Emerson Electric (NYSE:EMR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Emerson Electric (NYSE:EMR)
Historical Stock Chart
From Jul 2023 to Jul 2024