EX-99.1 7 dp183410_ex9901.htm EXHIBIT 99.1

 

Exhibit 99.1 

 

 

Investor Contact: Colleen Mettler (314) 553-2197

Media Contact: Charlotte Boyd (952) 994-8607

 

Emerson Reports Fourth Quarter and Full Year 2022 Results;

Provides Initial 2023 Outlook

 

•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

 

ST. LOUIS, Oct. 31, 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.

 

 

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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.

 

 

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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.

 

 

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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).

 

 

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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

 

 

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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)

 

 

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          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      

 

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          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.

 

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      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 

 

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        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 

 

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      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 

 

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  Table 5 (cont.)
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS, UNAUDITED)
 
   Quarter Ended Sept 30
   2021  2022
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 

 

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      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 

 

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  Table 6 (cont.)
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(DOLLARS IN MILLIONS, UNAUDITED)
       

   Year Ended Sept 30
   2021  2022
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 

 

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      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 
           

 

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      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 
           

 

Page 17

      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%

 

Page 18

      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%

 

Page 19

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%

 

 

Page 20

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      

 

Page 21

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%     

 

Page 22

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. 
                
###