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Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Rockwell AutomationInvestor Conference
November 19, 2015
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Safe Harbor Statement
This presentation includes statements related to the expected future results of the company and are therefore forward-looking statements. Actual results may differ materially from those projections due to a wide range of risks and uncertainties, including those that are listed in our SEC filings.
This presentation also contains non-GAAP financial information and reconciliations to GAAP are included in the appendix. All information should be read in conjunction with our historical financial statements.
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Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Agenda
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Sustainable Market Leadership
Strategic Overview
Financial Overview
Q & A Session
Keith Nosbusch, Chairman & CEO
Ted Crandall, SVP & CFO
Frank Kulaszewicz, SVP A&SBlake Moret, SVP CP&S
Final Remarks Keith Nosbusch, Chairman & CEO
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 4
$6.3B in FY15 sales; primarily an organic growth company
Automation industry leader for over 110 years The largest pure-play global automation and
information company Serving a broad range of end-markets
Great financial returns due to technology differentiation, domain expertise and productivity
A unique business model based on trusted partnerships
Strong culture of ethics and integrity
Rockwell Automation An Intellectual Capital Company
Differentiation … Diversification … Delivering Results
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Value Creation Strategy
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PRODUCTIVITY Drive productivity
to reinvest in the business
Working capital management
INTELLECTUAL CAPITAL Innovation Domain expertise Asset light
ABOVE-MARKETGROWTH Expand served
market Gain market share Acquisitions as
catalysts
VALUE CREATION Above-market organic growth Best in class operating
margin & ROIC Strong cash flow Expand customer value;
increase shareowner value
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
2015 Macro Trends / Disruptions“Four Global Forces Breaking All Trends”
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Urbanization
Accelerating Technological
Change
Aging World
Greater Global Flows
Urban population growing by 65 million every year
Expect a 150% increase in emerging market annual consumption from 2010 to 2030
One trillion objects expected to connect to the Internet by 2025
Expect an increase in the share of older workers in the workforce from 14% in 2010 to 22% in 2030
A 5X increase in global trade and financial flows from 1990 to 2012
Growing demand for consumer goods and energy
Secure access to information –anywhere, anytime
Skills gap and greater need for productivity to sustain GDP growth
Enterprise-wide optimization
(McKinsey, May 2015)
Disruption Trends Customer Impact
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Business Drivers
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Customers still need:
Fundamental business drivers haven’t changed
Faster Time to Market
Lower Total Cost of Ownership
Improved AssetUtilization
Enterprise Risk Management
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Automation Trends
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But with technology advancements like…
“The Connected Enterprise”
…customers are now seeking Enterprise-wide connectivity (IT-OT convergence) Real-time actionable information Secure network infrastructure Expertise to fill the skills gap Unified communication for collaboration
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Solutions & ServicesIntegrated Architecture Intelligent Motor Control
The Connected EnterpriseEnabled by Integrated Control and Information
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Delivered through our core platforms
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 10
Business model One company, unique market access, industry-leading strategic
partners
Leading the way with innovation through technological discontinuities
Future-proofing our customers’ production investments
Entering new markets, expanding capabilities and gaining share Eg. process, safety, connectivity and information management
Market Leadership
Right strategy plus great execution…market leader
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 11
Our Leadership Continues:High Performance Architecture
Delivering business value today!
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Attractive Growth Opportunities
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MarketShare
Productivity required to remain globally competitive Installed base refresh Consumer demand in emerging
markets Skills gap and aging workforce
Market Growth
High performance architecture Process (PlantPAx and
services) Midrange Powertrain Safety
Market/Customer Share
Network infrastructure Security Information & data
management Operational intelligence Bolt-on acquisitions
PAM Expansion
The Connected Enterprise will fuel growth across the spectrum
$65
$90B $90B market
Connected Enterprise added ~$8B
5-yr CAGR of 8%FY10 FY15
$90PAMProduct Available Market
(billions)
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Sustainable Market LeadershipDelivering Customer Value
13
Frank KulaszewiczSenior Vice President,Architecture & Software
Blake MoretSenior Vice President,Control Products & Solutions
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Agenda
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Technology Innovation
Competitive Differentiation at Rockwell
Delivering Value to Customers
Domain Expertise
Case Studies
Customer Values
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Rockwell Automation Approach to Innovation
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Focus on customer value and productivity Delivered through our technology and services Broad automation and information portfolio Premier Integration Key tenets
Scalable deployment Common platform Ease of use Backward Compatibility Future-proof
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Innovation and IP
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Market Leadership Through Each “Discontinuity”
Electromechanical Products
Programmable Logic Controllers, Drives, Software
Logix: Integrated Discrete,
Process, Motion, Safety, Motor Control
The Connected Enterprise: Integrated Control and Information
1903 - 1979 1980 - 1999 2000 - 2010 2011 - …
US Patents Issued/Year
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Innovation Enables The Connected Enterprise
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Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
The Resulting Products Deliver New Value Today
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Smart. Productive. Secure.
Processor and I/O Electronic Operator Interface Intelligent Sensors Network Portfolio Information Enabled
Intelligent Motor Control Common Software Environment Reusable Engineering Content Safety Devices & Solutions Mobility
Information Software & Solutions Tamper and Content
Protection Authentication and Policy
Management
Evolving Our Architecture With More New Products & Platforms Than Ever Before
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Domain Expertise to Serve a Broad Range of Industries
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The expertise to apply innovation and reduce risk
FOOD, BEVERAGE, HOME & PERSONAL CARE
AUTOMOBILE, TIRE PHARMACEUTICAL, MEDICAL DEVICES
UPSTREAM, MIDSTREAM DOWNSTREAM
MINING, METALS, PULP & PAPER, WATER / WASTEWATER
CONSUMER TRANSPORTATION LIFE SCIENCES OIL & GAS HEAVY INDUSTRY
We provide the fastest line integration for packaging equipment
Our partnership with Fanuc enables new value for Powertrain applications
We are the market leader in Pharma Manufacturing Execution Systems
Our digital oilfield solution optimizes production from existing wells
PlantPAx Modern DCS integrated with Intelligent Motor Control reduces startup and downtime
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
The Resulting Solutions & Services Deliver New Value Today
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Increased Capabilities in Served Markets Process Applications featuring
PlantPAx Modern DCS Serialization Powertrain
Industrial Network Infrastructure, Security and Remote Services
Safety Services
Manufacturing Execution Software (MES) Expansion
Reliability Services
Workforce Solutions Closing the Skills Gap
MES
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Combining Innovation & Domain Expertise with a Unique Approach…
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THE CONNECTED ENTERPRISEUnderstandingConsulting to Define Business Problems
Unique Market AccessUnmatched Partners
SimplificationMulti-discipline Control
and InformationData-driven Services
Single Integrated Business
Combined Innovation & Expertise
Smart Products Designed to Operate in a System
Packaged SolutionsProducts as a Service
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Agenda
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Technology Innovation
Competitive Differentiation at Rockwell
Delivering Value to Customers
Domain Expertise
Case Studies
Customer Values
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Delivering Customer Value
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Flexible production
Design productivity
Intelligent devices
Lifecycle management
Operator effectiveness
Technology migration
Reliability and quality
Analytics and diagnostics
Real-time data access
Regulatory compliance
Brand and image protection
Safe, secure operating environment
Faster Time to Market
Improved AssetUtilization
Lower Total Cost of Ownership
Enterprise Risk Management
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Procter & GambleConsumer Products – Global
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Synchronization of product, people and digitized information flows along the end to end supply chain
$50MPRODUCTIVITY
SAVINGS
30%REDUCTION
IN SCRAP
50%EXTENSION
of LIFE CYCLE
20%INCREASE in
THROUGHPUT
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
BCP GroupOil & Gas – OEM
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EXTENDED WELL LIFE
INCREASED ENERGY SAVINGS
IMPROVED SYSTEM RELIABILITY
INTEGRATED CONTROL
SIMPLIFIED START-UP
Networked Oil Wells Provide Insight Into Field Operations with Real-time Data
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Columbia Pipeline GroupOil & Gas - Midstream
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“We’re making more educated decisions based on real-time and historical operations data that we can access anywhere. We’ve been
able to significantly improve company profitability as a result.” - Brian Sloan, Engineering Manager
99.5%AVAILABILITY
Business Decisions Based OnREAL-TIME & HISTORIAL DATA
$2.3 MSaved in Maintenance and Downtime
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
MahindraAutomotive – India
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Master Data Sent AUTOMATICALLY
REDUCED Mean-time-to-repair with Alarms & Real-time Visibility
ERROR PROOFINGZero Defect Delivery
Inventory Reductionon Assembly Floor
INCREASED FLEXIBILITY With In-Process Changes
Work Stations Suppliers
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Video CueMahindra
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Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
BeingmateFood & Beverage – China
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Most Advanced Track & Trace System in all of China for Baby Formula.
- China Food Drug Administration (CFDA)
ProductivityIncrease3% Labor
Costs7%Reduced production prep/dispatch time
Speeds up delivery, auto-fill BOM
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Gruppo CampariFood & Beverage – U.S.
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Integrated Distillery, Process and Bottling Facilities Establish The Connected Enterprise
Distillery productionDOUBLED
OEE Increased
10-20%
Now 70%
“The PlantPAx system has helped us get better every day … Our KPIs are all trending
up, and our cost per case is going down.”
Down to the GallonSupports Government-mandated Reports
- Wayne Knabel, Packaging Director
PRODUCT TRACKING
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Video CueCampari
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Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Sustainable Competitive AdvantageBased on Differentiation
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Technology Innovation & Broad Portfolio The only scalable, multidiscipline, information-enabled
control platform Secure, unmodified EtherNet/IP network infrastructure Leading market position in safety Intelligent motor control products and systems
Domain Expertise & Global Support Application know-how Lifecycle support for customers in all industries
Trusted Partners & Unique Market Access Model Market-making channel partners, strategic alliances,
technology partners
Integrated Architecture
Intelligent Motor Control
Solutions & Services
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Financial Overview
Ted CrandallSenior Vice President and Chief Financial Officer
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Fiscal 2016 Guidance
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Full Year OutlookSales Midpoint ~ $6.0B
Organic Growth Range (4)% to 0%
Currency Translation ~ (3)%
Segment Operating Margin ~ 21%
Adjusted Effective Tax Rate ~ 27%
Adjusted EPS $5.90 - $6.40
Free Cash Flow as a % of Adjusted Income ~ 100%
Note: As of November 10, 2015
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Free Cash Flow Pension Contributions
Track Record of Execution
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Return on Invested CapitalSales
Free Cash FlowAdjusted EPS
Actual Results Nov. 10th 2015 Guidance
Actual Results Nov. 10th 2015 Guidance Actual Results as of Fiscal Year End
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 36
Cash Deployment Priorities
Free Cash Flow
Acquisitions
Dividends
Share Repurchase
Returned $3.5 billion to shareowners in the last 5 years
Cash Returned to Shareowners
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Final Remarks
Keith NosbuschChairman and Chief Executive Officer
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 38
In the near term we are focused on…
Our best growth opportunities New products and services Automotive and consumer industries Productivity projects in heavy industries
Prudent cost controls Q4 restructuring actions and tight reins on discretionary spending Incremental cost productivity Maintaining R&D and customer-facing spend
Continued solid cash deployment Increased the dividend 12% in November Acquisition opportunities Flexibility to make opportunistic share repurchases
Ensuring the long-term success of the company
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 39
How We Measure Progress
Sales and EPS growth, FCF, ROIC
Share gain in all market conditions
Measurable cost productivity every year
Customer loyalty index improvement
Connected Enterprise adoption indicators
Network infrastructure and services (up >15% in FY15) Logix growth (up 4% in FY15)
Holding ourselves accountable…
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 40
Good Stewards of Your Investment
Singular focus on industrial automation and information – a great market Robust pipeline of organic growth opportunities Experienced leadership team adept at managing through cycles Sustainable, profitable business model
Differentiation in technology and domain expertise support sustainable competitive advantage
Best in class operating margin and ROIC, while still investing in innovation for the long term
Strong cash flow and healthy balance sheet Track record of returning cash to shareowners Strong culture of ethics and integrity
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION 41
Business model, strategy and execution support shareowner value creation We effectively balance investment with cost management through a cycle Consistent track record of returning cash to shareowners
Shareowner Value Creation Will Continue
Total shareowner return consistently above S&P 500
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
AppendixReconciliation to Non-GAAP Measures
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Reconciliation to Non-GAAP Measures
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Return On Invested Capital(in millions, except percentages)
Twelve Months Ended September 30,
2015 2014 2013 2012 2011 2010 2009 2008
(a) ReturnIncome from continuing operations $ 827.6 $ 826.8 $ 756.3 $ 737.0 $ 697.1 $ 440.4 $ 217.9 $ 577.6 Interest expense 63.7 59.3 60.9 60.1 59.5 60.5 60.9 68.2 Income tax provision 299.9 307.4 224.6 228.9 170.5 103.8 56.0 231.3 Purchase accounting depreciation and amortization 21.0 21.6 19.3 19.8 19.8 18.9 18.6 24.2
Special charges - - - - - - (4.0) 46.7
Return 1,212.2 1,215.1 1,061.1 1,045.8 946.9 623.6 349.4 948.0
(b) Average Invested CapitalShort-term debt 166.6 275.5 209.0 207.2 - - 70.1 325.1 Long-term debt 1,261.9 905.3 905.0 905.0 904.9 904.8 904.6 804.5 Shareowners' equity 2,521.3 2,680.7 2,086.7 1,881.5 1,709.7 1,387.9 1,563.5 1,798.5 Accumulated amortization of goodwill and intangibles 792.6 772.7 775.2 751.0 716.7 679.4 648.3 619.0 Short-term investments (639.3) (485.2) (361.7) (232.5) - - - -
Cash and cash equivalents (1,376.1) (1,210.6) (1,010.2) (878.8) (922.7) (763.3) (576.0) (728.0)
Average invested capital 2,727.0 2,938.4 2,604.0 2,633.4 2,408.6 2,208.8 2,610.5 2,819.1
(c) Effective Tax RateIncome tax provision 299.9 307.4 224.6 228.9 170.5 103.8 56.0 231.3
Income from continuing operations before income taxes $ 1,127.5 $ 1,134.2 $ 980.9 $ 965.9 $ 867.6 $ 544.2 $ 273.9 $ 808.9 Effective tax rate 26.6% 27.1% 22.9% 23.7% 19.7% 19.1% 20.4% 28.6%
(a) / (b) * (1-c) Return On Invested Capital 32.6% 30.1% 31.4% 30.3% 31.6% 22.8% 10.7% 24.0%
Copyright © 2015 Rockwell Automation, Inc. All Rights Reserved.PUBLIC INFORMATION
Reconciliation to Non-GAAP Measures
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Adjusted EPS
Fiscal 2016 Year Ended September 30, Guidance * 2015 2014 2013 2012 2011 2010 2009 2008
Diluted EPS from continuing operations $5.53 - $6.03 $ 6.09 $ 5.91 $ 5.36 $ 5.13 $ 4.79 $ 3.05 $ 1.53 $ 3.89
Non-operating pension costs per diluted share, 0.58 0.46 0.40 0.55 0.25 0.16 0.07 (0.14) (0.17)
before tax
Tax effect on non-operating pension costs
per diluted share (0.21) (0.15) (0.14) (0.20) (0.09) (0.06) (0.02) 0.05 0.07
Adjusted EPS $5.90 - $6.40 $ 6.40 $ 6.17 $ 5.71 $ 5.29 $ 4.89 $ 3.10 $ 1.44 $ 3.79
Free Cash Flow(in millions)
Twelve Months Ended September 30, 2015 2014 2013 2012 2011 2010 2009 2008
Cash provided by continuing operating activities $ 1,187.7 $ 1,033.3 $ 1,014.8 $ 718.7 $ 643.7 $ 494.0 $ 526.4 $ 596.8
Capital expenditures (122.9) (141.0) (146.2) (139.6) (120.1) (99.4) (98.0) (151.0)
Tax payments related to the gain on divestiture ofPower Systems - - - - - - - 7.9
Excess income tax benefit from share-based
compensation 12.4 29.9 31.9 18.5 38.1 16.1 2.4 4.6 Free cash flow $ 1,077.2 $ 922.2 $ 900.5 $ 597.6 $ 561.7 $ 410.7 $ 430.8 $ 458.3