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Emerson Reports Fourth Quarter and Full Year 2019 Results, Provides 2020 Outlook

November 5, 2019

ST. LOUIS--(BUSINESS WIRE)--Nov 5, 2019--

Emerson (NYSE: EMR) today reported results for the fourth quarter and fiscal year ended Sept. 30, 2019.

Fourth quarter net sales were up 2 percent, with underlying sales up 3 percent excluding unfavorable currency of 2 percent and a positive impact from acquisitions of 1 percent. Growth was in line with management expectations for Automation Solutions but below expectations for Commercial & Residential Solutions due to cooler weather conditions in North America that unfavorably impacted air conditioning and construction markets and continued sluggishness in Asian markets. Emerson finished the year with trailing three-month underlying orders growth of 1 percent, or 2 percent excluding two prior year fleetwide modernization projects for large North American power customers, in line with the Company’s recent communications regarding slowing global economic growth.

Fourth quarter gross profit margin of 42.8 percent was up 70 basis points compared with the prior year, primarily due to solid operational execution and favorable price-cost. Pretax margin of 16.6 percent and EBIT margin of 17.4 percent were up 150 and 140 basis points, respectively. Total segment margin of 19.2 percent was up 10 basis points and was up 50 basis points to 20.2 percent excluding restructuring charges, reflecting year-over-year leverage exceeding 40 percent.

GAAP earnings per share were $1.16 in the quarter, up 20 percent versus the prior year, and were $1.07, up 20 percent, excluding discrete tax benefits of $0.09 this year and $0.08 in the prior year.

Fourth quarter operating cash flow was up 18 percent to $1.2 billion, and free cash flow was up 40 percent to $1.0 billion. Full year operating cash flow was up 4 percent to $3.0 billion and free cash flow was up 6 percent to $2.4 billion, reflecting 105 percent conversion of net earnings.

“Emerson delivered a solid year, despite a lower growth environment than we anticipated,” said Emerson Chairman and CEO David N. Farr. “We grew above our markets, delivered strong earnings and cash flow, and returned $2.5 billion to our shareholders. We plan to announce a 4-cent dividend increase for 2020, which is higher than recent increases, and we plan greater increases as our dividend to free cash flow ratio improves below 50 percent in future years.

“The year required our organization to be nimble, as we shifted from a growth mindset at our Investor Conference last February to an increasing focus through the second half of our fiscal year on setting up the right cost position for what we expect will be a low or no-growth environment.

“Emerson knows how to do this: We announced restructuring plans mid-year and increased the effort again in August. We drove hard through the fourth quarter to finish strong operationally while achieving $55 million in restructuring actions. We are not done – we will pursue further cost actions over the next couple of years.

“Our teams have worked hard and accomplished much in a short time during a challenging and dynamic year across the globe,” Farr said. “We believe this will help set the cost structure and the company up for continued success going into 2020.”

Business Platform Results

Automation Solutions net sales increased 4 percent in the quarter, with underlying sales up 5 percent excluding unfavorable currency of 2 percent and a positive impact from acquisitions of 1 percent. September trailing three-month underlying orders were up 3 percent and were up 4 percent excluding two prior year fleetwide modernization projects for large North American power customers.

Demand in process and hybrid end markets was steady in the Americas and Europe and was robust in Asia, Middle East & Africa. North American upstream oil and gas investment activity and global discrete end markets remained negative in the quarter. Programs focused on our installed base, including shutdowns and turnarounds and digital transformation solutions, contributed to steady growth of maintenance and repair (MRO) and brownfield investment activity. These programs drove an overall higher level of MRO growth and business mix in 2019 than we had expected at the outset of the year. Long-cycle businesses continued steady growth in the quarter, with Final Control underlying sales up mid-single digits and the Systems business up low-double digits. The September ending backlog for these businesses was up 6 percent compared to the prior year.

In the Americas, underlying sales were flat, reflecting slow discrete end markets and soft upstream oil and gas activity. The Industrial Solutions business, which primarily serves discrete manufacturing end markets through distribution, was down high-single digits on an underlying basis, reflecting continued soft short-cycle demand and some rebalancing of channel inventory. The Systems business was up high-single digits, reflecting steady MRO spending and project activity.

Asia, Middle East & Africa underlying sales growth was up 10 percent, supported by continued infrastructure investment, led by China, and strong growth in Middle East & Africa. Europe was up 7 percent, reflecting strong backlog conversion and steady demand in most key end markets.

Segment margin increased 70 basis points to 18.4 percent and was up 140 basis points to 19.5 percent excluding restructuring charges, reflecting year-over-year leverage exceeding 50 percent. Strong profitability in the quarter was driven by fixed cost leverage and the benefit of prior year restructuring actions.

For the full year, net sales were up 7 percent, or up 5 percent on an underlying basis. Segment margin decreased 50 basis points to 16.0 percent and was up 50 basis points to 17.3 percent excluding restructuring charges and the dilutive impact of the Aventics and GE Intelligent Platforms acquisitions, reflecting year-over-year leverage exceeding 30 percent.

Commercial & Residential Solutions net sales decreased 3 percent in the quarter, with underlying sales down 2 percent excluding unfavorable currency of 1 percent. September trailing three-month underlying orders were down 2 percent due to cooler weather in North American air conditioning markets and slower conditions in global professional tools and cold chain markets.

In the Americas, underlying sales were flat, reflecting modest growth in residential air conditioning markets offset by slower commercial and aftermarket demand and softer professional tools and cold chain end markets. Europe was down 2 percent, and Asia, Middle East & Africa was down 7 percent as sluggish conditions persisted across the region.

Margin decreased 120 basis points to 20.8 percent and was down 110 basis points to 21.6 percent excluding the impact of restructuring charges. Lower profitability primarily reflected deleverage on lower volume and unfavorable mix, partially offset by favorable price-cost.

For the full year, net sales were up 3 percent, or down 1 percent on an underlying basis. Segment margin decreased 200 basis points to 20.6 percent and was down 110 basis points to 21.9 percent excluding restructuring charges and the dilutive impact of the Tools & Test acquisition, primarily reflecting deleverage on lower sales volume and unfavorable mix.

2020 Outlook

Consistent with Emerson’s disciplined management approach, the Company’s Board of Directors is leading a comprehensive review of operational, capital allocation and portfolio initiatives. As announced on Oct. 1, this review was triggered earlier in fiscal 2019 by slowing macroeconomic conditions and geopolitical tensions that weigh on the Company’s demand outlook. The outlook does not include any impact from the Board’s ongoing review. We expect to present the Board’s conclusions and updated 2020 guidance at our February Investor Conference.

The 2020 guidance assumes that end market growth is muted, or even slightly negative, with Emerson net sales down 3 percent to up 1 percent and underlying sales down 2 percent to up 2 percent.

The 2020 adjusted earnings per share guidance excludes significant discrete tax items and restructuring charges, which will not be known until finalization of the Board’s review. The following table bridges 2019 GAAP earnings per share guidance to the new adjusted basis.

 

 

 

2019 GAAP EPS

$3.71

 

Less: Discrete tax benefits

(0.14)

 

Add: Restructuring charges

0.12

 

2019 Adjusted EPS

$3.69

 

 

 

 

2020 Adjusted EPS Range

$3.48 to $3.72

 

The 2020 adjusted earnings per share guidance includes headwinds of $0.29 related to increased pension expense driven by lower discount rates, higher stock compensation expense due to a higher assumed stock price in 2020, a higher tax rate and an unfavorable foreign currency impact. These headwinds are partially mitigated by lower interest expense and planned share repurchases of $1.5 billion in 2020.

The following table presents the 2020 guidance framework.

Sales Growth Guidance

 

EPS and Cash Flow Guidance

Net Sales Growth

(3%) – 1%

 

Adjusted EPS

$3.60 +/- $0.12

Automation Solutions

(2%) to 2%

 

Tax Rate

~23%

Commercial & Residential Solutions

(5%) to (1%)

 

Operating Cash Flow

~$3.1B

Underlying Sales Growth

(2%) – 2%

 

Free Cash Flow

~$2.5B

Automation Solutions

(1%) to 3%

 

Capital Expenditures

~$600M

Commercial & Residential Solutions

(3%) to 1%

 

Share Repurchases

$1.5B

“We are planning for a challenging economic environment in fiscal 2020,” Farr said. “The U.S. presidential election, continued trade tensions, and an increasing wave of corporate restructuring announcements will pressure global economies, leaving the large capital project cycle – which really hasn’t yet begun in our end markets – stalled.

“Fortunately, our businesses have proved they are resilient. Automation Solutions’ estimated $115 billion installed base offers secular growth levers, such as digital transformation upgrade projects and targeted MRO service programs that leverage our unique global service center infrastructure. Similarly, Commercial & Residential Solutions’ global position, diverse end markets and leading technology provide opportunities to grow above the market and a buffer against downside risk.

“Over the last few years, we’ve executed $6 billion of bolt-on acquisitions which provide runway for earnings growth, margin and cash flow improvement across both business platforms. Our Board of Directors continues its operations, portfolio and capital allocation review, and we expect to fully outline these plans and reset our 2020 and long-term guidance at our February 2020 Investor Conference.

“I want to thank the Board of Directors for their continued guidance and our company’s leaders and employees for their dedication as we navigate an uncertain macroeconomic environment.”

Upcoming Investor Events

Today, beginning at 2:30 p.m. Eastern Time, Emerson management will discuss the fourth quarter and full year 2019 results during an investor conference call. Participants can access a live webcast available at www.emerson.com/financial at the time of the call. A replay of the call 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 outcome and ultimate impact of the review referred to herein, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, among others, as set forth in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the SEC.

 

 

 

 

 

 

Table 1

EMERSON AND SUBSIDIARIES

CONSOLIDATED OPERATING RESULTS

(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

 

 

 

 

 

 

 

Quarter Ended Sept 30

 

Percent

 

2018

 

2019

 

Change

 

 

 

 

 

 

Net sales

$4,888

 

 

$4,971

 

 

2%

Costs and expenses:

 

 

 

 

 

Cost of sales

2,829

 

 

2,843

 

 

 

SG&A expenses

1,181

 

 

1,109

 

 

 

Other deductions, net

94

 

 

153

 

 

 

Interest expense, net

46

 

 

40

 

 

 

Earnings before income taxes

738

 

 

826

 

 

12%

Income taxes

116

 

 

102

 

 

 

Net earnings

622

 

 

724

 

 

 

Less: Noncontrolling interests in earnings of subsidiaries

5

 

 

7

 

 

 

Net earnings common stockholders

$617

 

 

$717

 

 

16%

 

 

 

 

 

 

Diluted avg. shares outstanding

631.9

 

 

617.5

 

 

 

 

 

 

 

 

 

Diluted earnings per share common share

$0.97

 

 

$1.16

 

 

20%

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended Sept 30

 

 

 

2018

 

2019

 

 

Other deductions, net

 

 

 

 

 

Amortization of intangibles

$57

 

 

$61

 

 

 

Restructuring costs

27

 

 

55

 

 

 

Other

10

 

 

37

 

 

 

Total

$94

 

 

$153

 

 

 

 

 

 

 

 

 

Table 2

EMERSON AND SUBSIDIARIES

CONSOLIDATED OPERATING RESULTS

(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

 

 

 

 

 

 

 

12 Months Ended Sept 30

 

Percent

 

2018

 

2019

 

Change

 

 

 

 

 

 

Net sales

$17,408

 

 

$18,372

 

 

6%

Costs and expenses:

 

 

 

 

 

Cost of sales

9,976

 

 

10,557

 

 

 

SG&A expenses

4,269

 

 

4,457

 

 

 

Other deductions, net

337

 

 

325

 

 

 

Interest expense, net

159

 

 

174

 

 

 

Earnings before income taxes

2,667

 

 

2,859

 

 

7%

Income taxes

443

 

 

531

 

 

 

Net earnings

2,224

 

 

2,328

 

 

 

Less: Noncontrolling interests in earnings of subsidiaries

21

 

 

22

 

 

 

Net earnings common stockholders

$2,203

 

 

$2,306

 

 

5%

 

 

 

 

 

 

Diluted avg. shares outstanding

635.3

 

 

620.6

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$3.46

 

 

$3.71

 

 

7%

 

 

 

 

 

 

 

 

 

 

 

 

 

12 Months Ended Sept 30

 

 

 

2018

 

2019

 

 

Other deductions, net

 

 

 

 

 

Amortization of intangibles

$211

 

 

$238

 

 

 

Restructuring costs

65

 

 

95

 

 

 

Other

61

 

 

(8

)

 

 

Total

$337

 

 

$325

 

 

 

 

 

 

 

Table 3

EMERSON AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN MILLIONS, UNAUDITED)

 

 

 

 

 

Quarter Ended Sept 30

 

2018

 

2019

Assets

 

 

 

Cash and equivalents

$1,093

 

 

$1,494

 

Receivables, net

3,023

 

 

2,985

 

Inventories

1,813

 

 

1,880

 

Other current assets

690

 

 

780

 

Total current assets

6,619

 

 

7,139

 

Property, plant & equipment, net

3,562

 

 

3,642

 

Goodwill

6,455

 

 

6,536

 

Other intangible assets

2,751

 

 

2,615

 

Other

1,003

 

 

565

 

Total assets

$20,390

 

 

$20,497

 

 

 

 

 

Liabilities and equity

 

 

 

Short-term borrowings and current maturities of long-term debt

$1,623

 

 

$1,444

 

Accounts payable

1,943

 

 

1,874

 

Accrued expenses

2,598

 

 

2,658

 

Total current liabilities

6,164

 

 

5,976

 

Long-term debt

3,137

 

 

4,277

 

Other liabilities

2,099

 

 

1,971

 

Total equity

8,990

 

 

8,273

 

Total liabilities and equity

$20,390

 

 

$20,497

 

 

 

 

 

Table 4

EMERSON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN MILLIONS, UNAUDITED)

 

 

 

 

 

 

12 Months Ended Sept 30

 

 

2018

 

2019

Operating activities

 

 

 

 

Net earnings

 

$2,224

 

$2,328

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

758

 

 

822

 

Changes in operating working capital

 

(83

)

 

(150

)

Other, net

 

(7

)

 

6

 

Net cash provided by operating activities

 

2,892

 

 

3,006

 

 

 

 

 

 

Investing activities

 

 

 

 

Capital expenditures

 

(617

)

 

(594

)

Purchases of businesses, net of cash and equivalents acquired

 

(2,203

)

 

(469

)

Divestitures of businesses

 

201

 

 

14

 

Other, net

 

(101

)

 

(125

)

Cash used in investing activities

 

(2,720

)

 

(1,174

)

 

 

 

 

 

Financing activities

 

 

 

 

Net increase (decrease) in short-term borrowings

 

343

 

 

(6

)

Proceeds from long-term debt

 

 

 

1,691

 

Payments of long-term debt

 

(241

)

 

(656

)

Dividends paid

 

(1,229

)

 

(1,209

)

Purchases of common stock

 

(1,000

)

 

(1,250

)

Other, net

 

35

 

 

39

 

Cash used in financing activities

 

(2,092

)

 

(1,391

)

 

 

 

 

 

Effect of exchange rate changes on cash and equivalents

 

(49

)

 

(40

)

Increase (decrease) in cash and equivalents

 

(1,969

)

 

401

 

Beginning cash and equivalents

 

3,062

 

 

1,093

 

Ending cash and equivalents

 

$1,093

 

$1,494

 

 

 

 

 

 

 

 

 

Table 5

EMERSON AND SUBSIDIARIES

SEGMENT SALES AND EARNINGS

(DOLLARS IN MILLIONS, UNAUDITED)

 

 

 

 

 

Quarter Ended Sept 30

 

2018

 

2019

Sales

 

 

 

Automation Solutions

$3,228

 

 

$3,368

 

 

 

 

 

Climate Technologies

1,168

 

 

1,142

 

Tools & Home Products

487

 

 

466

 

Commercial & Residential Solutions

1,655

 

 

1,608

 

 

 

 

 

Eliminations

5

 

 

(5

)

Net sales

$4,888

 

 

$4,971

 

 

 

 

 

Earnings

 

 

 

Automation Solutions

$570

 

 

$619

 

 

 

 

 

Climate Technologies

260

 

 

233

 

Tools & Home Products

104

 

 

102

 

Commercial & Residential Solutions

364

 

 

335

 

 

 

 

 

Stock Compensation

(72

)

 

(37

)

Pension and postretirement benefits

17

 

 

27

 

Corporate and other

(95

)

 

(78

)

Interest expense, net

(46

)

 

(40

)

Earnings before income taxes

$738

 

 

$826

 

 

 

 

 

Restructuring costs

 

 

 

Automation Solutions

$15

 

 

$39

 

 

 

 

 

Climate Technologies

9

 

 

12

 

Tools & Home Products

3

 

 

2

 

Commercial & Residential Solutions

12

 

 

14

 

 

 

 

 

Corporate

 

 

2

 

Total

$27

 

 

$55

 

 

 

 

 

Depreciation and Amortization

 

 

 

Automation Solutions

$132

 

 

$142

 

 

 

 

 

Climate Technologies

43

 

 

44

 

Tools & Home Products

16

 

 

17

 

Commercial & Residential Solutions

59

 

 

61

 

 

 

 

 

Corporate

10

 

 

10

 

Total

$201

 

 

$213

 

 

 

 

 

Table 6

EMERSON AND SUBSIDIARIES

SEGMENT SALES AND EARNINGS

(DOLLARS IN MILLIONS, UNAUDITED)

 

 

 

 

 

12 Months Ended Sept 30

 

2018

 

2019

Sales

 

 

 

Automation Solutions

$11,441

 

 

$12,202

 

 

 

 

 

Climate Technologies

4,454

 

 

4,313

 

Tools & Home Products

1,528

 

 

1,856

 

Commercial & Residential Solutions

5,982

 

 

6,169

 

 

 

 

 

Eliminations

(15

)

 

1

 

Net sales

$17,408

 

 

$18,372

 

 

 

 

 

Earnings

 

 

 

Automation Solutions

$1,886

 

 

$1,947

 

 

 

 

 

Climate Technologies

972

 

 

883

 

Tools & Home Products

380

 

 

388

 

Commercial & Residential Solutions

1,352

 

 

1,271

 

 

 

 

 

Stock Compensation

(216

)

 

(120

)

Pension and postretirement benefits

79

 

 

108

 

Corporate and other

(275

)

 

(173

)

Interest expense, net

(159

)

 

(174

)

Earnings before income taxes

$2,667

 

 

$2,859

 

 

 

 

 

Restructuring costs

 

 

 

Automation Solutions

$41

 

 

$65

 

 

 

 

 

Climate Technologies

20

 

 

20

 

Tools & Home Products

3

 

 

7

 

Commercial & Residential Solutions

23

 

 

27

 

 

 

 

 

Corporate

1

 

 

3

 

Total

$65

 

 

$95

 

 

 

 

 

Depreciation and Amortization

 

 

 

Automation Solutions

$488

 

 

$535

 

 

 

 

 

Climate Technologies

171

 

 

176

 

Tools & Home Products

44

 

 

71

 

Commercial & Residential Solutions

215

 

 

247

 

 

 

 

 

Corporate

55

 

 

40

 

Total

$758

 

 

$822

 

 

Reconciliations of Non-GAAP Financial Measures & Other

 

Table 7

 

 

 

 

 

 

 

 

 

 

 

Reconciliations of Non-GAAP measures (denoted by *) with the most directly comparable GAAP measure (dollars in millions, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

FY 2019 Underlying Sales Change

Auto Solns

 

Comm & Res
Solns

 

 

Reported (GAAP)

 

7

%

 

3

%

 

 

(Favorable) / Unfavorable FX

2

%

 

1

%

 

 

Acquisitions/Divestitures

(4

)%

 

(5

)%

 

 

Underlying*

5

%

 

(1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2019 Underlying Sales Change

Auto Solns

 

Comm & Res
Solns

 

Emerson

Reported (GAAP)

 

4

%

 

(3

)%

 

2%

(Favorable) / Unfavorable FX

2

%

 

1

%

 

2%

Acquisitions/Divestitures

(1

)%

 

%

 

(1)%

Underlying*

 

5

%

 

(2

)%

 

3%

 

 

 

 

 

 

 

 

 

 

 

FY 2020E Underlying Sales Change

Auto Solns

 

Comm & Res
Solns

 

Emerson

Reported (GAAP)

 

(2)% - 2%

 

(5)% - (1)%

 

(3)% - 1%

(Favorable) / Unfavorable FX

~ 1%

 

~ 1%

 

~ 1%

Acquisitions/Divestitures

 

~ - %

 

~ 1%

 

~ - %

Underlying*

 

(1)% - 3%

 

(3)% - 1%

 

(2)% - 2%

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

Q4 FY18

 

Q4 FY19

 

Change

Earnings per share (GAAP)

$

0.97

 

 

$

1.16

 

 

20%

Discrete tax benefits

(0.08

)

 

(0.09

)

 

—%

Earnings per share excluding discrete tax benefits*

$

0.89

 

 

$

1.07

 

 

20%

 

 

 

 

 

 

 

 

 

 

 

EBIT Margin

Q4 FY18

 

Q4 FY19

 

Change

Pretax margin (GAAP)

15.1

%

 

16.6

%

 

150 bps

Interest expense, net

0.9

%

 

0.8

%

 

(10) bps

Earnings before interest and taxes margin*

16.0

%

 

17.4

%

 

140 bps

 

Business Segment EBIT

Q4 FY18

 

Q4 FY19

 

Change

Pretax margin (GAAP)

15.1

%

 

16.6

%

 

150 bps

Corp. items & interest expense, net % of sales

4.0

%

 

2.6

%

 

(140) bps

Business segment EBIT margin*

19.1

%

 

19.2

%

 

10 bps

Restructuring charges

0.6

%

 

1.0

%

 

40 bps

Business segment EBIT margin excluding restructuring*

19.7

%

 

20.2

%

 

50 bps

 

 

 

 

 

 

 

 

 

 

 

Q4 2019 Automation Solutions Segment EBIT Margin

Q4 FY18

 

Q4 FY19

 

Change

Automation Solutions Segment EBIT margin (GAAP)

17.7

%

 

18.4

%

 

70 bps

Restructuring charges

0.4

%

 

1.1

%

 

70 bps

Automation Solutions Segment EBIT margin, excluding restructuring*

18.1

%

 

19.5

%

 

140 bps

 

 

 

 

 

 

 

 

 

 

 

Automation Solutions Segment EBIT Margin

FY18

 

FY19

 

Change

Automation Solutions Segment EBIT margin (GAAP)

16.5

%

 

16.0

%

 

(50) bps

Restructuring and acquisitions impact

0.3

%

 

1.3

%

 

100 bps

Automation Solutions Segment EBIT margin, excluding restructuring and acquisitions*

16.8

%

 

17.3

%

 

50 bps

 

 

 

 

 

 

 

 

 

 

 

Q4 2019 Commercial & Residential EBIT Margin

Q4 FY18

 

Q4 FY19

 

Change

Commercial & Residential EBIT margin (GAAP)

22.0

%

 

20.8

%

 

(120) bps

Restructuring charges

0.7

%

 

0.8

%

 

10 bps

Commercial & Residential EBIT margin, excluding restructuring*

22.7

%

 

21.6

%

 

(110) bps

 

 

 

 

 

 

Commercial & Residential EBIT Margin

FY18

 

FY19

 

Change

Commercial & Residential EBIT margin (GAAP)

22.6

%

 

20.6

%

 

(200) bps

Restructuring and Tools & Test acquisition impact

0.4

%

 

1.3

%

 

90 bps

Commercial & Residential EBIT margin, excluding restructuring and Tools & Test acquisition*

23.0

%

 

21.9

%

 

(110) bps

 

 

 

 

 

 

 

 

 

 

Q4 Cash Flow

 

 

 

Q4 FY18

 

Q4 FY19

 

Change

Operating cash flow (GAAP)

$

1,024

 

 

$

1,204

 

 

18%

Capital expenditures

(303

)

 

(199

)

 

22%

Free cash flow*

$

721

 

 

$

1,005

 

 

40%

 

Cash Flows

 

 

 

FY18

 

FY19

 

Change

Operating cash flow (GAAP)

 

 

 

$

2,892

 

 

$

3,006

 

 

4%

Capital expenditures

 

 

 

(617

)

 

(594

)

 

2%

Free cash flow*

 

 

 

$

2,275

 

 

$

2,412

 

 

6%

 

 

 

 

 

 

 

 

 

 

 

FY 2020E Cash Flow

FY 2020E

 

 

 

 

Operating cash flow (GAAP)

$

3,100

 

 

 

 

 

Capital expenditures

~ (600

)

 

 

 

 

Free cash flow*

$

2,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow to Net Earnings Conversion

FY19

 

 

 

 

Operating cash flow to net earnings (GAAP)

130

%

 

 

 

Capital expenditures

(25

)%

 

 

 

 

Free cash flow to net earnings*

105

%

 

 

 

 

 

 

 

 

 

Dividend to Free Cash Flow

FY18

 

FY19

 

Change

Dividends to operating cash flow (GAAP)

43

%

 

40

%

 

(3)%

Capital expenditures

11

%

 

10

%

 

(1)%

Dividends to free cash flow*

54

%

 

50

%

 

(4)%

 

 

Note: Underlying sales and orders exclude the impact of acquisitions, divestitures and currency translation.

 

 

 

 

 

 

 

 

 

 

 

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191105005519/en/

CONTACT: Investor Contact: Tim Reeves (314) 553-2197

Media Contact: Casey Murphy (314) 982-6220

KEYWORD: UNITED STATES NORTH AMERICA MISSOURI

INDUSTRY KEYWORD: ENGINEERING OTHER ENERGY TECHNOLOGY MANUFACTURING OTHER TECHNOLOGY ENERGY OTHER MANUFACTURING

SOURCE: Emerson

Copyright Business Wire 2019.

PUB: 11/05/2019 07:00 AM/DISC: 11/05/2019 07:01 AM

http://www.businesswire.com/news/home/20191105005519/en