Emerson Reports Fourth Quarter and Full Year 2023 Results; Provides Initial 2024 Outlook
ST. LOUIS, Nov. 7, 2023 /PRNewswire/ -- Emerson (NYSE: EMR) today reported results for its fourth quarter and fiscal year ended September 30, 2023, which are presented on a continuing operations basis. Emerson also declared a quarterly cash dividend of $0.525 per share of common stock payable December 11, 2023 to stockholders of record November 17, 2023.
(dollars in millions, except per share) | 2022 Q4 | 2023 Q4 | Change | 2022 | 2023 | Change | ||
Underlying Orders1 | 5 % | 5 % | ||||||
Net Sales | $3,892 | $4,090 | 5 % | $13,804 | $15,165 | 10 % | ||
Underlying Sales2 | 5 % | 10 % | ||||||
Pretax Earnings | $603 | $904 | $2,432 | $2,726 | ||||
Margin | 15.5 % | 22.1 % | 660 bps | 17.6 % | 18.0 % | 40 bps | ||
Adjusted Segment EBITA3 | $963 | $1,045 | $3,147 | $3,794 | ||||
Margin | 24.7 % | 25.5 % | 80 bps | 22.8 % | 25.0 % | 220 bps | ||
GAAP Earnings Per Share | $0.82 | $1.22 | 49 % | $3.16 | $3.72 | 18 % | ||
Adjusted Earnings Per Share4 | $1.07 | $1.29 | 21 % | $3.64 | $4.44 | 22 % | ||
Operating Cash Flow | $813 | $1,007 | 24 % | $2,048 | $2,726 | 33 % | ||
Free Cash Flow | $713 | $838 | 17 % | $1,749 | $2,363 | 35 % |
Management Commentary
"Emerson completed an exceptional fiscal 2023 with double-digit sales growth, strong operating leverage and robust adjusted earnings per share growth," said Emerson President and Chief Executive Officer Lal Karsanbhai. "This momentum and our continued focus on execution, leading technology and resilient end-markets provides confidence in our guidance for fiscal 2024."
Karsanbhai continued, "In the quarter, we also closed the acquisition of NI, largely completing our transformation into an automation leader. Our differentiated portfolio with NI and accelerated investments in new-to-the-world innovation provide a unique opportunity to solve many of our customers' toughest challenges and create long-term shareholder value."
2024 Outlook
The following tables summarize the fiscal year 2024 guidance framework and incorporates, other than as set forth below, our NI acquisition5, which closed on October 11, 2023. The 2024 outlook assumes approximately $500 million returned to shareholders through share repurchases and approximately $1.2 billion of dividend payments. Guidance figures are approximate.
2024 Q1 | 2024 | |
Net Sales Growth | 14% - 17.5% | 13% - 15.5% |
Underlying Sales Growth | 6.5% - 8.5% | 4% - 6% |
Earnings Per Share5 | $0.45 - $0.50 | $3.82 - $4.02 |
Amortization of Intangibles | ~$0.17 | ~$0.67 |
Restructuring / Related Costs | ~$0.08 | ~$0.22 |
Acquisition / Divestiture Fees and Related Costs | ~$0.19 | ~$0.22 |
Copeland Equity Loss | ~$0.11 | ~$0.22 |
Adjusted Earnings Per Share | $1.00 - $1.05 | $5.15 - $5.35 |
Operating Cash Flow | $3.0B - $3.1B | |
Free Cash Flow | $2.6B - $2.7B |
1 Underlying orders does not include AspenTech. |
2 Underlying sales excludes the impact of currency translation, and significant acquisitions and divestitures. Heritage AspenTech and Emerson's businesses contributed to AspenTech are included in underlying sales beginning in 2023 Q4. |
3 Adjusted segment EBITA represents segment earnings excluding restructuring and intangibles amortization expense. |
4 Adjusted EPS excludes restructuring and related costs, NI investment gains, acquisition/divestiture costs, write-offs associated with Emerson's Russia exit, an AspenTech Micromine purchase price hedge, the income/loss of Emerson's 40% share of Copeland, interest income on undeployed proceeds and intangibles amortization expense. Post-Copeland transaction close, adjusted EPS now includes the interest on the Copeland note receivable valued at $0.04 and $0.05 for the fourth quarter and fiscal year 2023, respectively. |
5 GAAP earnings per share guidance for 2024 does not include the impact of intangibles amortization and other purchase accounting-related costs related to the NI transaction. The initial accounting for the transaction is not yet complete and therefore Emerson is unable to estimate these amounts. Although these items may have a significant impact on GAAP EPS, they will be excluded from adjusted earnings per share and will have no impact on cash flows. |
Conference Call
Today, beginning at 7:00 a.m. Central Time / 8:00 a.m. Eastern Time, Emerson management will discuss the fourth quarter results during an investor conference call. Participants can access a live webcast available at www.emerson.com/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.
About Emerson
Emerson (NYSE: EMR) is a global technology and software company providing innovative solutions for the world's essential industries. Through its leading automation portfolio, including its majority stake in AspenTech, Emerson helps hybrid, process and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability goals. For more information, visit Emerson.com.
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 scope, duration and ultimate impacts of the Russia-Ukraine and other global conflicts, as well as economic and currency conditions, market demand, 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.
Emerson uses our Investor Relations website, www.Emerson.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts and social media. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Contacts
Investors: | Media: |
Colleen Mettler | Joseph Sala / Tanner Kaufman / Greg Klassen |
(314) 553-2197 | Joele Frank, Wilkinson Brimmer Katcher |
(212) 355-4449 |
(tables attached)
Table 1 | |||||||
EMERSON AND SUBSIDIARIES | |||||||
CONSOLIDATED OPERATING RESULTS | |||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) | |||||||
Quarter Ended September 30, | Year Ended September 30, | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Net sales | $3,892 | $4,090 | $13,804 | $15,165 | |||
Costs and expenses: | |||||||
Cost of sales | 2,063 | 2,078 | 7,498 | 7,738 | |||
SG&A expenses | 983 | 1,114 | 3,614 | 4,186 | |||
Gain on subordinated interest | — | (161) | (453) | (161) | |||
Other deductions, net | 189 | 263 | 519 | 683 | |||
Interest expense (income), net | 54 | (77) | 194 | 34 | |||
Interest income from related party1 | — | (31) | — | (41) | |||
Earnings from continuing operations before income taxes | 603 | 904 | 2,432 | 2,726 | |||
Income taxes | 150 | 209 | 549 | 599 | |||
Earnings from continuing operations | 453 | 695 | 1,883 | 2,127 | |||
Discontinued operations, net of tax | 255 | 43 | 1,347 | 11,073 | |||
Net earnings | 708 | 738 | 3,230 | 13,200 | |||
Less: Noncontrolling interests in subsidiaries | (32) | (6) | (1) | (19) | |||
Net earnings common stockholders | $740 | $744 | $3,231 | $13,219 | |||
Earnings common stockholders | |||||||
Earnings from continuing operations | $486 | $701 | $1,886 | $2,152 | |||
Discontinued operations | 254 | 43 | 1,345 | 11,067 | |||
Net earnings common stockholders | $740 | $744 | $3,231 | $13,219 | |||
Diluted avg. shares outstanding | 594.5 | 574.7 | 596.3 | 577.3 | |||
Diluted earnings per share common stockholders | |||||||
Earnings from continuing operations | $0.82 | $1.22 | $3.16 | $3.72 | |||
Discontinued operations | 0.42 | 0.07 | 2.25 | 19.16 | |||
Diluted earnings per common share | $1.24 | $1.29 | $5.41 | $22.88 | |||
Quarter Ended September 30, | Year Ended September 30, | ||||||
2022 | 2023 | 2022 | 2023 | ||||
Other deductions, net | |||||||
Amortization of intangibles | $129 | $125 | $336 | $482 | |||
Restructuring costs | 31 | 31 | 75 | 72 | |||
Other | 29 | 107 | 108 | 129 | |||
Total | $189 | $263 | $519 | $683 | |||
1 Represents interest on the Copeland note receivable. | |||||||
Table 2 | |||
EMERSON AND SUBSIDIARIES | |||
CONSOLIDATED BALANCE SHEETS | |||
(DOLLARS IN MILLIONS, UNAUDITED) | |||
Year Ended Sept 30 | |||
2022 | 2023 | ||
Assets | |||
Cash and equivalents | $1,804 | $8,051 | |
Receivables, net | 2,261 | 2,518 | |
Inventories | 1,742 | 2,006 | |
Other current assets | 1,301 | 1,244 | |
Current assets held-for-sale | 1,398 | — | |
Total current assets | 8,506 | 13,819 | |
Property, plant & equipment, net | 2,239 | 2,363 | |
Goodwill | 13,946 | 14,480 | |
Other intangible assets | 6,572 | 6,263 | |
Copeland note receivable and equity investment | — | 3,255 | |
Other | 2,151 | 2,566 | |
Noncurrent assets held-for-sale | 2,258 | — | |
Total assets | $35,672 | $42,746 | |
Liabilities and equity | |||
Short-term borrowings and current | |||
maturities of long-term debt | $2,115 | $547 | |
Accounts payable | 1,276 | 1,275 | |
Accrued expenses | 3,038 | 3,210 | |
Current liabilities held-for-sale | 1,348 | — | |
Total current liabilities | 7,777 | 5,032 | |
Long-term debt | 8,259 | 7,610 | |
Other liabilities | 3,153 | 3,506 | |
Noncurrent liabilities held-for-sale | 167 | — | |
Equity | |||
Common stockholders' equity | 10,364 | 20,689 | |
Noncontrolling interests in subsidiaries | 5,952 | 5,909 | |
Total equity | 16,316 | 26,598 | |
Total liabilities and equity | $35,672 | $42,746 | |
Table 3 | ||||
EMERSON AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(DOLLARS IN MILLIONS, UNAUDITED) | ||||
Year Ended Sept 30 | ||||
2022 | 2023 | |||
Operating activities | ||||
Net earnings | $3,230 | $13,200 | ||
Earnings from discontinued operations, net of tax | (1,347) | (11,073) | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||
Depreciation and amortization | 842 | 1,051 | ||
Stock compensation | 125 | 250 | ||
Pension expense | 2 | (71) | ||
Pension funding | (43) | (43) | ||
Changes in operating working capital | (312) | (190) | ||
Gain on subordinated interest | (453) | (161) | ||
Other, net | 4 | (237) | ||
Cash from continuing operations | 2,048 | 2,726 | ||
Cash from discontinued operations | 874 | (2,089) | ||
Cash provided by operating activities | 2,922 | 637 | ||
Investing activities | ||||
Capital expenditures | (299) | (363) | ||
Purchases of businesses, net of cash and equivalents acquired | (5,702) | (705) | ||
Divestitures of businesses | 17 | — | ||
Proceeds from subordinated interest | 438 | 176 | ||
Proceeds from related party note receivable | — | 918 | ||
Other, net | (138) | (141) | ||
Cash from continuing operations | (5,684) | (115) | ||
Cash from discontinued operations | 350 | 12,530 | ||
Cash provided by (used in) investing activities | (5,334) | 12,415 | ||
Financing activities | ||||
Net increase (decrease) in short-term borrowings | 1,241 | (1,578) | ||
Proceeds from short-term borrowings greater than three months | 1,162 | 395 | ||
Payments of short-term borrowings greater than three months | (1,165) | (400) | ||
Proceeds from long-term debt | 2,975 | — | ||
Payments of long-term debt | (522) | (741) | ||
Dividends paid | (1,223) | (1,198) | ||
Purchases of common stock | (500) | (2,000) | ||
AspenTech purchases of common stock | — | (214) | ||
Payment of related party note payable | — | (918) | ||
Other, net | 80 | (169) | ||
Cash provided by (used in) financing activities | 2,048 | (6,823) | ||
Effect of exchange rate changes on cash and equivalents | (186) | 18 | ||
Increase (Decrease) in cash and equivalents | (550) | 6,247 | ||
Beginning cash and equivalents | 2,354 | 1,804 | ||
Ending cash and equivalents | $1,804 | $8,051 | ||
Table 4 | ||||||||
EMERSON AND SUBSIDIARIES SEGMENT SALES AND EARNINGS (AMOUNTS IN MILLIONS, UNAUDITED) | ||||||||
The following tables show results for the Company's segments on an adjusted segment EBITA basis and are intended to supplement the Company's results of operations, including its segment earnings which are defined as earnings before interest and taxes. The Company defines adjusted segment and total segment EBITA as segment earnings excluding intangibles amortization expense, and restructuring and related expense. Adjusted segment and total segment EBITA, and adjusted segment and total segment EBITA margin are measures used by management and may be useful for investors to evaluate the Company's segments' operational performance. | ||||||||
Quarter Ended Sept 30 | ||||||||
2022 | 2023 | Reported | Underlying | |||||
Sales | ||||||||
Final Control | $1,001 | $1,081 | 8 % | 7 % | ||||
Measurement & Analytical | 921 | 1,045 | 14 % | 15 % | ||||
Discrete Automation | 718 | 666 | (7) % | (8) % | ||||
Safety & Productivity | 336 | 354 | 5 % | 4 % | ||||
Intelligent Devices | $2,976 | $3,146 | 6 % | 6 % | ||||
Control Systems & Software | 687 | 714 | 4 % | 3 % | ||||
AspenTech | 251 | 249 | (1) % | (1) % | ||||
Software and Control | $938 | $963 | 3 % | 2 % | ||||
Eliminations | (22) | (19) | ||||||
Total | $3,892 | $4,090 | 5 % | 5 % | ||||
Sales Growth by Geography | |
Quarter Ended Sept 30 | |
Americas | 3 % |
Europe | 8 % |
Asia, Middle East & Africa | 5 % |
Table 4 cont. | |||||||
Year Ended Sept 30 | |||||||
2022 | 2023 | Reported | Underlying | ||||
Sales | |||||||
Final Control | $3,607 | $3,970 | 10 % | 13 % | |||
Measurement & Analytical | 3,215 | 3,595 | 12 % | 16 % | |||
Discrete Automation | 2,612 | 2,635 | 1 % | 3 % | |||
Safety & Productivity | 1,402 | 1,388 | (1) % | (1) % | |||
Intelligent Devices | $10,836 | $11,588 | 7 % | 10 % | |||
Control Systems & Software | 2,398 | 2,606 | 9 % | 11 % | |||
AspenTech | 656 | 1,042 | 59 % | (1) % | |||
Software and Control | $3,054 | $3,648 | 20 % | 10 % | |||
Eliminations | (86) | (71) | |||||
Total | $13,804 | $15,165 | 10 % | 10 % | |||
Sales Growth by Geography | |
Year Ended Sept 30 | |
Americas | 10 % |
Europe | 10 % |
Asia, Middle East & Africa | 9 % |
Table 4 cont. | |||||||
Quarter Ended Sept 30 | Quarter Ended Sept 30 | ||||||
2022 | 2023 | ||||||
As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | ||||
Earnings | |||||||
Final Control | $168 | $233 | $247 | $285 | |||
Margins | 16.7 % | 23.2 % | 22.9 % | 26.4 % | |||
Measurement & Analytical | 250 | 250 | 275 | 298 | |||
Margins | 27.2 % | 27.1 % | 26.3 % | 28.4 % | |||
Discrete Automation | 177 | 180 | 131 | 145 | |||
Margins | 24.6 % | 24.1 % | 19.7 % | 21.8 % | |||
Safety & Productivity | 51 | 67 | 78 | 83 | |||
Margins | 15.1 % | 19.9 % | 21.9 % | 23.5 % | |||
Intelligent Devices | $646 | $730 | $731 | $811 | |||
Margins | 21.7 % | 24.5 % | 23.2 % | 25.8 % | |||
Control Systems & Software | 143 | 152 | 151 | 158 | |||
Margins | 20.8 % | 22.0 % | 21.1 % | 22.2 % | |||
AspenTech | (39) | 81 | (47) | 76 | |||
Margins | (15.2) % | 32.9 % | (18.7) % | 30.2 % | |||
Software and Control | $104 | $233 | $104 | $234 | |||
Margins | 11.2 % | 24.9 % | 10.8 % | 24.3 % | |||
Corporate items and interest expense, net: | |||||||
Stock compensation | (33) | (33) | (52) | (52) | |||
Unallocated pension and postretirement costs | 23 | 23 | 38 | 38 | |||
Corporate and other | (83) | (27) | (70) | (41) | |||
Gain on Vertiv Investment | — | — | 161 | — | |||
Copeland equity method investment loss | — | — | (116) | — | |||
Interest (expense) income, net | (54) | — | 77 | — | |||
Interest income from related party1 | — | — | 31 | — | |||
Pretax Earnings / Adjusted EBITA | $603 | $926 | $904 | $990 | |||
Margins | 15.5 % | 23.8 % | 22.1 % | 24.2 % | |||
Supplemental Total Segment Earnings: | |||||||
Adjusted Total Segment EBITA | $963 | $1,045 | |||||
Margins | 24.7 % | 25.5 % | |||||
1 Represents interest on the Copeland note receivable. | |||||||
Year Ended Sept 30 | Year Ended Sept 30 | ||||||
2022 | 2023 | ||||||
As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | ||||
Earnings | |||||||
Final Control | $592 | $761 | $865 | $981 | |||
Margins | 16.4 % | 21.1 % | 21.8 % | 24.7 % | |||
Measurement & Analytical | 785 | 809 | 936 | 976 | |||
Margins | 24.4 % | 25.2 % | 26.0 % | 27.1 % | |||
Discrete Automation | 542 | 572 | 509 | 565 | |||
Margins | 20.7 % | 21.9 % | 19.3 % | 21.4 % | |||
Safety & Productivity | 250 | 286 | 306 | 332 | |||
Margins | 17.8 % | 20.3 % | 22.0 % | 23.9 % | |||
Intelligent Devices | $2,169 | $2,428 | $2,616 | $2,854 | |||
Margins | 20.0 % | 22.4 % | 22.6 % | 24.6 % | |||
Control Systems & Software | 437 | 470 | 529 | 560 | |||
Margins | 18.2 % | 19.6 % | 20.3 % | 21.5 % | |||
AspenTech | 12 | 249 | (107) | 380 | |||
Margins | 1.9 % | 38.0 % | (10.3) % | 36.4 % | |||
Software and Control | $449 | $719 | $422 | $940 | |||
Margins | 14.7 % | 23.5 % | 11.6 % | 25.8 % | |||
Corporate items and interest expense, net: | |||||||
Stock compensation | (125) | (125) | (250) | (250) | |||
Unallocated pension and postretirement costs | 99 | 99 | 171 | 171 | |||
Corporate and other | (419) | (105) | (224) | (159) | |||
Gain on Vertiv Investment | 453 | — | 161 | — | |||
Copeland equity method investment loss | — | — | (177) | — | |||
Interest (expense) income, net | (194) | — | (34) | — | |||
Interest income from related party1 | — | — | 41 | — | |||
Pretax Earnings / Adjusted EBITA | $2,432 | $3,016 | $2,726 | $3,556 | |||
Margins | 17.6 % | 21.8 % | 18.0 % | 23.4 % | |||
Supplemental Total Segment Earnings: | |||||||
Adjusted Total Segment EBITA | $3,147 | $3,794 | |||||
Margins | 22.8 % | 25.0 % | |||||
1 Represents interest on the Copeland note receivable. | |||||||
Table 4 cont. | |||||||
Quarter Ended Sept 30 | Quarter Ended Sept 30 | ||||||
2022 | 2023 | ||||||
Amortization of Intangibles1 | Restructuring and Related Costs2 | Amortization of Intangibles1 | Restructuring and Related Costs2 | ||||
Final Control | $23 | $42 | $22 | $16 | |||
Measurement & Analytical | 6 | (6) | 12 | 11 | |||
Discrete Automation | 7 | (4) | 7 | 7 | |||
Safety & Productivity | 6 | 10 | 6 | (1) | |||
Intelligent Devices | $42 | $42 | $47 | $33 | |||
Control Systems & Software | 6 | 3 | 5 | 2 | |||
AspenTech | 121 | (1) | 122 | 1 | |||
Software and Control | $127 | $2 | $127 | $3 | |||
Corporate | — | 3 | — | 2 | |||
Total | $169 | $47 | $174 | $38 | |||
1 Amortization of intangibles includes $49 and $49 reported in cost of sales for the three months ended September 30, 2022 and 2023, respectively. | |||||||
2 Restructuring and related costs includes $16 and $7 reported in cost of sales and selling, general and administrative expenses for the three months ended September 30, 2022 and 2023, respectively. | |||||||
Year Ended Sept 30 | Year Ended Sept 30 | ||||||
2022 | 2023 | ||||||
Amortization of Intangibles1 | Restructuring and Related Costs2 | Amortization of Intangibles1 | Restructuring and Related Costs2 | ||||
Final Control | $94 | $75 | $88 | $28 | |||
Measurement & Analytical | 21 | 3 | 27 | 13 | |||
Discrete Automation | 30 | — | 29 | 27 | |||
Safety & Productivity | 26 | 10 | 26 | — | |||
Intelligent Devices | $171 | $88 | $170 | $68 | |||
Control Systems & Software | 22 | 11 | 22 | 9 | |||
AspenTech | 237 | — | 486 | 1 | |||
Software and Control | $259 | $11 | $508 | $10 | |||
Corporate | — | 16 | — | 14 | |||
Total | $430 | $115 | $678 | $92 | |||
1 Amortization of intangibles includes $108 and $196 reported in cost of sales for the twelve months ended September 30, 2022 and 2023, respectively. | |||||||
2 Restructuring and related costs includes $40 and $20 reported in cost of sales and selling, general and administrative expenses for the twelve months ended September 30, 2022 and 2023, respectively. | |||||||
Quarter Ended Sept 30 | |||
2022 | 2023 | ||
Depreciation and Amortization | |||
Final Control | $56 | $41 | |
Measurement & Analytical | 29 | 37 | |
Discrete Automation | 21 | 21 | |
Safety & Productivity | 13 | 13 | |
Intelligent Devices | 119 | 112 | |
Control Systems & Software | 22 | 23 | |
AspenTech | 123 | 123 | |
Software and Control | 145 | 146 | |
Corporate | 7 | 13 | |
Total | $271 | $271 | |
Year Ended Sept 30 | |||
2022 | 2023 | ||
Depreciation and Amortization | |||
Final Control | $212 | $170 | |
Measurement & Analytical | 117 | 121 | |
Discrete Automation | 88 | 84 | |
Safety & Productivity | 57 | 57 | |
Intelligent Devices | 474 | 432 | |
Control Systems & Software | 93 | 90 | |
AspenTech | 242 | 492 | |
Software and Control | 335 | 582 | |
Corporate | 33 | 37 | |
Total | $842 | $1,051 | |
Table 5 | ||||
EMERSON AND SUBSIDIARIES ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL (AMOUNTS IN MILLIONS, UNAUDITED) | ||||
The following table shows the Company's corporate and other expenses on an adjusted basis. The Company's definition of adjusted corporate and other excludes corporate restructuring and related costs, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. This metric is useful for reconciling from total adjusted segment EBITA to the Company's consolidated adjusted EBITA. | ||||
Quarter Ended Sept 30 | ||||
Corporate and Other | 2022 | 2023 | ||
Corporate and other (GAAP) | $(83) | $(70) | ||
Corporate restructuring and related costs | 1 | 2 | ||
National Instruments investment gain | — | (9) | ||
Other investment-related gains | (14) | — | ||
Acquisition / divestiture costs | — | 36 | ||
Russia business exit | 19 | 1 | — | |
AspenTech Micromine purchase price hedge | 50 | — | ||
Adjusted corporate and other (Non-GAAP) | $(27) | $(41) | ||
1 The Russia business exit charge includes $2 of restructuring costs. | ||||
Year Ended Sept 30 | ||||
Corporate and Other | 2022 | 2023 | ||
Corporate and other (GAAP) | $(419) | $(224) | ||
Corporate restructuring and related costs | 6 | 14 | ||
National Instruments investment gain | — | (56) | ||
Other investment-related gains | (14) | — | ||
Acquisition / divestiture costs | 91 | 84 | ||
Russia business exit | 181 | 1 | 47 | |
AspenTech Micromine purchase price hedge | 50 | (24) | ||
Adjusted corporate and other (Non-GAAP) | $(105) | $(159) | ||
1 The Russia business exit charge includes $10 of restructuring costs. | ||||
Table 6 | |||
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, gains or losses on the Copeland equity method investment, 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, interest income on undeployed proceeds, gains or losses on the Copeland equity method investment, 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 | |||
2022 | 2023 | ||
Pretax earnings | $603 | $904 | |
Percent of sales | 15.5 % | 22.1 % | |
Interest expense (income), net | 54 | (77) | |
Interest income from related party1 | — | (31) | |
Amortization of intangibles | 169 | 174 | |
Restructuring and related costs | 46 | 38 | |
Acquisition/divestiture and related costs | — | 36 | |
Gain on subordinated interest | — | (161) | |
National Instruments investment gain | — | (9) | |
Other investment-related gains | (14) | — | |
AspenTech Micromine purchase price hedge | 50 | — | |
Loss on Copeland equity method investment | — | 116 | |
Russia business exit charge | 19 | — | |
Adjusted EBITA | $927 | $990 | |
Percent of sales | 23.8 % | 24.2 % | |
Quarter Ended Sept 30 | |||
2022 | 2023 | ||
GAAP earnings from continuing operations per share | $0.82 | $1.22 | |
Amortization of intangibles | 0.14 | 0.16 | |
Restructuring and related costs | 0.06 | 0.07 | |
Acquisition/divestiture and related costs | — | 0.06 | |
Gain on subordinated interest | — | (0.21) | |
National Instruments investment gain | — | (0.01) | |
Other investment-related gains | (0.02) | — | |
AspenTech Micromine purchase price hedge | 0.04 | — | |
Interest income on undeployed proceeds from Copeland transaction | — | (0.14) | |
Loss on Copeland equity method investment | — | 0.14 | |
Russia business exit charge | 0.03 | — | |
Adjusted earnings from continuing operations per share | $1.07 | $1.29 | |
Less: AspenTech contribution to adjusted earnings per share | (0.06) | ||
Adjusted earnings per share excluding AspenTech contribution | $1.23 | ||
1 Represents interest on the Copeland note receivable | |||
Year Ended Sept 30 | |||
2022 | 2023 | ||
Pretax earnings | $2,432 | $2,726 | |
Percent of sales | 17.6 % | 18.0 % | |
Interest expense (income), net | 194 | 34 | |
Interest income from related party1 | — | (41) | |
Amortization of intangibles | 430 | 678 | |
Restructuring and related costs | 105 | 92 | |
Acquisition/divestiture and related costs | 91 | 84 | |
Gain on subordinated interest | (453) | (161) | |
National Instruments investment gain | — | (56) | |
Other investment-related gains | (14) | — | |
AspenTech Micromine purchase price hedge | 50 | (24) | |
Loss on Copeland equity method investment | — | 177 | |
Russia business exit charge | 181 | 47 | |
Adjusted EBITA | $3,016 | $3,556 | |
Percent of sales | 21.8 % | 23.4 % | |
Year Ended Sept 30 | |||
2022 | 2023 | ||
GAAP earnings from continuing operations per share | $3.16 | $3.72 | |
Amortization of intangibles | 0.45 | 0.62 | |
Restructuring and related costs | 0.14 | 0.14 | |
Acquisition/divestiture costs and pre-acquisition interest on AspenTech debt | 0.15 | 0.13 | |
Gain on subordinated interest | (0.60) | (0.21) | |
National Instruments investment gain | — | (0.07) | |
Other investment-related gains | (0.02) | — | |
AspenTech Micromine purchase price hedge | 0.04 | (0.02) | |
Interest income on undeployed proceeds from Copeland transaction | — | (0.19) | |
Loss on Copeland equity method investment | — | 0.24 | |
Russia business exit charge | 0.32 | 0.08 | |
Adjusted earnings from continuing operations per share | $3.64 | $4.44 | |
Less: AspenTech contribution to adjusted earnings per share | (0.27) | ||
Adjusted earnings per share excluding AspenTech contribution | $4.17 | ||
1 Represents interest on the Copeland note receivable | |||
Table 6 cont. | |||||||||||
Quarter Ended September 30, 2023 | |||||||||||
Pretax | Income | Earnings from | Non-Controlling Interests3 | Net | Diluted | ||||||
As reported (GAAP) | $904 | $209 | $695 | $(6) | $701 | $1.22 | |||||
Amortization of intangibles | 174 | 1 | 40 | 134 | 41 | 93 | 0.16 | ||||
Restructuring and related costs | 38 | 2 | — | 38 | 1 | 37 | 0.07 | ||||
Acquisition/divestiture and related costs | 36 | 3 | 33 | — | 33 | 0.06 | |||||
Gain on subordinated interest | (161) | (39) | (122) | — | (122) | (0.21) | |||||
National Instruments investment gain | (9) | (2) | (7) | — | (7) | (0.01) | |||||
Interest income on undeployed proceeds | (106) | (25) | (81) | — | (81) | (0.14) | |||||
Copeland equity method investment loss | 116 | 33 | 83 | — | 83 | 0.14 | |||||
Adjusted (Non-GAAP) | $992 | $219 | $773 | $36 | $737 | $1.29 | |||||
Interest expense, net (excluding interest income on undeployed proceeds) | 29 | ||||||||||
Interest income from related party4 | (31) | ||||||||||
Adjusted EBITA (Non-GAAP) | $990 | ||||||||||
1 Amortization of intangibles includes $49 reported in cost of sales. | |||||||||||
2 Restructuring and related costs includes $7 reported in cost of sales. | |||||||||||
3 Represents the non-controlling interest in AspenTech applied to AspenTech's share of each adjustment presented herein and eliminated from Emerson's consolidated results. | |||||||||||
4 Represents interest on the Copeland note receivable. | |||||||||||
Year Ended September 30, 2023 | |||||||||||
Pretax | Income | Earnings from | Non-Controlling Interests3 | Net | Diluted | ||||||
As reported (GAAP) | $2,726 | $599 | $2,127 | $(25) | $2,152 | $3.72 | |||||
Amortization of intangibles | 678 | 1 | 156 | 522 | 166 | 356 | 0.62 | ||||
Restructuring and related costs | 92 | 2 | 13 | 79 | 1 | 78 | 0.14 | ||||
Acquisition/divestiture and related costs | 84 | 7 | 77 | — | 77 | 0.13 | |||||
Gain on subordinated interest | (161) | (39) | (122) | — | (122) | (0.21) | |||||
National Instruments investment gain | (56) | (13) | (43) | — | (43) | (0.07) | |||||
Interest income on undeployed proceeds | (141) | (33) | (108) | — | (108) | (0.19) | |||||
Copeland equity method investment loss | 177 | 43 | 134 | — | 134 | 0.24 | |||||
AspenTech Micromine purchase price hedge | (24) | (5) | (19) | (8) | (11) | (0.02) | |||||
Russia business exit charge | 47 | — | 47 | — | 47 | 0.08 | |||||
Adjusted (Non-GAAP) | $3,422 | $728 | $2,694 | $134 | $2,560 | $4.44 | |||||
Interest expense, net (excluding interest income on undeployed proceeds) | 175 | ||||||||||
Interest income from related party4 | (41) | ||||||||||
Adjusted EBITA (Non-GAAP) | $3,556 | ||||||||||
1 Amortization of intangibles includes $196 reported in cost of sales. | |||||||||||
2 Restructuring and related costs includes $20 reported in cost of sales. | |||||||||||
3 Represents the non-controlling interest in AspenTech applied to AspenTech's share of each adjustment presented herein and eliminated from Emerson's consolidated results. | |||||||||||
4 Represents interest on the Copeland note receivable. | |||||||||||
Table 7 | |||||||||||
EMERSON AND SUBSIDIARIES ASPENTECH CONTRIBUTION TO EMERSON RESULTS SUPPLEMENTAL (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
| |||||||||||
The following tables reconcile the financial results of AspenTech reported to its shareholders with the amounts included in Emerson's consolidated financial results. Emerson currently owns approximately 57 percent of the common shares outstanding of AspenTech, a separately traded public company (NASDAQ: AZPN), and consolidates AspenTech in its financial results. The 43 percent non-controlling interest in AspenTech is removed from Emerson's net earnings common stockholders through the non-controlling interest line item. AspenTech is also one of Emerson's segments and its GAAP segment earnings is reconciled below to its consolidated impact to clarify that certain items are reported outside of its segment earnings within Emerson corporate, including interest income, stock compensation and the Micromine purchase price hedge. | |||||||||||
Quarter Ended September 30, 2023 | |||||||||||
Pretax | Income | Earnings from | Non-Controlling Interests4 | Net | Diluted | ||||||
Standalone reporting (GAAP) | $(52) | 1 | $(17) | $(35) | |||||||
Other | 3 | — | 3 | ||||||||
Reported in Emerson consolidation (GAAP) | (49) | (17) | (32) | (14) | (18) | $(0.03) | |||||
Adjustments: | |||||||||||
Amortization of intangibles | 122 | 2 | 27 | 95 | 41 | 54 | 0.09 | ||||
Restructuring | 1 | — | 1 | 1 | — | 0.00 | |||||
Adjusted (Non-GAAP) | $74 | $10 | $64 | $28 | $36 | $0.06 | |||||
Interest income | (14) | 3 | |||||||||
Stock compensation | 16 | 3 | |||||||||
Adjusted Segment EBITA (Non-GAAP) | $76 | ||||||||||
Reconciliation to Segment EBIT | |||||||||||
Pre-tax earnings | $(49) | ||||||||||
Interest income | (14) | 3 | |||||||||
Stock compensation | 16 | 3 | |||||||||
Segment EBIT (GAAP) | $(47) | ||||||||||
Amortization of intangibles | 122 | 2 | |||||||||
Restructuring | 1 | ||||||||||
Adjusted Segment EBITA (Non-GAAP) | $76 | ||||||||||
1 Amount reflects AspenTech's pretax earnings for the three months ended September 30, 2023 as reported in its quarterly earnings release 8-K. | |||||||||||
2 Amortization of intangibles includes $48 reported in cost of sales. | |||||||||||
3 Reported in Emerson corporate line items. | |||||||||||
4 Represents the non-controlling interest in AspenTech applied to each adjustment presented herein and eliminated from Emerson's consolidated results. | |||||||||||
Year Ended September 30, 2023 | |||||||||||
Pretax | Income | Earnings from | Non-Controlling Interests5 | Net | Diluted | ||||||
Standalone reporting (GAAP) | $(128) | 1 | $3 | $(131) | |||||||
Interim tax reporting/Other | 2 | (50) | 2 | 52 | |||||||
Reported in Emerson consolidation (GAAP) | (126) | (47) | (79) | (35) | (44) | $(0.08) | |||||
Adjustments: | |||||||||||
Amortization of intangibles | 486 | 3 | 107 | 379 | 166 | 213 | 0.37 | ||||
Restructuring | 1 | — | 1 | 1 | — | 0.00 | |||||
AspenTech Micromine purchase price hedge | (24) | 4 | (5) | (19) | (8) | (11) | (0.02) | ||||
Adjusted (Non-GAAP) | $337 | $55 | $282 | $124 | $158 | $0.27 | |||||
Interest income | (41) | 4 | |||||||||
Stock compensation | 84 | 4 | |||||||||
Adjusted Segment EBITA (Non-GAAP) | $380 | ||||||||||
Reconciliation to Segment EBIT | |||||||||||
Pre-tax earnings | $(126) | ||||||||||
Interest income | (41) | 4 | |||||||||
Stock compensation | 84 | 4 | |||||||||
Micromine purchase price hedge | (24) | 4 | |||||||||
Segment EBIT (GAAP) | $(107) | ||||||||||
Amortization of intangibles | 486 | 3 | |||||||||
Restructuring | 1 | ||||||||||
Adjusted Segment EBITA (Non-GAAP) | $380 | ||||||||||
1 Amount reflects AspenTech's pretax earnings for the twelve months ended September 30, 2023, derived from AspenTech's results for the year ended June 30, 2023 as reported in their Annual Report on Form 10-K, the results for the three months ended September 30, 2022 as reported in their Form 10-Q, and the results for the three months ended September 30, 2023 as reported in its quarterly earnings release 8-K. | |||||||||||
2 GAAP income taxes reported by AspenTech differ from the amount reflected in Emerson's consolidated financial statements due to the application of the ASC 740 tax rules at the AspenTech entity level in their stand-alone publicly reported financial statements as compared to the amount computed at the Emerson consolidated level. | |||||||||||
3 Amortization of intangibles includes $192 reported in cost of sales. | |||||||||||
4 Reported in Emerson corporate line items. | |||||||||||
5 Represents the non-controlling interest in AspenTech applied to each adjustment presented herein and eliminated from Emerson's consolidated results. | |||||||||||
Table 8 | |||||||||||
SUPPLEMENTAL INFORMATION NI RESULTS (AMOUNTS IN MILLIONS, UNAUDITED) | |||||||||||
The following table provides unaudited results for NI before Emerson's acquisition on October 11, 2023 and are not | |||||||||||
Q1 | Q2 | Q3 | Q4 | 2023 | |||||||
Sales | $ 448 | $ 437 | $ 417 | $ 391 | $ 1,693 | ||||||
Pretax Earnings | $ 49 | $ 54 | $ 32 | $ 34 | $ 169 | ||||||
Net Interest Expense / (Income) | $ 7 | $ 8 | $ 10 | $ 9 | $ 34 | ||||||
Earnings Before Interest and Taxes (EBIT) | $ 56 | $ 62 | $ 42 | $ 43 | $ 203 | ||||||
% of sales | 12.6 % | 14.2 % | 10.0 % | 11.1 % | 12.0 % | ||||||
Stock Based Compensation1 | $ 18 | $ 15 | $ 15 | $ 16 | $ 64 | ||||||
Acquisition and Related Costs1 | $ — | $ (1) | $ 16 | $ 3 | $ 18 | ||||||
Comparable Segment EBIT | $ 74 | $ 76 | $ 73 | $ 62 | $ 285 | ||||||
% of sales | 16.6 % | 17.4 % | 17.4 % | 15.8 % | 16.8 % | ||||||
Amortization of Intangibles | $ 12 | $ 12 | $ 13 | $ 12 | $ 49 | ||||||
Restructuring and Related Costs | $ 9 | $ 16 | $ 1 | $ (1) | $ 25 | ||||||
Comparable Adjusted Segment EBITA | $ 95 | $ 104 | $ 87 | $ 73 | $ 359 | ||||||
% of sales | 21.1 % | 23.8 % | 20.9 % | 18.6 % | 21.2 % | ||||||
1 To be reported in Emerson corporate line items. | |||||||||||
Reconciliations of Non-GAAP Financial Measures & Other | Table 9 | |||||||
Reconciliations of Non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except | ||||||||
Q4 FY23 Underlying Sales Change | Final Control | Measurement | Discrete Automation | Safety & Productivity | Intelligent Devices | |||
Reported (GAAP) | 8 % | 14 % | (7) % | 5 % | 6 % | |||
(Favorable) / Unfavorable FX | (1) % | — % | (1) % | (1) % | (1) % | |||
(Acquisitions) | — % | — % | — % | — % | — % | |||
Divestitures | — % | 1 % | — % | — % | 1 % | |||
Underlying (Non-GAAP) | 7 % | 15 % | (8) % | 4 % | 6 % | |||
Q4 FY23 Underlying Sales Change | Control Systems & Software | AspenTech | Software | Emerson | ||||
Reported (GAAP) | 4 % | (1) % | 3 % | 5 % | ||||
(Favorable) / Unfavorable FX | (1) % | — % | (1) % | (1) % | ||||
(Acquisitions) | — % | — % | — % | — % | ||||
Divestitures | — % | — % | — % | 1 % | ||||
Underlying (Non-GAAP) | 3 % | (1) % | 2 % | 5 % | ||||
Year Ended Sept 30, 2023 Underlying Sales Change | Final Control | Measurement | Discrete Automation | Safety & Productivity | Intelligent Devices | |||
Reported (GAAP) | 10 % | 12 % | 1 % | (1) % | 7 % | |||
(Favorable) / Unfavorable FX | 2 % | 2 % | 2 % | — % | 2 % | |||
(Acquisitions) | — % | — % | — % | — % | — % | |||
Divestitures | 1 % | 2 % | — % | — % | 1 % | |||
Underlying (Non-GAAP) | 13 % | 16 % | 3 % | (1) % | 10 % | |||
Year Ended Sept 30, 2023 Underlying Sales Change | Control Systems & Software | AspenTech | Software | Emerson | ||||
Reported (GAAP) | 9 % | 59 % | 20 % | 10 % | ||||
(Favorable) / Unfavorable FX | 1 % | — % | 1 % | 2 % | ||||
(Acquisitions) | — % | (60) % | (12) % | (3) % | ||||
Divestitures | 1 % | — % | 1 % | 1 % | ||||
Underlying (Non-GAAP) | 11 % | (1) % | 10 % | 10 % | ||||
2024E November Guidance Underlying Sales | FY24E | Q1 FY24E | ||||||
Reported (GAAP) | 13% - 15.5% | 14% - 17.5% | ||||||
(Favorable) / Unfavorable FX | ~1% | ~-% | ||||||
(Acquisitions) | (10) - (10.5)% | (8.5) - (10)% | ||||||
Divestitures | ~-% | ~1% | ||||||
Underlying (Non-GAAP) | 4% - 6% | 6.5% - 8.5% | ||||||
Final Control Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $168 | $247 | 16.7 % | 22.9 % | ||||
Amortization of intangibles and restructuring and related costs | 65 | 38 | 6.5 % | 3.5 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $233 | $285 | 23.2 % | 26.4 % | ||||
Final Control Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $592 | $865 | 16.4 % | 21.8 % | ||||
Amortization of intangibles and restructuring and related costs | 169 | 116 | 4.7 % | 2.9 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $761 | $981 | 21.1 % | 24.7 % | ||||
Measurement & Analytical Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $250 | $275 | 27.2 % | 26.3 % | ||||
Amortization of intangibles and restructuring and related costs | 0 | 23 | (0.1) % | 2.1 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $250 | $298 | 27.1 % | 28.4 % | ||||
Measurement & Analytical Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $785 | $936 | 24.4 % | 26.0 % | ||||
Amortization of intangibles and restructuring and related costs | 24 | 40 | 0.8 % | 1.1 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $809 | $976 | 25.2 % | 27.1 % | ||||
Discrete Automation Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $177 | $131 | 24.6 % | 19.7 % | ||||
Amortization of intangibles and restructuring and related costs | 3 | 14 | (0.5) % | 2.1 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $180 | $145 | 24.1 % | 21.8 % | ||||
Discrete Automation Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $542 | $509 | 20.7 % | 19.3 % | ||||
Amortization of intangibles and restructuring and related costs | 30 | 56 | 1.2 % | 2.1 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $572 | $565 | 21.9 % | 21.4 % | ||||
Safety & Productivity Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $51 | $78 | 15.1 % | 21.9 % | ||||
Amortization of intangibles and restructuring and related costs | 16 | 5 | 4.8 % | 1.6 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $67 | $83 | 19.9 % | 23.5 % | ||||
Safety & Productivity Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $250 | $306 | 17.8 % | 22.0 % | ||||
Amortization of intangibles and restructuring and related costs | 36 | 26 | 2.5 % | 1.9 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $286 | $332 | 20.3 % | 23.9 % | ||||
Intelligent Devices Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $646 | $731 | 21.7 % | 23.2 % | ||||
Amortization of intangibles and restructuring and related costs | 84 | 80 | 2.8 % | 2.6 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $730 | $811 | 24.5 % | 25.8 % | ||||
Intelligent Devices Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $2,169 | $2,616 | 20.0 % | 22.6 % | ||||
Amortization of intangibles and restructuring and related costs | 259 | 238 | 2.4 % | 2.0 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $2,428 | $2,854 | 22.4 % | 24.6 % | ||||
Control Systems & Software Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $143 | $151 | 20.8 % | 21.1 % | ||||
Amortization of intangibles and restructuring and related costs | 9 | 7 | 1.2 % | 1.1 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $152 | $158 | 22.0 % | 22.2 % | ||||
Control Systems & Software Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $437 | $529 | 18.2 % | 20.3 % | ||||
Amortization of intangibles and restructuring and related costs | 33 | 31 | 1.4 % | 1.2 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $470 | $560 | 19.6 % | 21.5 % | ||||
AspenTech Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $(39) | $(47) | (15.2) % | (18.7) % | ||||
Amortization of intangibles and restructuring and related costs | 120 | 123 | 48.1 % | 48.9 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $81 | $76 | 32.9 % | 30.2 % | ||||
AspenTech Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $12 | $(107) | 1.9 % | (10.3) % | ||||
Amortization of intangibles and restructuring and related costs | 237 | 487 | 36.1 % | 46.7 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $249 | $380 | 38.0 % | 36.4 % | ||||
Software and Control Adjusted EBITA | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $104 | $104 | 11.2 % | 10.8 % | ||||
Amortization of intangibles and restructuring and related costs | 129 | 130 | 13.7 % | 13.5 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $233 | $234 | 24.9 % | 24.3 % | ||||
Software and Control Adjusted EBITA | FY22 | FY23 | FY22 | FY23 | ||||
Business Segment EBIT / EBIT margin (GAAP) | $449 | $422 | 14.7 % | 11.6 % | ||||
Amortization of intangibles and restructuring and related costs | 270 | 518 | 8.8 % | 14.2 % | ||||
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP) | $719 | $940 | 23.5 % | 25.8 % | ||||
Total Business Segment Adjusted EBITA Margin | Q4 2022 | Q4 2023 | Q4 2022 | Q4 2023 | Change | |||
Pretax earnings / margin (GAAP) | $603 | $904 | 15.5 % | 22.1 % | 660 bps | |||
Corporate items and interest expense, net | 147 | (69) | 3.8 % | (1.7) % | (550) bps | |||
Total Business Segment EBIT / margin | $750 | $835 | 19.3 % | 20.4 % | 110 bps | |||
Amortization of intangibles and restructuring and related costs | $213 | $210 | 5.4 % | 5.1 % | (30) bps | |||
Adjusted Total Business Segment EBITA / margin (Non-GAAP) | $963 | $1,045 | 24.7 % | 25.5 % | 80 bps | |||
Total Business Segment Adjusted EBITA Margin | FY22 | FY23 | FY22 | FY23 | Change | |||
Pretax earnings / margin (GAAP) | $2,432 | $2,726 | 17.6 % | 18.0 % | 40 bps | |||
Corporate items and interest expense, net | 186 | 312 | 1.4 % | 2.0 % | 60 bps | |||
Total Business Segment EBIT / margin | $2,618 | $3,038 | 19.0 % | 20.0 % | 100 bps | |||
Amortization of intangibles and restructuring and related costs | $529 | $756 | 3.8 % | 5.0 % | 120 bps | |||
Adjusted Total Business Segment EBITA / margin (Non-GAAP) | $3,147 | $3,794 | 22.8 % | 25.0 % | 220 bps | |||
Cash Flow | Q4 FY22 | Q4 FY23 | Change | |||||
Operating cash flow (GAAP) | $813 | $1,007 | 24 % | |||||
Capital expenditures | (100) | (169) | (7) % | |||||
Free cash flow (Non-GAAP) | $713 | $838 | 17 % | |||||
Cash Flow | FY22 | FY23 | Change | FY24E ($ in billions) | ||||
Operating cash flow (GAAP) | $2,048 | $2,726 | 33 % | $3.0 - $3.1 | ||||
Capital expenditures | (299) | (363) | 2 % | ~(0.4) | ||||
Free cash flow (Non-GAAP) | $1,749 | $2,363 | 35 % | $2.6 - $2.7 | ||||
Note 1: Underlying sales and orders exclude the impact of significant acquisitions, divestitures and currency translation. | ||||||||
Note 2: All fiscal year 2024E figures are approximate, except where range is given. | ||||||||
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SOURCE Emerson
