Summary of Emerson Electric's 2025 Investor Conference Company Overview - **Company**: Emerson Electric (NYSE: EMR) - **Date of Conference**: November 20, 2025 - **Key Theme**: Engineering the Autonomous Future Key Points Industry Transformation - Emerson has transformed into a global automation leader, focusing on engineering solutions for the autonomous future [2][12][17] - The company has undergone significant portfolio changes, divesting non-core businesses and investing in industrial software [12][18] Financial Metrics - Emerson's revenues are now approximately **$18 billion**, with **52.8% gross margins** and **27.6% adjusted segment EBITDA margins** [21][18] - Software now constitutes **14%** of total revenues, growing at a low double-digit rate [18][21] - The company has achieved **18 consecutive quarters of growth**, with a **CAGR of 7%** over the last five years [20][21] Segment Reorganization - Emerson has reorganized its reporting structure into five segments, focusing on automation, software, and intelligent devices [3][4][5] - The automation portfolio accounts for about **90%** of sales, while safety and productivity segments make up the remaining **10%** [4][5] Growth Strategy - The company aims for a revenue target of **$21 billion** by 2028, driven by organic growth in its control, intelligent devices, and safety productivity segments [29][52] - Key growth markets include power, liquefied natural gas, life sciences, semiconductors, and aerospace and defense, which collectively represent **22%** of current revenue [41][47] Market Opportunities - **Power**: Significant investments in U.S. power generation, with a projected **30% increase** in generating capacity by 2030 [42] - **Liquefied Natural Gas**: Entering a third wave of investment, with **585 million tons per annum** of capacity expected [43] - **Life Sciences**: Strong growth driven by advancements in drug development and over **$350 billion** in committed investments for reshoring manufacturing [44] - **Semiconductors**: Positioned strongly with nine of the top ten semiconductor companies standardized on NI for validation and production testing [45] - **Aerospace and Defense**: A growing market with a projected size of nearly **$1 trillion** by 2030 [47] Operational Excellence - Emerson has improved its operational margins by **700 basis points** over the last four years, with a target of reaching **30% adjusted segment EBITDA margins** by 2028 [48][62] - The company emphasizes a disciplined pricing culture and operational efficiencies to drive margin improvements [49][62] Innovation and Technology - Emerson is investing **8% of revenue** in innovation, with a focus on software-defined technology and AI integration [38][40] - The company has established **15 major innovation hubs** and employs over **14,000 engineers** to drive technological advancements [39][40] Customer Base and Resilience - Emerson serves over **125,000 active customers**, with minimal concentration risk; the largest customer accounts for only **1.5%** of sales [24] - The installed base is valued at **$155 billion**, with a replacement rate of about **8%** annually, providing a stable revenue stream [22][23] Capital Allocation - Emerson plans to return **70%** of its cash flow to shareholders through dividends and share repurchases, with a projected **$10 billion** in cash flow over the next three years [51][52] - The company has committed to a **$1 billion** share repurchase program in 2025, with additional repurchases planned for 2027 and 2028 [51] Conclusion - Emerson Electric is positioned for significant growth and value creation through its focus on automation, innovation, and operational excellence, aiming to lead in the evolving landscape of industrial automation [12][52]

Core Insights - Emerson Electric Co. (EMR) is experiencing strong momentum in its Intelligent Devices segment, particularly in the Final Control business, which saw a 4% year-over-year sales increase in the first nine months of fiscal 2025 [1][8] - The Measurement & Analytical business is benefiting from robust growth in the Americas and Asia, the Middle East & Africa, with a 2% year-over-year sales increase, although the Safety & Productivity business faced a 4% decline due to weak demand [2][8] - The Software and Control segment is expected to grow due to strong performance in the AspenTech unit and favorable conditions in power and process markets, with overall net sales projected to rise approximately 3.5% year over year in fiscal 2025 [3][8] Segment Performance - Final Control business sales increased by 4% year over year in the first nine months of FY25, driven by strong demand in power end markets [1][8] - Measurement & Analytical sales rose by 2% year over year, supported by growth in the Americas and AMEA regions [2][8] - Safety & Productivity business sales declined by 4% in the first nine months of fiscal 2025 due to weak demand across all geographies [2] Peer Comparison - Flowserve Corporation (FLS) reported a 1.3% year-over-year revenue increase in its Pump Division, totaling $818.9 million in the first half of 2025 [4] - Ingersoll Rand Inc. (IR) saw a 1.7% year-over-year revenue growth in its Industrial Technologies & Services segment, with revenues reaching $1.49 billion in the second quarter of 2025 [5] Financial Performance - Emerson's shares have increased by 11.8% over the past year, outperforming the industry growth of 6.8% [6] - The company is trading at a forward price-to-earnings ratio of 19.41X, which is below the industry average of 22.52X [9] - The Zacks Consensus Estimate for EMR's fiscal 2025 earnings has been rising over the past 60 days, with current estimates at $6.00 per share for the current year and $6.48 for the next year [10][11]

Core Insights - Emerson Electric Co. (EMR) is expected to report growth in both revenue and earnings for Q3 fiscal 2025, with revenue estimated at $4.58 billion, reflecting a 4.6% increase year-over-year [1][9] - The earnings consensus is set at $1.51 per share, indicating a 5.6% rise from the previous year, with a history of surpassing earnings estimates in the last four quarters [2][9] Revenue Performance - The Intelligent Devices segment is projected to see a revenue increase of 3.4% year-over-year to $3.10 billion, driven by strong performance in power end markets [3] - The Software and Control segment is anticipated to grow by 7.5% year-over-year to $1.50 billion, supported by momentum in AspenTech and the power and process markets [4] Strategic Acquisitions - Emerson has focused on expanding its product offerings through acquisitions, including the full acquisition of AspenTech in March 2025, which enhances its automation and software capabilities [5] - The acquisitions of Afag and Flexim in Q4 fiscal 2023 are expected to contribute positively to EMR's revenue by enhancing its factory automation and flow measurement capabilities [5] Cost and Margin Considerations - Rising costs and expenses related to acquisitions and restructuring may negatively impact EMR's margin performance [6] - Foreign currency fluctuations due to the company's extensive international operations could also affect margins and profitability [6] Earnings Prediction - The earnings model indicates a likelihood of an earnings beat for EMR, with an Earnings ESP of +0.39%, as the most accurate estimate is $1.52 per share, slightly above the consensus [7][8]