Rockwell Automation(US:ROK)2022-11-02 16:34Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was over $2.1 billion, up 17.6% year-over-year, with organic sales growing 20.5% compared to the prior year [8][32] - Adjusted EPS grew 30% year-over-year to $3.04, reflecting strong operational performance [15][33] - Segment operating margin expanded to 23.3%, a 540 basis point increase driven by higher sales and positive price costs [32] Business Line Data and Key Metrics Changes - Intelligent Devices segment saw organic sales growth of over 16%, with significant contributions from PowerFlex drives and motion technology [10][11] - Software & Control segment experienced organic sales growth of over 32%, exceeding expectations [11][37] - Lifecycle Services organic sales were up 16% year-over-year, with a book-to-bill ratio of 1.02 [12][37] Market Data and Key Metrics Changes - North America organic sales grew by 20%, while EMEA sales increased over 24% and Latin America sales were also up 20% [25] - Discrete industries sales were up almost 20%, with automotive sales increasing by 25% [17] - Hybrid industry segment sales grew over 20%, led by food and beverage and life sciences [21][23] Company Strategy and Development Direction - The company is focused on expanding its intelligent devices and software offerings, with recent acquisitions enhancing its capabilities in renewable energy and data centers [15][16] - Continued investment in innovation and talent retention is a priority, with plans to introduce new cloud-native applications and solutions [65][126] - The company anticipates a conservative approach for fiscal 2023, projecting total reported sales growth of 9.5% [29][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate supply chain challenges and highlighted a record backlog as a positive indicator for future growth [26][63] - The company expects continued demand in key sectors such as EV, semiconductor, and food and beverage, despite macroeconomic headwinds [79] - Fiscal 2023 guidance includes expectations for adjusted EPS growth of 12% and free cash flow generation of over $1.1 billion [51][52] Other Important Information - The company completed the acquisition of CUBIC, enhancing its market access and capabilities [15] - Free cash flow for Q4 was $359 million, up $200 million from the prior year, driven by higher pretax income [34] - The backlog grew by over 75% year-over-year, providing strong visibility into future revenue [49] Q&A Session Summary Question: Can you provide insights on expected inflection points in end markets for 2023? - Management highlighted continued investment in EV and battery sectors, with strong demand from established brands and startups [74][75] Question: Are there any one-time items affecting Q1 guidance? - Management noted a decline in Software & Control segment due to specific component shortages impacting Q1 results [90][91] Question: What percentage of revenue is underwritten by existing backlog? - Approximately 60% of the full year is covered by backlog, which is significantly higher than the typical coverage [93] Question: How is the order intake being affected by supply chain normalization? - Management indicated that while lead times are decreasing, customer demand remains strong, with no significant reduction in order requests [138]