Emerson Electric Co. (EMR) J.P. Morgan's 2024 Industrials Conference Transcript

Summary of Emerson Electric Co. Conference Call Company Overview - Company: Emerson Electric Co. (NYSE: EMR) - Date: March 13, 2024 - Participants: - Ram Krishnan - Chief Operating Officer - Mike Baughman - Chief Financial Officer - Colleen Mettler - Investor Relations Key Points Business Performance - Order Growth: Exited Q1 with 4% underlying orders, expecting low-single digits in the first half, and mid-single digits by year-end [3][4] - Sales Growth: Achieved 10% sales growth in Q1, with a backlog of approximately $7.6 billion [3][4] - **Project Funnel**: Healthy project funnel at$10.4 billion, yielding $400 million to$500 million quarterly [4][23] Market Trends - Sector Strengths: Strong performance in process hybrid and measurement solutions, with a 28% sales growth in Measurement Solutions [7][8] - Geographic Performance: - Middle East and India: $1.5 billion, double-digit growth - China:$1.9 billion, 9% growth in Q1, expecting mid-single digit growth [11][8] - Western Europe: 10% sales growth in Q1 [8] Discrete Business Insights - Recovery Expectations: Modest sequential recovery anticipated in the discrete automation business, primarily driven by automotive and semiconductor sectors [12][14] - German Machine Builders: Positive outlook from German machine builders, with marginally better orders in Q2 compared to Q1 [20][21] LNG and Utility Sector - LNG Business: 17% of the project funnel is related to LNG, with an annual business of $300 million to$400 million [26][27] - Utility Sector: Ovation control systems account for 50% of power generation in the US, with low-single digit growth expected [29][30] NI Business Overview - Revenue Guidance: Expected revenues of $1.5 billion to$1.6 billion for the year, with low-single digit decline anticipated [36] - Market Diversification: NI's business is diversified across various sectors, including life sciences, semiconductors, and aerospace [33] Cost and Pricing Strategy - Pricing Strategy: Anticipating a 2% price increase, with favorable net material inflation [50][55] - Synergy Goals: Targeting $185 million in synergies by year three, maintaining 31$200 million of backlog as the year progresses, maintaining high levels through Q3 [24] - Investment in Software: Focus on integrating software capabilities to enhance automation and operational efficiency [67][68] This summary encapsulates the key insights and data points from the conference call, providing a comprehensive overview of Emerson Electric Co.'s current business status, market dynamics, and future outlook.