01—Abstract
Summary
Summary of the 10-K filed November 18, 2013. Cited figures are marked; the original filing is the authoritative source.
Rockwell Automation, Inc. (ROK) reported record sales of $6.35 billiona for the fiscal year ended September 29, 2013, an increase of 1.5% from the previous year.
The company operates through two segments: Architecture & Software and Control Products & Solutions. While overall sales showed modest growth, the company achieved this in a sluggish market environment by expanding its segment operating margin. The U.S. market accounted for 50%b of total sales, with international sales making up the other half, spread across various regions including Canada, China, the UK, Italy, Mexico, Germany, and Brazil.
The company highlighted its long-term strategy focused on achieving growth exceeding the automation market, diversifying sales streams, and enhancing market access through technology innovation and domain expertise. Investments in emerging markets and strengthening its global footprint are key components of this strategy. ROK also emphasized its commitment to cost productivity and continuous improvement initiatives to offset inflation and fund growth investments.
02—Key points
Key Highlights
- Record sales of $6.35 billion in fiscal year 2013, a 1.5% increase year-over-year.
- Operating segments are Architecture & Software ($2.7 billion sales) and Control Products & Solutions ($3.7 billion sales).
- Global sales distribution: 50% from the United States, 50% from international markets.
- Latin America was the highest growth region, with 12% organic sales growth, driven by Brazil and Mexico.
- The company expanded segment operating margin by nearly a full point despite a low-growth environment.
- Research and Development spending was $260.7 million in 2013.
- Total order backlog at September 30, 2013, was $1.28 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Rockwell Automation kept $0.12.
- Revenue$6.35B100.0%
- Cost of revenue−$3.78B59.5%
- Gross profit$2.57B40.5%
- Operating costs−$1.82B28.6%
- Operating income$756.3M11.9%
- Interest, other & tax$-00.0%
- Net income$756.3M11.9%
Where FY2013 revenue went
$6.35B- Cost of revenue: $3.78B, 59% of revenue
- SG&A: $1.54B, 24% of revenue
- Net income: $756.3M, 12% of revenue
- R&D: $260.7M, 4.1% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed November 18, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $6.35B$6.26B | +1.5% |
| Cost of Revenue | $3.78B$3.74B | +1.1% |
| Gross Profit | $2.57B$2.52B | +2.0% |
| R&D Expenses | $260.70M$247.60M | +5.3% |
| SG&A Expenses | $1.54B$1.49B | +3.1% |
| Operating Income | $756.30M$737.00M | +2.6% |
| Interest Expense | $60.90M$60.10M | +1.3% |
| Net Income | $756.30M$737.00M | +2.6% |
| EPS (Basic) | $5.43$5.20 | +4.4% |
| EPS (Diluted) | $5.36$5.13 | +4.5% |
| Shares Outstanding (Basic) | 139.20M141.50M | −1.6% |
| Shares Outstanding (Diluted) | 140.90M143.40M | −1.7% |
05—Questions
Frequently Asked Questions
What were Rockwell Automation's primary revenue drivers in fiscal year 2013?
Rockwell Automation's revenue in fiscal year 2013 was driven by its two operating segments: Architecture & Software and Control Products & Solutions. Sales were also influenced by global industrial production, customer capital spending, and specific industry trends. The oil and gas sector showed the strongest sales growth for the year, and Latin America was the leading geographic region for sales growth.
What are the key risks facing Rockwell Automation?
Key risks highlighted by Rockwell Automation include macroeconomic factors (global economic conditions, currency exchange rates), competitive pressures, technological advancements, disruptions to operations (natural disasters, geopolitical events), cybersecurity threats to IT systems, intellectual property protection, regulatory changes, and the ability to attract and retain qualified personnel. The company also faces risks related to its global operations and supply chain.
How did Rockwell Automation manage its financial condition and cash flow in 2013?
In fiscal year 2013, Rockwell Automation generated $1,014.8 million in cash from operating activities, resulting in a free cash flow of $900.5 million. This was an increase from the previous year, partly due to a discretionary contribution to its U.S. qualified pension trust in 2012 and lower incentive compensation payments in 2013. The company repurchased approximately 4.7 million shares of common stock for $401.5 million and had $535.1 million remaining under its stock repurchase authorization as of September 30, 2013.
What is Rockwell Automation's strategy for future growth?
Rockwell Automation's growth strategy focuses on expanding its served market and strengthening competitive differentiation, diversifying sales streams by broadening its product and service portfolio, and growing market share. It also emphasizes enhancing market access through its channel and partner network, making strategic acquisitions to catalyze organic growth, investing in technology leadership, continuously improving quality and customer experience, and driving annual cost productivity. The company aims for sales growth of 6-8% and double-digit EPS growth.
06—Continue