10-KPeriod: FY2018

ROCKWELL AUTOMATION, INC Annual Report, Year Ended Sep 30, 2018

Filed November 9, 2018For Securities:ROK

Summary

Rockwell Automation, Inc. (ROK) reported strong sales growth in fiscal year 2018, with total sales increasing by 5.6% to $6.67 billion, driven by a broad-based demand across its key industries. The company's strategic focus on "The Connected Enterprise" and investments in technology innovation, including its alliance with PTC, continue to be key drivers of growth. The Architecture & Software segment showed particularly robust performance with a 6.9% sales increase and improved operating margin. The company demonstrated solid financial health, with a significant increase in free cash flow to $1.17 billion. ROK also actively returned capital to shareholders through share repurchases totaling $1.5 billion. Management highlighted positive industrial economic trends in the U.S. and favorable, though moderating, trends in non-U.S. markets. Despite facing various macroeconomic and operational risks, Rockwell Automation appears well-positioned for continued growth, supported by its technological differentiation and global expansion efforts.

Financial Highlights

56 data points
Beta

Revenue

$6.67B

43.3% Gross Margin

Net Income

$535.50M

8.0% Net Margin

EPS (Diluted)

$4.21

Total Assets

$6.26B

Cash & Equivalents

$618.80M

Free Cash Flow

$1.17B

Financial Statements
Beta
Revenue$6.67B
Cost of Revenue$3.78B
Gross Profit$2.88B
R&D Expenses$371.80M
SG&A Expenses$1.59B
Interest Expense$73.00M
Net Income$535.50M
EPS (Basic)$4.27
EPS (Diluted)$4.21
Shares Outstanding (Basic)125.40M
Shares Outstanding (Diluted)126.90M

Key Highlights

  • 1Total sales increased by 5.6% to $6.67 billion in fiscal year 2018, indicating robust demand across industries.
  • 2Free cash flow improved significantly, reaching $1.17 billion, demonstrating strong operational cash generation.
  • 3The company repurchased approximately $1.5 billion of its common stock, reflecting a commitment to returning capital to shareholders.
  • 4The Architecture & Software segment demonstrated strong growth with sales up 6.9% and an improved operating margin of 29.1%.
  • 5Rockwell Automation's strategic investment in and alliance with PTC Inc. is expected to accelerate growth and enhance its information solutions portfolio.
  • 6The company reported positive year-over-year sales growth in all major geographic regions, highlighting its global reach.
  • 7Despite a significant one-time charge related to the U.S. Tax Cuts and Jobs Act of 2017, adjusted EPS showed a healthy increase of 20.0% to $8.11.

Frequently Asked Questions

In fiscal year 2018, Rockwell Automation achieved total sales of $6.67 billion, a 5.6% increase year-over-year. The company also generated strong free cash flow of $1.17 billion and repurchased $1.5 billion of its stock, indicating a healthy financial position and commitment to shareholder returns.

The Architecture & Software segment experienced robust growth with sales up 6.9% and an improved operating margin to 29.1%. The Control Products & Solutions segment also saw sales increase by 4.6%, with its operating margin improving to 15.2%.

The company recorded charges of $538.3 million related to the Tax Cuts and Jobs Act of 2017, which significantly impacted its reported net income and effective tax rate. However, on an adjusted basis, which excludes these and other special items, Adjusted EPS increased by 20.0% to $8.11, reflecting underlying operational strength.

Rockwell Automation made a strategic investment in PTC Inc., a leader in the Industrial Internet of Things (IIoT) and augmented reality. This alliance aims to accelerate growth for both companies and create an integrated information solution to enhance customer productivity and efficiency.