10-KPeriod: FY2019

ROCKWELL AUTOMATION, INC Annual Report, Year Ended Sep 30, 2019

Filed November 12, 2019For Securities:ROK

Summary

Rockwell Automation, Inc. reported stable sales of $6.7 billion for the fiscal year ended September 29, 2019, marking a slight 0.4% increase year-over-year, with organic sales growing by 2.8%. The company operates through two key segments: Architecture & Software and Control Products & Solutions, serving diverse industries including automotive, food & beverage, and oil & gas. The company's strategic focus remains on integrating industrial automation with information technology to drive digital transformation for its customers. Key growth initiatives include expanding its market reach in emerging economies and strengthening its information solutions and connected services. Despite a challenging macroeconomic environment marked by slowing global growth and trade tensions, Rockwell Automation demonstrated resilience through its diversified end-market exposure and geographic footprint. The company's financial performance was impacted by a significant loss on investments, particularly its stake in PTC Inc., which affected reported net income but not the underlying operational performance of its core business. Looking ahead, Rockwell Automation is investing in strategic acquisitions, such as Emulate3D, to enhance its digital simulation capabilities. The company continues to prioritize productivity initiatives, cost management, and innovation to maintain its competitive edge in the industrial automation market. The company also announced the formation of a joint venture, Sensia, with Schlumberger to focus on digital oilfield automation solutions, signaling a strategic move into specialized market segments.

Financial Statements
Beta

Key Highlights

  • 1Total sales were $6.7 billion, a modest 0.4% increase from the prior year, with organic sales up 2.8%, indicating underlying business growth.
  • 2The company's core strategy revolves around 'The Connected Enterprise,' integrating automation and information technology for digital transformation.
  • 3Architecture & Software segment sales slightly decreased by 0.9%, while Control Products & Solutions saw a 1.6% increase in sales.
  • 4Segment operating earnings increased by 2% to $1.47 billion, with a total segment operating margin of 22.0%, up from 21.6% in the prior year.
  • 5A significant loss of $368.5 million related to the fair value change of its investment in PTC Inc. heavily impacted the 'Income before income taxes' line item, reducing it by 32% year-over-year.
  • 6Rockwell Automation repurchased approximately $1.0 billion of its common stock during the fiscal year.
  • 7The company completed the formation of a joint venture, Sensia, with Schlumberger, to focus on digital oilfield automation solutions, holding a 53% controlling stake.

Frequently Asked Questions

Rockwell Automation reported total sales of $6.7 billion for the fiscal year ended September 29, 2019, representing a 0.4% increase compared to the prior year. Organic sales, which exclude currency translation effects, grew by 2.8%, indicating healthy underlying demand across its business segments.

The Architecture & Software segment experienced a slight sales decrease of 0.9%, while the Control Products & Solutions segment saw a 1.6% increase in sales. Despite the mixed sales performance, both segments contributed to an overall increase in total segment operating earnings.

The company's reported income before income taxes was significantly impacted by a $368.5 million loss recognized due to changes in the fair value of its investment in PTC Inc. This investment-related loss overshadowed the operational improvements and led to a substantial year-over-year decrease in pre-tax income, despite an increase in total segment operating earnings.

Rockwell Automation's strategy focuses on integrating industrial automation and information technology to enable digital transformation for its customers. Key growth drivers include expanding its presence in emerging markets, enhancing its information solutions and connected services, and pursuing strategic acquisitions like Emulate3D to bolster its digital capabilities. The formation of the Sensia joint venture with Schlumberger is also a key strategic move into a specialized market segment.