10-KPeriod: FY2020

ROCKWELL AUTOMATION, INC Annual Report, Year Ended Sep 30, 2020

Filed November 10, 2020For Securities:ROK

Summary

Rockwell Automation, Inc. reported total sales of $6.33 billion for fiscal year 2020, a decrease of 5.5% compared to fiscal year 2019, with organic sales down 7.8%. This decline was attributed to broad regional weakness, particularly in the Oil & Gas sector, and the ongoing impacts of the COVID-19 pandemic which affected customer spending and supply chains. Despite the sales dip, the company demonstrated resilience with net income attributable to Rockwell Automation increasing to $1.02 billion from $696 million in the prior year, largely due to favorable fair-value adjustments related to its investment in PTC Inc. Adjusted EPS, a key performance metric, decreased to $7.68 from $8.67 in fiscal 2019, reflecting the challenging operating environment. The company generated strong free cash flow of $1.01 billion, underscoring its operational efficiency and financial health. Rockwell Automation also continued its strategic acquisition efforts, acquiring several companies to enhance its digital transformation and cybersecurity capabilities, positioning itself for future growth.

Financial Highlights

57 data points
Beta

Revenue

$6.33B

41.0% Gross Margin

Net Income

$1.02B

16.2% Net Margin

EPS (Diluted)

$8.77

Total Assets

$7.26B

Cash & Equivalents

$704.60M

Free Cash Flow

$1.01B

Financial Statements
Beta
Revenue$6.33B
Cost of Revenue$3.73B
Gross Profit$2.60B
R&D Expenses$371.50M
SG&A Expenses$1.48B
Interest Expense$103.50M
Net Income$1.02B
EPS (Basic)$8.83
EPS (Diluted)$8.77
Shares Outstanding (Basic)115.80M
Shares Outstanding (Diluted)116.60M

Key Highlights

  • 1Total sales for fiscal year 2020 decreased by 5.5% to $6.33 billion, with organic sales declining by 7.8%, primarily due to macroeconomic factors and the COVID-19 pandemic.
  • 2Net income attributable to Rockwell Automation increased significantly to $1.02 billion, driven by a $153.9 million gain from the change in fair value of its investment in PTC Inc.
  • 3Adjusted Earnings Per Share (EPS) decreased to $7.68 in fiscal 2020 from $8.67 in fiscal 2019, reflecting the impact of lower sales on profitability.
  • 4The company generated strong free cash flow of $1.01 billion, demonstrating effective cash management despite the challenging economic conditions.
  • 5Rockwell Automation made several strategic acquisitions in 2020, including ASEM, Kalypso, and Avnet, to bolster its digital transformation, software delivery, and cybersecurity offerings.
  • 6The company provided a cautious but optimistic outlook for fiscal 2021, projecting reported sales growth of 6%-9% and Adjusted EPS between $8.45 and $8.85.
  • 7Despite a sales decline, the Architecture & Software segment maintained a strong operating margin of 28.1%, while the Control Products & Solutions segment saw its operating margin decrease to 13.2%.

Frequently Asked Questions

The COVID-19 pandemic significantly impacted Rockwell Automation's performance by causing disruptions to global economies, supply chains, and customer operations. This led to decreased demand for its products and services, supply chain challenges, and potential impacts on workforce availability. The company implemented safety measures and cost-saving initiatives to mitigate these effects.

Rockwell Automation holds a significant investment in PTC Inc. Changes in the fair value of this investment are recognized in the Consolidated Statement of Operations, which can lead to significant volatility in reported net income. In fiscal year 2020, a gain of $153.9 million from the change in fair value of the PTC investment positively impacted the company's net income.

In 2020, Rockwell Automation strategically acquired companies like ASEM, Kalypso, and Avnet to enhance its capabilities in digital automation, software delivery, consulting, and cybersecurity. These acquisitions are intended to drive organic growth, expand its served market, and strengthen its position in high-growth areas of industrial digital transformation.

For fiscal year 2021, Rockwell Automation projected reported sales growth between 6% and 9%, with organic sales growth expected between 3.5% and 6.5%. The company anticipated Adjusted EPS to be in the range of $8.45 to $8.85, reflecting an expectation of a gradual economic recovery, albeit with continued uncertainty related to the pandemic.