01—Abstract
Summary
Summary of the 10-K filed November 8, 2022. Cited figures are marked; the original filing is the authoritative source.
Rockwell Automation, Inc. (ROK) reported a strong fiscal year 2022, with total sales increasing by 10.9% to $7.76 billiona.
The company's performance was driven by robust demand across its segments, particularly in Intelligent Devices and Software & Control, with organic sales growth of 11.3%b. This growth was supported by strategic acquisitions and a focus on integrating advanced industrial automation with information technology to deliver customer value. Despite facing supply chain pressures and increased input costs, Rockwell Automation demonstrated resilience through pricing actions and cost productivity initiatives.
The company highlights its strategic focus on driving organic sales growth above the automation market, expanding its recurring revenue streams, and enhancing market access through its partner network. Management provided positive outlook guidance for fiscal year 2023, anticipating continued sales growth and earnings per share improvement, supported by a record order backlog.
Key risks identified include macroeconomic volatility, supply chain disruptions, and cybersecurity threats, which the company actively manages through its Enterprise Risk Management process. Investors should note the significant impact of the change in fair value of its investment in PTC Inc. on reported earnings.
02—Key points
Key Highlights
- Total sales increased by 10.9% to $7.76 billion in fiscal year 2022, driven by strong demand and strategic acquisitions.
- Organic sales grew by 11.3%, reflecting broad-based growth across operating segments, with Intelligent Devices and Software & Control showing particular strength.
- The company reported a record order backlog of $5.197 billion at the end of fiscal year 2022, indicating strong future demand.
- Segment operating earnings increased by 10.9% to $1.54 billion, with the Software & Control segment showing a significant 25.6% year-over-year increase in operating earnings.
- Rockwell Automation provided an optimistic fiscal year 2023 outlook, projecting reported sales growth of 7.5% - 11.5% and Adjusted EPS between $10.20 - $11.00.
- The company is actively managing supply chain challenges through investments in capacity, longer-term supplier agreements, and supplier diversification.
- Despite increased input costs and investment spend, the company effectively utilized pricing increases to offset these pressures and maintain healthy margins.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed November 8, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $7.76B$7.00B | +10.9% |
| Cost of Revenue | $4.66B$4.10B | +13.6% |
| Gross Profit | $3.10B$2.90B | +7.1% |
| R&D Expenses | $440.90M$422.50M | +4.4% |
| SG&A Expenses | $1.77B$1.68B | +5.2% |
| Interest Expense | $123.20M$94.60M | +30.2% |
| Net Income | $932.20M$1.36B | −31.4% |
| EPS (Basic) | $8.02$11.69 | −31.4% |
| EPS (Diluted) | $7.97$11.58 | −31.2% |
| Shares Outstanding (Basic) | 115.90M116.00M | −0.1% |
| Shares Outstanding (Diluted) | 116.70M117.10M | −0.3% |
05—Questions
Frequently Asked Questions
What were Rockwell Automation's key financial results for fiscal year 2022?
For fiscal year 2022, Rockwell Automation reported total sales of $7.76 billion, an increase of 10.9% compared to the prior year. Organic sales grew by 11.3%. Segment operating earnings increased to $1.54 billion, and the company provided guidance for fiscal year 2023 anticipating continued growth in sales and earnings.
What are the main growth drivers and strategic priorities for Rockwell Automation?
Rockwell Automation's strategy focuses on achieving organic sales growth exceeding the automation market, expanding its market share in core platforms, and driving double-digit growth in information solutions and annual recurring revenue (ARR). Key initiatives include strategic acquisitions to enhance its capabilities, strengthening its market access through its channel and partner network, and investing in technology leadership and intellectual capital.
What are the primary risks and challenges facing Rockwell Automation?
The company faces several risks, including macroeconomic and industry cycle volatility, supply chain disruptions affecting component availability and costs, foreign currency fluctuations, and cybersecurity threats. Management actively addresses these through its Enterprise Risk Management process, strategic sourcing, and investments in resilience and security.
How did the company manage supply chain challenges and cost pressures in fiscal year 2022?
Rockwell Automation managed supply chain challenges by making significant investments to increase capacity, extending order visibility, securing longer-term supply agreements, re-engineering products for resilience, and qualifying additional suppliers. To offset higher input costs and investment spend, the company implemented pricing increases, which contributed to maintaining segment operating margins.
What is the outlook for Rockwell Automation in fiscal year 2023?
Rockwell Automation provided a positive outlook for fiscal year 2023, expecting reported sales growth of 7.5% to 11.5% and Adjusted EPS in the range of $10.20 to $11.00. This guidance is supported by a record backlog and an assumption of continued supply chain stabilization.
06—Continue