emerson electricl 2009 Annual Investor Conference_Peters


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emerson electricl 2009 Annual Investor Conference_Peters

  1. 1. Charles A. Peters Senior Executive Vice President February 6, 2009 Safe Harbor Statement Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the remainder of the year and Emerson undertakes no obligation to update any such statement to reflect later developments. Information on factors that could cause actual results to vary materially from those discussed today is available in our most recent Annual Report on Form 10-K as filed with the SEC. Non-GAAP Measures In this presentation we will discuss some non-GAAP measures (denoted with an *) in talking about our company’s performance, and the reconciliation of those measures to the most comparable GAAP measures is contained within this presentation or is available at our website www.emerson.com under the investor relations tab.
  2. 2. ? ? Marine ? Platform Embedded Network Power Computing Management Appliance and Tools Process Management X Industrial Automation Climate Technologies Anticipate global trends Smart Automation? Growth Intelligent Home? Emerging Markets Efficient Energy Efficient Power Initiatives Power Generation Datacenter Infrast. Wireless? PlantWeb Service & Solutions Telecom Solutions Marquee Accounts Build distinctive capabilities Foundation Customer Customer Technology Information Support Insight Engineering Access Resources Innovation
  3. 3. Respect Tactics and targets competitive balance Disciplined processes - Tools and databases information Research capacity Deliver on customers needs Growth initiatives Align with macro trends Broad lifecycle models Provide solutions Create new platforms Acquisitions Strong management practices deliver consistent growth and sustain price realization – expanding value
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  5. 5. Wholesale Price Index G7 Industrial Prod. Index Emerson Price Increase Recession Recession Recession Inflation Emerson Price + + + + ≈ + + + ? ≈ – – – – – + Emerson price disciplines will attempt to offset downward pressure of likely material deflation
  6. 6. Profit
 Robust Worksheet Dashboards Interface Proposals Data Access Analytics Price Quotes/Agreements Historical Tracking Setting List Price Change Peer Comparisons Performance Assessment Negotiation Setting Enforce Policies Opportunity Identification Guidelines Approval Workflow Price
 • Historical transaction data • Prices, guidance, policies • Contracts, agreements, quotes
  7. 7. Analysis of Price Potential and Importance Improves Decisions Increase scrutiny Increasing Price Potential Invest Add autonomy Increasing Importance Unique maps for all divisions Deeper segmentation supports list price, quoting and portfolio investment decisions
  8. 8. Analytical Database Quote Database Parameters Parameters Project Status P&L Visual Data Mining Tools Analytical Quote Database Database Global Price Data Warehouse
  9. 9. Expedited Orders by Type of Business Distribution of Discounts Expedited Order Discount Distribution Sales Invoice Price Extended Discount %
  10. 10. Quote Submission Analytics and better visibility allow management to scrutinize more transactions Deal Approval Inbox Approval Workflow Unapproved deals
  11. 11. Win Loss Open Quote Multiplier List Price 1.0 20% 30% 40% 0.8 50% Target Multiplier 0.6 60% >25% 66% Approval 1 70% 0.4 Median Approval 2 <25% 80% Floor Price 33% 0.2 0.0 10 20 50 100 200 500 1000 2000 Historical Current Win Variable Gross Project Size ($000) Projects Agreements Probability Cost Margin %
  12. 12. Eliminate leakage Manage quotes ∆ Price Realized Savvy discounting Enforce authority ∆ List Price Change Vendavo Live Division 1 Division 2 Months Relative to Launch
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  14. 14. Emerson Research Projects Quantitative 90 China Qualitative Comprehensive 60 Quantitative 40 30 Qualitative 21 11 Comprehensive Increased research capacity and breadth – at best costs
  15. 15. % of New Product Sales Minor Revisions Major Revisions New to the Business New to the World “New to the World” and “New to the Business” expand to 30+% of new product portfolio
  16. 16. Opportunities Implications Megatrends Quality air/water Processing Monitoring Environment Emissions Efficiency Refining Gas Energy capacity Wind Solar Resource Scarcity Renewable sources Power & Water Efficiency Infrastructure Power & Water Roads Developing World Urbanization Retail footprint Vehicles Appliances Increasing Wealth Purchasing power Climate system Homes Healthcare Healthcare/Workplace information Aging Productivity solutions Workforce automation Vehicles Roads Mobility Transportation Retail footprint Wireless Network bandwidth Connectivity Network infrastructure Information applications Sensing Safety / Security Monitoring Tracking
  17. 17. 2030 CO2e Emissions Reduction Targets Current 2030 Projected 32,000 M 25,000 M 40,000 M 45,000 M Tons 58,000 M 550 ppm 450 ppm 400 ppm 385 ppm 700 ppm Source: The McKinsey Quarterly, 2007 Number 1 Prevented Annual Output M Tons CO2e Potential Emerson role Emerson realized Data Residential Plant Power Commercial Refriger- Disposers Emerson Centers HVAC Web Gen HVAC ation Emissions
  18. 18. US Rest of World # Households with HVAC Systems 80M 35+M Tons CO2 Reduction – Current 14M 8M Potential Tons CO2 Reduction – 2030 15+M 55+M Key improvements System efficiency: 8  13 SEER Refrigerant conversion: R12 (GWP=8500)  Optimized Ductwork R410A (GWP=2088) Installation verification: Programmable Thermostats 0%  20% Leak Reduction Expansion Valves Programmable thermostats: 0%  50% Penetration Improved Refrigerants Variable Speed Scroll Blowers Compressors
  19. 19. Improving Data Center Energy Efficiency Power Supply Efficiency 88%+ Reduction in Power Input per Unit Cooling Capacity 25%-45% Tons CO2 Reduction – Current 10M Potential Tons CO2 Reduction – 2030 35M Automatic Transfer Switches Generator Annual Usage Billion kWh Integrated Rack nd y Tre icienc Eff Precision Cooling urrent C Best Enterprise Monitoring System Pract ices Uninterruptible Power Systems
  20. 20. MW of Installed Power Plant Controls 750,000 Number of Supercritical Plants 400+ Tons CO2 Reduction – Current 21M Potential Tons CO2 Reduction – 2030 30+M Key improvements Thermal efficiencies upgrades through added instrumentation and optimization • 3%+ incremental advances Advancing supercritical and nuclear capabilities Data Acquisition Monitoring Predictive Intelligence Adaptable Platform
  21. 21. Reducing Emissions Through Household Disposer Use US Rest of World # Households 111M 1,000+ M Current Disposer Penetration 50% ≈ 1% Tons CO2 Reduction – Current 3M - Potential Tons CO2 Reduction – 2030 10M 10+M Power Generation Sewage System Natural Fertilizer CO2 CO2 Methane CO2 Garbage Truck Landfill Power Generation Fertilizer Plant
  22. 22. PlantWeb Wireless Main Automation Measurement Contractor Skids Datacenter Telecom Sites Process Management Electro- Network Power mechanical Joining Packages Automation Industrial Automation Climate Technologies Residential Retail Embedded Computing & Power HVAC Solutions Appliance & Tools Residential Vision Solution Sales as % of Total Sales Storage Systems
  23. 23. Offering Selling Technology Value Delivery Architecture Skills Approach Architect Understand Create Gain Tailor to bundles acceptance customer Broad – Benchmarks Intelligent Lifecycle cost Integrated system platform multi- division Customer Customer advocates Middleware chain Coordinate internal – Deep external Business User Leverage expertise models interfaces points Unique – comparitive Perpetuate Multi- advantage Knowledge engagement function management Lever value add Lengthy cycles
  24. 24. Value Level 5x Visibility 4x Diagnostics Monitoring 3x Delta V I/O Machines 2x Archiving Controllers Backup 1x Analytics Sensors
  25. 25. Products Solution Selling Specifications Knowledge and model Silo- Combine Custom Enhance Fully Product based advice & products customer integrated bundling products service on needs process partners Benchmarks Technologists vs. Collective value Price focus Lifecycle Quotas Find leverage Narrow task Tailored 1 1 1
  26. 26. Monitoring & Alarm Configuration Mgmt. Automation Datacenter Retail Solutions Telecom Sites Bundles Metrics Design Residential Residential Vision Systems Telecom Offices Storage HVAC Remote Assessment Transactional Portal Applications Mobile Mail Interfaces Security Data In Common Emerson Middleware Platform Backup Networking Protocols Connectivity
  27. 27. Typical City Office Back Office • Network design • Monitoring Haerbin • Project management Changchun Wulumuqi Shenyang • Technical support Huhehaote Beijing • Relationship Shijiazhuang Tianjin management Taiyuan Lanzhou Jinan Xian Headquarters Nanjing Zhengzhou Shanghai Hefei • Supply chain Chengdu Hangzhou Wuhan Chongqing • Application Nanchang Guizhou development Changsha Fuzhou • Product Guangzhou Kunming Nanning development Shenzhen Haikou • Research and innovation OEM Supporting key customers in the China telecom industry through network of city offices
  28. 28. ROW Appliance & Latin America Tools MEA Climate Technologies Europe Industrial Automation Asia Network Power Systems Emb. C&P United States Process Management We are fundamentally stronger as we go into this downturn as we have shifted our focus to high-growth areas
  29. 29. Embedded Computing Marine 2008 Sales ~$240M 2008 Sales ~$450M Telecom Telecom System Processing Rack Systems “Blade” Module Asset Management Medical Factory Defense Telecom Imaging Automation Global $2+B market; growing at 6% Global $8+B market; growing at 11%
  30. 30. Manage price   –  Through deflationary period –  Tools to enhance visibility and control Research for customer insight   –  Globalize capability –  Feed innovation for truly ‘new’ progress Align with trends   –  Environmental •  Efficiency •  Emissions control
  31. 31. Build solutions presence   –  Expand footprint across all businesses –  Enrich skills Improve portfolio mix   –  Business platforms –  Geography Advancing capabilities combined with post-2010 global economic rebound create strong growth and value foundation