2. Ed Monser
Chief Operating Officer
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.
3. Strategic Imperatives Actions
- Major Growth Initiatives will help keep us within the
Strengthen Business
5-7% zone – we have refreshed the list of growth
Platforms
initiatives to optimize the growth of the company.
- Service and Solutions Growth
- Acquisitions will be key – we must look outside our
current served market to grow – Adjacent Space.
- We are changing the mix of our business – in the
right way.
- Our Business Platforms are being valued globally –
we are starting to look like one integrated company.
- Develop more game-changing products and
Pursue Technology
technologies through efficient Portfolio Management
Leadership
and proper allocation of resources.
- Now is the time to invest in technology for a
competitive advantage!
- Develop a strong offering of Responsible and
Efficient Energy Products and Solutions.
- Customer involvement throughout the entire process.
Executing These Four Strategic Imperatives Will Be Key in the 2009 and
2010 Recessionary Periods to Drive a Strong, Outperforming, Recovery
4. Strategic Imperatives Actions
- Take care of mature markets, but emerging markets
Globalize Assets
play an ever increasing role in our success.
- Our geographic mix presence allows continued
growth.
- Reposition assets to drive profitability improvements
and to better serve our customers.
- Price actions must stay ahead of material inflation.
Drive Business
- Fix the complexity crisis – kill products and purge
Efficiency
data.
- We must improve on-time delivery performance to
exceed customer expectations.
- Continue to improve Trade Working Capital, generate
strong Operating Cash Flow, and manage Capital
Expenditures.
- ROTC improvement will continue to be a key indicator
of success.
Executing These Four Strategic Imperatives Will Be Key in the 2009 and
2010 Recessionary Periods to Drive a Strong, Outperforming, Recovery
8. US$B % to Sales
Fixed Assets
% to Sales
TWC % to Sales
17.9%
15.0%
14.1%
11.5%
Need to Continue to Improve Capital Efficiency – Trade Working Capital
Needs Be <15% and We Still Have Opportunities to Improve Fixed Assets
17. Global and Regional Mode Teams
– Development of the Global Strategies by Mode, Competitive Tension
and the Selection and Performance of the Carrier Base
Intercontinental Ocean and Air Programs
– Operational Movement of Intercontinental Freight
North America Trucking Program
– Canada, US and Mexico
– Operational Movement of Domestic Freight
Digitizing of the Supply Chain
Electronic Connectivity Between Emerson/Trading Partners
– Electronic System to System Transactional Data for Operating
Programs
– Audit Payment of Freight Bills
18. 48 Divisions Participating in the Program
– Savings Increased from $0.9M to $13.0M Since 2004
– Transit Times have Improved from 36 Days to 24 Days
– Container Utilization has Increased from 60% to 91%
Average Ocean Transit
Total Ocean Savings
Times - Asia To United States
$M
Days
Program Expands to Air Freight in 2009
19. Global and Regional Mode Teams
– Development of the Global Strategies by Mode, Competitive Tension
and the Selection and Performance of the Carrier Base
Intercontinental Ocean and Air Programs
– Operational Movement of Intercontinental Freight
North America Trucking Program
– Canada, US and Mexico
– Operational Movement of Domestic Freight
Digitizing of the Supply Chain
Electronic Connectivity Between Emerson/Trading Partners
– Electronic System to System Transactional Data for Operating
Programs
– Audit Payment of Freight Bills
20. Automates the Domestic Load Tendering Process
Reduced Leakage of eSourcing Savings by 28% in 2008
Shipper
Reduces Ethical Concerns
and Provides Valuable Data for
On-Boarding
Portal
Emerson
Load Control Center
Routing
Emerson Contract Guide
(Schneider Logistics)
Emerson Managed
eSourcing Event
5
4
3
1 2
13 Divisions Participating in 2008
21. Global and Regional Mode Teams
– Development of the Global Strategies by Mode, Competitive Tension
and the Selection and Performance of the Carrier Base
Intercontinental Ocean and Air Programs
– Operational Movement of Intercontinental Freight
North America Trucking Program
– Canada, US and Mexico
– Operational Movement of Domestic Freight
Digitizing of the Supply Chain
Electronic Connectivity Between Emerson/Trading Partners
– Electronic System to System Transactional Data for Operating
Programs
– Audit Payment of Freight Bills
22. Establishes a Reliable
2007 Pilot in Laredo Provided
Logistics Network
Proof of Concept
Across the Southern Border
Targeted 10%+ Cost Savings
Reduce Transit Times by 20%
Optimize Freight and Increase Utilization
Provide Visibility by Part Number
Reduce Inventory by +10%
Ensure Trade Compliance/ Ethics
2009-2010: Complete Laredo, McAllen, El Paso and Calexico
23. Cluj
~60 Xi’an
~130
Calgary Dubai
~320
Toronto
Mexico
New Delhi
City
~140
Manila
India
Pune
~2,700
1272
~1,300
Buenos
Aires Sao Paulo
~70
Future Shared Services Locations
24. Employees
Regionalization of Non-Customer Facing Positions
Allows for Highly Skilled Labor at Very Competitive Costs
25. 29
124
228
Employees
Finance/ Marketing IT Admin./Logistics
Accounting
26. 8
59
149
Employees
Finance/ Marketing IT Admin./Logistics
Accounting
27. 2,054
2,713
2,985
Employees
Finance/ Customer
Marketing IT Admin./Logistics
Accounting Service
28. 80,000 sq ft of Office Space/ 50,000 sq ft Process
Climate
Manufacturing & Warehouse Space Management
Technologies
Opened in January 2009
Dubai Facility Provides Middle East and Africa Customers with
Faster Service and Lower Cost Advantages
29. Number of Engineering
Engineers Investment $M
Best Cost
8,500
High Cost
7,200
49%
43%
5,000
30%
51%
57%
70%
30. Key Global Engineering and Design Sites
Xi’an, Suzhou,
Cluj,
China China
Romania
200
70
80
Shenzhen,
Sidney, OH 300
China
St. Louis, MO 300
1500
Columbus, OH
Manila,
200
Philippines 700
Chanhassen, MN 200 Pune, India
Marshalltown, IA 200 550
Austin, TX 200
Engineering Site
Multifunctional Engineering/Manufacturing Site
31. 2003 Engineers 2003 Sales
Sales $M Engineers
2008 Engineers 2008 Sales
+21% +26%
Engineers Sales
+74% +26%
+32% +38%
Engineers Sales
Engineers Sales
We are Using the Economic Downturn to Focus on Getting Strategic
Investments Done – We’ll be Ready to Grow as Markets Return
32. Restructuring
Implementing Global
People and Facilities to
Supply Chain Projects
Align with Market
to Realize Savings
Demand
Best Cost Sourcing
Best Cost Production
18% to 43% since 2000
39% to 68% since 2000
Developing Regional
Investing in Regional
Shared Services for
Centers to Develop
Highly Productive
New Products
Customer Support
>4,000 Best Cost Engineers
7 Sites/~4,700 People
Adding 100+ in 2009T
4 New Sites in 2009T
Add Resources to Drive Future Sales to 5-7% Underlying Growth
Improve Productivity and Operational Costs to Achieve 17%+ OP
