The document discusses Emerson's strategies for managing through an economic downturn, including maintaining price discipline, increasing research capabilities, aligning with emerging trends like environmental efficiency, building solutions presence across all businesses, and improving portfolio mix through business platforms and geography. It states that combining these capabilities with an expected post-2010 global economic rebound will create a strong foundation for growth and value creation.
2. 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.
3. ? ?
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
4. 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
15. Emerson Research Projects Quantitative
90
China
Qualitative
Comprehensive
60 Quantitative
40
30
Qualitative
21
11
Comprehensive
Increased research capacity and breadth – at best costs
16. % 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
17. 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
18. 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
19. 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
20. 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
21. 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
22. 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
23. 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
24. 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
25. Value Level
5x
Visibility
4x
Diagnostics
Monitoring
3x
Delta V I/O
Machines
2x
Archiving
Controllers Backup
1x
Analytics
Sensors
26. 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
27. 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
28. 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
29. 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
30. 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%
31. 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
32. 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