emerson electricl 2009 Annual Investor Conference_Peters
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Transcript of emerson electricl 2009 Annual Investor Conference_Peters
Charles A. Peters Senior Executive Vice President February 6, 2009
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.
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.
Growth Initiatives
Platform Management
Build distinctive capabilities
Anticipate global trends
Foundation Technology Engineering
Customer Support
Resources
Customer Insight Innovation
Information Access
Emerging Markets Efficient Energy Power Generation Datacenter Infrast. PlantWeb Service & Solutions Telecom Solutions Marquee Accounts
? ?
? Marine
Embedded Computing Network Power
Appliance and Tools Process Management Industrial Automation Climate Technologies
X
Wireless?
Intelligent Home? Smart Automation?
Efficient Power
Respect competitive balance
Disciplined processes - information
Deliver on customers needs
Align with macro trends
Provide solutions
Create new platforms
Strong management practices deliver consistent growth and sustain price realization – expanding value
Tactics and targets
Research capacity
Tools and databases
Growth initiatives
Broad lifecycle models
Acquisitions
This slide has been omitted
Wholesale Price Index G7 Industrial Prod. Index Emerson Price Increase
Recession Recession Recession
Emerson price disciplines will attempt to offset downward pressure of likely material deflation
+ + + + ≈ ≈ – – – – – + + + + ? Inflation Emerson Price
Price Quotes/Agreements Peer Comparisons Enforce Policies Approval Workflow
PriceConsoleProfitAnalyzer DealManager
• Historical transaction data • Prices, guidance, policies • Contracts, agreements, quotes
PriceDatamart
Historical Tracking Performance Assessment Opportunity Identification
Setting List Price Change Negotiation Setting Guidelines
Dashboards
Data Access
Analytics
Robust Worksheet Interface Proposals
Analysis of Price Potential and Importance Improves Decisions
Unique maps for all divisions Increasing Importance
Incr
easi
ng P
rice
Pote
ntia
l
Increase scrutiny
Add autonomy
Invest
Deeper segmentation supports list price, quoting and portfolio investment decisions
Global Price Data Warehouse
Visual Data Mining Tools
Parameters Parameters
Project Status P&L
Analytical Database
Quote Database
Analytical Database Quote Database
Sale
s In
vo
ice P
rice
Extended Discount %
Expedited Order Discount Distribution
Expedited Orders by Type of Business Distribution of Discounts
Unapproved deals
Analytics and better visibility allow management to scrutinize
more transactions
Quote Submission
Inbox Approval Workflow
Deal Approval
Approval 1
Floor Price
50%
60%
Multiplier
Historical Projects
1.0
0.8
0.6
0.4
0.2
0.0
Variable Cost
Target Multiplier
Win Probability
%
List Price
Current Agreements
30% 20%
Approval 2 70%
80%
40%
Gross Margin
66%
33%
Project Size ($000) 10 100 1000 20 50 200 500 2000
<25%
>25%
Median
Win Loss Open Quote
Vendavo Live
Division 1 Division 2
Months Relative to Launch
∆ Price Realized ∆ List Price Change
Eliminate leakage Manage quotes Savvy discounting Enforce authority
This slide has been omitted
11
Emerson Research Projects
Increased research capacity and breadth – at best costs
21 30
40
60
90
Comprehensive
Qualitative
Quantitative
Comprehensive Qualitative Quantitative
China
“New to the World” and “New to the Business” expand to 30+% of new product portfolio
% of New Product Sales
New to the World
New to the Business
Major Revisions
Minor Revisions
Opportunities Implications Megatrends
Environment
Developing World
Increasing Wealth
Aging
Connectivity
Safety / Security
Mobility
Resource Scarcity
Quality air/water Emissions
Infrastructure Urbanization
Purchasing power
Healthcare Workforce automation
Wireless Network infrastructure
Monitoring
Transportation
Energy capacity Renewable sources
Processing Monitoring Efficiency
Power & Water Roads Retail footprint
Vehicles Appliances Climate system Homes
Healthcare/Workplace information Productivity solutions
Network bandwidth Information applications
Sensing Tracking
Vehicles Roads Retail footprint
Refining Gas Wind Solar Power & Water Efficiency
Prevented Annual Output M Tons CO2e Potential Emerson role
Emerson realized
550 ppm 450 ppm 400 ppm
2030 CO2e Emissions Reduction Targets
32,000 M 40,000 M 25,000 M
2030 Projected
Emerson Emissions
Residential HVAC
Plant Web
Data Centers
Power Gen
Commercial HVAC Disposers Refriger-
ation
700 ppm 58,000 M
Source: The McKinsey Quarterly, 2007 Number 1
Current
45,000 M Tons
385 ppm
Scroll Compressors
Optimized Ductwork
Programmable Thermostats
Variable Speed Blowers
Key improvements System efficiency:
8 13 SEER Refrigerant conversion:
R12 (GWP=8500) R410A (GWP=2088)
Installation verification: 0% 20% Leak Reduction
Programmable thermostats: 0% 50% Penetration
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
Improved Refrigerants
Expansion Valves
Improving Data Center Energy Efficiency
Current Efficiency Trend
Best Practices
Annual Usage Billion kWh
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
Integrated Rack
Precision Cooling
Enterprise Monitoring System
Uninterruptible Power Systems
Generator
Automatic Transfer Switches
Key improvements Thermal efficiencies upgrades
through added instrumentation and optimization
• 3%+ incremental advances Advancing supercritical and
nuclear capabilities
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
Monitoring
Data Acquisition
Predictive Intelligence Adaptable Platform
Reducing Emissions Through Household Disposer Use
Sewage System Natural Fertilizer
Methane
Landfill
Power Generation
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
Garbage Truck Fertilizer Plant Power Generation
CO2 CO2 CO2
Process Management
Network Power
Industrial Automation
Climate Technologies
Embedded Computing & Power
Appliance & Tools
Solution Sales as % of Total Sales
PlantWeb Wireless Measurement Skids
Main Automation Contractor Datacenter Telecom Sites
Joining Automation
Electro-mechanical Packages
Retail Solutions
Residential HVAC
Residential Storage
Vision Systems
Value Offering Architecture
Selling Skills
Technology Approach Delivery
Broad – multi-division
Deep
Unique – comparitive advantage
Lever value add
Understand Create bundles
Lifecycle cost
Customer chain
Leverage points
Benchmarks
Customer advocates
Business models
Multi- function
Lengthy cycles
Gain acceptance
Architect
Intelligent system
Middleware
User interfaces
Knowledge management
Tailor to customer
Integrated platform
Coordinate internal – external expertise
Perpetuate engagement
1x
2x
3x
4x
5x Value Level
Controllers
Sensors
Machines
Delta V I/O
Diagnostics
Archiving
Analytics
Backup
Monitoring
Visibility
Silo-based
products
Product bundling
Combine advice & service
Custom products on needs
Enhance customer process
Fully integrated partners
Products Solution Selling Specifications Knowledge and model
Technologists Price focus Quotas Narrow task
vs. Benchmarks Collective value Lifecycle Find leverage Tailored
1 1 1
Interfaces Portal Mail
Common Emerson Middleware Platform
Applications
Data In
Backup
Security Mobile
Protocols Connectivity
Networking
Telecom Offices
Datacenter Retail Solutions
Residential HVAC
Automation Bundles
Residential Storage Vision Systems
Telecom Sites
Monitoring & Alarm
Transactional
Design
Configuration Mgmt.
Metrics
Remote Assessment
OEM
Haerbin
Changchun
Shenyang
Tianjin Beijing
Shijiazhuang Taiyuan
Huhehaote
Shanghai
Fuzhou
Hangzhou
Nanjing Hefei
Wulumuqi
Lanzhou Xian
Chengdu Chongqing
Guizhou
Kunming
Zhengzhou
Wuhan
Changsha Nanchang
Guangzhou
Shenzhen
Jinan
Nanning
Haikou
Typical City Office • Network design • Project management
• Technical support • Relationship management
Headquarters • Supply chain • Application development
• Product development
• Research and innovation
Supporting key customers in the China telecom industry through network of city offices
Back Office • Monitoring
Industrial Automation
Network Power Systems Emb. C&P
Process Management
Climate Technologies
Appliance & Tools
United States
Europe
Asia
MEA Latin America ROW
We are fundamentally stronger as we go into this downturn as we have shifted our focus to high-growth areas
Marine
Asset Management
Global $2+B market; growing at 6%
2008 Sales ~$240M
Embedded Computing
Telecom Rack
Telecom Systems
System “Blade”
Processing Module
2008 Sales ~$450M
Medical Imaging
Factory Automation Defense Telecom
Global $8+B market; growing at 11%
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
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