Rockwell Automation, Inc.

Thank you for holding, and welcome to Rockwell Automation's quarterly conference call. I need to remind everyone that today's conference is being recorded. Later in the call, we will open up the lines for questions. If you have a question at that time, please press star 1. At this time, I'd like to turn the call over to Jessica Korokas, Head of Investor Relations. Please go ahead.

Good morning. And thank you for joining us for Rockwell Automation's fourth quarter fiscal 2019 earnings release conference call. With me today is Blake Moret, our chairman and CEO, and Patrick Gores, our CFO. Our results were released earlier this morning, and the press release and charts have been posted to our website. Both the press release and charts include reconciliations to non-GAAP measures. A webcast of this call will be available at that website for replay for the next 30 days. Before we get started, I need to remind you that our comments will include statements related to the expected future results of our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a wide range of risks and uncertainties that are described in our earnings release and details in all of our SEC filings. So with that, I'll hand the call over to Blake.

Thanks, Jessica, and good morning, everyone. Thank you for joining us on the call today. I'll start with some key points for the quarter, so please turn to page three in the slide deck. Organic growth of 1.4% was better than expected, with growth seen across a broad range of industries and across all of our core platforms, despite a challenging macro environment. Going a little deeper into our vertical sales performance, oil and gas and mining each had another strong double-digit growth quarter. Life sciences continued to show solid momentum with sales growing mid-single digits and very strong bookings. Our offerings in cybersecurity, modular control, and pharma suite MES, coupled with factory talk innovation suite, are extremely well positioned and aligned with industry trends. Food and beverage was slightly up, led by strength in EMEA that was partially offset by other regions. Automotive grew mid-single digits with growth in all regions except Latin America and with some important competitive conversions. In the quarter, we also saw increasing activity within electric vehicles, including a strategic win in North America that we look forward to talking more about at our Investor Day on November 20th. Semiconductor, which is about 5% of our sales, was down over 10%, but flat sequentially. Our logics business grew 3%, even against a tough comparison last year where it grew 7%. Logics growth was broad-based across most regions and end markets. Adjusted EPS was $2.01, including a $0.14 impact from a restructuring charge and a $0.04 impact from Centsia set-up costs in the quarter that were not included in our July guidance. Finally, free cash flow was very strong. Turning to slide four and our regional sales performance in the quarter, North America declined 1%. Continued strength in oil and gas and mining was offset primarily by softness in semiconductor and power generation. Auto improved sequentially and was up year over year. EMEA sales were up 4% versus prior year, with strong growth in life sciences, food and beverage, and mining. Asia was flat, and China sales were down 4% versus last year. China weakness in semiconductor, metals, and automotive was partially offset by continued strength in infrastructure spend. Latin America was up 17% in the quarter. a great finish to a strong year. Most countries in this region, including Mexico, contributed to growth. Very strong oil and gas and life sciences sales performance more than offset weakness in automotive in this region. Now, moving to the full year, let's turn back to slide three. While fiscal 2019 was marked by uncertainty related to trade, Here's a year of progress for Rockwell, with strong operating performance and strategic investments setting the stage for our continued success. Here are some highlights of our financial performance. Our diverse industry exposure enabled us to deliver 2.8% organic growth, even with automotive and semiconductor down over 10%. Segment operating margins of 22%. expanded 40 basis points, and adjusted EPS was up 7% year over year. We had another good year of 100% free cash flow conversion, and we deployed $1.5 billion to dividends and share repurchases. We also continued to make solid progress in our long-term growth initiatives. These include share gains in our core platforms, faster growth in process, double-digit growth in information solutions and connected services, and growth in EMEA and Asia. For example, we saw core platform growth with strong contribution from products like PowerFlex drives and Stratix network switches. This makes sense when you consider that industrial companies can't transform their operations without data from smart, secure devices. This is also Rockwell's home field advantage. We saw double-digit growth in process industries like oil and gas, mining, and pulp and paper. Recurring revenue streams grew double digits with increases in project size and enterprise rollouts of our information solutions and connected services contributing approximately one percentage point to organic growth for the year. We capped off the first year of our alliance with PTC by delivering a very strong sequential increase in new deals in Q4. And for the full year, our alliance enabled strategic wins around the world across a broad range of vertical markets. Importantly, many of these wins were on top of competitive control platforms. Finally, we grew faster outside the U.S. Patrick will elaborate further on our fourth quarter and full year financial performance in his remarks. Let's move on now to the macro environment and our outlook for full year fiscal 2020. Our outlook balances geopolitical uncertainty with confidence in our differentiated portfolio and ability to gain share. Global trade tensions continue to create uncertainty and industrial production is decelerating, heading into fiscal 20, which we expect will have some negative impact on customer capex. However, we are excited about new product introductions across our portfolio. Also, given our pipeline of projects for our customers' digital transformation plans, which are often funded out of OPEX budgets and not capex, We believe we will have another good year in information solutions and connected services. Taking all this into account, we are expecting flat organic sales at the midpoint of our fiscal 20 guidance. We expect our reported sales to be up approximately 3.5% year over year at the midpoint of guidance. This includes approximately four points of inorganic growth coming from our investments in Sensia, and MES tech partially offset by currency. Turning now to earnings, as you have seen in our fourth quarter results, we took restructuring actions to help drive $40 million allow us to both reinvest in our highest growth initiatives and help deliver earnings growth in this environment. Including the impact of acquisitions in currency, Our guidance for sales is about $7 billion. Our adjusted EPS guidance range is $8.70 to $9.10, with a midpoint of $8.90. Now, I'll turn it over to Patrick to provide more detail around our Q4 and full-year results and our fiscal 2020 sales and earnings guidance.