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 call 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 would like to turn the call over to Jessica Caracos, Head of Investor Relations. Ms. Caracos, please go ahead.

Good morning, and thank you for joining us for Rockwell Automation's first quarter fiscal 2020 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, and our call today will reference, non-GAAP measures. Both the press release and charts include reconciliations of these non-GAAP measures. A webcast of this call will be available at that website for replay for the next 30 days. For your convenience, a transcript of our prepared remarks will also be available on our website at the conclusion of today's call. 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 detailed in 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. Please turn to page three of the slide deck. I'll begin by saying that I'm pleased with our execution in the quarter and our start to the year. Despite a tough manufacturing environment, both revenue and earnings were slightly better than our expectations for Q1. Total sales grew 3%. including over four points of contribution from inorganic investments, primarily related to our Sensia joint venture. Organic sales were down 1% compared to a strong quarter a year ago. Backlog, however, was up year over year, as well as sequentially. Organic sales performance continues to include market share gains in core platforms. For instance, independent carts motion control technology grew strong double digits for us in the quarter. It is becoming a game-changing solution across a broad range of industries and applications. Information Solutions and Connected Services, or ISCS for short, had another great quarter, also growing strong double digits. We had notable wins in life sciences, food and beverage, our first MES win in luxury goods, a significant MES win in mining, and our first ever augmented reality project in oil and gas. Our broader and more differentiated portfolio gives us more ways to win in a wide variety of industries, including those where we are not the incumbent control platform. Recurring revenue in the quarter grew double digits, led by an increase in software subscriptions. As I mentioned, our earnings performance was slightly better than expected. Segment margins and adjusted EPS include one-time items related to Centsia, as well as investments we are making to increase our long-term differentiation. As we look ahead to the rest of the year, we are reaffirming our organic sales and adjusted EPS guidance for fiscal 2020. While there have been recent positive developments on global trade and the macro environment is showing signs of stabilization, it is still too early to see that impact on customer spending. Let's now turn to slide four and go a little deeper into our vertical sales performance for the quarter. Discrete and hybrid end market segments did a little better than we expected this quarter, while process was a little weaker than we expected. Within our discrete segment, auto grew mid-single digits, largely related to higher program spend in North America and Asia Pacific and stabilization in MRO, albeit at low levels. While this higher program spend was better than anticipated, the overall auto market is still relatively weak, and we think it is premature to change our flat four-year outlook for this vertical. Semiconductor sales were notably better in all regions, of high single digits. Historically, our exposure to semis has been largely in facilities management, but we are also seeing new traction in material handling, IoT, and cybersecurity applications. Turning now to our hybrid market segment, food and beverage declined low single digits, reflecting some project delays. However, given what we are hearing from customers and the activity we have seen in packaging OEMs, we still believe food and beverage will grow low single digits for the year. In life sciences, we had another solid quarter, with sales growing both year over year as well sequentially. As we've said before, this is an industry where our scalable architecture and our differentiation in ISCS are well aligned and paying dividends. Our process market segment declined slightly, especially in chemicals and pulp and paper. Organically, oil and gas grew mid-single digits this quarter, and we continue to expect low single-digit sales performance for the year. Sensia, which had a good start to the year, is expected to grow double the digital oil field segment of this vertical. Turning to slide five and our regional sales performance in the quarter, North America was down 3% organically, reflecting a weak manufacturing environment. The weakness in process industries was partially offset by auto, up double digits, and strength in semiconductor. EMEA was up 2% in the quarter, led by oil and gas, life sciences, and tire. Asia Pacific grew by 6%, led by strong demand for oil and gas, life sciences, and auto. Auto was up over 10% in the region and included strong gains at EV battery manufacturers, where our readiness to serve is high. Our portfolio is demonstrating how well positioned we are to benefit from the transition to EV. Latin America sales were down 1% largely due to a tough comparison from last year and weaker performance in automotive and mining. I'll now make a few additional comments on our other accomplishments in the quarter. Our annual automation fair was held last November in Chicago, and I'm proud to say that we reached a new all-time attendance record. Customers are focusing on outcomes and sharply increased sales leads from the event, indicate we are demonstrating our increased value for a wide variety of industries. We also had record attendance at our Investor Day in November. There, we highlighted our execution plans to accelerate profitable long-term growth while at the same time build even greater resiliency in our business through higher recurring revenue streams and a leaner, more flexible cost structure. We also had exciting new partners at the event, including Schlumberger, Accenture, and Ansys, which is a game-changing technology partner for simulation and digital twin applications. We're seeing our partnerships contribute to many strategic wins. And we had some great wins this quarter, including in life sciences across all major geographies. In Europe, we signed a major agreement with Roche Roche will be implementing our PharmaSuite MES platform across 16 plants in their pharma and diagnostics divisions. In North America, we entered into a new multi-site, multi-year agreement with a major pharmaceutical producer. They selected FactoryTalk Innovation Suite to drive their digital transformation program for a connected plant and supply chain. It will provide a common platform to drive real-time visibility of analytics to the operator, plant, and enterprise levels, predict future events to avoid unplanned downtime and improve energy efficiency, and accelerate knowledge transfer and improve ease of use. Once implemented, this solution will eliminate hundreds of overlapping edge solutions, resulting in significant operational savings. In China, Ruying Pharma Group, a large pharmaceutical company, chose Rockwell to transform their factories to become smarter and more predictive, while at the same time assisting them to oversee quality management and ensuring that they comply with regulatory requirements. From regulatory compliance to safety and energy efficiency, Rockwell is becoming an increasingly important partner of our customers' ESG initiatives. In addition to what we're doing in our own facilities, everything we do for customers is about increasing efficiency, reducing energy usage, improving worker safety, and ensuring regulatory compliance, all of which lowers business risk and is good for the environment. Now, turning to slide six, let's talk a little more about our inorganic investments, which are becoming an increasingly important complement to our long-term organic growth strategy, starting with Sensia. This was our first quarter, including Sensia as a fully operational joint venture consolidated in our results, and I'm very pleased with its performance in Q1. Operationally, Sensia's top line grew double digits with strong traction at marquee oil and gas customers around the world. Our sales teams have been fully integrated and we are looking forward to the launch of new solutions and products that will contribute to the double-digit sales performance we expect this year. We also announced the acquisition of MES Tech at the beginning of Q1. MES Tech is an industrial software consulting and delivery services company based in India, and they have already been instrumental in winning key business for us in the quarter. Earlier this month, we announced the acquisition of Avnet Data Security, a cybersecurity provider based in Israel with over 20 years of experience. Cybersecurity is one of the fastest growing parts of our services business. The extensive knowledge and experience of the Avnet team will support our company's strategic objective to achieve double digit growth in information solutions and connected services by expanding our ITOT cyber and network expertise globally. Plus, this acquisition will establish a global cybersecurity center of excellence for us in EMEA. This includes a remote managed service center and expands our portfolio of capabilities, including a full training curriculum and labs. As you can see, we're actively deploying capital to advance our strategic priorities to accelerate share gains in our core business, continue growing double digits in ISCS, grow domain expertise in process, and accelerate our market access in Europe and Asia. We're focused on driving value with more intensity than ever before. Let me now turn it over to Patrick, who will elaborate on our first quarter financial performance and fiscal 2020 outlook in his remarks.