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 one. At this time, I'd like to turn the call over to Jessica Caracos, Head of Investor Relations. Ms. Caracos, please go ahead.

Thanks, Chris. Good morning, and thank you for joining us for Rockwell Automation's fourth quarter fiscal 2021 earnings release conference call. With me today is Blake Morett, our Chairman and CEO, and Nick Gangstad, 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 on 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. Additional information and news about our company can also be found on Rockwell's investor relations Twitter feed using the handle at investors rock. That's at investors are okay. 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 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 today. Let's turn to our quarterly results on slide three. We saw another quarter of exceptional demand across all three business segments. Total orders surpassed $2.2 billion and grew 40% over the prior year, reflecting a very strong demand pipeline across our portfolio of core automation and digital transformation solutions. Total revenue of over $1.8 billion grew 15%, with additional sales that shifted into fiscal 22 due to supply chain headwinds. organic sales grew 13% versus prior year. We had very strong growth in core automation, and information solutions and connected services grew double digits in both orders and revenue. This performance was led by strong demand for software and cybersecurity services. Turning to ARR, we continue to make significant progress to drive recurring revenue. Our ARR grew organically by over 18%, and including our recent acquisition of Plex, now accounts for over 8% of total sales. Segment margin of 18% came in line with our expectations with the execution of planned investments in Q4. I'll now comment on our top-line performance by business segment. Intelligent devices organic sales increased 15% versus prior year, even with significant headwinds from supply chain. From the orders perspective, this is the fourth consecutive quarter of record order intake in this segment, with orders 30% above fiscal 2019 levels. We continue to see significant strength across the automation portfolio and share gains, particularly evident in motion, led by our independent cart technology. Software and control organic sales grew 14%, led by strong demand across the segment, including double-digit growth in logics. Orders grew approximately 50% year-over-year, once again showing great momentum across the software, control, visualization, and network portfolios. In lifecycle services, organic sales increased 7% versus the prior year and increased 2% sequentially, even with some projects delayed as a result of component availability. Lifecycle Services' booked bill of 1.09 was well above seasonal Q4 levels. Total company backlog of $2.9 billion grew by over 80% year-over-year. Over 40% of backlog is related to our Lifecycle Services business. Turning to information solutions and connected services, which represent many of Rockwell's newest digital revenue streams, we had another great quarter. Recent orders included a number of meaningful software and infrastructure as a service wins. One of the more notable wins in the quarter was with Ardagh Group, one of the world's largest sustainable packaging companies. The company had placed a million-dollar order for fixed software in Q3 to reduce unplanned downtime. Ardagh, like a lot of manufacturers, is trying to respond to a sharp increase in demand. By Q4, as the relationship developed, we pulled through an additional $4 million purchase of core automation products, showcasing the tremendous synergy resulting from our new software capabilities and intelligent devices. With their ARR growing 45% and over 470 new fixed customers added in just the last nine months, I'm very happy with the contributions FIX has been able to make to our overall business. We also had a great win with one of the world's largest food and beverage companies in two key application areas. The first win is in the area of predictive analytics, where our Calypso digital consulting business will combine a factory-taught innovation suite with our automation technology to provide real-time monitoring and analytics for their manufacturing environment. The second application is in the area of sustainability, where our software and automation technology will be used to help monitor water, air, gas, electricity, and steam usage to develop real-time KPIs that further reduce their carbon footprint and drive quantifiable production outcomes. Calypso continues to play a very important role within Rockwell and is spearheading some of the most exciting digital transformation projects in all of manufacturing. Our customers are recognizing Rockwell's expanding capabilities to converge IT and OT and be a strong partner throughout the digital transformation journey. In fact, we announced yesterday that we are adding to Calypso's capabilities with our acquisition of Avada, which will strengthen and expand their supply chain solutions domain expertise. This expertise, combined with our operations management software and that of our partners, drives great outcomes for our customers. We're very excited to be expanding our presence in the connected supply chain, since it is such a critical high-growth area. We also accelerated our Factory Talk SaaS offering with the acquisition of Plex in September. The integration is going well, and we look forward to showcasing the entire FactoryTalk software offering, including Plex, at our upcoming Investor Day on November 10th in Houston. We hope to see you there. I'd also like to highlight the increasing traction we are seeing with our PTC partnership. Our sales force is seeing the number and size of engagements growing. The capabilities and versatility of the combined solution is a great way to win with both existing customers and new ones all over the world. A number of the wins we saw this quarter were in diverse industries around the world. We're happy with this partnership and think it's a great part of our software portfolio. Let's now turn to slide four, where I'll provide a few highlights of our Q4 end market performance. We had great performance in our discrete industry segment with roughly 15% sales growth. Within this industry segment, automotive sales grew about 15%, led by an increase in EV capital project activity, including a strategic win at Magna, one of the top Tier 1 auto manufacturers, delivering EV content for GM and Ford. Semiconductor was strong, growing 20% off of a very good quarter last year. E-commerce performance was also exceptional, with sales growing approximately 30% versus a strong prior year. Turning now to our hybrid industry segment, the verticals in this segment also had a terrific quarter. Food and beverage grew about 15%, led by strong greenfield and brownfield project opportunities in North America and EMEA, as well as strong double-digit OEM demand. Life sciences grew over 15% in Q4 and remains one of our top growth verticals. We see continued growth in the overall life sciences market and evidence that we are taking market share. Once again, our fastest-growing vertical in the hybrid segment was tire, which was up about 35% in the quarter. Process markets grew over 10% with strong sequential and year-over-year growth in oil and gas, especially in our Sensia JV. In summary, we are clearly seeing very strong growth across discrete and hybrid segments, as well as improving oil and gas trends. Turning now to slide five in our Q4 organic regional sales performance. North America organic sales grew by 16% versus the prior year, with strong double-digit growth across all three industry segments. EMEA sales increased 7%, driven by strength in food and beverage, tire, and metals. Sales in the Asia-Pacific region grew 12%, with broad-based growth led by EV, semiconductor, and mining. In China, we saw double-digit growth driven by strength in mining, life sciences, tire, and EV. Let's now turn to slide six to review highlights of fiscal 21. Record orders of $8.2 billion grew 26%. Reported sales grew 11%, even with supply chain constraints. Organic sales grew almost 7%. ISCS revenue exceeded $500 million at year end and grew double digits organically. Adjusted EPS through 20%, and we once again generated significant cash flow due to our very profitable financial framework, strong focus on productivity, and financial discipline. At the same time, we made significant investments in our future to accelerate profitable growth. That included organic investments as well as inorganic investments. In fiscal 21, we accelerated funding of software development projects and deployed approximately $2.5 billion towards inorganic investments. At the same time, we returned $800 million back to shareholders in the form of dividends and buybacks. Turning to slide seven, you can see how these investments in our strong order momentum and backlog are helping to accelerate our top-line performance heading into fiscal 22. Our new fiscal 22 outlook expects total reported sales growth of 17.5%, including 15.5% organic growth versus the prior year. These projections take into account our latest view of supply chain constraints. We have the people, supplier commitments, and plant capacity to support this growth but we will no doubt need to continue to manage new challenges as they emerge in this highly dynamic environment. We expect double-digit growth in both core automation as well as information solutions and connected services. Acquisitions are expected to contribute two points of profitable growth. We are increasing our margin expectations to 21.5%, up 150 basis points over the prior year. A new adjusted EPS target of $10.80 at the midpoint of the range represents about 15% growth compared to the prior year. I should add that we expect another year of double-digit annual recurring revenue growth, including our recent PLEX acquisition, which adds approximately $170 million to our ARR totals in fiscal 22. A more detailed view into our outlook by end market is found on slide eight. I won't go into the details on this slide, but as you can see, we continue to expect broad-based organic sales growth in fiscal 22. With that, let me now turn it over to Nick, who will elaborate on our fiscal 21 results and financial outlook for fiscal 22.