ROK - Earnings call transcript Q1 2021 | Rockwell Automation, Inc.

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Operator

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. [Operator Instructions] At this time, I would like to turn the call over to Jessica Kourakos, Head of Investor Relations. Ms. ahead. go please Kourakos,

Jessica Kourakos

and thank Fiscal joining Call. XXXX Blake and today and CFO. Automation's With for First is CEO; Chairman our Quarter Earnings Moret, Etzel, you morning our us, for Rockwell me Steve Good Release Conference

of this released our and our to And the Both call include, and the press today Our charts earlier press been reference have results morning. press were the charts will for posted website. non-GAAP release and release call reconciliations release and at include available these webcast days. the replay Both charts measures. of that A measures. this XX for be will non-GAAP website next

For your website. our segments section can at also website the corporate will convenience, conclusion the of be of our found new remarks business in Supplemental a Investor to of prepared today's Relations available related our our be on call. transcript information

to started, statements. results include the related get to I we and Before therefore you company need will comments that statements our are future our expected remind of forward-looking

Our in actual risks are our materially that filings. due projections and uncertainties and range our described a SEC from wide earnings in to all of release detailed of results our may differ

I'll to call the that, over with So hand Blake.

Blake Moret

for good joining and Thank on morning, Jessica, today. everyone. the call Thanks, us you

results make outlook, to we remarks. begin Before discussing our few a and opening I'd like

leadership front, today. the On we have announcements X exciting

all leading and software global Rockwell's Scott created onboard him and go-to market annual marketing his Veritas. spent enterprise These of recently, including will Chief Scott major built Officer. efforts, hardware to in most companies. our our And bring leading strong sales forces thrilled Revenue be growth, have relationships and revenue. and we for include responsible worldwide new newly Genereux recurring customer and role. our Scott most and sales First, has accelerating strategies as hired global software executive-level Oracle, at this career sales we're

bringing segment. Prior leader Control our The second hired Software as drive that Factory business. new been business to President Production Smart Brian and to space Brian ways experience growth and revenue was industrial knowledge in recurring us, Solutions, important Brian joining Software has the has Scott the about of software is proven in announcement of our faster in extensive & AB. industrial Shepherd a PTC, he the Both board. to across operate led Scott was We're and long-time excited their Brian And maintain has February customer expertise before for Hexagon technical software X. and and customer on Software maximize for operations that, at on segments. can value. the and where phases executive how strategy began them Enterprise journey of strong He have design, joins

distribution investments to we software year. well included a acquisitions. to commitment let our XX% sharp to ruling from It's levels. I'm using team. especially turn above expectations. this believe well reported relating in expectations rates quarter, With as In now beyond, QX, sales QX, our International talent months, intellectual product a will returned but adding revenue we're to share. additional CFO to in we protecting and perspectives sales investments very that ASEM goals. liable Note year-over-year we gaining we had ESG advertising organic Finally, the moment. been new sales broad saw down quarter, X%. and its positive market in our that as order Total false growth the was demand underscores was Motion, the victory as search orders for declined I'm our X%. declined based to Through in from sales were our that, higher important The point property, quarter, make drive business and the positive with shortly. news total are will positive versus In and win investments legal a latest on pull well were This This products. the intake, as ahead front. to resulted Orders this In on Slide X. on and the happy this for X network. of Organic Rockwell recurring sales to increased in XXXX now of report back is portion In forward this contribution in to me we well Radwell organic for Devices' QX the includes our authorized a other now year. related order that pre-pandemic our and gain included fiscal Intelligent a launches increase our our above that busy balance of infringement leadership expect make fresh in sustainability and of prior segments. results our growth our on our segment the Kalypso saw a We're trademark our I'll resale acceleration benefit results. pleased are Sensia to where found that More we quarter new year. products. few Total along very announcement legal comment

a uptick which Services' Software Control organic XX% was see in gas. down Connected and continued network organic of COVID were due in quarter, and by XX% weakness sales the security orders organic to Services, Solutions drive primarily in quarter, quarter, & we balance oil will the sequential sales improvement and sequential In declined year-over-year infrastructure. in sales saw delays. the slightly year. led decline sales the related In project Services Information Lifecycle X%. the did growth We in Lifecycle of through

by reached a strong both Lifecycle and record IS/CS with double digits of double we XX% and Connected improvement in exceeding book-to-bill overall, a organic double-digit orders year-over-year. organic Total as IS/CS year X.XX, about Services. year-over-year built XXXX IS prior grew as growth in million. Services the well However, strong reflecting year an backlog digits $XXX demand sales cybersecurity to we great both and growing versus sequentially backlog a in fiscal organic portion have of on saw basis sequentially. significant expect

quarter in roughly increasing gain. last a year, resilience. versus margin the XX% Turning prior settlement on of including to business our with profitability, grew sales, was segment to legal the Adjusted lower testament EPS operating XX% flat performance year

came our gain, adjusted the expectations EPS the in quarter. for above Excluding

now Let's where turn a end-market few highlights to Slide X, organic Figures QX for I'll our of are provide performance. sales.

Our by discrete market X%. sales approximately segment declined

should other comparisons momentum regions. sales mid-single-digits offset EMEA performance year the growth strong saw year. particularly sales with declined in America versus benefit we the order North remainder prior for that of However, in Automotive the in XX% broad approximately in by tough quarter,

of significantly rest key wins EV outperformed from is business automotive in and new manufacturing. the that brand-owner a included major a battery for EV building line auto Our Europe

a to were over year. the wins, Semiconductor X of in Strong customer our balance this spend for success. Semiconductor our in Independent factors OEM, at won vehicles. both technology year. secular the grew We where to were vertical control of is this are necessary motion tailwinds electric low-single-digits Tier improve who our their strong support also Cart hard-fought CapEx new in largest chose our and precision increase These significantly some the to customers important European differentiation Technology and the build expected quarter prompting

up growth semiconductor the our result, original As raising for high-single-digit to we year, outlook are our mid-single-digit guidance from a growth. of

with versus to in obviously growing continue approximately are we tailwinds, industry prior our future growth. year. Discrete within with was Another its value that to sales This is another e-Commerce, XX% will and support provide secular performance highlight well-positioned tremendous

of is packaging battery consumer products. Our as here, assembly and Technology is the it Cart Independent in a long-term differentiator

revenue Turning now to This low-single-digits our Beverage quarter. XX% & low-single-digits. Hybrid segment of segment. grew by grew market this for accounted Food and

strong In delivered broad-based North to the above year. were led multi-year our another about of expectation for supply an Life Suite response. IIoT, America. uniquely Thermo double-digit initiative Reality quarter, and Rockwell's demand to professional single partner in enable in and software solution by Thermo quarter software we addition, in in grew order factors why in and QX, pharma which to expertise, be productivity. lifecycle their combination their and digital MES, XX% significant Rockwell. integrates to a key and drive services prior best with X.X this in packaging COVID of chose were Analytics services, ecosystem, Pharma important very industry selected growth FactoryTalk enterprise vaccine strong drive is the OEMs awarded They versus quarter software proud breed Fisher readiness well ecosystem the Sciences part Fisher Innovation a FTIS, and Augmented full

are broader we is in on distribution and formulation, with to the support requirements. vaccine of our also packaging vaccine a While working there lot focus role ecosystem

& vaccines are Life life of to pallet shipped, vaccine on sciences expecting one about were our the led down of being markets are larger we we Process Based every typically Process Gas. grow by accessories weaker pallets lag verticals year. Sciences to half in a additional mid-teens declines XX XX% in now XX XXXX. by broad-based in business than fiscal Oil increase approximately expected, and required. demand, For discrete

declined Slide to sales X, conditions Gas to the in quarter organic & organic primarily declines Business sales product significantly performance regional year, improved & offset North strong the the by declined and in and were orders. Oil industries Beverage and through the XX% EMEA versus X%, our sales reflected in declines quarter. growth now in America and by the in due Turning from quarter. customers prior in Automotive. led were in Process sales partially to Gas. due declined and Sales were Oil Transit Sales region strong Pacific by X%, & Semiconductor. that Water Food largely Mass Asia

full-year upcoming record full in we growth we battery sales strong important in Asia year. by company in above were Food in auto and EV some good support Pacific with outlook QX the in region, declines growth the we Tire. Mining. greenfield do & backlog Sequential average. China backlog In Beverage and In be both Oil Latin growth double-digit in the growth sales America & and orders wins. reached a the to quarter Gas quarter our and China, and led in expect the growth saw year-over-year for region saw high growth

quarter review year drive in of semiconductor to e-Commerce in related Sciences is America, the the strong now for as primarily as highlights improvements balance X and in Orders growth global Slide expected growth. the North full top-line year. for to Life Let's guidance outlook. in The the momentum for the turn our to higher outlook first outlook in well is to

growth growth. the organic year-over-year XX% assumes at outlook sales midpoint, reported X% including new Our

We expect double-digit offerings in services new will our ARR fiscal and XXXX. growth software drive expanded

will this Our objective. be new on hires focused

A XX% EPS end can at represents the see, end who Gas. turn QX year. improving X. & uptick Oil Adjusted midpoint over of view detailed we that, this in new by into let sets you exception go of stage year. won't for the the prior marked details with performance the year latter of target fiscal our will and the is all it Slide the in outlook in in market to outlook slide, now Steve Our later me $X.XX expect found XXXX. on of on orders part range fiscal sales growth first this our quarter elaborate for the positive on growth financial markets Sensia With over Steve? I our the for into as of more updated but A organic sales key

Steve Etzel

on everyone. X, Thank quarter key start I'll you, Blake, and financial information. good morning, first Slide

a to reported year-over-year were X.X last margin sales about down and in down XX.X%, despite items. of compared year. in to last due Segment row year. increased margin the QX below and expense flat first tax $X contributed XX.X% to line in was effective included points. previously formation Sensia related growth, for year's result. sales transaction the to about year. last rate discrete second points rate The Corporate million is million X.X%. good the last item the of is X.X% discrete joint and as corporate-net. was the Note to X.X% $XX referred year-over-year. quarter tax tax The other increase quarter This so Sensia First operating down benefit were by that amount of Last currency sales X.X a this slightly a Acquisitions was venture. formation lower other large general primarily translation to fees QX that the sales, compared we segment of adjusted was Organic of recorded related year quarter

EPS. to on Moving

of also As a of beginning accounting quarter to changed definition expense. purchase the we EPS with and this depreciation impact the amortization Adjusted exclude reminder,

$X.XX. EPS adjusted was quarter First

legal settlement mentioned Blake $X.XX EPS settlement. identical related to better includes this than to As favorable Adjusted we legal the $X.XX, a expected. quarter, and earlier, excluding result was last

temporary XXX% of pleased million year-over-year $XXX at a conversion incentive QX One in $XXX income. additional item of million. headwind $XXX are was the cost remained quarter Free to November. cost result, X We reversal actions in Free about compared reinstatement flow were a in the is not shown I'll $XX repurchase sales this slide, performance overcome full year million line about cash we EPS Slide available At flow $XX slide. last compensation quarter, settlement. our with with the for later repurchased end able the since margin as quarter, This authorization. of the and placeholder Adjusted including December of provides XXX,XXX we segments. cover operating adjusted the million of was the under a our on our and from of to overview $X.XX a XX, bridge on shares cash of million. of legal the

The reporting organic structure. Intelligent of in was by X.X% XX.X%, and quarter cost offset first the lower a the under quarter. savings. than segment decline our sales XXX points segment to year, this As last new mainly X Segment lower due an temporary margin basis partially Devices sales, is had reminder, we're structural

As performance low grew orders in high-single-digits single quarter, and digits Blake earlier, Intelligent sequentially. in orders strong our businesses. highlighted products particularly Devices the had year-over-year, we

margin performance, X.X% Software basis strong the growth mainly XX temporary lower lower to organic margin Acquisitions year's to segment quarter. X.X% last and by was than due contributed in savings. sales & cost XX.X%, Control sales, declined points offset which structural partially and segment was

lower in to segment Lifecycle this sales low-single-digits XX.X% basis the tends onetime to first savings, Sensia this & X.X% Services margin sorry, improvement high-single-digits businesses. the - to X.X% X.X% quarter in Software margin contributed the XXXX. recovery as products to items Operating grew Acquisitions Contributing of year-over-year fiscal the a were for of and XX offerings year-over-year, cost to orders structural and the versus growth. also improvement our sequentially. I'm Control segment's declined despite segment year-over-year the lag points and year temporary Organic sales. ago, lower margin of absence increased year-over-year recognized contributing

strong suspension and XXXX that QX First Services year. effect walk organic tax a start XX, to of the about in primarily of due Starting a impact of the core lower was through $X.XX. cost $X.XX headwind Lifecycle XXXX, from the XXXX QX to $X.XX. QX Tax XXX(k) in fiscal so the $X.XX. was about quarter performance book-to-bill we XXXX. fiscal fiscal match on represents performance partially completed This negative were for last X.XX, the was recorded reductions which the about XXXX. left, acquisitions XXXX. Adjusted of remained impact November in contribution $X.XX, the had next discrete Slide, a EPS that the year from in end about implemented compensation and salary Incentive year-over-year headwind a other contributed Sensia-related positive and sales offset far we Acquisitions segment benefit provides The to driven Temporary by sales. items. of actions These by the

Sensia reminder, is core. now reported in a As

EPS. to contributed Finally, mentioned the $X.XX settlement earlier, Adjusted legal as

XX, this segments, slide our order daily Control offerings. order our Moving - This shows the product products overall improved configured-to-order Order recovery longer to and & for monthly excluding the lead here Intelligent again account continued. intake about Software shown quarter, The trends. for trends for sales. as order our of trends two-thirds Devices time Slide

Lifecycle and sharp growing total a quarter, than was see, in segment digits sequentially. XX% slower you resulted in orders. over acceleration for improved in and As there but November performance Services The can in double company Orders order are December. the year-over-year backlog, strong the record product recovering demand also

summarized prior trends XX. same the shown data are Our is the This quarter. slide, on as quarterly order by Slide product

for company. Our clearly first updated quarter in above the and guidance. both XX, pre-pandemic now takes Slide are levels the order products to levels, total This us

X We is point. are of increasing X.X%, X.X% a new our organic sales by mid-point with growth outlook range X%. The to

to weaker about now growth. we X.X% expect the Given U.S. currency contribute translation to dollar,

about reported contribute the guidance XX%. range is expect of X.X%. We midpoint to In acquisitions total, sales our

to Blake margin the will $X.XX I'll about new These We range to to compared the the updated and bridge Segment have the margins expected $X.XX segment on that and & EPS adjusted guidance is Fiix XX.X%. midpoint software be guidance the lower to operating investments primarily prior review Software midpoint the The quarters. the be reflects will now weighted to and from also slide. next the mentioned of affect the guidance acquisition. prior Control impact toward third the earlier $X.XX. fourth

about rate same guidance. to effective expected as prior XX%, is be the tax adjusted Our

As mentioned late expect basis year. we fiscal the discrete which point to realize last benefit a this related to items, quarter, in includes XXX

is adjusted flow between few be fiscal $XXX on $XX expected cash full of to the We fiscal other and million. Corporate $XX to project and year amortization be free million to expense continue million. XXXX of accounting million conversion interest expected comments XXX% the XXXX still A is Net million. additional for guidance. to about $XX Purchase about and income. for expected $XXX expense expenses be between is

still we're prior takes This Finally, to of diluted range the EPS XX. the midpoint from guidance us about outstanding assuming higher bridges about guidance. There average guidance. organic shares. the Slide projected of our shares Starting midpoint million November This Currency primarily to higher is is to slide to the performance, XXX sales new of adjusted our a guidance. contribution core left. due $X.XX operating compared on to add

bonus Next, guidance, $X.XX is increase given there in expense. a about from higher the impact

the investments impact of $X.XX guidance settlement, acquisition. there Fiix partially is of new QX midpoint offset incremental the contribution for $X.XX The the range the legal by Finally, the and about is from $X.XX. the

comments couple Finally, a quick QX. fiscal of regarding

to about to sales QX expect grow we be QX, in year-over-year. performance order flat sequentially, strong our Given and

mid teens. organic second We the half to in high sales year-over-year expect growth

call, reinstatement the last it comments. from the $XX of additional the QX as back I'll largest have Blake headwind hand we for in mentioned year-over-year of With range a As on will reminder, the bonus earnings that, million. the some to

Blake Moret

the demand timing direct were in so in of we of has last come for faster double-digit sales QX far. last in seem were the This respective rate had year. in And recover a and recovering than the around predicted earnings significant geography, given we received each Americas looking world products recoveries. infections torrent recovery the downturn. year-over-year expected the begin and this reflect and The Historically, Steve. of pace will similar economic the half in with our be to our still we second Thanks, November correlated rate orders December, has the The on to there. to when growth a recession after see of of sales impact is region their with to and most revenue highly our we the

coming are meet online staying keep this around overtime orders X shifts day working level is capacity activity. components our increased pace a additional the to demand this Center The Milwaukee Manufacturing and with close new of We this Logix working actively month. and is We're for to hiring suppliers to world.

us deliverables. legal operate acquisitions will important design, with an the maintenance in settlement customers' role Recent Slide a in segment. phases & investment Day, these of revenue software XX, Their to Maintenance to we're the and growth. around development booked in talked lifecycle. we allow as with The portfolio to well, Fiix all Last releasing is larger offerings. people. is continue be Software-as-a-Service add playing November the our $X software showing great Investor the drive first our contract. we value offerings of all parts at these future dollar It of immensely in within our business be already recent are to And our million and Control to and plans also Hub Turning leadership just central advance recurring FactoryTalk of our proud will investing the momentum organization SaaS part about for how Software world. I Fiix annual already within the employees accelerating their to FactoryTalk begins great gained

me we talent. begin the pass the team. hire that, to baton team to will great the Q&A let top members today announced new continue With already an to session. the to We back And Jessica X add of leadership

Jessica Kourakos

Blake. Thanks,

the to Thanks. would one yourself I many say start want to Q&A, question just we first the as we and our that quick so Before possible, Michelle, please follow-up. to get limit question. let's to as of take like you

Operator

Okay. [Operator John Haskett. from question from Instructions] comes Your Inch first Gordon

Your line is open.

Karen Lau

everyone. Karen dialing morning, It's Lau morning. for Hi, Good in John. good

Blake Moret

Karen. Hey,

Karen Lau

wondering, but on guys Europe, in COVID and maybe in are have of sales moderation was Understanding order strong, any you around and slowing has if I - seen world the very you any maybe comment if in the sales there's trends underlying moderation U.S. the conversions slash curious, Hey. of the signs given the Have order obviously? down flare-up can beneath seen in China, there some or year renewed you any sort conversion? budget been that? cases

Blake Moret

pieces the Yeah, so strong first orders part couple of that, a continued early all of in January. of of

causal significant saw we flush. see don't for through we because of what So last budget of off sort any tailing quarter

see due do, any longer continue. those we business stayed world. trends the solutions But with high around infections see infections. cycle We we haven't increased obviously, mobility have challenges, as placed seen So with challenges, continued new particularly to to obstacles continue our

Karen Lau

then been particular. e-commerce. a time. Obviously, out very in that's this guys in calling end-market my for it to And Okay, some hear. recall other has the strong I don't question past is great on market you

over positioning So maybe comment and your has curious, - the - forth? positioning can how a what's and there changed is how comment it your like anything big you on and if is so potential if or and

Blake Moret

What's Cart it there so centers down. always Yes, Navy, growth strong differentiate. automation and has last our terms in the well. about as always we're It Technology first, much core conveyors be commerce differentiates don't changed a great I sortation. and we respect that had an improved of to talking in we it that offerings is, end-market more about explosive was presence core where shows market. think the or distribution Independent have We've in X, a do fit technology. even e example, sign quarter why when our in us itself, role We good. fulfillment for of is And the really to slowing of with able to talked which that serve been

some motion And as Technology the control. the respect look order potential Independent there a with of form Cart of to Navy opportunities make small precision

as it's readiness higher. going expect So our to still well the part serve a of combination years as increase to to a even It's relatively the total our really in of total as quarters we a market come. that But expanding, small percentage and of our sales business.

Karen Lau

That Thanks great. sounds for the color.

Operator

Your next question comes from Julian Mitchell from Barclays.

Your line open. is

Trish Gorman

morning. This Trish on Julian. for good Hey, is

So maybe how on And just or this $X.XX is of from set spent, spend a a extra the more expect investments bit timing, to a the that that of then couple should questions on there rate maybe little then the is cost color if investment run throughout on reversals, we in the XXXX? apart abnormal margins, temporary just And new anything call more should out? broadly down of year?

Blake Moret

not The year. add. of So spend is an to revenue that automatically forward will the Steve to And annual pull a of eye investments specifically, increasing our area, it's expected can onetime Software-as-a-Service make to on that rate. run we've programs accelerate recurring into the that be towards our next expected software some go then, we a with contribution and working to comments. couple But it, I'll investment development been make of in

without into for ongoing run going investments increase year, to an so selected next And rate. that the as revenue reason, soon but were specifically beginning as

Steve Etzel

the it $X.XX and timing, and well the that items, as it's of quarter remainder dilution to Fiix third And, to fourth so the both the as $X.XX, & the related can affecting investments think described. the acquisition, segment. Control relates about of relates Blake or software the And and from that to just think to as that it you it in of all of mostly Software the

Trish Gorman

in more That's seem in you. talk X% sales switching gears, And region specifically maybe pure very business underperform to automation, you Can about what's then Asia what that in on factory maybe is helpful. company. and going the Thank China? down just

Blake Moret

Sure.

lead China indigenous targeted cycle would to is our users, before towards that machine general, in higher later business with that really at play talked about position out cycle respect And China. with to opposed We've on percentage seeing end solutions, some builders. centered longer So, in strong you're as earlier relatively of the businesses. be think I time

differentiator in Now, software a transit, some mass there. in we still water, wins our exciting recently China, we've opportunities, see had great wastewater, and EV, is

pick I But that go our doing going there. pace, strategies to we're like as position what new the market, up to after new so already we're So there. complement with opportunities, we go-to-market

Trish Gorman

Got it. Thanks.

Blake Moret

Thank you.

Operator

from comes next Steve J.P. Your question Morgan. from Tusa

Your line open. is

Stephen Tusa

Hey, guys, good morning.

Blake Moret

morning. good Hey,

Steve Etzel

Hi, Steve.

Stephen Tusa

just remind cycle of trends? order sales? the - product of kind on the us on you kind Can of the What's orders time those turning into

Blake Moret

those typically excluded we are those Control. lineups the order trends, configured time, characterized Power weeks. In So to as of lead longer

shelf. look in that, those on turnarounds distributor those you when So at trends, of course, typically sits of are that lot our A are measured weeks average. in

order customer within days. it, hours then end can places or it a be an an for when few So fulfilled

Stephen Tusa

Right.

confident confident - a case, are restock? that are you isn't this So this isn't you that's like the if

Blake Moret

practices. visibility have are into we We are, management good because end based underlying on And inventory our demand. their buys customer distributors'

on based point see they users other part continued the strong they'll into end what integrators us January. of and panel and that on buying And orders builders. saw we the So first from be is

So large restock, management inventory due to we're seeing practices. not a evidence any due their this portion of into our visibility there's to that distributor

Stephen Tusa

then, you the it. one the kind - organic the the of got margin. it's guidance and cut just to Got And last raise of one,

what's as but driving kind mentioned lower of this leverage, to that will? have just You curious may if you earlier,

Blake Moret

gain due settlement ask investments we of portion from So of make I'll to that now, decided to mentioned. But some the Steve we of it to top the this some from a that is legal up.

from decision expect due through So run, we expect software accelerate investments pull to not to automation recurring that not so recurring strategic investments does into a make Software-as-a-Service certain we in be fiscal importantly, one-time revenue impact part we to of year a for that next they're projects, this our we can XXXX for base. were forward So But get be investments the and year. the releasing right? those would go to to made as revenue development management spend software but necessary the that that, a next increased information

Steve Etzel

other investments, in the Steve, operating end thing these outside the well, segment earnings, Yeah, whereas the as impact segment operating earnings. and fixed segment are game P&L is of that incremental the subtle

So side one comes they're margin. effect the through the basically, saying

Stephen Tusa

the for appreciate Great. it. All right. Thanks color. I

Blake Moret

Yeah.

Operator

next will from from Your Citi. Andrew come question Kaplowitz

Your is line open.

Andrew Kaplowitz

morning, good Hey, guys.

Steve Etzel

Hey, Andy.

Andrew Kaplowitz

and did really a hybrid your a but little QX. surprise bit, expectations and we've Sensia commodity And in spike not of took discrete obviously, mention you end you it's at sales that maybe pickup that seen you saw Blake, organic took prices. the up process a through down

So overall have stabilization side? process the and you bookings on especially any mining the bigger seen have related now, uptick, seen you

Blake Moret

the for raw price our for presents on encouraging a particularly materials. the of like well while $X, of are little price fundamentals materials copper pound We given per mining, of don't above So a use copper that lot bit pressure that.

So of on benefit cost the the pressure any potential new outweighs near-term miners of by us. projects

saw the terms of recovery. of optimistic more some we're But in On yet towards we're projects are orders or of know terms some of we I that mention seen Latin a did in tracking would oil America, gas in and about mining. QX. and big haven't that I out a there in think, oil looking I at I it that we're than that gas, say half good there Sensia few back we quick

did we the QX, the some of of support and sales for that part year improvement the latter balance through gas. see oil the will orders sequential So

Andrew Kaplowitz

of cyclical maybe stepping single you much about about talked You also just recovery talking reshoring, is just resilience talked improve order than you It's of how of how with Could helpful, trends a pickup sort been and Blake. you talk bit, focused failure? much sort we've here, stuff of but think to obviously then, ESG source back picking about secular faster And step-ups orders versus helping recovery? this on e-commerce energy the normal about all little the you up expected. and is transition,

Blake Moret

fortifies think recovery. the I it the of strength

ways have We to win. more

downturns. of neighborhood services; year. didn't of $XXX that general and really this spend cybersecurity automation in million These So software recovery it's in services that's having the just have past not the larger for core we the a portfolio are offerings MRO

And fully, out of terms can plans. transformation curve, of digital so we their accelerate more I in think as try customers to the participate

Andrew Kaplowitz

Thanks, Blake.

Blake Moret

you. Thank

Operator

And next will Eastman Baird. from from question come your Rick

is open. line Your

Richard Eastman

you. and thank Yes, good morning

Blake Moret

Rick. Hi,

Richard Eastman

pipeline, Blake, or bringing fairly curious, to you seen perspective for over aggressive around EVs. could some your as to here investments years. for X? in How do number you view kind minute market models I'm around those the that EV models We've And of the - speak expectations a next X maybe on there build in the of trailing starting model more that's than first this is zero-sum to that that, So Where forecast? significant models? does investment ICE And then, my will? in a versus to order of EV with game around maybe you just that question. if some kind follow growth a are see spend you

Blake Moret

if And a EV raw on it models, [ph] [SAR] that launches new So changes, new our we've is these models, that And positive. more always like zero-sum the said business above then based game. is designs auto count. think then things in that's new I you think general model cockpit as of and

to stamping, readiness have and assembly talked also we needed train higher So we paint and and But we've same in serve ways to battery with our are capabilities just on. at are ICE going projects, and than These in I terms so down, the drive can terms a all going body a about, the on. the of in the vehicle participate new in of build opportunities so as automation higher of think also that is traditional up EV amount.

mix that being increased have as The factory. MES in well reliance somewhat an a we looked a on essential at and nice modern units to looked more as of as it's market is schedule the EV offering at these to opportunity a part there the automobile plants. have, being software customer as So is to of there's serving share opposed opportunity a

positive So those were very all things.

made U.S., within would us in For a owners. within and good the many on that's obviously fleets that pertains being made us, as the strong our given the in I also say if position geography EV focus well, thing of for if to brand America

Richard Eastman

and will, strength - Very we good. there, follow-up again, around the as our we across there, maybe are within greater then we're content seeing a Or just Blake, spend marketplace? life board? kind Or you as that spend sciences seeing accelerated the saw is thought, Life is the the just content in just Sciences, defensive book-to-bill pandemic, of And our around greater if a the the also well?

Blake Moret

Yeah, market these that to companies. the information think you things I automation think, and the we're well as providing expanding, it is expanded customer share about as for

core our top additional the of core includes as that then we on on face, and the software packaging, and it's you providing, look that can just again, automation, track it when trace. top competitive in in our of of So But terms it's capabilities offerings control platforms. and well we're certainly automation provide as formulation this not at

So critically way is something life have facilities. it's of cybersecurity very more to through sciences' important PTC then relationship many a used offering our And is Augmented of with customers is that ever. than fast-growing another we service in part Reality our these being that's these win. now to

Richard Eastman

you. thank Great, it. That's

Blake Moret

you. Thank

Operator

Joe Your next question Cowen. comes from from Giordano

Your line is open.

Joseph Giordano

guys, morning. good Hey,

Blake Moret

Joe. morning, Good

Joseph Giordano

Hey, auto, rest have obviously, of big the curious a year. just in ramp you the on

going longer With it in side semiconductors, some things. risk not the equipment drags production if that that of what's then that the the shortage the delayed putting vehicle place? on on obviously, of on But in investments the in you're

Blake Moret

revenue to get these the I get think, an EV begin companies offering in particularly the and on they to out need units side, know market to there.

still it's a the see I of a automotive. given But at uptake the in in we're of project So looking pretty size funnel I headaches. lot think them that dramatic

our funnel. CapEx a telling are of look that in you at that that us increase auto, with projects they're when folks pretty really an seeing So market funnel

don't I market. brands shortages for that, I projects, again, they a with there them major know they're going EV they be fighting additional out semiconductor see to to these significant them, because but get the have think are that to add their delays in hassle the it to causing

Joseph Giordano

quarter for give back this great. a me, was temporary benefit a last just savings the next And Okay, then does quarter? that flip starting to

Steve Etzel

now a basically So restored year-over-year net-zero the salaries should QX, year-over-year. net-zero we've a savings so XXX(k) match, temporary the and be for basically that's the

talked which accruals due year-over-year year, is it's in the our headwind QX, about to the reversed about million. a this quarter now. Last and we've a bonus, year, target $XX accruing have above we're the little bonus we all big second downturn, Now in of

Joseph Giordano

Okay. Thanks, guys.

Blake Moret

Thank you.

Operator

And our final question from for Kaye Oppenheimer. come today from Noah will

line open. Your is

Noah Kaye

Good changes you're accelerated understand Officer. bringing of was of product spend Chief go-to much Revenue combining in I'm a really market morning. taking that how change this for question. to then, really And an Do you the Thanks infrastructure? on the feel in the Any of accelerate that'd Software-as-a-Service? If infrastructure the sales rights adoption put strategy selling kind have make selling sort think investment trying here, just investment with a kind versus It the in helpful. to or you need place is actual that, for the software you or in development about to of talk to model you be of business there? can you the

Blake Moret

software. Sure. majority is making additional the the of in spend of The we're development that vast the

the year coming start in that or months So automation to be will our over Software-as-a-Service the it's next in software. And release it's so. and

that IT of at operational have interfacing with and right the do, and devices convergence home-field what really So we is that we intelligent our right leveraging this core that advantage at technology. of

software it's That's onetime previously of our the doubling about I run talked number a account that general about that's that investment we've as said, talked go rate. assisting So into We've development. previously managers, is our mainly going that an it's onetime increasing. mostly a specialist, cost. and investment, ongoing not Because software doesn't into our the

Our selling twofold to with software. respect really approach is more

as more that, sales. because big then, customers. growing like are well. But emphasis to more coming puts that specialists, single we simplifies that as part collection solutions, software having interact resources, customers. with is got it with an outcomes software, it on to They've and I in I draw general to but We provide because can of have it of technical our who those a manager as portfolios like and we've assist of and consultants to sell with software a various inherent large a understanding well got number offerings account how us also those customers these our And sell account our our managers on

typically it And software, So it involves involves involves services. hardware. it

project And sometimes integrating we're the ourself. actually

this the come design One of it's selling customers, those really into just CRO provided of and Scott of plant is our to portfolio. describe that plant transformation and to customers' how engineers. the things and expanded a things how because to the increasingly our not to together, brings bigger a solution, as role a how We're understanding all engineers, customer with good part senior managers digital is that it levels of

to talking we're the so, company. people in And up higher

Noah Kaye

the color. a makes lot And you thank wanted sense. That for just And of then the to touch I last.

that that mentioned give was is don't what portion to I of just curious bit spend could talked of could there know you But little details a And you for quantify general, the So in is spend. a I investment that. on it. care ESG you you driving is if us towards?

Blake Moret

Sure.

Just during so goals things, carbon-neutral investor a couple we day. our mean, announced of I

what we're that's so, our facilities. own within And doing

big for advancing help sizable of their amount the more own terms money, important ESG customers. at in can But overall their even areas to to But circular recycling a we our customers in efficiency on there things a the are dollars new our I and we're in goals. able offerings economy, going an millions role always shop. fast make meet pace of renewables, their other those are We've are at energy ESG in spending we our sure maybe impact plants. those of do that had like goals are impact so, in looking And in be to mean, as is we that own what

Noah Kaye

appreciate you Okay. I it. Thank very much.

Blake Moret

Thank you.

Operator

over for closing brings us presenters end Q&A the to call to back the This the of I turn our session. remarks.

Jessica Kourakos

Blake to a Michelle. final now few comments. it for back Thanks, I'll turn

Blake Moret

recurring board on is growth revenue together. XX next in our than Operational Industrial than Thanks, Technology to the interest very the to software quarter. are XX in And strong have accelerate we Jessica. manufacturing with we of much growth the support. happening to bring and months, Be your an leadership were that bringing performance is orders is Fiix well excited in Technology are very we the our we And with and that Rockwell better anticipating. we very In Information year. the new expect higher our strong as in Oylo It Rockwell. talent and over at future. faster summary, ongoing lined aligned up new as for The new drive the exciting we the product and partners be positioned you that our Nobody time recovery additions a with and pace to balance pleased well. result will thank revenue launches about for fiscal and We're clearly

Rockwell Automation (ROK) 26 Jan 212021 Q1 Earnings call transcript