ROCKWELL AUTOMATION INC
For the period ended Feb 4, 2025. Filed Dec 20, 2024.
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Feb 4, 2025 · Filed Dec 20, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
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MESSAGE FROM OUR CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
| BLAKE D. MORET CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER | “THE VOLATILITY OF THE PAST FIVE YEARS HAS CHALLENGED THE ENTIRE INDUSTRY, BUT WE HAVE REASON TO BE OPTIMISTIC, EVEN EXCITED, AS WE ENTER 2025.” |
Dear Fellow Shareowners:
After a very strong year in 2023, when we posted 17% revenue growth, 50% diluted EPS growth, and 28% adjusted EPS growth, fiscal year 2024 was a challenging year. Reported sales were down 9%, diluted EPS was down 31%, and adjusted EPS was down 20% year-over-year, due to continuing high levels of inventory in the channel and softening end-market demand through the back half of the fiscal year.* The actions we took to align costs with current business conditions and to create a strong foundation for future growth and expanded profitability included a 12% reduction in our global headcount from peak levels in early fiscal 2024. The volatility of the past five years has challenged the entire industry, but we have reason to be optimistic, even excited, as we enter 2025.
Rockwell continues to execute our strategy to bring the Connected Enterprise to Life for industrial customers. Especially with workforce constraints in most of our largest markets, the automation and digital transformation solutions we provide are more important than ever. I’m very proud of how the global team is working together with a sense of urgency to ensure we remain well-positioned to serve what is a growing market. In fact, nobody in our industry is positioned as well as Rockwell:
| ● | With our Allen-Bradley brand products and FactoryTalk software, Rockwell is the most widely used technology in U.S. manufacturing. We have the highest share, largest installed base, best channel, and deepest relationships in the best market for industrial automation and digital transformation. Policymakers recognize the essential role that U.S. manufacturing plays at the core of our economy, and we welcome policies that will benefit our most important market by spurring innovation, streamlining project approvals, and leveling the playing field. |
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| ● | We are a pure-play, with three business segments focused on common customers. Rockwell has proven |
| market access to these customers, whether they are in discrete, hybrid, or process end markets. Our market share has continued to grow, despite the volatility of the last few years. | |
| ● | Our diversification into software, high-value services, and production logistics has helped make us more resilient. Total ARR grew 16% in fiscal year 2024 and is now 10% of our revenue. We proudly continue to recognize a large part of our revenue from traditional sources of value, especially products, but new ways to win position us as an even more indispensable part of our customers’ digital transformation journey. They also cushioned what would have been an even larger negative impact on our profitability last year, as evidenced by the growth and performance of our Lifecycle Services business segment. Lifecycle Services margin improved 900 basis points year over year in fiscal year 2024. |
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| ● | We continue to pick up momentum on the execution of our plans to expand margins, and we are confident in our ability to save $250 million in fiscal year 2025 from the combination of our productivity actions. The financial growth and performance framework we introduced in November 2023 remains valid, and we were pleased to add additional detail during our recent Investor Day a few weeks ago. |
| ● | Rockwell has a superb leadership team. Our new CFO, Christian Rothe, joins a well-aligned team of seasoned automation industry professionals. We also benefit from the technology and commercial capabilities of talent we added through recent acquisitions. |
| ● | Our Board of Directors is well-equipped to provide governance oversight in important areas of finance, talent management, technology, risk management, and maximizing value to industrial customers. We have a great blend of talent and continue to actively refresh the team. |
| * | Adjusted EPS is a non-GAAP measure. See Other Information and Supplemental Financial Information sections below for the reconciliation of this non-GAAP measure to our externally reported results. |
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As we turn our attention to performance in fiscal year 2025, these areas will be key:
| ● | Adding new levels of customer value. It’s clear from recent customer conversations that our technology offerings and market access position us very well to “go on offense” as we win new customers and expand our share of wallet at existing relationships. Importantly, we expect new capacity project orders in the U.S. to increase again this year. The focus in fiscal year 2025 is to further integrate what we’ve built and bought to provide the highest levels of customer satisfaction and loyalty. |
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| ● | Continuing new product launches to help customers be more resilient, agile, and sustainable. We’ll see growing revenue in the year from disruptive products such as FactoryTalk Optix, Logix SIS for process applications, Vision AI, ArmorKinetix, new Otto Motors innovations for Autonomous Mobile Robots, plus Plex and Fiix Software as a Service, integrated with other Rockwell offerings. |
| ● | Executing our cost savings plans as part of a broader focus on operational excellence. Christian and I discussed highlights of a re-vitalized Rockwell Operating Model during the recent Investor Day, which integrates essential elements of company activities to ensure consistent, market-beating results. |
| ● | Delivering value to our shareholders, including by deploying capital toward dividends and share repurchases. We expect a return to 100% free cash flow conversion in the year.* |
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I want to end with a shout-out to our employees. Our people around the world have demonstrated remarkable dedication to serve our customers, bring new innovation to market, and make the changes necessary to position us for market-beating growth and profitability. My leadership team and I look forward to working shoulder-to-shoulder with our employees and partners around the world during the coming year, as we tune our operations, continue to innovate and add value for customers, and grow shareowner value.
BLAKE D. MORET
Chairman, President and Chief Executive Officer
| * | Free cash flow conversion is a non-GAAP measure. See Other Information and Supplemental Information sections below for further information on the calculation and use of this metric. |
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.