Emerson 2011 Annual Report Download - page 20

18 | 2011 Emerson
INDUSTRIAL AUTOMATION
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2009 2010 2011 ‘09 - ‘10 ‘10 - ‘11
Sales $4,172 4,289 5,294 3% 23%
Earnings $ 470 591 830 26% 40%
Margin 11.3% 13.8% 15.7%
2011 vs. 2010 – Industrial Automation sales increased
$1,005 million to $5.3 billion in 2011, reflecting improve-
ment in the capital goods end markets. Sales increased
in all businesses led by very strong growth in the power
generating alternators, fluid automation, electrical drives
and power transmission businesses. Underlying sales
increased 21 percent and foreign currency translation had
a 2 percent ($92 million) favorable impact. The under-
lying sales growth reflects approximately 18 percent
higher volume and an estimated 3 percent benefit from
higher selling prices. Underlying sales increased in all
regions, including 19 percent in the United States,
21 percent in both Europe and Asia, 49 percent in Middle
East/Africa and 36 percent in Latin America. Earnings
increased $239 million, to $830 million, and margin
increased approximately 2 percentage points, reflecting
higher sales volume and resulting leverage, savings
from prior period cost reductions, and lower restruc-
turing costs of $16 million, slightly offset by a $9 million
unfavorable impact from foreign currency transactions.
Higher materials costs were substantially offset by higher
selling prices.
2010 vs. 2009 – Industrial Automation sales increased
$117 million to $4.3 billion in 2010. Sales results reflected
a decline in the power generating alternators and motors
business due to weakness in capital spending, while sales
increased in all other businesses, including strong growth
in the electrical drives and hermetic motors businesses
and solid growth in the fluid automation business. An
underlying sales decline of 1 percent from lower prices
was offset by the System Plast, Trident Power and SSB
acquisitions contributing 3 percent ($101 million) and
favorable foreign currency translation adding 1 percent
($54 million). Underlying sales decreased 4 percent in
Europe and 2 percent in the United States, partially offset
by increases in Asia (9 percent) and Latin America
(17 percent). Earnings increased $121 million to
$591 million for 2010 and margin increased over
2 percentage points as savings from cost reduction
efforts were partially offset by unfavorable product mix.
Price decreases were offset by lower materials costs.
NETWORK POWER
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2009 2010 2011 ‘09 - ‘10 ‘10 - ‘11
Sales $5,456 5,828 6,811 7% 17 %
Earnings $ 579 800 756 38% (6)%
Margin 10.6% 13.7% 11.1%
2011 vs. 2010 – Sales for Network Power increased
$983 million to $6.8 billion, on underlying sales growth
of 6 percent, a positive contribution from the Chloride
and Avocent acquisitions of 10 percent ($598 million)
and favorable foreign currency translation of 1 percent
($77 million). Led by strong results in the network
power systems business worldwide, underlying sales
grew 7 percent on higher volume, less an estimated
1 percent decline in pricing. Strong growth in the North
American uninterruptible power supply and precision
cooling business and the embedded power business was
slightly offset by a decrease in the embedded computing
business. Underlying sales increased 6 percent in Asia,
3 percent in the United States, 19 percent in Latin
America, 5 percent in Europe and 40 percent in Middle
East/Africa. Earnings decreased $44 million to $756
million, and margin decreased 2.6 percentage points.
Amortization of intangibles increased $67 million due to
the Chloride and Avocent acquisitions, and other Chloride
acquisition-related costs negatively impacted earnings
$24 million. The margin was also reduced by higher
labor-related costs in China, unfavorable product mix,
higher materials cost, aggressive competitive pricing in
the China telecommunications sector, and investment
spending on next-generation data center technologies.
Earnings benefited from volume leverage and savings
from prior period cost reductions.
SALES BY SEGMENT
n Process Management n Climate Technologies
n Industrial Automation n Tools and Storage
n Network Power
21% 27%
16%
8%
28%