Emerson 2014 Annual Report Download - page 26

2014 Emerson > 22
22 percent, Middle East/Africa up 19 percent and
Canada up 10 percent. Earnings increased
$210 million and margin expanded 0.8 percentage
points on higher volume, leverage and lower materials
costs, partially offset by higher other costs. Benefits
from cost reductions were offset by unfavorable product
mix. Foreign currency transactions were $23 million
favorable compared to 2012. The comparison for 2013
includes incremental costs incurred in the prior year
related to Thailand flooding recovery.
INDUSTRIAL AUTOMATION
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2012 2013 2014 ‘12-‘13 ‘13-‘14
Sales $5,188 4,885 4,990 (6)% 2%
Earnings $ 871 777 802 (11)% 3%
Margin 16.8% 15.9% 16.1%
2014 vs. 2013 - Industrial Automation sales were
$5.0 billion in 2014, an increase of $105 million or
2 percent as slowly recovering global industrial goods
markets led to mixed results across the segment.
Underlying sales increased 2 percent ($86 million) on
3 percent higher volume
partially offset by 1 percent
lower price. Foreign
currency translation
added $19 million.
Growth was led by the
electrical distribution, fluid
automation and hermetic
motors businesses. Power
generating alternators and
motors and drives were flat,
and power transmission
decreased slightly.
Underlying sales increased
4 percent in the U.S.,
decreased 3 percent
in Europe and increased
5 percent in Asia on 9
percent growth in China.
Sales were up 3 percent
in Latin America and
2 percent in Middle East/Africa, while sales were down
3 percent in Canada. Earnings of $802 million were
up $25 million and margin increased 0.2 percentage
points, reflecting cost reduction benefits and lower
rationalization expense of $20 million, partially offset
by unfavorable mix and higher warranty. Materials cost
containment more than offset lower pricing. Near-term
expectations are favorable for North America and Asia,
with Europe remaining weak.
2013 vs. 2012 - Industrial Automation sales were
$4.9 billion in 2013, a decrease of $303 million or
6 percent, on weak global demand for industrial goods,
particularly in Europe. The power generating alternators
and renewable energy businesses led the decline, largely
due to customer inventory destocking in the alternators
business for most of the year. Smaller decreases in the
motors and drives, power transmission and materials
joining businesses were slightly offset by an increase
in hermetic motors from improved HVAC compressor
demand. Underlying sales decreased 6 percent on lower
volume, while foreign currency translation had a
$13 million unfavorable impact. Underlying sales
decreased 11 percent in Europe and 6 percent in the
U.S., while sales increased 4 percent in Latin America
and 6 percent in Middle East/Africa. Sales in Asia were
flat. Earnings of $777 million were down $94 million
and margin decreased 0.9 percentage points on lower
volume, deleverage in power generating alternators
and motors and drives, and the comparative effect
of a $43 million gain in 2012 from the receipt of
dumping duties. Savings from cost reduction actions
and materials cost containment more than offset the
volume decline and associated deleverage. The gain
in 2012 had an unfavorable impact of 0.8 percentage
points on the margin comparison.
NETWORK POWER
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2012 2013 2014 ‘12-‘13 ‘13-‘14
Sales $6,399 6,155 5,073 (4)% (18)%
Earnings $ 624 554 459 (11)% (17)%
Margin 9.7% 9.0% 9.0%
2014 vs. 2013 - Sales for Network Power were
$5.1 billion in 2014, a decrease of $1,082 million or
18 percent due to the Artesyn and connectivity
solutions divestitures, which subtracted 19 percent
($1,112 million). Underlying sales increased 2 percent
($73 million) as 3 percent higher volume was partially
offset by 1 percent lower price. Foreign currency
translation subtracted 1 percent ($43 million). The
data center business was up slightly, led by delivery of a
large hyperscale data center project and an increase in
uninterruptible power supplies products, partially offset
by decreases in thermal management and infrastructure
products. The global telecommunications power
business was flat, on modest increases in the Americas
and Asia offset by a decrease in Europe. Geographically,
underlying sales increased 2 percent in the U.S.,
4 percent in Europe, 2 percent in Asia and 3 percent
in Middle East/Africa. Canada was flat and Latin
America decreased 6 percent. Earnings of $459 million
SALES BY SEGMENT
Network
Power
20%
Climate
Technologies
16% Process
Management
36%
Commercial &
Residential Solutions
8%
Industrial
Automation
20%