Emerson 2012 Annual Report Download - page 22

20 | 2012 Annual Report
NET SALES
Net sales for 2012 were $24.4 billion, an increase of
$190 million, or 1 percent, from 2011. Consolidated
results reflect a 3 percent ($616 million) increase in
underlying sales (which exclude acquisitions, divestitures
and foreign currency translation), a 2 percent ($411 million)
unfavorable impact from foreign currency translation and
a negligible ($15 million) negative impact from divesti-
tures, net of acquisitions. Underlying sales reflect volume
gains of 2 percent and an estimated 1 percent from price.
Underlying sales increased 2 percent in the United States
and 3 percent internationally, including Asia (3 percent),
Latin America (13 percent), Middle East/Africa (7 percent)
and Canada (9 percent), while sales in Europe decreased
1 percent. Segment results were mixed as sales in Process
Management and Commercial & Residential Solutions
increased $899 million and $40 million, respectively,
while sales in Network Power, Climate Technologies
and Industrial Automation decreased $412 million,
$229 million and $106 million, respectively.
Net sales for 2011 were $24.2 billion, an increase of
$3,183 million, or 15 percent from 2010. Sales grew in all
segments, led by Industrial Automation, Network Power
and Process Management, which were up $1,005 million,
$983 million and $978 million, respectively. Consolidated
results reflected an 11 percent ($2,216 million) increase
in underlying sales, a 2 percent ($623 million) contribution
from acquisitions, and a 2 percent ($344 million)
favorable impact from foreign currency translation.
Underlying sales reflected volume gains of 10 percent
and an estimated 1 percent from higher selling prices
as sales increased 13 percent internationally, including
Asia (11 percent), Europe (11 percent), Latin America
(20 percent), Middle East/Africa (16 percent) and Canada
(20 percent). Underlying sales increased 8 percent in the
United States.
INTERNATIONAL SALES
Emerson is a global business for which international sales,
including non-U.S. acquisitions, have grown over the
years and now represent 59 percent of the Company’s
total sales. The Company expects this trend to continue
long term due to faster economic growth in emerging
markets in Asia, Latin America, Eastern Europe and Middle
East/Africa.
International destination sales, including U.S. exports,
increased 0.5 percent, to $14.4 billion in 2012, reflecting
an increase in Process Management, offset by decreases
in Network Power, Industrial Automation and Climate
Technologies. U.S. exports of $1,579 million were up
4 percent compared with 2011. Underlying destination
sales increased 3 percent in Asia (China down 4 percent),
13 percent in Latin America, 7 percent in Middle East/
Africa and 9 percent in Canada. Underlying destination
sales decreased 1 percent in Europe. Sales by interna-
tional subsidiaries, including shipments to the United
States, totaled $12.8 billion in 2012, flat compared with
2011. Excluding a 3 percent net unfavorable impact from
foreign currency translation and acquisitions, interna-
tional subsidiary sales increased 3 percent compared
with 2011.
International destination sales, including U.S. exports,
increased approximately 20 percent, to $14.3 billion in
2011, reflecting increases in Network Power, Industrial
Automation and Process Management as well as benefits
from acquisitions. U.S. exports of $1,520 million were up
15 percent compared with 2010. Underlying destination
sales increased 11 percent in Asia, including 12 percent
growth in China, 11 percent in Europe, 20 percent in Latin
America, 16 percent in Middle East/Africa and 20 percent
in Canada. International subsidiary sales, including ship-
ments to the United States, were $12.8 billion in 2011,
up 20 percent from 2010. Excluding an 8 percent net
favorable impact from acquisitions and foreign currency
translation, international subsidiary sales increased
12 percent compared with 2010.
ACQUISITIONS
In 2012, the Company acquired Avtron Loadbank, a
designer and manufacturer of high quality load banks
and testing systems for power equipment industries in
Network Power, and a marine controls business which
supplies controls and software solutions for optimal oper-
ation of refrigerated sea containers and marine boilers
in Climate Technologies. The Company also acquired
two smaller businesses during 2012 which were comple-
mentary to the existing business portfolio in Process
Management and Network Power. Total cash paid for
SALES BY GEOGRAPHIC DESTINATION
n United States
and Canada
n Europe
n Asia
n Latin America
n Middle East/Africa
6%
45%
20%
24%
5%
36%
EMERGING
MARKETS