Emerson 2012 Annual Report Download - page 6

4 | 2012 Annual Report
TO OUR SHAREHOLDERS
As I reflect on 2012, I am encouraged and energized
by what Emerson accomplished in a dynamic
global environment. We overcame a number of
significant challenges during a year that did not
unfold as planned. I have learned over the years
that plans never go quite as expected, but the true
measure of an organization is how it reacts. I have
also come to appreciate and respect the ability
of Emerson’s global organization to effectively
respond to challenges and opportunities. The past
year has strengthened my belief in our employees’
capabilities to achieve and innovate in a rapidly
changing world. Emerson’s global leaders know
how to rise to the challenge and get the job done.
I thank them for their support and action.
Emerson delivered solid results in 2012, as sales
increased, profitability reached record levels,
and operating cash flow remained solid despite a
number of headwinds and global economic volatility.
Strong financial performance did not come easily.
In many respects, it was our most difficult year in
recent history. With that said, it was in the moments
of struggle and uncertainty that I recognized
exceptional perseverance and tireless effort to
overcome and win. It is in times like the past
year that the great depth and talent of our next
generation of leaders emerge, and we get to take
their true measure.
Sales in 2012 were $24.4 billion, up 1 percent
from $24.2 billion in 2011, reflecting slower global
economic growth and related foreign currency
volatility. Underlying sales (excluding acquisitions,
divestitures, and foreign currency translation)
increased 3 percent compared to 2011. Operating
profit margin improved to 17.7 percent – an all-time
high for Emerson. Net earnings per share, excluding
noncash goodwill impairment charges, were $3.39
in 2012, up 3 percent versus $3.30 in 2011.
Cash generation remained in sharp focus through the
year, resulting in operating cash flow of $3.1 billion.
We returned a substantial portion of this cash to
our shareholders in the form of dividends and share
repurchases, reflecting a 64 percent total payout ratio.
Emerson’s dividend grew for the 56th consecutive
year, underscoring our long-standing emphasis on
generating returns for shareholders. In November,
the Board of Directors further increased the dividend
by 3 percent to an annual rate of $1.64.
With another successful year completed, we now
look forward to creating additional value for our
shareholders. The pace of change in the world
today is extraordinary. The technology needs of our
customers are evolving with unprecedented speed,
requiring them to seek innovation and ingenuity that
enable them to compete and thrive in new ways.
When we look to the future at Emerson, our objective
is more than just anticipating change – we aim to
create it. Waiting on change to come to us puts
us and our customers critical steps behind. Our
customers expect us to take the first steps and to
lead them into the future, creating sustainable
value for our industries and markets.