Emerson 2015 Annual Report Download - page 27

2015 Annual Report | 25
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.
NETWORK POWER
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2013 2014 2015 ‘13-‘14 ‘14-‘15
Sales $6,155 5,073 4,441 (18)% (12)%
Earnings $ 554 459 231 (17)% (50)%
Margin 9.0% 9.0% 5.2%
2015 vs. 2014 - Sales for Network Power were
$4.4 billion in 2015, a decrease of $632 million or
12 percent. Underlying sales were down 3 percent
($179 million) on 2 percent lower volume and
1 percent lower price, while foreign currency translation
deducted 5 percent ($243 million) and prior year
divestitures subtracted 4 percent ($210 million).
Telecommunications power products decreased
sharply on lower demand in all geographies. Data
center products were down as thermal management
was flat, and an increase from a large European
hyperscale project was more than offset by decreases
in uninterruptible power supply and infrastructure
management products. Underlying sales decreased
8 percent in the U.S. and 7 percent in Asia (China down
13 percent), and increased 5 percent in Europe. Sales
were down 4 percent in Latin America and 2 percent
in Middle East/Africa, and up 15 percent in Canada.
Earnings of $231 million decreased $228 million, or
50 percent, and margin declined 3.8 percentage points,
due to lower volume and deleverage, particularly in
telecommunications power products, and unfavorable
mix. Higher rationalization expense of $49 million,
litigation and bad debts also contributed to the
decrease, while cost reduction actions mitigated the
decline. Materials cost containment offset lower pricing.
Demand is expected to remain mixed by geography,
with opportunities for growth in both data center
infrastructure and telecommunications power products
over the course of the year.
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 supply 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
decreased $95 million, or 17 percent, as lower earnings
from the divestitures of $59 million and a $13 million
China research credit in 2013 negatively affected the
comparison 12 percentage points. The divestitures of
the lower margin Artesyn business, and the connectivity
solutions business, net of the research credit, improved
margin comparisons 0.5 percentage points. Cost
containment and lower rationalization expense of
$10 million were favorable. Materials cost containment
substantially offset lower pricing.
CLIMATE TECHNOLOGIES
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2013 2014 2015 ‘13-‘14 ‘14-‘15
Sales $3,876 4,109 4,011 6% (2)%
Earnings $ 716 737 698 3% (5)%
Margin 18.5% 17.9% 17.4%
2015 vs. 2014 - Sales for Climate Technologies were
$4.0 billion in 2015, a decrease of $98 million, or over
2 percent due to unfavorable foreign currency
translation ($112 million). Underlying sales were
up slightly ($14 million) as an increase in the global
refrigeration business was essentially offset by a
decrease in air conditioning. The temperature controls
and sensors businesses were flat. Air conditioning sales
in the U.S., Europe and China decreased while the rest
of the world had strong growth. Global refrigeration
was up modestly with growth in the U.S. and Asia and
weakness in Europe. Overall, underlying sales were
flat in the U.S., down 2 percent in Asia (China down