Emerson 2015 Annual Report Download - page 4

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To Our Shareholders:
Fiscal 2015 was a year marked by the challenges of
an increasingly complex and unpredictable global
marketplace. Importantly, it was also a year of
transformation at Emerson as we confronted our
declining sales and earnings head-on, undertaking
several initiatives that will strengthen our core
businesses and drive both near- and long-term
value for our customers and shareholders.
Emerson has long been recognized for its ability to
read the markets and anticipate economic changes,
enabling us to make the right moves at the right time
to maximize benefit and value … and we intend to do
this again. The plans introduced in 2015, drawn after
careful consideration and in consultation with our
Board of Directors, will enable us to keep pace with
the evolving needs of our customers, remain a leader
in our industries and create value for shareholders.
We are singularly focused on rebuilding the Emerson
foundation to drive premium growth in sales, earnings
and cash flow.
Our financial results in fiscal 2015 were impacted
by several factors, including lower oil and gas prices
and a global slowdown in industrial spending that
was especially significant in many of our key end
markets such as energy, telecommunications, mining
and backup power. In addition we faced very weak
economic conditions in emerging markets including
China, Brazil, Africa and Mexico; as well as headwinds
from the strength of the U.S. dollar. Sales were down
9 percent to $22.3 billion. Underlying sales were down
2 percent as divestitures reduced sales by $628 million
or 2 percent and the stronger dollar reduced sales by
$1.1 billion or 5 percent. Net earnings of $2.7 billion
increased 26 percent from operating results and
gains on divested businesses. However, adjusted
net earnings of $2.2 billion were down 19 percent
due to the weak business environment as well as
accelerated restructuring spending of $221 million
as we aggressively managed our cost structure. The
restructuring programs completed in 2015 and those
planned for completion in the first half of fiscal 2016
will allow us to generate improved earnings and cash
flow in a continually challenging environment.
2 | 2015 Annual Report