EMR Emerson Electric

Pete Lilly Director, IR
David Farr Chairman & CEO
Surendralal Karsanbhai Executive President, Emerson Automation Solutions
James Froedge EVP, Commercial & Residential Solutions Business
Andrew Kaplowitz Citigroup
Joseph Ritchie Goldman Sachs Group
Charles Tusa JPMorgan Chase & Co.
Andrew Obin Bank of America Merrill Lynch
Jeffrey Sprague Vertical Research Partners
John Walsh Crédit Suisse
Gautam Khanna Cowen and Company
Joshua Pokrzywinski Morgan Stanley
Call transcript
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Good day, and welcome to the Emerson First Quarter of 2021 Earnings Conference Call. [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Pete Lilly, Investor Relations Director. Please go ahead.

Pete Lilly

afternoon. Good much, Call. to so XXXX First welcome, Conference Earnings and you Emerson's everyone, Quarter Thank everyone staying hope I is safe and healthy. effective by Chief Senior of Solutions, announced and congratulations to Today, Officer; Emerson Emerson Commercial Froedge, Automation joined David Karsanbhai, Executive Solutions; and of Emerson's on Chairman as I'm and Residential Chief Executive Frank February President Dellaquila, recently Financial current Executive who Chief President Lal Officer was & Vice X. next Officer; Jamie Farr, Executive Executive President

usual, I recognition to our I'd work examples everyone customers from on our encourage slide X presentation, follow marketplace. great recent X. the As website. global and the along teams which like Slide on highlight the with to are briefly is doing available of some Starting and

analytics Breakthrough apply insights First, customers helps the of analytics, at key customized OT the recently software right Plantweb time. delivering Emerson's Emerson's Optics sources received Plantweb and variety Award. people a platform the XXXX right Optics and and data from collect visualization practical to IoT operational

Control to XXXX recently service positive solutions. technology, and continues from products in customers' our receive Slide expertise Emerson users our Award customer based automation and Choice industries. and of received customers X. focus Emerson to our the a on instrumentation relentless feedback turning control unmatched for Next, industry-leading Reader's on critical domain

will X, Slide we the quarter. review highlights very to Turning a of strong

starting flow emerge this the industries, health cost from we in see key to Serving employees, our of and steadfast to customers and First, through. benefits we focus priorities, commitment positioning and our remain outperform control our disciplined for remains critical are thematic safety communities. to Emerson COVID-XX customers and in as our

strategy and business operations regionalized and sturdy rooted build to our Next, upon localization. our firmly we will of stable, continue remain

up improving XX% the stabilizing adjusted to performance. was challenging in year prior and quarter, $X.XX EPS from expectations. of in a The and Emerson very delivered delivered quarter environment. which well demand above but strong a Turning the organization

million, plan with pandemic. our improvement points flow We continued operational Even revenue, record execution of X% This million $XX XX.X%. of flow was of margin restructuring cash execution for Cash and first strong the finishing operating lingering in on throughout additional and respectively. important free testament that Despite market new of margins and an million many to $XXX new consistent basis. over sales diversity quarter the to XX% outcome. down a cash was ahead on up critical the cost is balance, and challenges organic XXX It by the guidance. quite previous strong, reset XX% business key up our is orders broad Commercial uncertainty segment demand $XXX company the global to X-month orders the finished with cash underlying X flow the XXX%, remained the a strategy, basis & markets, strong trailing grew a Solutions organization Residential of the actions. of operational flow and emphasize stability enabling of to and platform end

Importantly, showing Automation improvement. is our of business Solutions and stabilization signs

accounting sales was XX and Adjusted was Solutions while Residential improving. up was and but fees, XX% down of to in restructuring profitability the X, Slide results down and X.X% first Automation respectively. year improvement, full which the reflect orders orders, came XX%, Commercial offers Please Solutions on we the $X.XX, of purchase and updating the ahead turn Both expectations up stronger down which X% excludes Given guidance underlying sales of outlook. to year sales and underlying details to expectations. -- X%, well EPS, & are quarter. at ahead

XX% working capital to new by $XXX increased increased flow previously and increased cash million. earnings million, a record flow Operating cash As achieved strong QX free $XXX mentioned, organization and XXX% driven cash flow the to management.

X. Slide to Turning

most of in were briefly EPS a We XX in with combined EPS XXXX nonfactor, Starting nonoperating element in $X.XX a vast in the tax, items, adjusted bridge quarter. total The which was $X.XX. adjusted the EPS operations, for will total. -- of contributing FX repurchase of majority other outperformance, including $X.XX; interest, of $X.XX quarter. drove the important adding QX added and elements, $X.XX Share the

EBIT will was we X, flat, reduction saw to of Net we Moving the increased percentage adjusted XXX were as cost-control restructuring accounting took which volume the and and cost-containment respectively, in and as through. basis reflecting also GP exclude a mix. which and aggressive deleverage margins, actions sales first-year a by points, XXX and Meanwhile, purchase actions XXX points driven basis XX% P&L. Slide EBIT points slight fees, sales by flowing effect. to review SG&A margin, and declined basis

tax in than Lastly, lower slightly XX%, expectations. the just below effective rate came at

Turning to by Slide XX, underlying will we review world sales area.

strong performance. we growth. Residential basis by business underlying increased with Commercial execution sales. XXX increased and at world measures turn points pretax will steepest XXX weakness and In strength than they down improve. China the but adjusted and sciences, segment Slide declines, & automation some All by XX.X%. X%, grew XX, to Adjusted the beverage Middle XX.X%, life importantly, America, strength food cost-control slightly areas offset markets Please Solutions EBIT residential, the to segment chain, continued the Total basis show to we Africa and discrete earnings end in North For while points markets. discuss in turned X%, started even margin East other to and similar cold Asia, Europe down Americas medical, magnitude, many a by aggressive quarter, saw more grew operational fueled in to to X%. X%; by reflecting

and highlighted, previously As net flow free represented respectively. earnings. XXX% performance cash cash Free QX cash conversion operating was record-setting XXX%, with a and XX% flow flow increasing flow cash of

working trade by sales driven to dropped Importantly, capital operations. by execution of XX.X% strong

of energy Europe Automation Europe the challenged, Americas to China, XX%, improvement stabilizing markets down and reflecting underlying and some platforms. Africa the the signs early most will showed and beverage Overall, trends. we in upstream to by Eastern but orders Meanwhile, sales driven Americas East well improvement down Middle the strength improvement. and momentum early markets. in early business to food life in XX%, single-digit turned finished of Trailing continued continued challenged, the The for X-month low both semiconductor XX%. sciences, again and discuss X% Solutions respectively. signs and as down Asia, Turning most Slide be remained growth stabilization were underlying and saw down as we quarter. XX, Geographically,

across XXX growing supported due to projects. X% by East in declined orders and platform of we adjusted peak by Adjusted execution Africa increased EBITDA totaled revenue. by $XX science life took to Middle the margins XXX in energy respectively, EBIT cost and X%. Asia, platform Europe by points return of basis The delivered profitability. ongoing declined actions robust the drop effects modestly continued points, somewhat as as hold. weakness and offset the markets, X%, and profitability power positive despite the basis million actions Restructuring China improvement chemical, the

the ending of $XXX balance increased was was billion. Lastly, which to due by million backlog of The acquisition $XXX million, OSI. the $X.X platform

at quarter. & residential, areas Commercial the XX. Americas to driven All solidly sales in core positive, up Turning XX% strongest were Solutions the by Residential showing were world strong XX% growth demand. in penetration Slide of with underlying X% was products heat growth chain and Europe end preferences. was share our sustainability many pump driven This as and customer markets. home points demand technology by gains cold up to the regulations

XX%. China, was and East X% Africa Middle up by up Asia, driven Finally,

by As in X-month Restructuring actions optimization Adjusted America volume XX% were on home up business mentioned, points, trailing underlying products leverage the robust EBIT all North remained and and in primarily HVAC up rationalization basis robust, totaled facility million China improved and demand, up while reflecting increased were XX%, orders with base. $X was and XXX units and margins growing. the adjusted up cost programs. on respectively, increased XXX and platform focused points basis EBITDA XX%.

Finally, we for respectively, $XXX above second return potential range will We $X.XX. is and expected GAAP ending beverage food plus the than driven The turn momentum X% forecasted. nearly flat previously the $XXX million, expect year-over-year line This ongoing continued outlook roughly to guidance. company introduce discrete Please minus top be $X.XX to and medical, at EPS up of positive to levels. are by with is and by down quarter and earlier and to Slide sales approximately automation quarter million, backlog science, business will the and markets adjusted growth XX, or improvement underlying which markets. is X%. in to well normal be $X.XX, now EPS in increased the a other stabilization residential, life in and

to EBITDA XX.X%. XX.X% to adjusted expect the to We be range XX.X% XX.X% margin adjusted in EBIT of with margin

price Lastly, note movement year this $X.XX assumes in challenging will framework. it and change continue costs XXXX is to that full XX Management important embeds updated Slide in vaccine efforts stock to be as price. mature. stabilizing steadily improving demand the guidance due guidance introduces global that but to an our stock

no are remain $XX the chain major that supply or $XX operational there in assume and also prices range. We disruptions to oil

expected down underlying X% that and to plus of between Solutions Commercial Given X% range flat Solutions X% expect Automation in range expected of is X%. context, Residential we is to to year to while this underlying growth with sales & be sales, a the grow up XX%.

-- platforms are improvements see, can November. both you platform As from these outlooks of

GAAP in tax decrease as or $X.XX. expected There $X.XX, while or cash rate the in $X.XX be flow be billion cash respectively. other $X.XX, change as to billion, slight We operating allocation to plus outlook. and flow expect well expected plus minus effective EPS and no $X.XX to a to minus increases free adjusted $X.XX; capital is is EPS is

year. down estimate We up $XX and in COVID-related only from we the million savings have for of profitability million. quarter, $XX Since tailwinds our previous will last now headwinds be outlook the that expect this updated also year,

now cost dynamics raw material challenge. short-term costs become be will However, this are to mitigate that a as diligently availability and of Operations issue. working we negative slightly more expect price

of cover price we restructuring year. savings plan. $XXX turn and Slide company the XX, stock restructuring million reset be to full the COVID-related to briefly changes spend planned and for more And a Total headwind. the now fiscal remains please Lastly, will will

over incremental As XXXX XXXX expect return the to year. as to million from million of of COVID-related mentioned, half Accordingly, we back improved conditions business $XXX normalize the savings in savings $XX have now the long-term start only program Slide turn Farr. to annualized hand XX, Total call will restructuring $XXX million. $XXX the I are now of the David and overall exceed savings expected to million. Mr. Please to to reset

David Farr

you, Pete. Thank

I the And but that, on earnings I'm it first interest the you I call. want clearly company. great for want bit a this to is in quarter to biased much everyone company. thank First, very little welcome to a great

I it My I employees late the and of all cost good. to have XX a global leadership recognition the team applauding have happen. recession last powerful The months. what for team, to first the all and But total fantastic my and our from threshold new for believe over been quarter I Second, and for done you hard a is of thank and the of quarter margins, want second the XXXX, with world of all downturn fiscal are heart a to execution we the thank you to They months year. the in growth. around resulting and make executing return all thankful. now will you've this for want now leadership global peak pandemic a XX and COVID-XX executive team investors. reset last delivering

the Third, I your so of a will XX done to of turned and then Knight excited When to Chuck want take I as heights as have you recognize deep moved in how breath, you for paused, Emerson. I Lal last and over OCE I and CEO forward. me the reins and I so took Emerson we and to I'm new team I proud new congratulate years. XXXX, the and smiled, late Karsanbhai you new

Emerson. and You're it to what takes ready lead have

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figure somewhere it the to to of how luck. decided happen out best I else. make him we wish So

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The They're others in the done are great leader. great next leaders. Emerson, They're but things great Lal They've great friends. is individuals.

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As had up. very strongly. has hold progress and quarter when massive The morning, been all execution enormous. in this We blank strong really upon XXXX, the had all at point don't taking is cost it final us turning is cost $XXX it's Orders Finance Committee told XXXX, that costing million this been firm know. back around a you good exceptional and in reset the said Lal reset embarked recovery in up have done. fiscal we as time. We've The over V-shape a

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will underlying the quarter, are and with sales much earnings million flow. quarter, margins, the solid free first Plus incremental that Based be in CEO, number EPS And cash I quarter to half underlying up, the and In Emerson will the The the XXXX, but EPS global the we'll about of 'XX, cost recovery, in which X%. very see margins fronts. GAAP first flow very up EPS into reset, believe economic sales fiscal number. higher and were the the GAAP -- I With $X.XX, we'll sales believe flat; sides. second all my momentum out, talk continue with the Cost yes, and was we that be also, on year, Profitability $X.X cash but and firmly take fiscal 'XX, XXXX. cash a sales, to I be ready $X-plus was and it bust is $XXX team lot, be new the improving underlying only a deliver do. our XXth. sales quarter, in billion, they think opinion, to growth strong We'll next-generation with live think looks clearly the with margins our not XXXX see around we flow in platforms peak and standpoint. margins, and on the we across XXXX was forward. sales drive has on entire both going quarter not $XXX positive. the in it good, strong rolling the EPS, our on even I'm volume down first to that in reins COVID-XX momentum even both finally million, can will vaccine this what 'XX. Sales grow in strong and The out, will order place. we, the the and balance so increased Clearly, stronger in restrictive And Strong maybe and extremely second OCE, he sheet. out will good and, both of 'XX. great in cost on record momentum of execution have potentially both we GAAP lead

the which be not in normal process management safe combat engagement; not process is planning a customer We're but live doing at have delayed. Emerson same. turned, to year them, process; and planning Global travel; organization known quite restricted environment. face-to-face are times; planning somewhat our is to all operate conference, the same. they're The We leadership sport a

is the this the I talked I said Dave the I'm to team, I than new this. which I the facts more many with and in some think been -- and take it's February maybe cases, what The CEO I the place, experience, to to there Yes, coming It there you've what team. a month The XXXX. investor in going later time issues, help. time with Yes, XX not know over But stand likely to I for So even makes That's for XX the XXth, for XX next new leading advise. present always XX of maturity, I help. game, do. Knight. ripe. presentation my the and in new time of up, most life surprise, about Board help CEO in do company. Mr. the years, It's environment I company. is I'm which you for February their team this said put shareholder worked ripe big as can be had the and sense. I'm this get the many about over my very I of -- thought XX Name and about I'll to in the the years, most XX our way this this environment, annual out that Farr to in it is care my years. as as for basically up next-generation mature, be in important. XXXX. have like it I'll conference

track The had string team, long, you quarter chest. the year in him try on down believed me drawn-out hit for took ready. for earnings. keys off X As successions. the to with to I months. never He or a the Lal in -- I and Chuck the know, break are He I've had X to days.

on. move let's So

Board, the I thing. all we to same the As said talked

congrats And and to match my anyone again, I'm the to sick. see start wants a you'll me, yelling Lal quickly So if with OCE. not

do bat, my here sure my Musial out, making is us helping my train Rally squirrel, Monkey and really today, rally lose a rally Chart to Let's thought. don't which go sitting Stan ferret, I XX. have I my of

We out the -- game out box think, out that We delivered We in box with time, forecast have quarter. in, at XXXX Bob Frank, I as in pretty boxes. we of started laid our laid momentum we good myself. put -- orders. first April and actually We the this

one as That's would issues. get we We're see He's You the He's his thought of obviously, not right-hand strong. has is be has business to blue can But building we that he's been came that, quite business Jamie's at sharp Clearly, It's very above upper it's better. turned. going got we backlog. turned. be. where in as Jamie. The dot down. corner. executing. model. business different backlog a Lal's to He's

We're much If you have with a the forecast, look orders we on seeing at the quarter, now blue momentum above I'm improvement X% dot pretty America, business, to seeing North plus in seeing momentum business X%. next sitting in Lal's line, momentum a in talk minus which We're some in good sure next about. in and good he'll Jamie's Asia. see Europe. We good we're

good orders. in very again, momentum So

to He's As the going we tell all we there with turn markets levels clearly as his It he'll is out. that's business it. of great flatten growth will see. point a at lay Jamie's in time, this right some bit. way, how see will which this out, at unique opportunity high you running down

relative X, at look Slide the for we're get XX, Jamie on backlog. we're has materials, the you He looking about. right now growth to of what plus Board, at this as which his So the quarter, talk -- on year, clearly we'll at the looking minus kind capacity, second for presented around X COVID, depends what execution can somewhere we issues the on if

short-term Lal's that starting to twosie think the business talk his I Even we'll are to of and starting some orders in discrete is turn up, about happen. business. onesie,

half. spike. a It's will -- the hard have quarter be We broad third second a

quarter. will issue that As we the to key and at second then Obviously, half let a overall turn in the But little so Jamie look going us good look ratios the third half really turn down. in 'XX. we'll into same marketplace, insights I for over all we're is looking he growth forecast the some know, about it the and his spike and second good want now what But business he What it do at it's half. to in pace do to can thing. to bit is him Lal sees, over into second talk and the a fiscal the

Lal, So yours. is floor the

Surendralal Karsanbhai

Thanks, David.

nothing an plan the a very team of and seeing which broadly been we This it a It's very that as we're Dave, the to went months. for emotional of you February in a XX, what the phenomenal highly in quarter. do, proud which company. orders special. of summer and generating the the P&L of investors talk last Sorry. we in really words has as I'll I'm encouraging. market and of to across is laid appreciably your us, time many is through the tailwinds, It's we execution our are We're starting team geographies some Page committed reflected lot our own to changed accomplished now for the and recover out about, our well, that

turned you see increase perspectives Europe right driven The process consumption engine by next economic an drove market the to engine. into in accelerate and fall, on give Germany, growth activity, then had industries we started outlook flip its to the export to got that space which the internal chart by dramatically its we driven and discrete and started particularly specifically, the see we and in late vast industries as now. on the were how both However, for I'll some Asia.

has a We moment. the and elephant into that of there accelerate what good growth packaging markets, by of What we as North about a gas at China, America was oil semiconductor in power the we've room in level X%. levels growth Europe And forecastable experienced activity North to the across stabilization of lower and in great what in -- as business for what chemicals about story America. has which been specialty but the the has the sciences business. around life and and a and albeit is automotive Steve seen generation, In in continent driven us. feel driven broad segment. in mining improve power that on But highlighted very been -- OEMs QX big see Southern as a expect to the started we Cone So well Asia, talk the we'll business throughout,

a order in half sequential As result year seeing to that, pacing back and in in are the second Chart we recovery improvement a XX. sales as of pacing and expect see indicated and the on second the quarter of

through to then will a world, turn we the and we most me see that second pick X to And first see areas perspective XX, the give Let we'll reflected can of X across and half. Chart here, or improvement of out how David pockets I distribution-based -- half world in noted, we've in signs seen, begin Europe America, And early we January. as recovery that momentum into particularly. the we've Americas, of in discrete discrete environment. North in and energy That navigated business built that December will the Asia as

ago. talked with ago. very a the saw I it from for that's a I X.X year, the production weeks see. which encouraging I was few level -- day a So Odessa, is million year a barrels Texas stable for met in about plans teams to was where and

increased drilling that, maintenance see we'll of in maintain levels those those to fields. So

about talked there. German So -- will demand drive story. ultimately I've it's obviously, been some a Europe, really But In that encouragement those market.

Our discrete over up is business XX%.

and there's over up with Germany continue. And increased momentum we and look -- good out that the Asia, throughout very in we that and back discrete-driven is pleased business the then positive alone. bounce the in And process-driven the of And was XX% to process first quarter, well. very activity expect as continent, we funnel that now. right feel That China about as important. we see was Our

team. much feel better I October, executing in in I as look than to a a much much David and I and did environment in forward go outlook better forward. we But -- better So

David Farr

the ring. did once You got you CEO better feel

Surendralal Karsanbhai

Jamie's I've because better rolling. even feel I got Jamie. Well,

David Farr

you tough set just I very a up Well, quarter. Yes. for second

we about early I I very It's now around interesting I to see distribution. to -- think January, So you think too so talk analyzing because see. feeling the the but January mean are

semblance feeling even seen orders. obviously you've in good international of very optimism some some are Americas, We the and

going think up. up. mean that are It I setting it's be to perfect So doesn't things straight a

You're be or here going to going there.

sideways you the you a -- very -- there you're go antelope, a You it. can't about I the running have good slowest tiger I got said, pack like be in you're slowest you've there. around. tiger's the not the out feel Jamie, when Right stepping. you antelope But now, but mean, out

business So you do see in to your the happening half? what second

James Froedge

is of tiger before that have The and material a the kind kind Yes. world. dealing growth around situation some between combination that folks never all of seen we're with

David Farr

customers. And

James Froedge

to going to special to again. just I this time It's moment to David Before come here. into career. that, I couple jump employees say I done. could you on wish just congratulations thousands know around want done as really I want say What not a say it. you've for speak -- the thank to a there's and there's well world you've comparison you've of that them touched all unprecedented say here this. words to because is for that be I'll to thank of I and in in no one they space, families an the you a

leader mentor but of been and you've the company this part you've great great friend. you are been of for -- You're a me, a forever. fabric also And

congratulations. So

David Farr

you. Thank

James Froedge

worked in similar together. I automation. leadership I class at joined I since for in were We've We much company. We corporate each you together a you. to together. other pretty the say congratulations Lal, the worked known want business and to worked in

CEO proud role, that chapter and you this as leadership next excited confidence the see get you, deal leaders great business in very Now has in of a as the I'm know team about you. we're now, to I of I very together. and

family, your have wonderful who I years. you congratulations gotten know over So the to to and

So congratulations.

Surendralal Karsanbhai

Thank you, Jamie.

James Froedge

So jump there, sales XX, with the outlook the Chart let's underlying that said, shows for for that into updated first year. the chart

since in improved saw It second residential about, and growth going Dave X% for the we were outlook be X% to in really see, the half. can in sales about improvement throughout you X% X% X% the to spoke. X% QX, businesses growth underlying to areas. all has and you As QX, other And for and North year. in in last greater-than-expected November, call, X% along with markets in to In in accelerated America the has QX was year outlooking really X% as we orders we accelerated heard the world and to strength talked

trailing all exception And with saw delivering so of X-month which X% December. of of in the from in growth Professional for a orders orders underlying QX our Tools, the month order at after double-digit standpoint, X% businesses came we

So and saw improving trends in increase we world The the QX orders, as broad line we for quarter year. the we backlog area continue in in our built, business it to on. outlook strength our that in see the went of what the remainder was the January product support

you product a to These X these a perspective. line at next the then if go charts business and XX. So chart, look next Chart the geographic X -- from

year. more inventory residential driven Extremely settle growth closer quarter, First, and moderate the XX% the pattern X% may to half product stabilize. from the first the half heating perspective, we a as, by the in strong should to fourth a by historic a market underlying and in second sales range see cycles. for Demand into AC restocking business

and and focus a by long-term see residential on efficiency concerns. the and do environmental market homeownership, medium- positive trends remodeling in driven we However,

driven by a in than Cold to we foodservice quicker XX-plus recovery was global X% than growth in Chain to for Our the now sales exhibited in In stronger X%, the Cold to really expected anticipated. which X% supported growth in has year, positive at a range November, percent a by QX QX X% transport, U.S. expected, business grow more Chain December.

that in in in In evolved. more range. is now space market, China as foodservice in for lag aftermarket products vaccine the though Home half Chain to X% double-digit in December, Chain even double-digit we the So Tools the food but growth X% stable growth. growth Foodservice solid, segments, year. also back transport growth coming the a had delivered quarter in drive half our positive the second could of X% anticipate back growth outlook rollout with Cold to sales Cold of continue the upside slower, year XX%. was to double-digit QX the November, tough up It's in other X%. & than retail We and U.S. improvement in will

Our residential home extremely have tools see we the and business will impacted by products half. first demand, strong growth we in

some markets and will business residential growth as orders first Again, X-month X-month very in the into more XX% rate orders, vac growth and home fundamentals fixed the settle year progresses medium trailing contractor perspective. XX% of trailing rates the InSinkErator Just In QX, rate the business and moderate saw good long wet/dry with put term. the strong growth in growth. overall fixed in half, posted our our plus to

in improvement also we our see Professional remainder in quarterly second the in of a we which QX general Tools QX, of the mentioned. as comparables the a to For will in double-digit products, started by half conditions David growth sales growth year, see, followed market return already but to by globally, aided

For right. example, steadily has in our building of the commercial both globally construction served and All lag Asia improving. been markets. recovery general positive will other continue turned industrial of Overall, QX, to most EMEA,

XX. Chart chart, Next

heating Our residential. growth exponentially XX% compression X-month saw higher AC growth trailing QX and orders plus with in business

businesses XX% unfolded. as accelerating as we've of into first growth in inventory residential and Our QX grew with seen do rebuild channel. in We growth in and half the heating the the second U.S. residential sales the market to the the settle for lower the U.S. dynamics growth near-term quarter expect AC quarter half unique compression

see mentioned persisting. construction do However, continues lagging. I some trends earlier, improve to commercial as building residential with industrial positive North longer-term America we

was to than along up growth X-month rate growth climate X%. were climate XX%. up due up and little with orders trailing December more part climate conditions was XX%. overall up Europe conditions sales piece improving Overall, climate Europe continued fixed QX fixed XX%, were XX%. in rate fixed marketing was by sales with the in in that Europe climate heating China. XX%, up X% The heat pump heating space up Asia the inside of was a supported weather Overall, Asia strength

slower watching dynamic. COVID in view whole would America, up, the our East team, we thank & recovery We're in North start is quarter. team wrap I Asia. and if growth and a current see say for know we situation you a Middle year the the to the Commercial but changes smaller the the any that entire for parts Europe, Residential Solutions of just to is going remainder it let want So markets The Emerson reflect to closely see the several you world. year of North how China solid and unfold. of dynamics tremendous to around to We'll pretty And Southeast

needs we unprecedented to responded increases demand several hard long employees customer keep all saw safe. to while working in we businesses. And sure to You historic in worked demand increases, meet our make our hours

Our a pandemic. a middle what did responding. the And we is team job can't great forget all of

much And of so to want all how your leadership the you team efforts. appreciates I entire know

Onto it Dave. So back Dave. with that, pass you, I'll to

David Farr

Thank come in again you you quarter, issues you got the keeping plants obviously, of you've Lal running. with, the and lot know very much, your up Jamie. Key issue second to needs a is team. here and through I

so plenty 'XX. As again it are of we productivity 'XX, Lal's today, when we for facilities you. got making new the he's Board for clearly for have moving comes capacity, yesterday and capacity, out, he'll told capacity to but investments

So you really have moving a lot of parts.

through try support the is team you corporate team will great as on here strong this shape. because year. in banking we're And your to your at think process know to they I execution deliver go really can best you this I

James Froedge


David Farr

will change last to shareholder time. you. been can I people in Board over the For I and meetings, imagine, received e-mails ignoring you busy days the didn't faxes. meeting. X I'm back very takes It get everybody. not I've if phone, XXX I on address, e-mail my work in open. up. a the I way and and I'll there It's sent all process my webcast too. and have And morning that then out me e-mails, tomorrow I didn't Lal, crazy block ones start will with wide the the people

You all mean a lot to me.

We again, With don't last I I me the X Q&A. my to back appreciate We debate. my for has get floor the listening I, and or every You're going to that guess friends, but look you're days. sent always person faxes over agree, e-mails and single that all friend. will the that, May. time. be forward -- the to this we're to I that. next will Webex open webcast

today, And so a more one fun. have time. guys are But you going we fun little have to

Well, So first? open going me the floor hit to up. who's


[Operator Instructions].

Citigroup. from with Kaplowitz comes question first Our Andy

Andrew Kaplowitz

to Dave, great community. the been investment you've of us: I I entire for a all know help speak

You keep real. it

keep Lal. You time, at which Congrats, the light it same appreciate. we

I to of some those think you're sort fill going need to shoes animal of rally Dave.

David Farr

those That rally He or isn't is home sucker taking my -- are with me. ferret. Rally going Monkey my

Andrew Kaplowitz

So CapEx talked Dave, new one past of you've begins same is would the you're the again -- the unfolds in that CEOs first that ramp hopeful and maybe spend begin distribution year question about as things is up. that the to to on

customers Automation maybe where to So of us your you're point bit and you up orders are that CapEx conversations seeing changing their little open a Solutions, with yet step tell back they're to if suggest maybe that starting spigots. in the could but your

David Farr

is is, the around the talking lines fellow industrial word the -- that CEOs, -- conversation my they're that, are use being spending would up. I Andy, And use spigot, but some up, I world, in CEOs, they wouldn't capacity. money getting bringing opening I with capital So back about think incremental

business. issue, Jamie's enough in not they're capacity, have money steel, to things. know to a to spending chain they're going going iron have all plastics, and side There's ore, supply there's the copper, situation mining, start now We these around where the for right we huge a -- capacity of

been to are now small States projects about a spending. Lal's and even Europe, guys across hearing the in starting bit and what talk hearing we've quite So United and even they are

continue. So conversations will I think those

start capital. the to spend for this think time, we'd I you, going we issue but year. probably is even We're if the you'll big bet more, capital a time spend more had I us. seeing not

So really for all it. see and make really, capital, guarantee -- customers, the it I think really, I is Where we're it that we're him. -- to his and need one but I you the Jamie's is to U.S.A. seeing who Lal's And going facilities, it, feeling want Lal's

we how what see that that's we'll see. this So unfolds year. But

They're had I coming the think We our U.S. at channel. month. that product. in a projects that totally, And good They're discrete are ordering had will know yet I good the they the a distributors tell month. very but business talking. think probably me don't the of

now I shaking If will to turn head. I think that Jamie. -- Professional Tools I be same the way. He's his

James Froedge


David Farr

Andy. is the means coming, channel that So

think that I So about good I feel it.

But some got they've question to the They've productivity-wise. to momentum, is how see we'll going, things much. spend here. Now the but get money got

And so I feel good now. about right it

Andrew Kaplowitz

the decline look obviously at to think bit, the front-running your then points risk margin XXX And despite little hear, improved revenue. good downturn when progression, basis about That's and Analyst the adjusted a in out the Automation by Dave. Day you Solutions we when you at of QX, coming of EBIT

efforts? next be mid-XX% teens of high the your And segment here you've incrementals years? you couple the delivering improves, restructuring back should you So over margin as over the given past capable in to about talked of that adjusted the a do see path

David Farr

but to he's let one answer have opinion, him my who's I'll Lal I because deliver. the that. it I'll answer let first got

Surendralal Karsanbhai

is plan We stay to will to we participation XXXX. make path, need well peak allow tailwind, do in We're we to differentiate This this margin the enjoyed business technology business. in Andy, that and deliver course. that built that's that we have phenomenal and us If on Absolutely. benefited in get always that investments that we a have products marketplace around from. want gains those that

in stay in back momentum we we'll the I think measured. a will of terms invest But phenomenal execution. and opportunities, right are and now we have business, margin we So obviously, in

David Farr

next X are going businesses. Those all quarters, think earlier-cycle the you to have the if his he's So way business. will higher-margin Lal's or about X business his unfold,

about Those are what's D&I, flow you businesses. for measurement you about those as going businesses and think That's you to think him business. instrumentation, if better-margin come And so first. think back about

in much for, does. good coming pretty have lot a XX He doesn't have has it XX, incrementals. should what, see but He months, he cost/price projects little of KOBX-type Jamie of a the Lal. as And So don't I pressure. not bit same as

Surendralal Karsanbhai

That's right.

David Farr

first good margin I And be 'XX So those they're orders of have overall, ready, plans is into The ready to I for quarter the team up new goes to going the a that fourth one. double-digit perfect my tells peak And think they gut margin, into execution on he this done. think Not this. going a be 'XX have got set margins. in is he's quarter. is he's the think his he every execution good think, the focused will has will as me I But got around very 'XX, they half question of I reach to flow-through. really going strong like moves and --

Andrew Kaplowitz

Congrats Good again, luck, guys. Dave.

David Farr

much. very thank Andy, you


Sachs. comes The Joe next question from Ritchie with . Goldman

Joseph Ritchie

throughout Go going links. Dave, you're years. everything to fixed the hit missed. knee I be retirement. yes, you thanks for as well. the Enjoy soon. Lal, congratulations that hope get But

Surendralal Karsanbhai

you. Thank

Joseph Ritchie

that's couple Investor going to a Day And But weeks. tell look first you're the with margin my maybe that's us a And to portfolio, -- to I from structure. I the maybe more things slate. forward clean bit you question. us like a working trajectory, the But little cost know you're thinking at maybe about with how maybe yes, maybe the of closer. looking that's in at Lal, about talk maybe

making Just your that you organization? on have any imprint transition then and initial the thoughts the on

Surendralal Karsanbhai

who I the to I is the question, first was appreciate waiting hear ask. one to and surely

our year. on the organization I upon we've team. on are will to quarter for lot shortly a me of today been time. just guidance XXth focus be us. like a I've that for for discuss thought Allow So that that things out about put a February of the us what's really and There The phenomenal the need little of that. and bit I'd congrats internalize to with

voices. our hear You'll

allow hear I of And You'll you me our that, some thoughts. it. if appreciate truly

Joseph Ritchie

Jamie, growth like clearly, look XX slide in that at what you in half it take easiest Okay. you and we to your comp Fair enough. a the Jamie a when second. saw a at for you have it turning look XXXX, take Maybe the outlook for and third second quarter. like compare to the over

James Froedge


Joseph Ritchie

reconcile kind this been the first recognize I that the of in hot those given in what QX? But white in half easy that X growth seems like comp have really going in things how of fiscal second like year. is guys down And just do step to half a I things for you

James Froedge

and I in I demand to QX possibly the see. of dramatic that third model. And that plus the we'll -- now mean, a Yes, portion a question big into the pulled first quarters got right think inventory what X pent-up we one is a little mark quarter. is restocked scenario be bit had of

-- towards by to tougher so you see end time back come fourth, which last the you the get to got the comp. And a fourth of growth quarter. We started

different So it's residential and markets go comp that the a you're could even chasing range. flat, down, slightly in positive slightly

doing demand second throughout but we terms Cold -- the just also comps I both going steady to -- very is in it Tools see Professional So well the of in improvement. year. be businesses think the half, Chain you're

wave of But could be the upside. -- in early the this housing on remodeling go. market it's too tell. housing sidelines a another you residential a participate That could to purchasing. last could and have lot has the wave strong there's stays summer, really hot a and think it's strong story. residential have folks a have and I that in didn't If may it We extend. ready here buying market of then They you -- very to So

-- but going thing. so key the And to be that's


from comes JPMorgan. with The next Steve question Tusa

Charles Tusa

a the Dave, I lot years fun been times Congrats all both. to for the XX fun. thanks or It's over really you of don't last, so. know,

David Farr

much, at one least see each time. Hopefully, other we'll Thank you Steve. very more

Charles Tusa

But for good. hoping which results, definitely the I'm onto pretty were Maybe. that.

just that mean, quarter would second on is I like you have the kind always sequentially. AS of kind I guidance, revenue And right? of quick can that The And seems flat follow-up explain comfortably. think, like Do margins. sequentially, of in than other reported up looking then I that kind looks why it have XXXX, I business a for back be?

David Farr

the of FX, really, business we But some last he it, right the the delta business see done the business we quarters, U.S. And is would we're Lal's know as cycle of we've a mix say, at Okay. initial Steve. that early-turn beat it's -- gets function numbers, a be that -- got the well the It's to as business. also because just cautious of now, U.S. in. the just get He's does of I on right. flat business. Lal is there. probably two get -- trying to you're look foreign question Until the coming exchange,

be that happening he quarter. should he do well if January, second so to did And able in that see in

So Steve. better your see. you're more the else impact it right cautious quarter. probably we'll anything currency always. from in perspective, has a Hopefully, and little But analysis a than that as And

Surendralal Karsanbhai

watching We're Yes. -- Steve. sorry,

Charles Tusa

Go ahead, sorry.

Surendralal Karsanbhai

carefully. very lag quickly. Control, as just the they and project-based very Yes, Final the will watching lag businesses, later-cycle Those into We're which coming which had businesses are our down good cycle.

growth year at So solid Ram this was experiencing and last still point having weakened.

little And so come we'll see him in a bit later.

as us well. against going that's So

Charles Tusa

revenue how contribute And much will year? this OSI

Surendralal Karsanbhai

I The sales. is. Board you tell what million $XXX can around that in plan, It's

David Farr

to it million. gets Hopefully, $XXX

Surendralal Karsanbhai

shot. a have We real

David Farr

But are now too. run the the various lot, a But execute easily it's of there? The guys whole I these mean momentum can helping hitting we with Steve. had our a a renewable the million we is this they customers. orders how question taking quarter, push now obviously, rate. question really first right keep They're good the going $XXX this channel. And quarter, then, much hold around right can strong


Surendralal Karsanbhai


first So million we in booked nearly quarter. $XX the

David Farr


Charles Tusa

you. dynamic despite XQ. reason? prior then I margins margins something we year-over-year? I I the margin a year-over-year for adjusted you're basically mean, segment on driver on of this there flat guiding, it what's I going flattish was mean, decline, last to that kind to of Right. there Is a a Like, well guess, which have is of mix kind there any And Is is year cost? for above -- one price a quarter, there? one think,

David Farr


guys? margins that -- the we did think for No. I give up individual the

is figure to So how good volume. got that numbers is Yes, coming inflation But from price the starting hit has the material he's now And Steve, margins. business the what this cost in. you're time. Jamie coverage good at got big quarter. first as cost him from leverage override leverage Lal's have point the that. He's The is will between to quarter his now seeing material is working, got issue to are hard reset. eyes offset to in out the team right in had scrambling We second

news to get a that's of I quarter, than in second struggling will think good we the Lal good when automation going see one good margins quarter. have he's the if have the he'll better -- the it be will margins there, then costs. the to second So be don't quarter. I business Lal or And but comes second material -- a because

Charles Tusa

one first then tough a know for in you ride one CEO. Dave. as you, had And last I your kind year of

in here shoes like sitting streak same have months cut going break You from visibility the guidance. do kind the us be comfortable of had kind feel make not enough of we're that kind mean, to and X you I now? to of to

David Farr

Yes. the I dot-com. mean March the year. thing the We other year. did the X/XX is with in for there. too that's on bust would that dot-com We GameStop have issue problem The had problems that out going have me came

have and break in. I did year to but I the we my to So do -- XX see break second yes, knew going I string. the not it we're go Chuck, Chuck -- to did eventually quarters. said, was I quarter about

You're right, Steve.

now, going I don't dot-com right a think we better I and for bust. see have feel on a what's

call -- not I I all guys. famous Lal So think I'm don't comfortable. setting you phone we're feel that that up to for

Surendralal Karsanbhai

No bubbles. SPAC

David Farr

you're No SPAC bubbles. optimist. Steve, an you. No such Thank SPAC bubbles.

James Froedge

you're what -- is want One seen thing But cycles follow all up this those I before. right, facing. the call, with to -- on want for these Dave is I we're to we've absolutely didn't

I bounce than think the we've back seen is before. faster in volume

markets issues materials the of the are Some than greater experienced. have

year, works as we have part this throughout with with next customers the out. we our go relationships in that, we all to customers, it itself into and regards of MI, the our year, price early confident have we're contracts However,

getting now this making play sure needs. to supply with focus need, is those to very we the But our MI focus out and on meet regards situation. have much we also right tends in we price how the customers, So in partnering their

through. it where be months things. we'll as it's months other little there'll So a that rocky chase There we flows are as be -- will fantastic


comes of with question America. Bank Andrew next The from Obin

Andrew Obin

you, congratulations. Dave. Thank And Lal,

Surendralal Karsanbhai

Andrew. Thank you. you, Thank

Andrew Obin

little the the sort your are you Analyst of talk bit a the has So opportunities And of of conversations customers relates regarding question changed? specifically I'm maybe Senate, batteries. with into relates I guys Day. the think the to tone green control maybe the But at and goes what going to Democratic grid in it of anything Ovation mining it about you're talking tone related in as EVs seeing as to has things and on to change with terms

David Farr


guys talk it. so decision about we two Board we've talk, knows today spent these to this working on on because a bring very made today. it, we topic two been Board have organization before on the hours in So the we to been The this with working

are a and guys' Lal one the this businesses Lal relevant and on first, because I'll stuff. let Jamie both I'll so our that's we'll involved question. very this around let talk And ESG, of go and of in then sides these renewable just let whole because very sustainability And go -- much Jamie

are relevant in Andrew. really Go space, the ahead. We

Surendralal Karsanbhai

you're investors excited February Emerson. we're that Andrew. we with And opportunities And as the talk the for talk us about in meeting. very This thematical what the and we'll is to share right, have Yes. about in

James Froedge

it, to on dedicated have going section Andrew. We're a

Surendralal Karsanbhai

Now have so you management. our and about energy Emerson the I decarbonization customers with efficiency and that aid of various dimensions And as around and the within emissions greening Emerson. the it's Andrew, about we greening by It's speak Emerson, are spoken greening we'll Emerson. the And elements.

the world. and a partnering around it's around So solutions organizations

we here. -- really a a and as in business commercial global and position an fulfill demand a are unique have We automation is global a what to need residential as

last over There excited it. a about really years, it. around world two We'll you to working we've pretty where business. are the through sit. I'm of walk had guys It's specifically. to a there So various But facets individuals the we growing number try David,

with that share XXth the to Jamie. excited is on I'm you as So

David Farr

around alternative we mean, tremendous Andrew, sight. think, in energies, I a have start I

to And start. create have We've good our areas I the and I pretty to Board. XX of around involved some the had have base We're quite next some I work think to of the credibility time. -- efficiencies. I'll the but marketplace that been the some lot going internally think refrigerant solutions, whole XX but to on we and both technology core in and with as externally, years. a told X we new working technologies, the have thing going we these here. talk, been this be let with happens a customer Jamie's for we've over Jamie on There's

the and happening the been now of that's technologies for stuff world with going there's some moves we've living and changing well that on, think around the over big You XX governments years, right now.

so is that's Europe So in why Jamie's strong. business

you... don't why So

James Froedge

going that. broader No, not it's around topic Look, in I regulations. great think into political to general, I get think that's a I'm a point.

it look should they gets impact decision-making could clear and a gives efficiency is targets, targets it If have cetera. need its in you place, there clarity purchase, or how what what purchase, at to that do when what et to they to its certainty just around in meet emissions markets, people our put in order regulation whether

just around their capital the So as to money. the And we general we around generally they Dave world, folks for driving the technical policies the look, -- leader them, and all in many, certainty engineers, how for Investor are committees major requirements leaders said, to refrigerants. our been lower-GWP many because of speaking, talk it's as you here have our trend got very their deploy business it compression better capabilities where a driving it's other spend positive in about to business are on and that our the seen years, Day. And we're have XX need months our lot go use gives in markets solutions ready getting terms, is we've example, this the efficiency, developed low-GWP we'll lot being to need for in next they and a launch that We're refrigerants. on But And or is next here transition ready around we're globally. to to a technology disposal that good we the that for delivering waste of and because business for cases, it. already efficiency coming, because these


David Farr

around situation say, working but world, it the ago. have business. our running have we with in would space. a years start started but I And very next what's push in opportunity. our unique in business, was XX, you. excited of share a this everyone reach of the we in We Asia, with the automation about it Jamie of and on Lal's But the We're helping they when the out going they're about standpoint for we the combination European business, not these of XX because X, I'm and European oil saw commercial. pushes Asia goals. big so doing some the and also got ourself team customers want what with And really acceleration to now pretty years And -- a X automation the that's from good refining in

it. about good So I feel

Andrew Obin

to have sounds follow-up on like software. you at guys it question bit a are say A about Analyst quite Day. It to the going

have referring $X.X growth But to it's market multiple you the like, sort think definitions guys of of software. to. software, expecting kind year? are grow sort what of I'm I you -- seen rates business think the I What for are you at this last billion. stand-alone have the And of That's what, there quarter?

Surendralal Karsanbhai


life see past. Andrew, seems a that continue but QX and to and discrete through it's That work we well. about -- we talked There's range, about, we again, driven in the in by in We think, consistent for expect spoke as the high to opportunities of And in I lot sciences. electrification in the year. core grid as you process what be single-digit

David Farr

we ventures you then some good sorry, to I Yes, -- I and both it's in around years strong, internal, obviously, really trying it's Andy be and some through, as key we're too making years think, Andrew, not continue have and less, Andrew with invest acquisitions. And going it's lot doing port what -- there. -- really a know, to But well, we... look now. area at but a there'll good Lal's we're for Same using this -- of software. right going compression And we're but -- this to because startups also the momentum sustainability with it's to doing around a foothold because software too of thing be it's as electronics part in business having a only it of

James Froedge

require legal When have there's remediate low-GWP they're to I going out Dave, monitor, you issue. requirements rolling to an to about how leak you often talking day. AXL if a you will how -- the start or mean, what have we the just other it it have, around you Yes. -- be refrigerants, sensing have it there's refrigerants, to were

data, business. time it's to our as more it's So more the real world and moves to just more and for huge going a that in the require direction, insight opportunity

David Farr

unless so so former run give much have chart: -- Andrew, and goodbye. we and hello of will one we lot me to probably Chairman, time. we eliminate so out but only have say, the Because they they'll time. But

see. we'll So

Andrew Obin

Thank Lal, again. you, congrats And Dave.

Surendralal Karsanbhai

Thanks, Andrew.


Vertical with Sprague Research. Jeff from comes question next The

Jeffrey Sprague

you. Dave, congrats. We're going really to miss

the the like last You're of Mohicans.

I right? that, know You mean...

David Farr

last the Probably I'm know but -- Mohicans. the okay. the the last truly I of Mohicans, that's of

around can't Mohicans more here. guys many You handle

Jeffrey Sprague

will Lal. No, doubt do job. that's right. no a And great Lal Congrats,

Surendralal Karsanbhai

Thank you, Jeff.

Jeffrey Sprague

the based any, discussion if mind? its was pros kind I in of hey, you And again, at juncture Emerson splitting could succession for where and the cons CEOs the culminating, debate kind clearly, that decision on degree, address if discussion of and in and was the this clear around what, your But today. kind X wondering as did the all this is about, Dave, landed maybe naming was if what history? to us particular any, of

David Farr

so Well, process history, in XXXX. went we back of replay through that sort to not

analysis period the outside believe time platforms, looked businesses. with the rationale obviously hired X and value And say, relative in around the these Board that it very combined took through X clear time. we basis the on of, end at strategic the we as help, the there's more So was separating opinion the platforms, the of -- November the the the two June through we fundamentally to for help was at in and and than point that issues. Board two working And their outside table

around going what around in world sustainability, And see ESG, -- the around relative this right software, to happening we see so investments whole the was now. around the global the logic we

evaluate go standpoint, constantly at strategy in Board that sessions cycles, I'll the or now as look And they to As from leverage sessions on I to classics businesses. our through went was of out in table each in other, different will we and what's right continue months done be business. to it's mid- his -- believe cycles the as or going decision to on look -- obviously, that did XX it and the the work XX. And go we but XX how made the that we that I point sits. -- decision. has that never to The here. a fundamentally X will The a Board XX not the company strategy what's out unique. made And Lal's I Board. -- we quite in This and about XX the that's with want get Emerson of. of the time. different look Board at not the clearly, if at mix late while last with the you where want been made we where say and out this get XXXX. think where may guess back these that's in businesses, Board close and next They at of in And months. We'll back, this We

years transformed don't XX you around, XX the XX if I let the company, years this we the and still. For we look alone at I've years how been did, sit

company it different So Lal I the look is I mean, before will guarantee, today. than retires,

differently? and its course Well, Now his it play and team that the look will going out with how to is Board. him hand

word as to that's around at Jeff. So look you it, here, how trying a -- don't know. status quo is at we not We look

Jeffrey Sprague

these No costs out into total really also we obviously temporary looking think that of are $XXX get you're to XXXX. When doubt. this back? restructuring. of mitigate you only hard savings, And $XX COVID-related million of does coming wondering, hard sounds through Yes. I you've how million like even kind about was think do extraordinarily worked much It come which working back, to that

David Farr

-- be the we going to business really You're going measure because to time 'XX, to -- the get have you're it's to again. hard growing by is

obviously, what things I this process, say, through we've So change. learned would some will

as but So investments it's a the certain to it's it's at say you're standpoint. not to growth for going seeing not it's It's be be we you're also we're because XX%. back, meeting going things solid we get us dollar-for-dollar looking but I I coming only that coming into back, in But point growing same happen But will growth know clearly, you a know to time growing. XXXX. be company time, that's at hard standpoint, would exact XXX% been year number, for travel but different But from an get a not to 'XX. going be mean, at

not a But XX%. So come felt lot that -- we've fun time of lot last and mean different XX% what always to be learned It's process. here learned things. guarantee really happens what the I've from somewhere XX% I grow, probably of Jeff. in things we've a businesses we'll -- back probably I over always have around the but different a and would it's

Let's learned put it a we've that way. But lot.


John Suisse. with The next Walsh Crédit from comes question

John Walsh

A and a thank you you, to Dave, congratulations Lal. to

Surendralal Karsanbhai

Thanks, John.

John Walsh

just some things through noticed this you're here actually software. of if the I around channel curious to your the around financial is just shuffling was or I way if software changing some new some in this goes back for customers. So reporting disclosure

David Farr

going a the software to going say to columns the -- -- you there. We're what understand No, as world, so sit it. -- we things, around it. number. A his world in it make you shaking exactly worry don't there, and talked to do, Auditor the with out on companies we one head. Fundamentally, thing so about, in look measurement start about talking they're we're does those report trying Frank see integrity can is he's to Emerson of start sales. going the to accounting sure we've the going measure we how got -- I but want we've lot about measure once stages of to our worry to Because early about are

So this step. first is our

start and when make it it, have grounded what you we talking can want measure what you that so is, about numbers is, we really tell sure As to that you we we it. know

So -- it's it first-step a is. That's all that process.

Surendralal Karsanbhai

just change no channel, to that reporting there from change No to perspective...

David Farr

giving some software. around We're going to That's more start insights all.

John Walsh

working the guess, bit. forward that. to I the took just you I to Great. look like Okay. a than higher is cash the capital then, And understand just I wanted on there guidance, I free just the flow little up seems with some guess, earnings free there associated It higher cash sales? the dynamic flow.

David Farr


growth and happening quarter is strong. we in So will see be pretty yes, what third this fourth

situation fourth Jamie said Now unique be what where his really someone the it's third spike. quarter. he so like could is has quarter easy to a comparison the -- And going in as know he has doesn't earlier, to got he

to be trying we're So cautious.

a can Jamie's was of all very where that in we're magnitude, execution with before good. of haven't sudden, we all shipping business using inventory we situation very, issue seen Jamie's the and had strong he's good. first very yes, the execution of But operating one was The quarter face the flow that Lal's very cash -- we other now right Yes, a reasons in this the maybe standpoint side in all from of getting now suppliers out paying He's the and inventory not on and a standpoint. getting his right the trade situation working where payable the paid down percent know we extremely starts areas. that's where some And reverse sale is low, in a as of will out. his capital certain of based business as that just slowing

to cash bit was to think estimate very good I the he as on talked working And try much team, pull-in they I officers there, to as cautious. that because his it want want a a how quarter So and to and we be earnings cautious was more of but out very financial be little the execution. Frank think capital,

the all tweak comes But if it second I better to be the a think cash we being in if rate. we think we execution back surprised honest. we're I very fourth will growth we flow now higher, feel wouldn't in, little be up as right a don't get think how John, I quarter, good. into right that just cash is I that cash have our because And of quarter now. get burning the definitely and careful earnings But


Khanna question The from Cowen. next with comes Gautam

Gautam Khanna

great run, the on Congrats Congratulations. Dave.

David Farr

Thank you.

Gautam Khanna

And Lal, and luck. best congrats to of

Surendralal Karsanbhai

Thank Gautam. you,

Gautam Khanna

you I this might I lot the a couple guys commercial was any a HVAC that market. that OEMs HVAC to in maybe potential going of does Is another add in play quality air commercial the you your especially indoor are there to in But commercial address driver, wondering, being you'll or was Emerson -- about ask weeks. offering growth solutions products market, really of that? a HVAC sales? specific talk you hear and leg

James Froedge

broader Yes. We solution. folks work indirect, of it right? mean often some or an the I direct, it's do. quality upgrade with solution to put they and different compression air a and out core is change in will as the place, Indirectly, of include some it a OEMs may

in of humidity that would the big that. be other around think is I air And of solutions the control, we better band. tighter work air humidity that a tight component quality piece a quality think, I found a lot

our some and XX% some providing of And we Our Xac early energy OEM example. invested business that tight is space of directly, buildings, for, bought, of we'll that stage, that do business out, bought a humidity bands handling that then we'll we at sell commercial and XX%, very for it. for some efficient now through we in partners. has it we're the just air It more commercializing initially, also large

So it that some from there's we multiple that to But to ways already, see end invest today. OEMs as go base. in sell in forward we lift we I we continue a both user play, and with solutions and direct space the think we'll maybe

David Farr


the we and in putting some the efficiency I conversation that this see think what in we go the current and refrigeration states is as Jamie and issue the key controls here, chains, highlighted through is -- states Gautam, monitoring earlier be around see we that because this based. where playing justification And of systems want whole the will area going -- going they're commercial sit, things some know sensing which to software I to that think be to especially area in where offering. that's we're

here. unfold play will something in us. does that air think going That's comfort talk that But think I investing about I is does So efficiency efficiency, and to right for Jamie or now. we're -- quality,

I so I way. to that game us. think build it's for that And going continue like to

James Froedge

element about we and We control element. system automation. our measurement and talk closed always control in have close, work business between a that We loop final or

moving If the you in about think direction. air space, fundamentally, quality it's that

You've got close to the loop.

electronics, to management. got the the monitoring, You close the humidification, the loop between particulate controls,

loop diagnostics you that a other example, business partnerships residential close And puzzle so have a then tied or of build key those there's and for solution. the And to there. you've and pieces you that's large commercial -- part full around electronics, a to if if can big thermostat the have got you

in there we'll it do I talk space, of we'll going So forward. couple more weeks, very more active think but in we're a and about that

David Farr

What want to Gautam? else you know,

Gautam Khanna


maybe question second a Solutions. Just at Automation

to second So down lot order right mean, range come comparisons orders. the what going is the X to And in and May third when the we I month the are XX% fourth But easier the automation. for June get you're or we or at in the bigger snapback get I a down of XX%, obviously, a we or quarter KOBX see a expectation? as quarter? X where comping gave could you absence kicking half see double-digit in guidance the know

Surendralal Karsanbhai

More Gautam, don't I months. next been I expect foresee right. should dependent what will and What what on, fully is living activity is the tell to XX you that. significant, certainly. happens we've not KOBX; snapback that obviously, XX KOBX We in on think the North I KOBX, your assumption America. is for

David Farr


Surendralal Karsanbhai

story. hard of how of it how back, will that -- measure snapback comes that the End really is. And Period. quickly dimension that's the

David Farr

and assuming to going stop cautious, these guys to decision, not just that. pattern make we're think you'll because be put to happens that. not but will stop I may from order we're trying I'm that see that but Lal's out standpoint. going He that watch think I the what watch


from Stanley. question Pokrzywinski with The Morgan Josh comes final

Joshua Pokrzywinski

good Enjoy Get in Dave, it's games. miss dogs. luck. few a in you retirement. congratulations pleasure. been a Cardinals certainly Take more few I'll and Lal, a more Laguna.

need it don't You sure. for

Surendralal Karsanbhai

Thank you.

Joshua Pokrzywinski

And being question kind Lal or the versus process a energy about before If of a that, little you quarter. the both kind guys know evolving? high end looks for auto things. and KOBX complexes But I what guidance a at How up are brought important was that talked of do maybe half, sol, similar side lower. low the wider look is is see the KOBX the of Dave, process of and drivers those kind It bucket? of and the onto how of drivers parameters range I bit on you angle C&RS. second end last the like, today? that range little got What

David Farr

my relative -- and are They've had I now. see. how taking a I'll They've you couple clearly So -- as been Josh, know still thinking negative, answer, the They're give I I cautious of end back right these guys mean I'll very give to good know up. quarters.

So as right. you're they've -- been -- I think

they probably they'd the and look they quarter. a the at bit as better As fourth in the little third, little on get got a second bit

I we eye because think cautious to relative pure are just these that being I so -- they're think not And of seen guys whites recovery. the the U.S. have

coming I I think will seeing little ordering if a get we that Asia, like we've more Europe, and or consistent these of like U.S.A. profit type X get that a that in. we KOBX the see think in where volume you're comfortable to in seeing month in relative guys KOBX, been

Jamie. cost just like -- ago. was this market let's thing is of they're go. think wants couple tough mean one to Jamie that's guys. a gone here, I So just just hey, of my impression reset. it's cautious say, They've over, these a no through And a I quarters

to he hard -- through, as him Now has he's it's running hide. for

want there? my that's you think say I to feel. So Anything

James Froedge

-- are right outage positive Those with as the all add Obviously, things very our are very I would signs. important access schedules, in well. holding carefully which I watching which customers; like now, spring it's David. No. engagements think is said, of site we're well terms

David Farr

date pattern. short your mean, order The I --

you day So what going was to what be? it's think month? -- do What day day-to-day order to your this

James Froedge

of January, million, land $XX there, month million and day. the In it somewhere in between a $XX will somewhere

David Farr

So number. means coming he's That that's back. a good

-- say, continue. the I mean gets wants holding to the January like couple to So that analyze we just December. gets okay, half That Josh. first or early going with business. the details. of I you months to now firmly, that I we think conference, he's we definitely about then in investor gaining everything's from would If details, months And see think he's of he February, talked Early said Jamie's into of be saw good. X a standpoint, the taking signs at hold want the he just it's X ago

So is. all think are what signs that's it things. right the doing the I But

Joshua Pokrzywinski

post got end customers are then has so to scenario? all a talking clean, are a much? where off, guys of about Just the longer over happy projects come today? would the kind be scenario have going the we slate new projects equation, back your nirvana Do COVID, on you you have those helpful. just that the we to those plus changed that That's weigh with and like What you What Do of COVID, start it. do in come fronts hearing? given great. the that there And Got shelf? world think with we shelved longer the cycle off

Surendralal Karsanbhai

appreciably jobs. The cancellations, were but the of changed you by not a number high funnel they billion. smaller color. were quick really funnel, last for about a give happened has at Yes, there of What sits number $X.X I'll that replaced a X It months. within

So quicker things. of paybacks, those types

that, OSI what's to addition us. project funnel, billion In electrification brought $X.X is a to now which about been we have interesting

overall, a traditionally. been eventually bit billion $X.X talk just we've It's that matter in We'll those projects So a move demand. here little talking to that that's a detail about weeks. this of going the in feel forward. few in about addition more around But are to KOBX funnel time

David Farr


perspective, on and pressures capital is The CEO they're from I I of relative think that. hear as sort projects the think to to my differently. from -- recut I going like things Lal's will be customers,

will forward, might So They I good they little cut might think be be They projects, differently. but are the they move projects. smaller. a bit

there's been customer lot broken way in been think the discipline arms, back. in couple of a a like a of around our that's learned of I old-fashioned broken lot base spending legs, through the pain, knives capital

going good. I obviously leaves, more But got some think to There'll think some that new. Lal's think And be so I be say. And I they're going feel one to good overall, I it's to be done.

Surendralal Karsanbhai

Yes, more exactly thing. you're point, To just right. David, one your

was project, project refinery a of your type that the If of barrel" scrapped. "bottom got

project are States a many in United processes. very projects refinery, biofuel forward. in we're those the is moving There are engaged your to active If conversion Europe, and a and those

David Farr

it more good to going early 'XX, be It's late -- -- see it as Josh, will be right be 'XX, I now. a that will

send of people and get to the use they to a want back, me now what everybody. now back running. got With team's done. and And I going, in work he's so got in Europe. pasture. repositioning his is the thank take for a business It's got world go up in and I to and to I when get around he's get a think coming lot getting that to right markets area of to I again, to world facilities And in I he But those get the get that, look and done I underway facilities because can They've e-mails. all will got capacity lot try he me truly new will starts before -- e-mails, to to cover work it. out I it. got Lal's the on right fully to Lal faxes appreciate while. people going And

for truly years that. all some will of part I XX likely challenge you've we I long into from years. And everything We forward keep as seeing that. XX on been became when will over me guys, too. keep learn, and probably those years months. help Jamie was an these the get gentlemen. learnings relations he most to New try I But you, me investor But look straight, the want guy and for for trying honest me I disagree love care. to me. do appreciate only to but you Lal. spokesperson well, time, could I bring and of came this back a done and sessions York I just my with so me I to have know, and I Take these Bye. I I to can Emerson years was, have CEO, for X as That's I pass And that doing not along Asia, multiple --


now conference you today's concluded. The has for Thank attending presentation.

may disconnect. now You