President and Chief Executive Officer
Dear Fellow Shareholders,
In 2023, we continued to undertake strategic moves to further transform Emerson into a leading global automation company. At the same time, we focused on execution, exceeded our financial targets set at the beginning of the year and delivered value to shareholders, customers and employees. We attribute these accomplishments to our Emerson Management System, a formula for driving operational execution and growth, balancing risk and innovation, and better allocating leaders’ time and resources.
As we embark on fiscal 2024, with the majority of our strategic portfolio transformation complete, I can tell you with confidence our future will continue to be focused on and grounded in one collective commitment: execution. This is something for which Emerson has long been known and will continue to be a core characteristic of the company.
Driving Strong Financial Performance
We drove excellent financial performance in 2023.
- Underlying Sales Growth: 10%
- Adjusted Segment EBITA Margin: 25.0%
- Adjusted Earnings Per Share: $4.44
- Free Cash Flow: $2.4B
Thanks to the work of our talented global team, each employee’s embodiment of our Emerson Management System and our ongoing efforts to progress our portfolio transformation, we have continued to build a foundation for driving continued shareholder value and achieving our long-term financial targets. Looking ahead, I am confident we are well positioned to execute on our value creation opportunities.
Building A Higher-Growth, More Cohesive Automation Portfolio
As part of the continued reshaping of Emerson as a global automation leader, we made several bold portfolio moves in 2023, including the NI acquisition and the completion of the Copeland transaction. Through these strategic decisions, the continued success of our AspenTech relationship, and the additions of Flexim and Afag, we have built a cohesive automation portfolio that enables customers to navigate the full automation spectrum and aligns with the secular growth drivers of digital transformation, energy security and affordability, sustainability and decarbonization and nearshoring.
Enabling Innovation and Operational Excellence
Innovation has been a defining characteristic of Emerson’s culture for 133 years. During the past year, thanks to our continuous commitment to innovation, we launched new products and offerings aligned to customer needs, positioned the business to transform the industries we serve and capitalize on key growth drivers like software growth and the energy transition, and secured the No. 33 ranking on Fortune Magazine’s inaugural list of America’s Most Innovative Companies.
Prioritizing Our People and Modernizing Our Culture
People are and always will be at the center of everything we do at Emerson, which is why I was excited to announce several strategic appointments to Emerson’s Office of the Chief Executive throughout 2023, including Mike Baughman as Chief Financial Officer, Nick Piazza as Chief People Officer, Vidya Ramnath as Chief Marketing Officer and Peter Zornio as Chief Technology Officer. I want to take a moment to recognize the incredible contributions of Frank Dellaquila, who retired earlier this year after 13 years as our Chief Financial Officer.
When I first stepped into the role of CEO, I shared I was most excited about the people at Emerson and the opportunity to modernize our culture. Our commitment to our people has not changed and remains one of our highest priorities. This year, we introduced a new employee value proposition: Let’s Go, which serves as an invitation to our current and potential employees to join our bold ambitions. We also launched Your Voice Counts, a new listening strategy to effectively understand employee sentiment. While we still have work to do, supporting our people and empowering them to deliver results, investing in our culture and making Emerson a place everyone feels proud to work remains paramount.
Executing Now and Moving Forward
Our portfolio transformation, the Emerson Management System, and our outstanding people and culture constitute a strong foundation for driving value and differentiated operational execution now and moving forward. Emerson is now positioned to drive accelerated growth as a leading global automation company and significant value creation for our shareholders.
Thank you for your ongoing trust and support of Emerson.
Sincerely,
Lal Karsanbhai
President and Chief Executive Officer
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