EMR - Emerson Electric Co. (EMR) J.P. Morgan's 2024 Industrials Conference Transcript
2024-03-13 20:40:25 ET
Emerson Electric Co. (EMR)
J.P. Morgan’s 2024 Industrials Conference
March 13, 2024 3:00 PM ET
Company Participants
Stephen Tusa - Analyst, J.P. Morgan
Ram Krishnan - Chief Operating Officer, Emerson Electric Co.
Colleen Mettler - Investor Relations, Emerson Electric Co.
Mike Baughman - Chief Financial Officer, Emerson Electric Co.
Conference Call Participants
Presentation
Stephen Tusa
All right, great. We’re going to move along here with Emerson, CFO, Mike Baughman. What’s your title now? COO. I mean you’ve done so much to this company, and I forgot. But COO, Ram Krishnan; and from Investor Relations, Colleen Mettler of Emerson. All of you, thank you so much for being here. Really excited to have you. And let’s just start with the usual intro question, which is how’s business? And any updates that you guys wanted to give from a fundamental perspective here relative to the last time we talked?
Ram Krishnan
Yeah. So consistent with what we said in our earnings call, I think we feel pretty good about where we sit. I’ll comment on orders. I think orders, we exited Q1 with 4% underlying orders. We’re going to do low-single digits in the first half, strength in process hybrid, strong funnel, offset by weakness in discrete, which as it recovers into the second half, we’ll get into mid-single digit too. Orders growth and exit the year at around mid-single digits.
So that’s from an orders’ perspective, from an underlying sales’ perspective, 10% in Q1, some liquidation of backlog as we go through the year. But our backlogs overall remain at very, very good levels at about $7.6 billion, we built about $500 million of backlog in the core business and added another $500 million with NI.
And the pace of business is, we look very closely at the project funnel, which is a very healthy funnel at $10.4 billion, we built about $200 million into the funnel. In terms of size, we’re yielding about $400 million to $500 million from the funnel every quarter, which fuels our project business. KOB3 remains strong at about 65%. So we feel very good.
The underlying trends, the secular tailwinds around re-shoring energy, security and affordability, the software trend in our customers as they digitize their operations, and certainly the spend around sustainability and decarbonization remains very positive. We believe the discrete cycle will certainly turn....
Emerson Electric Co. (EMR) J.P. Morgan's 2024 Industrials Conference Transcript