pitch8 rok
TRANSCRIPT
Rockwell Automation (ROK)Efficiency in RoboticsTarget Price of $125.73 (+16.4%)Director: Dylan JamesJunior Analyst: Qiwei LiJunior Analyst: Jonathon McClanahanGeneral Member: Rebecca ChenGeneral Member: Sambhav Upadhyay
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Table of Contents
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Investment Thesis Summary
Efficiency of Automation
Modularity and Scalability
Versatility of Logix
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Investment ThesisLogix Control Platform • The only scalable, multidisciplinary PLC (Programmable Logic Controller)
that can take raw data, perform calculations, and execute actions
• Central nervous system of a factory
• Compatibility with various equipment allows Rockwell to tap into competitors’ markets
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Investment ThesisLogix
Discrete Manufacturing
Process Manufacturing
Logix
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Investment ThesisModularity and Scalability
Modularity
• Standardized parts that can be rearranged to create new software and hardware
Scalability
• Flexible manufacturing: able to react to production volume changes
Results
• Increased efficiency• Reduced costs
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Investment ThesisEfficiency of Automation• Even in an economic downturn Rockwell’s products and services will be desired
to cut costs
• Automation Industry market is growing faster than GDP
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Catalyst
Original Equipment Manufacturer
Acquisition of U.S. based Jacobs Automation Co. Leader in OEMs Rockwell has the infrastructure for success
OEM Market Expansion
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Catalyst
Expanding to Latin America 12% growth 2013 Emerging Markets in India
OEM Market Expansion
50%
9%
20%
13%
United States
Latin America
Europe & Africa
Asia
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Industry OverviewTypes of Products
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Industry OverviewIndustries Utilizing Automation
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Industry OverviewGrowth of Automation Industry
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Industry Overview
Barriers to Entry
Bargaining Power of Buyers
Intensity of Rivalry
Threat of Substitutes
Bargaining Power of Suppliers
HIGH
LOW
MODERATE
LOW
MODERATE
Requires large amounts of R&D to enter industry
High customer switching cost
Efficient due to specialization
Demand for Automation
Software not dependent on suppliers
Porter’s Five Forces Indicates Favorable Industry
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Company Overview
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Company OverviewBreakdown
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Company Overview
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Company Overview
Differentiates Rockwell in Automation Industry Transferrable through different hardware and software
SCALABILITY
Logix
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Company OverviewOriginal Equipment Manufacturing Emerging Markets in Latin America and India Growth in entering a global expansion
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Company OverviewOriginal Equipment Manufacturing Emerging Markets in Latin America and India Growth in entering a global expansion
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ValuationRelative Valuation
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ValuationRelative Valuation
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Valuation
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Valuation
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Valuation
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Risks and MitigantsExpansion of New Products
Risks Mitigants
Commodity Market Slump Hurts Process Automation
Rockwell primarily operates in US; developing countries have room for
long-term automotive growth
Foreign Auto Industry Declines in the Short-Term
Discrete manufacturing set to grow; Discrete/process package provides platform
for future growth
Process Automation Products Underperform
Commodity market is cyclical; market share gain offsets near-term losses
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Risks and MitigantsRisk 1: Commodity Market Decline
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Risks and MitigantsRisk 2: Process Automation Underperforms
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Risks and MitigantsRisk 3: Foreign Auto Industry Slump
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Questions?