FY2021 10-K Document - FINAL 11 15 21 - Flipbook - Page 32
Table of Contents
Industrial Systems
(dollars in millions)
Net sales
Operating profit
Operating margin
$
$
2021
892
86
9.6 %
$
$
2020
909
80
8.8 %
$
$
2019
918
109
11.9 %
2021 vs. 2020
$
%
Variance
Variance
$
(17)
(2%)
$
6
7%
2020 vs. 2019
$
%
Variance
Variance
$
(10)
(1%)
$
(29)
(27%)
Net sales in Industrial Systems declined in 2021 as compared to 2020, as the recent industrial automation recoveries
were more than offset by a decline across our other industrial markets. Stronger foreign currencies, primarily the Euro
relative to the U.S. Dollar, increased sales $23 million in the year in comparison to 2020, partially offsetting the real
sales decrease.
The COVID-19 pandemic, and the associated macroeconomic slowdown and reduced capital investments by our
customers, created productivity and demand challenges. Additionally, the decline of the global airline market
weakened demand for flight simulation products. These factors started in the second half of 2020 and continued
through much of fiscal 2021, leading to a sales decline of $17 million year over year. Sales decreased $18 million
within our medical market, as the prior year's surge in demand related to the COVID-19 pandemic moderated. The
COVID-19 pandemic also affected sales within our simulation and test markets and energy markets, resulting in $13
million and $8 million declines, respectively. Partially offsetting these declines was a $22 million sales increase in our
industrial automation market, as companies began to build capacity to meet recovering demand late in the year.
Both 2021 and 2020 operating margins include COVID-19 charges. In 2021, there was $4 million of COVID-19 related
charges and impairments, while in 2020 there was $14 million charges related to the COVID-19 pandemic. Excluding
these charges, adjusted operating margin for 2021 and 2020 were relatively unchanged at 10.1% and 10.3%,
respectively. Research and development expenses increased by $4 million, which when combined with the sales
decrease and portfolio refinement charges, resulted in a slightly reduced adjusted operating margin.
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