Lal Karsanbhai
President & Chief Executive Officer at Emerson Electric
Thank you, Colleen, and good morning everyone. I'd like to begin by thanking the nearly 90,000 Emerson employees around the world for their tremendous effort, passion and commitment to deliver the solid results we will speak about today. Over the past four months, I've had the opportunity to travel to several US sites including Houston, Chicago, Elyria, Ohio and Pittsburgh, as well as visiting investors, customers and our teams in Germany, Denmark, Brazil and Mexico. I have to be honest, there is no substitute for being with our teams in person. I'm looking forward to this month's trips to India and Singapore, and I'd also like to thank our Board of Directors for their support and our shareholders for your trust in us.
As an organization, we continue to make significant progress on all of our strategic imperatives, aim to accelerate value creation, culture, portfolio and execution. Our culture evolution continues in earnest. We are launching our efforts with new listening tools, a modernized employee value proposition, and a new reinvigorated talent engine. To this end, on August 1 we hired our first Vice President of Culture, Kelly Clark who joins our company at a crucial point in time and brings unparalleled experience in culture transformation.
Turning to Slide 3. Emerson's portfolio transformation is well underway, and in the quarter we made significant progress to create a higher growth, more diversified cohesive portfolio. We took five important steps. Number one, on May 16 we closed the Aspen Tech transaction. We are very excited about the synergy opportunities which are sized at $160 million in the funnel and the projects won to-date. Number two, Aspen Tech announced an agreement to acquire Micromine, the first transaction under the new structure. Micromine is an Australian based exploration to optimization software offering well positioned to benefit from the minerals required to fuel the renewable revolution. Number three, we announced and closed the acquisition of Fluxa, a critical life science process knowledge business, highly synergistic with our industry-leading DeltaV system. Number four, on May 31 we closed the TOD sale. And, last, five, yesterday we announced the sale of InSinkErator to Whirlpool Corporation for $3 billion or an 18.1 multiple of adjusted EBITDA.
Prior to turning to Slide 4, allow me to say a few words about our execution. This was a solid quarter, and I feel incredibly positive as we go into the fourth and into 2023. June trailing three months' underlying orders were plus 10%, driven by Automation Solutions at plus 13%. Third quarter underlying sales grew 7% driven by the Americas, which grew 14%. This performance occurred despite lockdowns in Shanghai which impacted six plants for two months and continued challenges with electronics availability. Together, the two factors resulted in a $180 million sales impact in the quarter or five points to the Automation Solutions segment sales. Adjusted EBITDA improved 20 basis points with improvement in both platforms. Operating leverage in the quarter was 27%, and we are well on track to exceed our 30% target for 2022. Adjusted EPS was $1.38 including $0.08 contribution from Aspen Tech. Although free cash flow conversion in the quarter was 100% adjusted for non-operating and one-time items, operating cash flow was down driven by working capital investments in inventory and receivables.
Let's now turn to Slide 4 please. In addition to the portfolio, Emerson has also made tangible steps in our ESG journey. Recently, we have established a target to reach net zero greenhouse gas emissions across our value chain by 2045. In the near term, our objective is to reach net zero in our operations and reduce our Scope 3 emissions 25% by 2013. Our 2021 ESG report, which can be found on emerson.com includes more detail on our target which is aligned with the net zero standards set by the Science Based Target initiative. Our goals are bold and we have a credible, credible roadmap that include many of the solutions, technologies and expertise we offer our customers and the critical industries we serve.
Please turn to Slide 5. I am particularly excited about the opportunities in the renewable space. As I said, our portfolio is broadly relevant as an enabling technology across a broad segment of the world's economy. This includes electrification efforts such as heat pumps as well as sustainability -- a strong sustainability funnel in Automation Solutions that has grown to $1.5 billion inclusive of the carbonization, energy efficiency, emissions management, and new energy investments in wind, hydro, solar, and hydrogen. I'll share a few examples on this slide.
First, starting on the left. Emerson was recently selected by Mitsubishi Power to automate the world's largest clean hydrogen production and storage facility. The Advanced Clean Energy System hub will convert renewable energy into storable hydrogen which can subsequently be dispatched and converted to electricity when required. Emerson Automation and software solutions were selected based on industry expertise and our leading digital portfolio. This is the first-in-kind facility, and it will be capable of producing 100 tons of green hydrogen per day with storage capacity for 300 gigawatt hours of energy. That's equivalent to 150 times the current lithium battery storage in the United States. Next in the middle, along with NESTE Engineering Solutions we were chosen to provide Automation technologies and software to Fintoil, for the world's third-largest tall oil biorefinery, the advanced biofuel and bio chemical facility to refine a byproduct of the wood pulping process to produce sustainable feedstock for biofuels, chemicals and pharmaceuticals. The expected annual capacity of 200,000 tons will create a 400,000 ton reduction in carbon emissions. That represents roughly 1% of Finland's total emissions. Lastly, Emerson was selected by Albioma, a French energy provider, to enable the transition of its flagship coal fired Bois Rouge plant to 100% renewable energy. Emerson's Automation system and software will help convert the existing coal-fired power plant controls to utilize biomass feedstock. In doing so, this project will result in 640,000 ton reduction in carbon emissions, part of Albioma's plan to reach almost 100% renewable energies by 2030. These projects and our net zero targets represent our continued progress in our greening of and greening by framework that Mike Train has introduced.
And lastly, before I turn it over to Frank, on slide 6 I would like to highlight a few exciting investments we've made in operations around the world. Our regionalization strategy and operational excellence served us well through the pandemic and in the current challenging supply chain environment. We continue to drive operational excellence with investments like the three shown here. Starting on the left. Earlier this month, Emerson officially opened our new professional tools facility in Ash flat Arkansas. This is a 277,000 square foot facility which will be used mainly for our Greenlee tools for electrical applications across North America. It currently employs 150 employees and we will double the employment over the next four years. I'm very excited about this investment and we were honored to have government Asa Hutchinson join us for the ribbon cutting.
Next in the middle, Emerson recently opened its Mahindra City Chennai, India facility for fluid control and pneumatics. This is a 145,000 square foot facility which will help serve process, hybrid and discrete customers in India and surrounding Asian countries. And then lastly, we introduced a new Saltillo Mexico manufacturing facility for our specialty valve technologies, assemblies and actuators using life sciences, metals and mining and other key industries. As with all of these facilities, Saltillo, we use state of the art factory automation capabilities, environmental designs, and include our own Emerson technology.
As we close out 2022, I feel extremely positive about where we are as a business and where we are going. Our goal is accelerated value creation and we are executing on all the critical dimensions. With that, I will now pass the call over to Frank Dellaquila who'll go through our detailed financial results in the third quarter.
