Thomas B. Okray
Executive Vice President and Chief Financial Officer at Eaton
Thanks, Craig. I'll start by reviewing our how our fiscal year 2023 results compared to our original guidance. Throughout the year, we demonstrated the ability to execute on our commitments and raise guidance for all key metrics. We've delivered our third consecutive year of double-digit organic growth with a 20% increase in adjusted EPS, all-time record margins, and a 48% increase in free cash flow. Of particular note, organic growth and segment margins were up versus the original guidance 400 basis points and 110 basis points respectively. Further, adjusted EPS and free cash flow grew 11% and 4%, respectively versus the original guide.
On the next chart, we have a summary of our quarterly results, which includes several records. With respect to the topline, we posted an all-time sales record of $6 billion, up 11%. Organic growth continues to be strong, up 10% for the quarter. We've generated double-digit organic growth in seven of the last eight quarters with the last seven quarters growing over 20% on a two-year stack. We posted operating profit Q4 records on both the margin and absolute basis. Operating profit grew 22% and segment margin expanded 200 basis points to 22.8%. Incremental margin was very strong at 42%.
Adjusted EPS of $2.55 increased by 24% over the prior year. This is an all-time record and above the high-end of our guidance range. This performance resulted in all-time quarterly operating and free cash flow records. Our $1.3 billion of operating cash flow was 9% higher than the prior year, generating 18% free cash flow margin and 103% free cash flow conversion. For the full year we also set numerous records, including record sales, segment margins, adjusted EPS and earnings and operating and free cash flow.
On Slide 9, we detail our Electrical Americas results. The Electrical Americas business continues to execute very well and delivered another very strong quarter. We set an all-time record for sales, operating profit and margins. Organic sales growth remains strong at 16% with broad-based growth in nearly all end markets. On a two-year stack, organic growth is up 36%.
Electrical Americas has generated double-digit organic growth for eight consecutive quarters. All-time record operating margin of 28.5% was up versus prior year, 480 basis points, benefiting primarily from higher volumes, effective management of price-cost and improved manufacturing efficiency. Incremental margin was 58% for this segment.
On a rolling 12 month basis, orders were down 4%. However, it's important to note that the dollar value of the orders remains high and the decline needs to be viewed in the context of the 34% order growth in Q4 of last year. As discussed in prior earnings calls, order intake is an important metric but needs to be analyzed together with record backlog.
Currently in our electrical sector, we have backlog coverage of almost three times our historical average. We've looked at multiple scenarios with meaningful order intake decline and are confident in those scenarios, given our backlog coverage that we can generate robust organic growth for several quarters well into 2025. More specifically, Electrical Americas backlog increased 18% year-over-year and was also up sequentially, resulting in a book-to-bill ratio of 1.2 on a rolling 12-month basis. For orders, we had particular strength in Data center, MOEM, and institutional market. Also, our major project negotiations pipeline in Q4 was up 55% versus prior year and up 189% since Q4 2021.
On a full-year basis, Electrical Americas posted 19% organic growth with 26.5% margins, up 400 basis points over prior year. Electrical Americas posted records for full year sales along with profit on both the margin and absolute basis. With the tailwinds from secular trends, strong execution and robust backlog, Electrical Americas is well positioned as we enter 2024.
The next chart summarizes our results for the Electrical Global segment. Leveraging Q4 record revenue, organic growth increased to 4% from flat in Q3. We have strength in Data center, industrial and commercial and institutional markets. Operating margin of 18.8% was up 10% versus the prior year. Orders were up 1% on a rolling 12-month basis, with strength in Data center and IT, utility, MOEM and industrial markets. Importantly, book to bill continues to remain greater than 1. On a full year basis, Electrical Global posted 5% organic growth and 19.3% margins. The business posted records for both full year sales and operating profit.
Before moving to our industrial businesses, I'd like to briefly recap the combined Electrical segment. For Q4, we posted organic growth of 11%, incremental margin of 51%, and segment margin of 25%, which was up 320 basis points over prior year. On a rolling 12-month basis, our book-to-bill ratio for our Electrical sector remains very strong, above 1.1. We remain quite confident in our positioning for continued growth with strong margins in our overall Electrical business.
Chart 11 highlights our Aerospace segment. We posted an all-time quarterly sales and Q4 operating profit records. Organic growth was 8% for the quarter with a 2% contribution from foreign exchange. Growth was driven by broad strength across all markets with particular strength in defense aftermarket in both commercial OEM and commercial aftermarket, which were up 26%, 25% and 18%, respectively.
Operating margin of 22.4% was down 210 basis points on a year-over-year basis, benefiting from higher volumes and effective management of price-cost, offset by unfavorable mix and favorable defense programs in the prior year. On a rolling 12-month basis, orders increased 7%, with especially strong growth in commercial and defense aftermarket and commercial OEM. Year-over-year, backlog increased 13% and was up 3% sequentially. On a rolling 12-month basis, our book-to-bill for our Aerospace segment remained strong at 1.1.
Moving onto our Vehicle segment on Page 12. In the quarter, total revenue was up 2%, all from favorable foreign exchange. Vehicle end markets were down 500 basis points year-over-year, but the business was able to deliver outgrowth, primarily driven by higher aftermarket sales, stronger share in heavy duty transmission, and a new product launch of Electrical Vehicle Gearing in China.
Operating margin came in at 17.9%, 270 basis points above prior year, driven by effective management of price cost and improvement in manufacturing efficiency. Throughout 2023, we demonstrated the ability to execute on operational improvements as shown by our 270 basis point improvement in segment margins from the first half to the second half of the year.
On Page 13, we show results for our eMobility business. We generated another quarter of strong growth, including an all-time sales record. Revenue was up 19%, 18% organically and 1% from favorable foreign exchange. Driven by the ramp-up of new product launches, we outpaced the market, which grew 7%.
However, due to program startup costs, the operating loss increased by $14 million when compared to the prior year. On a full-year basis, eMobility posted 18% organic growth on slightly lower margins as we continue to invest in the business. We remain very encouraged by the profitable growth prospects of the eMobility segment. In 2023, we won new programs with more than $1 billion of mature year revenue. Through these wins, we continue to find opportunities to leverage expertise and differentiated technologies across segments.
Moving to Page 14, we show our Electrical and Aerospace backlog updated through Q4. As you can see, we continue to build backlog with Electrical stepping up to $9.5 billion and Aerospace reaching $3.2 billion for a total backlog of $12.7 billion. Both businesses have increased their backlogs by significantly more than 100% since Q4 2020, with Electrical growing almost 200%. Versus prior year, our backlogs have grown by 15% in Electrical and 13% in Aerospace, which exceeded our expectations as we began the year. As noted earlier, both Electrical and Aerospace have book-to-bill ratios above 1.1. Our strong backlog to close the year gives us continued confidence in our growth outlook for 2024 and beyond.
In addition to our strong backlog growth in 2023, the next page shows the acceleration in growth of our negotiations pipeline, which supports our expectation for stronger market and structurally higher organic growth rate. In Electrical Americas, the pipeline doubled over the past three years and increased a further 29% in 2023. This is even stronger than the 19% organic growth in our Electrical Americas business, which suggests continued strength going forward. For 2023, we saw $6.2 billion of projects in our negotiations pipeline in Electrical Americas alone.
Now, I'll pass it back to Craig to walk through the guidance and wrap up the presentation.
