15 slides from Johnson Controls International's earnings presentation, Apr 16, 2008
Slide 1: Quarterly update FY 2008 second quarter
Quarterly update FY 2008 second quarter April 16, 2008 Exhibit 99.2
Slide 2: Agenda
Agenda Introduction Denise Zutz - Vice President Strategy, Investor Relations and Communication Overview Steve Roell - Chairman and Chief Executive Officer Second quarter 2008 business results Keith Wandell - President and Chief Operating Officer Financial review Bruce McDonald - Executive Vice Pres
Slide 3: Second quarter 2008: Record sales and earnings
Second quarter 2008 Record sales and earnings Achieving our growth targets Sales up 11% to a record $9.4 billion Higher revenues in all three businesses: Power Solutions, Building Efficiency and Automotive Experience Segment income up 29% to $453 million Underlying margin expansion in all three busi
Slide 4: Sustainable, profitable growth: Executing on our growth opportunities
Sustainable, profitable growth Executing on our growth opportunities Growing backlogs: Building Efficiency, Automotive Experience Strong growth in international markets Diversification enables consistent growth Experienced management team World-class continuous improvement processes and cost control
Slide 5: Sustainable, profitable growth: Building Efficiency growth
Sustainable, profitable growth Building Efficiency growth Stability: 75% of revenues are service / retrofit High energy prices = improved payback of our efficiency offerings Growing customer need for carbon footprint measurement and management N.A. institutional (healthcare, education, government) n
Slide 6: Sustainable, profitable growth: Automotive Experience and Power Solutions growth
Sustainable, profitable growth Automotive Experience growth Stability: 2/3 of revenues to European and Asian OEs Detroit 3 only 50% of North American revenues Double-digit production increases in emerging markets Continuing to invest in innovation to gain competitive advantage Gaining share (increas
Slide 7: Full-year 2008 outlook
Full-year 2008 outlook Increased guidance: Sales growth of 13% to $39 billion (vs. previous guidance of $38 billion) 62nd consecutive record year Unchanged: Earnings growth of 18% to approx. $2.45 - $2.50 per share 18th consecutive record year FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 F
Slide 8: Continuous improvement
Continuous improvement In addition to our focus on revenue growth, innovation and emerging market expansion, we are driving margin improvement through continuous improvement initiatives Best Business Practices Core to all of our continuous improvement efforts $2B+ identified cost reduction opportuni
Slide 9: Driving improving margins through best business practices
Driving improving margins through best business practices Automotive Experience engineering improvement Low-cost country engineering footprint Global level loading of engineering launches Sharing of engineering best practices Annual improvement in tens of millions of dollars Building Efficiency inst
Slide 10: Building Efficiency
Second quarter 2008 Building Efficiency 2008 2007 Net sales $3.3 B $3.0 B +11% (+13% excluding residential) Double-digit increases in North America systems, global workplace solutions, Europe, Rest of World Systems market share gain in North America North America residential down 18% Segment income
Slide 11: Power Solutions
Second quarter 2008 Power Solutions 2008 2007 Net sales $1.5 B $1.0 B +47% Higher unit prices due to lead pass-through LME lead in quarter: $2,650 - $3,460/ton (average of $2,899 vs. $1,787/ton in 2007) Unit shipments level Stable aftermarket New European OE business offsets lower N.A. OE production
Slide 12: Automotive Experience
Second quarter 2008 Automotive Experience 2008 2007 Net sales $4.6 B $4.5 B +2% North America: down 7% Industry production down 8% Higher volume: GM Lambda, Lacrosse/Allure, Ford Edge, Toyota Tundra, Honda Accord Lower: GM Trailblazer; Ford Expedition, F-150; Chrysler Grand Cherokee, Toyota Corolla/
Slide 13: Financial highlights
Second quarter 2008 Financial highlights FX - Euro to U.S. Dollar average exchange rate at $1.49 in Q2 2008 vs. $1.31 in 2007 Gross profit - Dilutive impact of lead pass-throughs 50 bps SG&A - Lower as a percentage of sales Equity Income - Improvements in North America and Asia automotive joint vent
Slide 14: Financial highlights
Second quarter 2008 Financial highlights Financing charges-net - Benefits of de-leveraging and lower short-term interest rates Income tax provision - 2007 amount includes $37 million in non-recurring tax benefits and $5 million in base effective rate adjustments Minority interests - Higher profitabi
Slide 15: 2008 outlook
2008 outlook Third quarter Diluted earnings per share of $0.74 to $0.76 Increase of 12 - 15% versus Q3 2007 Q1 Q2 Q3 (est.) Q4 (est.) 0.39 0.3 12-15% 12-15% 2008 earnings increases by quarter 39% 30% 12 - 15% Full-year $2.45-$2.50 +18% Continued global growth and margin expansion in Building Efficie