Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q3 2023 Earnings Presentation

29 slides from Johnson Controls International's earnings presentation, Aug 2, 2023

1. Slide 1: Fiscal Q3 2023 Earnings Conference Call

   FISCAL Q3 2023 Earnings Conference Call August 2, 2023

2. Slide 2: Forward-Looking and Cautionary Statements/Non-GAAP Financial Information

   FORWARD-LOOKING AND CAUTIONARY STATEMENTS/NON-GAAP FINANCIAL INFORMATION Johnson Controls International plc cautionary statement regarding forward-looking statements Johnson Controls International plc has made statements in this communication that are forward-looking and therefore are subject to ris

3. Slide 3: Fiscal Q3 Highlights and Summary

   Fiscal Q3 Highlights and Summary Strong Sales, Orders, and Backlog Fiscal Q3 Financial Overview +9% Organic Sales Growth*  Solid Q3 financial results led by strong margin expansion $7.1B and double-digit adjusted EPS growth $6.6B Sales  Continued Service momentum led by 12% organic sales* and Q3 F

4. Slide 4: Vectors of Growth

   Vectors of Growth Leading the Evolution of Smart, Healthy, and Sustainable Buildings SERVICE DECARBONIZATION $160B opportunity1 $240B opportunity3 Q3’23 Q3’23 Service Orders: ~$1.7B, +12% TTM Orders2: ~$1.1B, +20% Organic Revenue*: ~$1.7B, +12% Heat Pump Revenue: ~$970M, +MSD Total Q3 revenue from c

5. Slide 5: FM:Systems Acquisition: Accelerating Leadership in Smart Buildings

   FM:Systems Acquisition Accelerating Leadership in Smart Buildings FM:Systems, a leading Digital Workplace Employee & Visitor Experience Management Systems and IoT solutions provider Desk / Room Scheduling / Hoteling   Strengthens current OpenBlue offering, providing a one- Visitor Experience  sto

6. Slide 6: Accelerating Our Strategy

   Value Creation Framework Accelerating Our Strategy Positioned to Enhanced Products, Services, and Driving margin capture secular Solutions through expansion and Disciplined trends across the adoption of executing on our capital allocation sustainable and OpenBlue productivity plan healthy buildings

7. Slide 7: Delivering on our Commitments

   Fiscal Q3 Results Delivering on our Commitments Total JCI Sales ($ in Millions) $595 $24 +9%  FX headwind (2%) Organic Sales ($100) $7,133 Growth* $6,614 Sales Sales Q3 FY22 Growth M&A FX Q3 FY23 Total JCI Adj. Segment EBITA/Margin* ($ in Millions)  Positive price/cost: ~$140M 16.4% +130bps Adj. E

8. Slide 8: Delivering on our Commitments: Adjusted EPS Bridge

   Fiscal Q3 Results Delivering on our Commitments Adjusted EPS Bridge* (Continuing Operations) +21% Operations YoY Growth $0.12 NFC ($0.04) FX ($0.02) NCI ($0.01) Shares $0.01 Corp $0.01 8 *Adjusted EPS from continuing operations, excluding special items, is a non-GAAP measure. See footnotes for recon

9. Slide 9: Global Products Performance

   Fiscal Q3 Results Global Products Performance Global Products Sales +6% ($ in Millions) $162 $5 $51  Price +8% / Volume (2%) Organic Sales Growth*  Commercial HVAC1 +mid-teens $2,687  Residential HVAC (LSD); NA Residential (mid-teens) $2,571  Fire and Security +LSD  Industrial Refrigeration +>2

10. Slide 10: Resilient Growth, Strong Price Realization

    Fiscal Q3 Results Resilient Growth, Strong Price Realization % of Organic Sales Growth* % FY22 North America EMEALA Asia Pac Global Products Consolidated JCI Sales Applied1 33% +low-teens +HSD +20% +low-teens2 +low-teens Light Commercial3 9% +>20% +>20% Commercial HVAC 42% +mid-teens +mid-teens NA R

11. Slide 11: Building Solutions Performance

    Fiscal Q3 Results Building Solutions Performance Building Solutions Orders - Organic % Growth Building Solutions Backlog ($ in Billions) Service Install +8% +8% YoY Organic Growth $11.1 $11.1 $11.3 $11.7 $12.0 YoY Organic Growth 11% $2.3 $2.4 9% $2.1 $2.0 $2.3 8% 8% 5% Service +12% Service +8% $9.0

12. Slide 12: Building Solutions Performance by Segment

    Fiscal Q3 Results Building Solutions Performance by Segment Adj. Segment Orders Orders / Backlog Sales Sales Adj. Segment EBITA/Margin* Organic % Growth Comments Organic % YoY* Comments EBITA Comments Change YoY +5%  Orders +10%  Service +9% +370bps 15% ̵ Service +8% $2.7B  Install +11% 14.4% $2.

13. Slide 13: Disciplined Capital Allocation

    Balance Sheet and Free Cash Flow Disciplined Capital Allocation Capital Structure ($ millions) Q3 FY22 Q2 FY23 Q3 FY23 Short-term debt and current portion $2,298 $2,659 $1,267 Debt and liquidity Net Debt / EBITDA* of long-term debt  94.5% fixed rate debt Long-term debt $7,194 $7,832 $8,497  3.12%

14. Slide 14: Introducing Q4 and Updating Full Year Guidance

    Outlook Summary Introducing Q4 and Updating Full Year Guidance Q4 / FY 2023 Commentary Q4 FY23 FY23  Applied demand remains strong and Service Organic revenue* ~+4% ~+HSD continues to gain momentum (previous ~10%)  Residential weaker and destocking expected in Adj. Segment ~+60bps ~+110bps indirec

15. Slide 15: Appendix

    City graphic Appendix

16. Slide 16: Additional FY 2023 Guidance Items

    Fiscal Q3 2023 Additional FY 2023 Guidance Items FY23 Adjusted corporate expense* ~$350M Amortization expense ~$450M NFC ~$290M Tax rate ~13.5% NCI ~$200M Shares ~687M 16 *Non-GAAP measure. Non-GAAP excludes special items.

17. Slide 17: Consolidated Financial Results (Continuing Operations)

    Fiscal Q3 2023 Consolidated Financial Results (Continuing Operations) ($ in Millions, except earnings per share) Q3 FY22 Q3 FY23 Q3 FY22* Q3 FY23* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,614 $7,133 $6,614 $7,133 8% Gross profit $2,200 $2,431 $2,220 $2,430 9% (% of sales) 33.3% 34.1% 3

18. Slide 18: Special Items (Continuing Operations)

    Fiscal Q3 2023 Special Items (Continuing Operations) ($ in Millions, except EPS) Pre-tax income Tax (Expense) NCI (Expense) After-tax/NCI Q3 FY23 EPS impact (Expense) benefit income income (Expense) Mark-to-market adjustments $17 $(4) - $13 $0.01 Restructuring and impairment costs $(81) $11 - $(70)

19. Slide 19: IR Contacts

    IR Contacts Jim Lucas Vice President, Investor Relations jim.lucas@jci.com Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com www.johnsoncontrols.com © 2023 Johnson Controls. All rights reserved.

20. Slide 20: Condensed Consolidated Statements of Income, Three Months Ended June 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended June 30, 2023 2022 Net sales $ 7,133 $ 6,614 Cost of sales 4,702 4,414 Gross profit 2,431 2,200 Selling, general and administrative expenses (1,555) (1,58

21. Slide 21: Condensed Consolidated Statements of Income, Nine Months Ended June 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Nine Months Ended June 30, 2023 2022 Net sales $ 19,887 $ 18,574 Cost of sales 13,124 12,526 Gross profit 6,763 6,048 Selling, general and administrative expenses (4,705) (4

22. Slide 22: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) June 30, September 30, 2023 2022 ASSETS Cash and cash equivalents $ 1,057 $ 2,031 Accounts receivable - net 6,540 5,727 Inventories 3,092 2,665 Other current assets 1,317 1,262 Current

23. Slide 23: Condensed Consolidated Statements of Cash Flows, Three Months Ended June 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended June 30, 2023 2022 Operating Activities Net income attributable to JCI $ 1,049 $ 379 Income attributable to noncontrolling interests 73 64 Net income 1,122 443 Adjustments t

24. Slide 24: Condensed Consolidated Statements of Cash Flows, Nine Months Ended June 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Nine Months Ended June 30, 2023 2022 Operating Activities Net income attributable to JCI $ 1,300 $ 771 Income attributable to noncontrolling interests 152 143 Net income 1,452 914 Adjustments

25. Slide 25: Footnotes: Financial Summary

    FOOTNOTES 1. Financial Summary The Company evaluates the performance of its business units primarily on segment earnings before interest, taxes and amortization (EBITA), which represents income before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset a

26. Slide 26: Footnotes: Segment EBITA Reconciliation

    A reconciliation of segment EBITA to net income is shown earlier within this footnote. For the three months ended June 30, 2023 and 2022, there were no items excluded from the calculation of adjusted segment EBITA. The following is the nine months ended June 30, 2023 and 2022 reconciliation of segme

27. Slide 27: Footnotes: EPS Share Reconciliation and Organic Growth

    The following table reconciles the denominators used to calculate basic and diluted earnings per share for JCI plc (in millions; unaudited): Three Months Ended Nine Months Ended June 30, June 30, 2023 2022 2023 2022 Weighted average shares outstanding for JCI plc Basic weighted average shares outsta

28. Slide 28: Footnotes: Install Revenue and Free Cash Flow Reconciliation

    The components of the change in total install revenue for the three months ended June 30, 2023 versus the three months ended June 30, 2022, including organic growth, are shown below (unaudited): Install Revenue Adjusted Base Install Install Revenue for the Revenue for the for the Three Months Ended

29. Slide 29: Footnotes: Debt Ratios

    5. Debt Ratios The Company's earnings presentation provides financial information regarding net debt to adjusted EBITDA, which is a non-GAAP performance measure. We also present below net debt to income before income taxes. The Company believes these ratios are useful to understanding the Company's

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