Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Q1 2021 Earnings Presentation
26 slides from Johnson Controls International's earnings presentation, Jan 29, 2021
Slide 1: First Quarter 2021 Earnings Conference Call
First Quarter 2021 Earnings Conference Call January 29, 2021
Slide 2: Forward Looking & Cautionary Statements / Non-GAAP Financial Information
Forward Looking & 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
Slide 3: Executing On Our Commitments
Executing On Our Commitments ▪ Strong start to the year; solid financial performance ▪ Remaining focused on: - Our Employees & Communities… - Our Customers & Suppliers… - Improving Fundamentals… - Executing Our Strategy… ▪ Key strategic announcements and external recognition ▪ Ambitious new ESG comm
Slide 4: Strategic Announcements & External Recognition
Strategic Announcements & External Recognition OpenBlue Digital Twin Collaboration with Microsoft OpenBlue Digital Twin + Azure Digital Twins creates a foundational platform that enables customers to reimagine their physical assets, harnessing the power of AI and cloud computing to build digital rep
Slide 5: Sustainability is Fundamental to Our Vision
Sustainability is Fundamental to Our Vision Achieve net zero carbon emissions before Double the representation of women Link executive compensation to 2040 leaders globally and minority leaders in the sustainability and diversity goals to drive United States within 5 years leadership accountability
Slide 6: A Clear Shift To Healthy Building Trends
A Clear Shift To Healthy Building Trends People: Occupant Health & Wellness ▪ Clean Air ▪ $10-15B new addressable market growing at ▪ Ergonomics ▪ Security ▪ Wellness double-digit CAGR Healthy People, Healthy Places, Healthy Planet ▪ Cleanliness & Reduced Infection Risk - JCI uniquely positioned Peo
Slide 7: Service Revenue Key Vector of Growth & Margin Expansion
Service Revenue Key Vector of Growth & Margin Expansion Advanced Customer vision Remote $6B+ engineering Comprehensive workshops audits diagnostics & integration SERVICE REVENUE Risk assessment Expert installation & Retrofit services Predictive maintenance commissioning Managed ~60% Expert consultin
Slide 8: We Are Investing In Products, Technology & Channels Driving Share Gains Globally
We Are Investing In Products, Technology & Channels Driving Share Gains Globally Q1 Launches • Low GWP refrigerants 1 Regulatory and • Future regulation ready ▪ >150 product launches in Environmental • Cost & performance optimized FY21 across domains YORK Water YORK Residential Hitachi Modular Coole
Slide 9: Q1 FY21 Financial Summary
Q1 FY21 Financial Summary* SALES EPS +8% $5.6B (5%) Organic $5.3B - Volume headwinds $0.43 + Increased profitability $0.40 + Sequential improvement in field and + Lower share count products + Service continues to improve Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Segment EBITA MARGIN FCF +80bps +10% Re
Slide 10: Order Momentum Continues & Backlog Visibility Improves
Order Momentum Continues & Backlog Visibility Improves Trailing 3-mo Field Orders (YoY % Chg) 15% ▪ Trailing 3-month Field Orders continue to 10% sequentially improve; down 3% YoY 5% 0% ▪ Service orders +2% -5% Total Field ▪ Install orders remain under pressure down 7%, with -10% Service higher retr
Slide 11: Q1 FY21 EPS Bridge (continuing operations)
Q1 FY21 EPS Bridge* (continuing operations) $0.03 $0.00 $0.43 $0.02 $0.40 ($0.01) Volume ($0.01) FX + Mix M&A Price/cost + Actions + Q1 FY20 OPERATIONS, NFC NCI SHARE OTHER Q1 FY21 ACTUAL NET OF COUNT ACTUAL MITIGATING ACTIONS ▪ Broad based volume declines related to COVID-19 ▪ Disciplined price / c
Slide 12: Q1 Segment Results
Q1 Segment Results* EBITA Sales Comments Organic % YoY Margin ($M) Change YoY ▪ Service (2%) / Install (9%) North America $2,034 12.5% ▪ Recurring revenue growth across all domains; retrofit continues to see improvement (6%) +50bps ▪ Strong gross margin expansion ▪ Orders (7%); Backlog $5.9B, +1% Yo
Slide 13: Q1 Segment End Market Performance
Q1 Segment End Market Performance* % of FY20 Consolidated Organic Sales % Change Sales North America EMEALA APAC Global Products JCI Applied1 31% (MSD) (LDD) FLAT (LSD)3 (MSD) Light Commercial 9% (LDD) (LDD) Commercial HVAC 40% (HSD) (MSD) NA Residential 4% +>45% +>45% ROW Residential 8% FLAT FLAT R
Slide 14: Corporate Expense
Corporate Expense* Corporate Expense $81M + Mitigating cost actions ▪ Expect FY21 Corporate expense to be $67M + Continuous structural cost reductions in the range of $300 to $320M Q1 FY20 Q1 FY21 *Non-GAAP excludes special items. See footnotes for reconciliation. 14 Johnson Controls, plc. — January
Slide 15: Balance Sheet & Free Cash Flow
Balance Sheet & Free Cash Flow* Capital Structure ($ millions) Q4 FY20 Q1 FY21 DEBT & LIQUIDITY Short-term debt and Net Debt / EBITDA* $293 $464 current portion of long-term debt ▪ 97% fixed rate debt Long-term debt 7,526 7,469 ▪ 2.9% weighted avg interest rate Total debt 7,819 7,933 ▪ $1.8B cash po
Slide 16: Fiscal 2021 Full Year and Q2 Guidance
Fiscal 2021 Full Year and Q2 Guidance* FY 2021 Commentary Guidance Q2FY21 FY21 ▪ Market remains uncertain; higher level of confidence in performance despite the Organic Revenue Up slightly +L/MSD environment ▪ Continued share gains EBITA Margin +80 to +100bps +40 to +60bps ▪ Tax rate 13.5% ▪ Free ca
Slide 17: Appendix
Appendix • IR CONTACTS • Antonella Franzen • Chief Investor Relations & Communications Officer • antonella.franzen@jci.com • Ryan Edelman • Executive Director, Investor Relations • ryan.edelman@jci.com
Slide 18: FY21 First Quarter Financial Results (continuing operations)
FY21 First Quarter Financial Results (continuing operations) ($ in millions, except earnings per share) Q1 FY20 Q1 FY21 Q1 FY20* Q1 FY21* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,576 $5,341 $5,576 $5,341 (4%) Gross profit 1,803 1,728 1,803 1,728 (4%) % of sales 32.3% 32.4% 32.3% 32.4%
Slide 19: Special Items (continuing operations)
Special Items (continuing operations) $ In millions, except EPS After-tax/NCI Pre-tax Income Tax (Expense) NCI (Expense) Q1 FY21 (Expense) Benefit Income Income EPS Impact (Expense) Mark-to-market adjustments 21 (5) - 16 0.02 Total $21 $5 $- $16 $0.02 After-tax Pre-tax Income Tax (Expense) NCI (Expe
Slide 20: Condensed Consolidated Statements of Income
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended December 31, 2020 2019 Net sales $ 5,341 $ 5,576 Cost of sales 3,613 3,773 Gross profit 1,728 1,803 Selling, general and administrative expenses (1,294) (
Slide 21: Condensed Consolidated Statements of Financial Position
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) December 31, September 30, 2020 2020 ASSETS Cash and cash equivalents $ 1,839 $ 1,951 Accounts receivable - net 5,177 5,294 Inventories 1,913 1,773 Other current assets 1,105 1,035 Cur
Slide 22: Condensed Consolidated Statements of Cash Flows
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended December 31, 2020 2019 Operating Activities Net income attributable to JCI from continuing operations $ 327 $ 159 Income from continuing operations attributable to noncontro
Slide 23: 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 from continuing operations before income taxes and noncontrolling interests, excluding general corporate e
Slide 24: Footnotes: Adjusted Corporate Expenses and Special Items
(2) Adjusted Corporate expenses excludes special items because these costs are not considered to be directly related to the underlying operating performance of the Company's business. Adjusted Corporate expenses for the three months ended December 31, 2019 excludes $37 million of integration costs.
Slide 25: Organic Growth Reconciliation
3. Organic Growth Reconciliation The components of the changes in net sales for the three months ended December 31, 2020 versus the three months ended December 31, 2019, including organic growth, is shown below (unaudited): Adjusted Base Net Net Sales for the Three Sales for the Three Net Sales for
Slide 26: Trade Working Capital as a Percentage of Net Sales
6. Trade Working Capital as a Percentage of Net Sales The Company provides financial information regarding trade working capital as a percentage of net sales, which is a non-GAAP performance measure. Trade working capital is defined as current assets less current liabilities, excluding cash, short-t
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