105 slides from Johnson Controls International's investor day presentation, Oct 12, 2011
Slide 1: Strategic review and 2012 outlook
October 12, 2011 Strategic review and 2012 outlook Exhibit 99.2
Slide 2: Three world-class growth businesses
Johnson Controls Three world-class growth businesses Track record for sustainable, profitable growth Long-term focus driven by core values Global market leadership positions in Building Efficiency, Automotive Experience, Power Solutions Expanding offerings, geographic footprint, vertical integration
Slide 3: Factors driving sustainable, profitable growth
Johnson Controls Factors driving sustainable, profitable growth Global diversification Global opportunities Aligned with global mega-trends Energy/fuel efficiency Sustainability Emerging markets Innovation Ability to invest
Slide 4: Reflections on 2011: highlights of a record year
Reflections on 2011 Highlights of a record year Record sales and earnings Market share gains All three businesses improved faster than the broader global markets Strengthened emerging market position Investments Capital investments - organic $1.4 billion in capital expenditures Metals acquisitions -
Slide 5: Reflections on 2011: highlights by business
Reflections on 2011 Highlights of a record year Building Efficiency Double-digit top-line growth in slow growth market Record backlogs Strong emerging market growth Automotive Experience Secured $2.3 billion in new business Progress on improving European containment costs Power Solutions Accelerated
Slide 6: FY 2011 forecast results
FY 2011 forecast results Record sales and earnings Consolidated net sales 2010 2011 $35B $40.7B +14% Earnings per share* 2010 2011 $1.99 $2.43 +22% *Excluding non-recurring and acquisition-related items *Excluding non-recurring and acquisition-related items Automotive Experience Power Solutions 2011
Slide 7: Continuing our long track record of profitable growth
Johnson Controls Continuing our long track record of profitable growth Revenue $ billions Net Income* $ millions (CHART) (CHART) Excludes one-time and restructuring charges
Slide 8: Entering FY 2012: mixed macro environment
Recent uncertainty regarding pace of global recovery Associated with low consumer confidence Modest growth estimates for developed markets balanced by strong growth in BRIC countries Auto production outlook in North American and European auto markets still positive Flattish improvements in North Ame
Slide 9: Sustainable, profitable growth: investing for organic growth
Sustainable, profitable growth Investing for organic growth and margin expansion Generating new platforms for growth while improving profitability Increasing battery manufacturing capacity and advanced battery capabilities Capacity and footprint expansion in emerging markets Supporting increased lev
Slide 10: Building Efficiency: what to listen for
Building Efficiency What to listen for in today's presentation What to listen for in today's presentation What to listen for in today's presentation Focus around four growth platforms ... .... to drive above-market growth and extend our global leadership position Positioned to deliver sustainable, d
Slide 11: Automotive Experience: what to listen for
Building on our core strengths ... Global reach Vertical integration Cost leadership Emerging market footprint Component excellence Technology ....while continuing to de-risk the business Further margin expansion associated with vertical integration investments Automotive Experience What to listen f
Slide 12: Power Solutions: what to listen for
Power Solutions What to listen for in today's presentation Aggressive investments targeted around three growth platforms... .... leveraging our competitive advantages Seizing an expanding set of market opportunities
Slide 13: 2012 Outlook
....based on key assumptions you will hear in detail today $2.85 - $3.00 Approx. +20% Consolidated net sales Earnings per share Approx. $44B +9% 2012 Outlook
Slide 14: Our long-term growth objectives are unchanged
Sustainable, profitable growth Our long-term growth objectives are unchanged Organic growth greater than twice the rate of our underlying industry / market growth Continued margin expansion Minimum annual net earnings growth of 10-15% 15% after-tax ROIC Disciplined, sustained investment Continuing t
Slide 15: Today's agenda
Business unit presentations Dave Myers President, Building Efficiency Beda Bolzenius President, Automotive Experience - Break - Alex Molinaroli President, Power Solutions Financial outlook Bruce McDonald Executive Vice President and Chief Financial Officer Questions and Answers 12:30 - 1:30 lunch To
Slide 16: Closing comments
Closing comments sotnson Controls
Slide 17: Continuing our long track record of profitable growth
Johnson Controls Continuing our long track record of profitable growth Revenue $ billions Net Income* $ millions (CHART) (CHART) Excludes one-time and restructuring charges
Slide 18: Sustainable, profitable growth
Johnson Controls, Inc. Sustainable, profitable growth Committed to providing best-in- class total returns to shareholders Sustainable organic sales and earnings growth ROIC improvement Margin expansion Growth investments Increasing dividends Market recovery Growth strategies Value-creating investmen
Slide 19: Building Efficiency
Building Efficiency Dave Myers Vice President & President, Building Efficiency
Slide 20: Building Efficiency Profile
Johnson Controls Building Efficiency Profile Johnson Controls makes buildings in 125 countries more comfortable, productive, and safe. Our offerings are necessary to provide a comfortable indoor environment at the lowest operating cost. Working with Johnson Controls delivers a payback: reduced energ
Slide 21: Who is Johnson Controls Building Efficiency?
Who is Johnson Controls Building Efficiency? Every Day... 60,000 employees are dedicated to energy efficiency and sustainability in more than 150 countries 20,000 GWS employees help manage 1.5 billion sq. ft. of real estate 15,000 employees meet with customers to help them achieve their goals 3,900
Slide 22: Global platform - branches and manufacturing locations
Building Efficiency Global platform - branches and manufacturing locations Branches: 258 Mfrg: 13 Branches: 28 Mfrg: 5 Branches: 226 Mfrg: 5 Branches: 21 Mfrg: 3 Branches: 161 Mfng: 5 Middle East $0.6B Asia $2.2B N.A. $7.4B Europe $4.2B Latin America $0.7B 2011 $15B We have over 650 branch offices t
Slide 23: Global platform - distributor locations
Building Efficiency Global platform - distributor locations Branches: 258 Mfrg: 13 Distributors: 744 Branches: 28 Mfrg: 5 Distributors: 499 Branches: 226 Mfrg: 5 Distributors: 1,310 Branches: 21 Mfrg: 3 Distributors: 79 Branches: 161 Mfng: 5 Distributors: 1,001 Middle East $0.6B Asia $2.2B N.A. $7.4
Slide 24: Global platform - customer sites
Building Efficiency Global platform - customer sites Branches: 258 Mfrg: 13 Distributors: 744 Branches: 28 Mfrg: 5 Distributors: 499 Branches: 226 Mfrg: 5 Distributors: 1,310 Branches: 21 Mfrg: 3 Distributors: 79 Branches: 161 Mfng: 5 Distributors: 1,001 Middle East $0.6B Asia $2.2B N.A. $7.4B Europ
Slide 25: Emerging markets - commercial building stock growth
Market overview Emerging markets - opportunity from commercial building stock growth There is ~400 billion sq. ft. of commercial building space globally. Over the next 10 years, over 110 billion additional square feet will be built, 80%+ in emerging markets. in emerging markets. in emerging markets.
Slide 26: Market overview: energy legislation
Market overview Energy legislation United States American Jobs Act Repair or modernize 35,000 schools "Better Buildings Challenge" Reduce commercial building energy use by 20% over the next decade Executive Order 13514 Starting in 2020, all new Federal buildings must be able to achieve net-zero ener
Slide 27: Market overview: North America
Market overview North America Market Non-residential forecast continues to deteriorate due to weaker than expected spending across most sectors Office and Commercial are down significantly with slow recovery Institutional and Industrial show declines, but lead the improvement Market North America: f
Slide 28: Market overview: Asia
Market overview Asia Market Construction in Japan and Southeast Asia driven by Japan and New Zealand reconstruction from earthquakes India growth steady in short-term with acceleration in 3-5 years China has been weaker in most sectors as global demand slowed and concern over inflation Asia has not
Slide 29: Market overview: rest of the world
Market overview Rest of the world Market Western Europe had already been forecasted to have flat growth based on underlying economic weakness Russia is up based on sustained oil prices fueling spending for Eastern Europe Market Sustained oil prices continue to support growth in Saudi Arabia and UAE
Slide 30: Integrated building solutions and connectivity
Market overview Integrated Building Solutions and Connectivity Building integration and connectivity: Contracting chain is changing More design/build projects Service moving from event driven to ongoing and energy-focused Remote services evolving Evolution of our customer base: CIOs and CFOs are bec
Slide 31: What Building Efficiency does: value to our customers
What Building Efficiency does Value to our customers
Slide 32: What customers are asking for
Value to our customers What they are asking for We interviewed hundreds of customers around the globe. They told us they are asking for: Partnership Innovation Human achievement We will win more often and more profitably by delivering on those critical needs. Our major strategies flow from these spe
Slide 33: Value to our customers: Partnership
Value to our customers Partnership Sales force 4,000 sales people globally 3,600 distribution partners Service force 15,000+ systems & service technicians to locally serve our customers 20,000 GWS employees serving customers directly in their facilities We continue to invest in the quantity and qual
Slide 34: Value to our customers: Innovation
Value to our customers Innovation Our customers primary focus is to be efficient at what they do They have told us that their most critical needs are: Energy Operations Assets Comfort and safety We are investing in the key technologies to help them solve their problems Energy Management Most Efficie
Slide 35: Innovation: EnergyConnect and Central Plant Optimization
Value to our customers Innovation EnergyConnect - new acquisition Ready-made grid demand response technology Real-time energy information and access to energy markets Central Plant Optimization(tm) Helps reduce energy consumption in central water plants Up to 60 percent energy savings Next Generatio
Slide 36: Value to our customers: Human achievement
Value to our customers Human achievement We are able to help our customers achieve more by knowing how they use their buildings to achieve their goals On October 4th we launched a new system platform that will redefine how buildings are used to help customers' organizations perform better
Slide 37: Panoptix platform: technology trends
The Panoptix(tm) platform Technology trends By combining new IT technologies with our proven expertise in building systems, we will leverage market trends to deliver improved building performance and business outcomes to our customers Trends Opportunity Smart Grids Smart Buildings Smart Devices New
Slide 38: Panoptix platform launch
The Panoptix(tm) platform Launched Oct. 4th: Data management platform, applications, services, community Mission critical control algorithms to run the building and Open Integration Platform (OIF) for connectivity and data management Control logic and algorithms to run the equipment Smart Equipment
Slide 39: Building Automation System vs Panoptix
The Panoptix(tm) platform Building Automation System vs Panoptix(tm) Building C Metasys Adapter 3rd Party BAS Adapter Generic Data Adapter
Slide 40: How are buildings managed?
The Panoptix(tm) platform How are buildings managed? Single building Temperature Security Energy Management Multiple computer stations for different systems Complex, non-intuitive screens One view to see all systems Anytime, Anywhere, Interface Panoptix provides the platform to make high performance
Slide 41: How is energy managed?
The Panoptix(tm) platform How is energy managed? Utility bills - 30-90 days after the fact Real time benchmarks to show building performance JCI service team to assist with the fix Prioritized fixes based on continuous diagnostics Closed-loop verification to show that the suggested fix actually brou
Slide 42: A new approach that makes it easier than ever
The Panoptix(tm) platform A new approach that makes it easier than ever Panoptix(tm) Connected Community Building Efficiency Apps (Open platform, extensible system) Live Guide(tm) Support Building & Energy Services
Slide 43: Panoptix applications
Panoptix(tm) applications Optimized energy usage, healthier environments , sustainability solutions Insight to reduce energy usage and carbon footprint Measure savings of energy efficiency projects, identify key usage drivers and unanticipated changes Carbon and Energy Reporter Measurement and Verif
Slide 44: Growth path: how does JCI win?
Growth path How does JCI win? Market Improving share despite slow recovery in North America & Europe Leading market position in emerging markets for short- term and long term growth Expanding energy retrofit capabilities ahead of competitors Growth of relationships 33,000 points of customer contact
Slide 45: Revenue growth path outlook
Revenue growth path Outlook Energy Solutions Global Workplace Solutions Emerging Markets Systems Service Residential 15% Growth 9% - 11% Growth for FY12E 10% - 15% Growth Through 2016E Continued growth in energy retrofit and renewables projects Significant new contract wins convert to revenue expans
Slide 46: Expand margin and leverage scale: major investments
Expand margin and leverage scale Major investments to drive margin expansion Products and engineering Panoptix and smart equipment platforms Next generation HVAC equipment System selection tools Business systems Technical service delivery Space and facilities management platform Global ERP We are in
Slide 47: Expand margin and leverage scale: key initiatives
Expand margin and leverage scale Key initiatives Short-term 2012-2013 Pricing and margin expansion Service pricing Energy solutions value Long-term 2013 and beyond Evolution of business models Selling software as service Technology-enabled service Standardization of tools Extended initiatives: 2012
Slide 48: Summary - Strategic objectives
Summary - Strategic objectives Strategies for profitable growth Strategic summary We are positioned for 10-15% annual growth through 2016 We are investing in the people and technology that differentiate us and drive growth We are focused on several initiatives to drive margin expansion drive margin
Slide 49: Automotive Experience
Automotive Experience Dr. Beda Bolzenius Vice President & President, Automotive Experience
Slide 50: Automotive Experience: profitable growth
Automotive Experience Profitable growth Profitable growth through product & process excellence, by transforming into a technology company and by leveraging our global capabilities Key levers for profitable growth Systematically elevate our operational performance Drive vertical integration and lever
Slide 51: Automotive Experience competitive advantage
Automotive Experience Competitive advantage Leading global provider of systems and components for seats, overhead systems, doors, cockpits and electronics Global presence Total interior capability Components Strong market position through acquisition strategy recognized in industry Enhanced vertical
Slide 52: Worldwide OEM supplier ranking
Automotive Experience No. 7 in worldwide OEM supplier ranking - No 1. in automotive interiors domain LG Chem. Hyundai Mobis Continental Faurecia Aisin Seiki JCI AE Magna ZF Denso Robert Bosch Top 10 Global OEM Suppliers Ranked on 2010 global OEM sales Ranking 1 2 3 4 5 6 7 (6)* 8 9 10 Leadership pos
Slide 53: Incremental sales backlog 2012-2014
Automotive Experience Incremental sales backlog 2012-2014 $4.2B of incremental sales backlog Further strengthened diversified customer portfolio Increased vertical integration content Profits align with quoting discipline Interiors backlog gains due to global Mercedes interiors business award Increm
Slide 54: Top new wins for 2012-2014
Automotive Experience Top new wins for the 2012 - 2014 period Mini Paceman Seating W. Europe Mercedes Benz C-Class Interior Worldwide PSA DS4/ DS5 Seating China Volkswagen Multiple Programs Front/ Rear Structure Europe Fiat Interior & Seating E. Europe BMW Multiple Programs Electronics Europe & N. A
Slide 55: Market development: global light vehicle production
Automotive Experience Market Development Global Light Vehicle Production (in CY) JCI Estimates, September 2011 74729356.0000085 80900000.0000092 97967118.0000111 +8% CAGR 5.6% 2016F 98.0 2012F 80.9 2011F 74.7 Regional Light Vehicle Production (in CY) JCI Estimates, September 2011 15252499.0000017 16
Slide 56: Market drivers and our response
Automotive Experience Market drivers and our response End-consumer Growing demand for smaller vehicles Rising environmental awareness Increased quality and safety expectations Connectivity OEM Strategy Upgrade of interiors Differentiate through innovation Ongoing trend toward component sourcing Sust
Slide 57: Levers for growth and margin improvements
Automotive Experience Levers for growth & margin improvements We're well positioned to respond to the market drivers Levers for growth & margin improvement Operational excellence Vertical integration Technology and advanced development Emerging markets, focus on China Development of automotive compo
Slide 58: Operational excellence drives margin improvements
Automotive Experience Operational excellence drives margin improvements Reinforce our processes and tools to foster our leading position, ... Foster world-class quality organization Overall 300 resources added globally, including 60 Six Sigma Black Belts Improve launch performance Significant improv
Slide 59: Vertical integration
Automotive Experience Vertical integration Build a world-class component capability to differentiate through technology Response to OEM sourcing patterns Component excellence as enabler for complete seating growth Identify new profit pools Technology in components is a differentiator Synergy Seat Ne
Slide 60: Technology and advanced development
Automotive Experience Technology and advanced development While competing in a more technically driven business environment, Technology and Advanced Development helps to... Create a unique selling proposition Improve our profit margin Balance customer tailored products with standardization Identify
Slide 61: Technology and advanced development: new products and processes
Automotive Experience Technology and advanced development Science-based approach delivers new products and processes Technology domains Metals forming and joining New adhesive technology for dissimilar materials Structural composites Fiber-reinforced composites for light-weight solutions Foam Hot cu
Slide 62: Enhanced technology portfolio through acquisitions
Automotive Experience Enhanced technology portfolio through acquisitions Textiles and integrated trim Michel Thierry Slush skins Benoac Fertigteile Metal seat components, structures and mechanisms, special seats Keiper / RECARO* Leather wrapping of interior parts Seton Group Seat structures, tracks
Slide 63: Technology - margin driver in component business
Automotive Experience Technology - margin driver in component business 3 Technology: margin driver in component business ($1B backlog) Synergies from... Building world-class component capability through vertical integration Enhancing our technology portfolio through acquisitions Supporting our effor
Slide 64: Emerging markets - focus on BRICs
Automotive Experience Emerging Markets - Focus on BRICs Sales in BRICs are steadily increasing JCI sales share of BRICs 3% 12% 82% 3% AE Sales in B USD, @ 100% incl. unconsolidated sales 2011 India Brazil China Russia 2016 4% 7% 5% 84% China India Russia Brazil Solid position >30% market share in se
Slide 65: Growth in China
Automotive Experience Growth in China We have put our largest focus on China to position ourselves to participate in attractive growth opportunities 2011 China revenues: $4.0 B (mostly uncons.) Market leader in seating (>44%) # 2 in interiors and niche player in electronics Diversified customer base
Slide 66: AE China manufacturing footprint
Automotive Experience Growth in China 4 AE China Manufacturing Footprint Status August 2011 More than 50 plants and 28 JVs 45 major launches in 2012 >20,000 employees (2010: 18,000) Balanced presence with global customers and Chinese customers Existing site* New plant * Some cities have multiple pla
Slide 67: Automotive Experience summary
Automotive Experience Summary We will accelerate our growth and improve our margins Profitability Short-term: Ensure operational excellence Long-Term: Strive for technology leadership Growth Short-term: $4.2B Backlog Long-Term: Drive vertical integration Expand position in emerging markets Increase
Slide 68: Power Solutions
Power Solutions Alex Molinaroli Vice President & President, Power Solutions
Slide 69: Power Solutions Profile
Power Solutions Profile The world's largest provider of battery power solutions for the vehicle original equipment and aftermarket World-class customer base in the automotive aftermarket Original equipment (OE) batteries for the top automakers worldwide Leader in advanced battery technologies AGM ba
Slide 70: Mission and competitive advantages
Power Solutions Mission & competitive advantages Mission Be the global leader providing battery power solutions for the vehicle original equipment and aftermarket and a leading global provider of advanced energy storage systems
Slide 71: About our customers
About Our Customers OEMs & aftermarket Long-term relationships with strategic customers Original Equipment manufacturers (OEs) Branded distribution channels Key private label partners Strong mix 20% OE 80% Aftermarket Differentiated relationships and services Warranty support, category management, c
Slide 72: Market dynamics
Market Dynamics A few key trend lines from 1990 through 2011... ....accelerating change and opportunity in vehicle energy storage
Slide 73: Vehicle energy storage market evolution
Vehicle Energy Storage Market Evolution Power Solutions perspective 2015 2020 2025 35-45 45-55 60-? Target MPG for New Vehicles Predominant Vehicle Configuration Enabling Energy Storage Technology Internal Combustion Engine High Efficiency ICE w/Start-Stop HEV PHEV EV 1990 Advanced Lead Acid Lead-Ac
Slide 74: Competitive landscape
Competitive Landscape Leadership requirement for advanced battery 2 Automotive Expertise Ability to Manufacture Performing Technology @ Scale Adjacent Market Players (i.e. industrial & stationary) 3 Regional SLI Battery Providers Technology Players (alternate chemistries) 4 High High Energy Storage
Slide 75: Our growth roadmap
Power Solutions Our growth roadmap Aggressive investments across three diversified growth platforms... .... leveraging our competitive advantages Delivering shareholder value over the long term
Slide 76: Core business
Core Business A growth business ...for decades Batteries for Starting, Lighting and Ignition (SLI) Design Engineering Manufacturing Distribution Collection Recycling Unprecedented scale
Slide 77: Vertical integration opportunity
Vertical Integration Opportunity Increasing internal capacity from 15% to 50% of requirements for North America Garcia, Mexico facility Start of Production in 2011 Florence, SC in 2012 Invest in other markets as core collection systems develop Ensure access and minimize price volatility for lead ...
Slide 78: Emerging markets growth strategy focus
Emerging Markets Growth strategy focus EMEA Asia South America Become the market leader in China Leverage current leadership position to grow as market develops Expand network to support Eastern Europe market leadership
Slide 79: China: recent developments in Shanghai
China Recent developments in Shanghai September - Suspended production in Shanghai plant after achieving annual quota on lead usage We are working with our customers and employees to maintain product availability Temporarily importing batteries from other regions Accelerating Changxing facility ramp
Slide 80: Building our China network
Fuling County, Chongqing Municipality Western China Region 133,000 square meters Engineering design complete Key permits obtained Foundation under construction Building Our China Network $1 Billion invested by 2016 Changxing Facility -- Production Launching Now Future Capacity Committed to expansion
Slide 81: Battery technology growth strategy
Battery Technology Growth strategy Long-Term Global Market Leader Early Market Leader in Rapidly Expanding Segment First Mover in Nascent Market Maintain & grow leadership position Investments in core business Continue innovations in product design and manufacturing process Focus on cost and quality
Slide 82: Shifting battery requirements
Shifting Battery Requirements OE forecasted programs Our pipeline with OE Customers indicates strong emphasis on AGM (CHART) Europe (CHART) North America Advanced Lead-Acid Standard SLI
Slide 83: Investment in AGM capacity
Seizing the Opportunity Johnson Controls investment in AGM AGM Global Capacity Plan Represents annual production level given timing of expansions Leverages unique IP and best practice manufacturing approaches Includes 2.4M in China ....80% of planned capacity committed Million Units Investing over $
Slide 84: Advancing technology for the future
Advancing Technology for the Future Unlocking the full potential of Start-Stop Maximize Start-Stop system potential with AGM technology Operating temperature range, improve charge acceptance, process improvement and new manufacturing equipment Number, size and placement of batteries New chemistries
Slide 85: Acquisition of Johnson Controls-Saft joint venture
Seizing the Opportunity Acquisition of Johnson Controls-Saft joint venture $145 million purchase price JCI gains perpetual license to use key Saft Li-Ion technologies JCI retains government grants Provides flexibility to broaden R&D, partnerships, and market participation within and beyond automotiv
Slide 86: A snapshot of Li-Ion commercial wins
Seizing the Opportunity A snapshot of Li-Ion commercial wins Azure E450 Balance PHEV 4 Year Program Target SOP - March, 2012 2,000 systems per year Azure F550 Super Duty PHEV 5 Year Program Target SOP - March, 2013 1,400 systems per year Range Rover L405 Hybrid Electric 5 Year Program Start of Opera
Slide 87: Power Forward: Power Solutions summary
Power Forward Power Solutions Accelerating market dynamics - expanding opportunity Emerging market expansion, tightening environmental standards, technology evolution Power Solutions positioned for leadership - today and tomorrow Unique competitive advantages: quality, cost, scale & footprint Track
Slide 88: Financial outlook
Financial outlook R. Bruce McDonald Executive Vice President and Chief Financial Officer
Slide 89: Q4 2011 expectations
Q4 2011 Expectations Sales: $10.7B Earnings: $0.75 / diluted share* * Excluding non-recurring items
Slide 90: Fiscal 2012 key assumptions
Fiscal 2012 key assumptions Fiscal 2012 key assumptions * October 1, 2011 - September 30, 2012
Slide 91: Fiscal 2012 key assumptions
Fiscal 2012 key assumptions Euro $1.35 in 2012 (vs. $1.40 in 2011) Tax rate 19% in 2012 Improved profitability overseas Low 20% range in 2013 and 2014 Retirement plan - expense / funding ($0.05) / share headwind due to discount rate and market performance Discretionary funding of approximately $250
Slide 92: Fiscal 2012 outlook
Fiscal 2012 outlook Fiscal 2012 outlook * Excluding one-time items
Slide 93: Automotive Experience 2012 financial outlook
Automotive Experience 2012 financial outlook Sales up approximately 6% Modestly higher volumes in North America and Europe Growth in emerging markets Largely via unconsolidated joint ventures Higher y/y backlog launch level 2012: $1.4 billion vs. 2011: $1.1 billion Negative impact of Euro Up 9% at c
Slide 94: Automotive Experience mid-term outlook
Automotive Experience Mid-term outlook (through 2016) Sales growth: 2-3% over industry Backlog growth Continued growth in Asia Margin target: Increased to 7 - 8% (vs. 6 - 7%) Annual expansion of 50 - 70 bps Vertical integration New business quoting disciplines Increasing global production 7-8% Key m
Slide 95: Power Solutions 2012 financial outlook
Power Solutions 2012 Financial outlook Sales up 11% - 13%* Higher volumes across all regions Market share growth Full-year impact of the Changxing, China plant Short-term impact of Shanghai plant closure Increased production of AGM batteries Higher revenues per unit vs. traditional SLI Consolidation
Slide 96: Power Solutions mid-term outlook
Power Solutions Mid-term outlook (through 2016) Key margin drivers Sales growth: 10-12% Market share gains Growth in China and other emerging markets AGM technology Annual margin expansion: 100 bps (excluding lead) Improved product mix Manufacturing improvements Vertical integration (CHART) 16-17%
Slide 97: Building Efficiency 2012 financial outlook
Building Efficiency 2012 Financial outlook Sales up 9% - 11% Launch of record backlog, especially in the emerging markets and Energy Solutions Strong emerging market growth; slow growth in mature markets Moderate recovery in service GWS contract wins Margin: 5.6% - 5.8% (7.3% - 7.5% excluding GWS) O
Slide 98: Building Efficiency mid-term outlook
Building Efficiency Mid-term outlook *10% excluding GWS Sales growth: 10-15% Growth in Energy Solutions Expansion in emerging markets Market share gains Late-cycle market recovery Annual margin expansion: approx. 50 bps Continuous improvement and supply chain management Service pricing / solutions v
Slide 99: Organic investments: capital investment trend
Organic investments (CHART) $800 M $650 M $1.3 B $1.7 B Capital investment trend $1.4-1.6 B
Slide 100: Organic investments
Organic investments AGM (Start-Stop) $375 million - 4 years Lithium-ion Hybrid $300 million - 5 years Automotive Launches $400 million - 3 years Geographic Expansion $550 million - 5 years Vertical Integration $250 million - 3 years I.T. Capital Investments $550 million - 4 years
Slide 101: Capital allocation
Capital allocation Cash flow deployment Capital expenditures to increase organic growth Tuck-under acquisitions Discretionary pension funding Dividend payments Dividends Consecutive dividends paid since 1887 Intend to increase payout ratio to 30% over time November Board of Directors meeting
Slide 102: Strategic review and 2012 outlook
October 12, 2011 Strategic review and 2012 outlook
Slide 103: Continuing our long track record of profitable growth
Johnson Controls Continuing our long track record of profitable growth Revenue $ billions Net Income* $ millions (CHART) (CHART) Excludes one-time and restructuring charges
Slide 104: Sustainable, profitable growth
Johnson Controls, Inc. Sustainable, profitable growth Committed to providing best-in- class total returns to shareholders Sustainable organic sales and earnings growth ROIC improvement Margin expansion Growth investments Increasing dividends Market recovery Growth strategies Value-creating investmen
Slide 105: Strategic review and 2012 outlook
October 12, 2011 Strategic review and 2012 outlook