Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q3 2021 Earnings Presentation

31 slides from Johnson Controls International's earnings presentation, Jul 30, 2021

  1. Slide 1: Fiscal Q3 2021 Earnings Conference Call

    Fiscal Q3 2021 Earnings Conference Call July 30, 2021

  2. 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

  3. Slide 3: Q3 Summary

    Q3 Summary  Strong Q3 results across the board - Offset significant headwind related to temporary actions in the prior year - Managing price/cost and supply constraints  End markets continue to improve; order growth accelerating driven by retrofit with new construction beginning to recover  Strat

  4. Slide 4: Strategic Announcements & External Recognition

    Strategic Announcements & External Recognition OpenBlue “Net Zero Buildings as a Service”  Impactful OpenBlue sustainability innovations and real-time performance dashboards & reporting that analyzes energy, water, materials and GHG emissions  Uniquely positioned to offer an “as a Service” model t

  5. Slide 5: Accelerating Services Through Digital Enablement

    Accelerating Services Through Digital Enablement $6B+ Q3 Revenue Double-digit SERVICE REVENUE Growth Growth +11% In each region ~55% RECURRING REVENUE Double-digit Order Growth Growth +13% In each region MSD ANNUAL GROWTH RATE Achieved FY21 Attach Rate guidance of +300 to +370bps YTD 2x MARGIN (to ~

  6. Slide 6: Net zero leadership made easy

    Addressing a $240B market1 Over the Next Decade Includes a full spectrum of sustainability offerings tailored to schools, campuses, data centers, healthcare facilities as well as commercial and industrial. We make net zero leadership easy with a proven path to hit decarbonization & renewable energy

  7. Slide 7: Leading our customers' achievement of decarbonization & sustainability goals

    …leading our customers achievement of decarbonization & sustainability goals Beijing Municipal Standard Chartered DEWA HQ (Al Shera’a) The Rose Theater City of La Crosse (Dubai Electricity & Water Authority) (Mt. Fuji, Japan) Administration Center Bank (La Crosse, WI) (Tongzhou District, Beijing, Ch

  8. Slide 8: Q3 FY21 Financial Summary

    Q3 FY21 Financial Summary* SALES EPS $6.3B  +15% Organic  +24% $0.83 + Strong growth across all segments + Increased profitability $5.3B + Global products organic revenue growth $0.67 + Lower share count above 20% + Service revenue up LDD Q3 FY20 Q3 FY21 Q3 FY20 Q3 FY21 Segment EBITA MARGIN FCF 15

  9. Slide 9: Order Momentum Continues & Backlog Visibility Improves

    Order Momentum Continues & Backlog Visibility Improves Trailing 3-mo Field Orders (YoY % Chg) 30%  Trailing 3-month Field Orders +18% YoY 20% - Service orders +13% 10% - Install orders accelerating, +23% YoY 0% Total Field Service -10% -20% -30% Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-

  10. Slide 10: Q3 FY21 EPS Bridge (Continuing Operations)

    Q3 FY21 EPS Bridge* (Continuing Operations) $0.83 $0.16 $0.03 $0.04 $0.67 ($0.03) ($0.04) Volume + Amort (0.02) Mix + FX 0.03 Price/cost Shares 0.03 FY20 actions Q3 FY20 OPERATIONS SG&A CORPORATE NCI OTHER Q3 FY21 ACTUAL (NET) ACTIONS ACTUAL  Strong and accelerating operational performance  Discip

  11. Slide 11: Q3 Segment Results

    Q3 Segment Results* EBITA Sales Comments Organic % YoY Margin ($M) Change YoY  Service +10% / Install +7%  Sequential improvement in HVAC & Controls and F&S; continued strong growth in North America $2,212 14.7% performance infrastructure driven by sustainability needs +8% (70bps)  Significant he

  12. Slide 12: Q3 Segment End Market Performance

    Q3 Segment End Market Performance* % of FY20 Consolidated Organic Sales % Change Sales North America EMEALA Asia PAC Global Products JCI Applied1 31% +MSD +HSD +mid-teens +>25%2 +LDD Light Commercial3 9% +high-teens +high-teens Commercial HVAC 40% +>20% +LDD NA Residential 4% +mid-teens +mid-teens R

  13. Slide 13: Corporate Expense & Other Items

    Corporate Expense* & Other Items Corporate Expense Full Year Guidance Items $70M - Reversal of temporary costs  Corporate expense $280 to $285M + Continuous structural cost reductions  Amortization expense ~$425M $48M  NFC ~$215  NCI $230 to $240M Q3 FY20 Q3 FY21 *Non-GAAP excludes special items

  14. Slide 14: Balance Sheet & Free Cash Flow

    Balance Sheet & Free Cash Flow* Capital Structure ($ millions) Q4 FY20 Q2 FY21 Q3 FY21 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $293 $444 $461  94% fixed rate debt current portion of long-term debt Long-term debt 7,526 7,323 7,318  2.8% weighted avg interest rate  $1.5B cash positi

  15. Slide 15: Fiscal 2021 Q4 & Raised Full Year Guidance

    Fiscal 2021 Q4 & Raised Full Year Guidance* FY 2021 Commentary Guidance1 Q4FY21 FY21  Underlying market is continuing to improve Organic Revenue +MSD +MSD  Continued share gains  Tax rate 13.5% Segment EBITA Margin ~+30bps +80 to +90bps  Free cash flow conversion ~105%  Disciplined capital allo

  16. Slide 16: 2021 Virtual Investor Day Save The Date

    2021 Virtual Investor Day Save The Date Wednesday, September 8, 2021 Further details to follow 16 Johnson Controls, plc. — July 30, 2021

  17. 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

  18. Slide 18: FY21 Third Quarter Financial Results (Continuing Operations)

    FY21 Third Quarter Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q3 FY20 Q3 FY21 Q3 FY20* Q3 FY21* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,343 $6,341 $5,343 $6,344 19% Gross profit 1,832 2,197 1,853 2,187 18% % of sales 34.3% 34.6% 34.7% 34.5% SG

  19. Slide 19: Special Items (Continuing Operations)

    Special Items (Continuing Operations) $ In millions, except EPS After-tax/NCI Pre-tax Income Tax (Expense) NCI (Expense) Q3 FY21 (Expense) Benefit Income Income EPS Impact (Expense) Mark-to-market adjustments $66 $(17) $- $49 $0.07 Restructuring & impairment costs (79) 15 - (64) (0.09) Acquisition r

  20. Slide 20: Reduced Cost Structure & Improved Productivity Creating Significant Margin Runway

    Reduced Cost Structure & Improved Productivity Creating Significant Margin Runway Cumulative Net Cost Reductions1 $550M 30bps SG&A COGS Base margin improvement $290M $60M Significant FY21 FY22 FY23 SG&A Cumulative One Time Restructuring & Initiatives = Margin $300M Implementation Costs Expansion SG&

  21. Slide 21: 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, 2021 2020 Net sales $ 6,341 $ 5,343 Cost of sales 4,144 3,511 Gross profit 2,197 1,832 Selling, general and administrative expenses (1,367) (1,33

  22. Slide 22: 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, 2021 2020 Net sales $ 17,276 $ 16,363 Cost of sales 11,408 10,927 Gross profit 5,868 5,436 Selling, general and administrative expenses (3,914) (4

  23. Slide 23: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) June 30, September 30, 2021 2020 ASSETS Cash and cash equivalents $ 1,450 $ 1,951 Accounts receivable - net 5,668 5,294 Inventories 2,064 1,773 Other current assets 1,128 1,035 Current

  24. Slide 24: 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, 2021 2020 Operating Activities Net income (loss) from continuing operations attributable to JCI $ 574 $ (182) Income from continuing operations attributable to nonc

  25. Slide 25: 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, 2021 2020 Operating Activities Net income from continuing operations attributable to JCI $ 1,244 $ 190 Income from continuing operations attributable to noncontrolli

  26. Slide 26: 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 (loss) from continuing operations before income taxes and noncontrolling interests, excluding general corp

  27. Slide 27: Nine Months Net Sales and Segment EBITA Reconciliation

    The following is the nine months ended June 30, 2021 and 2020 reconciliation of net sales, segment EBITA and segment EBITA margin as reported to adjusted net sales, adjusted segment EBITA and adjusted segment EBITA margin (unaudited): Building Solutions Building Solutions Building Solutions Consolid

  28. Slide 28: Diluted Earnings Per Share Reconciliation

    2. Diluted Earnings Per Share Reconciliation The Company's press release contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include integration costs, net mark-to-market adjustments, restructuring and impairment costs, S

  29. Slide 29: Weighted Average Shares Reconciliation

    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, 2021 2020 2021 2020 Weighted average shares outstanding for JCI plc Basic weighted average shares outsta

  30. Slide 30: Net Debt to EBITDA

    5. Net Debt to EBITDA The Company provides financial information regarding net debt to adjusted EBITDA, which is a non-GAAP performance measure. The Company believes the total net debt to adjusted EBITDA ratio is useful to understanding the Company's financial condition as it provides a review of th

  31. Slide 31: 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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