Johnson Controls International plc · NYSE:JCI
Johnson Controls International — Q4 2004 Earnings Presentation
18 slides from Johnson Controls International's earnings presentation, Oct 26, 2004
Slide 1: 4th Quarter 2004 Conference Call
4th Quarter 2004 Conference Call October 26, 2004 Safe Harbor Statement: Johnson Controls has made forward-looking statements in this document pertaining to its financial results for fiscal 2004 and 2005 that are based on preliminary data and are subject to risks and uncertainties. Forward-looking s
Slide 2: Agenda
Agenda Overview John Barth - Chairman and CEO Q4 Results Denise Zutz - VP Strategy, Investor Relations and Communication Financial Review Steve Roell - Executive VP and CFO Q&A 2
Slide 3: Record 2004 Results
Record 2004 Results • Pleased to have achieved another record year – Sales up 17% to $26.6 billion – Net income up 20% to $818 million – 2004 was 58th straight year of sales growth and 14th consecutive year of increased earnings • Financial performance is a scorecard – Expectations of customers, emp
Slide 4: 2004 Results On Plan Versus Expectations a Year Ago
2004 Results On Plan Versus Expectations a Year Ago • Some headwinds stronger than anticipated – Raw material costs – Automotive price reductions – Weaker building markets • Accelerated rate of change to reduce costs - both in North America and Europe; automotive and controls • Process improvement a
Slide 5: 2005 Outlook - October 8, 2004
2005 Outlook - October 8, 2004 • Johnson Controls will continue to perform like a growth company – Sales up 8 - 10% – Operating income up 10 - 12% – Net income up more than operating income – Improving ROIC • Sustain outstanding track record – 16% compounded annual 10 year growth rate in sales – 18%
Slide 6: Increasing Shareholder Value
Increasing Shareholder Value • Growth in our markets by bringing value to our customers – Improve and differentiate vehicle interiors – Extract more value from building operations – Battery market - drive profitable aftermarket sales and improved cost/quality for original equipment and replacement m
Slide 7: Fourth-Quarter Overview
Fourth-Quarter Overview • Record sales and earnings • Sales growth of 13% to $6.8 billion -- excluding foreign exchange, up 9% • Operating income up 15% - record results by both automotive and controls • Diluted earnings per share growth of 22% -- $1.41 versus $1.16 7
Slide 8: Fourth Quarter 2004 Automotive Group Sales
Fourth Quarter 2004 Automotive Group Sales (in millions) 2004 2004 2003 2003 Change Change Change Changeex exFX FX $5,126 $5,126 $4,453 $4,453 +15% +15% +11% +11% North America Europe Interiors sales up 6% Interiors sales up 25% • Industry production down 0.8% • Sales up 15% excluding FX • Industry
Slide 9: Fourth Quarter 2004 Automotive Group Operating Income
Fourth Quarter 2004 Automotive Group Operating Income (in millions) 2004 2004 2003 2003 Change Change $317.7 $317.7 $267.9 $267.9 +19% +19% North America Europe Lower interiors margin Interiors margin up • Mix of “new” vs. “old” business • Lower engineering • Higher commodity costs • Improved operat
Slide 10: Fourth Quarter 2004 Controls Group Sales
Fourth Quarter 2004 Controls Group Sales (in millions) 2004 2004 2003 2003 Change Change Change Changeex exFX FX $1,631 $1,631 $1,547 $1,547 +5% +5% +3% +3% North America Europe Sales +1% Sales +16% • Technical services up 5-10% • Revenues up 7% ex FX • Facility management revenues up • Modest incre
Slide 11: Fourth Quarter 2004 Controls Group Operating Income
Fourth Quarter 2004 Controls Group Operating Income 2004 2003 Change (in millions) 2004 2003 Change $96.0 $96.0 $92.2 $92.2 +4% +4% North America Europe Slightly lower margin Margin improvement • Slightly lower gross margins • Higher volumes more than offset lower SG&A % • Improved performance • Neg
Slide 12: Controls Group Backlog
Controls Group Backlog* (in billions, at September 30) 2004 2004 2003 2003 Change Change $1.84 $1.84 $1.75 $1.75 +5% +5% Q4 Orders OrderHighlights Order Highlights • NA systems orders were down – Lower government bookings more than ••University UniversityofofSouth SouthCarolina Carolina offsets high
Slide 13: Fourth-Quarter 2004 Financial Highlights
Fourth-Quarter 2004 Financial Highlights (in millions) 2004 2003 $ Change % Change Sales $ 6,757 $ 6,000 $757 13% Gross profit 904 873 31 4% 13.4% 14.6% SG&A 490 513 (23) -4% 7.3% 8.6% Operating income $ 414 $ 360 54 15% 6.1% 6.0% 13
Slide 14: Fourth-Quarter 2004 Financial Highlights
Fourth-Quarter 2004 Financial Highlights (in millions) 2004 2003 Change % Change Operating income $ 414 $ 360 $ 54 15% Net interest expense (28) (26) (2) Equity income 19 17 2 Miscellaneous - net (12) (26) 14 Other expense (21) (35) 14 Income before taxes/minority interests 393 325 68 21% Provision
Slide 15: YTD 2004 Cash Flow
YTD 2004 Cash Flow (in millions) September 30, 2004 Net income $818 Depreciation/amortization $617 Capital expenditures ($862) Change in working capital ($10) Total debt-to-total capitalization 33.9% vs.35.6% vs. 35.6%at at September30, September 30,2003 2003 15
Slide 16: Fiscal 2004 Summary
Fiscal 2004 Summary Achieved Financial Expectations • Sales: +17% or $4 billion • Double-digit increases – Operating income up 12% – Net income up 20% • Strong financial position Focal Points • Automotive European turnaround on track • Realized targeted European battery integration synergies • Offse
Slide 17: 2005 Outlook - First Quarter
2005 Outlook - First Quarter • Sales growth 100 - 150 basis points lower than rest of year - NA build down 3% - Lowest flow-through of automotive backlog - Slower controls growth No Change to October 8, 2004 • Operating income slightly below prior year Guidance - Lower automotive and controls sales
Slide 18: 2005 Full-Year Outlook
2005 Full-Year Outlook • Sales up 8 to 10% • Operating income up 10 to 12% • Net income up more than operating income • Improving ROIC • Strong cash flow –Reinvest in growing our businesses –Increasing dividends 18