Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Investor Presentation (March 2005)
30 slides from Johnson Controls International's investor presentation, Mar 8, 2005
Slide 1: Forward-Looking Statements
Exhibit 99.2 Forward-Looking Statements Johnson Controls has made forward-looking statements in this document pertaining to its financial results for fiscal 2005 that are based on preliminary data and are subject to risks and uncertainties. Forward-looking statements include information concerning p
Slide 2: John M. Barth, Chairman and Chief Executive Officer
John M. Barth Chairman and Chief Executive Officer
Slide 3: Largest global supplier: automotive interiors and batteries, controls
Largest global supplier Automotive interiors and batteries Facility management and control Johnson Controls 3 2004 Sales: $25.4 Billion * Automotive 79% Controls 21% North America 43% Europe 39% ROW 18% 3 * From continuing operations
Slide 4: Financial Performance
Sales 16% compounded annual growth rate 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 column 168 223 223 338 419 470 478 600 679 800 Net Income 18% compounded annual growth rate 13% organic Financial Performance 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2004: 58th Consecutive increase 20
Slide 5: Automotive Interiors
Automotive Interiors Largest global supplier of interior systems Seating Overhead Electronics Cockpit Door ...for more than 20 million vehicles a year 6 5 Customer expectations: Innovation that differentiates and sells a vehicle Great craftsmanship, world-class quality Global interpretation and deli
Slide 6: Automotive Interiors Growth Opportunities
Automotive Interiors Growth Opportunities Strengthen leading share of seating system market globally Expand share of other interior systems Participate in growing electronics content in vehicles Leverage global capability for global platforms 0% 50% Cockpit Seating Door Overhead Floor Electronics JO
Slide 7: Growth strategies
Growth strategies Innovation/systems integration New consumer features Seamless integration of trim and electronics Leverage expertise in Human Machine interface Strengthen product/systems portfolio Driver info systems, multimedia and navigation Seating convenience and comfort features Door, instrum
Slide 8: New Business
New Business Late 2006 launch: Kia C segment five-door Front and rear seats Headliners Door panels Floor consoles Expand to C segment wagon in 2007 Automotive Interiors Kia will assemble C Segment vehicles in Zilina, Slovakia Incremental backlog in billions Three-year forward cumulative Based on veh
Slide 9: Automotive Battery
Leading market share and best-known brands in North America, South America and Europe Customer expectations: Quality (dependability), service, lowest cost Automotive Battery Aftermarket 80% OE Growth Opportunities Existing and new customer market share growth Geographic expansion to Asia Battery sys
Slide 10: Controls
Controls Leading global supplier to the nonresidential buildings market Integrated control systems for HVAC, security, fire/safety, energy management Technical services Facility management Customer expectations Improved comfort: temperature, humidity, air quality Reduced costs: energy, operations, m
Slide 11: Controls Growth Opportunities
Controls Growth Opportunities Tap growing demand for highly integrated, outcome-based solutions Mission-critical operations (e.g.: data centers) Water metering Security Performance contracting "Green" buildings Greenhouse gas management Global real estate portfolios Control systems for smaller/less
Slide 12: Growth Strategies
Growth Strategies Extend control system technology leadership Advanced Metasys software releases Wireless technology Digital video integration Strengthen operational efficiency Calibrate branch processes and staffing to requirements of new construction market Accelerate profitable growth in services
Slide 13: Johnson Controls Vision
Mission To continually exceed our customers' increasing expectations Objectives Customer satisfaction Technology Growth Market leadership Shareholder value Johnson Controls Vision 13 Values Integrity Customer satisfaction Our employees Improvement and innovation Safety and the environment
Slide 14: Stephen A. Roell, Executive Vice President and Chief Financial Officer
Stephen A. Roell Executive Vice President and Chief Financial Officer
Slide 15: Consolidated Outlook 2005
Consolidated Outlook 2005 Sales growth of 8 to 10% Operating income up 10 to 12% Excluding 2005 and 2004 restructuring; 2004 gain on Japanese pension plans Income from continuing operations up more than operating income Strong operating cash flow Higher return on invested capital (ROIC)
Slide 16: Automotive Segment 2005 Outlook
Automotive Segment 2005 Outlook Sales up 8 to 10% Vehicle production slightly down in North America and Europe NA: 15.6-15.7m vs 15.8m vehicles Higher battery shipments/JV consolidation Interiors backlog: $2.3 billion of $4.7 billion 3-year forward cumulative 16
Slide 17: 2005 Incremental Business
2005 Incremental Business Smart ForFour/ Mitsubishi Colt Cockpit, OHS, doors Land Rover Discovery 3 Seating Seating Renault Modus Nissan Xterra Seating Opel Astra Complete interior AutoVision, overhead rail (in addition to existing seating and overhead systems) Chevy Uplander / Buick Terraza / Monta
Slide 18: Automotive Segment 2005 Outlook: Operating Margin
Operational improvements Synergies related to European battery integration Lower launch costs Technology / innovation 2004 footprint changes Operating Margin - Slight Improvement ....More Than Offsetting Lower customer pricing Higher commodity costs Automotive Segment 2005 Outlook 18
Slide 19: Controls Segment 2005 Outlook
Controls Segment 2005 Outlook Sales up 8 to 10% Double-digit technical services and facility management growth Systems sales to construction and renovation markets comparable to prior year Moderate Operating Margin Decline Competitive pricing reflected in backlog of new construction contracts Higher
Slide 20: Divestitures
Divestitures Engine Electronics Part of 2001 Sagem automotive electronics acquisition Transaction closed February 28 Price $427 million Not strategic to interiors focus World Services 1989 acquisition DoD & DoE base operations and contingency support Transaction closing in March Price $260 million,
Slide 21: Second Quarter 2005 Estimates
Second Quarter 2005 21 Estimates Income from continuing operations up over 10% 2005: $0.85 per diluted share 2004: $0.76 per diluted share Sales and earnings growth by both the automotive and controls groups Before: 2005 gains on divestitures - approximately $230 million pre-tax 2005 one-time tax be
Slide 22: 2005 Summary
Organic growth Technology/innovation Improved cost and quality Leverage strengthened financial position 2005 Summary Improvement Strategies Sales up 8 to 10% Operating income up 10 to 12% Excluding 2005 and 2004 restructuring; 2004 gain on Japanese pension plans Income from continuing ops. - up more
Slide 23: Appendix
Appendix
Slide 24: EPS Reconciliation
EPS Reconciliation 2005(e) 2004 Second Quarter Year 2004 *Subject to finalization of transactions and determination of tax treatments (unaudited)
Slide 25: 2005 Financial Guidance
Net interest expense $110 - 115 Base effective income tax rate 26.5% Minority interests in net earnings of subsidiaries $80 - 90 Capital expenditures $725 - 775 Depreciation expense $650 - 665 Total debt to total capitalization Below 30% 2005 Financial Guidance ($ in millions) Continuing Operations
Slide 26: Segment Revenues
Continuing operations Segment Revenues 26 Controls Sales Seating & Interiors 88% 89% Battery 12% 11% 2005(e) 2004 N.America 50% 52% Europe 43% 41% Asia/ROW 7% 7% By business By region Automotive Sales 2005(e) 2004 100% 100% 100% 100% N. America 58% 57% Europe 33% 33% Asia/ROW 9% 10% Systems construc
Slide 27: Pro-forma Financials from Continuing Operations
Pro-forma Financials from Continuing Operations ($ in millions, except per share data, unaudited)
Slide 28: Pro-forma Financials GAAP Reconciliation
Pro-forma Financials GAAP Reconciliation ($ in millions, except per share data, unaudited) * *
Slide 29: Discontinued Operations
Discontinued Operations Dec - 03 Mar - 04 June - 04 Sept - 04 Sept - 04 Dec -04 ($ in millions, except per share data, unaudited) Quarter ended Quarter ended Year ended Fiscal 2004 Fiscal 2005
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company has provided information regarding Return on Invested Capital (ROIC), a non-GAAP financial measure as defined under the SEC Regulation G rules. ROIC is calculated as the twelve-month rolling average return (net income plus after tax interest expense) divided b
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