Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Investor Day (December 2012)
116 slides from Johnson Controls International's investor day presentation, Dec 21, 2012
Slide 1: CEO Perspective
Exhibit 99.2 ceo perspecttive steve Chairman Roelland chief executive officer
Slide 2: Today's Agenda
Today’s Business ??Dave ??Beda — ??Alex President, Financial ??Bruce Executive 2??Questions Break Molinaroli Bolzenius Myers Agenda McDonald unit —??Bill outlook Automotive Building Power Vice and presentations President answers??12:30 Solutions Jackson Efficiency Seating Electronics and Chief –and
Slide 3: Johnson Controls Overview
Johnson World-class ??Strong –??Long-term ??Strategies 2012 Segment America North Europe ROW Asia/ Power Building Automotive 3*Does Technology Diversification Strong Customer Reputation Cost Global Sales* Solutions not discipline Controls position market presence income Efficiency and include relati
Slide 4: Johnson Controls Strategy and Culture
Johnson A ??Customer –??Experienced 4??Engaged Anticipate Adding Help Support winning them Controls management and culture workforce??History satisfaction needs succeed capitalize management capacity on their teamof and moves overcoming depth to with new macro talent marketsfrom issuesoutside JCI
Slide 5: Johnson Controls Sales and Income Growth
Johnson A Sales $45 ($ Income $2,000 2003 5Consecutive compelling billion) million) $40 2004 $1,800 $35 Controls 2005 growth $30 track $1,600 2006 $25 record in$20 $1,400 2007 65 $15 22 of of2008 last profitable $1,200 $1023 66 2009 $5years $1,000 $0 2010 growth $800 2012 2011 $600 $400 $200 $0
Slide 6: Entering 2013: Overarching Outlook
Entering A ??Overarching 6•–??Industry North Europe China Weakening Slower Moderate Global challenging America –2013 isauto non-residential –growth continuing the outlook challenging, improvement economy exception production macro market –inlow North to environment trends single-digit in grow potent
Slide 7: Entering 2013: Expectations and Factors
Entering We Why ??Returns –??Improvements ??Expectation Factors ??European ??Slowdown ??Disruptions ??China ??A 7??Tax AGM Vertical Metals Fabric Launch/operational Interiors expect downturn you rate that slowdown 2013 should Integration on operational our will market in M&A from in of actions build
Slide 8: Entering 2013: Aligning Automotive Reporting
Entering Aligning ??OEs –??Economic 8•Action: Seating, Increases Seating Capital Footprint Competitive Commercial moving New 2013 Automotive intensity assembly, interiors, management and organizational and landscape tocompetitive component-level operating electronics metals, Experience capacity foam
Slide 9: Combined Automotive Experience Backlog
Entering Combined Automotive 2013—2015 Continuing Asia Europe N.A. Seating/Components Interiors Electronics 2013 9Reflects -15lost 2013 backlog automotive toExperience business $3.7B gaininclude share due backlog Backlog lower to financial volumehurdle assumptions rate discipline in Europe than in 2
Slide 10: Automotive Top Wins
Automotive Top Daimler Complete Honda Global Volkswagen China BMW Europe Mazda Electronics Japan Ford Door Next Chrysler North Floor 10 new Edge generation panel console America Complete 7Axela Compact Seating Series & wins Seat Renault assembly –Seating, Golf Instrument HMI /for & instrument Jeep C
Slide 11: Automotive Experience Footprint
Automotive 2102 Europe Americas Asia 10 11 additional Auto Experience footprint plants currently inconsolidated sales China including planned sales non-consolidated China JVs
Slide 12: Committed to Reinvesting: $1.4B Capital Expenditures
Committed Driving $1.4B Expansion, 2013 Maintenance Infrastructure All –??Reinvesting Our 15% 12Advanced Automotive Geographic I.T. of long-term after-tax Capital capital our (est.) sustainable businesses equipment, to batteries: investments Expenditures expansion, ROIC launches consistent in return
Slide 13: 2013 Business Unit Priorities
2013 What ??Consistent –??Business 13Automotive Customer Quality Improving Cost Emerging Innovation Building Power Strategic tocontrol listen Solutions focus efficiency unit focus markets operational strategic Seating Electronics for Review priorities today – Evolving ––Metals themes and gaining eff
Slide 14: Confidence in 2013 Outlook
Confidence ??Higher –??Work ??Competitive 2013 Based ??Slightly 14Greater Realistic More Increased Strategic vs. on contingency streams 2012 confidence the consensus higher growth management inassumptions our Review advantages inrevenues??Slightly 2013 expectations, place of planning in and industry
Slide 15: Mr. Roell's concluding slides after Q&A
??Mr. Roell’s concluding slides after Q&A 15
Slide 16: Johnson Controls Sales and Income
Johnson Sales $50 ($ Income $2,000 16 *Estimated billion) million) $45$1,800 $40 Controls $35 $1,600 $30 $25 $1,400 $20$1,200 $15 $10$1,000 $5 $0$800 $600 $400 $200 $0
Slide 17: Shareholder Value Proposition
Johnson Shareholder –??JCI ??Attractive We 17Growth Improved arewill focused confident Controls faster outperform margins ROIC value dividend on than that delivering across our our yield; over underlying 2013 all the increasing sustainable our long strategic businesses term markets payout plan impro
Slide 18: Johnson Controls
Johnson Y) ( Controls
Slide 19: Building Efficiency
Building Dave President, Myers Efficiency Building Efficiency
Slide 20: Johnson Controls Building Efficiency Profile
Johnson Building ??1 –??Local 2012 LA Asia Service Residential Non-Residential Europe Making Construction New Global America 2North increase 30,000+ 5,000+ /million+ ME Revenues America and buildings market Controls Efficiency energy energy customer-facing recurring customers $14.7B presence efficie
Slide 21: Building Efficiency Vision
Johnson Controls Building 3“Johnson Efficiency Controls will Vision be the global leader in building efficiency solutions. We will be a customer’s partner through the lifecycle of their buildings, delivering world-class energy and operational performance.”
Slide 22: Global Presence Region by Region
Global North Europe Region Asia Middle Latin 417Where continents million+ 7,500 America America we business, 3,250 (locations) East are: customers 250 7002,000 20,000 branches localserved market 31locally plants presence 3,600+ by employees distributors in over 33,000 locations
Slide 23: Market Trends
Markettrends Major Integrated Buildings Global Electricity Simple 5Legislation Construction & outlook Smart Integrated Design Prices & Building Equipment Impacted & Spending Build with Codes Electricity Process by to Fuel Enable to Supply Grid Improve Integrated Outcomes Building Technology
Slide 24: Short-term Regional Outlook
Short-term North non-residential institutional ?Asia residential 6Source: FlatMiddle Projected Positive Emerging Slow, to America continued McGraw minimal outlook, and markets market declines, growth, ?East Eastern: non- Europe residential Hill growth, &growth, outlook commercial ?growth residential
Slide 25: Strong Long-term Growth Opportunities
Solid Strong Developed Recent ticking Energy Continued Building Aging Global Indexed Construction 2010 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 E. Asia W. FY11-16 CAGR 10% National 35.0 45.0 55.0 65.0 Increase Decrease Jan-06 7Source: Europe Europe 25.0 10% 8% 2015 long-term building Jan-07 growth AIA No
Slide 26: Strategic Objectives: FY13 Strategy Summary
Strategic FY13 Emerging America North Margin & 8Technology Innovation strategy Expansion objectives Markets summary
Slide 27: FY13 North America Strategy Summary
FY13 America North Strategy Summary
Slide 28: Meeting North American Customer Needs
Meeting North Customers Facility Owners Quick Contractors Minimize Keep Improve Reduce Win Deliver Resolve Our 10 customer new, tenants America return the jobs deferred Directors issues customer utilization profitable operating We building on on happy focus Serve quickly time investment maintenance
Slide 29: Enhancing North America Lifecycle Value
Complete Enhancing North Monitor 65% Attach Building Renew Linkage 35% Combine We 11 are ofAmerica service /the lifecycle point building feed Lifecycle equipment building only value the agreement player revenues for installed tocycle pinpoint our andinNorth solutions controls the to base installed s
Slide 30: Enhancing North America Lifecycle Value
Complete Enhancing North 65% Building Deliver 35% Utilize 12 ofAmerica building-wide lifecycle energy technical industry-leading Lifecycle building valueefficient revenues for building cycle our systems building North HVAC solutions services integration American equipment upgrades throughcustomers c
Slide 31: FY13 Strategy Emerging Markets Summary
FY13 Strategy Emerging Markets Summary
Slide 32: Driving Emerging Markets Growth
Driving Emerging 2012 Middle $2.2B Asia $3.7B $11B $14.7B Latin Systems Service Security $2,000 +14% +18% $USD $600 $800 2009 +11% Growing 14 Revenues $600 $400 2010 America (M) $1,500 East growth installed markets Markets $400 $200 2011 $2,500 $1,000 | $0.8B |$1,000 by $0.7B 2012 $200 $0 base build
Slide 33: Well Positioned in Emerging Markets: China
Well The Emerging Service Equipment Distribution Controls 1,400 +13% 2012 2007 Rest China 37 Manufacturing Asia 15 branches most of Engineering positioned 2008 1,200 Business Revenue as accounts Asia aimportant Markets % 2009 1,000 offacilities for by Asia in 2010 Center 800 China LOB over market 20
Slide 34: Key China Initiatives
Key China Emerging Expand Build Enhance 1. 4. Acquisition 2. Management Talent 3. 16 Talent strategic talent core channels infrastructure Retention Integration Development Markets and product initiatives scale and /increase to technology and support capabilities third-party long-term and service to
Slide 35: FY13 Strategy Margin Expansion Summary
FY13 Strategy Margin Expansion Summary
Slide 36: Continued Margin Expansion
Continued 2012 Margin Increased ROS Aggressive SG&A Europe Actions Lowered UPG Pricing America North 18 Margin SG&A and Expansion tobreak-even 70 significantly healthy reduction business bps Expansion year-over-year margin model point plan lower expansion implemented changes 2013 costs ininEnergy 20
Slide 37: Key Margin Expansion Initiatives
Key Executed Margin Productivity Improvement Field Operations ??Ensuring Pricing ?opportunities business propositions on These 19Continuous Integrated Driving Enhanced outcomes strategic Execution initiatives Expansion to select we value drive focused in initiatives are every pricing enable increase
Slide 38: FY13 Strategy Technology & Innovation Summary
FY13 Strategy Technology & Innovation Summary
Slide 39: Addressing Complex Customer Requirements
Complex Addressing Technology Customer ??Optimized Winning York Panoptix® Key ??Panoptix Smart Extension Building -Global 21 Addressing Enhanced Lowering Identifying Integration Technologies Chiller Equipment Security technology Optimization /Requirements of developed solution Energy cost visibility
Slide 40: Addressing Emerging Market Customer Requirements
First-cost Addressing Technology Customer ??Attractive ??Simple ??Easy ??Simple, Key ??Low-cost ??Variable ??Heat -??Absorption 22 VRF First Provides Heating Large-scale Technologies cost continues pumps to features is /specify Requirements low-cost aWater Refrigerant is emerging customer controls t
Slide 41: Building Efficiency Positioned for Growth
Building Positioned Key ??Strong ??Large ??Unique ??Leading ??Global Resulting drivers global Efficiency customer presence combination inposition for profitable future markets to focus ingrowth serve key growth of with products markets customers attractive across andlocally long-term services the gl
Slide 42: Johnson Controls
Johnson MK Controls
Slide 43: Automotive Experience: Seating
Automotive Beda President, Bolzenius Automotive Seating Seating
Slide 44: Automotive Seating Key Highlights
Automotive Key Leading ??Global ??Diversified ??Vertical of $2012 Complete Components Seating 44% 45% 12% Europe Americas *Asia 84% 216% 15.9 building highlights Sales B*Excludes global presence Seating integration customer Seating customer provider $ 5.1B value ofand components ofunconsolidated aut
Slide 45: Automotive Seating Mission and Strategic Framework
Automotive Our “Exceeding Three Customer & CREATING by VALUE DELIVERING SUSTAINING through Organizational (People 3Increase Profitable enhancing Mission pillars &product standardization mid-term Excellence Cultural the Seating VALUE Growth and of our VALUE Capacity increasing our and Strategic techn
Slide 46: The Complete Seat Global Leader
Automotive The Complete Faurecia Foam Metals 27% Bridgestone Woodbridge Cut 23% Brose Johnson Fabrics 28% Toyota Global 11% Aunde 4Lear& global Faurecia Sew Market & Boshoku Controls Mechanisms Seat leader Seating Prevent Shares Faurecia in automotive 2012 (including seatingChina) and seat Source: c
Slide 47: Major 2012 Accomplishments
Automotive 2012 Major ??$3.2B and ÖkoGlobe “Resources, ComfortThin 5*including advanced Accomplishments business ofAward non-consolidated awarded Seating Materials seat development and2012 strategy business and Process achievements JVs in Automotive inOptimization” China Seating*??16 for Johnson suc
Slide 48: Consistently Strong Backlog
Automotive Consistently Continued Backlog Selective Business Daimler Europe Next Chrysler North Honda Global Volkswagen China $Incremental By 79% 21% 8% 67% 25% N. Asia Complete 6including 2.7 America region Europe generation Billion America Complete Compact Seating & alignment awards approach $1.9B
Slide 49: Automotive OEM Industry Trends
Automotive OEM Leading ??Global ??Diversified ??Vertical of Global By Production 79.4 4.4% CAGR 72012F building 2017, 98.3 &2017F Light HIS, Industry global presence more integration will customer Seating December Vehicle customer than provider beTrends in50% value Production BRIC of2012 and compone
Slide 50: 2012 Seating Challenges
Automotive 2012 Our Rapid … 1Internal 8Robust which organization has emergence initiatives been quality hadSeating negative a year 2Launch was from haveof strained impact 2009 been challenges performance put automotive on byinorganizational internal place3Operational crisis for challenges sustainabl
Slide 51: Quality Initiative for Sustainable Improvement
Automotive 91Initiatives ??Program 1. 2. 3. ??Leading Total Quality for ContainmentSeating sustainable Sustainability Quality Transformation indicators includes and Company improvement andCorrective three Program Transformation demonstrate dimensions: Actions of (QTP) operational significant excelle
Slide 52: Launch Excellence Initiative
Automotive 2Initiatives 10 Launch for –??Excellence ??Development On-time Seating sustainable Cross-functionalPerformance staffing sourcing in of Program Program of improvement executive Improvement simultaneous Execution Management launch ofUniversity operational development (EPE) reviews driving i
Slide 53: Operational Improvement Initiative: Metals
Automotive 3Initiatives (MBBP) Operational Improvement Development for Launch/ProgramSeating Characteristics discussion sustainable ??Technology-driven ??Capital-intensive product Solidifying Our Material Manufacturing 11 Excellence Engineering Optimization Commercial strategy Best our Efficiency: P
Slide 54: Metals Workstream 1: Manufacturing
Metals Workstream The Manufacturing Production Product Share Footprint Leverage Shift Capitalize Track Stamped 12 manufacturing labor-intensive best manufacturing transformation Synergies track lower on practice Processes 1:synergy profiles Manufacturing cost, processes workstream processes better o
Slide 55: Metals Workstream 2: Material
Metals Workstream Material The Low-cost Supply Strategic Shift Develop Reduce Apply 13 MBBP 50% MBBP transformation Base stamping Best local Partners country ofworkstream 2: Consolidation supply Practice cost supply Purchasing supply benchmark base base program Sourcing drives base for (e.g. – Mater
Slide 56: Metals Transformation Program Target
Metal Our 14 target transformation is to reach ~5% program ROSSTEP in FY14
Slide 57: External Factors Impacting Seating in 2013
Automotive External The Eurozone Declining Overcapacities Distressed High 15 automotive inflation factors uncertainty OEM supply Seating ininindustry challenge margins South-America vehicle baseimpacting ismanufacturing seating facingregional new market macroeconomic plants and global in Europe mark
Slide 58: European Restructuring: Rightsizing
Restructuring –Rightsizing Smart European Source: Date Apr. 20.8 19.5 18.1 -8.3% -11% 16.1 16.6 16.9 17.6 17.9 17.5 15.6 18.6 20.0 2007 20.2 *)Europe 16SG&A Further Selective 2012 20.6 of 2008 and estimate: Johnson reduction engineering excl. contingency light Dec. selective 2009 footprint ofcharge
Slide 59: Long-term Competitive Advantage
Automotive Long-term Progressing Vertical Differentiation Competitive Protect Technology Growth Provide 17 advantage markets integration customer strategies & on Seating advantage Advanced via our expansion value by USPs long-term into expertise anbuilt achieve and environment Development with profi
Slide 60: Vertical Integration Strategies
Long-term Vertical “Best-of-breed” Metals: Modularization Integrated Trim: Increased Global Foam: Leverage 18 standard integration components product innovation strategies and for portfolio quality and process standardization to between expertise achieve product viatechnology fabrics fabrics profita
Slide 61: Technology Strategies
Long-term Science Technology Seat Innovative Differentiating 19 Systems based strategies Complete & approach domains Advanced ink and to Seat process achieve delivers Development system technologies profitable new solution lightweight growth that to includes adapt solutions individual non-automotive
Slide 62: Growth and Expansion in China
Long-term Growth Solidifying Partnership Our 56 –State-of-the 20Trim/fabrics 8800 Metals Foam plants Technical Capabilities: engineers markets and instrategies our is 25 art Mechanisms Centers the locations; product substantial expansion foundation to & achieve 10 process leadership new of our profi
Slide 63: Automotive Seating Summary
Automotive Challenges Summary FY?13 Simultaneously, Customer & CREATING by DELIVERING SUSTAINING through Organizational (People Increase 21 Profitable enhancing and & product standardization mid-term Excellence Cultural FY?14, being Seating VALUE Growth our VALUE Capacity VALUE we and addressed tech
Slide 64: Johnson Controls
Johnson Y) ( Controls
Slide 65: Automotive Experience: Electronics and Interiors
Automotive Bill President, Jackson Automotive ElectronicsElectronics and Interiors and Interiors
Slide 66: Leading Global Electronics and Interiors Supplier
WeExcludes Leading Global Diverse Market Strong Over 2012 Projected 1: Americas Europe 44% 42% 14% 2Asia are 50 Sales: and presence one leading customer plants global togrowing of $5.5 unconsolidated grow the worldwide; supplier product with Billion1 base leading to capabilities 22% good and and ofb
Slide 67: Electronics and Interiors Product Portfolio
JCI’s Overhead Instrument Visor Headliner Driver Body Specialty Infotainment Door Floor 2012 1: 75% 25% Interiors 3Electronics Excludes Sales: Panel Electronics Console Electronics Information & Console Panel $5.5 unconsolidated OtherBillion1 & InteriorsJVs business competes in 10 product segments
Slide 68: Interior Design Drives Consumer Purchase
Continued Top 2012 Rank 1235E Interior Online 435% 15% 18% xterior Reason 22% J.D. Reason Reviews design Design Styling Power 19% growth for %isVehicle of Purchase Survey one in Respondents interiors of Rejection thePrice topas5Reliability/Quality adrivers key, differentiating of model preference in
Slide 69: Barriers to Entry in Interiors
Today, Europe, 2010 5?Entry Capital Process Estimated barriers there North know-how are are America, Revenue only highand a handful IP/DP/FC deep ($B) engineering of suppliers Merchantcapabilities? with Market the requisite OEMcapabilities relationships? to meet Ability rising to credibly OE demands
Slide 70: Seamless Electronics Integration
Seamless Driver Display Cluster Head-up Mobile Smart RSE Body Center Controller Navigation ?Sensors/cameras 6The Audio Adaptive Tire Window Voice Telematics Power Electric Remote Connectivity/Handsfree Radio Music Lane Park Blind Distance Drowsiness Night Cloud Display control Pressure Phones: Assis
Slide 71: Estimated Market Share and Competitors
We arebarriers Estimated Global Other Competitor Instrument 14% 25% 9% Strong Note: Entry 7Engineering engineering Competitor #4 Market currently #1 Electronics Displays 128and #3 Competitor JCI are Share innovation well high 1 –Head-Up 8positioned Market are7 the Competitor capabilities Share Clust
Slide 72: Building Out Driver Information Positions
… and Distributed Real Connectivity Driver Entertainment Head Cluster ADAS 8Infotainment Seat up Information are with Display building-out today Display Display HeadIntegrated Unit our driver 2015 information and infotainment positions to prepare for the increasing integration of these functions
Slide 73: Innovation Trends
Innovation High (incl Greener Light Always Connected Enhanced Comfort, Need Consumer Market Innovations Groove Starlight 9Cite Lite Emerging Quality for weight Trends Lamination Connected &HL Speed wellness, End-user electronics, Healthier cars helps platforms Sold vehicle at Markets & Lower narrow
Slide 74: Innovation and Cost Position
Butainnovation Our Price They Innovations …And As …making Lowest relationships 10 customers result, work iscustomers total theitto main no don’t are acost Effective, develop cost competitor are israpidly driver positions no facilitate earn cost game more product consistent driven efficient copied… o
Slide 75: Electronics and Interiors Key Challenges
Much North While Asia Has Very Electronics: Restructuring Fixing Lowering Moving Expanding Solid Facing We Change Thoughtful Grow Establish Expand Accelerate Build 11 need historically Interiors: strong returns athe America of earning anear globally the LTA to few our to acore SG&A aour solid protec
Slide 76: Interiors Program Issues
…but Will Increased Loses Customer Program Launch Fixes We 12 have are lose are some $9 $19 $8 cost working issues 1four 2 3 4 5 bid rights million $11 being engineering requesting million programs disadvantaged and million initiatives with to worked with to won per cancel per have a year higher ele
Slide 77: Taking Further European Restructuring Actions
Taking Further We In Creating Current Future DIRECTIONAL 70% 30% 90% 10% Western 13 total, alsoInteriors have near exacerbating Interiors we need European Europe ataken structurally expect term toone Europe restructure Eastern Europe actions FY’13 to wave issues achieve advantaged Revenue Europe Rev
Slide 78: Launch Program Roadmap
ForSales Launch July Program Roadmap Current All Monthly A 14 programs costing programs August September Program and Controls regional isOperations September are done in2012 pre ROS in reviews are atbeing production realistic inProgress Planning Control managed and rates program phases, process in M
Slide 79: North America Plant Performance
In part Interiors October Moving 0.3 0.4 0.9 1.0 1.2 1.5 1.6 1.7 1.8 2.0 2.2 2.3 2.7 CRITICAL CHALLENGED PERFORMING Our “Critical” The Across Glide 15 value resources paths by our Plants 2012, North plants refocusing isnetwork have inare Aggregate to fixing America been “Performing” focused ofon the
Slide 80: Interiors Profitability Plan
By executing Interiors 0% Program 2012 (0.5%) Profitability Analyst Economics December 16 ROSDayReturn Plant 19, Performance this 2012 Supply onplan, Sales SG&A Interiors Key Base&Drivers Engineering Structural can be a 5%LTAs, Changes ROSMaterial business & Labor 2015 by 2015
Slide 81: Executing Program Management Model
To beRFP TBL Create Decisions program Innovation Human Development Capital Operations Supply Process Management 17 sustainable, Advantage Base Management Resources Discipline program Award outside Aligned Structure Continuous Cadence Change Launch Executing of Capture we Pricing SDT PLUS the Product
Slide 82: Building Critical Leadership Roles
And build Critical Account Actions Identify internal 18 Leadership redeployment to success Financial our Reinforce bench factors Manager Roles in Critical orthe –ifcore Plant necessary four Roles competencies Manager most critical external Program Assess leadership recruiting Manager talent roles Bu
Slide 83: Electronics and Interiors Priorities
Ourprocess Drive In Expand Improve Focus Program Supplier Plant Move SG&A Re Redefine Continue Complete 19 enforce near performance margin Interiors onour engineering structure profitability term how near to the on Electronics footprint build aimprovement operating Innovation agenda term to setAsia
Slide 84: Power Solutions
PowerPresident Alex Vice Molinaroli Solutions & President, Power Solutions
Slide 85: Power Solutions at a Glance
2012 Power World’s World Advanced First 30 Asia, Europe, Americas, 2Uniquely manufacturing to Sales: 9% class Solutions market 34% largest aLead 57% global 26% customer provider provider Acid 5% $5.9B facilities provider for base of of Start Li in battery 36% ofthe Ion vehicle Stop global automotive
Slide 86: Power Solutions Positioned for Long Term Growth
Power Positioned Long GLOBAL Start Market Significant Capacity North Vertical Largest Poly, Leader Li Leading Developing Hybrid First Meadowbrook Technology Universities, 3Strategic IonLi Stop separator, Term America, Leadership Solutions in products leading ion global Integration provider R&D inves
Slide 87: Leveraging Competitive Strengths for Growth
Power2012 Leveraging …for 2000 EMERGING TECHNOLOGY 4ORGANIZATIONAL aggressive Solutions 2017 our MARKETS competitive Roadmap investments CAPACITY COMPONENTS for strengths… across growthdiversified COREgrowth platforms.
Slide 88: Fuel Economy Regulatory Drivers
Market Government Europe 2015 –United China 2025 become MPG 38 33 •36 5Regulations Targets Proposed 10% Planned 43levels 36 37 Targets* 58 43 39 regulatory improvement increase States drivers more represent 58 55 3965% 40% by are regulations stringent 2012 2020 improvement by forcing increase policy
Slide 89: Emerging Powertrains Require Diverse Energy Storage
Market A Starter 6Emerging spectrum batteries driver powertrains of implications powertrains (SLI) Start require Stop a diverse (12V) Micro set of energy Hybrid storage (48V/12V) technologies Mild and full hybrids (HEV) PHEV / EV
Slide 90: Strategically Investing in Start-Stop Growth
Strategically Start Source: 11M 26% End AGM JCI N. Europe 2012 Incumbent Maintain 7aftermarket America AGM consumers CAGR 33M Stop 2017 batteries IHS, market capacity opportunity forecast 2012 market +53% in investing November Start remain confirm 2017 leadership +314% leader –expansion Stop New 201
Slide 91: Micro Hybrid Technology Opportunity
Technology Emerging MICRO Micro 8June 2011 Hybrid HYBRID opportunity Johnson options applications Controls across positioned will the analyst full require between spectrum presentation a “non startlead stopacid” and mild energy hybrids storage solution
Slide 92: Micro Li Technology Development Path
MicroLi Technology 2016 Integrated Vehicle Accessory Dual System 12V Path Development 48V ESS 9Boost Lead 48V Cold Energy 2020+ /Hybrid Ion regeneration Architecture (ESS) Evolution Li acid cranking starter/generator electrification roadmap Ion Storage Key energy 12V Boost off Key Lead Cold Dual Opt
Slide 93: Extensive Energy Storage Market Opportunity
Vehicle Extensive Total OE $26B $53B xEV Engine Combustion 2012 Powertrain Legend By Emerging 10 2017 2020 and 2017 market Internal (ICE) Aftermarket energy over micro technology 2020 ICE opportunity 1/2 2/3 storage Start hybrid of all $81B Stop opportunity market new opportunity (by Micro vehicles
Slide 94: Emerging Market Battery Opportunity
Emerging 2020 Americas W. Canada Russia United Ukraine Europe States Iran Saudi India co Turk South Brazil Indonesia Malaysia Thailand Emerging: Argentina Total Source: 11 Polpassenger Units: Arabia Africa na S.Booz, Japan Korea EMEA market 53M 147M CSM, vehicle 65M Asia opportunity 143M JCI 165M ba
Slide 95: China Compelling Demand
China Compelling Demand Northern (2011) 13 Eastern 8Western 6Southern Planned Current 111 Aftermarket 83 73 64 58 52 45 17 15 43 34 2011 Strong 12M38 M119 34 32 30 28 25 19 82 77 48 units 2012 units 22 69 30 opportunity market China manufacturing OE manufacturing China Today 62 China 2013 101 market
Slide 96: Investing in China
Investing Tianjin Changxing SOP Chongqing China Original Strong Expand ?Advanced ?Expand Aftermarket Initial VARTA® ?PowerFrame® Growth 13 2015: 2011: 2013: focus Growth relationships position Objective: Equipment distribution for brand 8M 6M batteries on market Strategy units East technology with 3
Slide 97: Industry Landscape and Vertical Integration
Industry Closed Environmental standards 50% investment and Infrastructure in to Regional demand spent driving Lead Consolidation integration storage Leveraging 14 N.processes recover self America landscape Large ramping Loop and price imbalances drivers supply/ driving capacity across vertical globa
Slide 98: Power Solutions Margin Drivers
Power Margin Shifting penetration Vertical Aftermarket Growth Strong –New 15Lead Poly Other North Chinese facility Solutions containers aftermarket recycling drivers key America in integration product battery China of components growth launches AGM mix recycling plants brands in technology with Euro
Slide 99: Power Solutions Positioned for Growth
Positioned Accelerating Unprecedented regulations Power Unique Consistent Technology Customer A Advancing Aggressively Over Continued 16diverse $1Solutions competitive billion set centered emerging investment for performance our portfolio market of commercializing leadership vertical changes planned
Slide 100: Johnson Controls
Johnson Y) ( Controls
Slide 101: Financial Outlook
Financial Bruce Executive McDonald Outlook Vice President and Chief Financial Officer
Slide 102: Fiscal 2013 Key Assumptions
Fiscal Automotive North Europe China Construction 2*Non October residential America 19.8m 2013 18.2m 1,key build* 2012 up spending down 15.5m Asia U.S. Europe assumptions 8%to2013* 7% +5% flat September upflat 3% 30th, 2013
Slide 103: Fiscal 2013 Key Assumptions: Currency, Tax, Commodities
Fiscal Euro $1.30 Copper Tax 20% Experience 3–Lead Shift 2012 rate in Commodities atin 2013 in average 2013 hedges $2,200/MT –2013 geographic Economics key (vs. Minimal $2,007/MT assumptions 18.1% profitability indexing exposure in 2012) in Automotive
Slide 104: Fiscal 2013 Consolidated Outlook
Fiscal Consolidated Segment EPS +10% Benefits Capital Automotive Net Free 4*Approx financing debt-to-capitalization Cost cash 2013 expenditures $43.5B $2.60 $255 $1.4 27% $1.2B Excluding from income flow savings outlook new billion net million charges restructuring –payments Strong (up $2.70 busines
Slide 105: Quarterly Earnings Trends
Quarterly First –Flat/ Slowing Non-qualified Power Second Restructuring Revenue Metals 5Vertical Weakness Lowlower Currency half Solutions business and half integration/ emerging growth vs. EPS revenue Interiors headwinds insecond benefits restructuring Europe Trends confidence across battery market
Slide 106: Automotive Seating 2013 Outlook
Automotive 2013 Sales Higher Continued, Margin European 6–Product Internal Manufacturing Restructuring Significant NOTE: financial upvolumes 4.2%—4.4% launches/Program approximately (+) Production quality but Experience—Seating launch =outlook slowing, positive benefits in efficiencies improvement N
Slide 107: Automotive Seating Mid-term Outlook
Automotive Mid-term Market Backlog Accelerating Margin Improving Annual Vertical Operational 7Quoting share target: expansion integration discipline growth outlook toimprovements Experience—Seating growth gains 7%—8%(through of in 30—40 Asia2017) bps
Slide 108: Electronics and Interiors 2013 Outlook
Automotive 2013 8S Higher Europe Margin Operating –Operational Investment NOTE: ales Program Supply Interiors Restructuring Optimized financial upvolumes Electronics 1.9%—2.1% (+) approximately base leverage turnaround profitability = in improvements Experience footprint positive Electronics improve
Slide 109: Electronics and Interiors Mid-term Outlook
9Automotive Mid-term Sales Strong Margin Improving Annualgrowth backlog target: expansion outlook toExperience 6%—7% to support (through of 60—70 – Electronics future 2017) bpsbusiness Increasing & Interiors Electronics Electronics growth profitability Interiors operational turnaround
Slide 110: Power Solutions 2013 Outlook
NOTE: Power 2013 Sales Higher Market Increasing Margin Operating –Operational *Lead 10 Assumes Vertical Significant Improving Manufacturing recovery, financial up Solutions volumes share approx (+) 10%—12% integration leverage production average =improvements China volume positive growth outlook inv
Slide 111: Power Solutions Mid-term Outlook
Power Solutions 11 Mid-term Annual Market Growth Margin Improved Manufacturing share expansion sales inoutlook product China growth gains improvements and (through mix targeted 10%—15% other 200 emerging 2017) Vertical bps markets integration AGM technology
Slide 112: Building Efficiency 2013 Outlook
Building 2013 Sales Strong Conversion Margin Operating –Pricing Benefits NOTE: 12Recovery Energy financial upemerging and 6.4%—6.5% (+) of 2%—4% Efficiency Solutions leverage restructuring =in business ofpositive our year-end outlook market service (+) model impact; backlog growth programs businesse
Slide 113: Building Efficiency Mid-term Outlook
Buildingmargin Mid-term Growth Annual Continuous 13 sales inEfficiency outlook Energy improvement growth expansion (through Solutions 8% toand of10% 2017) Expansion 50 supply bps chain in emerging management markets Service Market pricing/ sharesolutions gains Late-cycle value Business marketmodel r
Slide 114: Organic Capital Investment
* projected 14 Organic Capital $1.8 BE PS AE trend $1.3 $1.4 $800 FY13P* FY12 FY11 FY10 BMinvestment investments
Slide 115: Cash Flow and Capital Allocation
Cash flow Capital Consecutive Dividends 15 allocation expenditures deployment dividends to paid increase sinceorganic 1887 Approved growth M&A payout to accelerate ratio of 30% organic growth Dividend payments
Slide 116: Johnson Controls
Johnson Y) ( Controls