32 slides from Johnson Controls International's earnings presentation, Apr 29, 2016
Slide 1: Second Quarter Review
Second Quarter Review 29 / April / 2016
Slide 2: Important Information
Important Information NO OFFER OR SOLICITATION This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisd
Slide 3: Important Information
Important Information Statement Required by the Irish Takeover Rules The directors of Tyco accept responsibility for the information contained in this communication relating to Tyco and the directors of Tyco and members of their immediate families, related trusts and persons connected with them. To
Slide 4: Forward-Looking Statements / Safe Harbor
Forward-Looking Statements / Safe Harbor This presentation contains a number of forward-looking statements. In many cases forward-looking statements are identified by words, and variations of words, such as "anticipate", "estimate", "believe", “commit”, “confident”, "continue", "could", "intend", "m
Slide 5: Johnson Controls/Tyco Merger: Executing Against Our Day 1 Plan
Johnson Controls/Tyco Merger* Executing Against Our Day 1 Plan April 4, 2016 October 1, 2016 Tyco S-4 initial filing JCI/Tyco Day 1 with SEC legal merger March April May June July August September October November S-4 Amendments July / August 2016 October 2016 JCI and Tyco Shareholder BOD meeting to
Slide 6: Q2 2016 Results – Financial Overview
Q2 2016 Results – Financial Overview (EPS amounts are fully diluted and attributable to Tyco ordinary shareholders) ($ in millions, except per-share amounts) Q2FY16 Q2FY15 Change Revenue $2,331 $2,430 (4%) Organic Growth* (1%) 2% Segment Operating Income before special items* $311 $331 (6%) Segment
Slide 7: Mixed Macro-Economic Environment
Mixed Macro-Economic Environment North America Commercial Industrial Institutional Retail Asia POG Commercial POG Hospitality Retail Infrastructure Latin America Europe Commercial Pacific Retail Govt / Institutional Commercial Residential POG Commercial Industrial Industrial Resi
Slide 8: Product Enhancement Through Innovation
Product Enhancement Through Innovation Industry’s 1st “in-mask” New, reformulated fire Launched new version of our thermal imaging camera suppression foams, conform C-Cure 9000 enterprise allowing the firefighter to new industry standards security management hands-free, increased with a chemis
Slide 9: Second Quarter Highlights
Second Quarter Highlights Revenue of $2.3 billion declined 4% year over year on a reported basis, including 4% headwind from foreign currency exchange rates • Acquisitions contributed 4%, mostly offset by 3% decline related to divestitures • Organic revenue* declined 1%, driven by softness in Global
Slide 10: Second Quarter Highlights Continued
Second Quarter Highlights Continued Orders growth of 7%, excluding impact of foreign currency and divestiture • Service +3%, Integrated Solutions +16%, and Products +3% YoY Total Orders Growth 7% 7% 6% 5% 4% 3% 3% 3% 3% 1% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Backlog of $4.65
Slide 11: Second Quarter – NA Integrated Solutions & Services
Second Quarter – NA Integrated Solutions & Services Organic revenue* was slightly ($ in millions) Q2FY16 Q2FY15 Change positive • Service was flat Revenue $947 $944 0% • Integrated Solutions increased 1% Operating Income* $131 $125 5% Acquisition growth of 1% was fully offset by the negative impact
Slide 12: Second Quarter – ROW Integrated Solutions & Services
Second Quarter – ROW Integrated Solutions & Services Organic revenue* decreased 1% ($ in millions) Q2FY16 Q2FY15 Change • Service increased 1% Revenue $768 $847 (9%) • Integrated Solutions decreased 3% Operating Income* $77 $90 (14%) Foreign currency exchange rates negatively impacted revenue by Ope
Slide 13: Second Quarter – Global Products
Second Quarter – Global Products ($ in millions) Organic revenue* decreased 3% Q2FY16 Q2FY15 Change • Driven by tough prior year Revenue $616 $639 (4%) compare and softness in high- hazard, heavy industrial end Operating Income* $103 $116 (11%) market Operating Margin* 16.7% 18.2% (150bps) Net acqui
Slide 14: Other Items
Other Items Corporate expense before special items* was $46 million in the quarter • Outlook: Expect corporate expense before special items for the full year to be ~$200 million Tax rate* excluding special items was 17.3% for the quarter • Outlook: Expect similar rate in second half of year Restruct
Slide 15: Guidance Q3 FY 2016
Guidance Q3 FY 2016 Q3 2016 EPS Bridge Outlook $0.52- ~$2.4 billion $0.08 ($0.02) $0.03 $0.54 Revenue ~2% decline YoY ($0.02) on reported basis $0.46 Organic Growth +1% to +2% FX ~$80 million (3%) headwind Net M&A Activity ~$5 million headwind Incl. Divestiture Segment Margin Similar to Prior Year (
Slide 16: 2nd Half Guidance
2nd Half Guidance 1st Half Q3 Q4 2nd Half Earnings Per Share* Earnings Per Share* Earnings Per Share* Earnings Per Share* Tyco $1.21 $0.87 $0.52 - $0.54 $0.65 - $0.70 Mid-Point Guidance Revenue of ~$90M** 53rd Week $0.04 - $0.05 $0.02 $0.05 $1.21 $0.02 $0.04 $0.21 $0.87 1st Half FY16 Historical 2H R
Slide 17: Guidance FY 2016
Guidance FY 2016 Original Guidance Current Guidance Q4’15 Earnings Call Q2’16 Earnings Call Revenue ~$9.65 billion to $9.85 billion ~$9.67 billion to $9.77 billion Decline (1%) to (3%) YoY on reported basis Decline (1%) to (2%) YoY on reported basis Organic Growth Flat to +2% Flat to +1% FX Headwind
Slide 18: Appendix
Appendix
Slide 19: 2016 Full Year Foreign Exchange Impact
2016 Full Year Foreign Exchange Impact Original FX Current FX Guidance Guidance Q4’15 Earnings Call Q2’16 Earnings Call 2016 Revenue ($310M) ($390M) Headwind (~3%) (~4%) Top Foreign Currency Exposures Original FX Current FX 2016 EPS Rates* Rates* ($0.07) ($0.10) Variance Headwind Q4’15 Q2’16 Earning
Slide 20: FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact
FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact Q1FY15 Q2FY15 Q3FY15 Q4FY15 YTD FY15 Revenue NA IS&S 951 944 972 1,012 3,879 ROW IS&S 916 847 842 827 3,432 Global Products 611 639 675 666 2,591 Total Revenue 2,478 2,430 2,489 2,505 9,902 Operating Income NA IS&S 131 13.8%
Slide 21: Consolidated Statements of Operations
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) Quarters Ended Six Months Ended March 25, March 27, March 25, March 27, 2016 2015 2016 2015 Revenue from product sales $ 1,398 $ 1,458 $ 2,806 $ 2,946 Service revenue 933 972 1,901 1,962 Net
Slide 22: Results of Segments
TYCO INTERNATIONAL PLC RESULTS OF SEGMENTS (in millions) (Unaudited) Quarters Ended Six Months Ended March 25, March 27, March 25, March 27, 2016 2015 2016 2015 Net Revenue NA Integrated Solutions & Services $ 947 $ 944 $ 1,900 $ 1,895 ROW Integrated Solutions & Services 768 847 1,580 1,763 Global P
Slide 23: Consolidated Balance Sheets
TYCO INTERNATIONAL PLC CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) March 25, 2016 September 25, 2015 Assets Current Assets: Cash and cash equivalents $ 345 $ 1,401 Accounts receivable, net 1,722 1,732 Inventories 670 624 Prepaid expenses and other current assets 864 754 Deferred income tax
Slide 24: Consolidated Statements of Cash Flows
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) For the Quarters Ended For the Six Months Ended March 25, March 27, March 25, March 27, 2016 2015 2016 2015 Cash Flows From Operating Activities: Net income attributable to Tyco ordinary shareholders $ 146 $ 167 $
Slide 25: Free Cash Flow Reconciliation
For the Quarters Ended For the Six Months Ended March 25, March 27, March 25, March 27, 2016 2015 2016 2015 Reconciliation to "Free Cash Flow": Net cash provided by operating activities $ 124 $ 167 $ 313 $ 262 Capital expenditures, net (74) (55) (142) (120) Acquisition of dealer generated customer a
Slide 26: Organic Growth Reconciliation - Revenue
TYCO INTERNATIONAL PLC ORGANIC GROWTH RECONCILIATION - REVENUE (in millions) (Unaudited) Quarter Ended March 25, 2016 Base Year Adjustments Adjusted Net Revenue for the Fiscal Net Revenue for the Quarter Ended Divestitures / 2015 Base Quarter Ended (1) March 27, 2015 Other Revenue Foreign Currency A
Slide 27: Earnings Per Share Summary
Earnings Per Share Summary (Unaudited) Quarter Ended Quarter Ended March 25, 2016 March 27, 2015 Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP) $ 0.33 $ 0.43 expense / (benefit) Restructuring and repositioning reversals (FY15 and prior) (0.01) — Merger costs 0.06 — (
Slide 28: Quarter Ended March 25, 2016 Reconciliation
Tyco International plc For the Quarter Ended March 25, 2016 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Integrated Integrated Solutions Solutions Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $947 $768
Slide 29: Quarter Ended March 27, 2015 Reconciliation
Tyco International plc For the Quarter Ended March 27, 2015 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Integrated Integrated Solutions Solutions Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $944 $847
Slide 30: Non-GAAP Measures
Non-GAAP Measures Organic revenue, free cash flow (outflow) (FCF), and income from continuing operations, earnings per share (EPS) from continuing operations, operating income and segment operating income, in each case “before special items,” are non-GAAP measures and should not be considered replac
Slide 31: Non-GAAP Measures Continued
Non-GAAP Measures Continued The limitation associated with using these cash flow metrics is that they adjust for cash items that are ultimately within management's and the Board of Directors' discretion to direct and therefore may imply that there is less or more cash that is available for the compa
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