Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Tyco International — Q4 2015 Earnings Presentation
34 slides from Johnson Controls International's earnings presentation, Nov 13, 2015
Slide 1: Fourth Quarter Review
Fourth Quarter Review 13 / November / 2015
Slide 2: 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 3: A Strong Finish to the Fiscal Year
A Strong Finish to the Fiscal Year Solid quarter of operational execution Continued focus on productivity and “self-help” initiatives • Across all businesses • Across all global functions Strong EPS* growth for both the quarter and the full year Earnings Per Share* Increased 9% Year-Over-Year For Th
Slide 4: Mixed Macro-Economic Environment
Mixed Macro-Economic Environment Regional ~5% Impact of Oil & Gas of total Outlook revenue North Decline related to Western Canada region North America Significant decline in new O&G installation America projects IS&S High margin service work down year over year Decline related to UK’s North
Slide 5: Full Year 2015 Results – Financial Overview
Full Year 2015 Results – Financial Overview (EPS amounts are fully diluted and attributable to Tyco ordinary shareholders) ($ in millions, except per-share amounts) FY15 FY14 Change Revenue $9,902 $10,332 (4%) Organic Growth* 1% 3% Segment Operating Income before special items * $1,421 $1,438 (1%) S
Slide 6: Fiscal 2015 Highlights
Fiscal 2015 Highlights Revenue of $9.9 billion with organic revenue* growth of 1% • Net impact of acquisitions and divestitures +1% • 6% headwind from FX • Overall revenue decline 4% Segment operating margin before special items* improved 50 basis points to 14.4% • Margin expansion led by North Amer
Slide 7: Q4 2015 Results – Financial Overview
Q4 2015 Results – Financial Overview (EPS amounts are fully diluted and attributable to Tyco ordinary shareholders) ($ in millions, except per-share amounts) Q4FY15 Q4FY14 Change Revenue $2,505 $2,703 (7%) Organic Growth* (1%) 3% Segment Operating Income before special items* $394 $384 3% Segment Op
Slide 8: Fourth Quarter Highlights
Fourth Quarter Highlights Revenue of $2.5 billion declined 7% year over year on a reported basis, including 7% headwind from foreign currency exchange rates • Organic revenue* declined 1% • Acquisitions contributed 2%, partially offset by 1% decline related to a divestiture • Excluding FX service +3
Slide 9: Fourth Quarter Highlights Continued
Fourth Quarter Highlights Continued Orders growth of 3%, excluding impact of foreign currency and divestiture • Products +10%, Service +2% and Integrated Solutions (1%) YoY Total Orders Growth 7% 6% 5% 4% 3% 3% 3% 1% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Backlog of $4.6 billion increased 3
Slide 10: Fourth Quarter – NA Integrated Solutions & Services
Fourth Quarter – NA Integrated Solutions & Services Organic revenue* increased 2% ($ in millions) Q4FY15 Q4FY14 Change • Service increased 3% • Integrated solutions increased 1% Revenue $1,012 $1,012 - Foreign currency rates negatively Operating Income* $180 $134 34% impacted revenues by two percent
Slide 11: Fourth Quarter – ROW Integrated Solutions & Services
Fourth Quarter – ROW Integrated Solutions & Services Organic revenue* decreased 3% ($ in millions) Q4FY15 Q4FY14 Change • Service flat Revenue $827 $1,010 (18%) • Integrated solutions decreased 7% Operating Income* $90 $119 (24%) Foreign currency exchange rates Operating Margin* 10.9% 11.8% (90bps)
Slide 12: Fourth Quarter – Global Products
Fourth Quarter – Global Products ($ in millions) Organic revenue* decreased 2% Q4FY15 Q4FY14 Change • Driven by decline in Life Safety Revenue $666 $681 (2%) Operating Income* $124 $131 (5%) Acquisition growth of 7% was offset by a 7% negative impact Operating Margin* 18.6% 19.2% (60bps) from foreig
Slide 13: Other Items
Other Items Corporate expense before special items* was $45 million in the quarter and $201 million for year • Outlook: Expect fiscal 2016 corporate expense before special items to be in the range of $205 - $215 million Tax rate* excluding special items was 17.4% for the quarter and 16.0% for year •
Slide 14: Recent Debt Refinancing
Recent Debt Refinancing September 2015, raised $1.5 billion in debt: Principal Interest Rate and Maturity $750,000,000 3.9% Notes due 2026 $750,000,000 5.125% Notes due 2045 Proceeds of debt used to redeem several tranches of higher interest rate debt, the related make-whole payments, as well as the
Slide 15: Guidance FY 2016
Guidance FY 2016 FY 2016 Outlook Revenue ~$9.65 billion to $9.85 billion Decline (1%) to (3%) YoY on reported basis Organic Growth Flat to +2% FX Headwind ~$310 million or (3%) headwind Net M&A Activity ~$30 million benefit Incl. Divestiture Segment Margin Expansion +50bps to +80bps Before Special I
Slide 16: Guidance Q1 FY 2016
Guidance Q1 FY 2016 Q1 2016 EPS Bridge Outlook $0.07 ($0.02) ~$2.3 billion ($0.03) Revenue ~6% decline YoY $0.38 ($0.03) $0.03 ~$0.40 on reported basis Organic Decline (1%) – (3%) FX Headwind ~$150 million (6%) headwind Net M&A Activity ~$40 million benefit Incl. Divestiture Segment Margin ~12.8% to
Slide 17: Tyco Appoints Robert E. Olson Executive Vice President & Chief Financial Officer
Tyco Appoints Robert E. Olson Executive Vice President & Chief Financial Officer as Part of Planned Transition Mr. Olson, 56, will serve as Chief Financial Officer succeeding Arun Nayar, 65, who is retiring from the company at the end of the calendar year Most recently, Mr. Olson served as the Execu
Slide 18: Appendix
Appendix
Slide 19: FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact
FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact Q1FY15 Q2FY15 Q3FY15 Q4FY15 YTD Actual Actual Prelim Prelim 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 Operat
Slide 20: Foreign Exchange Rates – FY16 Guidance
Foreign Exchange Rates – FY16 Guidance Top Foreign Currency Exposures % of FY15 FX Rates* Annual Revenue EUR/USD 11% 1.09 GBP/USD 11% 1.53 USD/CAD 7% 1.32 AUD/USD 5% 0.71 * Foreign exchange rates quoted as of November 6th, 2015. 20
Slide 21: Consolidated Statements of Operations
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) Quarters Ended Twelve Months Ended September 25, September 26, September 25, September 26, 2015 2014 2015 2014 Revenue from product sales $ 1,508 $ 1,668 $ 5,965 $ 6,218 Service revenue 997
Slide 22: Results of Segments
TYCO INTERNATIONAL PLC RESULTS OF SEGMENTS (in millions) (Unaudited) Quarters Ended Twelve Months Ended September 25, September 26, September 25, September 26, 2015 2014 2015 2014 Net Revenue NA Integrated Solutions & Services $ 1,012 $ 1,012 $ 3,879 $ 3,876 ROW Integrated Solutions & Services 827 1
Slide 23: Consolidated Balance Sheets
TYCO INTERNATIONAL PLC CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) September 25, 2015 September 26, 2014 Assets Current Assets: Cash and cash equivalents $ 1,401 $ 892 Accounts receivable, net 1,775 1,734 Inventories 627 625 Prepaid expenses and other current assets 776 1,051 Deferred inco
Slide 24: Consolidated Statements of Cash Flows
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) For the Quarters Ended For the Twelve Months Ended September 25, September 26, September 25, September 26, 2015 2014 2015 2014 Cash Flows From Operating Activities: Net income (loss) attributable to Tyco ordinary
Slide 25: Free Cash Flow Reconciliation
Reconciliation to "Free Cash Flow": Net cash provided by operating activities $ 31 $ 311 $ 542 $ 829 Capital expenditures, net (62) (75) (241) (278) Acquisition of dealer generated customer accounts and bulk account purchases (5) (5) (18) (25) Payment of contingent consideration (2) — (25) — Free Ca
Slide 26: Organic Growth Reconciliation - Revenue
TYCO INTERNATIONAL PLC ORGANIC GROWTH RECONCILIATION - REVENUE (in millions) (Unaudited) Quarter Ended September 25, 2015 Base Year Adjustments Adjusted Net Revenue for the Fiscal Net Revenue for the Quarter Ended Divestitures / 2014 Base Quarter Ended (1) September 26, 2014 Other Revenue Foreign Cu
Slide 27: Earnings Per Share Summary
Earnings Per Share Summary (Unaudited) Quarter Ended Year Ended Quarter Ended Year Ended September 25, 2015 September 25, 2015 September 26, 2014 September 26, 2014 Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP) $ 0.19 $ 1.44 $ (0.17) $ 1.72 expense / (benefit) Restr
Slide 28: Reconciliation for Quarter Ended September 25, 2015
Tyco International plc For the Quarter Ended September 25, 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) $1,012
Slide 29: Reconciliation for Year Ended September 25, 2015
Tyco International plc For the Year Ended September 25, 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) $3,879 $3
Slide 30: Reconciliation for Quarter Ended September 26, 2014
Tyco International plc For the Quarter Ended September 26, 2014 (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) $1,012
Slide 31: Reconciliation for Year Ended September 26, 2014
Tyco International plc For the Year Ended September 26, 2014 (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) $3,876 $3
Slide 32: 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 33: 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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