Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Bernstein Strategic Decisions Conference 2016
24 slides from Johnson Controls International's conference presentation, Jun 3, 2016
Slide 1: Creating a Global Industrial Leader: Johnson Controls and Tyco
Creating a Global Industrial Leader Johnson Controls and Tyco George Oliver – CEO Bernstein Strategic Decisions Conference June 3, 2016 Filed by Tyco International plc pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of
Slide 2: No Offer or Solicitation; Additional 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 jurisdiction, nor shall ther
Slide 3: Legal Disclosures/Forward Looking Statements
Legal Disclosures/Forward Looking Statements PARTICIPANTS IN THE SOLICITATION Johnson Controls, Tyco and certain of their respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information rega
Slide 4: Forward Looking Statements/Required Disclosures
Forward Looking Statements/Required Disclosures Cautionary Statement Regarding Forward-Looking Statements (cont.) revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansi
Slide 5: Creating A Global Industrial Leader
Creating A Global Industrial Leader ~$30B Tyco: ~$10B Fire & Security Integrated Solutions & Services Fire, Security & Life Safety Products Johnson Controls: ~$20B Building Controls, HVAC Solutions & Services Energy Storage *Excludes automotive-seating business spin “Adient”
Slide 6: Uniquely Positioned To Provide Most Comprehensive Portfolio Of Building And Energy Solutions
Uniquely Positioned To Provide Most Comprehensive Portfolio Of Building And Energy Solutions World’s leading provider of Buildings and Energy Storage technologies, solutions and services with 2016 pro-forma revenue of ~$30B* Industry leading brands and technologies with deep innovation pipelines Sig
Slide 7: Executing Against Our Day Plan
Executing Against Our Day 1 Plan* April May July / August Oct 1st Announced Transaction Tyco S-4 initial filing with SEC Adient Form 10 Filing with SEC JCI & Tyco Shareholder Meetings to Vote on Merger January ...Integration Work Underway …Adient Spin On Track Leveraging “Best Of Both” To Be “Day 1”
Slide 8: Combined Company Has A Stronger Financial Profile
~$30B of Revenue ~$4.5B of EBITDA (before synergies) Income Statement 2x – 2.5x Net Debt / EBITDA ~$10.5B of Net Debt* Balance Sheet ~940M shares outstanding** ~17% tax rate Strong FCF Conversion Other Combined Company Has A Stronger Financial Profile… *Assumes a ~$3B cash dividend from Adient and $
Slide 9: Balanced Revenue Mix Provides Strong Base For Growth
Type Cycle End Market Geography Balanced Revenue Mix Provides Strong Base For Growth And Durability Through The Cycle *Excludes automotive-seating business spin “Adient” NOTE: Pie chart %’s based on FY15 actuals, proforma to include Hitachi Commercial HVAC23% ~$30B* Proforma Revenue
Slide 10: Significant Value Creation Within Our Control
Johnson Controls Productivity ~$300M* Tyco Productivity ~$100M* Deal Synergies ~$650M* Manufacturing/ Engineering Procurement Marketing & Sales Functional Excellence Procurement Branch Network Functional Excellence Operational Tax Productivity Plus Deal Synergies = $1B+ Opportunity ~$1B+ Significant
Slide 11: Elements Of Our Cost Synergy & Productivity Plans
Elements Of Our Cost Synergy & Productivity Plans ~$400 Million (45% of Total Net Savings) Consolidate ~$275 Million (30% of Total Net Savings) Enhance Savings Area Savings $ G&A Procurement Generating ~$900 Million Net Operational Savings ~$225 Million (25% of Total Net Savings) Integrate Field
Slide 12: Consolidate: Leverage Combined Structure
Consolidate: Leverage Combined Structure ~$2 Billion Cost Base Areas of Savings: Public Company Costs Functional Excellence Duplicative Spend HR Finance Legal IT Other G&A ~$400M Net Savings
Slide 13: Enhance: Savings Through Scale And Best Practices
Enhance: Savings Through Scale And Best Practices FY16 ~$12B ~25% ~45% ~30% Direct Indirect Field ~$275 Million Net Savings Procurement Spend
Slide 14: Integrate: Drive Savings In Manufacturing, Engineering And Business Unit Integration
Integrate: Drive Savings In Manufacturing, Engineering And Business Unit Integration Type of Costs ~$8 Billion Cost Base Manufacturing Engineering Commercial Operations Branch Overhead What Drives Savings? Lean Six Sigma Branch Consolidation Duplicative Spend ~$225 Million Net Savings
Slide 15: A Proven History Of Operational Execution
* Segment operating margin before special items is a non-GAAP measure. See appendix for reconciliation. A Proven History Of Operational Execution… …Driving Transformation And Building Strong Fundamentals Tyco Adjusted Segment Margin* 230bps segment margin expansion over 3 year period ~20% segment in
Slide 16: Early Thoughts On Revenue Synergies
Nascent market but well-positioned with technologies and expertise to lead Approach is becoming increasingly common in large, complex and enterprise markets Have the products and commercial capabilities in place today Early Thoughts On Revenue Synergies 1 2 3 Immediate, tangible benefits of cross-se
Slide 17: Combined Company Able To Leverage Connectivity & Drive Synergies For A Smarter Customer Offering
Combined Company Able To Leverage Connectivity & Drive Synergies For A “Smarter” Customer Offering
Slide 18: Compelling Combination With Significant Value Creation
Compelling Combination With Significant Value Creation Global leader in Building Automation, Controls, Fire, Security, HVAC Equipment and Energy Storage Systems $1 billion+ in initiatives within our control creating ~$1 of earnings per share over the next 3 years Combined company well positioned to
Slide 19: Appendix
Appendix tg MO tyca
Slide 20: JCI + Tyco Proforma Share Reconciliation
JCI + Tyco Proforma Share Reconciliation (Approximation) (in millions, except stock split ratio) Tyco diluted shares 430 Reverse stock split x 0.955 Tyco post-stock split diluted shares 411 A JCI diluted shares 653 Less: expected share repurchase ($500M) (13) Less: $3.9B cash to JCI shareholders (11
Slide 21: Transaction Highlights
Transaction Highlights Name & Relative Ownership Johnson Controls and Tyco to combine under the existing Tyco entity and the combined company will be called Johnson Controls plc Johnson Controls shareholders will own ~56% of the combined company shares (plus receive ~$3.9bn cash consideration in the
Slide 22: What Each Shareholder Receives
What Each Shareholder Receives Johnson Controls Shareholder Pro Forma Transaction Today 1 Tyco share Effect reverse stock split 0.9550 combined company share 1 Johnson Controls share Cash / stock election $3.9B aggregate cash consideration 1 combined company share –or-- $34.88 cash / share (subject
Slide 23: Non-GAAP Reconciliation: Tyco Segment Operating Margin FY12 – FY15
Non-GAAP Reconciliation: Tyco Segment Operating Margin FY12 – FY15 FY12 FY13 FY14 FY15 Revenue Revenue Revenue Revenue Revenue (GAAP) $9,875 $10,058 $10,332 $9,902 Segment Segment Segment Segment Operating Operating Operating Operating Income Margin Income Margin Income Margin Income Margin Segment
Slide 24: Non-GAAP Reconciliation: Johnson Controls Segment Operating Margin FY12 – FY15
Non-GAAP Reconciliation: Johnson Controls Segment Operating Margin FY12 – FY15 FY12 FY13 FY14 FY15 Revenue Revenue Revenue Revenue Revenue (GAAP) $36,310 $37,145 $38,749 $37,179 Segment Segment Segment Segment Income Margin Income Margin Income Margin Income Margin Segment Income (GAAP) $2,227 6.1%
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