Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Investor Day (September 2021)
135 slides from Johnson Controls International's investor day presentation, Sep 8, 2021
Slide 1: Investor Day
Investor Day September 8, 2021
Slide 2: Better | Bolder | Building
Johnson Controls has deep expertise and a deserved reputation for innovation stretching back more than 135 years. We prize our past. We are proud of it. But we don’t live in it. We know today is the best time to build tomorrow. We have a glorious impatience to make the future. Johnson Controls is pe
Slide 3: Forward Looking & Cautionary Statements / Non-GAAP Financial Information
Forward Looking & Cautionary Statements / Non-GAAP Financial Information Johnson Controls International plc Cautionary Statement Regarding Forward-Looking Statements Johnson Controls International plc has made statements in this communication that are forward-looking and therefore are subject to ris
Slide 4: Investor Day
Investor Day STRATEGIC OVERVIEW George Oliver, Chairman & Chief Executive Officer ENVIRONMENTAL, SOCIAL & GOVERNANCE Katie McGinty, VP, Chief Sustainability, Government & Regulatory Affairs Officer PRODUCT LEADERSHIP Jeff Williams, VP & President Global Products TECHNOLOGY LEADERSHIP / OPENBLUE Vija
Slide 5: Strategic Overview
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Strategic Overview George Oliver, Chairman &
Slide 6: Leading the Evolution of Smart, Healthy & Connected Buildings
$24B broad synergistic OpenBlue digital portfolio spanning platform is fundamentally across HVAC, Controls, disrupting the built LEADING THE Fire, and Security environment EVOLUTION $300B global market with an exciting decade Demonstrated leadership in ESG OF SMART, of opportunity ahead focused on s
Slide 7: We Are a Leader in Attractive Markets With Significant Upside for Growth
We Are a Leader in Attractive Markets With Significant Upside for Growth Annual Decarbonization Addressable Market We can address 60% of future decarbonization demand, today ~$250B 2 Healthy Buildings / IEQ HVAC & Post-pandemic focus on operating Incremental market Services ~$300B Controls 41% healt
Slide 8: Our Journey to a Smart Buildings Solutions Leader
Our Journey to a Smart Buildings Solutions Leader CEO Launch of Transition OpenBlue Divested Scott Safety Sept. Oct. Apr. Sept. 2021 Closed 2016 2019 2020 JCI-TYC Merger Accelerating Growth & Returns Sept. 2016 Sept. Oct. Jul. 2017 2017 2020 We Are Here Closed Divested Power Adient Spin Solutions (S
Slide 9: Balanced Portfolio Mix Provides Strong Base for Growth
Balanced Portfolio Mix Provides Strong Base for Growth Light Commercial Commercial HVAC & Controls Residential Global Products Installation HVAC Products NA 36% 37% 36% 37% FY21F REVENUE Asia Pac EMEALA 11% 16% Service 27% $23.7B Industrial Refrig. Performance Contracting SEGMENTS BUSINESS MIX Fire
Slide 10: Global Footprint With Local Leadership
Global Footprint With Local Leadership FY21F Revenue: $23.7 Billion Geographic Mix NORTH AMERICA 46% of revenue is generated outside of EUROPE North America ASIA MIDDLE EAST & $7 Billion of AFRICA revenue generated from growth market countries LATIN AMERICA PACIFIC Local market-driven R&D supported
Slide 11: Serving The Most Mission Critical Vertical Markets
Serving The Most Mission Critical Vertical Markets… Smart Campuses Schools Airports Hospitals Cities Data Sports & Life Mfg. / Oil & Gas Centers Entertainment Sciences Industrial …With Tailored Solutions to Meet Full Building Lifecycle Needs Industrial Commercial Customer Vision Advanced Comprehensi
Slide 12: Multi-Channel Presence Supports Go-To-Market Strategy
Multi-Channel Presence Supports Go-To-Market Strategy Served Market Small Mid-Market Complex Residential Commercial Commercial Commercial Business Unit $8.6B GLOBAL PRODUCTS $15.1B BUILDING SOLUTIONS North America EMEALA APAC Go-to-Market Channel Indirect Channel Direct Channel Applied Indus'l Light
Slide 13: This Portfolio is Key to Enabling Customer Outcomes
This Portfolio is Key to Enabling Customer Outcomes SYSTEM OF SYSTEMS & APPLICATIONS OUTCOMES Vibration AMBIENT INTELLIGENCE (XaaS) Flow Energy Humidity Management Sustainability Wayfinding Health & Occupancy Wellbeing Air Quality Air Velocity Threat Intelligent Identification Security
Slide 14: Our Direct Channel Is a Competitive Advantage
Our Direct Channel Is a Competitive Advantage 3+ Decades of delivering guaranteed outcomes 10+ Years of 31 Million metric tones of CO2 reduction since 2000 experience delivering $6 Billion+ in annual technology enabled $2.8 Billion guaranteed Impact service revenues outcomes across key ene
Slide 15: Our Advantaged Portfolio Enables Greater Value Creation
Our Advantaged Portfolio Enables Greater Value Creation Lifetime Value Economics Transitioning from 5X to 10X Example Customer: Complex Hospital Smart Building LTV Building Size: 500,000ft2 Building Life Span: 50 years Chillers: 3 York YZ BAS System: Metasys Controls 10x Lifetime Value OpenBlue Plat
Slide 16: A Look Ahead: Driving Continued Long-Term Earnings Growth
A Look Ahead…Driving Continued Long-Term Earnings Growth 1 Culture & Leadership 2 Accelerate Our Growth Strategy The power behind your mission. 3 Drive Margin Expansion 4 Disciplined Capital Allocation 16
Slide 17: Strengthening Leadership for Today and Tomorrow
1 Strengthening Leadership for Today and Tomorrow Attributes Capability Investments Outcome Growth mind-set Blend of digital and core skills / acumen (+500 adds in digital talent across AI, Twin, Platform, Sustainability through 2024) Entrepreneurial spirit Solution orientation for outcome-based
Slide 18: Core to Our Culture Is Zero Harm to People and the Environment
Core to Our Culture Is “Zero Harm to People and the Environment” Safety Foster a caring, no-blame culture Promote proactive preventative safety Focus on key risk factors and drivers Health and Wellness Zero Harm is part of our DNA Promote a harmonious work-life balance Encourage a positive
Slide 19: Ambitious New ESG Commitments
Ambitious New ESG Commitments Double 2002 Double 75% Since Direct executive the representation of customers’ annual avoided compensation history of transparency R&D investment emissions by 2030 through to sustainability and sustainability data women leaders on new product Johnson Controls OpenBlue d
Slide 20: Accelerating Our Growth Strategy
2 Accelerating Our Growth Strategy Vectors of Growth ~$250B+1 Incremental Market By 2035 Driving Digital Services 1 Source: Navigant, Guidehouse, Memoori, JCI analysis 20
Slide 21: Decarbonization – Buildings Play a Crucial Role
Decarbonization – Buildings Play a Crucial Role A We Are Positioned to Lead the Industry Why Attractive Strategy to Win Global Decarbonization Segment1 (by region) HVAC and BMS Technology powered by OpenBlue $240B Key Solution Technologies APAC 12% Leverage our Installed EMEALA 36% Other3 15% HVAC (
Slide 22: Healthy Buildings – Leading Suite of Cross-Domain and Digital Solutions
Healthy Buildings – Leading Suite of Cross-Domain and Digital B Solutions to Meet Sustained Indoor Air & Environmental Quality Needs Why Attractive Strategy to Win Global focus on Healthy Buildings Metasys & HVAC $10-$15B1 industry through 2030 Equipment Installed Base Expect sustained demand post-
Slide 23: Smart Buildings – Disrupting the Built Environment
Smart Buildings – Disrupting the Built Environment C With Cutting Edge Digital Technology & Data Analytics Why Attractive Strategy to Win Intelligent Buildings Solutions1 Digitalizing Services $70B & Products CAGR +12% $25B Unifying Software 2021 2030 New Solutions Increasing acceptance that digit
Slide 24: Digital Services – Digitally Enabled Innovation
Digital Services – Digitally Enabled Innovation D Changing the Traditional Services Market Why Attractive Strategy to Win Broad Capabilities Digital Enabled Innovation Additional derivative opportunities from decarbonization and healthy buildings will be incremental to this market opportunity Enhanc
Slide 25: Product and Technology Leadership
Product and Technology Leadership – E Solving Our Customer’s Most Relevant and Pressing Problems Growth in Patent Portfolio Broadest Building-Technology Cumulative count of US patents granted since FY2016 Portfolio 1,301 IR Ducted Best-in-Class Heat Pump Portfolio Fire Supp. 948 Chillers + Air Side
Slide 26: Aggressive Productivity Program Creating Significant Margin Runway
Aggressive Productivity Program Creating 3 Significant Margin Runway 30bps $300M $250M Significant Base Margin Improvement SG&A Initiatives COGS Initiatives = Margin Expansion 26
Slide 27: Disciplined Capital Allocation
4 Disciplined Capital Allocation Competitive Dividend Dividend growth in-line with earnings growth Strategic M&A Targeting 1 to 2 additional points of top-line growth per year Share Repurchases Annual share repurchases 27
Slide 28: Leading the Evolution of Smart, Healthy & Connected Buildings
$24B broad synergistic OpenBlue digital portfolio spanning platform is fundamentally across HVAC, Controls, disrupting the built LEADING THE Fire, and Security environment EVOLUTION $300B global market with an exciting decade Demonstrated leadership in ESG OF SMART, of opportunity ahead focused on s
Slide 29: Building Long-Term Shareholder Value
Building Long-Term Shareholder Value MSD+ Sales 250 to 300bps 100% FCF ~$8B In Capital Double Digit Growth Of Margin Conversion Deployment Adjusted EPS Expansion Potential Growth Accelerated Strong leverage Continued Organic Revenue growth service growth SG&A / COGS improvement re-invest
Slide 30: Sustainability & ESG
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Sustainability & ESG Katie McGinty, Vice Pre
Slide 31: We transform the environments where people live, work, learn and play
At Johnson Controls, we transform the environments where people live, work, learn and play As the global leader in technology that powers smart, healthy and connected buildings, our mission is to reimagine the performance of buildings to serve people, places and the planet. And we’ve been doing it s
Slide 32: Sustainability has been at the heart of our business since inception
Sustainability has been at the heart of our business since its inception and is fundamental to everything we do Delivering sustainability Johnson Controls publishes its first sustainability report and joins 2003 10,000 Customers EPA Climate Leaders Program More than 30.6m ~ Saved more than Johnson C
Slide 33: Executing on Our 2025 Sustainability Strategy
Executing on Our 2025 Sustainability Strategy Solutions Provide increasingly sustainable products and services Integrate sustainable design for products and services identified as having the highest environmental and social impact People Foster a culture of sustainability that engages and attracts p
Slide 34: Recognized ESG Leader
Recognized ESG Leader Awarded World’s Most Ethical Named one of the 100 Best Named in Corporate Knights’ Johnson Controls MSCI AAA rating since Johnson Controls named Company in 2021 by Corporate Citizens in 2021 for the 2021 Global 100 index as one recognized by CDP for 2018 to prestigious FT Ethis
Slide 35: Strengthening Our ESG Leadership with New Ambitious Commitments
Strengthening Our ESG Leadership with New Ambitious Commitments GLOBAL ESG STRATEGY ALIGNED WITH UN GLOBAL COMPACT ENVIRONMENTAL SOCIAL GOVERNANCE Climate change solutions Ensuring a safe & healthy working Board diversity Reducing waste environment Pay for performance Reduce water consumption Cultur
Slide 36: Sustainability is Imperative for Better Buildings
7 Sustainability is Imperative for Better Buildings ~40% of global CO2 emissions are generated by the building sector Innovating sustainable products & solutions Disrupting traditional delivery models OpenBlue digital/software is essential to delivering on customers’ energy efficiency & emission red
Slide 37: Proactively Supporting Public Policy Development
Proactively Supporting Public Policy Development President Biden Climate Summit 37
Slide 38: Healthy People, Healthy Places, Healthy Planet
Healthy People Healthy Places Healthy Planet Power wellness & high Optimize the performance Drive customer sustainability performance teams of customers, buildings and assets goals and community health 38
Slide 39: Product Leadership
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Product Leadership Jeff Williams, Vice Presi
Slide 40: Product Leadership With Synergistic Portfolio
Product Leadership With Synergistic Portfolio Key to Big Data & Enabling Outcomes Unparalleled portfolio breadth Leading player in attractive industries Global coverage with deep expertise Cutting edge technology with robust R&D pipeline Multiple channels to market Secular trends support future grow
Slide 41: Unparalleled Portfolio Breadth Poised for Growth
Unparalleled Portfolio Breadth Poised for Growth Revenue Mix Industrial NA Resi Refrigeration HVAC Direct Security Channel (Field) 5% 8% 9% ROW Resi 25% HVAC 18% Fire 14% ~$11.6B ~$7.9B ~$11.6B FY21F 5% Lt. Comm. FY21F 5% Revenue1 HVAC Revenue1 5% Controls 75% Third VRF Party 31% HVAC Applied Busine
Slide 42: Leading in Applied HVAC – Equipment
Industrial NA Resi Refrigeration HVAC Leading in Applied HVAC – Equipment Security 5% 8% Enabling Customers’ Efficiency and Environmental Goals 9% ROW Resi 18% HVAC Fire 14% ~$11.6B 5% Lt. Comm. 5% HVAC Controls 5% VRF #1 in Global Applied HVAC Equipment 31% ~$20B chiller addressable market segment
Slide 43: Leading in Applied HVAC – Controls
Industrial NA Resi Leading in Applied HVAC – Controls Refrigeration HVAC Integrating Building Systems to Create Smarter, More Security 5% 8% ROW Optimized, Energy Efficient Facilities 9% Resi 18% HVAC Fire 14% ~$11.6B 5% Lt. Comm. Controls 5% 5% HVAC VRF #3 in Global Controls 31% ~$8B commercial bui
Slide 44: Top Global Player in Industrial Refrigeration
Industrial NA Resi Refrigeration HVAC Top Global Player in Industrial Refrigeration Security Enabling Customers’ Mission Critical Needs 9% 5% 8% ROW Resi 18% HVAC Fire 14% ~$11.6B 5% Lt. Comm. 5% HVAC 5% Controls VRF #2 in Global Industrial Refrigeration 31% ~$4B industrial refrigeration addressable
Slide 45: Targeted New Product Launches in Rooftops and VRF
Industrial NA Resi Refrigeration HVAC Targeted New Product Launches in Rooftops and VRF Security 5% 8% ROW New platforms demonstrating cost, technology and efficiency leadership 9% Resi 18% HVAC Fire 14% ~$11.6B 5% Lt. Comm. Controls 5% 5% HVAC #3 in NA Unitary Rooftops #2 in Global VRF VRF 31% ~$3B
Slide 46: Gaining Share in Residential HVAC
Industrial Refrigeration NA Resi HVAC Gaining Share in Residential HVAC Security 5% 8% ROW Resi Focused New Product Development, Expanding Channel Presence and Improving Scale 9% HVAC 18% Fire 14% ~$11.6B 5% Lt. Comm. 5% HVAC 5% Controls VRF #5 in NA Residential HVAC #8 in Global Ductless HVAC 31% ~
Slide 47: Leading Positions Across Core Fire Products
Industrial NA Resi Leading Positions Across Core Fire Products Refrigeration HVAC Security Large Installed Base of Sensing & Detecting Edge Devices, 9% 5% 8% ROW Integral to Digitalization, Regulated services 18% Resi HVAC Fire 14% ~$11.6B 5% Lt. Comm. 5% HVAC 5% Controls VRF #1 in Global Fire Produ
Slide 48: Leader in End-to-End Security Solutions
Industrial NA Resi Refrigeration Leader in End-to-End Security Solutions Security HVAC Solutions Across Video Management Systems, IP Cameras, 5% 8% ROW Access Controls, “aaS”, and Smart Home 9% Resi 18% HVAC Fire 14% ~$11.6B 5% Lt. Comm. 5% HVAC 5% Controls VRF #3 in Global Security Products 31% ~$1
Slide 49: Broad Portfolio in Core Building Systems Key to Big Data and Enabling Outcomes
This Broad Portfolio in Core Building Systems Key to Big Data and Enabling Outcomes SYSTEM OF SYSTEMS & APPLICATIONS OUTCOMES Vibration AMBIENT INTELLIGENCE (XaaS) Flow Energy Humidity Management Sustainability Wayfinding Health & Occupancy Wellbeing Air Quality Air Velocity Threat Intel
Slide 50: Product Strategy Enables Complex and High Value Service / Solution Outcomes
Product Strategy Enables Complex and High Value Service / Solution Outcomes Sustainability Supporting Sustainability Mission Through OpenBlue Enterprise Manager Customer Needs North America’s first fully-digital hospital for building management and patient care Improve patient journey visibility
Slide 51: Allocating Product R&D to Vectors of Growth
Allocating Product R&D to Vectors of Growth Focusing On Growth Vectors ~75% of R&D 50%+ of R&D FSP Security spend allocated Spending related to sustainability to product lines FD and IAQ supporting service / digital HVACR R&D focus includes Investments will & Controls developing software yield new c
Slide 52: Leveraging M&A to Drive Growth
Leveraging M&A to Drive Growth Together with Silent-Aire, we Inorganic Focus Areas have a strong foundation to grow Data Center spend is accelerating Lead in fast growing industries Market Size1 ($B), Product & Service +11% Strengthen our geographic coverage: $ 29 $ 32 $ 36 channel relationships
Slide 53: Delivering Above Market Growth Through the Cycle
Delivering Above Market Growth Through the Cycle Unparalleled portfolio breadth Leading player in attractive industries Global coverage with deep expertise Cutting edge technology with robust R&D pipeline Multiple routes to market Secular trends support future growth Target Growth at ~100bps Premium
Slide 54: Technology Leadership / OpenBlue
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Technology Leadership / OpenBlue Vijay Sanka
Slide 55: The Blueprint of the Future
The Blueprint of the Future OpenBlue is the space where BUILDING SOLUTIONS COME TOGETHER AND CONNECT to deliver new experiences, solve new customer problems, provide better safety and ensure impactful sustainability – and so much more. This is how value… keeps building. 55
Slide 56: Lead and Accelerate the Transformation to a Smart Autonomous Buildings' Future
Lead and Accelerate the Transformation to a Smart Autonomous Buildings’ Future Traditional Buildings Smart Autonomous Buildings (Buildings with static manual sequences, that are (Buildings that continuously learn, adapt and automatically reactive to needs of environment and people) respond to the ne
Slide 57: Disrupting Buildings Through Digital Solutions – With OpenBlue At The Core
Disrupting Buildings Through Digital Solutions – With OpenBlue At The Core Customer Outcomes Energy/sustainability, smart building, healthy spaces, customer experience AI/ML Service Remote management • Predictive ML based • Subscription Tiered Data Platform Cyber Global Products Edge / Cloud Con
Slide 58: OpenBlue – Enabling Enterprises to Manage All Aspects of Their Physical Spaces
OpenBlue – Enabling Enterprises to Manage All Aspects of Their Physical Spaces SOFTWARE PLATFORM Single Data Repository represented as a “twin” Analytical insights and AI models In-the-cloud and On-prem Digital Experiences to support twin visualization, energy optimization & sustainability Alerts an
Slide 59: OpenBlue Architecture – Four Key Building Blocks
OpenBlue Architecture – Four Key Building Blocks 1 Connected Devices Software defined smart edge to connect devices, equipment and control systems (BMS, ACVS) OpenBlue Platform Architecture Stack Support for popular OT-IT protocols and cyber security, with support for remote command and control
Slide 60: OpenBlue Currently Enables Several Applications That Create Tangible Value
OpenBlue Currently Enables Several Applications That Create Tangible Value for Customers… OpenBlue A comprehensive suite of apps delivered through a single pane of glass, empowering customers to drive Enterprise Manager ESG attributes that improve property value, operational efficiency, and tenant r
Slide 61: Also Creates Growth and Efficiency Opportunities for JCI
…Also Creates Growth and Efficiency Opportunities for JCI Positions JCI as a Smart Buildings Solutions leader, drives top-line growth in digital-enabled services & subscriptions, and delivers EBIT improvements Digital-enabled Subscription OPEX Services Revenues Improvement Connected Equipment Moni
Slide 62: OpenBlue Capabilities Augment Traditional BMS Systems
OpenBlue Capabilities Augment Traditional BMS Systems… Building management systems assist building operators in managing and monitoring equipment in the building – but Platform they are not an analytical, visualization and optimization platform Data from disparate sources – within and Metasys
Slide 63: Significantly Enhancing Functionality Critical to Delivering Holistic Outcomes
…Significantly Enhancing Functionality Critical to Delivering Holistic Outcomes Functionality Improvements of an OpenBlue Enabled BMS Functionality1 Traditional, on-premise BMS OpenBlue Enabled BMS Automation of buildings systems Yes Yes Remote Management No Yes Equipment Health Monitoring No Ye
Slide 64: Customer Example – Extending BMS Capabilities For Increased Value Creation
Customer Example – Extending BMS Capabilities For Increased Value Creation Large Global Real Estate Management Firm Operational Pain-Points OpenBlue Digital Enablers Energy Efficiency Efficiency drop as equipment ages Integrate BMS Automate equip/ Advanced Analytics Centralized monitoring Energy
Slide 65: OpenBlue Is Differentiated and More Holistic Relative to Competitive Offerings
OpenBlue Is Differentiated and More Holistic Relative to Competitive Offerings Competitive Landscape Across BMS, HVAC, Start-Ups Material Applications Ability to HVAC Controls Security BIoT & Analytics Integrate 3rd Competitor Equipment Share Products Platform Breadth Party Data Most competitive o
Slide 66: Alliances and Partnerships
Proactively Managing Customers’ Cybersecurity And Privacy Risk From Development to Operations Obtaining Platform Security and Privacy Certifications Including Alliances and ISO 27001, SOC 2, FedRAMP Partnerships Driving cybersecurity best practices and We add our expertise to industry groups, partic
Slide 67: Amplifying Our Reach Through Ecosystem Partnerships
Amplifying Our Reach Through Ecosystem Partnerships Ecosystem Partners Sell with / Build co-innovate Technology partnerships Enhancing capabilities in: Both AI/ML, edge, cloud, device Both management & visualization Increases speed to market Build Go-to-market partners Build Formalized partner
Slide 68: OpenBlue Positions JCI as a Smart Buildings Solutions Leader
OpenBlue Positions JCI as a Smart Buildings Solutions Leader Software platform enables services, products Digital Revenue ($B) and digital solutions CAGR 10% Creates tangible value for customers and $5.6 growth and efficiency opportunities for JCI $4.2 Significantly enhances functionality critical t
Slide 69: Digital Services
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Digital Services Ganesh Ramaswamy, Vice Pres
Slide 70: Driving Value Creation Through Services
Driving Value Creation Through Services $6B+ global service portfolio with accretive margins Large and fragmented market ($150B)1; derivative opportunities from secular trends: decarbonization, clean air / IEQ and smart buildings Digital enablers deliver enhanced value outcomes in cost, energy, upti
Slide 71: Global Services Market – Large & Fragmented
Global Services Market – Large & Fragmented Global Services Market Opportunity ($B)1 Key Characteristics 2021 – 24 [HVAC, Controls, Fire, Security] CAGR Commercial $38B 4.5% Large market globally – ~$150B growing at GDP (excl. retrofit) Education $20B 4.5% Services include: Healthcare $15B 5.5%
Slide 72: Services Market Is Changing – Accelerated By Post-Pandemic Needs and Technology
Services Market Is Changing – Accelerated By Post-Pandemic Needs and Technology Market Dynamics1 Winning Attributes Demographic shifts with one in five Ability to access and activate installed technicians to exit the labor force base with solutions – for scale and efficiency Indoor environmental
Slide 73: Large & Profitable Global Service Portfolio
Large & Profitable Global Service Portfolio BY REGION BY TYPE Key Value Drivers: EMEALA Non- Low Total Cost of Ownership (TCO) 30% Recurring Recurring FY21F 54% FY21F 46% Meeting Compliance REVENUE REVENUE $6B+ APAC 18% $6B+ Cost avoidance North America 52% Energy efficiency Asset uptime A
Slide 74: Way Forward: Build Strategic Capabilities through Digital Service Transformation
Way Forward Build Strategic 1 Capabilities through Digital Service DELIVERING TRACK RECORD OF SUCCESS Transformation 200 to 300bps Historical service growth aligned with GDP FY21 Q3 double-digit orders and revenue growth ABOVE MARKET Increased service attach rate by ~400bps in FY21 GROWTH Supp
Slide 75: Developing Strategic Capabilities Enabled by Digital Technologies
1 Developing Strategic Capabilities Enabled by Digital Technologies Connect digital Collect & process data ready equipment from connected equipment Ramp up brownfield/installed base Common user interface and data platform connectivity (installs post FY15: 97% Scalable and secure connectable to
Slide 76: Leveraging OpenBlue to Deliver Strategic Digital Service Capabilities
1 Leveraging OpenBlue to Deliver Strategic Digital Service Capabilities Examples of Advanced Analytics Capability Area of Impact Predictive Analytics Robust, ML-based anomaly detection, fault triaging, – Proactive Maintenance for condition-based condition-based maintenance prediction, alarm priori
Slide 77: Service Offering Example: Connected Chillers
2 Service Offering Example: Connected Chillers Voice of Customers Connected Chiller Strategy Expand asset capacity without adding asset footprint Goals & Objectives Connected Customers’ Top Equip. Platform Reduce unplanned failures and time to repair Reduce costs (total cost of ownership “TCO”
Slide 78: Example Offering: Healthy Buildings
2 Example Offering: Healthy Buildings Healthy Buildings Solution Strategy Continued Demand for Healthy Buildings Solution IEQ aaS IEQ aaS Identification & Remote Assessment Monitoring Gen 1 Gen 2 Application Global focus on indoor air & environmental quality (IAQ/IEQ) post- pandemic Available now
Slide 79: Groundbreaking Security-as-a-Service Platform Leveraging Exponential Technologies
2 Groundbreaking Security-as-a-Service Platform Leveraging Exponential Technologies Key Shifts Shaping the Future of Security Services New Security-as-a-Service Platform Platform that bridges Access Controls/Video Systems with Implications OpenBlue, drives powerful intelligence, and leverages robu
Slide 80: Customer Examples
Customer Examples Connected Chillers Healthy Buildings Security as a Service Digital Transformation of Maintenance Digital Transformation of IEQ Digitally Enabled Security Outcomes Healthcare Company University Major US Retailer Chain Standardize globally & transform to Installed high efficiency
Slide 81: Transforming Our Service Strategy Powered by OpenBlue Technologies
Transforming Our Service Strategy Powered by OpenBlue Technologies and Enabled by Our Installed Base, Domain Expertise and Global Coverage Today / Tomorrow Yesterday Embed Technology in Installed Base Leverage Data to Provide Differentiated Services Installed Base Connected Equipment OpenBlue Plat
Slide 82: On the Path to Deliver HSD Growth
On the Path to Deliver HSD Growth Growth Drivers Global Services Revenue, $B Market Growth Reflects GDP growth CAGR +7% $7.9 $0.6 Recurring Offerings $6.5 $0.8 Attach rate increase (+1pp = $30M) – Increasing from ~40% in FY21 to ~55% in FY24 Attrition reduction (-1pp = $35M) – Going from ~10%
Slide 83: Accelerating Transformation to Smart Buildings
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Accelerating Transformation to Smart Buildin
Slide 84: Operational Technology Meets Information Technology
Operational Technology Meets Information Technology The Power of Operational Technology We are digitally transforming environments to more effectively use the data that buildings generate to drive comfort, security and sustainability. 84
Slide 85: JCI Accelerating Transformation to Smart Autonomous Buildings
JCI Accelerating Transformation to Smart Autonomous Buildings The Evolution of Connected Buildings Improve Performance of Both Buildings and Businesses TYPICAL BUILDINGS CONNECTED BUILDINGS SMART BUILDINGS Standalone Systems Holistic view Most building systems integrated using BIOT platform
Slide 86: The Value Creation Potential Is Significant
The Value Creation Potential Is Significant Intelligent Buildings Solutions Market1 $70B CAGR +12% $34B $25B 2021 2024 2030 Intelligent Buildings Solutions Components & Value Solution % of Total Edge & Communication Devices 27% Energy & Operational Management 26% Integration Software & Services 21%
Slide 87: Investing in Technology and Platforms to Deliver Complex Outcomes
Investing in Technology and Platforms to Deliver Complex Outcomes Managing High Data Complexity Across Intelligent Use Cases and Applications Sustainability Occupant Experiences Energy Management People Analytics Utility Pricing and Weather Transit Operations App integration Parking App
Slide 88: Driving Outcomes to Support Customers' Mission
Driving Outcomes to Support Customers’ Mission Commercial High-Rise Healthcare Retail Education Office Residential Improve patient health Intelligent Increase worker Improve student Increase tenant outcomes merchandising and productivity and learning outcomes satisfaction, comfort, marketi
Slide 89: Smart HQ
Smart HQ Delivering Largest Government Zero-Energy Building in the World Dubai Electricity & Water Authority Built-up area: is over 2 million square feet. Floors: 15, Occupants: 5,000 people Facilities: 500-people auditorium, training halls, creativity center, exhibition hall, nursery, and a gym
Slide 90: Accelerating Go-to-Market Capabilities
Accelerating Go-to-Market Capabilities 1 Dedicated regional smart Field Sales/ building sales teams to GTM demonstrate technology, articulate Capabilities value proposition and deliver results 2 Global and regional customer Customer success teams to ensure best-in- Success class delivery time and qu
Slide 91: We Are Engaging Customers Differently
1 We Are Engaging Customers Differently New Personas Engagement C-suite engagement and management Identifying solutions value pools at strategic customers Owners CEO / CFO Co-Innovation sessions to develop use cases Ensuring adoption, optimization and expansion of JCI digital offerings with
Slide 92: Augmenting Direct Field Sales and GTM Capabilities
1 Augmenting Direct Field Sales and GTM Capabilities Dedicated Smart Building Teams in Region to Regional Teams Are Supported With Additional Enhance Regional Go-to-Market Capabilities Expertise and Capabilities Targeted upskilling of hand- picked sellers across globe Regional Vice President (Digi
Slide 93: Global Customer Success Teams to Ensure Superior Customer Experience and ROI
2 Global Customer Success Teams to Ensure Superior Customer Experience and ROI Solution Deployment Teams Global team of solution experts to deploy OpenBlue Suite Customer Digital Tiger Team Success Management Be-spoke delivery teams for Ensuring customers achieve their ROI highly complex INITIATION
Slide 94: Ecosystem Partnerships Expanding Market Access and Building Scale
Ecosystem Partnerships Expanding 3 Market Access and Building Scale Co-marketing Sell to, and co-selling Sell with, partnerships Sell through and alliances Industry engagement System and joint integration solution development 94
Slide 95: Growing Market Traction
Growing Market Traction Smart Building Pipeline Growth 60%+ win-rate on major Smart Total deal value $1.2B Building projects over the last 12 months +75% Evidence of strong value creation and differentiation On average, Smart Building projects generate 10x pull through of JCI products FY20 FY21 Subs
Slide 96: Well Positioned to Lead the Transformation to Smart Buildings
Well Positioned to Lead the Transformation to Smart Buildings Unified and standardized software development and Attractive market with innovation across all JCI solutions / business units, double-digit growth services, working with CTO Connected buildings OpenBlue platform is a clear leader for
Slide 97: Decarbonization & Heat Pumps
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Decarbonization & Heat Pumps Visal Leng, Vic
Slide 98: Buildings Play a Key Role in Achieving Net Zero
Ann – please format Buildings Play a Key Role in Achieving Net Zero Significant market opportunity ~$240B1 over the next decade As an OEM and solutions provider we have the technology and capabilities to provide complete solutions Direct channel is a competitive advantage Decades of experience guara
Slide 99: Decarbonization – A Global Imperative With a Major Role for Buildings
Decarbonization – A Global Imperative With a Major Role for Buildings Other What Is Driving Action Now: 6% Transportation 23% US Government plans to cut Building greenhouse gas emissions in half by Operations 28% 2030; EU net zero buildings by 2050 ~40% Policy and government targets – Industry B
Slide 100: ~$240 Billion Opportunity by 2035
~$240 Billion Opportunity by 2035 With HVAC, BMS, Digital as Key Technologies Global Decarbonization Segment1 Global Decarbonization Segment1 (by building type) (by region) $240B JCI Mix $240B 16% APAC 12% Key Solution Technologies Complex 27% HVAC Other3 (other)2 EMEALA 36% 15% 23% Lighting 11% Mid
Slide 101: We Are Differentiated With Full Capabilities Providing Complete Solutions
We Are Differentiated With Full Capabilities Providing Complete Solutions Energy Alternative Efficiency Refrigerants Electrification Digitalization Renewables Energy efficient Low-GWP options for Heat pumps Data exchange between Procurement optionality equipment (e.g. – ducted and applied
Slide 102: Our Direct Channel Is a Competitive Advantage
Our Direct Channel Is a Competitive Advantage Bulk of market opportunity in key verticals with JCI direct owner Market relationships Access Leverages JCI install base across offices, healthcare, and higher-ed Expertise advising on sustainability planning and implementation Turnkey capability i
Slide 103: Our Strategy Has Key Elements to Win
Our Strategy Has 4 Key Elements to Win Portfolio Leverage portfolio breadth and strengths across HVAC, BMS and Digital to Breadth / provide differentiated and advantaged “systems” solutions Technologies Expand existing innovative deal structures, including off-balance sheet financing Innovative for
Slide 104: Portfolio Breadth Creates Advantaged Solutions That Reduce Emissions
Portfolio Portfolio Breadth Creates Advantaged Breadth / Technologies Solutions That Reduce Emissions HVAC/R & Controls Security Fire Commercial HVAC Residential HVAC Applied BAS & Air Unitary Industrial Fire Fire Equipment Controls Distribution Equipment Refrigeration Ducted Ductless ACVS Intrusion
Slide 105: Our Strengths in BMS and Energy Management Position Us Well
Portfolio Breadth / Our Strengths in BMS and Energy Management Position Technologies Us Well as RECs Become Unattractive Figure 1: Corporate Clean Energy Demand Large companies are diversifying their renewable energy and carbon reduction objectives beyond renewable energy certificates (REC) purchase
Slide 106: Leveraging Existing Experience in Innovative Deal Structures
Innovative Leveraging Existing Experience in Innovative Deal Structures Deal Structures for Outcome-Based Solutions Traditional Model Outcome-Based Model Owner Focus on your goals with guaranteed outcomes Vendors & Client Partner O&M Staff Services Contractors Consultants Outcome-based Innovatio
Slide 107: Partnering on Energy as a Service Projects
Innovative Deal Structures Partnering on “Energy as a Service” Projects JV Partnership With Apollo Adds Additional Financing Flexibility Apollo & Johnson Controls form a joint venture to finance certain types of Energy as a Service projects (EaaS) Provides customers across the U.S. and Canada wi
Slide 108: Building on Market Leading Performance Infrastructure Business
Go-to-Market Building on Market Leading Strategy Performance Infrastructure Business Net Zero as a Service Current PI Industry is made up of three Industry Achieving sectors – ESPC, IaaS and BaaS/P3 decarbonization goals with risk transfer The current U.S. addressable Industry is $5.5B and predi
Slide 109: Leveraging Key Capabilities Gained Through Performance Infrastructure Business
Go-to-Market Leveraging Key Capabilities Gained Through Strategy Performance Infrastructure Business Expertise in audits, energy and Consulting and advising group in carbon analysis, modeling and place with processes and tools advising on sustainability plans Expertise in renewables, grid Decades of
Slide 110: Decarbonization – Customer Example Colorado State University Pueblo
Decarbonization – Customer Example Colorado State University Pueblo Net Zero Customer Challenge Meet state mandated greenhouse gas and energy efficiency targets as part of a broader drive toward net zero electricity usage for the campus Solution 22.3-acre solar array that will be completed by Oc
Slide 111: Guiding Government Actions Will Help Accelerate Market Development
Government Guiding Government Actions Will Actions Help Accelerate Market Development Region Policy Initiative Implications for JCI EMEALA EU Green Deal EU Energy Efficiency Directive Higher energy efficiency for – decarbonized buildings building stock Accelerating heat pump and by 2050 automa
Slide 112: Heat Pump Technology Presents High Versatility and 3x Higher Energy-Efficiency
Heat Pump Technology Presents High Versatility and 3x Higher Energy-Efficiency Description Customer Example Heat pumps transfer heat from a cool space (source) to a warm WarmteStad starts construction of sustainable space (sink), by means of electricity heat plant on Zernike Campus (2020) Air-to-a
Slide 113: Global Heat Pump Industry Is Growing Driven by Decarbonization Regulations
Global Heat Pump Industry Is Growing Driven by Decarbonization Regulations Global heat pumps1, $Bn USD CAGR CAGR 5% 2018-20 2020-24 Key messages Global share Total 11% 8% with 2X share in 14 14 Complex and Europe 13 13 EU target is to halve 1990 carbon Commercial Asia 12 emissions by 2030 and net ze
Slide 114: A Best in Class Heat Pump Technology Portfolio Enables Growth
A Best in Class Heat Pump Technology Portfolio Enables Growth Across All Building Segments and Delivers on Sustainability Goals Building Segment JCI Heat Pump Product Portfolio Complex HeatPAC recip DualPAC recip YMC2 SHP NS YK CYK Titan OM YHAP Single Stage Absorption VSD Mag. Bearing VSD Screw VSD
Slide 115: District Heating Flagship Project for German Utilities
District Heating Flagship Project for German Utilities Challenge Municipalities play a key role in achieving renewable energy and heat by 2050 Meeting the stringent regulations objectives of EU CO2 target reductions Financing is critical and subventions possibilities need to be understood: ‒ G
Slide 116: Strong Secular Trend Puts Johnson Controls at the Pole Position
Strong Secular Trend Coupled With Our Breadth and Depth Puts Johnson Controls at the Pole Position Significant market opportunity ~$240B1 over the next decade As an OEM and solutions provider we have the technology and capabilities to provide complete solutions Direct channel is a competitive advant
Slide 117: Financial Outlook
If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Better | Bolder | Building Financial Outlook Olivier Leonetti, Executiv
Slide 118: Building on a Foundation of Strength
Building on a Foundation of Strength Compelling financial profile positions us well for the future Large, diverse revenue stream provides stability Solid cash flow generation Attractive return on invested capital A great track record of improved financial performance Managed “best-in-class”
Slide 119: A Look Back: Driving Improved Profitability While Investing in Our Future Growth
A Look Back: Driving Improved Profitability While Investing in Our Future Growth Revenue & Segment EBITA Margin* Low to mid single digit $Billions Revenue EBITA Margin growth (excluding Covid-19) $24.0 Synergies and productivity $23.4 $23.7 $22.8 14.3% Significant sales force and $22.3 R&D inv
Slide 120: Positioned to Out-Perform End Markets FY22 – FY24
Positioned to Out-Perform End Markets FY22 – FY24 JCI Revenue Exposure Expected Market Growth Other 4% +MSD Data Centers 5% DEC/CRAH2 +HSD Expected GDP Growth In 2022 – 2024 Ducted HVAC Residential 17% Ductless HVAC +MSD North America Europe Asia Security Products Food & Beverage 18% Tra
Slide 121: Exciting Opportunities as a Smart Buildings Solutions Leader
Exciting Opportunities as a Smart Buildings Solutions Leader Decarbonization Digital Revenue growing at 10% CAGR Smart Buildings growing at 12% CAGR 1 Exponential growth in Decarb market Service revenue growth 7% driven by XaaS and recurring revenue models Product Growth ~100bps premium to Digital S
Slide 122: Driving Mid-to-High Single Digit Top-Line Growth
Driving Mid-to-High Single Digit Top-Line Growth +80bps +70bps VECTORS OF GROWTH 6 to 7% +50bps SERVICES OUTPERFORM Decarbonization REVENUE PRODUCT Smart Buildings CAGR OVER +450bps GROWTH Enhanced service Healthy Buildings/ NEXT 3 PREMIUM offerings and IAQ YEARS CORE MARKET attachment rates New pro
Slide 123: Aggressive Productivity Program Creating Significant Margin Runway
Aggressive Productivity Program Creating Significant Margin Runway Cumulative Net Cost Reductions1 SG&A COGS $550M Levers: material spend, field labor, $290M manufacturing and distribution, business simplification and $60M standardization, and external spend FY21 FY22 FY23 Strong execution through p
Slide 124: Closing the Margin Gap
Closing the Margin Gap Segment EBITA & Margin* ~$4.9B $Billions FY24F ~$1.0 16.8% to LEVERAGE ~$0.3 17.3% COGS ~$0.2 SAVINGS ~$3.4B SG&A SAVINGS FY21F ~40% 14.3% Segment EBITA $ 250 to 300bps Of Segment Margin Expansion Over The Next 3 Years 124 * Segment EBITA margin are non-GAAP measures. For a re
Slide 125: FY24 Financial Outlook Assumptions
FY24 Financial Outlook Assumptions* Revenue Segment EBITA CAGR Margin NA 6 to 7% +300 to +350bps Below-The-Line Items EMEALA 4 to 5% +150 to +200bps Amortization Expense of $450M to $475M APAC 5 to 6% +100 to +150bps Corporate Expense of $310M to $330M Global Products 7 to 8% +200 to +250bps E
Slide 126: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation Free Cash Flow* & Conversion From Net Income (Incl. Restructuring) ~$7.9B - $8.3B 100% ~$2.0B 105% FY21F Cumulative '22F - '24F Strong Free Cash Flow Conversion Supporting Further Value Creation 126 * Free cash flow is a non-GAAP measure. See appendix.
Slide 127: Disciplined Capital Allocation
Disciplined Capital Allocation Returning 100% Strategic of Free Cash Flow Bolt-on M&A Increase Dividends in Line Targeting 1 to 2 points of with EPS Growth additional revenue growth Share repurchase 127
Slide 128: Acquisitions Are an Integral Part of Our Growth Strategy
Acquisitions Are an Integral Part of Our Growth Strategy Additional Target Criteria Value Drivers Enhance digital portfolio Fit within our core Leverage acquisitions across competencies our global footprint Expand product portfolio Leadership in key technologies, Supply JCI products and
Slide 129: Strong Capital Structure Provides Liquidity & Financial Flexibility
Strong Capital Structure Provides Liquidity & Financial Flexibility Summary Capitalization ($B) Credit rating of BBB+ Minimum Cash $0.3 - $0.5 Target Net-Debt / EBITDA ~2.0-2.5X Current External Debt* ~$7.8 Significant liquidity Maintain balance sheet Revolving Credit Facility $3.0 flexibili
Slide 130: Positioned to Accelerate Top-Line & Deliver Double Digit EPS Growth
Positioned to Accelerate Top-Line & Deliver Double Digit EPS Growth Segment EBITA Margin & EPS* FY21 to FY24 3-year revenue CAGR: 6 to 7% ̵ 1% of revenue growth generates ~1.5% EPS CAGR growth + 250 to 300bps segment EBITA margin 16.8% to expansion ~$2.65 17.3% ̵ Includes ~$500M of cost savings; E
Slide 131: Appendix
APPENDIX 131
Slide 132: Forward Looking Non-GAAP Financial Metrics
Forward Looking Non-GAAP Financial Metrics The Company has presented forward-looking statements regarding, organic revenue growth, adjusted segment earnings before interest, taxes and amortization (EBITA), adjusted segment EBITA margin, adjusted corporate expense, adjusted earnings per share, free c
Slide 133: Organic Revenue Growth Reconciliation
Organic Revenue Growth Reconciliation The components of the changes in adjusted net sales for the twelve months ended September 30, 2020, September 30, 2019, September 30, 2018 and September 30, 2017 versus the twelve months ended September 30, 2019, September 30, 2018, September 30, 2017 and Septem
Slide 134: Adjusted Segment EBITA Margin
Adjusted Segment EBITA Margin The Company provides financial information regarding adjusted segment EBITA margin, which is a non-GAAP performance measure. The Company believes the adjusted segment EBITA margin is useful to investors in understanding the ongoing operations and business trends of the
Slide 135: IR Contacts
IR Contacts Antonella Franzen Chief Investor Relations & Communications Officer Better Bolder antonella.franzen@jci.com Ryan Edelman Executive Director, Investor Relations ryan.edelman@jci.com Building Committed to smart, sustainable success 135
Johnson Controls International — Investor Day (September 2021) on 6ix