Johnson Controls International plc · NYSE:JCI
Johnson Controls International — Q3 2013 Earnings Presentation
15 slides from Johnson Controls International's earnings presentation, Jul 18, 2013
Slide 1: Quarterly update FY 2013 third quarter
Quarterly update FY 2013 third quarter July 18, 2013
Slide 2: Forward-looking statements
Forward-looking statements Johnson Controls, Inc. has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed "forward-looki
Slide 3: Agenda
Agenda Introduction Glen Ponczak, Vice President, Global Investor Relations Overview Steve Roell, Chairman and Chief Executive Officer Business results and financial review Alex Molinaroli, Vice Chairman Bruce McDonald, Executive Vice President and Chief Financial Officer Q&A 3
Slide 4: 2013 third quarter: Markets are still challenging
2013 third quarter Markets are still challenging Starting to see some positives in our markets Automotive industry production slightly better than expected – North America: +6% – China: +10% – Europe: down 1% Building Efficiency pipeline opportunities stronger in certain vertical and geographic
Slide 5: 2013 third quarter highlights and outlook
2013 third quarter* Sales: $10.8 billion +2% Highlights Double-digit segment income increases by all vs. $10.6 billion in Q3 2012 three businesses Segment income: $764 million +20% - JCI profitability: +110 bps y/y margin improvement vs. $638 million in Q3 2012 Europe Automotive business pro
Slide 6: Stronger year-over-year performance in the second half of fiscal 2013
Stronger year-over-year performance in the second half of fiscal 2013 Drivers of Q3 improvement expected to provide continued benefits in Q4 Benefits of restructuring ─ Earlier initiatives on track; additional actions taken in Q3 Lower lead core costs vs. record high levels in 2H 2012 Margin e
Slide 7: 2013 third quarter Power Solutions
2013 third quarter Power Solutions 2013 2012 Net sales $1.4B $1.3B +8% Global unit shipments slightly higher, but softer-than- expected aftermarket demand in North America and Europe – Americas and Asia, each up 1% – Europe up 7% Florence, South Carolina Improved product mix and pricing battery
Slide 8: 2013 third quarter Building Efficiency
2013 third quarter Building Efficiency 2013 2012 Commercial backlog and orders Net sales $3.7B $3.8B -2% (at June 30, 2013) Soft N.A. and European demand negatively impacting sales Orders up 2%; positive in all geographic markets Level sales in North America Service and Asia with lower revenue
Slide 9: Building Efficiency Organizational Changes
Building Efficiency Organizational Changes Combining North American Systems, Services and Solutions businesses – Single consistent customer interface – Facilitates bundled offerings – Increase margins by improving sales force productivity and streamlining administrative costs Establishing Global
Slide 10: 2013 third quarter Automotive Experience
2013 third quarter Automotive Experience 2013 2012 Fiscal Q3 production Net sales $5.7B $5.5B +4% North America up 6% Higher revenue in North America and Europe Europe down 1% partially offset by lower sales in Japan (F/X impact) China up 10% Seating up 5%; Interiors and Electronics up 1%
Slide 11: Automotive Electronics Divestiture Update
Automotive Electronics Divestiture Update Announced today: Definitive agreement to sell HomeLink® product line to Gentex Corporation Purchase price of approximately $700 million in cash Transaction expected to close on or about September 30, 2013 Process to sell remainder of Electronics busi
Slide 12: Third quarter 2013 Financial highlights
Third quarter 2013 Financial highlights % (in millions) 2013 2012 change Sales $10,831 $10,581 2% Gross profit 1,680 1,541 9% % of sales 15.5% 14.6% SG&A expenses 991 973 2% Equity income 75 70 7% Segment income $764 $638 20% 7.1% 6.0% Gross profit – Improved margins in Interiors, Metals and Build
Slide 13: Third quarter 2013 Financial highlights
Third quarter 2013 Financial highlights 2013 2012 2013 2012 (in millions, except earnings per share) (excluding items *) (excluding items *) (reported) (reported) Segment income $764 $638 $764 $638 Restructuring costs ----- ----- 143 52 Financing charges - net 67 59 67 59 Income before taxes 697 579
Slide 14: Balance sheet / cash flow
Balance sheet / cash flow Cash provided from operating activities $1.0 billion – Net debt reduction of $556 million – Net debt to capitalization 31.7% Improved working capital performance – Trade Working Capital 6.5% of sales, 20 bps year-to-date improvement – Cash generated from Working Capital
Slide 15: Looking forward
Looking forward Q3 an inflection point, strong confidence in Q4 outlook – Continued sequential profitability improvements in Automotive Europe and South America – In Building Efficiency, our pipeline supports further improvement in our fourth quarter orders; Q4 revenue growth anticipated with furt