Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Q4 2024 Earnings Presentation
42 slides from Johnson Controls International's earnings presentation, Nov 6, 2024
Slide 1: Fiscal Q4 2024 Earnings Conference Call
FISCAL Q4 2024 Earnings Conference Call November 6, 2024
Slide 2: Forward-Looking and Cautionary Statements/Non-GAAP Financial Information
FORWARD-LOOKING AND 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 3: Key Reminders and Non-GAAP Definitions
Key Reminders and Non-GAAP Definitions ▪ Results for fiscal fourth quarter 2024 and fiscal year 2024 contained within this presentation represent the consolidated results of the Company, inclusive of the Residential & Light Commercial (“R&LC”) business, which was classified as discontinued operation
Slide 4: CEO Summary
Delivered robust Q4 sales growth, margin expansion, and cash flow ̵ Organic sales growth of 10% led by double-digit growth in Systems and Service ̵ Segment EBITA margin expanded 260 basis points to 18.6% ̵ FY24 adjusted free cash flow conversion of 96% Strong order growth led by data center demand C
Slide 5: JCI at a Glance: A Simplified Portfolio Across the Building Lifecycle
JCI at a Glance A Simplified Portfolio Across the Building Lifecycle GEOGRAPHY MIX DOMAIN APAC Other Indirect Systems HVAC EMEA Fire $23B* Service Security Americas Controls One End-to-End Business Solutions Operating Model Systems Services Solutions Enabled by Digital KEY STATISTICS KEY MARKETS 4M+
Slide 6: Fiscal Q4 Results: Strength Across the Portfolio
Fiscal Q4 Results Strength Across the Portfolio JCI Sales - Organic % Growth* Balance Sheet and Reported FY24 Adjusted Free Cash Flow* ($ in Millions) ($ in Millions) $681 10% 96% Balance Sheet YoY Organic Growth* FCF Conversion ▪ 88% fixed rate debt ($140) ($53) 67% $2,396 $7,394 FCF Conversion ▪ ~
Slide 7: Growth and Robust Margin Expansion (Global Products)
Fiscal Q4 Results Growth and Robust Margin Expansion Global Products Sales ($ in Millions) $169 8% YoY Organic ▪ Price +3% / Volume +5% Growth* ▪ Commercial HVAC1 +LDD ($135) $2,386 ($26) $2,394 ▪ Residential HVAC +LDD – NA Residential +>25% ▪ Fire and Security (LSD) ▪ Industrial Refrigeration (MSD)
Slide 8: Order Growth Delivered Record Backlog; Supports Continued Momentum
Fiscal Q4 Results Order Growth Delivered Record Backlog; Supports Continued Momentum Building Solutions Orders - Organic % Growth Building Solutions Backlog ($ in Billions) 12% Service Install 8% $12.9 $13.1 7% 9% YoY Organic Growth $12.1 $12.1 $12.6 YoY Organic Growth 8% $2.2 $2.3 $2.3 $2.4 $2.4 5%
Slide 9: Building Solutions Performance by Segment
Fiscal Q4 Results Building Solutions Performance by Segment Adj. Segment Orders Orders / Backlog Sales Sales Adj. Segment EBITA/Margin* Organic % Growth Comments Organic % YoY* Comments EBITA Comments Change YoY 7% ▪ Orders 16% ▪ Service +8% 40bps 8% ̵ Service +15% $3.2B ▪ Systems +21% 15.4% 7% 15.0
Slide 10: 2025 Guidance and Long-Term Outlook
2025 Guidance and Long-Term Outlook Simpler, Higher Growth Company Driving Consistent Adjusted EPS* Growth $3.71 $3.40 to Target Double-Digit $3.50 Adjusted EPS Growth Long-Term $3.21 +6% to Greater revenue visibility underpinned by long-cycle backlog +9% ($0.50) Further margin expansion driven by o
Slide 11: Introducing Q1 and Fiscal '25 Full Year Guidance
Outlook Summary Introducing Q1 and Fiscal ‘25 Full Year Guidance (Continuing Operations) Q1’25 FY’25 FY’25 Comments Organic Revenue* Up ~MSD Up ~MSD ▪ NA benefiting from data centers ▪ Continued momentum EMEALA ▪ China stabilization Adjusted Segment ~14.5% Up >50bps ▪ Global Products improvement EBI
Slide 12: The New Johnson Controls
The New Johnson Controls A Faster Growing, More Profitable, Simplified Company Higher-growth business model Increased exposure to robust data center demand Long-cycle backlog underpins greater revenue visibility Higher profit margins with further margin expansion driven by operating leverage and gro
Slide 13: Appendix
City graphic Appendix
Slide 14: Additional FY 2025 Guidance Items (Continuing Operations)
Additional FY 2025 Guidance Items (Continuing Operations) Q1’25 FY25 Corporate Expense* ~$110M ~$430M Amortization Expense ~$120M ~$485M NFC ~$85M ~$350M Tax Rate ~12% Shares ~661M ~656M *Adjusted Corporate expense includes certain stranded costs from divestiture transactions to be addressed by mult
Slide 15: Strong Sales Growth and Margin Expansion in FY24
Fiscal 2024 Results Strong Sales Growth and Margin Expansion in FY24 Total JCI Sales - Organic % Growth* Total JCI Adj. Segment EBITA Margin* ($ in Millions) $954 ($ in Millions) 4% 16.1% 110bps ($71) ($258) $27,418 YoY Organic Growth* Adj. EBITA Margin* Expansion $26,793 15.0% Service +8% Sales Gro
Slide 16: Broad-Based Global Reach
Fiscal Q4 Results Broad-Based Global Reach % of Organic Sales Growth* % FY24 North America EMEALA Asia Pac Global Products Consolidated JCI Sales Applied1 38% +>20% +LSD (LSD) +low-teens +low-teens Light Commercial3 7% +MSD +MSD Commercial HVAC 45% +LDD +low-teens NA Residential 3% +>25% +>25% ROW R
Slide 17: Disciplined Capital Allocation
Balance Sheet and Adjusted Free Cash Flow Disciplined Capital Allocation Capital Structure ($ billions) Q4 FY23 Q3 FY24 Q4 FY24 Short-term debt and current portion $1.0 $2.5 $1.5 Net Debt / EBITDA* of long-term debt Debt and liquidity ▪ 88% fixed rate debt Long-term debt $7.8 $7.9 $8.0 ▪ 3.6% weight
Slide 18: Consolidated Financial Results
Fiscal Q4 2024 Consolidated Financial Results Q4 FY23 Q4 FY24 Q4 FY23* Q4 FY24* % Change ($ in Millions, except earnings per share) GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,853 $6,248 $5,853 $6,248 7% Gross profit $1,972 $2,268 $2,012 $2,270 13% (% of sales) 33.7% 36.3% 34.4% 36.3% SG&A expense
Slide 19: Special Items
Fiscal Q4 2024 Special Items ($ in Millions, except EPS) Three Months Ended September 30 Net income (Expense) EPS impact 2023 2024 2023 2024 Mark-to-market adjustments $(108) $16 $(0.16) $0.02 Restructuring and impairment costs, net of NCI $(216) $(144) $(0.31) $(0.22) AFFF insurance recoveries - $1
Slide 20: Historical Quarterly Results – Continuing Operations
Historical Quarterly Results – Continuing Operations Continuing Operations (in $ millions) FY 2024 FY 2023 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Net sales 5,209 5,597 5,898 6,248 22,952 5,155 5,546 5,777 5,853 22,331 Net income attributable to JCI 340 (321) 852 536 1,392 97 44 940 481 1,563 Income attribu
Slide 21: Historical Quarterly Results – Continuing Operations (EPS)
Historical Quarterly Results – Continuing Operations Continuing Operations FY 2024 FY 2023 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Diluted EPS $ 0.50 $ (0.47) $ 1.25 $ 0.80 $ 2.08 $ 0.14 $ 0.07 $ 1.36 $ 0.70 $ 2.27 Adjustments: Net mark-to-market adjustments (0.03) (0.02) (0.01) (0.01) (0.07) - 0.01 (0.02)
Slide 22: Historical Quarterly Results – Global Products Continuing Operations
Historical Quarterly Results – Global Products Continuing Operations Global Products - Continuing FY2024 FY2023 Operations (in $ millions) Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Segment EBITA* 267 290 387 459 1,403 298 305 355 358 1,317 Adjusting items: Earn out adjustments - (7) - - (7) - (30) - - (30) Gl
Slide 23: Solutions to Bring Value Across the Building Lifecycle
Building Lifecycle Solutions to Bring Value Across the Building Lifecycle 1. Product & Technology Leadership 2. New Construction Systems ▪ Sales support and project engineering ▪ Focus on systems margin expansion IN ST ▪ World class estimating tools ▪ Local execution matched with centralized AL a
Slide 24: IR Contacts
IR Contacts Jim Lucas Vice President, Investor Relations jim.lucas@jci.com Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com linkedin-logo-high-res-1254-1024x1024 - High resolution facebook Logos YouTube is getting a new logo every week this month – here's why | Creative Bloq
Slide 25: Consolidated Statements of Income
FINANCIAL STATEMENTS Johnson Controls International plc Consolidated Statements of Income (in millions, except per share data; unaudited) Three Months Ended Twelve Months Ended September 30, September 30, 2024 2023 2024 2023 Net sales Products and systems $ 4,391 $ 4,128 $ 15,967 $ 15,789 Services 1
Slide 26: Condensed Consolidated Statements of Financial Position
Johnson Controls International plc Condensed Consolidated Statements of Financial Position (in millions; unaudited) September 30, 2024 September 30, 2023 Assets Cash and cash equivalents $ 606 $ 828 Accounts receivable - net 6,051 5,494 Inventories 1,774 1,872 Current assets held for sale 1,595 1,55
Slide 27: Consolidated Statements of Cash Flows
Johnson Controls International plc Consolidated Statements of Cash Flows (in millions; unaudited) Three Months Ended Twelve Months Ended September 30, September 30, 2024 2023 2024 2023 Operating Activities of Continuing Operations Income from continuing operations attributable to Johnson Controls $
Slide 28: Footnotes
FOOTNOTES 1. Sale of Residential and Light Commercial HVAC Business The Company signed a definitive agreement in July 2024 to sell its Residential and Light Commercial HVAC business (the “R&LC Business”), which includes the North America Ducted businesses and the global Residential joint venture wit
Slide 29: Footnotes: Items Excluded from Certain Financial Measures
As detailed in the tables included in footnotes four through seven, the following items were excluded from certain financial measures: • Net mark-to-market adjustments are the result of adjusting restricted asbestos investments and pension and postretirement plan assets to their current market value
Slide 30: Sales Reconciliation
3. Sales The following tables include sales from both continuing and discontinued operations and detail the changes in sales attributable to organic growth, foreign currency, acquisitions, divestitures and other (unaudited): Three Months Ended September 30 Net sales Building Solutions North Asia Glo
Slide 31: Products and Systems Revenue
Three Months Ended September 30 Products and systems revenue Building Solutions North Asia Global Total JCI (in millions) America EMEA/LA Pacific Total Products plc Products and systems revenue - 2023 $ 1,727 $ 570 $ 498 $2,795 $ 2,386 $ 5,181 Base year adjustments Divestitures and other — (1) — (1)
Slide 32: Service Revenue
Three Months Ended September 30 Service revenue Building Solutions North Asia Global Total JCI (in millions) America EMEA/LA Pacific Total Products plc Service revenue - 2023 $ 1,051 $ 475 $ 199 $1,725 $ — $ 1,725 Base year adjustments Divestitures and other — 1 (7) (6) — (6) Foreign currency (1) (3
Slide 33: Cash Flow, Free Cash Flow and Free Cash Flow Conversion
4. Cash Flow, Free Cash Flow and Free Cash Flow Conversion The following table includes free cash flow and free cash flow conversion attributable to both continuing and discontinued operations (unaudited): Three Months Ended Twelve Months Ended September 30, September 30, (in millions) 2024 2023 202
Slide 34: EBITA, EBIT and Corporate Expense
5. EBITA, EBIT and Corporate Expense The Company evaluates the performance of its business units primarily on segment EBITA. The following table includes both continuing and discontinued operations (unaudited): Three Months Ended September 30, Twelve Months Ended September 30, Adjusted Adjusted Actu
Slide 35: Segment EBITA Twelve Months Ended September 30
Twelve Months Ended September 30, Building Solutions Building Solutions Building Solutions (in millions) North America EMEA/LA Asia Pacific Global Products 2024 2023 2024 2023 2024 2023 2024 2023 Segment EBITA $ 1,663 $ 1,394 $ 391 $ 316 $ 261 $ 343 $2,123 $1,965 Adjusting items: Earn-out adjustment
Slide 36: Net Income and Diluted Earnings Per Share
6. Net Income and Diluted Earnings Per Share The following tables reconcile net income attributable to JCI and diluted earnings per share as reported to the comparable adjusted amounts (unaudited): Three Months Ended September 30, Net income attributable to Diluted earnings JCI per share (in million
Slide 37: Share Count Reconciliation and Debt Ratios
The following table reconciles the denominators used to calculate basic and diluted earnings per share (in millions; unaudited): Three Months Ended Twelve Months Ended September 30, September 30, 2024 2023 2024 2023 Weighted average shares outstanding Basic weighted average shares outstanding 665.3
Slide 38: Adjusted EBIT and Adjusted EBITDA Reconciliation
The following table reconciles net income to adjusted EBIT and adjusted EBITDA (unaudited): Twelve Months Ended (in millions) September 30, 2024 June 30, 2024 September 30, 2023 Net income $ 1,900 $ 1,803 $ 2,033 Income tax provision (benefit) 252 42 (323) Net financing charges 359 326 281 EBIT 2,51
Slide 39: Statements of Income: Three Months Ended
9. Statements of Income The following tables include statements of income for both continuing and discontinued operations. Three Months Ended Three Months Ended September 30, 2024 September 30, 2023 Continuing Discontinued Continuing Discontinued Operations Operations Combined Operations Operations
Slide 40: Statements of Income: Twelve Months Ended
Twelve Months Ended Twelve Months Ended September 30, 2024 September 30, 2023 Continuing Discontinued Continuing Discontinued Operations Operations Combined Operations Operations Combined Net sales Products and systems $ 15,967 $ 4,466 $ 20,433 $ 15,789 $ 4,462 $ 20,251 Services 6,985 — 6,985 6,542
Slide 41: Quarterly Results - Continuing Operations (Fiscal 2024)
10. Quarterly Results - Continuing Operations The following tables include reconciliations of EBIT to adjusted EBIT, diluted EPS to adjusted diluted EPS, and Global Products segment EBITA to Global Products adjusted segment EBITA for continuing operations only. Fiscal 2024 (in millions, except per s
Slide 42: Quarterly Results - Fiscal 2023
Fiscal 2023 (in millions, except per share) Q1 Q2 Q3 Q4 Year Net sales $ 5,155 $ 5,546 $ 5,777 $ 5,853 $ 22,331 Net income attributable to JCI $ 97 $ 44 $ 940 $ 481 $ 1,562 Income attributable to NCI 4 1 7 7 19 Net income 101 45 947 488 1,581 Income tax provision (benefit) (3) 8 (381) (92) (468) Inc
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